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DrumBeat: November 27, 2007
Posted by Leanan on November 27, 2007 - 10:02am
Topic: Miscellaneous
Industry experts offer mixed opinions on speculative investment's impact on oil prices. Some say it's marginal, that strong demand and limited supply are the real reasons oil prices have risen five-fold since 2002, and say additional investors actually benefit the market by adding more liquidity.Others say the tight supply and demand situation has been known for a while, and nothing but speculation is behind the doubling of oil prices over the last year. They say there is a cost to the sheer number of oil contracts now traded on the oil exchanges, and this trading has just enriched Wall Streeters at the expense of average Americans.
Conoco cancels refinery upgrade on North Slope
Conoco Phillips says it's canceling a major North Slope project because the new oil tax denies deductions for the work, but the state revenue commissioner says the company never deserved the tax breaks in the first place.
Nigeria threatens stiff penalties for gas flaring
Nigeria's oil industry regulator threatened on Tuesday to impose hefty fines and other penalties on firms that continue to burn off gas beyond a 2008 deadline.Oil companies in Nigeria flare about 2.5 billion cubic feet per day of gas associated with the extraction of crude because there is no infrastructure to make use of it. Only Russia flares more gas than Nigeria.
Rural Australians to pay price for climate change
A study of the costs of climate change has found rural communities will pay almost twice as much as city dwellers for the effects of environmental degradation.
Oil Trouble: How high can the price of a barrel of crude go?
The last time oil prices were this high was more than a quarter-century ago. Then, too, the Middle East was aflame. Following the 1979 overthrow of the shah of Iran, revolutionaries had taken Americans hostage at the embassy in Tehran. U.S. forces later mounted a failed rescue mission, prompting worries of escalating conflict. Now tensions with Iran are roiling again, as President Mahmoud Ahmadinejad vows to continue his country's nuclear program in defiance of the United States and other Western governments. Global demand for crude is growing, yet the business of finding and developing new oil fields is becoming more expensive. On Monday the price of a barrel of oil briefly topped $99.04—a level last reached in April 1980 (after factoring in inflation), according to Cambridge Energy Research Associates. How high can oil prices go, and what impact will they have? James Burkhard is managing director of the Global Oil Group at CERA, a private company that advises governments and corporations on energy trends. He spoke to NEWSWEEK's Jeffrey Bartholet.
OPEC Discusses 750,000-Barrel-a-Day Output Increase
The Organization of Petroleum Exporting Countries is discussing a 750,000-barrel-a-day increase in production because of concerns about the effect of oil prices on the U.S. economy, Dow Jones Newswires reported, citing an OPEC delegate it didn't identify.There is "a lot of concern" about a possible U.S. recession with oil prices at current levels, Dow reported the delegate as saying.
Pemex begins dismantling damaged oil platform off Gulf coast
Mexico's state-run oil company has begun dismantling a damaged oil platform off the Gulf coast.Pemex decided to take down the platform because heat from near-constant fires have made it unstable. In a statement released yesterday, the company said engineers have successfully removed the platform's drilling rig.
As the Price of Oil Soars, Many Turn to Renewables
Thomas M. Rainwater spent 25 years in what people today call the traditional, old-fashioned energy business. An engineer by training, he worked at nuclear and coal-fired power stations, was a marketing executive for a natural gas producer and pipeline, and finally a top strategist for a Canadian power-generation company with a market capitalization of $5.5 billion.Then in July Rainwater moved to the Washington area to become chief executive of SunEdison, a Beltsville company that is building and servicing solar panels on the rooftops of warehouses, supermarkets and other commercial buildings around the country. SunEdison is a tiny fraction of the size of his former employer, but Rainwater said "there is growing recognition across the land, across the globe, that we need to do something different to fire the economy."
Shell halts oil sands mining to fix upgrader
Royal Dutch Shell said on Monday it has suspended bitumen production at its oil sands mine near Fort McMurray, Alberta, as it works to repair a fire-damaged upgrader that converts the tar-like bitumen into synthetic crude oil.
