'Peak oil' takes it on the chin

[Xiahou]

Tests of a deep-water well in the Gulf of Mexico could indicate a significant oil discovery, three companies announced Tuesday, in the first project to tap into a region that reportedly could boost U.S. oil and gas reserves by as much as 50 percent.

.....

The Wall Street Journal reported Monday that the region where the well is located could become the nation's biggest new domestic source of oil since the discovery of Alaska's North Slope more than a generation ago.

The Journal said Chevron and Devon officials estimate that recent discoveries in the Gulf of Mexico's lower-tertiary formations hold up to 15 billion barrels' worth of oil and gas reserves, a total that would boost the nation's current reserves by 50 percent.As much as a 50% increase in reserves eh? That's really going to mess up the US bellcurve isnt it? :wink:

[edyzmedieval]

15 billion barrels? ~:eek:
You screwed the arabs. Good job. :laugh4:

This is really gonna make Bush and Condolezza happy. This will make them want a 3rd time at president. :laugh4:

[Redleg]

15 billion barrels? ~:eek:
You screwed the arabs. Good job. :laugh4:

This is really gonna make Bush and Condolezza happy. This will make them want a 3rd time at president. :laugh4:

The possiblity of this oil being there has been discussed since the late 1980's. Technology and deepsea drilling capability has finally enabled the oil field to be tested.

[Ser Clegane]

According to IEA statistics this would cover the US demand for oil (20.8 million barrels/day in 2005) for roughly 2 years.
Also according to the IEA 5-10 trillion barrels of oil equivalent are considered as "technically recoverable" today.
While this discovery is nice I do not think that the impact on the bellcurve should be overestimated...

[Xiahou]

I know my math isnt too good- but Im pretty sure a 50% increase in US reserves would make a pretty significant impact on any chart of US oil reserves and future production.

Seeing as how US oil is one of the very few places where Peak Oil scare mongers claim to have actually gotten it right, I'd say they "took it on the chin".

[Ser Clegane]

I know my math isnt too good- but Im pretty sure a 50% increase in US reserves would make a pretty significant impact on any chart of US oil reserves and future production.
Then I guess the oil reserves of the US aren't that high to start with (at least compared to the domestic consumption)

[macsen rufus]

Tests of a deep-water well in the Gulf of Mexico could indicate a significant oil discovery, three companies announced Tuesday, in the first project to tap into a region that reportedly could boost U.S. oil and gas reserves by as much as 50 percent.

.....

The Wall Street Journal reported Monday that the region where the well is located could become the nation's biggest new domestic source of oil since the discovery of Alaska's North Slope more than a generation ago.

The Journal said Chevron and Devon officials estimate that recent discoveries in the Gulf of Mexico's lower-tertiary formations hold up to 15 billion barrels' worth of oil and gas reserves, a total that would boost the nation's current reserves by 50 percent.

Don't book the stripper yet, folks....

[Redleg]

I know my math isnt too good- but Im pretty sure a 50% increase in US reserves would make a pretty significant impact on any chart of US oil reserves and future production.

Seeing as how US oil is one of the very few places where Peak Oil scare mongers claim to have actually gotten it right, I'd say they "took it on the chin".

Oh there are other sources of oil in North America that will further cause problems for the Middle-East once technology allows us to access and refine it in a cost productive and environmental sound way. Then there is corn...

[English assassin]

It seems no one really knows what oil reserves are: http://www.monbiot.com/archives/2005/09/27/crying-sheep/#more-952 Oil shales and tar sands yeildf far, far fewer multiples of the energy required to extract them than does crude oil. And corn is a non-starter:http://www.monbiot.com/archives/2005/12/06/worse-than-fossil-fuel/#more-964

In 2003, the biologist Jeffrey Dukes calculated that the fossil fuels we burn in one year were made from organic matter “containing 44×10 to the 18 grams of carbon, which is more than 400 times the net primary productivity of the planet’s current biota.”(1) In plain English, this means that every year we use four centuries’ worth of plants and animals.

The idea that we can simply replace this fossil legacy – and the extraordinary power densities it gives us – with ambient energy is the stuff of science fiction. There is simply no substitute for cutting back

In a sense this is a stupid argument. We can debate the precise when, sure, but no one can deny that its going to happen. If peak oil is ten years later than predicted is anyone really goign to sit back smugly and say, see, peak oil pundits were wrong?

