There was a time, not that long ago, that we were led to believe that the world’s oil supply was about to run out. “Alternative energy sources” entered our cultural consciousness and ever since, there’s been a burning desire by “some”, to find alternate energy sources. After all, fossil fuels were finite and the survival of civilization depended on new energy sources.
Who’d have thought back then, that our good little planet was awash in the stuff. No wonder the “oil-phobes” had to invent Global Warming:
All this should make one thing amply clear – there is enough oil to go around for a very long time. Even on conservative assumptions – accelerating consumption and few new discoveries – earth’s oil supplies should last for at least a century.
This, however, is the worst case scenario. We can be reasonably certain that new exploration and advancing technologies will in coming years greatly add to the quantities of available oil. So much so that Morris Adelman, Professor Emeritus in Economics at Harvard, has argued that the ‘amount of oil available to the market over the next 25 to 50 years is for all intents and purposes infinite.’
The notion that this planet is running out of oil is one of the great misnomers of our age. There is more oil available today than there was a hundred, fifty or ten years ago. And there is every indication that this trend will continue into the future. Instead of lamenting that we are running out of it, it would be far more accurate to say that we are constantly bumping into new oil. This is why two years ago the Economist headlined an article on the topic The Bottomless Beer Mug.
cross posted @ Celestial Junk
Peak Oats !
In the early 1900s, New Yorkers were worried there would not be enough oats for all the horses.
There will never be a ” Peak Leftist”
we will never run out of them.
There is a truly infinite resource of leftists.
Don’t count on the oil sands to quickly provide the needed oil. Over the last 7 years, production in Canada’s oil sands has increased 600,000 barrels per day, in the wake of a massive investment program.
Over the same time frame, the decline in one field alone, Cantarell in Mexico, has been about 800,000 barrels per day. This decline is expected to accelerate.
The oil sands, while huge, and very prolific, require an enormous capital installation to exploit. That takes time to put in place.
“…some form of technological advance…”
Actually, a technological advance that would have gone a long way to solve the problem has ALREADY been around for half a century but, having a technology and using it are two different things. Now we have perhaps half a century to partially wean ourselves from oil dependency. That won’t be easy because the developing world will still be on oil long after the technologically advanced countries have drastically cut their consumption.
Anyway, any switch from oil to electricity or to an as yet undiscovered “something else” couldn’t be done overnight and cold turkey. Thus the need to husband the resource we have during the transition. Remember, it’s not just a question of switching energy sources. Our entire infrastructure is designed and built for a carbon economy and changes will entail enormous capital costs.
Gord Tulk: If you mean Kohlmayer’s piece, yes I’ve read it. It’s interesting but pretty short on science and engineering – his resource figures are over the moon. If you don’t start out with hard-nosed science, economics go out the door.
As others here have mentioned,”alternative” energy sources have inherent limitations. The huge energy problem for Canada is its size and location. The “green” agenda is nothing but noise and static that has prevented Canada as a nation from maintaining its focus on cheap RELIABLE energy.
Canada was one of a few countries developing nuclear energy as both a base load domestic energy source and exportable technology. WE need a stable energy source moreso than Japan or France. We’re a lot colder, and flung out population wise.
Extracting and refining oil by using nuclear as a heat source as well as an electrical source would drop our oil recovery cost imensely.
So what if we can’t use it? I mean no one uses crude. We use gasoline/diesel/jet fuel.
Build the refineries and use what we have NOW. (oil and uranium)
This refinery infrastructure problem WILL bite us in the rear as the climate cools and our manufacturing sector tries to upgrade high tech while developing our raw resources to higher priced products for export.
G
I was of course referring to nuclear-electric. Maybe not self-evident in my post of 9:17
DaninVan
The refinery issue is a red herring, and completely off base. Crack spreads (the margins the refineries make) are pitifully low, reflecting more than adequate capacity.
That there have been no refineries built in North America in 3 decades is offset by refineries built elsewhere, and capacity upgrades at existing refineries.
More refineries will not reduce the price of oil.
Zog:
His resource figures pretty much match up with what I have read/heard. The key is the difference between “proven” and “potential” reserves. Over time more and more known reserves are converted into proven – read: economically viable reserves.
DaveY:
Actually I think it’s highly likely that fossils will be providing the bulk of our energy needs 50 yrs from now – particularly in transportation. They are in abundance and technology has steadily made it more and more pollution-free. (a 1970 beetle polluted at a 1000 times higher a rate than a “new” beetle does – it probably polluted more just sitting in the driveway on a warm dry volatilizing fuel out of the tank than a new beetle does at a steady 70mph) Whether we are burning gasoline or hydrogen or CH4 (once the AGW fad abates) remains to be seen, but the internal combustion engine – probably piston – will probably be the technology in use too. Also, oil is gaining an ever-increasing role as a building/structural material. Plastics are the ultimate recyclable too – they are resistant to decay and require little energy to convert back into a (re)usable form.
None of the alternate sources to fossils can compete except nuclear and unless we all get over our NIMBY attitude towards it, it will never gain ground versus simple and ridiculously cheap coal.
Woodporter:
Oilsands development will accelerate with new tech like THAI which is a fraction of the cost/complexity of SAGD – the current established method. And unlike conventional reservoirs the develpments have a much more static output level. The current and future bottleneck may be upgrader capacity but that too looks to be being addressed.
“An evil worse than depletion” says Simmons of the decline in energy infrastructure.