Protest causes drop in Ecuador oil output
Ecuador's national oil company Petroecuador has said that it incurred the loss of some 5,000 barrels of oil output because of a weekend protest that disrupted operations at a key production facility, Spanish news agency EFE reported Tuesday.The state-owned oil major said that the shortfall would mount unless the facility returned to normal and may have unpredictable impact on price.
Oil Tankers Owe Strength to OPEC
Notka said the spot rates on the Very Large Crude Carriers, or VLCC’s, have jumped in the Arabian Gulf in the past few days. Last week, VLCC’s averaged $33,000 per day. On Monday morning they spiked to $84,000 per day, a level not seen since August 2006. The number of vessels being chartered has jumped significantly, limiting the supply of ships, Nokta said.
Seven Questions: The Price of Fear
Something funny has happened to the price of oil: It no longer reflects reality. The reason, according to Fadel Gheit, one of Wall Street's top energy analysts, is that “financial players have seized control of the oil markets”.
Russia agrees to Turkmenistan gas tariff hike in 2008 - Gazprom
Russia has agreed to a substantial increase in the price of gas imports from Turkmenistan, gas monopoly Gazprom said in a statement on Tuesday, amid concern that the hike could raise prices for European customers.
The Economic Community of West African States (ECOWAS) was formed to promote economic and development growth in West Africa. Major exports from the region include energy products, minerals and agricultural products.
Consider the countless policy challenges that radiate from the central matter of the fuels used for transportation, heating, electricity generation and manufacturing. Chief among them is the rapid approach of peak oil, the point at which the availability of petroleum-based fuels begins to decline. As oil becomes scarce, diesel, gasoline and home heating oil become more costly. Those costs could begin to cripple the U.S. and world economies; their impacts are already being felt.
New Zealand: Campaigner Moore kicked out of council meeting
Mr Moore was making a public comment at the beginning of last night's monitoring committee meeting when his heated presentation - in which he called councillors and staff both criminally negligent and clinically insane - prompted several calls for his removal. Numerous calls for order from new committee chairman councillor Neil Wolfe were ignored by Mr Moore who continued his tirade....The presentation Mr Moore had been making urged council to prepare for the effects on the district of peak oil and climate change.
Rich and poor gird for climate change
People around the world are preparing for floods, droughts and other natural disasters in ways largely dictated by wealth and poverty as evidence of climate change mounts, a United Nations report said on Tuesday.
Smart appliances learning to save power grid
Researchers at an appliance lab that looks more like a utility room are fine-tuning washers, dryers, water heaters, refrigerators — even coffeemakers — to help ward off the type of colossal power failures that plunged much of the Northeast into darkness in 2003 and blacked out big chunks of the West in 1996.If you’re a bit skeptical as to whether subtle tweaks to your dryer or dishwasher might help keep the lights on, you’re not alone. But in two related experiments, scientists from Pacific Northwest National Laboratory in Richland, Wash., found that providing homeowners with smart appliances and information on how to save money cut their energy costs but also reduced overall power consumption during peak use periods, when the nation’s aging power grid is most susceptible to breakdowns.
Saudi oil minister says pumping 9 mbpd, no OPEC comment
Saudi Oil Minister Ali al-Naimi said on Tuesday the world's top oil exporter had raised output to 9 million barrels per day (bpd) in line with OPEC's November 1 agreement, but offered no clues about the group's next meeting.The Organization of the Petroleum Exporting Countries (OPEC) agreed in September to pump an additional 500,000 bpd from the start of this month, but that increment has failed to stop oil prices from surging to record highs near $100 a barrel.
Where EOR Succeeds and Where it Does Not: Big Thermal EOR in California, But Where Else?
Industry’s Holy Grail for EOR was to develop a series of processes that would extract an additional increment of oil, i.e. tertiary oil, after primary and secondary reserves of conventional oil fields were depleted.However, despite nearly 60 years of R&D, followed by untold applications in fields across the U.S., only one group of processes, miscible gas injection (MGI) successfully extracted significant volumes of oil from fields with light or medium weight oil. But these successes were restricted to productive formations with unusually low permeabilities. MGI did not improve oil recovery to an appreciable degree from formations with moderate or good permeabilities.
