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Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 08:39:07
by Revi

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 09:00:04
by KaiserJeep
If I understand the situation correctly, the US supply of conventional oil has peaked some months ago, and the present demand is being filled with a combination of heavy oils (tar sands, etc) and lighter oils (condensates, etc.) from fracking.

Can the deficit of conventional oil be replaced by blending the heavy and light components? Can this mix be used to make diesel and home heating fuels, even if it costs more to do that than by conventional petroleum?

Just trying to understand the US perspective on a diesel shortage that is primarily outside the US today. That diesel costs more than gasoline in the US today will soon increase the cost of everything transported by truck or rail. Home heating oil that is more expensive will bite me personally. My Nantucket home uses oil and natural gas is not available on the island - but LPG is available and some use it for heat.

So far, it seems more like an incovenience for refineries than a genuine hydrocarbon production shortfall. But maybe I am missing something.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 09:15:08
by onlooker
The way I see it, the heavy oil and the light one from Shale/fracking, was NOT used extensively before because the EROEI is not good. Lending has been a big part of sustaining this Shale fracking bubble. But, the ecoomics and energy profile going forward is simply is not going to allow Modern Civilization to continue humming along like before. The Peak Oil dynamic is very much imposing itself as Net Energy is dwindling.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 09:34:08
by GHung
KaiserJeep wrote:If I understand the situation correctly, the US supply of conventional oil has peaked some months ago, and the present demand is being filled with a combination of heavy oils (tar sands, etc) and lighter oils (condensates, etc.) from fracking.

Can the deficit of conventional oil be replaced by blending the heavy and light components? Can this mix be used to make diesel and home heating fuels, even if it costs more to do that than by conventional petroleum?

Just trying to understand the US perspective on a diesel shortage that is primarily outside the US today. That diesel costs more than gasoline in the US today will soon increase the cost of everything transported by truck or rail. Home heating oil that is more expensive will bite me personally. My Nantucket home uses oil and natural gas is not available on the island - but LPG is available and some use it for heat.

So far, it seems more like an incovenience for refineries than a genuine hydrocarbon production shortfall. But maybe I am missing something.


From Revi's link:

...... the refineries are indeed having difficulty in producing quality fuels from combining of tar sands and light-tight shale oil. The industry thought by combining the heavy tar sands oil and U.S. light shale oil, it would make an average oil blend, similar to good ole fashion medium grade API conventional oil.

However, it has turned out to be a real nightmare as this Tar Sands-Shale Oil blend creates a lot of difficulties for the refineries. So, it will be interesting to see how the situation unfolds in the global refinery market when U.S. shale oil finally peaks.


So there's a case for robbing Peter to pay Paul:

Global Production Of Diesel & Fuel Oil
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Global Production Fuel Oil (Minus Diesel)
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Global Production Of Diesel Fuel
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The article suggests that raising taxes on diesel using environmental concerns as a reason (France?) may in fact be an attempt to get ahead of a permanent decline in conventional oil and heavier fuel oils including diesel. Demand destruction? Anyway, some months ago, our local diesel prices were near par with regular gasoline and have now jumped to be about $0.80 higher. Supply and demand it seems.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 09:46:16
by KaiserJeep
I understand what you said, but the economic side of your argument is subject to being refuted by higher retail prices for such blended hydrocarbon fuels. There is a huge personal difference for me, actually. I need available gasoline to buy groceries and for other personal transport. I need heating oil for both residential heating and domestic hot water in the Nantucket home. I need natural gas for residential heat and hot water and cooking fuel in California and probably also in the Wisconsin residence that will replace that.

So I obsessively research everything and try to make contingency plans for likely shortage scenarios. Where there are available green energy alternatives, I install those. I have solar PV in California and a plan to add wind turbine(s) to the Nantucket residence.

So even in the face of a generalized economic malaise from more expensive hydrocarbon fuels, I wish to eat, shop, and not suffer major disruptions to lifestyle. But so far, I'm not seeing any such disruptions coming. Instead what I am seeing is a looming increase in the cost of living. I have long been dealing with that on a routine basis.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 10:01:11
by Revi
Here in Maine the price of regular gasoline is at $2.28 and the price of regular diesel is $3.32. So it's over a dollar more. The price of heating oil is around $3.00, so it's going to be a harder winter for some people. I can't remember a time when diesel was more than a dollar more than gas.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 10:53:43
by Tanada
Revi wrote:Here in Maine the price of regular gasoline is at $2.28 and the price of regular diesel is $3.32. So it's over a dollar more. The price of heating oil is around $3.00, so it's going to be a harder winter for some people. I can't remember a time when diesel was more than a dollar more than gas.


I certainly can remember it, it lasted for almost two years and it wasn't that long ago either!
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Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 10:54:07
by KaiserJeep
Well, I have been living in California since Jenuary 1986. I routinely pay $3.799 for a gallon of regular, and can recall when it was $5.659 in the past - at the local 76 station on the corner.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 11:05:53
by rockdoc123
The way I see it, the heavy oil and the light one from Shale/fracking, was NOT used extensively before because the EROEI is not good.


completely incorrect. The US has been blending heavy oil and light oil to put into refineries for many years. The refineries were all retooled years ago to take advantage of returns from cracking heavier components. Previously the heavy oil came from a mix of countries but primarily Canada and Venezuela and light oil was imported from places like Saudi Arabia. The only difference that has occurred is that Venezuela has become less of a source of heavy with Canada replacing the volumes and the light oil that was previously imported for blending is now being replaced by US production of LTO.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 11:08:04
by ROCKMAN
T - Is one of us misunderstanding what Revi posted: "I can't remember a time when diesel was more than a dollar more than gas." Your chart seems to confirm his post. Or am I confused?