[Redleg]

It seems no one really knows what oil reserves are: http://www.monbiot.com/archives/2005/09/27/crying-sheep/#more-952 Oil shales and tar sands yeildf far, far fewer multiples of the energy required to extract them than does crude oil. And corn is a non-starter:http://www.monbiot.com/archives/2005/12/06/worse-than-fossil-fuel/#more-964


How much ethohal does Europe burn in their fuel? I wonder if you know what crop they produce the achocal out of for ethohal?

Nor did I state biodiesel now did I? So is it the corn that is a non-starter or the palm plant that was mentioned in your link?

But then one must assume you missed the sarcaism that was indicated by the ...

[Ser Clegane]

For anybody who might be interested - here are some estimates on oil & gas reserves by country (http://www.eia.doe.gov/emeu/international/reserves.html)

[English assassin]

Let me be more precise. All plant derived fuels, be they ethanol, biodiesel, or wood fired steam traction engines, are a non-starter for sustaining total global energy use at its current level.

But as I did indeed miss the sarcasm I guess we are in agreement.

[doc_bean]

Consumption still needs to be toned down, drastically. Oil needs of the third world are rising rapidly which is going to affect the price sooner or later, you're not too friendly with some important oil producing countries and the effects of oil consumption/burning on the earth's atmosphere/biosphere are unknown and possibly dangerous.

But this is good news for the short term. Just don't make it an excuse to rest easy...

[yesdachi]

But this is good news for the short term. Just don't make it an excuse to rest easy...
I couldn’t agree more! :yes:

[macsen rufus]

Interesting figures, Ser, thanks for the link :2thumbsup:

Looking at the BP estimates, then, this 15 billion barrel "cornucopia" is about 1.3% of total global reserves. Hardly a death-knell for Peak Oil theory, is it?

North American sources of oil are in no way going to "cause problems" for the Middle East (now North American methods of securing supply are a different matter...). USA has been a nett importer since the 1970s, with rising demand.

Lack of transparency in national reserve figures means most "proven" reserves are almost certainly exagerrated. Why? Because when OPEC went over to the quota system, those quotas were allocated in relation to size of reserves - ie the more you had the more you could export. Look at the figures from the period - many OPEC country reserves doubled or tripled overnight without any new fields or major change of extractive technology. Guess what folks - THEY LIED. Which goes some way to explaining why Saudi et al are struggling to keep up with predicted/expected production now.

Now a real conspiracy theorist might suggest that the whole "war on terror" thing could be there to provide a smoke screen to "explain" all the oil price rises recently (regardless of the hikes NOT correlating to any specific "terror" situation). Cause let's face it, a bunch of mad militants can be handled with the prefered solution - overwhelming military might - but an oil shortage can't, oh, unless it's geared towards occupying major oil-producing areas with ten times the North American reserves. Keeps the flag-wavers happy, in the dark, and unsuspecting, and the "problem" conveniently overseas rather than forcing anyone to take an uncomfortable look at their consumption.

[Shaun]

The thing is, even if the oil supplies go up, the prices will also follow this trend. You see, the oil companies are the greediest of them all, we will still pay recordly high prices while they make recordly high profits.

[yesdachi]

The thing is, even if the oil supplies go up, the prices will also follow this trend. You see, the oil companies are the greediest of them all, we will still pay recordly high prices while they make recordly high profits.
I would consider them the second greediest of them all right after our governments who make more from taxing oil than the oil companies make in profits from selling the stuff.

[doc_bean]

At the rate they're charging and the relative scarsity of their product, I'd say they're practically giving it away...

The diamond sector shows how you keep prices high even though meeting demand is easy.

[Vladimir]

At the rate they're charging and the relative scarsity of their product, I'd say they're practically giving it away...

The diamond sector shows how you keep prices high even though meeting demand is easy.

I suspect the people that go after "Big Diamonds" are also the first ones that go "Ooo, shiny."

[Xiahou]

Then I guess the oil reserves of the US aren't that high to start with (at least compared to the domestic consumption)
Oh Im not suggesting everything is solved because we discovered some new reserves. My point, in the original post, was simple-the Peak Oil scare mongers are wrong again. The bell-curve was wrong yet-again. For years (after fixing it once already for being wrong) they pointed to US production as proof-positive that the 'peak oil' curve is a fact. Now, it's wrong yet again- no doubt they'll change their predictions yet again and then go on making the same dire claims.