John Michael Greer: Adaptive responses to peak oil
One of the occupational hazards of writing a blog on the future of industrial civilization, I’ve discovered, is the occasional incoming missive from somebody with a plan to save the world. My inbox fielded another of those the other day.
Localise and go organic to avert post-peak famine - Heinberg (podcast)
Agriculture must localise and convert to organic production methods without delay if the world is to avoid famine, according to a leading thinker on peak oil.
Ford Chairman Says New Fuels Are Developing Too Slowly
The chairman of Ford Motor, William Clay Ford Jr., expressed frustration Tuesday night at the slow pace of alternative fuel development, saying industry leaders expected better progress by now.
Big Oil PR blitz suggests the un-reformed industry just wants to be friends — so shut up!
Ever since Americans were forced to juxtapose the devastation of New Orleans with the record-breaking oil-industry profits that followed, companies like British Petroleum, ExxonMobil, ConocoPhillips, and Chevron have ramped their advertising campaigns into overdrive.
In Miles of Alleys, Chicago Finds Its Next Environmental Frontier
Chicago has decided to retrofit its alleys with environmentally sustainable road-building materials under its Green Alley initiative, something experts say is among the most ambitious public street makeover plans in the country. In a larger sense, the city is rethinking the way it paves things.
Fuel quest may create food crisis
THE world is in danger of running out of basic foodstuffs, according to a leading Australian economist.The shortage will create further dramatic price rises in essential grains such as wheat and corn, accompanied by a tightening of supply, says ABN Amro Morgans chief economist Michael Knox.
Mr Knox blames much of the supply and price crunch on the international demand for grain to be used to manufacture bio-fuels such as ethanol.
"Some people worry about the world running out of oil. They should worry about the world running out of food," he said in a recent paper.
Can crude oil price be stabilised?
At a recent oil and money conference in London where important figures in global energy with over 700 participants brainstormed to assess the state of the global petroleum market, little did they know that Hubert peak oil output prediction some decades back will stare the world in the face so soon. Peak oil output according Dr Shokri Gbanem, chairman of the peoples committee of the National Oil Corporation (NOC) of Libya is not about the time at which oil will be exhausted, but the time at which production can no longer be increased to cope with increasing demand and the only way the oil price can go is up.
The faulty forecasts, Groppe says, reflect a reliance on the flawed work of the International Energy Agency. His group gathers its own data.For example, the IEA last year forecast a major rise in production by nations outside of the Organization of Petroleum Exporting Countries. The actual increase was tiny.
"The Saudis made a mistake taking the IEA forecast seriously and cutting production when they should not have done it," Groppe said.
Iraq’s Uncertain Oil And Political Prospects (Part 1 Of 2)
It is common knowledge that Iraq has the second-largest proven oil reserves in the world, with no less then 115bn barrels, and probable reserves of around 250bn barrels. But why is that Iraqi oil does not account for more than a fraction of global oil supply? In fact Iraq has made an average of no more than 2.0mn b/d of its oil available to the world market for almost 27 years, with the exception of a few spells when production exceeded that.
UK Facilities Face Energy Crisis
"It's a time of great change; we've witnessed a shift in emphasis. No longer is data center capacity being driven by space alone, it's now about availability of power," says Peter Knight, CEO of Adept. "In addition, significant consolidation of data center operators, absorption of old capacity and a shortage of new sites being built mean colocation now carries a scarcity value. With demand outstripping supply it's clearly not a buyers market, meaning the corporate sector will be under serviced. London is suffering particularly badly because of soaring demand."
Israel: Delek chairman Last warns Ben-Eliezer of fuel crisis
Sources inform ''Globes'' that Israeli fuel companies are warning the Ministry of National Infrastructures of a pending fuel crisis because of problems in the transport of fuel from Ashkelon fuel terminal to Ashdod.
