DrumBeat: June 27, 2006
Posted by threadbot on June 27, 2006 - 9:25am
OSLO -- Norway, the world's third-largest oil exporter, is battling to stem falling crude output as high costs, maturing resources and labor disputes threaten to undermine near- and long-term production goals.This is labor dispute they are talking about: Oil industry to strike in NorwayFor years, the Nordic country has been a top supplier of crude to world markets, particularly Europe and the U.S. Despite record oil prices and investment, however, government and industry officials say oil-union strikes, a tight rig market and a dwindling number of big-field discoveries may accelerate the inevitable decline in crude production and prevent the country from meeting its output targets.
OSLO, Norway, June 25 (UPI) -- Norwegian oil industry workers may be preparing to go on strike, Aftenposten reported.Leif Harald Halvorsen of the oil industry's national association told reporters that drilling activity and exploration is being halted, and about 30 drilling operations may be affected if no solution is found. A strike among members of the oil services branch has already closed operation on two oil rigs.
Energy literacy - what you don't know can hurt you.
David O'Reilly, CEO of Chevron, says Corn is not the answer.
African countries struggling with high oil prices
Kuwait wonders, How much oil do we really have?
For quiet some time Kuwait's official oil reserves have remained static, hovering around an agreed figure of 94 to 99 billion barrels of proven oil, although some sources put it as high as 101.5 billion. However, in a series of controversies revolving around the oil industry and its global implications, it has been revealed through certain individuals that the official figure is a mockery, since what has actually been accounted for is way below the official figures.In what seems to be a phenomenon that not only affects Kuwait but the entire oil industry, people are starting to wonder how much longer can we sustain oil, especially as demand from emerging countries is constantly increasing. Oil is a limited resource and its depletion date seems to approaching rather fast.
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Russia to quadruple natural-gas price for Belarus in 2007
The Folks over at 321energy.com have an interesting article
Energy Price Explosion Not a Short Term Event
The topic of natural gas was quite interesting...
A little off-topic but interesting none the less...
A Cup of Gasoline per Apple?
Do you like the taste of juicy organic apples from Washington? They're not bad, but they could taste sweeter if each one didn't involve a cup of gasoline.
-C.
Europe fears new energy crisis as Russia gas row flares
Some tidbits...
"It seems like all the makings of a perfect storm," said Jeffrey Woodruff, a director of the energy group at ratings agency Fitch.
"Any of the events in isolation could be enough to spark new supply interruptions in Europe, but all of them colluding near the beginning of the G8 summit on energy security seems unbelievable."
-C.
They have less resources of their own to rely on, the guy at the other end of their pipe is a former KGB agent who is hugely pissed over the fall of the USSR empire and is going to extract revenge on anybody he can for it, and on the opposite end of that same pipe is a rising empire that is fighting like hell for access to resources.
Everybody depending on energy imports to support their current lifestyle is in big trouble - the thing is, that is what, around 80% of humanity?
The question is, what happens after the energy available is reduced?
There, I place my bets on Europe in comparison to the U.S. - Europe will quite likely return to its standard traditions - the harvest is going quite well out my window and throughout this region, the sheep are doing their annual trek, a lot of people made strawberry jam from local strawberries using sugar made from sugar beets grown in the region, and the cherries are looking quite good. This will be followed by apples and grapes.
How does it look from your window?
If you mean Germans will be doing worse because they aren't going to be tearing down the autobahn, I agree. If you mean the trains connecting the cities and towns will stop running, I disagree. And if you mean that countries with with positive trade flows are in a worse position than the world's largest debtor nation, I think you are very mistaken.
No one, absolutely no one, is likely to enjoy the next several decades - but I prefer living in a place with local agriculture and high technology and long term perspectives in planning.
I think the U.S. will have to work very hard to even come close to achieving European 'disadvantages' like inefficient local agriculture, social services and essentially universal health care, essentially zero population growth, and a perspective which covers generations not quarterly reports.
Unlike 40% of Americans, wwho I have read expect to end their lives among the top 1% of the wealthy, Europeans are people who tend to have a realistic view of what life offers. This seems to be the essential handicap you are describing.
Expat, I enjoy your unique perspective and I realistically plan to die in Europe. I prefer the Danish, but that's another topic. I'd like to point out something about your quote above. Those 40% who believe they will die in the top 1% is the entrepreneurial spirit that has driven this country from the bottom to the top. I'm not saying Europe lacks this, but historically the risk takers left Europe to come here. Those who wanted to just deal with what life gives them, stayed.
I don't see this as a handicap either because this spirit drives people to compete and attain what they want. Now 40% believing the top 1% is a stretch, but I still believe I will be well of financially, just not THAT well off. I've opened businesses that have failed, I know what failure feels like, but I still grind out a living and think of HOW to get myself out of the race I'm in. If I were "realistic" as you say, I would just kowtow and lack any motivation to change my life for the better. I'll end this by saying there is a definate difference between those who BELIEVE they will be rich, and those who WORK to becoming rich.
In reality, we have been steadily moving towards a system of taxation that favors wealth over work. The middle class has steadily been shrinking for many years. We have moved into a mindset that consumption is the central goal of all our lives, and in the process have ended up augmenting our lifestyle based on going deeper and deeper into debt.
I think it's a mistake to think of the United States as being somehow more exceptional than Europe or anywhere else. We're different, certainly, but not necessarily better. I doubt there is any significant difference in personality type based on people leaving Europe to come here. You can use that sort of thinking to make almost any argument. For example, you could just as easily say that "only those who couldn't cut it in Europe came to America." It would have just as little validity to it.
Europe right now is grappling with the opposite problem that we are. Their society is designed to be more egalitarian, so that even those who are poor are better off. For example, European poor can still go to the doctor, poor here don't have that luxury. Now, the opposite side of that is that in ensuring stability and economic fairness, that their economies are a bit less fluid and able to quickly react. Clearly they have problems, but they are also relatively overblown by the U.S. financial press.
My point was essentially based on the delusional idea that 40% becomes 1% - not only won't it happen, it is not possible.
