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A concern about Canadian gas and the oil sands
Posted by Heading Out on March 18, 2006 - 8:48pm
Natural gas is an important part of the way these resources are being developed, and until now that has not been much of an immediate concern. However, just as we have seen growing worries about the chances of gas being able to keep up with demand in the U.S., so now there is a warning from Ziff Energy via Dow Jones (and Schlumberger) of a growing problem with Western Canadian natural gas supply. As with many regions of the continent, current fields are running out and new ones are getting harder to find. Further the fields that are being found are smaller, so greater numbers of wells are being needed to produce them, and , as with the US, they are then running out faster.
Western Canada produces 16.6 billion cubic feet of gas a day, representing the lion's share of the nation's total output. About 75% of the region's gas is extracted from easy-to-produce conventional reserves, with the remainder coming from "unconventional" reserves - gas deposits located in formations such as coal beds - that require more expensive production techniques.To maintain current levels of production, 2.5 bcf/d of new production must be found to match current depletion. This will require both conventional and unconventional sources. Since unconventional is less productive the report suggests that either 17,000 conventional, or 25,000 unconventional wells will be needed. Contrast this with the 15,645 wells drilled in 2004 and with the 658 rigs drilling in Canada last week. The Canadian rig count is up some 329 rigs over this time last year.
As with the US production in Canada is relatively flat, despite the increased drilling activity, which is turning increasingly toward unconventional sources. There are 3,500 exploratory wells already planned for 2006, with the hope that this will increase unconventional production from 0.45 to 0.7 bcf/day by the end of the year. To put this in context, the oil sands operations are currently using around 1 bcf/day, and are seeking to treble this in the years ahead. Must be time to watch We Were Warned
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The other main fuel for peaking plants is oil.
TVA has built the Raccoon Mountain Pumped Storage (a bit more than 1,700 MW) within sight of 6 nukes (i saw them from the top). The nukes run water up at night, down in the day.
Very little oil is used for electricity in the "Lower 48".
Nuke can replace NG, at least in part.
It's an economic thing, at least according to my utility company. The fuels for peaking plants are so expensive now that there's no way they're going to build baseload plants that use them.
Nope. I've not seen a single fission nuke proponent explain why such energy generation needs government libality protection for accidents if 'cost comparison' is such an important mechinism.
My point was that a nuke at idle costs about the same amount to operate as a nuke producing at capacity. It is all about spreading fixed costs over units of production. No production -- infinitely high unit costs -- production at capacity essentially the same total costs spread out over design capacity of the plant.
As to why liability relief is needed, as a libertarian, my basic belief is that that Government shouldn't be bestowing relief on one class of producers. However, the counter to that is the fact that there is simply no way to commercially insure the risk involved with a serious accident at a nuke on the open market. No responsible party will write these policies as the theory of insurance requires some predictability of occurence [or at least a basis for handicapping the odds] and the more critically the financial capability on the part of the issuer to pay off. Both are lacking in the case of nukes.
Without effective risk management to place limits on liability, a company operating nukes will be seen as [sorry -- pun intended] radioactive.
In in commercial sense, a major nuke accident represents the unthinkable. In a broader sense, the Russians had the unthinkable occur and for the most part life goes on.
It all comes down to the responsibility of the board of directors to manage risk and avoid whenever possible optional, but potentially fatal risks to the corporation. The board's duty is to the shareholders and not to the greater good -- whatever that might be.
IMO, [and from what I surmise to be Alan's perspective] the debate really is over whether we want to burn more coal; compel behavior changes --- probably at the point of a gun; simply let the SHTF as the grid collapses from overloads; go to progressively longer rolling black outs -- same end result as the other grid collapse scenario although initially the process of break down of society might be less dramatic; or build nukes.
BTW, I am positive on solar [and maybe wind] coupled with better storage technologies over the long haul, but nukes appear to be the best approach to getting through what I expect will be a nasty transition.
I don't know whether you consider the above to be an adequate explanation, but that is most of the story in few paragraphs. An even more abbreviated version might be: Generate or degenerate.
Exactly.
The majority of people who SUPPORT fission nuclear power with market arguments ignore how nuclear power is not a possibility without the government handout of support.
Not to mentiopn the limited nature of fissionable material.
The abundance of fissionable material is probably greater than the lowball estimates. OTOH, contrary to the cornucopians most granites are probably not going to ground up for the contained U235. However, though a admittedly a diffuse source, even some granite is much hotter than average and might be considered ore if it ever comes down to that.
If we are going to continue using fission reactors over the medium term [50 plus years] answer to the availability of fissionable material is the fast breeder reactor. The technology can apparently be made to work.
The issue has been the reality that plutonium is easier to enrich to weapons grade that U235. Given that in addition to the long standing nuclear powers, India, Pakistan, North Korea, Isreal, [and maybe South Africa, Brasil and some others] have the bomb, that genie is already out of the bottle.
The abundance of fissionable material is probably greater than the lowball estimates. OTOH
STILL limited. Like oil was limited in 1890 amd 'we' are now discussing this limited nature today, the use of fission is limited.
have the bomb, that genie is already out of the bottle.