The steady climb in fuel prices continues to be a challenge for truck drivers and trucking companies."The more expensive fuel gets the higher the cost of transportation gets, especially road transport."
And the price of fuel is expected to continue to rise.
Nepal: Farmers protest petroleum shortage in Dhangadi
Locals in the far-western region took out a jar rally in Dhangadi Municipality, Kailali to protest the ongoing petroleum crisis in the region Tuesday morning.They also staged sit-in at the regional office of Nepal Oil Corporation (NOC) demanding supply of petroleum products since 10 in the morning.
Local farmers were enraged after they could not get diesel in the current wheat farming season.
China economic planner says fuel shortage to ease 'very soon'
China's fuel shortage will ease "very soon" because the government is requiring refiners to increase crude runs and lift fuel supply limits to some regions, the country's economic planner said Tuesday in a statement on its Web site.
China: Fuel oil futures surge 4.4%
Spurred by rising global crude oil prices, Shanghai fuel oil futures yesterday surged 4.4 percent, the biggest one-day increase since early 2006, reaching the highest level since the contracts began trading in 2004.
North Dakota needs more fuel opportunity
Here is an interesting twist; North Dakota now produces about 125,000 barrels of crude per day; just under half of that is refined in-state to fuel products; the remainder of the crude and much of the refined product is piped out of the state (amount not specified at the meeting).During this shortage period from late summer to present, the pipeline terminals at Fargo and Grand Forks have been out of product or severely limited.
As a result, tanker trucks must go to Alexandria, Minn., or further, to wait in line sometimes for 12 hours, to get product and haul it back into ND. This gasoline and diesel product may be the same product produced at Mandan, now being hauled back.
Michigan's road-fix shortage: $300M
The projected funding decline is linked to shrinking state gasoline tax receipts and the completion of a three-year, $800-million Granholm administration program that used bonds and private investment to accelerate work on some key road improvements intended to foster economic development."The condition of our roads will get worse as each year goes by -- actually as each month goes by -- and they're already in bad shape," said Mike Nystrom, a construction industry spokesman who co-chairs a state coalition that has pressed for a 6-cent boost in the 19-cent state gasoline tax and 10-cent increase in the 15-cent diesel fuel tax to shore up road repair revenue.
Thailand: Bio-fuel use soars in first 10 months
Consumption of alternative energy has soared with bio-diesel use skyrocketing by over 1,000 per cent and natural gas for vehicles (NGV) more than doubling.Mettha Bunthuengsuk, director-general of the Energy Business Department, conceded that NGV is now unavailable for sale in some areas since there is a shortage of gas cylinders.
Oil prices continue to fall: Traders bet OPEC will raise output next week
Many traders believe Saudi Arabia is pushing for production increases against opposition from Iran, Venezuela and other OPEC members. CNBC reported Monday that Saudi Arabia has already boosted its oil output. Analysts said that confirms reports last week by two research firms that found OPEC production is rising faster than expected.But Vienna’s PVM Oil Associates noted that OPEC’s seaborne oil exports in the first half of November dropped 340,000 barrels a day from the second half of October to 22.48 million barrels a day.
No need for now for December OPEC output boost: Qatar
There is no need for OPEC to boost oil output when the producer group next meets on December 5, Qatar's Oil Minister Abdullah al-Attiyah said on Tuesday."My personal belief is that for the moment there is no need to increase production," he said.
India's refining hub to be largest in world
The expansion projects will bring their combined refining capacity at Jamnagar to 1.9m barrels a day, the largest in the world in a single location, outstripping hubs such as Rotterdam and Singapore and those in China and South Korea, according to figures compiled by Fesharaki Associates Consulting and Technical Services, Singapore.The plants at Jamnagar will mostly handle crude imported from the Middle East for refining and re-export, underlining India's growing role as an offshoring hub not only for computer services but also for more traditional industries.