And yet, Americans believe it. There are a lot of beliefs which seem fairly unique to America, if only in part because no other society had the chance to live in such luxury that they could ignore the world around them for a generation or two. (And for those Americans who believe Europe is living in a dream world - sure, they are, in part because they also know very well what a nightmare world looks like too - they worked hard to achieve the dream.)
Sort of like saying global warming isn't true, because it is just raining for a week in DC - I should trademark something along such lines as 'Cold rain means no global warming' for the oil companies.
EU countries do not look to be able to resolve even simple internal issues of employment - students riot to protect young people's wages and guarantees of lifetime employment that prevent them from being hired, resulting in high unemployment that then creates dissatisfaction and more riots among immigrants. The US, for all its recent mismanagement, remains a far better place for a poor person to rise to middle class or above, to say nothing about a person with a 'different' background to get a job.
THe US could do without any oil imports by car-pooling, converting to prius/diesel technology, plus moving from trucks for long haul to trains - that is, adapting to Europe-level energy consumption. And, we will soon begin converting from fossil fueled generating stations to nuclear ones, something not likely to come soon to Germany, the EU's largest economy, where we will see more brown coal consumed instead. Europe is addicted to russian gas, and the price is rising fast. As for oil, the EU is becoming less self-sufficient by the day.
As an aside, the world may well be moving towards less trade and more local product, not least agriculture. But, globalization has brought higher living standards to many, not least in asia but in many others too. Many at this site decry trade and its more visible entities, such as walmart. Probably many of these proudly think of themselve as liberals. There was a time when US liberals, and "trade" unions too, supported free trade both as helpful to the world's poor and as usefully providing markets for our exports. Trade still mostly helps the world's poor while competition does, in the end, help everybody. Restrictions to trade would reduce jobs everywhere today, just as they did do in the thirties, whether caused by policy or higher energy costs.
I disagree about our leadership though. I'm not liberal by any means, I'm for a small small national govt. States should have a bit more power, but that's for another discussion. People keep saying we did this before, so we'll rise to the occasion. I think this is flat wrong. We will do something about, albeit too late, but it can't FIX this problem. It's easy to build crap and destroy even more crap with big metal bombs. The people of those generations were used to sacrificing and dealt with rationing of common goods for the war effort. Can you imagine that now?
We are different people than just three decades ago. We haven't faced a major crisis that required a national effort since WWII. Vietnam, Korea, & the middle east conflict are NOT even close in national scope. We transformed entire sectors of our economy into wartime mode. We couldn't do that now and part of it has to due with the flight of all the equipment, plant & property we used to make these wartime machines.
So much has changed especially the consuming public. We consume like no one on this planet and we gloat on top of that. Generally speaking we have transformed into a "me, now" culture and have little room for sacrifices. Add on that our representatives do not represent us, rather corp america and what will motivate these people? Personally I'm getting rid of any incumbant that I can, but the replacements don't look a whole lot better. The business interests of this country do not jive with the personal needs of America. However the average American will tell you different due to the success of the machine know as marketing.
Not to mention Science is being repressed. Does that sound like another time European history? Science is being tarnished by this Administration and who knows what the next leader will have to say about this. Most people are asleep at the wheel, the leaders are sleeping, and the few of us that are awake are screaming to slam on the brakes. The only way out is reduce demand. As a politician you will not get elected telling everyone to stop doing what they are doing.
Maybe things have changed. I haven't been there in 20 years.
T
Things may look nice outside your window, but in terms of the European Union, times are generally good right now and we see:
- Truckers blockading ports and cities when gasoline prices get too high.
- Students rioting (and the government give in) when labor laws are changed.
- Sizeable minorities (Muslims, Turks) who are widely disaffected.
- Huge agricultural subsidies keeping those local farmers in business, and when those laws are threatened, they threaten to riot too.
- Several countries have already had their populations refuse to ratify articles of the European Union.
So clearly there's already some tension under the surface there. And yes, some of those things are also true of the US. But the US has the advantage of an American identity. When things get difficult, say a recession, do you think the Germans and the Italians are going to agree on interest rates?And notice - whenever worldwide markets decline, what goes up? US Treasury Bills. That says something, namely that there is still an underlying faith in the US.
I won't argue with you though that Europe in general has significantly better transit systems.
well, it is a problem of focus. I grew up in Fairfax County near Washinton, DC - if you think a neighborhood in Anacostia has anything to do with Fairfax, then you will see quickly how the averages paint a very different picture. The same is true of West Virginia compared to Northern Virginia. But Fairfax in the 70s was a very good place to live.
America has extremes which are pretty much unacceptable in a European context. And America has thrown away things which Europeans consider important to the long term.
And Europeans tend to want to keep what they have - what you see as social disorder (and which it is, at times) most people here see as standing up for their rights - and yes, they have a broader definition of 'rights' than being hired and fired as a privilege of participating in a free market where the rich are certainly getting richer, and the poor are to blame.
There are a number of ways of looking at the future, of course - personally, I prefer a place already living many of the suggestions Americans are still dimly aware of as a response to declining liquid fossil fuels. European societies existed long before fossil fuels, and they are likely to exist afterwards. The same is much harder to seriously suggest about the U.S.A.
Local agriculture, for example, is a social question, not a technological one. Technology is only a part of peak oil, though the one Americans tend to focus on it almost obsessively, either pro or con. How much farmland did the last couple of decades of suburban development cost the U.S.? And in a decade or two, do you think anyone will find that a good bargain - giving up farm fields for the hour commute to pay for the mortgage?
Europe has made different long term choices - we will see how they play out.
The Austrian energy companies run hydroelectric reservoirs in the mountains, where off peak surplus energy is stored, by pumping water up into these reservoirs. Base load often from nuclear plants is traded against peak load from these reservoirs. Just as Switzerland or Norway we aren´t dependent on coal or natural gas in our electricity generation.
North America should be the world leader in natural sustainability and biosolar Powerup, but sadly we are the worst. I have posted below my just written reply to Magnus Redin in an old thread for debate by other TODers:
Hello Magnus Redin,
Good for you to live in such a proactive country. =D Hopefully other global leaders are watching and learning.
