Are we running out of oil?

[Davidr]

Thanks for the Dazzling reply. As a simple consumer of 'Oil', in all its various forms (from food to plastics and of course pertrol), it seems I might be able to wrap myself comfortably in my apethy blanket for a while yet

More research into those resource stocks required though.

Cheers,
David.

PS If you guessed JMSU = Just Make S*** Up, then you were correct

 

[topcropper]

Hello David.

Australia is a net importer of oil, and our production has been declining.


Hello Dazzling.

I really don't remember anyone on this forum sugesting that oil was going to run out any time soon. Plenty have suggested that the world is approaching 'Peak Oil'. That is the time when world oil production starts declining. Big difference!

Everyone knows that oil won't run out for a long time, but when oil production starts to decline, it is expected that the remaining oil will be harder to get, and much more costly. This can be seen already, with offshore drilling.

Your posts are very interesting. Always good to hear a conflicting viewpoint. Keep them coming.

See ya's.

 

[Bantam Roosta]

Hello Dazzling.

I really don't remember anyone on this forum sugesting that oil was going to run out any time soon.

Topcropper,

That was me.
In my post I mentioned that someone told me that oil was going to run out in 3 years.

BR

 

[Simon]

I do remember listening to Dr Karl on Triple J bemoaning the fact that we burn oil. One of the most useful natural resources we have for manufacturing and we burn it!

Cheers,

 

[topcropper]

Thanks Bantum.

Silly me.

See ya's.

 

[Dazz]

One of the most useful natural resources we have for manufacturing and we burn it!
Cheers,

Yes, "we", and it's a pretty exclusive little "we club" burn it up at the ludicrous rate of an Olympic sized swimming pool every second .... but then that's what modern Western society demands. There's absolutely no way anyone living in those socities would ever give up their lifestyle standards to lessen the demand...so, here we are.

As a previous poster said, wait 'til the Indians and Chinese get up to our level of wants and demands...

 

[Aceyducey]

To put a figure on it (from APPEA) Australia currently can supply about 7 months worth of the oil we require each year for domestic needs.

Our refining capacity is quite limited as well.

However we're a major exporter of LPG and have some of the cheapest gas prices in the world.


Oil will never run out. We simply need to shoot more dinosaurs: http://www.youtube.com/watch?v=RtlWJBAi8oM

Seriously, peak oil is not about oil running out - it's about not having as much (decline curve). Basically we'll always have oil, just in much smaller quantities.

Cheers,

Aceyducey

 

[Lacasa]

Just my two cents worth:

I work in Iraq on the oil reconstruction program, not on the oil side of things but in security, so can’t help you with any oil knowledge, I think Dazzling has that taken care of quite well! But I can tell you that in the south of Iraq (where I work) you only have to kick over a rock and the black stuff comes out of the ground...and they say that they have only explored around 20% of the country? One day the security situation will be under control and from what I hear from oil engineers over this way, is that this place has the second largest reserve of oil in the world, don't know how much that is exactly?? but I hazzard a guess that its "lots" ...so my answer to the original question would be, "no we are not running out"

Lacasa

 

[natmarie73]

From another POV

Maybe the question shouldn't be "What happens if we run out of oil" but "what will happen if we keep using oil".

 

[Aceyducey]

BTW - saw an interesting little article about ethanol and biodiesel as fuel sources in New Scientist today...

Both ethanol biofuel, made from corn, and biodiesel, made from soybeans, have been touted as alternative fuels that can reduce greenhouse gas emissions, because they remove carbon dioxide from the atmosphere as they grow.

But making these fuels takes a lot of oil – to make and run farm machinery, to produce pesticides and fertilisers, and to process the harvest into fuel. Some sceptics have argued that the emissions produced are so high that using biofuels may not reduce overall emissions at all.

To test whether these two biofuels are viable, David Tilman, an ecologist at the University of Minnesota, US, and his colleagues calculated the total environmental costs of their production. When all these costs are factored in, corn-based ethanol does indeed reduce greenhouse gas emissions, but only by about 12% compared to gasoline, they found.

In contrast, biodiesel reduces emissions by 41% over diesel fuel, largely because it does not need distillation to be processed into fuel. Also, far fewer fertilisers and pesticides are used in growing soybeans, giving biodiesel a further edge in reducing environmental impact.