But that does not address the need for long-term protection of nuclear waste. 'The Bomb' is preventable just by not using
'em, Nuclear waste is preventable only by not making it. After it is made, you have a many year protection need - longer than any human society has existed.
Everything is limited. The wind & sun energy is limited to - isn't the sun sending limited energy to the Earth? Even the whole Universe contains a limited amount of energy.
The question is can a given resource be sufficient for such an amount of time to justify the investments we make to develop it. With hundreds of years of conventional uranium reserves and many thousands of years if we start using breeders I can assure you that the answer for nuclear is YES.
Link please?
The European Nuclear Society states that with the current reserves "all 439 world-wide operated nuclear power plants can be supplied for several decades".
But if you are talking about ramping up the use of nuclear power (as half the world is saying), then that "several decades" will be shortened quite drastically.
From Wikipedia:
http://en.wikipedia.org/wiki/Uranium
To say that "we have several decades of uranium left" is like saying "we have only 100 days of food left in the world" (which can make you want to shoot yourself if you don't give it a second thought).
We are nowhere near to reaching the geological limits because what is being included in the official reserves now is just the tip of the tip of the iceberg. This link for example gives more than 100 years of U under 130$:
http://www.inb.gov.br/english/reservasMundiais.asp
But this is again relative, because should U go to 100$ and above (from the current ~ $35), the breeders reactors will become competitive, meaning that you have to multiply these figures by a factor of 100. In addition many new discoveries will be found all around the world if we simply start looking for them. Even now enormous amounts of nuclear fuel are simply stored away as waste, because the processed nuclear fuel contains plutonium and unburnt uranium that can be used. But the prices are so low that it is not worthed the investment and overcoming the NIMBYSsm.
Regarding economics - even at $130, the price of fuel will be below 30% of the production costs, assuming (wrongfully of course) that the sales prices in 100 years will remain at current levels.
http://www.americanenergyindependence.com/uranium.html
Very informative, reminding you once again to question your assumptions before making projections for the future (especially far in the future).
I find the idea excellent, but I don't think we have that level of international cooperation that will make it possible in the forseeble future.
Another good thing with it is that it adds a new intrest in making sure that your neighbour runs their reactor in a sensible way. It makes people running nuclear reactors keep an eye on how other operators run their reactors.
However I have to be a little bit cautios as to how exactly we will implement it, so that the results will not be lifted on minus first extent. For example I can see the major players inventing such standards for joining the co-insurance league which will make only their designs and equipment salable, thus throwing out any competition and innovation in designs.
Therefore I think for it to work it must iclude all operators, regardless of place, design etc, much the same way the the whole younger generation is paying for the retirment and medical costs of the elderly. Of course there must be a provision some significant percentage (for example 20%) of the hypothetical costs to be carried by the individual countries/operators which will be enough motivation for them to strive for safe designs.
I think Alan got this one right. The cost of fuel for a nuke is a very minor cost of production and the figurative burn is largely fixed in any event. Accordingly, there is an almost perfect inverse relationship between total output and cost per MW. Hence if at all possible, you want to run a nuke at or near designed capacity.
No, the reason you run a nuke at all times and never shut it off is that shutting a nuke off is very dangerous. Thermal shocks to a system like a nuke make leaks. You don't even want to shut off a coal burning power plant if you can avoid it. They tried doing that and it just doesn't work. Leaks always seem to occur at the most inconvenient times. You might as well just burn straight through and throw away the power.
Well, that was back when coal was cheaper.
There are quite a few inches of procedures to be followed to stop & restart a nuke, but it is NOT unsafe.
Reactionary is correct, economics (CHEAP fuel, expensive capital) make 100% load the preferred mode. Occasionally, when the power source with the cheapest fuel (hydro) has a surplus of fuel and no place to store the excess water, they will slow down WHOOPS 2 (not enough distribution lines to take all available hydro + nuke out of area). The French also throttle back a handful of their nukes as night (AFAIK).
To restart a steam NG plant from cols takes the equilavent of 30 minutes fuel at 100% load just to get it hot. Coal takes even more.
Given a choice between burning coal at 3 AM and idling an NG plant, or burning NG at night and turnign of a coal plant, idle the one with the more expensive fuel.
Base load plants have thicker turbine blades at the roots (last longer at constant load), whilst peakers have thinner blades (heat & cool easier, last longer when cycled). When the City of Astin was looking at swicthing one of their NG steam plants from base load (load with cycle between ~33% & 100%) to peaker, they planned to remachine the turbine blades at considerable expense.
Karahnjukar hydro turbines were designed for a steady load. Very different turbines would have likely been built if it were a peaking hydro plant.
So it is not the fuel, but a number of engineering decisions that are made in design. What works best for cycling use (on/part load/off) does not work best for steady 100% load use. Cycling a base load plant, regardless of fuel, is just NOT a good idea. And running a peaker at full load for 500 days straight is also not a great idea.
Other than thw whole issues of creating radioactive by-products, paying for the guarding the wastes, and running out of the fissonable material.
Buiding fission plants adds to the waste pile and attempts to keep the party going as the party has been going.
About a good a plan as running pumping stations to keep a city that should be underwater not underwater.