I agree with you that universal Peakoil awareness would be better than denial and ignorance. Once worldwide awareness of possible Smallpox elimination by 'ring encirclement vaccination' was achieved-- everyone cooperated and mobilized towards this end. I consider this the greatest example of worldwide cooperation and achievement in our entire history!
Thus, the entire world should be treating Peakoil as just another Smallpox [Small-thoughts] outbreak. Proper 'ring encirclement vaccination' requires widespread Peakoil Outreach education, and every leader from local to the national level needs to be encouraging everyone to 'vaccinate' themselves with conservation and lower birthrates.
The US, with the highest/capita energy consumption rate; or the worst 'conservation Small-thoughts' infection rates, should be the worldwide leader in Powerdown to help reduce infectious detritus consumption elsewhere [like China's desire for cars].
The gradual proactive encirclement of high consumption areas by 'innoculated' outsiders spreading Peakoil Outreach 'vaccinations' will finally defeat the terribly harmful infection of ignorance and denial.
To achieve this 'ring encirclement' end, I would not be averse to the President, in cooperation with the AZ governor, to temporarily declare AZ martial law and close the statewide borders to any people ingress or outgress with Earthmarine forces, gradually impose $10/gallon equiv gas prices on all energies, 24/7 TV broadcast of Peakoil Outreach info, and mandate a gradual multi-year shrinkage of shared carry-capacity with outside states to proactively drive ELP Powerdown and biosolar Powerup. This would rapidly reduce infectious ignorance and denial in our Asphalt Wonderland, and instantly jumpstart mutual cooperation to hopefully prevent Nature's Overshoot cull.
When AZ has reached sustainability; is finally clear of Small-thought infection, then 'ring encirclement vaccination' at the next state. Lather, rinse, and repeat till the US is energy infection free. Strength thru Detritus Powerdown and Biosolar Powerup!
Obviously, this is very controversial, but should be considered preferable by all versus having the 'last man standing scenario' and Mother Nature batting last.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
slight proof-reading oversight: "Lather, rinse, and repeat till the US is energy infection free."
should read: "Lather, rinse, and repeat till the US is detritus energy infection free."
In other words-- we can harness all the truly sustainable biosolar energy we want by PV, wind, tide, hydro, alt fuels, etc-- Biosolar Powerup as far as is naturally sustainable.
I picked Az as the first state because we should be the world leader in PV [endless sunshine], but our cheap energy infrastructure has suppressed this PV growth.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Why not let the market decide who gets to have or keep cars? Once peak oil is widely accepted prices will rise. Many chinese exporters might be able afford a car while many US importers relinquish theirs. (Many think we are rich and they are poor - but, they hold the mortgage. Generally it is the banker who is rich, not the borrower.)
Thxs for responding. Letting the collective market decide is exactly the method used by all past societies to suboptimally collapse into violence and mayhem; the typical Thermo-Gene Collision. As mentioned before by me: Our Genes are not our friends. Can we collectively outwit our instinctive impulses? This is the true test of our vaunted intelligence.
Reg Morrison already has posited that GAS and other genetic drivers are already whittling away at our numbers. Mother Nature has an insurmountable arsenal to rapidly decrease a plague specie. No need to go into the details.
If we collectively are to be Smarter than Yeast then proactive mitigation must be driven worldwide to optimize our monumental numeric decline and retain some vestiges of civilization and other lifeforms. Historians like Diamond, Price, and Tainter, and Geneticists like Reg Morrison, Dawkins, and Darwin strongly doubt our grey matter overcoming our ancient lizard brain. I think we have no choice but to try our proactive best.
Of course, all my various hypothetical scenarios may not be the best answer-- I make no claim for any above average intelligence. But I sure wish some true Einstein genius would propose a plan that the whole world would agree is the best grey-matter path forward.
At least lizards can lose their tails, then crudely consider their next option as the tail regrows. Can Humans afford to lose their collective asses?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
This is symptomatic of a culture meme that runs deep in our society --the ISEP excuse (it's somebody else's problem -- it's einstein's problem).
I'm not blaming you. We all suffer from this cultural embed. There is no Einstein. It's you & me. That's all there is going to be. So we have to figure how to edge the universe towards a new direction. -one yeast cell at a time if it has to be that way :-)
Too bad for the EU, Russia's days of being desperate for foreign cash are over. Russia is about to pay off the remaining $22 billion of its Paris Club debt after cutting it by $15 billion last year. Easing off on fossil fuel exports will help Russia lower inflation.
Current prices for oil and gas are still heavily influenced by the myth that we have decades of easy sailing ahead. I believe Simmons's prediction of a severe production decline in the next 15 years. Realistic prices should be in the hundreds of dollars per barrel of oil and thousands for a thousand cubic meters of gas. There are no substitutes that will arrive in the next 15 years so it is time to get real.
http://news.bbc.co.uk/1/hi/health/4965034.stm
Apparently health of richest Americans about as good as that of poorest Brits. I would suggest this can be extended to most of EU countries and not just UK. they did the study only on white US residents to keep it neutral. I would guess it has to do with instability and change resulting in heavy stress in the individual. we all know that death of spouse, changing jobs or moving cause stress and stress reduces immune system response which reduces health. USA is flexible that is very true and therefore achieves lots of interesting solutions and fast growth but as people having fewer internal cultural barriers to change(like language, geography and tradition) accept almost any change as normal regardless. These changes however are easily imposed/influenced through commercial interests quickly on a continental scale which is elsewhere impossible except possibly in China(which has a historical tendency to switch from isolation to reform every generation or so). If you believe what was written in the book 1421 about the Chinese discovering the New world and everywhere else 71 years before Columbus then going immediately back into isolation you can see that such a quick flexibility has its disadvantages long term. Europe with its competing centers was able to develop through its competition into the center of world culture although China had long before made huge steel ovens, paper, gunpowder and moving print. Competing centers of ideas will remain in Europe despite EU centralist tendencies. This encourages development of new ideas, which will then be copied by others after experimentation or even not. Freedom is relative. When you have no freedom to stop a certain trend like chain stores, mass immigration or whatever you might feel like moving abroad. In USA this is hardly possible. In Europe the national units are small enough so that people feel a bit more connection emotionally, historically, culturally and ethnically to the whole and no reason to change just for its own sake(ss in USA) as they have no inner roots in local culture.
