50 comments on Deep Ocean Energy Resources -- A Critical Analysis
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The OCF oil and gas is interesting, to me at least, because it promises so much, or is nothing but a pisss in the sea, depending on who you listen to.
What can we actually know? Well, let's take a quick look at some "big picture" thoughts and conclusions:
- If the OCF lived up to it's fullest projected potential, it would have a BIG impact on the U.S. oil/gas situation, for awhile at least, and there is always the possibilities of surprise to the upside, ala a North Sea type find hiding out there, which would re-revolutionize oil/gas economy as the North Sea did in the 1980's (as "Brent North Sea" influence fades, will we see a new bourse, perhaps "A&P (Atlantic Pacific) New York Index. It is not impossible.
- What is known is very little. The technology developed since OCS has been explored years ago is nothing less than staggering. The old numbers are now essentially useless.
- The greatest potential impact is in natural gas, and there is a backside to the sword on this one. Would you pour billions of dollars, and spend years in court on lawyers to try to establish an LNG (Liquified Natural Gas) facility and contracts, fearing the onslought of OCS natural gas flooding the market?
Opening the OCS risks destroying investment in LNG and pipeline development. That may be a good thing, or a bad thing, depending on your point of view.- OCS natural gas creates the potential for a new "dash to gas" if it shows real potential of materializing. The problem there is that the "dash" could outrun the "gas". The well respected NPC (National Petroleum Council) "Balanced Options" natural gas report projected a shortfall on natural gas production vs. consumption, EVEN ASSUMING a complete opening of OCS and all moratoria areas by 2006.
- Opening OCS only increases the logistical log jam in the petroleum drilling equipment, and workforce area. If the gas and oil actually turns out to be there, it could create a boom in oil services/oil and gas equipment area unprecedented in the history of the industry.
- Lastly, is opeing OCS good news or bad? It can be taken either way. It indicates that we somehow think we can still avoid frugal use of oil and gas, and that we are showing every sign of wasting the very, very, valuable time the oil and gas cuould buy us. If it drives prices down, the waste will be unbelievable. The CERA "happy news" types will use it as justifation of an "all's well" view of the petroleum situation. On the other hand, the Colin Campbell school of peakers can smile wryly, and point out that this last blast of "throw it all open, desperation drilling" was predicted as the final phase of the fossil fuel age all the way back to Hubbert and the birth of the Peak Oil Theory.
Take from it what you will.Roger Conner known to you as ThatsItImout
The only real answer is to do a far more in depth study but
on the same hand if there are not significant finds then we don't need to worry about the environmental impact.
One thing I can say is that if the US as a wealthy country finds a large reserve it should exploit it. Simply because right now and in the future with high prices its the poor countries that suffer.
I may post about doom and gloom but I'd love to not see peak oil happen. I wish it was in 30 or better 100 years because I'm convinced it will be very bad for mankind.
I am somewhat the flipside. :-) I am an optimist by the standards of the peak types, but I do agree with you that a fast surprise "peak" and even more importantly, a fast dowslope post peak could cause great suffering, at least for awhile, until consumption could be readjusted/stabalized.
Your sentence,
"One thing I can say is that if the US as a wealthy country finds a large reserve it should exploit it,"
Creates two questions for me, however. First, If we take the position that "we should exploit it", should we not really lean hard on policy makers, technicians, peak aware folks, etc., to answer, "yes, but what else should we be doing while we 'exploit it'. The most catastrophic outcome would be a repeat of the 1980's, in which new reserves were found, exploited, and only served to drive the price through the floor and create an orgy of waste, and at the same time kill off all interest in alternatives for a quarter of a century! Think of that for a moment, almost a quarter of a century completely wasted, and the "new large reserves" destroyed! And with no alternatives developed for the end of that road!
Second, we have to decide whether we take CO2/greenhouse gas/global warming seriously. The waste of "new large reserves" would of course push up CO2 emissions by leaps and bounds. In the recent Rolling Stone Magazine interview he did, Al Gore essentially phrased the argument in such a way that Peak Oil was a secondary and side crisis compared to Global Warming.
If we accept that logic, new large reserves would only speed the more dangerous of th two catastrophic outcomes, massive global warming.
Do we? This is the problem in trying to "convince" the masses about Peak Oil.
What it sounds like to the public is convoluted logic:
"There are no solutions, and even if there are, you can't use them. We are are running out of oil, which is catastrophic, but if w're not running out, that is even more catastrophic." "The fossil fuel age is over, and if it's not, we're in even greater trouble."
The whole thing keeps running in a logical circle, until it runs the risk of devouring itself by it's own tail.
Roger Conner known to you as ThatsItImout
My point is there is no doubt that two things are going to happen for sure.
1.) The world will drive there cars until you pry the keys out of there cold dead fingers.
Our government will not mobilize until maybe sometime after a new administration comes in (2-4) years.
They will react badly at first 1-2 years.
There will be tremendous pressure for CTL/GTL/Oil Shell/Shelf exploitation anyway.
2.) The third world will bear the brunt of the first years of post peak oil.
So by bringing new oil onstream to lessen the slope of depletion even though we won't really do else were helping the poorer countries do power down more gracefully.
I think its way to late to engage in trying to educate the American public since the turnaround time is measured in years if not decades.
Lets take sulfur emissions how long did it take the get those under control ? Almost 20 years.
Global Warming Few Kyoto signers actually controlled their emissions the US Hah.
I'm not saying not to keep pounding forward educating the public but I'm a lot more comfortable if we begin to exploit every oil source possible now then later since were going to do it anyway and if we wait much longer were simply damaging the environment with little effect on the peak.
Aggressively going after non-conventional oil now could significantly reduce the initial effects of peak oil buying time for a decent power down. Waiting till significant declines have happened and "demand destruction" i.e. the third world has gotten screwed simply destroys the environment for no reason.
I truley believe that the world will face significant decline rates soon 8%+ mainly from the depletion profiles caused by advanced extraction methods. It the rate of depletion that is the killer not depletion itself.
We cannot handle a 8% decline rate 1-2% will be very tough worldwide.
Now this is were transparency from OPEC is critical if we are really facing 8% decline rates then OPEC is killing more people then hitler or stalin could ever think to kill.
If I'm right I think the future will show the lack of transparency on the part of OPEC was the biggest crime commited in the 20th century.
I don't understand your last comment. How can OPEC's lack of transparency be a crime? They have no obligation to provide the world with cheap oil. If they lie about their reserves, so what? It's their oil, they can do what they want with it. The real crime is the plunder of their resources by the Europeans and the US until their oil was nationalized in the 60's & 70's.
It is the rest of the oil-consuming world's responsibility to develop sustainable lifestyles. Alas, at this point it seems inevitable that the US may well experience the greatest decline of a world superpower in the history of the world as peak oil arrives. Placing the blame for this on anyone but ourselves is arrogant and short-sighted.
I think your mixing low consumption in the African countries with critical consumption. Its the diesel that powers the clean water well or gets perishable goods to market on time or powers the ambulance. They certianly don't wast oil which means what they do use is critical.
See
http://www.eia.doe.gov/emeu/cabs/archives/africa/africa.html
The point is the have the highest engergy cost per GDP thus
every increase removes some fairly critical usage.
Sure they use a lot of wood but not in a sustainable way.
Next I don't separate Oil producers from consumers since there in this game together. I assure you if depletion is quick the oil producers will bear the brunt of the troubles.
Ask an Iraqi.
The oil based economy can fall apart very quickly once its known that supplies are running out and there are disruptions.
None of the oil producing nations outside of Russia have sustainable economies. There is no doubt in my mind if America crashes hard it will take everyone with it. If the depletion in the Middle East is real then for them and the governments that do know about it to hide it is a crime since it could lead to the deaths of BILLIONS.
Finally I think it is too late to prevent major disruptions in America but look at it this way our current oil production internally is plummeting we need secure oil supplies Mexico is pretty much a goner and the oil sands won't come on line fast enough. Were not going to be able to play the invasion card that many more times and oil production in a war zone as we have seen is problematic at best.
But its gonna take a lot of oil to kick the oil habit we have to used our oil based infrastructer to create these new electric rail lines and vitalized urban centers its a massive construction project.
Start working through the material and energy costs of de-oiling america there tremendous. We will need every barrel of oil we can get our hands on when we finally wake up and do something about it.
So figure we won't do anything till the second year post peak work a forecast for say 2% 4% 6% 8% depletion rates.
Add in some fairly massive demand destruction to some extent esp in the 3rd world. We would at that point have given up a lot of our excessive usage and simply from recession.
But take a good hard look at Africa they can't seem to get out of the quagmire there in and the root cause is lack of resources to create infrastructure. It takes money to make money. If were not careful to much of the world will tilt into the same situation as Africa.
Sorry for the rambling but yes at some point times will get very very tough world wide and we will need every drop of oil and coal to make it through it. And if you remove the small amount of oil that Africa can afford from there grasp you push a whole continent that not doing well into desperate straits.
How to finish...
Get everything we can into production depletion and skyrocketing prices will take care of wasteful demand and maybe if we do this we can keep Africa going and get our economy converted.
A very good point. It worries me some that a number of people think loosing your kerosene lamp and stove is less troublesome then loosing your car and moving to a shared apartment. As if complete hardship is easier for the poor then some hardship for the rich who on average has electric lights and piles of old resources around them as fallback.
> None of the oil producing nations outside of Russia have sustainable economies.
Norway has one.
I am afraid that I have to agree with Memmel on the sentance:
"I think the future will show the lack of transparency on the part of OPEC was the biggest crime commited in the 20th century.", and I have made this opinion clear in prior posts. In todays interlinked world, simply because you own an asset does not give you the right to be secretive, and go even further and possibly be outright misleading in your public pronouncements if you wish to be an accepted and trusted supplier and modern world player.
Every modern and trusted player on the world stage, be it large company, charitable or non-governmental not for profit, and/or natianal or governmental entity is now expected to accept standard accounting practices, outside auditing, and third party confirmation or oversight, if it expects to be accepted as modern and trusted, with the stunning exception of the energy industry, that most CRUCIAL of all modern industries. It is truly outragous and astounding.
OPEC, and it must be said, others including private large oil firms and other governmental oil concerns around the world and energy information agencies, go further than just being secretive and silent, but instead are perfectly willing to put out their own brand of decietful "dis-information" to sway events. This only serves to even further expand their crime of "lack of transperency" and make it a crime of misleading and false statements, false advertising (Exxon, remember?), and when they give this testimony to the U.S. government and other international governmental judicial bodies and legislatures, it elevates it to outright perjury and obstruction of justice, as well as falsifying evidence, evidence needed in the preservation of whole nations.
Memmel is correct. If the "doomsters" are correct, and against all the misleading, lulling, comforting testimony of the oil companies and OPEC, a rapid and soon occuring decline in world oil production begins, the OPEC cartel and the private oil companies should be held accountable for making proper preparation all but impossible to win support for through their misleading statements and secretive policies. Allow me to quote the phrase that goes right through me..."well, BP and Exxon say....and they ought to know....", which is used by every man and woman on the street to shoot down any cause for concern, and instead to continue the waste and poor policy of business as usual.
I have made this case before. If the "peak aware" community has awoke us to a great imporatant fact that is ALREADY a fact ( because peak, let's admit, we just don't when or how it will occur yet), it is this: The United States and the industrialized modern world is in a very dangerous position in running completely without guidence and forward visibilility. It is like running a car down a dark road at night at high speed with no lights. Nothing may go wrong. But do you want to take that chance? And if you should hit someone or something in the dark, do you think you would be held legally accountable for your actions?
The same goes for OPEC, the private oil firms, the EIA and the IEA and the USGS, among others. (CERA for instance, should be sued out of existance if they are as wrong about crude oil as they have been about natural gas, and keep spreading the same disabling and lulling propaganda when once they clearly know better.
In the meantime, every responisible business, Civil Defense agency, local, municipal, county, state and federal agency, along with critical services and utilities, hospitals, and on and on, have a civic obligation, and a fiduciary responsibility to their stakeholders to inform them of the blindness we are running in and the need to prepare as though the worst could happen. One of the great services the Peak Aware community performed for me when I first discovered them (and TOD, by the way :-). was to help me see that what I thought "we knew" we most certainly did not "know", and to see the danger of the complete lack of forward visibility we are living with. (I was blind, but now I see that I was blind, and that is a great bit of sight indeed!)
This is a service "we" must keep performing. It is one of the most valuable services of the peak aware community. Thank you.
Roger Conner known to you as ThatsItImout
If you are talking about predicting prices, then lots of PO advocates were wrong historically, too.
I don't follow CERA's oil production numbers closely as they don't release it to public, but from what I understand of them is that they got great respect in estimating future production with a proven track record.
Is that wrong?
What about Mr. 5%?
The oil majors had a better use for Iraq's oil than drilling it - not drilling it.
http://peakenergy.blogspot.com/2006/07/greening-antarctica.html
I may post about doom and gloom but I'd love to not see peak oil happen. I wish it was in 30 or better 100 years because I'm convinced it will be very bad for mankind.
If you think Peak Oil now will be bad, what it would be like in another 30 years (let alone 100!) doesn't bear thinking about. The longer we have before the peak, the further down the path of unsustainable development the world will go. What we really need is Peak Oil now (or, as some TOD commentatorrs have been saying, Dec05) and then a slow slide down.
We may very well have reached the Peak & I certainly hope so, though I'm not yet willing to bet that we have. Will we have a fast (8% p/a) slide or a slow (2% p/a) one? There's a world of difference in the consequences and I'd like it to be the latter, but if it's the former, I'd rather live to see a peak & an 8% slide now than have my kids see it in 30 years.
The fact that many large fields may be going to suffer 8% annual production falls is quite bad news. I seem to remember, however, someone with more maths & technical knowledge making a case that, even if individual fields are going to decline at 8%, the pattern of new fields coming on will mean a much slower overall decline - which which would be much better.
As far as having new fields come on line through opening up new exploration provinces, I think it would be best if it happened later rather than earlier. The last thing we want is to drive down the price of oil so far that people can think it's safe to buy a SUV again & Peak Oilers are just a bunch of Chicken Littles. It's best if the oil comes on stream when the whole world knows that using it frivolously is a crime and we have to treat it as an energy bank for the transition to a sustainable future.
Later allows more technical innovation we are just now researching how to wean the world from oil. 30 years buys time. I don't think technology will save the day but it will certianly help. There are a lot of technologies that will make a post oil world a much better place.
1.) Ultra high density capacitors ( this is a simple physics problem of surface area of a conductor )
2.) Better lighter batteries.
3.) Cheap solar cells.
5.) Super conductors.
All of these make electricity storable.
Finally decent fuel cells.
There is a tremendous amount of commercial work in all these areas because of laptops and mobile phones so there being well explored without regards to transportation issues.
Next I don't believe anything we do now will prevent peak oil we will face it.
Oil like the coastal housing markets will face the same pricing pressure once demand exceeds supply not only will it go up but it will go up exponentially.
Think about it if we start this oil exploration new its 5-6 out at least before stuff comes on line if not longer and if there is anything there is the first place.
And added benifit is that if the SUV drivers have to deal with a oil well in their backyard maybe they will wakeup to peak oil.
Its amazing that no one is wondering why we have to do this now since the goverment couches it in terms of secure oil not peak oil ( bastards).
Thanks a lot guy!!!!!!! You must be in the 30/40 age groupe.
Don't let it happen to me, let happen to someone else on down the road.