Given the short distances of the lift, the power requirments are minimal. (Unlike Phoenix, where 20% of electricity is used to lift water up from the Colorado)
OTOH, New Orleans was tied with NYC for fewest miles driven by residents of any major US city. Our carbon footprint is well down towards the tail in the US distribution and our oil consumption is the tip of the tail.
Superb, energy efficient rail and water transportation connections as well.
New Orleans should be preserved as a living model of what a VERY livable urban city can look like with minimal oil use (as well as it's value culturally, only NYC and SF are also worth preserving for their cultural value, all other US cities are not).
Alan - stranded in Phoenix ATM tending for my father after knee operation.
I still worry about you living behind levees that are prone to failure. By their nature, levees fail--true in California's San Joaquin delta, true everywhere I know of.
By way of contrast, the Dutch have dikes: Concrete sitting on top of rock. Also, the Dutch have a five-hundred year tradition of extreme respect for the sea and do not have the laid-back, easy-going, and sometimes corrupt attitudes and practices that a certain lovely U.S. City has been notorious for during about the past four hundred years.
Could New Orleans just be moved a few hundred miles upriver? Or what would it cost to bring in enough landfill to rebuild the city twenty feet above sea level?
BTW, I am opposed to people putting houses and office buildings on all flood plains, not just yours.
Most of the U.S. never floods. Put floodplains to good use growing food or cane for ethanol--but I fail to see the logic of putting people where every now and then they and their stuff will be under water.
One could build (and it would happen) a New Phoenix upstream ;-(, but NOT New Orleans. One has to live here to truly appreciate the unmatched genius of the 1800s Urban Planners/Developers here, the quality of the cypress framed houses (heart pine was used later when cypress ran short), the beauty and ambience of the culture that flows from it all.
The New Urbanist Movement draws VERY strongly from the living example of New Orleans, BUT they still don't quite "Get It". They need to look longer and harder at what makes New Orleans tick (I have told them some of the points that they miss in postKatrina planning meetings but they believe their textbooks more than their lying eyes) so that it can be replicated elsewhere. Losing New Orleans will also mean a loss for the future of every urban area in the US.
In addition, the population of New Orleans is uniquely motivated to improve the city that we truly love. This unique civic resource should NOT be wasted ! What works here, with the wisdom of the people*, can guide others by example postPeak Oil.
I cannot wait to leave Phoenix and go back to my disaster zone, with all the suffering that entails. But a broken New Orleans is a FAR more livable and passionate city than Phoenix/Scottsdale (I am typing close to 56th & Cactus).
BTW, about $15 billion to $18 billion would rebuild the levees AND, more importantly, restore the wetlands destroyed by the US Army & the oil industry. A proper wetlands will be a "speed bump" for any hurricane with MANY other values and we value restored wetlands more than Cat 5 levees (isn't that odd, a widespread acceptance of a long term natural solution rather than a "Bigger & Higher" fix ?)
One rebuilds the wetlands by diverting some of the Mississippi from it's channel and spreading alluvial deposits back over natural areas.
* I would take the Urban Planning choices of a waiter, barber, school teacher and taxicab driver who live & work here over that of the out-of-town New Urbanists who parachuted in. We know better because we live and interact with our city in ways that few other cities do.
The Old River structure was at risk over a decade ago, but now appears to be properly built & maintained (the addition of the hydroelectric plant helped, the scouring power of the water going west is now much less since that energy is now in wires :-)
I will accept a thousand year delay before nature takes it's course.
But I wouldn't bet on it.
I don't think the Atchafalaya is going to stay a hydroelectric dam forever. It's going to let the Mississippi go back to Texas sooner or later. Just like the Nile is going back to the Red Sea sooner or later, instead of the Mediterranean.
Is that true that the Dutch dikes are built on rock? I thought the Dutch were built on an outwash plain from the Alps, sediments all the way down. I don't know, so did you read that in a geology book someplace?
By way of contrast, the earthen levies of New Orleans, as I understand it, are built on gooey clay, and almost inevitably they will be undermined in extreme flooding situations.
In Calif. levees, rodents burrow deep into levees to undermine them, and it would not surprise me if this also happens on the lower Mississippi.
To me, it is just incomprehensible why people build or live where they are almost certain to be flooded out. In other words, the risks New Orleans faces are uninsurable. The risks the Dutch face are (I believe) insurable and fully insured at reasonable rates.
To have done so would have cost ~1/4 the fed funds (not to mention private losses) of what has been spent postKatrina. About what was spent on saving the Everglades and Chesepeake Bay.
Concrete coat the levees (raise them ~2 m) and use decent quality clay fill in the center. Rebuild the wetlands (something locals had been trying to get fed funding for decades to do to repair earlier fed damage) by diverting water from the Mississippi onto old floodplains.
Build a block to the entrance of Lake Pontchartrain (combined with either a railroad bridge or I-10). Close MR GO (an atrocity from the US Army that locals have opposed for decades). And consider an inflatable dam accross Mississippi as a final topping.
Not particularly difficult engineering, but beyond the scope of "military intelligence".
That is your argument? America has FAR more land as a precentage that won't be underwater if the pumps are turned off and the dikes are not built.
Using the Dutch as an exammple ignores the lack of overall land aviable to the Dutch. The land situation for the Dutch != the US Land situation.
Given the short distances of the lift, the power requirments are minimal.