We will never find a single alternative energy source that will replace oil. We will, though, find ways to use a collection of energy sources, technologies, and conservation measures to replace oil. E.g. personal motor vehicles running on electricity generated by wind and solar, large trucks running on biodiesel, and substitutes for oil in making things like plastics will all contribute.
Imagine making plastics from scratch - split water, combine the freed hydrogen with carbon. This is what algae, fueled by sunlight, did way back when.
What we want here is very efficient solar collectors, more nukes, or both.
Oh, that's not true at all. Plant carbohydrates can be used to make plastics/fertilizers. Heck, it's mostly our odd obsession with corn that makes fertilizers a big deal in farming. Feedstocks for plastics are not the big deal. It's the big things, the things that take 80% of our oil/gas use, that are the hard part. That's transportation and heat, for which electricity from wind and solar (and solar thermal) will work just fine. In the long run...it's just the transition that's the problem. That's what Simmons is trying to scare us into dealing with.
Not only do we flush fertilizer down the commode on a regular basis, but also we waste huge amounts of food and vegetable products.
There is research going on that may make it possible to extract NPK from sewage and animal wastes for recycling. We also could do much better in recycling grey water to crops that are not destined to be consumed by humans, like switchgrass, tree plantations, soilseed and fiber plants, and even corn not intended for human consumption.
With some effort and known technologies, I believe that we could reduce the amount of chemical fertilizer usage by quite a bit.
http://www.simmonsco-intl.com/files/Energy%20Conversation.pdf
He's really waving the red flag. On one slide is "By 2020, the current 80+ mb/d base could be reduced to 25 mb/d." Below it says this is based on a 8% p.a. decline rate, presumably starting in a year or two's time. Am I missing something or does he expect total liquids production to fall to that level by 2020? What is the justification for this - terrifying - prognosis?
Starting in 2007 (8% decline), 2020 24.60 mmbpd
I guess in this presentation he is assuming PEAK in NOW - 2006. I don't think he has ever openly said this before, but the numbers he put out there do.
I just did a simple 8% year over year reduction, no curve or other fancy math. (Forgive me if it is too simple)
80 8% 2006 Using 80+ figure from Simmons.
73.6 6.4 2007
67.71 5.89 2008
62.30 5.42 2009
57.31 4.98 2010
52.73 4.58 2011
48.51 4.22 2012
44.63 3.88 2013
41.06 3.57 2014
37.77 3.28 2015
34.75 3.02 2016
31.97 2.78 2017
29.41 2.56 2018
27.06 2.35 2019
24.90 2.16 2020
On another note, Cheney's famous "Peak" speeches seems to indicate that he thinks it will be this bad as well.
I don't presume to have the technical knowledge or graphing expertise of many on this forum. Just thought I would take a stab at it.
=========It's all about population!
Should read:
Starting in 2007 (8% decline), 2020 24.90 mmbpd
from the table.
=========It's all about population!
In this presentation it seems he is stating more firmly than ever before that he believes we are essentially at peak right now.
Rather worrying that the man who you might expext to know the most, is so pessimistic.
Q = 288 Gbb
URR 828 Gbb
now at 35% of URR
Laherrere Link
The same is now true in Africa. And it will only get worse as prices for kerosine and gasoline get higher while the rich and their assets flee overseas. And while they starve they cut down every tree and bush for fuel while destroying the topsoil with pitiful, futile attempts to farm the spreading desert. This is intolerable but I have no suggestion or solution. May God have mercy on all of us, its a horror that will be repeated all over the world unless we conserve and use birth control and encourage others to do the same.
The most energy "efficient" human being is one who is dead and decompsing.
I'm so thrilled that our Magnificent Management Machine (the hidden foot) is guiding us all towards this "efficient" outcome.
Late credit card payments tick higher
Come join
'The Light Brigade'
http://www.pbase.com/image/62576165
Lighting
Most lighting in U.S. homes is produced by inefficient incandescent light bulbs or moderately efficient fluorescents. A switch from incandescents to compact fluorescent (CFL) bulbs can result in up to a 75% decrease in energy use. A typical CFL will save over $50 in replacement bulb and electricity costs over its lifetime.
The best targets for conversion to CFLs are 60-100W bulbs used several hours a day. In addition, CFLs eliminate the cost of buying and installing at least a dozen ordinary bulbs. CFL bulbs now come in a wide variety of sizes and shapes making it possible to replace almost any incandescent bulb. Some newer CFLs are also capable of producing a warmer light which is closer to the light produced by incandescents than that produced by some earlier CFLs.
Each CFL can prevent the emission of between 1,000-2,000 lbs. of carbon dioxide from entering the atmosphere, and between 8-16 lbs. of sulfur dioxide (the cause of acid rain). CFLs run cooler than incandescents and halogens, minimizing fire hazards and reducing the cost of cooling in summer. CFLs also last up to seven years, which saves you the expense and hassle of frequent light bulb replacements.
Compact fluorescent bulbs are widely available and can be purchased at Home Depot and most hardware stores (where rebates and/or coupons are often available) or online at:
Energy Federation Incorporated
www.efi.org
Real Goods
www.realgoods.com
Noli Control Systems
www.nolico.com/saveenergy/15_watt_swirl.htm
www.bulbs.com
In order to further maximize savings on lighting, make sure that lights are turned off when not in use. While this sounds simple, it can be difficult to manage. Therefore, you should consider installing motion sensors (activated only when someone is in a room), dimmers and timers on lights.
They are for instance used instead of light switches in manny of my universities toilets and other types switch off the lights in lecture rooms if nobody is present.
That reminds me that I have to get some more. I have converted most of the house. I just moved into it a bit less than 2 years ago, and have been converting as bulbs have burned out. I always buy mine from Ebay. You can get them in bulk for 25% of what you pay at Home Depot.
RR
http://www.ihservices.org/catalog/i201.html
-C.
RR
-C.
Obviously outdoor light don't fit this thinking.
