<On production rates and refinery capacity The Oil Drum Peak Oil: The inflationary case>

172 comments on Wednesday Open Thread and News Dump

Comments can no longer be added to this story.

| Show without comments | PDF version

JD on April 12, 2006 - 2:11am Permalink | Subthread | Parent | Comments top
The surprise is that a leading peak oil authority has finally bit the bullet and admitted that what matters is not oil, but liquids.

As Laherrere writes in his presentation:
"Oil demand is for all liquids. So the forecast of oil supply has to be given for all liquids."

Welcome the "The Liquids Drum"! ;-)

On a more serious note, I think Laherrere is right to focus on what will happen, as opposed to what should happen in an ideal world. I seriously doubt that climate concerns will keep people out of their cars. A massive move to coal may not be the best idea, but it's hard to imagine any social force that could stop it. (Not that I approve, of course. I don't. I detest cars.)

Comments can no longer be added to this story.
Stuart Staniford on April 12, 2006 - 2:51am Permalink | Subthread | Parent | Comments top

On a more serious note, I think Laherrere is right to focus on what will happen, as opposed to what should happen in an ideal world. I seriously doubt that climate concerns will keep people out of their cars. A massive move to coal may not be the best idea, but it's hard to imagine any social force that could stop it. (Not that I approve, of course. I don't. I detest cars.)

There is much to what you say.  At least for me, my thinking on it has always been more that to understand the problem I have to break it into its constituent pieces and understand them one at a time.  Since conventional oil production is by far the biggest piece on the supply side, it's behavior will dominate the situation in the short term.  In the longer term, of course the question becomes about which of the various alternatives wins out.

I agree about the pressures for coal.  I think everything depends on the hurricanes though.  If we have more hurricane seasons like the last two, and if a scientific consensus emerges that the mode switch is due to global warming, I think the politics of coal will look extremely different in very short order.  My own investigation of the climate issues has changed my view from thinking coal was the obvious stopgap solution to peak oil to thinking we shouldn't even go there.

Comments can no longer be added to this story.
JD on April 12, 2006 - 3:13am Permalink | Subthread | Parent | Comments top
I think everything depends on the hurricanes though.  If we have more hurricane seasons like the last two, and if a scientific consensus emerges that the mode switch is due to global warming, I think the politics of coal will look extremely different in very short order.

That would be a great thing, and I'm definitely on your side. However, even if the hurricanes continue, I still think it's going to take the mother of all political streetfights to keep any fossil fuel in the ground.

Comments can no longer be added to this story.
mcgowanjm on April 12, 2006 - 10:09am Permalink | Subthread | Parent | Comments top
However, even if the hurricanes continue, I still think it's going to take the mother of all political streetfights to keep any fossil fuel in the ground.

But this is where Synergy and the Power Laws come in.

Climate Change is underway.  And instead of preserving
Carbon Sinks, the West does a China.

The Tragedy of the Commons.  Amazonia lose it's Carbon
Sink Status by 2015 (maybe sooner) Kilimanjaro loses it's
Snow Cap by 2015. Expect the Atlantic Thermohaline Conveyor
to quit by 2020.

But that is just the beginning, a report in Nature said last week. Future disasters around the Himalayas will include 'floods, droughts, land erosion, biodiversity loss and changes in rainfall and the monsoon'.

At the same time, rivers fed by these melted glaciers - such as the Indus, Yellow River and Mekong - will turn to trickles.

Even as humans do the Rule of 70, our ecology is screaming
it's loss.

We've got our foot on the accelerator as we slam into the Time Wall.

