Peak Oil News and Message Boards

It appears that the US has got itself a new supply of oil re the Azerbaijan pipeline that's opening. The oil is non Russian and non middle eastern and the pipeline will hold 10 million barrels.

How does this play out with peak oil dating?
Is this 'new' oil and will it make a significant difference?
And what do folk on here think that the Arab oil producers will make of this when suddenly the US doesn't need as much of their oil?
Will this cause a cut in production from OPEC?
full story at
http://news.bbc.co.uk/1/hi/business/4577497.stm

KevO

This is not "new oil" and the pipeline only pumps 1 millions barrels per day. Another few weeks of rising demand from Asia and the US will absorb this. Nice big long target for terrorists too.

Can't see this making any difference whatsoever except to offset the loss of Iranian oil when (sorry if) the US attack it.

I think Iran produces 4 million bpd. Offset the oil from the new pipeline = 3 million bpd. US strategic reserve = 800 million barrels. If the US strategic reserve was tapped to make up for the loss of iranian oil, it would last 266 days. but of course most iranian oil goes to India, China etc and I doubt the US cares about their oil requirements too much.

The incredible fact from this news is that it's going to take months to 'fill' the pipeline. The volume of the pipe is 10 million barrels!

This is no solution for anything - it means Caspian oil doesn't have to flow through Russia... but Georgian, Azerbaijan and Turkey aren't much more secure.

Madpaddy wrote:This is not "new oil" and the pipeline only pumps 1 millions barrels per day. Another few weeks of rising demand from Asia and the US will absorb this. .

Seriously, how long will this pipeline actually delay peak oil assuming all goes well with it. Are we talking 6 months, a year, 5 years?

KevO

KevO,

The development of this pipeline has been well flagged in advance so Campbell et al are fully aware of it. The coming on stream of several mega projects have been factored into the estimates for a date for peak oil. So, unfortunately, it does not delay PO whatsoever. I think the estimate of 220 billion barrels of reserves in this oilfield that the bbc article mentioned is also wildly optimistic.

MP

sorry KevO, 220 billion barrels was mentioned in this article.

http://www.energybulletin.net/6310.html

MP

KevO wrote:

Madpaddy wrote:This is not "new oil" and the pipeline only pumps 1 millions barrels per day. Another few weeks of rising demand from Asia and the US will absorb this. .

Seriously, how long will this pipeline actually delay peak oil assuming all goes well with it. Are we talking 6 months, a year, 5 years?

KevO

The US comsumes 21 million barrels per day, so 1 million barrels of new oil will meet the US demand of about 52 minutes each day.

Seriously, how long will this pipeline actually delay peak oil assuming all goes well with it. Are we talking 6 months, a year, 5 years?

As mentioned above this is not new oil....it comes from fields in Azerbaijan and Kazachstan that have been producing for a long time. As a consequence it has zero impact on peak oil....all it does is give the US another source for oil to offset risk from Middle East and/or Russian oil supplies. It might have some impact on price by relieving the terrorism premium. That being said this is not a wildly stable area. The Caspian Sea has been disputed territory for a long time...Iran claims areas that Turkmenistan and Azerbaijan also claim (Rule of Sea argument). It was only a few years ago that Iranian gunboats lobbed shells at a BP drilling vessel offshore Azerbaijan. Also Kazachstan government has changed the rules for foreign companies once more. This is also the country where the army was sent in to shut down a refinery operated by a foreign company for alledged tax evasion. Not to mention that not very far from the pipeline is Georgia...
So I can't see this as being a solution for anything.

LOL Montequest,

I think that is 68 minutes though. Check your calcs.

Madpaddy wrote:I think the estimate of 220 billion barrels of reserves in this oilfield that the bbc article mentioned is also wildly optimistic.

Last I heard the Caspian was downgraded to 20B barrels (mostly heavy sour too). That initial 200B barrels was the estimate in the 90s before mass exploration began

anyways, not only is this not new oil, but while its being filled it will effectively take oil out of the market. At 6 months to fill in its entirety, thats 50,000brls/day out of the market during that time. Its not a lot, but its also not good as there is already predicted a shortfall for Q3

on the upside, it increases the total throughput of oil in the region so if new oil is found it can move more freely

Last I heard the Caspian was downgraded to 20B barrels (mostly heavy sour too). That initial 200B barrels was the estimate in the 90s before mass exploration began