Higher oil prices have many effects. One, it makes extremely deep wells such as the one in the article become profitable. Additionally, it makes harvesting our vast shale oil reserves look viable. Importantly, it also makes alternative fuels/energy sources more viable. There isnt going to be a cataclysmic oil crash as many peak oilers would have you think- it's going to be a very slow gradual transition.


Let me be more precise. All plant derived fuels, be they ethanol, biodiesel, or wood fired steam traction engines, are a non-starter for sustaining total global energy use at its current level.Im skepical of ethanol because it can't seem to stand on its own (at least in the US- Brazil seems to be doing ok) without heavy subsidies. OTOH, I love the idea of biodiesel- First, diesel engines are significantly more fuel efficient than traditional gasoline engines, so right there you're saving oil. Second, you can blend in fuel from plant sources and further save oil.

Bio-fuels will never totally replace oil, as you point out. But they can slow the use of oil and help stabilize prices. It's a good thing. :2thumbsup:

[English assassin]

Bio-fuels will never totally replace oil, as you point out. But they can slow the use of oil and help stabilize prices. It's a good thing.

Yeah, sure, it is. I was a bit disappointed when I realised it was more of a sticking plaster than a bandage, but don't get me wrong, even 5% of the solution is better than 0%

[Seamus Fermanagh]

But will we ever see these "new" reserves come on line?

In a nation where efforts to rebuild one of its 25 largest cities and 10 largest ports are being repeatedly delayed by environmental lobbies lodging suit against virtually any and all proposals for rebuilding, do you think that new drilling efforts will be allowed anytime soon?

:laugh4: :laugh4: :laugh4:

[Strike For The South]

Is this Texas's oil?

[Shaun]

I would consider them the second greediest of them all right after our governments who make more from taxing oil than the oil companies make in profits from selling the stuff.

But the thing is the governments need the money, the oil corporations wouldnt really notice if they sacrafised a about 1 billion dollars, would they? Yet it would help us all pay for fuel, more fuel, which in turn would mean we might want to drive more places.
Bah, you wont understand if your American, you yanks pay about one quarter of what us brits pay for fuel.

[Redleg]

But the thing is the governments need the money, the oil corporations wouldnt really notice if they sacrafised a about 1 billion dollars, would they? Yet it would help us all pay for fuel, more fuel, which in turn would mean we might want to drive more places.
Bah, you wont understand if your American, you yanks pay about one quarter of what us brits pay for fuel.

The cost of production of oil into gasoline is fairily consistent across all nations since the technology and methods of distilling the crude oil into usable fuel have been around for a while now.

If you do an honest review of what your cost for fuel at the pump is - you will most likely find that the greatest precentage of the cost goes to taxes, in your nation.

At the current price - less then 1/4 of the cost I pay for a gallon of gas goes to tax.

http://www.gaspricewatch.com/usgastaxes.asp

18.4cpg federal tax
20cpg State Tax

Plus there is a small county tax on gasoline that I can not remember right now.

Basically it ranges from 39cpg to 54cpg based upon the current tax rates for the county and state within the United states, which if I do a simple percentage calculation my gas tax rate is appoximately 20%. Now the data I find for Europe is that the average cost of gas has a tax rate of appoximately 60%.

So before claiming that us yanks don't get it, especially when it concerns oil profit versus government tax dollars on gasoline - one should review how one's gas expenditures are really used by corporations and your own government.

Should oil companies make a smaller percentage in profit on the sale of gasoline at the pump? That is actually a harder question then what you have presented with your arguement.

Should the United States place an even higher excise tax on gasoline then the current one?

I have been in favor of such an increase for years....

[Lemur]

Is this Texas's oil?
Not if it's any distance off the coast. Just ask Louisiana about that one -- they're still bitter.

More oil is good. Now we just need to use the breathing room to get less addicted to the stuff ...

[Samurai Waki]

Agreed. I've even taken some steps in my daily life to decrease my overall oil consumption. Instead of driving to the coffee shop twelve blocks away, I've been riding my bike, I don't have to worry about the traffic jams (which are so common in California it's pathetic). The sad thing is, if I drove there I might save myself 10 minutes. I've lost a good fifteen pounds since I've started doing this, and I've also saved about $150.00 a month. Not too bad in my book.

[Strike For The South]

it says oil of the TEXAS coast. Do I have to commison privaters?

[Ironside]

I know my math isnt too good- but Im pretty sure a 50% increase in US reserves would make a pretty significant impact on any chart of US oil reserves and future production.