I’m feeling a little creaky my own self.
http://www.321energy.com/editorials/simmons/simmons051008/simmons051008.html#
Woodporter; you’re playing with words, you little devil. The cost of crude oil has nothing to do with refinery capacity. The owners will charge whatever the market will bear for their finished products. As long as they make their margins they don’t care what the raw material costs, however by restricting production they, like OPEC, force the selling price up, but then you already know that.
http://www.forbes.com/2005/02/17/cz_0217oxan_canadaoil.html
“Another key concern is the lack of refinery capacity available in Canada to absorb the increased production expected over the next ten to 15 years. The number of refineries has declined over the last two decades. As a result, refining capacity is now approximately 2 million b/d and, in 2002 and 2003, refineries operated at just over 90% of their capacity–leaving little room for increased production. While Canada is able to export unrefined crude to the United States and other locations, the lack of refining capacity within the country will limit the ability of Canadian oil firms to demand premium prices.”
DaninVan
(Tks for the link)
Living in the lower mainland I remember when Edmonton had a problem with the refinery there, having to lower capacity for a breif period.
Living close to a major port on the Pacific and watching fuel trucks coming north from Washington state made me sick. The pump price spiked for a while also.(transportation costs??)
A question if I may.
Does anyone know if a “mini” refinery exists out there in the world?
I’m asking, wondering if oil refining could be modeled on the mini nuclear model Japan uses.
Would it make sense dispersing our refining assets throughout Canada?
(I know it already is dispersed, but I’m wondering how we could mitigate an unforseen closure of one of the main refinerys we depend on. They are all already maxed out. Think of a Katrina Canada style.)
Tks
G
DaninVan
I’ll concede you did not claim that refinery capacity is responsible for high oil prices, but many others have. Every discussion on high oil prices seems to eventually lead to someone claiming we need more refineries.
On the point of lack of refinery capacity in Canada, it is valid and a result of increasing oil production here. But at the same time there is declining production south of the border, resulting in a growing surplus of refining capacity there. Given the enormous capital costs of refineries, the market is simply solving this issue by refining the growing Canadian oil supply in the US.
Again, given the current low margins in the industry, there is little incentive to build another refinery here.
Actually, the model for successful new refineries is the Jamnagar complex in India. Large, coastal (boats of oil in, boats of product out), with low labor costs, and none of the environmental straight jackets applied here, this is tough to compete with, and part of the reason for low refinery margins.
The Irving family of Saint John, N.B, home of Canada’s largest oil refinery, in partnership with international oil company BP,is currently studying the feasibilty of building another 300,000 bpd refinery at a cost of $7 billion. Decision expected in 2009.
Next to the new LNG plant and pipeline built by Irving and Spanish partner Repsol. Close to the nuclear plant currently being refurbished. Up the road from the new $2 billion potash plant. Also waiting expected positive decision to build 1 or 2 new reactors.
Hope someone out there can answer this for me. I was listening to Roy Green’s talk show yesterday. Lately Roy has been on a tear about the price of a barrel of oil and the subsequent price of gas. At one point he asked the question: How much oil is in a barrel? Now I believe that the answer is 45 gallons.
If that is the answeror whatever the correct answer is, are those Imperial gallons or US gallons (1/5th smaller). Anyone?
Oil IS NOT A FOSSEL FUEL IT DIDNT COME FROM PREHISTORIC CREATURES AND THE ANWR IS NOT A FRAGILE ECO-SISTEM
Oil is priced on the world market.
Blame the high price on those who have control over reserves and production.
Who are the biggest ?
State Oil Companies:
Saudi Arabia, Iran, (all ME Oil)
Russia
Venezuela
Mexico
I stand to be corrected, but are the majors, Exxon, Shell ect, only im control of about 15% of the world’s oil reserves and production ?
Those doggone Socialists, they sure know how to rip us off !!
adb:
“The standard barrel of crude oil or other petroleum product (abbreviated bbl) is 42 US gallons (34.972 Imperial gallons or 158.987 L)”
(With two fingers down my throat as I quote “wiki”.)
G
That’s right. However, the standard barrel for refined gasoline (before bulk deliveries became common) was the “45” i.e. 45 Imperial gallons. Gas was also sold in 10s where transportation was a problem. Don’t ask me how this came about! Measurements are funny things.
I remember hauling and refueling aircraft out of those “45’s” up in the arctic and northern Canada.
Thats why I was curious and surprised at the actual numbers
G
How big is BIG Exxon-Mobile ??
[Exxon Mobil, the world’s largest privately owned oil company, owns only 1.08 percent of the world’s oil reserves.]
What !? Well what about all the other Big Oils ??
[ ..the five largest private global oil companies together own only about 4 percent of the world’s oil reserves.]
So who controls all the rest ??
[OPEC is an international government cartel made up of Iraq, Iran, Kuwait, Libya, Angola, Algeria, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. These nations control about 77 percent of the world’s known liquid crude oil reserves.]
Add in Russian oil , state owned, and Mexico, state owned and .. they got it all.
mmmmm, so if the Socialists own/control most of the world’s oil and the Global Warming Alarmists/Kyoto/United Nations/Eco Fanatics want to stop the Western World from exploring for more oil and to stop using what we do have … well who’s side are they on anyways !??
Link for above
http://www.cato.org/pub_display.php?pub_id=8778
ron in K:
I’m assuming that those numbers do not include oilsands and other unconventional reserves.
As the supply of oil decreases, demand increases, prices will naturally do what?? (in the abscence of alternatives). D’oh.
The longer it takes to find alternative sources of energy the longer we will be at the whim of countries-many of whom-support state funded terrorism.
It seems, yet again, the boat has been missed.