Some OPEC Members Seek Non-Dollar Payment For Oil
Venezuela will continue to push a proposal within the OPEC to find a new reference measure for crude prices and to eventually demand payment for crude in some other currency than the dollar, the country's oil minister said Tuesday."We're working on a scheme to, first of all get paid in an alternate currency (other than the dollar) and to search for a new crude reference," Oil Minister Rafael Ramirez said during an interview on state television. "The Brent and the West Texas Intermediate (crude indicators) are both pegged to the dollar," and that's no good, he said.
Gazprom plans underground storage near Berlin
Russian gas monopoly Gazprom said Tuesday it had bought mining rights north of Berlin that would allow it to build Europe's biggest natural-gas storage site.The controversial North European Gas Pipeline (NEGP), to be built under the Baltic Sea, will supply the gas from Russian gasfields. It will be injected under pressure into the rock in Germany till it is needed.
Grubb is heading for his favourite patch of wild food on the creek - a plum grove, which he says yield the sweetest, most delicious plums he has ever tasted, "like eating cherries". He says his interest in weeds sprang from his work as founding editor of EnergyBulletin.net, an online site dedicated to the proposition that petroleum production has peaked and that our present way of life cannot continue indefinitely.During his years as a voluntary researcher on peak oil, Grubb began to wonder how city dwellers would feed themselves if agriculture based on petroleum products - chemical sprays and fertilisers, long-distance trucking and refrigeration - became unviable. Other countries have turned to their sources of wild food in times of crisis. Grubb says that before the Argentine economy collapsed, for instance, the government distributed edible weed pamphlets.
Global Warming: Where the Candidates Stand
Australia: Climate is right to tackle impacts of environmental change
The election campaign was largely devoid of debate about national security, and one of the neglected security issues was the impact of climate change. There are now few sceptics about global warming, given that the effects are apparent even to flat-earth proponents. The focus is now on how rapid (or delayed) climate change might be, the extent to which human countermeasures can mitigate the effects, and consideration of best and worst case scenarios.
New Australian leader prepares to ratify Kyoto
Australian prime minister-elect Kevin Rudd said Tuesday he was working on fulfilling his campaign pledge to ratify the Kyoto Protocol on climate change, but a law expert said he could face problems.
Rising sea disrupts flights in Indonesia
Indonesia's environment minister said Tuesday that global warming was to blame after the capital of Jakarta was partially flooded, forcing thousands of people to flee homes and cutting off a highway to the international airport.
Bush welcomes Gore to White House for talks on climate
President George W. Bush on Monday welcomed defeated Democratic presidential rival Al Gore to the White House for the first time since 2001, celebrating Gore's Nobel Peace Prize and discussing global warming.
Poor in need of help from global warming
Floods, droughts and other climate disasters will rob millions of children of the decent meals and schools they need unless rich nations pony up $86 billion by 2015 to help the poor adapt to global warming, an expert panel warned Tuesday.The U.S. government needs to cover $40 billion of that spending, which will "strengthen the capacity of vulnerable people" to cope with climate-related risks, according to the report commissioned by the U.N. Development Program.
Sarkozy calls on China to join global 'New Deal' on environment
French President Nicolas Sarkozy Tuesday urged China, one of the world's major polluters, to join in a worldwide "ecological and economic New Deal" to fight global warming.
The good news on climate change is that the world wants to do something. It's no longer just the Europeans and a few fellow travelers; a recent survey suggested that 96 percent of South Koreans and 66 percent of Ukrainians regard global warming as an important threat. The latest report from the Nobel-anointed Intergovernmental Panel on Climate Change got the blanket media coverage it warranted. In the United States, business and congressional leaders have decided action is inevitable.Then there is the bad news: None of these fine sentiments will matter unless a critical mass of countries unites around a real policy. And unity is miles away. Former Treasury secretary Larry Summers remarked recently that today's climate debate is like the U.S. health-care debate of 15 years ago. People agree that action is essential, but they disagree so fiercely on the details that action may prove impossible.