I find this to be one of the biggest fallacy's in the whole energy savings marketing game. Right behind it is electric water heaters- if they ar located inside the heated living space of a home then it adds heat to the living area and is not "wasted".
Have you read this anywhere? Obviously NOT at Home Depot.
You're better off burning the natural gas for heating yourself, rather than having a power plant burn the natural gas to convert it to electricity, only to then inefficiently convert it back to heat.
CFL bulbs do save a LOT of power. I don't know about the money figures involved, as personally I care more about using less power, not what it means to my bottomline. I assume the end result is superior to incandescants due to the lower power usage.
I understand that there are things like heat pumps which run on electricity and which are fairly efficient, but the average toaster-style electric water heater is not the slightest bit.
USFilter installed, last year, 20 new 125,000 barrel per day seawater treatment filters for the Ain Dar and Shedgum seawater treatment plant. This plant treats seawater, removing sand and other solids from the water before it is injected into the oil reservoir. Water injection is used to keep the pressure up on the reservoir. Ain Dar and Shedgum are the two northernmost fields in the super giant Ghawar field in Saudi Arabia. They are the most productive areas of Ghawar and consequently where most of the injection water is used. However it is likely that this filtration plant supplies injection water for the rest of Ghawar as well.
This adds 2.5 million barrels to the already 7 million barrel capacity of the plant. What this means is that 9.5 million barrels per day of seawater are now being injected into the Ghawar reservoir.
Those of us who follow Saudi oil production closely read often that 7 million barrels of seawater is being injected into Ghawar every day. Well, now that figure is 9.5 million barrels per day. I don't know what the water cut is up to right now as I don't think there is any direct correlation between water injected and water cut. But I have heard from other sources that it is above 55 percent and rising. But the fact that they have increased the water being injected into Ghawar by 35 percent tells us that that the world should take notice about what's happening in the Saudi oil patch. Things are not looking good.
Here is the URL. The part about the newly installed 2.5 million barrel per day filters is in column 1 of page 4.
http://tinyurl.com/f2cz2
Ron Patterson
55%?
Didn't M. Simmons state in his book (twilight in the desert) that the Saudis were encountering problems when water cut was hitting mid 30's? (I don't have the book here in front of me so I'm going from memory...)
I recall that they were able to hit mid 30's on water cut for a while but had to back off due to risk of damaging the fields, correct?
-C.
The extra water injection went on line in mid 2005, so their water cut must be way in excess of 30% now. Well, that is just my guess but you cannot increase the water injection by 35% without increasing the water cut as well. Not for very long anyway. But remember, you cannot back off the water injection without decreasing production. You inject water for two reasons. The first is to try to "sweep" the oil toward the wellhead. The second is to keep the pressure up in the reservoir. The higher the pressure, the more oil is forced out. Decrease the pressure and you decrease the oil extraction.
"Brine stained with oil", now that is a pretty heafty water cut. Of course I think the Occidental Petroleum official was speaking of Oman here, he did not say, but that is pretty much the case in a lot of places in the Middle East.
thank you for clarifying. I surely meant water injection as well, apologies for stumbling on the terminology.
I must be loosing my mind, I could have sworn Simmons said they "backed off" on the water injection to keep from damaging the fields. I've loaned the book at to a friend, once returned I'll have to re-review :-/
-C.
I read Simmons' book and do not remember anything about the Saudis backing off their water injection. I loaned the book to my son who took it back to Saudi Arabia with him last August. He will be back, with the book, in July and I will check it again. He said there was always a waiting list to read the book. I think about 8 people over there have read my copy of it. But they all have had their expat leave by now and should have their own copy now if they want one that bad.
By the way Simmons does express the idea in the book that the Saudis are damaging their fields by overproducing. He talks about "coning" in several places. He also discusses the problem of water coming up to a horizontal well pipe. I don't remember the term but it would look more like a wall instead of a cone. At any rate, too much water injection definitely can damage a well. As others have pointed out, coning, or walling, (not the word he actually used) can cut off oil to the well wellhead.
Simmons also talked a lot about the fracturing, or rather the fractured condition, of the Ghawar reservoir. What this does is create shortcuts for the water to penetrate and dramatically cuts down the "sweeping" effect. At any rate I cannot wait to get my copy back. I am going to read it cover to cover.....again.
-- Same here!
-C.
From Ghawar the King of Oilfields
"As the world's thirst for more oil dissipated in 1982 Saudi Aramico quickly throttled back Ghawar's output to let this great field 'rest' in the hope of bringing the rising water cuts back under control. In the field by field production reports in 1982 Ghawar's total output has already dropped by almost 2 mbpd.... then it's production in 1985 may have dropped to as low as 1 mbpd. This badly needed 'resting' no doubt worked to push back the declines the 1979 Senate Staff Report predicted would arrive by the early 1990's. It most likely postponed this event for a decade or more."
"Mothballing 50 to 70% of Ghawar must have brought genuine relief to he field's reservoir engineers who had grown concerned that the area was being overproduced. This large southern area then lay fallow until 1990 when Iraq invaded Kuwait......An Aramico team had been carefully monitoring (and welcoming) a steady rise in both the pressure and temperature through most of the resting part of the field. The pressure buildup was purely a natural phenomenon; no water injection was being done and no oil was being produced. When Haradh (southern Ghawar) was put back into production the reservoir pressure rapidly declined."
"When Iraq invaded Kuwait SA was suddenly forced to raise it's total output to from around 5 mbpd in 1990 to over 8 mbpd by the end of 1991. This rapid increase led to a doubling of water cut. Ain Dar/Shedgum (north Ghawar) jumped back to a level of 2.2 to 2.5 mbpd. As horizontal wells began replacing verticle wells the water cut soon stabilized but it was now a steady 35 to 36%."
"From 1993 to 2003, Ghawar's production averaged between 4.6 and 5.2 mbpd, increasing slowly from 1993 to 1997 decreasing sharply from 1997 to 1997 then increasing again in 2000 and 2001 and then jumping to 5.2 mbpd in 2003. The water cut increased from about 26% in 1993 to maybe 29% in 1996, and then accelerating sharply to a high of over 36% in 1999, coinciding with the two year oil production decline. The water cut then declined steadily to 33% in 2003 as production began to increase....... Abandoning the verticle wells and replacing them with horizontal configuration would allow Aramaco to place the completion zones above the oil/water contact and minimise water production for several more years."
