The Oil Drum

49 comments on Is it time to start exploring again?

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Dave Cohen on September 13, 2005 - 12:06pm

He's what the environmental economist says

Same [fruit] goes for oil. It's relatively cheap to poke a hole in the ground and extract the big pools of oil. But as stocks deplete it requires more and more investment to extract the deeper, harder to find stocks. What creates the incentive to extract these tough to extract oil stocks? Higher prices of course.

It must be nice for Tim Haab to live in such a conceptually simple world. I wonder if he's ever looked at the discovery curves. Does he know discoveries peaked in the 1960's? What does he think of the fact that the oil companies spend more time consolidating than exploring? Has he ever listened to an oil geologist talk about new prospects? Does he know that we use roughly 4 times as much oil as we discover year to year? Does he know about EROEI with respect to so-called unconventional sources? Can he distringuish between oil sands (we'll get some oil) and oil shale (we're unlikely to ever get any oil)? There's no end to questions like this.

I suppose I should comment on Haab's own blog but maybe he'll take the time to read over here at TOD where he might actually learn something.

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Eroie Van Tanstaafl on September 13, 2005 - 12:16pm

EROEI of marginal extraction is estimated by a variety of authors to be currently around 10:1. And that's just for the publicly reported information from Western oil companies, not the ME NOCs, which presumably have cheaper oil left underground than the West does. That means that oil extraction has to get TEN TIMES more energy intensive than it is currently for the EROEI to slip below 1.

That's not gonna happen for a VERY LONG time, no matter when the peak is.

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Dave Cohen on September 13, 2005 - 1:05pm

Sources of your information? Previous discussions at TOD would indicate what you wrote here is a bunch of nonsense. What do you mean by "marginal extraction"? Of what? From what type of source? And don't say oil shales if you want to maintain any kind of credibility whatsoever.

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Eroie Van Tanstaafl on September 13, 2005 - 4:57pm

Heinberg's "The Party's Over", 2003, lists two major studies of EROEI, Cleveland et al 1984, and Odum 1996. Cleveland et al calculated pre-1950 oil EROEI at over 100, and 1950-1970 at 23 for production, 8 for new discoveries. Odum 1996 calculated ME oil at 8.5 (including transport to N.America), and Alaskan oil at 11.1 (benefits of a single pipeline!).

Shales and tar sands are, as you suggest, horribly inefficient, with EROEI near 1. Oil shales are not relevant to the discussion, and I did not mentione them.

As for marginal extraction, I mean "marginal" in basic economic sense of "the last and least profitable barrel extracted and sold on the market for the market price at a given time". If oil demand rises, and supply responds by extracting additional oil, the cost of that marginal barrel sets the market price. Econ 101.

Other sources: Savinar's absurd LATOC site cites convetional oil EROEI at 30:1, with tar sands at 1.5. http://lifeaftertheoilcrash.net/SecondPage.html Wikipedia's EROEI says domestic oil is 3, Saudi oil is 10, but provides no cites. http://en.wikipedia.org/wiki/EROEI Wikipedia does link to oilanalytics.com, which provides a detailed examination of the concept. A chart gives EROI of oil c.2000 by thermal measures as 17, by Divisa measures as 11. The chart is cited to Cleveland, 2001. http://www.oilanalytics.org/neten/fgn14.html

But thanks for asking!

As for TOD discussions,