IEA report released. Oil production up by 1.41mbd in October for new record of 86.43mbd.
http://omrpublic.iea.org/omrarchive/13nov07full.pdf
Which is exactly why RR was right to tell people to be cautious to cry Peak Oil right now, now those who have been screaming it will lose that much credibility. Best hopes that it doesnt hurt mitigation efforts and alternative energy hopes.
The real peak is still intact! That is Peak Oil instead of Peak All Liquids. 74,298,000 barrels per day was produced in May of 2005 and is unlikely to be breached by October 2007 production.
At any rate, when we talk of the US peak, we speak of 1970, not June of 1970 or August of 1970, just 1970. Likewise, in the future when we talk about the World Peak we will talk about the year oil peaked, not the month. The average for the first eight months of 2007 world production is currently over 700,000 barrels per day below 2005 production. When the last four months come in, they will not even come close to lifting 2007 production above the 2005 level.
I am calling 2005 as the year the world oil production peaked.
Ron Patterson
Exactly. That's the evidence so far.
Exactly, the 86.43mbd is clearly all liquids, not just oil. When natural gas peaks, then production of other liquids will probably peak as well, and total liquids will begin to fall.
Are you sure about this? If so, why?
At any rate, I think Peak All Liquids is the more economically relevant number, not Peak Oil (Crude + Condensate), because it is All Liquids that drives the economy. And if this is so, and All Liquids is continuing to grow, then who cares about Peak C+C?
You might be right about May 2005 or even 2005. But you have shifted your emphasis from the peak month to the peak year in light of a possible new peak month of October 2007.
I don't discount the utility of tracking C+C, and monitoring its peaking. It is easier to define and measure C+C, as opposed to All Liquids, the definition of which seems to be expanding with time. But as I said earlier, the economy is driven by All Liquids, not C+C.
This has been argued a lot. I, personally, think C+C is what we should be watching. It's what Deffeyes based his prediction on. For good reason, IMO. Hubbert's work was based on geology, and was never intended to model things like ethanol production.
And others have pointed out that using "all liquids" has some double-dipping, since the oil used to produce ethanol is essentially counted twice.
Didn't Deffeyes also define the peak as an average over a 6 month period?
If he didn't he should have. What if the production data were reported weekly, or daily. Where is averging in all this, to discern the trend from the fluctuations? The trend is flat production. It'll take months or more to say otherwise. It's only years from now, averaging out the noise, that we'll put a month/year on peak. But it'll be academic.
It was either Cambell or Deffeys who said that peak should be indicated by whether producers are able to sustain production for at least 5 years.
I also think that this event develops on at least year-long scale. Month to month variations are too minute to indicate (almost) anything - pretty much like following day-to-day price variations.
I would appeal though that we should be equally fair on both sides - a dip in output in one or several months is as much a proof to the "peak-oil-now" theory, as much as a similar short-lived growth is a proof to the opposite.
Hi Leanan,
I agree, C&C is what we should be watching. No matter what line is selected below, peak C&C has probably passed in the year 2005.
click to enlarge
The forecast from 2007 to 2012 is the same for all three lines, (red, green or black) as it is based upon new projects. These new projects include those in this list, which is under development, http://en.wikipedia.org/wiki/Oil_Megaprojects
For more information please see my October world oil forecast http://www.theoildrum.com/node/3064
My own opinion is that world C&C will be between the red and green lines. The black line is shown because some people believe the USGS resource estimates.
The current trajectory of the URR is "aimed" directly at 2200 GB.
But for a laugh, you ought to include the EIA's IEO 2006 projections.
As is the oil used to produce oil.
Everything in "all liquids" is a direct substitute for a major use of oil. EIA and IEA both refer to all liquids as "oil supply". Looking at that number is the only reasonable thing to do.
More importantly, though, since looking at the all liquids number is what everyone else does, it accomplishes nothing to obsess over a different number, except maybe to make peak oil folk look a little out of touch. Nobody else cares about some arbitrary subset of the oil supply, and you'll just hurt your message if you insist they should. It'd be as foolish as insisting that the peak was years ago, since on-shore conventional peaked years ago.
It's also utterly pointless and unnecessary. The important idea is that oil supplies are having trouble satisfying oil demand; the minutiae of month-to-month production levels does not matter in that overall context, and obsessing over it just distracts people and undercuts your message.
Pitt the Elder wrote:
I disagree completely with your statement. The various liquids in the reports are not equal in their ability to produce energy from each barrel of product. That's because there's less energy in a barrel of ethanol or propane than there is in a barrel of crude or products like diesel or JP5 fuel.
Adding all these into a total distorts the facts about the energy available. Without getting into a further discussion regarding the EROEI for oil vs. ethanol, just summing the energy available over time would be better than a total in barrels. That approach would certainly give a better picture of our situation.
Even better would be some attempt at an EROEI analysis, since, as we all know on TOD, the amount of energy required to produce corn ethanol is much higher than that required to drill a hole in the ground. And, were there to be an EROEI approach, this would also capture the fact that oil is no longer being found in large quantities by simply drilling, but now is recovered by major industrial enterprises placed far off shore. This would show that it's becoming ever more difficult to supply the energy demand of consumers outside the small world of the energy producing sectors. To do this would provide all who were interested with a much better grasp of the reality, without there being a need for detailed understanding of the sort we see here on TOD.
E. Swanson
"All Liquids" measures by volume and not by energy.
NGL & ethanol have expanded in recent years, making up (in part or in whole) for declining oil production. But each has just 60% the energy density/volume of oil.
Also, oil intensive operations (Alberta tar sands) have increased. Although most energy used is NG, quite a bit goes toward diesel for those monster trucks !
So "Peak Liquid Energy" appears to be in the rear view mirror.
Peak Liquid Energy Exports certainly are !
Alan
Yes.
One indicator of the scam-ish nature of the "all liquids" category is that it includes "orimulsion," which includes WATER!
That's just one category of "liquids" to be suspicious of.
Oh...and don't forget Refinery Gains!
I wish someone could explain "refinery gains" in such a way that I could understand what is meant by it.
Simple answer: When crude is processed, some of it gets "fluffed up." By that, I mean the density is decreased. So, if I take a gallon of oil, and run it through a hydrotreater, for instance, I may come out with 1.2 gallons of lighter products (but containing the energy of around 1 gallon of oil).
but containing the energy of around 1 gallon of oil
Is this true? It was my understanding that there is some added energy from the hydrogen used in the process (ultimately coming from NG). Probably this depends upon the efficiency of hydrogenation but I would suspect it would be somewhere in between, probably 1.1 gallons of oil.
This is interesting to me, as if we implement a low-cost non-FF method to produce hydrogen (like high temperature electrolysis in nuclear reactors) we could use it to produce light hydrocarbons starting from abundant low-grade carbon source like coal. I would give this path an order of magnitude higher probability than straight hydrogen economy.
Is this true? It was my understanding that there is some added energy from the hydrogen used in the process (ultimately coming from NG).
True, and that is why I said "around." But I was trying to keep it relatively simple.
In hydrotreating there is added hydrogen. In other refining processes (cat cracking, coking) there isn't.
Thanks.
Refinery gains are simple, speek, at least as I understand them. The denser longer chain hydrocarbons are cracked producing less dense shorter chain products. Think of it like fluffing a pillow - you put a hundred barrels of crude in, the junk from the bottom of the barrel is 'fluffed', and you get a hundred and six barrels out ...
No it doesn't - orimulsion hasn't been produced in about a year.
In any event,there is no evidence that are current path is sustainable -- none. And what if we haven't peaked? We don't have the time to be debating how many angels can dance on the head of a pin. The world is in a world of hurt regardless of whether or not the peak was in 2005 or will be in 2020. We have already dilly dallied well beyond the point at which we could have taken effective remediation measures, unless one things that coal will save us all.
What interests me here is which side has really changed the terms of the argument mid-stream?