Right, having motors that you need to nitify the electric company when they are turned on sure sounds 'minimal'.
New Orleans should be preserved as a living model
Then it doesn't need a single dime of federal money. Should that not be the way if one is going to agure econmomics? But your position here is 'take actions to preserve' - normally one takes actions to 'preserve' only things that are not otherwise able to be saved under market forces.
Our carbon footprint is well down towards the tail in the US distribution and our oil consumption is the tip of the tail.
Love to see this data and HOW this claim is generated. I bet when normallized for income the 'tail' argument goes away due to the collection of poor. But right now it is just a claim.
Just give us the Offshore Oil & Gas Royalties. Alaska gets so much that they have almost zero taxes and give chacks back most years. Half of Wyomings budget, but we get zero today.
Our disaster is the direct result of incompetence and malfeasance by the US Army. A man made disaster, not a natural one. Just compensation for our losses would give us FAR more than we need.
> Love to see this data
I was surprised to see how low it was from postKatrina planning documents that were handed out.
You seem to know the price of everything and the value of nothing. I will leave it at that.
So ya got no actual data to back up your claim. That's fine.
I'm just happy to be able to call ya out on your claim.
I think that my credability here is quite good and I resent your attitude.
Per 2000 census, from memory, 28% of New Orleans households did not have a car. And not all were the poor.
If one lived there you would understald. I had five places to buy food from within a 6 block radius of my home preKatrina, as well as my tailor, bank, insurance agent and coudl take the streetcar to the CBD, French Qtr. or Uptown.
Per August board meeting of RTA, 24% of baordings were on streetcars and, per financial head Mr. Majors, a fare increase would have been required if the Canal Streetcar Line had not opened due to high diesel prices.
Who's making a handout on 'the carbon footprint of the geographic area' type information? If you are taking someone elses data and they opt to ignore a poor suburb because 'it is not part of new orleans' because they wish to 'cook the books', knowing the source of raw data will allow the analysis be looked at and corrected.
I resent your attitude.
And your 'tude about the data you presented was 'just fine'?
A willingness to show your data on your claim is how you 'get and keep' a rep.
Resent or not, at least mentioning your data came from a handout is better than most ever bother with.
If one lived there you would understald.
I don't need to live along the coast to understand: If the area you live in would not be lived in save for federal flood insurance, then living there might not be a good idea.
Federal Tax obligations arn't going to be able to support things like flood insurance. Why sucker a bunch of people into a place where thier posession end up wrecked with water? A desire to 'rebuild the New Orleans area' will eventually end up with the rebuilt areas under water once again. How long should the people who don't build in the way of rising water pay for people who want 'an area preserved'?
lotssa places within a 6 block radius
The same can be said for parts of Chicago. But Chicago and its surrounding land isn't at risk to become underwater from rising sea water and need energy input JUST to keep the sea water at bay.
http://en.wikipedia.org/wiki/New_Orleans#Demographics
and
http://www.wsws.org/articles/1999/oct1999/nyc-o19.shtml
27.5% and 24.3% of the populations were at/below the poverty line.
Cars miles driven may just be from an ability to own a car to drive. And if one is obtaining a low carbon footprint model JUST because people are poor, why "we should preserve" such a cultural model?
(as well as it's value culturally, only NYC and SF are also worth preserving for their cultural value, all other US cities are not).
Lets see, all of those cities run the risk of going underwater when the sea level rises. Ya know what is really neat? If these cities were to go POOF, the 'culture' would just end up someplace else. And what is the 'culture' displayed there? Consumption, proverty, pollution - what else?
Simon Winchester thinks the U.S. is especially vulnerable, simply because we are such a new nation.
Ignoring radiation levels, the power needed to run such places will puts many places between a bullet and a target. If the sea levels rise, many places will be under water.
The key would be the US Federal Government's ability to pay off on federal flood insurance. This expenses in a bad storm season or any of the 'object falls into sea, causes big wave' would create a 'renig on the debt or collape' situation.
Its easy to say 'rebuild' when it is someone elses money.
Western grain can be (and is) shipped efficiently from West Coast ports after fairly long transport by rail.
Also, a small port city near New Orelans (which might make good sense--maybe build it on pontoons or something) does not imply anything like a return to the traditional city.
Infeasibility of Rebuilding New Orleans
Hardly one sentencequoted above is partially true and none are completely true.
For the engineers it's worth a look - many site just Google Thames Barrier.
The 6 GW (6,000 MW) of new nukes that the US will subsidize in order to get utilities back into the business of building nukes (supply chain has dried up and will cost to restart) will not be operating before 2022 IMHO.
Even Exxon-Mobil thinks the party will be dying down by then.
All 6 GW will do in ~2025 is soften the blow a bit, make the downslope a tenth of a degree less steep.
I see that as a VERY good thing, but if you are into suffering and punishment for past "sins", perhaps you do not.
Electrification of Transportation is our best hope IMO, and we need electricity for that. My ideal mix for the North America would be (by energy) 20% nuke, 15% hydro, 15% pumped storage, 55% wind, 9% other renewable (geothermal, solar, bio) with some fossil preserved for emergencies. Continent wide HV DC loop with spurs. (the extra 4% is for losses in pumped storage, the best known electricity storage medium).