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 11:26:26
by marmico
Gasoline refining margins have collapsed and distillate (diesel) refining margins are above average. Aggregate the change in margins and the retail diesel-gasoline spread widens.

https://www.eia.gov/todayinenergy/detail.php?id=37612

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 11:35:48
by Pops
Revi wrote:How about this?

Fuel oil is leftovers, the dregs. The amount of leftovers has fallen since 2007 because a) other uses like unleaded are more profitable, and b) declines in uses other than transport:

A little dated but good for context
Global fuel oil production was approximately 8.9 million BPD in 2015. Around 3.1 million BPD of this volume was used as a bunker fuel. At 35% of the total, bunker fuel was the dominant use of fuel oil. Fuel oil is also used for electricity generation, heating and for a variety of industrial purposes. In 2015, the fuel oil component represented only slightly more than half of the total bunker demand, with the rest being mostly distillates....

While bunker fuel demand has been slowly rising in recent years, nonbunker fuel oil demand has been falling for decades. Since 1986, nonbunker fuel oil demand is down by nearly 60% and further declines are expected through the next decade. By 2020, we estimate global nonbunker fuel oil demand to be slightly over 4.1 million BPD.

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http://www.turnermason.com/index.php/he ... er-bunker/

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 12:22:23
by Pops
The decline in fuel oil use is probably in large part switching from oil to nat gas power generation.
Ironically, that's where fracking took off initially, wasn't it?
So the decline in fuel oil IS due to fracking!
LOL

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:04:04
by MD
Two bucks a gallon here in Florida. I've given up crystal ball gazing. No idea what comes next. I'll just take each day as it comes, expecting each to be about like the last, until it isn't.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:17:54
by onlooker
rockdoc123 wrote:
The way I see it, the heavy oil and the light one from Shale/fracking, was NOT used extensively before because the EROEI is not good.


completely incorrect. The US has been blending heavy oil and light oil to put into refineries for many years. The refineries were all retooled years ago to take advantage of returns from cracking heavier components. Previously the heavy oil came from a mix of countries but primarily Canada and Venezuela and light oil was imported from places like Saudi Arabia. The only difference that has occurred is that Venezuela has become less of a source of heavy with Canada replacing the volumes and the light oil that was previously imported for blending is now being replaced by US production of LTO.

Really. I said extensively. In past times NO talk of a shale boom, or exploitation of the tar sands of Canada or Eagle Ford or Fracking or any of that. Conventional reserves were meeting very well world wide demand. Then in 2005, coinciding with this site going online, we hear of peak conventional crude. We have people freaking out here on this site, We have PO experts like Campbell and Laheire calling peak, we have the runup to $147 oil in 2008. So no you cannot say this was all happening before 2005 because it didn't.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:26:31
by Pops
This is just memory but seems way back here we were talking about how thr refiners were retooling to take heavier crudes from CA, MX, Venezuela, because light sweet was beginning to dwindle

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:28:36
by onlooker
Pops wrote:This is just memory but seems way back here we were talking about how thr refiners were retooling to take heavier crudes from CA, MX, Venezuela, because light sweet was beginning to dwindle

Yes Pops 2005 and afterwards 8)

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:45:50
by Tanada
ROCKMAN wrote:T - Is one of us misunderstanding what Revi posted: "I can't remember a time when diesel was more than a dollar more than gas." Your chart seems to confirm his post. Or am I confused?


I was in a hurry when I posted it, the missing paragraph is
Tanada wrote:This chart shows wholesale prices reaching a level of over 80 cents a gallon in the last decade. Combined with local fuel taxes in Ohio and Michigan where I have lived the last decade that created a $1/gallon differential at the pump that lasted a seemingly long time, decreased for a few month below threshold and then went back above the $1/gallon mark again. At that time around here rail traffic almost doubled and road truck traffic took a steep hit.

Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 17:50:58
by Tanada
onlooker wrote:
rockdoc123 wrote:
The way I see it, the heavy oil and the light one from Shale/fracking, was NOT used extensively before because the EROEI is not good.


completely incorrect. The US has been blending heavy oil and light oil to put into refineries for many years. The refineries were all retooled years ago to take advantage of returns from cracking heavier components. Previously the heavy oil came from a mix of countries but primarily Canada and Venezuela and light oil was imported from places like Saudi Arabia. The only difference that has occurred is that Venezuela has become less of a source of heavy with Canada replacing the volumes and the light oil that was previously imported for blending is now being replaced by US production of LTO.

Really. I said extensively. In past times NO talk of a shale boom, or exploitation of the tar sands of Canada or Eagle Ford or Fracking or any of that. Conventional reserves were meeting very well world wide demand. Then in 2005, coinciding with this site going online, we hear of peak conventional crude. We have people freaking out here on this site, We have PO experts like Campbell and Laheire calling peak, we have the runup to $147 oil in 2008. So no you cannot say this was all happening before 2005 because it didn't.


Hold up there Onlooker, the Athabaska 'tar' sands started producing back in the 1980's and as prices started climbing around 2002 they started expanding production, at least that is how I remember it. Back in the beginning as RockDoc posted they used 'Arab Light' from the middle east as the blending component, but they were definitely blending Athabaska bitumen sands oil three decades ago.
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Re: Peak oil debate

Unread postPosted: Wed 12 Dec 2018, 18:07:54
by onlooker
Well if you look at this link, you can see that production in Athabaska 'tar' sands, really took off in the period 2005-2012
2005 = 760,000 bpd
2012= 1.8 million bpd
So again, I am saying production really took off not started

https://en.m.wikipedia.org/wiki/Athabasca_oil_sands