Of course, implicit in that is simply the question of the Net Energy we can produce, in particular those that can serve as Liquid Transportation Fuels. But since many of the 'alternative fuels' are produced with heavy inputs, you either have to count the EROEI shifting in this new output number, or in some other way acknowledge that you are double-counting a great many barrels, since they are produced once and then are basically 'converted' into an alternative fuel.. while both barrels are included in the tally of All Liquids output.
That is of course before anyone bothers to consider deducting the costs that the Increasing volumes of freshwater and other natural resources that get eaten up in the process.
The debts are piled high on top of this 86 million figure, but with the correct blinders on, that all doesn't have to be considered part of the equation..
Bob
That's come up a couple of times lately, I've got a few ponderances (the main one is #4):
#1 Non-alternative fuels, likewise are produced with 'heavy inputs' - although much less so, doesn't exactly the same argument apply? Shouldn't we automatically deduct the barrels produced used in producing the barrels?
#2 Isn't this the whole "do you count the energy used building the tractor / the oil-rig" question again, just in a more direct way?
#3 Is it not actually impossible to set any meaningful number in terms of energy inputs used, and therefore isn't it better to not try - better to know at least what the number is counting, even if flawed, than to add in what essentially would be guesswork? [This will for me forever be regarded as the Lindsay Lohan question]
#4 Finally, and this is actually where this train of thought started - lets say one barrel of ancient-bio-diesel is extracted and refined in the US, and is used as an input to a US farm which produces one barrel of less-recently-deceased-bio-diesel.
Do BOTH barrels get counted as contributing to GDP? Does the barrel of dino-diesel, in the course of being made into a barrel of eco-diesel, actually 'do work' in some abstract probably not-really-real but fundamental-to-the-economy accountancy speak?
If the farm is contributing nothing in terms of net energy, isn't it meanwhile supporting the farmer and family and farm suppliers? Do we ignore, when talking about EROI for biofuels, the small amount of 'processing gain' between input and output of roughly equal energy, which supports the local economy.
I dunno, I just find this stuff curious, and almost too hard to think about for some reason I can't quite grasp.
If a fuel requires FF inputs its derivative rather than alternative, right?
Re: Almost too hard to think about for some reason I can't quite grasp
EROEI is a fallacious concept because all energy is not created equal. Suppose that we used metal return on metal invested (MROMI) to decide which metal to produce. Now suppose for sake of argument that it take 10 pounds of iron to produce 1 pound of gold. The MROMI is therefor .1. Obviously using this reasoning no gold should be produced.
This is the reason EROEI is too hard to think about. It makes no sense, even if 99% of the posters here believe in it. It is fallacious. It is impossible to determine which form of metal/energy should be produced without taking into account market prices. When prices are left out of the equation, it all becomes nonsense. So don't strain your brain, just realize that EROEI is pure bullshit.
Please elaborate, I'm eager to understand your take on EROEI. Seems that unlike your metal example, there is a common denominator with energy - joules, BTUs, etc. Hard to figure, to be sure, but still not the same as metals.
This post is enticing, yet fallacious in its fundamental nature.
EROI is a simple and easily understood concept: How much energy do you have to put in to get a certain amount of energy out?
Let me state this in human terms. If I eat a grape I get a certain number of calories. The ones in the dish here next to me require very little energy to recover. If I had to walk to the grocery store (twelve miles) in order to get them I suspect I would have a negative EROI for the process.
If oil shoots out of the ground when you poke a stick into the soil you've got a very good EROI. If you're burning five barrels hauling, drilling, and refining for every six you recover the EROI is very poor.
The use of the example comparing iron used to gold produced is not a good comparison. Iron is used for some things, gold for others. They can be exchanged for a small set of uses but mostly they are not fungible, as one can't build a skyscraper out of gold and iron is not going to be found in bank vaults as it is far too common.
One can argue the minutia of oil vs NG vs various non FF electricity production schemes but energy is basically fungible - if you need heat to crack heavy crude into something lighter gas, oil, or electric can do the job. Some just happen to be more efficient than others based on a variety of factors.
SCT, good example. I was thinking, if I work all week for x $, and it takes that same x $ to pay my foo