An EROEI of 1:1
means that for every unit of energy input
We produce 1 unit of energy, hence the ratio is 1:1. The energy we get must all go back into the production cycle to produce more energy.
An EROEI of 1:2
means that for every unit of energy input
We produce 2 units of energy. One unit goes back into the production of more energy, and we have a net gain of 1 unit of energy that can be distributed for consumption.
An EROEI of 1:4
means that for every unit of energy input
We produce 4 units of energy. One unit goes back into the production of more energy, and we have a net gain of 3 units of energy that can be distributed for consumption.
Remember. If the EROEI of any energy resource is less than 1, then doing that activity no longer adds to our energy stockpile.
Furthermore, not all energy thus produced is equal. The energy content of a gallon of diesel fuel is (roughly) 139,000 Btu, the energy derived from a gallon of gasoline is (roughly) 124,000 Btu, and the energy in a gallon of ethanol is (roughly) 80,000 Btu. Can you guess which fuel will give us the best vehicle mileage? If we can get 50,000 Btu from 10 pounds of dry wood, 104,000 Btu from 10 pounds of high quality coal, or 139,000 Btu from 1 gallon of heating oil, which fuel would the consumer prefer to use for heat?
Unfortunately, the average EROEI of world oil production has been declining. I read somewhere that before 1950 the EROEI for oil was more than 100:1. By the 1970s it had dropped to 30:1, and by 2005 the average EROEI on new production had fallen to 10:1. As we go for oil in increasingly difficult environments (deep under the ocean, open pit mining, etc.) the EROEI will decline further. We have to face the facts. Just because there is oil in the ground does not mean it is practical to extract. Every well has its cost in money AND energy. At some point the EROEI for every well will fall to less than 1, making oil from that well an impractical resource for energy. Although we will probably continue to work that well, the oil thus produced will have a greater value as a raw material for manufactured products than as a fuel. It won't go into your gas tank.
The concept of EROEI is usually ignored by politicians, disputed by alternative energy advocates, and distrusted by "Peak Oil" critics. It's not even discussed on the DOE WEB site. But eventually, it will become a topic of great importance. And credibility. Right now, there are no standard definitions of how to determine EROEI values, or what should - or should not - be included in an EROEI calculation. I believe we need a three-tier model:
Basic EROEI modeling - which confines itself to energy production versus energy consumption as an energy production process.
Energy Supply Chain EROEI models - which calculate an estimate of energy used to research, develop, explore, produce, transport, distribute, and consume energy through the entire supply chain.
Life Cycle EROI Models - should include co-generation, ancillary product production, waste, and the impact on ecology. Or put another way, everything discussed in this essay (including labor).
http://www.financialsense.com/editorials/cooke/2006/0318.html
The bad news is that, unlike conventional sources of oil, oil derived from these oil sands is extremely financially and energetically intensive to extract.
Whereas conventional oil has enjoyed a rate of "energy return on energy invested" (EROEI) of about 30 to 1, the oil sands rate of return hovers around 1.5 to 1.
http://lifeaftertheoilcrash.net/
But i'm sure there is lots of money to be made from investors who don't know about EROEI.
Friday I got a call about investing in gas wells in the Powder river region.
Caller is sending information.
Karahnjukar in East Iceland has a design life of 400 years with a constant output of 550 MW. Not bad for a billion US$ !
Much of the power to build comes from renewable electricity (25 MW for several years to run TBMs). My guess is a lifetime EROEI of over a 1000 to 1.
Hydro can be split by size or storage vs. run-of-river.
Storage adds little if any new energy, but makes it readily available when needed and most suitable sites for large storage schemes have been exploited. But run-of-river in the US & Canada is still largely untouched despite the lower environmental impacts. So storage is a non-EROEI factor.
Traditional hydro, at least, isn't anywhere near that good. Environmental Hamilton, a non-profit, puts traditional hydro's EROEI at between 10:1 and 30:1. The Environmental Working Group, a think tank, says it's less than 48:1. EROEI.com cites a Cutler Cleveland et al. paper that evaluates hydro at 11.2:1 on a gross basis and 33.6:1 on a energy-quality basis (put low-quality energy in, get high-quality energy in the form of electricity out). Odum's book "Environmental Accounting: Emergy and Decision Making" puts traditional hydro at 10:1.
Can you provide some more details on why you think this would be so much better?
Do your reference somehow confuse building energy used for producing the building materials and do the building work with conversion of potential energy from elevated water falling downhill to electrical energy? I do not get where energy-quality enters the equation.
The nature of the application is why EROEI is important, but not everything. Assume your problem is to power tractors, and that you have unlimited quantities of nuclear electricity. Tractors need tremendous power output, need to be able to operate in places not near the electric grid, need to be refueled quickly, and so on. Using electricity to manufacture ethanol (or octane) from biomass might be the "right" answer to your problem, even though the EROEI ratio of the conversion process is less than one.
Cleveland estimates that the lifetime EROEI for the hydro installation is 11:1 if you look at thermodynamic measures. But 33:1 when you factor in that you get electricity out.
That is 1,927,200 GWh before becoming a non-storage hydro project. A 1,000 MW (1 GW) nuke with an 86% availability factor will produce 300,000 GWh.
