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I think this presentation gives a nice overview of the challenges associated with non-conventional oil.

http://www.iea.org/Textbase/work/2004/opec/knapp.pdf

Update on Competitiveness of Update on Competitiveness of Non-Conventional oil
David Knapp
Energy Intelligence Group

Second Joint IEA/OPEC Workshop on Oil Investment Prospects

Paris, April 28, 2004 Paris, April 28, 2004

Jeroen van der Veer, CEO of Royal Dutch Shell has said that, in his opinion, we are past peak on conventional oil. The story is here. He says, "My view is that “easy” oil has probably passed its peak. But there are other reserves that are still a long way from their peak. In unconventional oil and gas – resources that are harder to tap – there are plenty of reserves."

But how likely is it that unconventional oil can both make up for declines and increase the total oil production to match anticipated demand growth?

Tony

Absolutely zero. And even if they could, they couldn't do it as cheaply as conventional oil.

Peak oil is about the end of cheap, readily available energy, not energy sources.

Prime example, the oil sands.

1mbpd production that is projected to triple in 10 years.

So? 3mbpd in a world that will consume perhaps 120 mbpd in 10 years.

Won't keep up with demand or decline.

Insignificant.

MonteQuest wrote:Absolutely zero. And even if they could, they couldn't do it as cheaply as conventional oil.

Peak oil is about the end of cheap, readily available energy, not energy sources.

Prime example, the oil sands.

1mbpd production that is projected to triple in 10 years.

So? 3mbpd in a world that will consume perhaps 120 mbpd in 10 years.

Won't keep up with demand or decline.

Insignificant.

So the CEO of Royal Dutch Shell is effectively admitting that (in his opinion) we have passed peak. It should be an interesting year.

Tony

TonyPrep wrote: So the CEO of Royal Dutch Shell is effectively admitting that (in his opinion) we have passed peak. It should be an interesting year.

We have a daunting task ahead. Technology advances could increase the amount of oil we can recover from existing reserves, but that reality remains to be seen. Simple physics and the law of dimishing returns rules here...also time.

Scaling up unconventional sources is not as easy as most think. The infrastructure, lead time, EROEI, transport, delivery, and financial hurdles are immense.

And all of this must be done while sequestering the new CO2 and reducing CO2 emissions from exisiting sources by 60-70% to avoid runaway global warming, and still growing the economy to service the debt, provide new jobs, housing and food for an expected 3 billion increase in the population by 2050.

Not to mention while fighting resource wars over the remaining dregs.

No problemo.

Next stop, Iran.

MonteQuest wrote:And all of this must be done while sequestering the new CO2 and reducing CO2 emissions from exisiting sources by 60-70% to avoid runaway global warming, and still growing the economy to service the debt, provide new jobs, housing and food for an expected 3 billion increase in the population by 2050.

So, does this mean that a couple mile-high chimneys for generating electricity won't solve the problem? The optimists are going to be quite shocked.

Seriously, the U.S. economy is creaking presently. The recent Barron's investment rountable reflected some distinctly bearish sentiment. Combine existing issues with Peak Oil, and I can't see where the excess investment capital can possibly come from. The landing looks ever harder.

MonteQuest wrote:... and reducing CO2 emissions from exisiting sources by 60-70% to avoid runaway global warming,...

Indicators suggest that we will be increasing our global CO2 output by 50% instead of reducing it at all.

MonteQuest wrote:And all of this must be done while sequestering the new CO2 and reducing CO2 emissions from exisiting sources by 60-70% to avoid runaway global warming, and still growing the economy to service the debt, provide new jobs, housing and food for an expected 3 billion increase in the population by 2050.

No need to grow the economy. The economic crash is about to come, and these guys know it. And population is likely to stabilize soon.

CO2 is the tricky thing here.

I've been doing a lot of diggin on peak oil recently and there's one subject I haven't found much on: are rates of non-conventional oil production limited?

Natural pressure falloff occurs in conventional wells leading to a decline in oil production. When taken as a sum over all the wells overall production is Gaussian (the Hubbert curve in an idealized, non-constrained system).

However, extracting oil from the Athabasca tar sands rather resembles mining. There is no need to worry about dipping pressure in the well, because, among other things, there is no well.

Has anyone done any studies as to what, if anything would limit the production rate of the Athabasca tar sands? Or of Venezuela's Orinoco oil belt?
(environmental reasons aside)

An interesting refresher on what we know compared to what we thought we knew.

P - And what do we know now?

ROCKMAN wrote:P - And what do we know now?

Hard to say. The link doesn't work, and no one has been able to explain the difference in at the very how many more or less carbon and hydrogen atoms are in this special non-conventional oil versus the normal stuff.