James
James

Comments can no longer be added to this story.
oil on April 12, 2006 - 11:39am Permalink | Subthread | Parent | Comments top
This is an unbelievably depressing statement.
Comments can no longer be added to this story.
BOP on April 12, 2006 - 2:25pm Permalink | Subthread | Parent | Comments top

 But you cannot dispute the truth of it.
Comments can no longer be added to this story.
popple on April 12, 2006 - 6:07pm Permalink | Subthread | Parent | Comments top
It would be difficlt enough if we merely had to contend with the science, but the BushCheney shuck and jive make any consensus on global warming extremely tough.
Comments can no longer be added to this story.
TJ on April 12, 2006 - 10:20am Permalink | Subthread | Parent | Comments top
Time lags, Stuart.  Any large scale CTL would take decades to implement, and we as a society aren't even to the point of making proposals for that kind of an effort, let alone breaking ground.  And as investment costs inexorably rise with the price of energy, it becomes increasingly less likely that the effort will be made.

Coal burning steam power plants are what worry me as far as CO2 is concerned.  That is what is going to be built over the next ten years.

Comments can no longer be added to this story.
Twilight on April 12, 2006 - 11:56am Permalink | Subthread | Parent | Comments top
I have to agree - we talk about innovation, but we will implement the tried and true, low cost, low risk.  Conventional coal.
Comments can no longer be added to this story.
Oilrig medic on April 12, 2006 - 1:34pm Permalink | Subthread | Parent | Comments top
low cost, low risk = low return

I think there are investors willing to gamble on high risk high return.

Comments can no longer be added to this story.
Twilight on April 12, 2006 - 4:27pm Permalink | Subthread | Parent | Comments top
I'm sure there will be, but I'm not sure what the relevant point is.  Do you think that will represent a significant percentage?  The conventional solution is also the fastest, and therefore will return more quickly.  

There is a reason why conventional is conventional - by definition that's the solution most often implemented.   Do you see forces that would change the equation, and make non-conventional solutions more appealing from a business point of view?  

Comments can no longer be added to this story.
Oilrig medic on April 12, 2006 - 7:00pm Permalink | Subthread | Parent | Comments top
"Any large scale CTL would take decades to implement, and we as a society aren't even to the point of making proposals for that kind of an effort"

"Montana is actively pursuing development of coal-to-liquids technology as a means of converting our significant coal reserves into synthetic gasoline and other fuels. Synthetic versions of petroleum fuels have been made for almost a century, and this technology offers great promise for reducing American dependence on foreign oil."
http://governor.mt.gov/hottopics/faqsynthetic.asp

"How long will it take for America to produce enough synfuel to make a difference?
There are already a number of small plants being designed around America, but a large-scale national effort must involve the federal government and would take a number of years. Given South Africa's success in this field, we should assume that if the federal government became meaningfully invested in this concept, America could have a strong synfuel industry by the next decade."

The last sentence, does that mean by 2010 or 2016?

Anyway this and other tax breaks do make alternatives viable in a business sense. Ten years is not a long time for a major corporation to invest on a known return.  FT method works and is proven.  It is just as conventional as any other current use for coal.

Comments can no longer be added to this story.
Twilight on April 12, 2006 - 7:42pm Permalink | Subthread | Parent | Comments top
OK, then are these as common in recently constructed generation plants that utilize coal?

I was just listening to a report on NPR a couple of weeks ago about how New Mexico (I believe) was trying to force consideration of a coal gasifaction plant, but was having a very hard time.

"Actively pursuing development" is a long way from actual serious proposals.  There's nothing in that link about Montana that sounds like any more than talk - are there any drawings, any plans?  Have they figured out wher they'll get the water from yet? If the answers are no, then they are decades away.  

Comments can no longer be added to this story.
TJ on April 12, 2006 - 10:03pm Permalink | Subthread | Parent | Comments top
Anything by 2010 is impossible.  Say you want 1 mbpd by 2016, which would be a minimal program.  That's five 200,00 mbpd huge coal gasification/FT plants (Montana is trying to find financing for a 60,000 bpd plant).  To make the 2016 date we then have to authorize one $6-8 billion plant every year starting now. Three years from now, when the equipment is delivered, we can start construction on the first.  We have a few years to figure out how we're going to build three or four giant projects simultaneously without the necessary talent.

Except that it's obvious we're not going to start this year, and no corporation is going to make that investment, despite having large profits.  The best shot is that a few governments like Montana will do something.