I question the stats that they came up with of EROEI. Per chance any links ? (I am short on time ATM though).
Everyone agrees that the EROEI for hydro is at least 10:1, but an estimate of about 50:1 seems to be the upper limit that's been published. Karahnjukar has some advantages over the typical hydro project because they can put the generators so far below the level of the stored water -- 600 meters of working head but the tallest dam is less than 200 meters. I would be reluctant to make an EROEI estimate using a 400-year operating life, but that's just me.
I'm sure the coal will have gas. I'm also sure that it will have salt water to be disposed of that will cost more than the gas is worth. Tell them your brother works at the EPA and is looking for more information for his investment club. See if they send you any more stuff.
Maybe the big players are mentaly drawing a line between the Mackenzie Delta and U.S. markets ... and based on geography intend to holler "dibs" on that gas? Might make some sense given the additional cost of a much longer natural gas pipeline.
Any insights into what fuel is being used to generate the steam for recovery at for example Midway Sunset in CA?
Why don't they? Because the process is substantially more capital intensive than just using NG. While it does lower the cost per barrel by an estimated $7, which is significant, the other oil sands operators prefer to lower their investment.
But it's all a matter of the price of NG. Right now NG is looking pretty cheap - about half the price of last Fall. But if the bulk of posters here are right about supply being more difficult to increase and maybe peaking, then as the price of NG soars, the oil sands operators will convert to the process used by OPTI.
Essentially the oil sands are the ONLY global source of oil that is guaranteed to grow over time, to last for many decades, and to be in "friendly" hands. This is one thing we don't have to worry about.
I own shares in Opti.
I Bought them in November 2005 last year after studying publicly listed oil sands compaines for about 6 months. In my opinion It was and is the most undervalued listed oil sand company in Canada.
Massive reseveres.
Lowest production cost per barrel @39 API
Proprietory Technology and know-how of onsite co-generation of electricity and gas from Bitumen!
Experienced Team
I could go on and on about this company, but I'll try not to. I'll just say that I love it and be done with it. Its where I'm putting my dosh.
My price expectation for Opti if oil at $60/Barrel atfer all phased expansion plans are completed in 2015-2016 is between $180 to $240 per share($CAN). Opti closed on Friday at $45.20
And thats being conservative.
Sorry, another thing.
I believe it could take approx 2-4 years and 1 Billion + $ to build a serious Bitumen Co-gen-electric-gas Generator, so if Nat Gas Supply or prices do get become a major problem in the sort/med/long term, many Oil Sand operators without the Co-gen could have a very rough ride. :)
could be up the creek for production energy
My strategy is a conservative one. Invest is a diverse set of hydro utilities that compete with fossil fuels (usually NG) and will benefit long term. Geographic & political diversification.
EMail me at Alan_Drake@Juno.com please.
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Nexen is as great company to own too with its strong cashflow from existing conventioinal operations and vast oil sands reserves.
As and individual investor, my job is to find the company whose shares are likely to increase most per share.
Nexen's current market capitisation as at 17/03/2006 is
$ 16,464,913,000
Opti's current market capitisation as at 17/03/2006 is
$ 4,149,360,000
Without getting too detailed here, I see Opti going higher, and faster that any other. But I stand to be corrected.
And yes, I reckon oil will be worth more far more that $60/barrel by 2015-2016. My personal esitmate is in the range of $120-$160 per Barrel for Light Sweet @ 39 API.
However its better to be conservative and enjoy the surprises as they occur. Opti's share price could go to $500+ if oil gets near $120 barrel in 2015-2016
You make a good point about Nexen being less concentrated in the high-growth sands region than OPTI. The advantage of NXY for a US investor is that it can be margained and trades with more liquidity. But aside from that, I agree that OPTI is a great opportunity.
You might also want to take a look at Gazprom from a near-term viewpoint. They seem to be taking steps to improve their trading liquidity, may trade on US markets and with their huge market cap will need to be owned by many institutions. Moreover their enormous growth potential from transitioning to market prices for their sales of NG make it a pretty interesting fundamental story.
I don't believe the global economy can sustain, or will tollerate, much more than about $10-15/bbl per year increase in oil going forward from now.
I also think there is more elasticity in oil demand than is often projected in popular PO related demand estimates.
The elasticity of oil demand, the so-called "demand destruction" is a fascinating subject. Seems to me it varies from one user to another. For wealthy people and their cars - no elesticity. For the poor, a lot. For truckers, probably close to zero until their customers find the cost of shipping too expensive and decide to buy products with a lower shipping cost. For airlines and pleasure ships, the same thing. For the military, probably close to no elasticity. To calculate the total elasticity of demand in developed economies you'd need a lot of good data and a computer.
A standard investment outlook mirrors your thinking - saying that if price rises dramatically, say to $100 in a short time, a recession would result, thus lowering demand and price. That would seem to be true except in the developing world where prices are sometimes controlled and mitigated by the government and where growth is mandated by political needs. That exception is even more true in the oil exporting developing countries, where there is almost total disregard for price in determining demand and where oil usage is growing at a very high rate.