Seeing as how US oil is one of the very few places where Peak Oil scare mongers claim to have actually gotten it right, I'd say they "took it on the chin".

That would optimally mean that you go from importing 60% of your oil to 40% for about 9 years, using current numbers.

[Productivity]

The thing is, even if the oil supplies go up, the prices will also follow this trend. You see, the oil companies are the greediest of them all, we will still pay recordly high prices while they make recordly high profits.

I work for an oil company (Chevron in fact to keep in theme with this thread), in the economics section. We're currently working on putting in the Gorgon Gas Project in Western Australia. This is a pretty mega gas project really. There's a hell of a lot of gas down there. The current publically available figure for how much it's going to cost to put in is ~8 Billion USD (it might be AUD actually, I'm pretty sure the public figure is somewhere around there though, obviously the real figure is confidential for the moment).

You know what? Sometimes things go wrong. There may not be as much gas down there as we thought. Other things might get in the way.

Gorgon is one of five projects of a similar size that Chevron is working on. Forgive the oil companies for getting a return, there only sinking billions of dollars of investment into getting it out of the ground. If something goes wrong with Gorgon, that's 8 Billion thrown away. We aren't talking small business sums here.

This recent announcement, it's in 7000 feet of water. The gas is 20,000 feet even further down. It's not cheap to get down there. People love to criticise oil companies for their profits. This is a high risk business, where they are sinking huge amounts of investments into a lot of dry holes.

As for the price of oil, well it's supply and demand. There is no global conspiracy, the closest thing you can get to that is OPEC. We don't have weekly meetings where we try and work out how much we can screw you for, every day I start by getting a run down off the intranet of what's happened overnight relating to oil, it's these factors that determine the short term shifts. 15 kidnapped in Nigeria? The price is going to rise. Iraqi pipeline explosion? Going up again. Long run, you're talking high demand for a scarce product which is allways going to lead to an upward trend.

You want to complain about oil production levels? Don't bitch at the listed firms, we control only ~7% (from memory) of the worlds oil resources. The listed firm with the most oil under it's control (XOM) comes 17th in terms of oil controlled when you take state firms into account. They're the ones who constrict the supply, not Chevron, ExxonMobil, ConnocoPhillips, BP etc. We're sinking holes into the hardest places on earth to get to and that's going to take time, there's no easy oil left for the listed firms.

Could Chevron et al. sell for less than the current price and continue to make a profit? Of course they could. Would it acheive anything? Hell no. You'd end up with an arbitrage system with a middleman who buys it and then onsells it at the market rate.

[yesdachi]

I work for an oil company (Chevron in fact to keep in theme with this thread)
Does Chevron know you spend time at the org. during business hrs?

Give up the secrete handshake for cheep gas or I’ll tell um! :wink:

[Banquo's Ghost]

Does Chevron know you spend time at the org. during business hrs?

Give up the secrete handshake for cheep gas or I’ll tell um! :wink:

You live in the States and you want cheaper gas? The only way it could be cheaper is if they pay you to fill up!!

:bounce:

[yesdachi]

You live in the States and you want cheaper gas? The only way it could be cheaper is if they pay you to fill up!!

:bounce:
I find that arrangement acceptable.:grin2:

[Productivity]

Does Chevron know you spend time at the org. during business hrs?

Give up the secrete handshake for cheep gas or I’ll tell um! :wink:

Um... Timezones. Unless they've rezoned it so that 0:30AM = workhours.:inquisitive:

I'm actually finishing a BEc/BSc at teh same time, so I have some time off for study/lectures etc. as well, hence my posting now.

[yesdachi]

Um... Timezones. Unless they've rezoned it so that 0:30AM = workhours.:inquisitive:

I'm actually finishing a BEc/BSc at teh same time, so I have some time off for study/lectures etc. as well, hence my posting now.
I don’t want excuses, I want that dam handshake! ~D

What is a BEc/BSc?

[Sir Moody]

BSc = Bachelor of Science - I have a degree in Programming and so fall under this

BEc = Bachelor of Economics

they are degree titles

[yesdachi]

BSc = Bachelor of Science - I have a degree in Programming and so fall under this

BEc = Bachelor of Economics

they are degree titles
Thanks! Sorry to digress from the topic.

The lower case “c” threw me, what is the purpose of it? Is it only because of it being the second letter of the word and used for clarity?
I feel like a fool, im 33 and have never noticed one before.:dizzy2: