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136 comments on DrumBeat: February 26, 2007

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PeakPlus on February 26, 2007 - 9:47am Permalink | Subthread | Comments top

Norsk Hydro makes significant new oil and gas find in Barents Sea
300-500mbl - million barrels, right?
That mean 4-7 days of world oil consumption. Or have I missed something?

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Bruce Scott on February 26, 2007 - 9:52am Permalink | Subthread | Parent | Comments top

Just to add to PeakPlus: my point is that a find of 0.3-0.5 GBl is a pin prick and that during earlier times nobody would have made a big deal of such a find.

What these journalists should do if they're at all professional is to put their reports into perspective: tell the readers how small the find is compared to previous years and let them know (1) what the hype threshold would have been back then (say, 1970s) and also, as PP notes, how many days that is in terms of either the world consumption or the US/EU consumption.

Bruce Scott in Duesseldorf

drift wave turbulence: http://www.rzg.mpg.de/~bds/

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CO2 on February 26, 2007 - 10:22am Permalink | Subthread | Parent | Comments top

This hype and lack of basic math skills is also the reason why ANWR oil development continues to make the "addicted to oil" talking heads in Washington salivate.

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sf on February 26, 2007 - 10:42am Permalink | Subthread | Parent | Comments top

ANWR is 25 times more than this discovery. That is enough to matter. It is almost inevitable that this area will be developed eventually. But it will be a lot more valuable post peak when we are all driving micro-mini cars or taking public transit.

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ET on February 26, 2007 - 11:43am Permalink | Subthread | Parent | Comments top

ANWR may be or may not be 25 times more than this discovery. As I understand, the SWAGs for ANWR are just that, Scientific Wild-Ass Guesses.

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sf on February 26, 2007 - 12:14pm Permalink | Subthread | Parent | Comments top

There was a test well. That makes the estimate 10 gb better than a SWAG.

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elwoodelmore on February 26, 2007 - 5:47pm Permalink | Subthread | Parent | Comments top

one test well 10 gb ??????? roflamo

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Jack on February 26, 2007 - 8:43pm Permalink | Subthread | Parent | Comments top

I also understood that there had been one test well drilled in ANWR, but that the findings were not public.

I did a fairly intensive search of the EIA, though, and could not find any reference to the test well. Instead estimates of oil resources seemed to be based on comparisions of other areas with similar geographical structures.

Does anyone have any more solid data on what we actually know about potential resources in ANWR?

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elwoodelmore on February 27, 2007 - 7:38am Permalink | Subthread | Parent | Comments top

the 10 gb figure is apparently the mid range of usgs estimates, based on very limited information, making lots of assumptions and applying monte carlo simulation.
when i first started learning fortran* the prof had a saying "gigo" (garbage in garbage out)

* that was back in the days when programing was done on punch cards (shortly after we graduated from basic programing - the programs were saved on tickertape)

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ET on February 26, 2007 - 10:23pm Permalink | Subthread | Parent | Comments top

Here are a couple of links on KIC-1 'The only test well drilled in ANWR' with its results still held confidential by Chevron.

http://www.gasandoil.com/goc/company/cnn11977.htm
http://anwrnews.blogspot.com/2005/04/aint-it-kic-story-of-anwrs-only-wel...

Like I said, SWAG, unless somebody has news of a more recent, and public, exploratory effort.

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HeIsSoFly on February 26, 2007 - 2:10pm Permalink | Subthread | Parent | Comments top

No realistic estimate that I can find goes beyond 7-800 kbd, and many go lower. Which is a lot, but still maxes out at just 3% of US daily use (today's consumption, no growth included).

And it's an optimistic number, and disregards the costs and uncertainties inherent in the operation. Look at what happens at the Sakhalin projects, how the deep freeze differs from normal extraction. Cost predictions double every 2 years, Putin gets angry etc etc.

If, for example, the ANWR oil turns out to be twice as expensive to extract as the oilsands, what will happen? What if the oilsands' oil gets twice as expensive as it is now? Hard to predict, except that the price'll move upward, not down.

All of these estimates are on the "happy"side, but we will be in for some nasty surprises.

What's going to happen to ethanol fuel prices if the cost of corn, or grains in general, quadruples?

Might as well get your investment advice in Vegas.

Oil in the ANWR

Numbers are bandied about by both sides - those for drilling say that there is 30 years-worth of Saudi imports of oil available, and that drilling will enhance the national security and lessen dependence on imported oil (especially from the volatile Middle East.) Opponents say that the ANWR will supply less than 3% of US annual oil use, and that the price for drilling this small amount of oil will be the destruction of unspoiled land and the ANWR's flora and fauna.

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The estimates of the technically-recoverable oil (i.e. ignoring the market price) in the 1002 area are as follows: There is a 95% probability of being able to technically recover 4.254 billion barrels of oil, and a 5% probability of recovering 11.8 billion barrels of oil. The mean expected estimate is of being able to technically recover 7.7 billion barrels of oil. Using the graph on the right we see that at an oil price of below $13/barrel no oil is commercially recoverable, while at an oil price of $30/barrel the 95% probability estimate is 3.2 billion barrels of oil, the 5% probability is 10.4 billion barrels of oil, and the mean expected estimate is 6.4 billion barrels of oil. At an oil price of $24/barrel the mean expected estimate comes in at 5.2 billion barrels of oil.

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sf on February 26, 2007 - 2:54pm Permalink | Subthread | Parent | Comments top

OK, I will buy 7.7 gb as a reasonable estimate. By the time this comes on line, the price will probably be well over $100/barrel. It's hard to imagine the technical/economic problems there being more challenging than deep water oil, or tar sands.
There is no environmental free lunch for oil (except conservation) The potential environmental nightmares for oil shale and stripmined tar sands are probably worse than ANWR. Chronic marine oil spills have a comparable impact.

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radlafari on February 26, 2007 - 10:09am Permalink | Subthread | Parent | Comments top

That mean 4-7 days of world oil consumption. Or have I missed something?

I think that is correct. But 500 million barrel of oil also translates into 30 billion dollars (at the current price of $60 per barrel), and maybe thats the countervalue oil companies prefer to think of.

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Mriswith on February 26, 2007 - 3:42pm Permalink | Subthread | Parent | Comments top

What I found strange is how this "news" made it all the way to Forbes. Because when I read the original article, I definitely got the impression that the 300-500mbl number was pure speculation ahead of the Norsk Hydro information that is to come out sometime in march. (I haven't had time to check out the printed edition though). Similarly there has been speculation that Eni's Goliat field may actually contain as much as 900mbl (from memory) rather than the present 250mbl.

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