We tend to look at demand/supply from a western perspective, sometimes forgetting that oil is a world commodity and that demand in non-western economies is not a free-market phenomenon. When you add that consideration to the potential for increased hording by exporters and eventually the decline in global production, the possibility for sustained large increases in oil price regardless of "elasticity" becomes apparent, in my view.
That is a fundamental tenet of economics.
Structural changes that cannot be made in 18 months CAN be made in 12 years.
How much with the increased elasticity of demand for oil be ? I do not know, but I am not encouraged ATM.
What is worrisome to me is the CO2 output per unit of useful enegy is going the wrong way, and if everybody thinks that tar sands and oil shale are our salvation, they must be ignoring global warming. What if the 2005 hurricane season was just a preview??
http://www.fcnp.com/602/peakoil.htm
There's a really big problem with natural gas supplies in North America and they relate very directly, as you point out, to the tar sands development in Canada. The sooner people wake up to this fact, the sooner they will know just what kind of trouble we're in. Not that I know what to do about it except start powering down and conserving--which is not happening right now. Nor is there any coherent policy to address the problem, as Captain Picard said, "Make It So".
That said, I think there's still plenty of room to conserve. There's still some manufacturing that can move overseas (which may not be a good idea, in the light of peak oil, but big business doesn't think that way). We could widen the use of differential rates, to give people and businesses incentive to shift their electricity use to nights. We could go to a four-day work week.
And rising costs will force conservation. People will lower the thermostat, buy more insulation, buy energy-efficient appliances, etc., if their gas and power bills keep rising. I don't use a lot of electricity, but my bill has increased so sharply that I'm remembering all the things my parents used to do to save energy in the '70s.
I just noticed a new ad for Tide laundry detergent tonight. It showed a whole family cowering in terror...of the electricity bill. Tide to the rescue, of course. It works in cold water. Last scene is the wife happily folding her beautifully clean clothes while hubby fearlessly opens the power bill and rejoices at how much lower it is.
No matter what you do, the easy motoring lifestyle must be changed. That is where everyone's efforts should be concentrated. Trying to figure out new ways to continue business as usual is the equivalent of taking new passengers onto the Titanic and then speeding up without changing course.
More people will die. Needlessly.
Do not take us further out onto the technological fix limb. Eventually it will break. Please. Have a heart.
And I am not taking anyone further out on a technological limb. I am merely pointed out what is likely to happen, not what I want to happen.
Into this idea?
No matter what you do, the easy motoring lifestyle must be changed.
What is wrong with this idea?
"Leaked plan: G8 Seeks to Promote "Trillions" of Dollars of Investment in Fossil Fuels and Nuclear Energy"
http://www.energybulletin.net/14013.html
My hair, what little is left, stood on end. The stupid, greedy bastards are going to do it. They are determined to destroy the world.
It is over.
There is nothing left to do.
Bush and Co., the G-8, whomever, have decided to go after fossil fuels and nuclear with trillions upon trillions of dollars. They have their meetings, divide up the planet, do the big P.R. dance for the cameras.
OK.
Quick credibility check... Did Bush get social security privatized? Has he won his war with Iraq? Will he get Wall Street to pony up buckets of capital to do this? No. No. And no.
Exxon and Chevron aren't going there. They can't sell $1000 barrels of oil from little dipshit reservoirs at the bottom of the deepest oceans. Who can buy them? China? the Third World? the U.S. Consumer? Who is making those giga-bucks? We cannot build machines sufficiently efficient to consume $1000 oil, $500 oil or even $250 oil. And Duane, the business monkey down the street from me isn't about to put corn, switchgrass or coal into his fabulous F-250 with the bushguards.
Very soon we will start doing the obvious. We will
"In a dramatic turn-around from last year's meeting in Gleneagles, Scotland, G8 leaders have set their sights on expanding access to fossil fuels and nuclear energy. Last year, G8 leaders focused on mitigating the impacts of climate change and canceling debt. This year the G8 will focus on promoting trillions of dollars of investment in fossil fuels which will exacerbate both climate change and developing country debt."
Yes. Bring on the tech. I see the machines grinding over the skulls even now.
My heart is breaking.
This, should it be true, is the blackest day in human history.
The thing that got me riled up was there's no talk at all about conservation or alternatives of any kind. And they're not satisfied with the "status quo" and only want more more more. If there's a surefire way to consume all our natural resources in the span of a single generation, this is it.
Well, look on the bright side, at least we won't be sending up too much more CO2 into the atmosphere in about 50 years, b/c either we'll use up all our coal or we're entirely on another "clean" energy source.
1. Would you share your thoughts on what effect the Iran Bourse might have on the Price of oil?
I've only read about the possible effects on the USD.
- If it the Iran Bourse does effecftively devalue the USD, what effect will that have on the price of oil for oil importing countries?
- What countries/traders are likely to use the Iran Bourse? and for what benifit ? will it make oil cheaper ?
Damm! so many questions have I.On the Bourse, he has spoken before.
IT CANNOT BE DONE.