Food or fuel?
But all this is barely a splash in the tank of energy demand. Even if the US devoted all its corn to ethanol and all its soybeans to biodiesel production – which would cause widespread food shortages – the resulting biofuels would cover less than 5% of US gasoline and diesel fuel needs, they calculate.

http://www.newscientisttech.com/article/dn9519-biodiesel-beats-ethanol-in-biofuel-battle.html

Cheers,

Aceyducey

 

[young_gun]

I am no expert but I saw a program on the ABC the other night , I think it was four corners and they interviewed some of the worlds leading experts on oil for their opinions. The general consesus was that when oil is drilled the first half of the tapped out is able to be pumped out rapidly due to the pressure however when the oil levels in the wells dimish supply is cut significantly.

A popular theory is that oil is being discovered all over the world all the time. However demand is always every increasing and the new supplies are only just meeting demand let alone future demand. It is also the view that the world will reach "peak oil", in between 5 - 10 years in which the product of oil will eventually taper off further and further.

Their are however a number of solutions to the problem these include Nucleur and even coal can be turned into oil although at a greater expense. The problem with the alternatives is their is some cost asociated with them as wel such a pollution problems.

 

[Aceyducey]

Fear not, SA alone has enough to keep the whole world's consumption of 84 MMbbls ticking along by itself for quite some time.

Hey Dazzling,

I was going back through this thread and noticed this comment of yours on 25 november that I had missed earlier.

I'd really like to understand how you figured that Saudi Arabia, which is producing at around 11MMbbls per day could increase it's production up to 84MMbbls per day.

It's had problems attempting to increase it's production by 10% (to 12MMbbls per day) let alone increase it's production by 800% AND provide that level of refining and transportation capacity.

With an official 261.9 billion barrel proven reserve, Saudi Arabia would deplete their entire oil reserve in 8 years at that rate. Even at 11MMbbls they are depleted in 65 years - assuming they could produce it all and at a constant rate (which doesn't happen with oil).

Remember that with present technology you can generally only extract 33-40% of proven reserves - which more than halves those lengths of time.

You've also not considered that Saudi's production rests heavily on eight fields discovered in the 1940s through 1960s - there have been no 'elephant' oil discoveries since, despite enormous amounts of exploration. And those fields are declining in production by between 5 and 12% per year, with Gwahar, their largest field and thus most difficult to replace, estimated to be approximately half empty now.

Following on from this, I am finding it more difficult to credit many of your other statements, which at times seem to be very distant from the perspectives I see from inside the upstream end of the industry.


For example, regarding Gwahar on 27 November (yes I've been tardy reading your posts) you said:

There is 6.29 bbls in one cubic metre, therefore this one reservoir contains 2,063 billion bbls.

Ghawar contains 70 billion barrels of oil tops - and that's according to the Saudis. The entire of Saudi Arabia has proven reserves of 261.9 billion barrels - yet you're claiming Gwahar (one field) has almost 10x as much as their entire published proven reserves.

Your figure is totally at odds with, well, everyone experienced in reservoir measurement.

Can you back up your statements?



Here's a few references for people who want to know more about Saudi Oil production.

Saudi Arabia Country Analysis Brief
http://www.eia.doe.gov/emeu/cabs/saudi.html
Contains a good chart of Saudi Oil production and figures on their reserves.

Saudi claims it can double oil production and find billions more in reserves
http://www.ameinfo.com/61640.html
They've been claiming this for years, but have not delivered as yet.

And a interesting perspective at whether we can trust Saudi claims
http://www.mideastweb.org/log/archives/00000203.htm
Contains a lot of good information on the problems the Saudis are having in finding new reserves to replace the fields that are running out.

Cheers,

Aceyducey

 

[Aceyducey]

BTW Young Gun,

That article pretty well sums up why I have invested in oil companies (though the current IPO is painful in bits - due diligence is a painful process)

Looking at usage versus discoveries, we tend to discover less than 50% of the oil we use each year. actually it's less than this now - but could be argued up to 50% based on GTL, biodiesel and oil shale projects.

That's a recipe for increasing oil prices and pressure on many other industries reliant on petroleum products.

Plus huge opportunities for those investing in energy - whether fossil or renewable.

Though, IMHO, renewable are more risky as they need greater upfront investment to prove, political and popular support (look at the demise of wind farms) and then the infrastructure built to enable their use.

