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Peak Oil to the Rescue!

Discuss research and forecasts regarding hydrocarbon depletion.

Re: Peak Oil to the Rescue!

Unread postby ralfy » Mon 06 Feb 2017, 10:53:27

Tanada wrote:
I was looking for something else entirely and stumbled over this post from April 2015 and I think it is worthy of pointing out and reinforcing a couple of things.

Pops is dead on target when he says we Peakers have engaged in the silly fallacy that Peak Oil means we have run out of places to drill and depletion is eating away at production causing big drops in available oil day by month by year until everything falls apart.

The problem with those assumptions is blatantly obvious, the USA peaked in 1970-71 and quite literally thousands upon thousands of wells have been drilled here since that date, and a lot of them found oil nobody had discovered before peak. Another large segment were infill drilling and reworking projects like ROCKMAN does for his company that recovered a lot of oil that was discovered a long time ago but considered uneconomic to lift when prices were low.

We now know from the 2014-2016 price crash period that Fracking wells can keep lifting oil out of the formations at very cheap rates of return. How that worked is pretty much how it has always worked in the oil industry, finding the oil, completing the well and lifting the oil out of the well are all distinctly different processes.

Exploration budgets are at or near zero across most of the industry because at $50/bbl WTI contract price it just doesn't pay off in the long run to spend beau coup cash to explore for $90/bbl oil.

Drilling the well into the formation and putting the collection point in the pay zone is a second skill set, but you only engage in that if you have too, say to keep a lease or provide short term cash flow needs, if you can't sell the oil for more than it will cost you to drill and complete the well.

Completion in the case of fracking involves taking care of the really expensive part of a tight well, fracking the formation and installing the lifting equipment so you can get the oil out of the ground and send it off to market.

Actually lifting the oil out of the ground and sending it off to market is cheap compared to the rest of the steps.

So when a small Fracker goes bankrupt and their assets are auctioned off other companies buy the already producing wells cheap, and make a good income because they are only paying lifting cost on the wells that had a great deal of money invested in the first three phases.

Last but not least, about the graph of EROEI.

Keep in mind that every number on that graph was created by someone who wanted to prove something. If they did a study to find whatever that number was they had a confirmation bias to find what they wanted to find. Two examples, this graph says the EROEI on In Situe Bitumen production from the tar sands is only 60 percent the EROEI on surface mining. I call BS on that number because with In Situ production there are a wide range of methods ranging from steam flood to flame front dynamics, to dilutent flooding to probably a half dozen more methods. For surface mining you need large trucks and large excavators and a heating and washing plant and a tailings pile and a tailings pond and when you are finished you have to do land reclamation by law. That all takes a lot of energy. It seems likely to me they took the worst case scenario for in situ and assumed it was all done that way even though some of the methods are not that different than any other oil field development. The second problem with the graph is choosing two subsidized USA biofuels, Corn Ethanol and Soybean Oil, and treating them as if they are typical supplies for biofuels. They are not typical, even in the USA they are not the best return on investment for the product they yield and farmers would not be so eager to use those two sources if not for the crazy subsidies that exist in our system. There are literally dozens of plant species that yield more ethanol per acre than Corn and more oil per acre than Soybeans, but instead of going for the biggest return on investment our government went for the most popular with the lobbyists. Switching from corn ethanol to say white potato ethanol would more than triple the yield, and Potato is not the best yield by a long stretch. We could be encouraging farmers in Louisiana and Florida to grow beau coup sugar cane instead of Iowa and Nebraska farmers to grow corn. For oil yield we could be encouraging farmers to grow oil crops like Sunflower or Peanuts, both of which yield twice as much bio-oil per acre as Soybeans do. Heck even lowly Rice produces more oil than Soybean and if you really get extreme Castor Beans produce triple the yield.

Clearly we are not desperate for biofuel when we are using crops poorly suited to produce them instead of picking the most effective choices. Therefor we have no real way to judge the ultimate EROEI of biofuels until such time as we are using them in the most efficient manner we can, and that will not happen until we need them badly as substitute fuels.


I think your post seems to prove that fallacy in part.
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Re: Peak Oil to the Rescue!

Unread postby Tanada » Mon 06 Feb 2017, 11:46:07

Revi wrote:We use as much oil just driving around as China uses for everything. China has 4 x the number of people we do, and they are an exporting giant. We use ours in wave runners and monster trucks. Who is going to have to adjust more? Us at 22 barrels per person per year, or them at 2 barrels per person?

We are going to be very unhappy. The saddest thing is that we could be spending on infrastructure to deal with this right now instead of trying to revive the kind of industry that used to exist.


Give them another 10-15 years and China will be wasting oil for all sorts of frivolous things too. Right now they are busy getting 25-30 million new cars to the car crazy public, once that demand slacks off all the other ancillary recreational stuff is next. It wasn't until Ford and Packard and Nash and Chevrolet satisfied consumer car demand that recreational use took off in the USA.
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Re: Peak Oil to the Rescue!

Unread postby AdamB » Tue 07 Feb 2017, 16:10:15

Revi wrote:We use as much oil just driving around as China uses for everything. China has 4 x the number of people we do, and they are an exporting giant. We use ours in wave runners and monster trucks. Who is going to have to adjust more? Us at 22 barrels per person per year, or them at 2 barrels per person?

We are going to be very unhappy.


Some people are unhappy from birth, so no big deal for them I suppose. And some people aren't going to be unhappy about another peak oil any more than they were the older ones. Global peak oil in 1979 was FANTASTIC for oil field folks, certainly no one was running around in industry then being unhappy. Until that peak oil busted the same way the one in the last decade did.

Revi wrote: The saddest thing is that we could be spending on infrastructure to deal with this right now instead of trying to revive the kind of industry that used to exist.


Some folks are. Not only infrastructure either, but reconfiguring even capital investment to use the fuels created by this new infrastructure!

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