Most relevant passages I could find.
Someone else said it. This chapter is more sobering the second time through.
Water breakthrogh then closing lower parts of verticle wells ,more water then advanced drilling, then more water then advanced mapping, reloating wells, avoiding the fissures, now more water.....
if this were musical chairs I'd say the music has been playing a long time while we run around, I'm telling my friends better start looking for a good place to land.
I really wasn't loosing my mind :)
-C.
> overproducing will damage the fields (-- Darwinian)
Broadly true, but you'd have to suck REALLY hard to do any lasting harm to something like Ghawar. Deliberately producing beyond the ability of artificial or natural energy sources to maintain reservoir pressure will eventually hit your productive well capacity, but that is more akin to the battery running down than damage to the fabric of the reservoir.
> there is no way you can control the water cut (-- Darwinian)
You can control field watercut by shutting in the wettest wells. You would normally do this only if your surface water handling facilities were fully utilized (could this be the case in G.?). Some of the shut-in oil will migrate updip and be produced elsewhere, some will be lost for good - it's never a certain thing. Within individual wells you can intervene in various ways to shut off production from layers which have watered out, which buys you some time and may or may not cost you oil. In the case of those "bottle brush" wells, you are supposed to be able to turn off just the wet branches.
> You inject water for two reasons. ( -- Darwinian)
> The first is to try to "sweep" the oil toward the wellhead.
> The second is to keep the pressure up in the reservoir
This is what some REs will tell you, but if they were being honest they'd only mention the second reason. You inject water to replace what you take out, ie to maintain pressure. Period. You HOPE that it gives pressure support to producers but won't move faster than the oil (fingering, channeling, coning, cusping, wedging - different verbs for different physics and geometries) and so make your producers water out before all the moveable oil (another technical term - sorry) in a given sector of the reservoir has been produced. These two objectives (pressure support and no early breakthrough) are incompatible to a certain extent - the only way to guarantee no breakthrough would be a barrier of some sort between injector and producer, and then you'd get no pressure support. So in practice this is impossible to get 100% right, but you can help things by appropriate choice of injector well location, what layers you inject in, injection and production rates, interventions in producers when they start watering out (see above), and a bit of luck.
There's a third reason for injecting water i.e. to dispose of produced water. Not always possible as oil mist, scale and other grunge can clog up your injectors - filtration may or may not improve matters - but if water is scarce (e.g. in the desert) or the regulator won't let you dump produced water then you're going to want to give it a try. You'll be wanting to put the volume back one way or another anyway.
> Whichever way you shake a stick at it, if ( -- Mudlogger)
> ultimately you have to pump 9.5mB of water per
> day to get 9.5mB oil
See my comments on formation volume factor (FVF) elsewhere e.g. http://www.theoildrum.com/comments/2006/2/8/233314/5260/52#52 - you ALWAYS have to inject more water than you produce oil, just to stay standing still.
+++ MY TAKE ON THIS (stop reading now)
There's a production profile for Ghawar here http://www.searchanddiscovery.com/documents/2004/afifi01/index.htm
And some more technical data here http://www.gregcroft.com/ghawar.ivnu where did that come from? Any of these data may be made-up, of course.
The former paper gives a recent production rate of about 5 MMb/d and a watercut of 33% so that's about 2.5 MMb/d produced water. The latter paper gives an FVF of about 1.32 so reservoir conditions production is (5*1.32+2.5)=9.1 MM reservoir barrels per day so 7 Mb/d water injection means about 7/9.1 = 77% voidage replacement so reservoir pressure will be dropping.
So it looks as if they are upping their water injection capacity to go back to 100% voidage replacement or so. Should have done it earlier, but a reservoir that size can take it. Of course, more recent production data would be helpful here. Somebody upthread mentioned 55% which seems rather a sharp increase from 33% in 2003 when compared with the historical trend - would certainly qualify as a "collapse". Hard to believe but scary-exciting if true.
ARAMCO-watchers are the Kremlin-watchers of the 21st Century. I think I'll hit POST now as this is going on far too long!
http://maps.google.com/?ie=UTF8&ll=25.629919,49.39436&spn=0.054247,0.079136&t=k&om=1
http://maps.google.com/?ie=UTF8&t=k&om=1&ll=25.179874,49.340522&spn=0.013613,0.01978 4
Scale bar at bottom left. Don't know how big a pond would have to be to evaporate 2.5 MMb/d though! Or maybe it's just the ARAMCO executive club boating lake.
BTW great insight to the oil field management, thanks.
If so, why would the Saudis possibly damage their fields when cutting in the mid 30s? (again, going from memory so maybe this argument is moot)
-C.
Water cut is not the problem it has to do with pump rates.
My basic understanding is that if you over pressurise the reservoir with water it damages the structure basically these reservoirs are spongy limestone or sandstone that can crack.
The water also tends to follow natural fractures.
Your right its not simple but there is a direct correlation between the rate that water is pumped into the reservoir and damage. I think when people speak of damaging the resivors by over pumping most of the damage is actually caused by injecting to much water to over pressurise the resivor so you can pump more.
Surprisingly google does not return a good link on the subject I think it would be a excellent topic for the oil drum.
Lots of early fields were ruined in the US by these practices. That's why oil wells are choked {produced through a small orifice) and the Railroad Commission sets an allowable at the maximum effective rate, or MER.
What really matters in an oil well is not the percentage of oil but how much fluid an operator can produce and separate and dispose of responsibly. And this is on a well by well basis. I know a couple of operators who make money with a 3% oil cut. Although I don't know of any 1% cut wells making money, I would not be surprised to hear of some, particularily if they just dump the formation water in a creek or the ocean. That's not allowed in the US, but who knows whats being done in the jungles of the Amazon or the Nigerian Delta. And in Saudi the water is used in pressure maintainence.
Reentering old wells that were abandoned when they were making oil or gas but not in commercial quantities is big busness here in the US, and lots of production was abandoned early because of water disposal costs.
