High Oil prices here to stay

[sdw]

Saudi Oil production dropped 8% this month. This drop in production is when the Saudi government has committed itself to an increase in production and Oil prices are at a high.

What is happening?
The Saudi Oil ministry has increased the number of drilling rigs from 17 to 50. The additional rigs are drilling injection bores so that super heated brine can be injected and float the Oil into the producing wells. However, the producing wells in Ghawar are experiencing very high “water cut” which is when the injected brine comes out with the oil.

http://www.resourceinvestor.com/pebble.asp?relid=9692
http://www.theoildrum.com/node/2437
http://europe.theoildrum.com/node/2330
http://www.engineering.ualberta.ca/nav02.cfm?nav02=44888&nav01=18430

The Saudi Government hosted a conference on May 22, 2006 in which some of the documents provided alluded to production difficulties and end of life on some oil fields.
http://www.co2management.org/symposium_program.php

What does it mean?
The Saudis are at end of life at the Ghawar Oil Field. They may be near end of life on two of their other oil fields.

Orson Scott Card has written a piece that puts it much better than I can.
http://www.ornery.org/essays/warwatch/2007-05-06-1.html

 

[LaCreme]

Saudi Oil production dropped 8% this month. This drop in production is when the Saudi government has committed itself to an increase in production and Oil prices are at a high.

What is happening?
The Saudi Oil ministry has increased the number of drilling rigs from 17 to 50. The additional rigs are drilling injection bores so that super heated brine can be injected and float the Oil into the producing wells. However, the producing wells in Ghawar are experiencing very high “water cut” which is when the injected brine comes out with the oil.

http://www.resourceinvestor.com/pebble.asp?relid=9692
http://www.theoildrum.com/node/2437
http://europe.theoildrum.com/node/2330
http://www.engineering.ualberta.ca/nav02.cfm?nav02=44888&nav01=18430

The Saudi Government hosted a conference on May 22, 2006 in which some of the documents provided alluded to production difficulties and end of life on some oil fields.
http://www.co2management.org/symposium_program.php

What does it mean?
The Saudis are at end of life at the Ghawar Oil Field. They may be near end of life on two of their other oil fields.

Orson Scott Card has written a piece that puts it much better than I can.
http://www.ornery.org/essays/warwatch/2007-05-06-1.html

soon 2$ the litres then in few yrs be ready to spend 5$ the litre oh la la i want a hybrid so bad now..

 

[MissingOne]

Orson Scott Card has written a piece that puts it much better than I can.
http://www.ornery.org/essays/warwatch/2007-05-06-1.html

Card's argument makes considerable sense. Unfortunately, he starts the article with an untrue statement about the origin of oil, and that makes one skeptical about the rest of what he says.

Most oil does not come from "the carboniferous structures of long-dead plants", as Card says. It's coal that is derived from plant material. Oil comes mostly from long dead marine animals. That's why Shell Oil named itself Shell Oil.

OK, so I'm being picky. But when a person starts off an argument with an untrue statement, you wonder how good a job he did of researching the rest of what he wrote. That's too bad, because I like the ideas that he put forward.

 

[yoyo00]

There is plenty of oil in this world, and at current prices - it is economical to begin drilling and exploring in more area's of the globe.

One forgets just how much oil there is in Iran, Iraq and Venezuela. It's just "easy" to get it out of the ground in the Gulf (ie Saudi). Oil companies, knowing the "easy supply" is nearing an end (which is quite far away, btw) will have two choices. Hotspots or hotspots. Wether or not it is the war torn nation of Iraq, dealing with Chavez and his nationalism, or figuring out how to properly defend wells in Nigeria; the business of drilling has become a lot harder.

So, onwards to other areas and types of drilling. We will see more technological innovations now that the price can support it. Case in point, deep sea drilling and the Alberta Oil Sands. Also, the incredible technology that has gone into the making of Kazakhstan into an oil power.

Look for emerging markets to step up to the plate in the next 10-20 years. Places you would never think of - places like Azerbajian, Vietnam and Trinidad will all be sucking their wells dry to maintain our rampant pace of consumption in the Western World, primarily the United States.

But, when its all said and done, we are still going to be paying an arm and a leg for gas at the pump... literally... Remember that we live in a world where thousands of lives are sacrificed to fill your tanks at Chevron. And we complain about $1.30 a litre....

 

[ReluctantPooner]

Don't forget all the oil that will be coming from Iraq, as long as they can keep insurgents from blowing holes in the pipeline.

 

[Olmac]

Just more reasons to develope our tarsands here in Canada.

 

[sdw]

It is anticipated that the world demand for energy supplied from petroleum will continue to rise. See page 4 of this pdf http://www.co2management.org/procee..._on_Petroleum_Industry_Adnan_Shihab_Eldin.pdf
However, as the graph shows, coal is expected to rise to the level petroleum is at currently and gas is expected to increase in it's demand.

The pdf is produced by the Saudi Oil Ministry and can be taken as what they hope will happen as much as it can be taken as an accurate picture of future demand. This makes it interesting. They are predicting a rise in use of coal despite all of the adverse effects of using coal as an energy source. That means they expect petroleum to exceed the price necessary to drive stationary energy producers over to coal from Oil. That means that there is a much higher sulfur content in remaining Oil reserves or the remaining Oil reserves will be too expensive to deliver and compete in price with Coal.

