[Ketzl]

Hi! I'm a newbie so please pardon me if this has been hashed and rehashed. I'm trying to learn about the peak oil debate, and it seems to me that there's a huge range of projections of the world's recoverable oil reserves, from people who believe we've hit peak already and it's all depletion here on out, to those crazy abiotic oil people who seem to believe the planet magically generates fuel. But the most common projections I've seen say we'll hit peak later on, like in 10 or 20 or 30 years by which time we'll have switched to a Energy Source To Be Named Later because of market forces.

Also, almost everyone also seems to agree we've run out of the cheap and easily-extracted oil except possibly in Saudi Arabia, that refineries are running at capacity right now and take a long time to build, and that the oil coming out of the ground is increasingly sour and requires more refining and more expensive refineries to do it.

I look oil supply projection graphs like this one from the EIA (conveniently their projection stops at 2025, when they're projecting peak oil) and wonder, how does souring figure into the picture?



I assume the EIA is full of competent, smart people who figure out an oil "souring curve" indicating how the percentage of light sweet to heavy sour rises over time, and have a ratio of how many barrels of heavy sour = a barrel of light sweet, and use both those factors in their projections. Also, if future oil increasingly requires more expensive infrastructure investment like sophisticated refineries, do they count the cost of infrastructure against the benefit of the oil gained? Since the accompanying article doesn't mention it, I wanted to ask y'all if these sorts of peak projections do take that into account, or if I'm misunderstanding the situation and they're not really a big factor.

Thanks,
Ketzl

[RonMN]

My take on it (i'm not an expert) is that heavy sour only contains 60% of the energy that light-sweet has. If we moved entirely to heavy sour, we would need to extract 40% more barrels from the ground (daily) and refine 40% more, just to break even in what we are using today.

Today = 84MBPD (mostly light sweet) = 117.6 MBPD (heavy sour).

That alone puts us in some pretty deep do-do.

But i can't answer your original question...i'm not sure if the sweet/sour curves have been factored into the calculations...we do however know that light sweet has peaked.

[nth]

I assume the EIA is full of competent, smart people who figure out an oil "souring curve" indicating how the percentage of light sweet to heavy sour rises over time, and have a ratio of how many barrels of heavy sour = a barrel of light sweet, and use both those factors in their projections. Also, if future oil increasingly requires more expensive infrastructure investment like sophisticated refineries, do they count the cost of infrastructure against the benefit of the oil gained? Since the accompanying article doesn't mention it, I wanted to ask y'all if these sorts of peak projections do take that into account, or if I'm misunderstanding the situation and they're not really a big factor.

Thanks,
Ketzl

Hi and welcome.
EIA does not track sour or sweet curves. I am not sure how tracking that will fit into their mission.
It is very hard to find data regarding sweet crude production and sweet crude refining capacity. Refineries are not simple where you can take one refinery and classify it as sour refinery or sweet refinery. Oil comes in lots of grades and refineries are very flexible if it has the right equipment. EIA does track these refinery equipments' capacities.

Here is a good chart:
EIA refineries

[nth]

My take on it (i'm not an expert) is that heavy sour only contains 60% of the energy that light-sweet has. If we moved entirely to heavy sour, we would need to extract 40% more barrels from the ground (daily) and refine 40% more, just to break even in what we are using today.

60%?? That is very low number.
What kind of sour crude are you using to get this?

Most crude oil that is labeled heavy sour crude are of better quality than your 60%. There are a few things you have to take into account when accounting for energy:
1. sour crude produces how much gasoline.
2. extra energy required for sour crude to produce gasoline.
3. extra equipments needed for sour crude to produce gasoline.

A better way to determine is simply to let the markets decide. Looking at price differential of sour/sweet, this way you get to see how much of each product is needed.

[Ketzl]

EIA does not track sour or sweet curves. I am not sure how tracking that will fit into their mission.
It is very hard to find data regarding sweet crude production and sweet crude refining capacity. Refineries are not simple where you can take one refinery and classify it as sour refinery or sweet refinery. Oil comes in lots of grades and refineries are very flexible if it has the right equipment.

Hi nth & thanks. I take your point to mean that coming up with an oil "souring" curve or coefficients would be difficult due to sweet&sour being more of a spectrum than a black and white issue, and in any case there's a lack of available data. Makes sense

But I'd think figuring out the impact of oil "souring" would still be important, right? I run across these news reports of Iranian crude going unsold because it's so sour no one wants it, and same for Saudi Arabia. So it must be a pretty big factor. If not the EIA, are other people known to take it into account?

[nth]

But I'd think figuring out the impact of oil "souring" would still be important, right? I run across these news reports of Iranian crude going unsold because it's so sour no one wants it, and same for Saudi Arabia. So it must be a pretty big factor. If not the EIA, are other people known to take it into account?

Well, yes, that is correct. Heavy Sour Crude has not peaked yet and there is a refinery shortage for these types of fuel.

Right now, I don't think Campbell has factored in supply bottle necks into his model. He seems to just take total production and URR for the most part. I have yet to read anywhere that he has tweaked for economic factors.

The key to PO is all about oil prices will go up and stay up.
PO antithesis are mostly a bunch of economists who believed oil prices will drop as money is invested to increase production. When we do run low on oil, an alternative fuel source that is cheaper will arrive. The economy will adapt to this new fuel and life goes on....

That is the general argument between the two factions, in my opinion.
Then there is a smaller argument regarding when PO hits. Here you have correctly pointed range from yesterday to 100 years from now. I think people have failed to realize that Campbell's original forecast was for conventional oil and as far as we can tell conventional oil has peaked!

People like Yergin like to point out that is why Campbell is flawed. Conventional oil means nothing. Alternatives or non conventional oil must be factored in, too. Yergin further points out that Campbell's cheap oil argument is false. Yergin points to advances in technology that keeps reducing costs, so that alternative or unconventional sources will be just as cheap as today's cheap oil.

I think Yergin relies too much on technology and I think at some point prices will rise faster than technology can solve it.

That is my summary of the situation.

[Antimatter]

Heavy oil actually has more energy per barrel than light oil. Sulfur content has little effect on energy content. Removing sulfur and producing light products like gasoline from heavy oil does however require more energy. I'm not sure if this offsets the greater energy content per bbl, someone probably has figures.