The true nut monkeys, or more accuarately the unwitting-dupe monkeys, are people like OilCEO who believe that we will continue to grow: that population will continue to swell, that some magical techno bullet will save all our butts from the reality of simple physics. His is the blarney we all hear from carnival barkers and patent-medicine salesman. He is the man who insists that the dot.com revolution will go on forever and the stock market will rise to ever greater heights, so buy some more dot.com stock. He is the stock brocker who famously, and fatuously, said on October 28th, 1929, the stock market will rise forever. If OilCEO had even a modicum of education he would see the irony in citing the "dark side" in his comment, but he doesn't. He is mired in profit-seeking, hip-deep in moral equivocation, up to his eyeballs in ignorance: a sad and ignorant man bereft of the knowledge that would would set him free and unable to assess that knowledge, should he deign to think critically about it.
He is a booster, he is George Babbit.
What he and his ilk say is a shuck and jive that is guaranteed to ensure the snuffing of all rational action regarding this revolutionary problem. His proffered hope that something/anything, some special technology, some special human quality, will step out of the shadows and fix everything is nonsense for one simple reason:
WE LIVE ON A SPHERE, NIMROD!!!!
Even if we work out perfect, clean, unadulterated fusion, the planet will still be doomed because of population growth, the destruction of arable farmland, the loss of fresh water, the destruction of the oceans and global warming.
The problem is not oil. Oil is only the rickety wooden framework that is holding up our improbable rollercoaster of a species. The problem is ALL the resources. The problem is species footprint.
The problem is there is only so much cheap oil, expensive oil, coal, natural gas, and what ever else you may want to throw in the mix, left to help back us down from the precipice with a minimum of pain. The time to remove the horses from the barn is before the building is engulfed in flames.
Listen to whom you will, but mark this: Nature will go its own way no matter our actions, but it is entirely possible that she will not include us.
Isaac Asimov in his foundation trilogy imagined an imperial planet, Trantor, that was all city and the entire surface was made of metal. Presumably, the metal had been obtained by strip mining several other worlds The very large population (Asimov himself was inconsistent about the population size) was fed by a just in time supply chain of spaceships from several agricultural worlds. The energy source was never specified, but evidently was vast, clean, and inexhaustible. Asimov never himself addressed how oxygen was regenerated on this metal world, later writers cleaned up the loose ends for him.
To technophiles, Trantor is a dream, the natural goal of exponential population growth and economic development. To biophiles, Trantor is a nightmare. I have no desire to live in such a metal world, which has more in common with a high security prison than a natural environment. Yet, the G8 plan is another step towards trying to build the technophile dream.
In my values system, the program of exponential growth is a lose/lose proposition. The goal requires the destruction of the natural world. Even if miracles such as zero point energy existed to sustain exponential growth, the destination is inherently undesirable. While production of cell phones can keep up with population growth, no new Yosemites are being made. This makes all humanity poorer.
Notably, Asimov had no confidence in the infinite growth of this complex system, so his fictional Trantor suffered a Tainter style collapse and dieoff. Our system will do the same. The G8 program guarantees that the dieoff survivors will inherit a even more severely impoverished world.
That comment makes you sound like a bit of a looney rambler.
Why so pessimistic and angry?
We made it this far haven't we?
By now it's too late to avoid a major crisis.
The good/bad news is that they'll never come up with those trillions. We'll be too busy trying to keep warm and growing food.
Gas is cheap now and the Alberta Energy Utilities Board does not have much backbone in forcing companies to reduce gas usage. For surface mined stuff, the gas use isn't so bad. They produce their own gas in the Syncrude Cokers I think, but they supplement with market gas. For SAGD (steam assisited gravity drainage: like where you inject steam and pump out the bitumen), they use sales gas.
Do not forget that SAGD also uses fresh water in huge quantities and the surface mined stuff ends up creating huge settling ponds from the sand/oil separation process. Water use is the major concern.
As for firing bitumen, the sulphur content is a big problem. This is why the OPTI process looks good since it does a fuel reform to make the combustion fuel. The other way to go is dirty combustion+scrub or inject the nasty stuff down some hole to improve recover elsewhere.
On the dry separation front, it's pretty grim (like a bust). If you don't use water to separate out the sand and dirt (which is like 80 percent of what you dig up) you'd have to heat the whole load up then do heat recovery on the spend sand. Not a good prospect from the second law of thermodynamics standpoint.
Eventually I think the whole oilsands operation will have to be shut down for environmental reasons, but for now in north america it's a needed bandaid/bridge to get off the addiction. Methadone.
First is the nuke option. There are inherently safe designs such as pebble bed and boreated reactors. There is no such thing as nuclear waste, just unused resources. The spent rods could be used in lower temperature systems using ammonia or propane as a working fluid. A particle accelorator based system would covert spent rods into stable isotopes of potassium while generating large amounts of electricity as a byproduct.
I like the compressed air option for storage of wind and PV power. It has many advantages one of which is extraction of water from the atmosphere. Somebody mentioned competeing with China and India for oil, food, and WATER. How can China and India compete with America for WATER??? The same atmosphere flows over every nation and the same ocean flows around all continents.
Economic growth does have natural limits but at a global scale we are nowhere near it. There is 72 terawatts of wind power still waiting to be used as well as hundreds of terawatts of solar shining on us everyday. Human ingenuity is even more abundant. There are better ways of food production that use less land and water if only the rich nations invested in them. All it would take is 25 cents of every dollar spent for war.
National debt is very different from household debt. It is more of a problem for those its owed to than for those who owe it.