Hmm.....not sure the 20B barrel number makes sense. Tengiz on it's own is >20B I think ....and Kashagan is supposedly as big or much bigger (no one has published an autenticated number as far as I know but I have seen a range in numbers from 20 B bbl to 50 B bbl). The only other numbers of any significance I have seen are Kavlanaskoye where Lukoil claims 2 B bbls and Kurmangazy where the Kazachs and Russians are looking at a joint development of 5 B bbls. I am not sure about the reserves in the South Caspian. Doubtful that it all adds up to 220 Bbbls but it is still a relatively significant number. Acutally there has not been that much exploration in the Caspian....south Caspian has been limited due to the disputes and North Caspian due to access and other host of issues including environmental (Sturgeon grounds, old Russian nuclear testing sites, manufacturing waste flowing out from the Volga).

Madpaddy wrote:LOL Montequest,

I think that is 68 minutes though. Check your calcs.

But I want those minutes!

The US comsumes 21 million barrels per day, so 1 million barrels of new oil will meet the US demand of about 52 minutes each day.

52 minutes or 68 minutes assumes every drop will reach the USA, which can't happen. The daily USA share from this pipeline will likely be ignited in about the time it takes me to warm up my motorcycle every day.

This new pipeline won't have any impact whatsoever on Peak Oil in the USA or in the world.

EastBay

rockdoc123 wrote:Hmm.....not sure the 20B barrel number makes sense.

sorry, I had a look around and realized my info only refers to the Caspian sea itself. But the Sea's estimate of 200B brls was so similar to 220B that Madpaddy gave I thought it was the same thing.

The Energy Bulleting article doesn't mention where its "220B underground reserve" is so I'm not sure what they're talking about. However at the end of the article it mentions that the reserve may only be 32B barrels so I suspect we're both talking about the same things

anyways, we maybe moving off topic here as I think the Caspian reserves have been discussed somewhere else already

I saw an interview with a poor Kurd who lived literally on top of this oil pipeline but could only afford to heat his home with turds. If I was him that would drive me to distraction; hundreds of gallons a second of oil passing within meters of your little shack while you huddle over a little cow-pie fueled stove.

Madpaddy wrote:LOL Montequest,

I think that is 68 minutes though. Check your calcs.

Yep, you're right. We are saved!

That being said this is not a wildly stable area. The Caspian Sea has been disputed territory for a long time...Iran claims areas that Turkmenistan and Azerbaijan also claim (Rule of Sea argument). It was only a few years ago that Iranian gunboats lobbed shells at a BP drilling vessel offshore Azerbaijan. Also Kazachstan government has changed the rules for foreign companies once more. This is also the country where the army was sent in to shut down a refinery operated by a foreign company for alledged tax evasion. Not to mention that not very far from the pipeline is Georgia...
So I can't see this as being a solution for anything.

True, not just the Caspian but this Baku-Ceyhan pipeline is right in the middle of a very volatile South Caucasus.

Risk from disruption could come from a renewed conflict with Armenia over the disputed territory of Nagorno Karabagh. There has been renewed border skirmishes recently. Although there has been Azeri reports of Armenia wanting to hand over large areas of occupied Azerbaijan territory in exchange for peace I don't think anyone should be hopeful this can be resolved anytime soon. Armenia & Azerbaijan have economic n political reasons to keep the status quo. Thats is, I think, until Azerbaijan has enough oil money to buy arms & build its army to re-take Nagorno Karabakh. If Azerbaijan is to be foolish enough to launch an attack I think a dilapitated Armenian army can be quite capable of sabotaging Azerbaijan's oil line.

Also, domestically President Aliev who suceeded his father is not well liked by many Azeris. If the oil money does not translate into improved living standards for those outside Baku & human rights, we may see another American supported leader perceived by his own people as stooge of imperial interest...

saw an interview with a poor Kurd who lived literally on top of this oil pipeline but could only afford to heat his home with turds. If I was him that would drive me to distraction; hundreds of gallons a second of oil passing within meters of your little shack while you huddle over a little cow-pie fueled stove

.
Ah yes, but when the oil runs out he will still be warm and have a means of heating a cup o tea. Maybe he is quite content in his advantageous position....after all he won't take a hit on his lifestyle when oil runs out!

I believe the pipeline will carry just enough oil to fuel the vehicles and troops that will be needed to defend the pipeline.

There was a bombing attack on the Turkish pipeline. First of many to come, I'm sure.

Nero's Kurd might soon be inviting the insurgents over for a "barbeque," don't you think?