AdamB wrote:

ROCKMAN wrote:P - And what do we know now?

Hard to say. The link doesn't work, and no one has been able to explain the difference in at the very how many more or less carbon and hydrogen atoms are in this special non-conventional oil versus the normal stuff.

Is that gross carbon and hydrocarbons or net?

We know that EROEI has been steadily falling especially with the focus on non conventional. We know that the Shale/fracking has been relying on high lending to produce. Other than that, I am will not comment as I know we have experts who are more qualified to opine.

pstarr wrote:

Tanada wrote:An interesting refresher on what we know compared to what we thought we knew.

Not surprisingly, it appears we now know less (from the link)

Uh oh, something's not right

That page doesn't appear to exist

Try this link, IEA changed everything a couple years ago so I had to dig out the direct link.

www.worldenergyoutlook.org/media/weoweb ... EO2004.pdf

Looker - "We know that EROEI has been steadily falling especially with the focus on non conventional." No, we don't actually. The EROEI of what gets drilled is very dependent upon the price of oil as well as other factors. As explained before when oil prices shot upwards about 10 years ago it took less bbls of oil (which generated higher revenue due to high prices) to generate an acceptable rate of return. Thus EROEI decreased significantly...however it was calculated. But when oil prices fell a couple not years ago a well had to produce more bbls to generate the same revenue to produce that same acceptable ROR. Which is why the rig count fell: there were much fewer of the remaining prospects that would produce that sufficient number of bbls. Even the current rig count indicates a lack of larger recovers to justify drilling as many prospects as we did during the boom.

Simply put the EROEI (however it!s calculated) of wells drilled today had to increase significantly compared to those drilled a few years ago. And if oil prices decrease further EROEI will continue to increase. Conversely if oil prices increase to former levels the EROEI will decrease as it did 10 years ago.

Now let's look at a completely unrealistic model: oil prices stay at the current level for the next 50 years. Also assume the amount of energy used to drill remains the same. IOW no great new technology to increase drilling efficiency. So the cost (in both Btu's and $'s) remain the same and companies hold to the same required ROR the EROEI will hold constant. But given the decreasing number of sufficiently large prospects remaining fewer and fewer wells will be drilled. In theory there might be only one prospect that's economical to drill in 2067. And its EROEI will be the same as those drilled today.

Back to the same point repeatedly made: the industry has never, does not today and will never make drilling decisions based on any calculation using EROEI. Those decisions are based on economic analysis.

And once more: the is no thing as "unconventional oil". There is oil produced from reservoirs using unconventional completion methods. Or if you like we can call those unconventional reservoirs. But as far as the molecular structure of the oil I'm producing condensate from a convention reservoir using a conventional completion method identical from a frac'd horizontal Eagle Ford Shale well. My "convention oil", if you insist, is being produced from a deep NG/condensate well in S Louisiana from a high permeability reservoir that did not require frac'ng. There have been BILLIONS OF BBLS of similar oil produced in this trend.

Oil is oil regardless of its API gravety, if it's from a frac'd well or not, from a vertical or horizontal well. I can give you a sample of 44 API oil and no lab analysis will tell if it came from the EFS or my Louisiana well.

This confusion has been going on too long.

GHung wrote:

AdamB wrote:

ROCKMAN wrote:P - And what do we know now?

Hard to say. The link doesn't work, and no one has been able to explain the difference in at the very how many more or less carbon and hydrogen atoms are in this special non-conventional oil versus the normal stuff.

Is that gross carbon and hydrocarbons or net?

I think it was only hydrocarbons discovered in igneous rock. Very non-conventional.

onlooker wrote:We know that EROEI has been steadily falling especially with the focus on non conventional.

We know that EROEI has been CLAIMED to be falling for half a century, and yet fuel prices today are about the same as half a century ago. So anyone who isn't Shorty can demonstrate that the correlation coefficient of this relationship appears meaningless.

onlooker wrote: We know that the Shale/fracking has been relying on high lending to produce.

We know that the oil industry has needed to borrow money to drill and complete wells since 1859 when Drake did it, and more borrowing is done in boom times as companies try and grow, and that none of this is dependent on what the particular completion technique is.

onlooker wrote: Other than that, I am will not comment as I know we have experts who are more qualified to opine.

We know that the experts who discuss EROEI know nothing about the oil and gas business, because those that do understand why it is irrelevant. And we know that the oil and gas companies have been borrowing money and horizontal drilling and hydraulic fracturing since before many on this forum weree born, and the most recent boom was no different than all the others that modern peakers ignore in their rush to claim the next hoped for peak.