Comments can no longer be added to this story.
JD on April 12, 2006 - 11:35pm Permalink | Subthread | Parent | Comments top
Good points. Money really isn't an issue. The oil industry already invests about $60 billion per year in the U.S. for exploration and production alone. A lot of that money will naturally shift to unconventional as conventional gradually poops out. The U.S. military is also interested in CTL, and they have a budget of $400 billion a year. $8 billion a year is big, but it's still just a small fraction of what we're spending already to develop conventional.

Also, a lot of the posts here have criticized Laherrere's curve because CTL can't be scaled up to fill such a large gap. But that totally misses the point. It is not the case that liquids=CTL. Lots of things fall under the category of liquids: NGL, GTL, CTL, heavy oil synthetics, tar sand synthetics, sugar cane ethanol, biodiesel. Even CNG can be regarded as a liquid, in that it can be (and is) used to fuel vehicles and supplant demand for conventional oil.

So, that's the liquids dragon you pessimists have to slay. You have to show that the full ensemble of liquids can't fill the gap. Liquids=CTL is a straw man.

Comments can no longer be added to this story.
steverino on April 12, 2006 - 2:42pm Permalink | Subthread | Parent | Comments top
i have to agree...we can hope for a renewable future, but what will happen is the least painful path , as determined by the large mass of people. ...that will be fossil fuel in all it's reflected glory.
Comments can no longer be added to this story.
Boof on April 12, 2006 - 3:45am Permalink | Subthread | Parent | Comments top
If there is a petroleum deficit of say 5 mbpd to be made up with tar sands and CTL I think it will freak people out, whether or not hurricanes continue. For example slaughterhouses are kept off busy highways so the public doesn't have to think about them. Not so when huge swathes of countryside are dug up for alternative oil. Add to that local pollution and water shortages. The guilt factor will kick in and bad weather news will just reinforce it. Therefore I'd put a limit of X mbpd for alternative oil, just not sure what X is.
Comments can no longer be added to this story.
TJ on April 12, 2006 - 8:08am Permalink | Subthread | Parent | Comments top
Look at it a different way.  CTL plants take 6 years and cost $4-5 billion to build.  Oil sands plants aren't much quicker or cheaper.  If there truly was any chance at all of getting 10 mbpd of CTL in 13 years built (that would be 25-30 plants) we would have to be breaking ground now.  We're not.  We do not even have the engineering and construction ability to even come close.

Not gonna happen.  If you want to worry about CO2 worry about old-fashioned coal steam power plants.

Comments can no longer be added to this story.
LevinK on April 12, 2006 - 11:14am Permalink | Subthread | Parent | Comments top
How did you come with 25-30 plants figure? This translates to a whopping 300-350 kbpd per plant... AFAIK the biggest producer of CTL - South Africa is producing 150 kbpd.from its 3 plants, and China is building several plants in the 50-75 kbpd range. Mind you these are still huge.

Not to mention the coal availability constraint - with 70% efficiency 10 mbpd would require about 4 million of tons of coal per day or 1460 mln.of tons annualy. World coal production (2003) was 5408 mln.tons... This would be a 27% increase just for oil! I guess here HO would need to give a hand, but I don't think this is realistic to expect.

Comments can no longer be added to this story.
TJ on April 12, 2006 - 11:38am Permalink | Subthread | Parent | Comments top
LevinK, I was arguing that that much CTL was impossible.

The biggest proposal I ever saw was for 200,000 bpd.  Even that required multiple equipment trains (like multiple air separation plants).  300,000-350,000 bpd is a WAG  for the biggest plant that would still have any economies of scale.  Could be wrong.

Of course you're right that the mining probably couldn't keep up, unless again we had already started to expand it.  Just another reason to disbelieve any big alternative liquids production ever coming online.

Comments can no longer be added to this story.

172 comments on Wednesday Open Thread and News Dump

Comments can no longer be added to this story.

| Show without comments | PDF version