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Page added on September 25, 2011

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Developments show demise of oil greatly exaggerated

Production

Oil, the other stuff that made the state’s energy fortunes, was on the decline here and elsewhere. Discussions about reaching a “peak oil” summit were taken quite seriously. Meantime, new gas discoveries — and increased use of hydraulic fracturing for natural gas in shale formations — were putting more attention on gas than on oil.

Price stability and a diversification of demand for gas (CNG for vehicles, conversion of power generation from coal to gas) have been big news in the energy field for years.

Turns out, though, that the demise of oil was greatly exaggerated, even in a state where oil production peaked years ago. Someone forgot to tell energy firms that oil was no longer noteworthy — or profitable.

Oil sands, linked to the controversial Keystone XL pipeline project that would go through Cushing, make Canada the world’s second-largest storehouse for oil in reserve. Producing the bitumen crude is made possible by technology and made profitable by higher oil prices.

SandRidge Energy, a five-year-old Oklahoma City firm with its roots in west Texas natural gas wells, told its employees recently that “Oil is our future.” Larger state energy firms known primarily as gas producers have also shifted more resources to oil. That’s where the money is.

The Wall Street Journal noted Sept. 17 that the summit point for oil has been quite elastic. “It was once supposed to arrive by Thanksgiving 2005,” the newspaper said. “Then the ‘unbridgeable supply-demand gap’ was expected ‘after 2007.’ Then it was to arrive in 2011.”

The peak prediction is now sometime between this year and 2020. By next week that could change to 2025. Dire predictions about an oil shortage following an elusive peak have consistently been wrong. Between 2007 and 2009, 1.6 barrels of oil were added to the reserves column for every barrel of oil actually produced.

Oil is being produced in great quantities today in places where only a trickle was flowing a few years ago. Locating tomorrow’s oil boomtown is as hard as accurately predicting when the production summit will be reached.

CNG may be filling more vehicle tanks, but natural gas is no longer in the driver’s seat. And, no, we don’t care to predict how long that will last.

NewsOK



2 Comments on "Developments show demise of oil greatly exaggerated"

  1. sunweb on Sun, 25th Sep 2011 2:23 pm 

    Speaking about the future, without a doubt we need our snowmobiles. We need our wave runners, our four wheelers, and our big ass trucks for groceries. We need lights on everywhere to tell us what to buy all night long, we need wall size television sets, our golf carts for exercise and our electric can openers. We need our oil and natural gas by golly. We don’t need no frackin’ water.
    From the Curmudgeon Vignettes, read more at:
    http://sunweber.blogspot.com/2011/07/curmudgeon-vignettes.html

  2. sunweb on Sun, 25th Sep 2011 2:26 pm 

    The earth simply cannot sustain us and our growth and behavior. We will do anything and everything to maintain our present personal level of energy use and the comfort it affords us. We will do anything and everything to the earth, to other people and even to ourselves to continue on this path. And if we don’t have the energy level we see others have, we will do anything and everything to the earth, to other people and even to ourselves to attain that level. The proof of this assertion is simple; we are doing it.
    From: The Curmudgeon Report
    http://sunweber.blogspot.com/2011/02/curmudgeon-report.html

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