The water in these operations is sent back down on a gravity feed arrangement to another zone for disposal after the oil and water is separated by skimming the oil off the top in a separator. Electricity is expensive, the disposal well --- [in particular the special tubing in the disposal well] -- is expensive, casing and tubing sizes in the production well are typically large to allow for a larger diameter and thereby cheaper pump, and the REDA [Russian Electric Downhole Actuation] submersible pump itself is also fairly pricey.
Strangely enough, these "brine stained with oil" wells produce with a much higher cut when they are pumped down to a level just above the producing zone. Reducing hydrostatic pressure is much more important than any ill effects from the coning that undoubtedly occurs. A massive water drive and good permiability and porosity are required, and a number of large diameter cased holes make for a good prospect.
There is also a different category of well that operates a little like I suppose the coal bed methane wells, where the object is to physically "dewater" the formation which mobilizes the oil. Good prospect in these cases are typically fairly tight carbonate reservoirs with gas solution drive. The Carney area of OK has produced a lot of very profitable Hunton Lime wells applying dewatering techniques. Unfortunately I don't own any part of any of them.
My layman's understand of the matter goes something like this:
When water injection is used to maintain the pressure of an oil field (which naturally drops as a greater and greater volume of oil is extracted from the formation's pore space), the water injection wells are typically placed toward the outer edges of the field, so as to produce a pressure gradient that will help 'sweep' the oil toward the production wells.
This technique will work just fine if the formation is of uniform porosity and uniform permeability. However, in reality many formations exhibit quite variable porosity and permeability, as well as outright fractures. Under such conditions, if the water is injected at too high a rate, instead of uniformly sweeping the oil toward the production wells, some of the water can move preferentially along pathways of high porosity and high permeability and completely bypass the oil. The higher the pressure on the injection wells and the higher the reate of water injection, the greater the risk of this occurring.
Excessive water injection not only increases the water cut of the oil coming out of the wells but also leaves a certain amount of oil stranded, sometimes irreversibly (or only reversible at very high cost).
So, it's not just the inconvenience and expense of having to deal with all that oily water, it's that a high water cut is a symptom that all is not going well down below and that a lot of oil is being left behind, possibly permanently.
I hope I got this at least close to being right. If not, any of you real oil people out there, please jump in.
Ghawar has made about 60 Gb. If it matches the world record recovery factor of about 45%, Ghawar will make about another 17 Gb (souce: Simmons).
The problem is that with a rapdily thinning oil column, a high production rate is the enemy of high remaining recoveries. The Saudis may be telling the truth that their cutback was voluntary, but as I said before it may be voluntary in the sense that you have the choice of whether or not to hand your wallet over to a robber holding a gun on you.
The 45 mile long East Texas Field, the largest oil field in the Lower 48 (about 5.5 Gb), is now producing 1.2 mbpd of water, with a 1% oil cut.
Ghawar and Saudi Arabia are now at about the same point--based on the HL method--at which the East Texas Field and Texas started a terminal decline in production.
BTW, in regard to Norway, following is a link to my HL plot of the total North Sea (crude + condensate) production, through 2004:
http://static.flickr.com/67/158784886_5c7a813465_o.png
In regard to my Export Land model, note that the UK has already slipped from exporter to importer. Norway will be a net exporter for quite a while longer, but if you look at the net oil exports from the North Sea as a whole, the UK will be sucking hard on the Norway's declining net exports. Note that Norway is the third largest net oil exporter in the world, and at this point in time--based on EIA data to date--the top three net oil exporters in the world are reporting declining oil production.
In water drive fields the water expands as the pressure is released by production and is already present.The best fields in Texas are water drive-East Texas, Webster,Seminole and thousands more.
But natural pressure can cause over-production too. The iconic Gushers often caused formation damage. The Spindletop field caprock is the first major example of that kind of field. The American Association of Petroleum Geologists published a paper 60 or 70 years ago that identified that problem. The original field is only about 200 acres, but produced about 60 million barrels and then crapped out from overproduction. There were over a 100 gushers and they were allowed to run wild as a money raising tool. Blow-outs are the modern gusher and are rightly reguarded as a disaster because they often ruin oil fields. A good example is the Refugio field that had a well burn for a year and ruined the pressure. This kind of uncontrolled depletion might be a large part of the problem with the Kuwait production.
The breakthrough can also happen with CO2 production too. I've heard as a rumour that the CO2 is breaking through at Seminole, and its from a creditable source.
I'm a landman, not an engineer. A good petroleum engineer could answer in a whole lot more detail.I'm interested because I think a lot of the old fields could have their ultimate production raised by a factor of 10%-20% by being redrilled and water cycling operations set up. And now everyone knows my strategy for getting rich.
''...This kind of uncontrolled depletion might be a large part of the problem with the Kuwait production...''
Perhaps Kuwait's current problems then have a lot to do with the intentional blow outs created by the retreating Iraqi land forces in the First Gulf War. This may not be the sum total of Kuwait's current problem, but may well have made a bad situation worse. Bearing in mind that an isolated blow out is problematic within a field, how much more problematic is a score or more of blown out wells on a field for a long period of time?
As for water cutting, I have been led to understand that Ghawar is now 40% cut in parts of the Arab -D. Also, there are distinct zones of high permeability bounded by low permeability strata above and below and that these strata are the effective conduits for oil and are therefore also an even more effective conduit for pressured water. The need for complex drilling practices now indicates that the strata is less of a simple layer cake with a high, uniform yield and a much more complex carbonate system. This complex carbonate system was obscured by the ease of which oil could be tapped but it is now becoming increasingly problematic.
Whichever way you shake a stick at it, if ultimately you have to pump 9.5mB of water per day to get 9.5mB oil (which , on aggregate is what they are saying they need to do)then surely you are at peak!
All in all, and after reading Simmon's latest offering, (Opus Apocalyptica?)then 2006 is as good as it will be for Homo Sapiens Hydrocarbonensis.
I think I need to go and find my blue blanket.