Fossil fuels like oil, gas and coal you can sell straight to the market as the political will and infrastructure is already in place.

Cheers,

Aceyducey

 

[Andrew_A]

Jim Puplava from the financial sense newshour would agree with Acey on this one.

His take on the situation is that the Saudi's are near max capacity and they are very private with their remaining reserves, and the list of countries in OPEC combined with the incentive to fudge their reserves (production quotas are tied to reserves) doesn't leave anyone with confidence in what is really going on.

Jim is very widely read on Peak Oil and regularly has other PO experts on the show, the one drawback is he never seems to seek out those with dissenting views.

From what I understand of the situation people are just taking the Saudi's at their word when they say don't worry be happy, we can meet all your oil needs.

** edit ** though Jim Puplava does regularly go through dissenting opinions and attempt to refute them regarding PO not being a serious threat, he also makes the point that some of the strongest PO advocates started researching the subject in an attempt to prove that PO actually wasn't a threat **

 

[RichardC]

Hi Andrew. Much to the chagrin of my lady I've tuned into Puvlava every weekend for a couple of years now. Today it runs nearly 4hrs. By comparison Don Coxe tells me more in under an hour.

But credit where it's due, Puvlava has kept me focussed on resources and '05 - '06 has been a watershed year for me by sorta following his advice.

Don Coxe's broadcast is about to go subscription only (big bummer) but his message is to buy miners with large proven reserves in politically stable countries. Sounds great to me!

To take that a little further, he advises to ignore P/E ratios: Buy the metal in the ground. There may be an awful lot of coffee in Brazil but there is also a lot of silver in Mexico. (Sorry about that blatant plug.)

 

[Delta]

Exploration in Antarctic by the Russians

I think it was always going to happen. Humans will explore previously unexplored areas, to find resources. With so much resources being used to sustain an increasing global human population (now at 6.5 billion people), what's the alternative?

BHP and RIO have recently announced new exploration investments into Russia. Siberian desert perhaps?


http://www.theage.com.au/news/world...-antarctic-lake/2006/07/12/1152637740824.html

 

[Aceyducey]

Siberia is a lovely place to explore - if you can get through the permafrost.

In fact a couple of the major producing fields up there are geologically very similar to the territory one of my companies is exploring in the Northern Territory - though we have no permafrost issues. Go back to the same geographic time when the oil systems were developing and the two areas were sitting next to each other - which surprised the heck out of me when I found out (after we'd taken out the grants, but before we'd done a lot of work on it - as that was part of the background work).

Antarctica has been compared to the moon in terms of the difficulty to exploit.

Sure it's an engineering problem and exists to be solved, but my feeling is that it won't be for some time and won't be commercial at current oil prices.

When oil prices hit US$200 we'll see.

Cheers,

Aceyducey

 

[Delta]

Siberia is a lovely place to explore - if you can get through the permafrost. ......
Aceyducey

The permafrost starting melting in 2005. Reported in The Guardian on 11 Aug. 2005.

 

[Aceyducey]

Yup

But it certainly wasn't impossible to drill through anyway - the Russians managed it in the 1960s.

BTW here's a more recent article about the melting: http://www.newscientist.com/article.ns?id=mg18725124.500

Note the huge impacts for global warming....call it the domino effect.

THE world's largest frozen peat bog is melting. An area stretching for a million square kilometres across the permafrost of western Siberia is turning into a mass of shallow lakes as the ground melts, according to Russian researchers just back from the region.

The sudden melting of a bog the size of France and Germany combined could unleash billions of tonnes of methane, a potent greenhouse gas, into the atmosphere.

The news of the dramatic transformation of one of the world's least visited landscapes comes from Sergei Kirpotin, a botanist at Tomsk State University, Russia, and Judith Marquand at the University of Oxford.

Kirpotin describes an "ecological landslide that is probably irreversible and is undoubtedly connected to climatic warming". He says that the entire western Siberian sub-Arctic region has begun to melt, and this "has all happened in the last three or four years".

 

[Delta]

I read more about Global Warming recently in a book "The Weather Makers" by Tim Flannery. All ice glaziers across the world have started melting.

I was in Europe recently. They seem a lot more concerned about Global Warming than Aussies (prima facie).

Perhaps humans have more to worry about when Mother Nature 'unleash fury' on Earth, than worry about running out of oil in the future.