They also predict a greater supply of Natural Gas and Natural Gas being competitively priced with Oil. Well management requires the retention of Natural Gas until the Petroleum has been harvested. Natural Gas is sold from wells that have no significant Petroleum to be harvested and wells that have had all the Petroleum harvested. Since it is known that many Saudi wells are "water cut", I believe that the Saudis are telling us that they will be producing much more Natural Gas from their depleted Oil fields.

They also predict a much greater use of Nuclear Power. As we all know, Nuclear Power is Capital Intensive, Highly Regulated and Politically Difficult. Having the Saudis predict that stationary power producers are going to be willing to jump through all those hoops is a very telling read on how much remaining available petroleum they have.

Page 6 of the pdf talks about current vehicle ownership and predicted vehicle ownership. Note where the USA and Canada are in relationship to the rest of the world.

Starting on page 11 of the pdf there is a discussion of Global Warming, Carbon Economy and their effects on OPEC operations.

On page 29 is a map showing the major Carbon Producers. The majority of Carbon Producers are located in the East Coast of North America, Europe and Japan.

Page 30 is a map showing the Oil Field formations. The dark shaded areas are where we know that Oil Field formations are located. Note how many have already been developed. The medium shaded areas have also been tested in many cases and are more likely to produce Natural Gas than they are to produce Petroleum.

 

[sdw]

Card's argument makes considerable sense. Unfortunately, he starts the article with an untrue statement about the origin of oil, and that makes one skeptical about the rest of what he says.

Most oil does not come from "the carboniferous structures of long-dead plants", as Card says. It's coal that is derived from plant material. Oil comes mostly from long dead marine animals. That's why Shell Oil named itself Shell Oil.

OK, so I'm being picky. But when a person starts off an argument with an untrue statement, you wonder how good a job he did of researching the rest of what he wrote. That's too bad, because I like the ideas that he put forward.

Hmm, well in my view you and Card are both right, but sloppy. I'll try to explain.

Both Coal and Oil are formed in the basins of seas. Both Coal and Oil contain Animal and Plant material.

Petroleum is the result of dead animals and plants falling to the bottom of a moderate or deep sea. The sea has to be deep enough so that there isn't much oxygen in the sediment on the bottom. If there is oxygen in the sediment, the plant and animal material just rots and isn't there when the sediment changes to rock.

These links explain the process:
http://www2.wwnorton.com/college/geo/egeo/animations/ch12.htm
http://earthguide.ucsd.edu/fuels/oil.html
http://en.wikipedia.org/wiki/Petroleum_geology
http://en.wikipedia.org/wiki/Oil_reservoir

Coal is the result of dead plants and animals on the shores and bottom of a shallow sea. The sea has to be covered with sediment quickly enough to cut off oxygen that would rot the dead plants and animals and prevent the formation of Coal.
http://en.wikipedia.org/wiki/Coal

The main difference between Coal and Petroleum is the depth of the sea, the rapidity of being covered with sediment and the time necessary to create Coal or Oil.

Coal is generally quite young. While there have been deposits that are over 100,000 years old, most coal is only 50,000 to 60,000 years old. There are coal fields that are less than 10,000 years old. There is a coal field where humanoid bones and metal pots have been discovered embedded in the coal. The Biblical flood?

Oil is generally old. Indications are that the youngest oil field is over 300,000 years old and oil fields generally take much longer to form. We believe some of the major fields are as much as 5 million years old.

 

[MissingOne]

Hmm, well in my view you and Card are both right, but sloppy. I'll try to explain.

Figures. I get myself mixed up with someone who actually researches his answers.

Thanks.

 

[sdw]

Twenty percent of the Canadian Tar Sands Oil is produced by surface mining. Eighty percent of the Canadian Tar Sands Oil is concentrated far too deep to be accessible via surface mining. We must then use a form of steam injection using great amounts of natural gas. The problem is that Canada has not been able to find or produce any new natural gas resources. We need an alternative power source to extract this deeply sourced tar sands. Nuclear energy is one method currently being discussed however the need for natural gas follows to the refining process as well as the extraction process. It will be many years before we find a technological method that is cost effective and by then we will have depleted the twenty percent. Let's not even look at the greenhouse gas emissions that are produced from the extraction/refinement.

This development will, in my estimation, take quite some time.

The development of Nuclear Power plants in parallel with Oil Sands Development can't happen soon enough.

Nuclear plants produce lots of heat, this is why the Saudis and Kuwaitis use them both for desalination and to supply the super heated brine to continue production of their oil wells.

The deep Oil Shales that form the majority of the Oil Sands are most easily brought into production through that technology.

Then, we get to the necessity of Hydrating the resulting product from the Oil Sands. We currently use Natural Gas for this. Nuclear plants also produce large amounts of Hydrogen that is scrubbed with metal Hydride filters. That Hydrogen could be used to Hydrate the Oil Sands product. Hydrocarbon = Hydrogen and Carbon.

What this does is reduce the CO2 that is currently being produced as part of the Oil Sands processes, make Natural Gas available for consumer use and make Canada self sufficient for petroleum.

If we are going to have a bunch of Nuclear plants, Alberta is a great place to put them. The land is geographically stable, we can use all the waste products (heat and Hydrogen) that normally have to be gotten rid of and we could also directly power Aluminum smelters which would allow the Purdue method of using Aluminum/Gallium alloy to create Hydrogen to become commercially viable.

In Saudi Arabia and Kuwait, electricity is almost a waste product. They can't use much of it because of the difficulty of arranging for transmission lines.