I feel that its important for people in the business to try to explain some of this stuff clearly. Its a total lack of understanding that makes people advocate silly "solutions" like ethanol and oil shale, as well as punitive, self-defeating stuff like the windfall profits tax. I know in my heart that West Texas is right-conservation will help a whole lot more than any other one thing. And support your neighbors, buy local products. It saves fuel, is healthier, tastes better and probably improves your sex life ( well, ell it to anyone you really need to convince!). And,if it really comes to a crash a bicycle repairman is a lot more likely to have a job than a fast food manager.
Hydro accounts for 7% of electricity generation. How this translates to 10% of the total, I have no idea. Glad this guy did his homework before telling us we don't know anything.
Somebody administered a quiz to 130 million Americans. I must have been out of the country that day. Yeah, right.
You missed the quiz? Here ya go.
http://www.neetf.org/roper/roper2001-b.htm
You don't find the "technical mistake" that he led off with rather ironic given what the article is about? I just found it slightly amusing, that's all.
On a side note, most Americans can't locate New York on a map or tell you who the Vice-President is even though 50 million of them voted for him, I would hardly expect them to even know what hydropower is. I took the quiz that Eric Blair posted. It didn't have a question on hydropower, maybe it was a slightly different version. I got one wrong. The quiz wasn't easy. We can all laugh, but the readers here are a little above average in their knowledge of these topics.
I think the losses should be subtracted from nuke (and some coal) because that is the fuel used to pump the water up.
The legislation is discussed at Green Car Congress:
http://www.greencarcongress.com/2006/06/new_house_bill_.html
RR
I live in the mid-west and it is not possible to discuss corn rationally with anyone: not the media, not the University crowd. You may laugh, but I think the Maya had it right.
The Corn God requires human sacrifice.
http://www.physorg.com/news70621539.html
Unfortunately, too many a scholar pray to the Absent Appendage (Invisible Hand) and to the Priesthood of Perpetual "Progress" without daring to ever question their religion or whether its machinations have benevolent "intelligence" or direction.
Just this morning, I saw some R-type Senator on C-SPAN yapping about how American GDP is rising and how that proves that the Lord Leader (GWB, aka the tipping shrub) did the good thing for the USA by cutting taxes for the upper class. Did this guy ever stop to think that maybe, just maybe, US population is heading for the 300 Million mark and that is why GDP is rising? The "numbers" seem to be the end all of all rational thought.
Capitalism and Adam Smithism are not the same thing BTW. Smithism is the religious part.
Capitalism merely means that capital (means of production) is privately owned and owners can do as they please.
Smithism, on the other hand, assumes that the selfish acts of individuals will automatically lead to benefit for the collective. Sometimes this is true, but not always.
It's the "not always" part that bothers me.
(Tragedy for the Commoners, tisk, tisk --they're doing as best as they can for themselves)
insurance company's follow the money and they see that insuring coastal homes now as a money loosening venture.
The cost to build a waste treatment plant at the highly contaminated Hanford Nuclear Reservation in south-central Washington has risen to $11.55 billion, according to a new cost estimate released Wednesday by the Energy Department.
The Energy Department hired contractor Bechtel National in 2000. At that time, the cost of the project was estimated at $4.3 billion.
I don't mean to hog the resources of TOD, but I think this article I got from John Mauldin is a great insight into the money behind the oil and the macro international picture. I took out all the graphs, but the graphs make it easy to see some things John talks about. John doesn't understand peak oil (yes I have written to him), but he does address the economic impact of higher oil prices. He tries to provide a scenario for price collapse, but I really do not see that happening at all.
For those who want the entire article (yes it's longer), check out this link.
http://www.investorsinsight.com/otb_va_print.aspx?EditionID=344
If I go to the Austrian mint and buy a one ounce Philharmoniker gold coin I pay euros, I don´t have to exchange my euros for US dollars, just because the price of gold is fixed in US dollars.
What is the truth in this matter? I think if Tate 423 is correct then Iran and now Russia's move to get away from the dollar in oil pricing/sales could spell disaster for the economy. If obdacher is correct then there is a lot of fear mongering going on. Are there any experts in this topic on TOD who wish to help clarify the issue? I suppose the truth lies somewhere in the middle but I can't even figure that out.
P.S. When somebody tells you he's jest an ol' country boy or how conservative he is or how much he loves Jesus, watch your wallet.This is a solid tip from the oil patch.
Same with oil, you pay euros for the petrol at the petrol station, but the petrol station is not the primary producer of the oil that was used to make the end-products that you buy.
I think the biggest question is: Are real dollars currently exchanged for the majority of oil products that are sold by these primary producers who want to trade in Euros. If they are currently not selling their oil for real dollars, then the switch will make no difference.
I just wish someone here could answer that question definitively.
How do we currently pay for Russian and Iranian oil?
At any rate, it takes a fraction of a second to convert any currency to any other currency on the FOREX. And it cost about three basis points, that's three cents per hundred dollars.
The very best summery of the role the euro plays in oil trading can be found here:
http://tinyurl.com/gt9gu
Go to "Box 3, on page 24 of this file. It is actually page 25 if you use the PDF file numbers at the bottom of the page. At any rate the box is only about a page and a half long so you should be able to cover it in a couple of minutes.
But doesn't this effect the price of both currencies? If I trade $100, it makes no difference, but if I trade $100 million, that will change the exchange rate. When you make the exchange, the money doesn't come from thin air, someone is doing the opposite exchange. If fewer people want US$ then the US$ drops in value until more people want it at the better exchange rate.
Also, as I understand it, all oil exporting countries choose to use US$ for all purchases of oil, and there is a lot of political pressure to keep it that way. Iraq start requesting that they get paid in Euros. Then the US invaded Iraq, and Iraq suddenly started accepting only US$ again.
I really don't understand why the rest of the world keeps lending money to america, why don't they buy something usefull for themselfs with it?
When the world stops lending it's unlikely that their former loans will be repaid, but they aren't throwing good money after bad anymore. The US, on the other hand, will need to find other sources of funding (difficult, with a service economy), or cut back spending (infectuous, with a service economy).
Wow a small spill thats barely in the news and we have to
open the strategic reserves.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acwQEAdRNP0Q&refer=worldwide_news
And I think it was Carlin who said "If it's tit for tat, where can I get some tat?"