Oil, Peak Oil, etc.

Calliban · 2024-03-25 04:29:44

I realised that this forum lacks a specific topic for oil and the important issue of Peak Oil.

Below is a link from the IEA showing global production of crude & lease condensate from Jan 1973 to present.
https://www.eia.gov/international/data/ … 73&ev=true

I have excluded natural gas liquids, biofuels and refinery gains. NGLs are light alkanes like propane and butane. Whilst these are useful in many applications, they do not power the global transport system. Biofuels are often added to gasoline and diesel. But their volumetric energy density is lower and substantial fossil fuel inputs are needed to produce them. Refinery gains amount to nothing more than the increase in volume that occurs due to cracking and fractionating. It isn't a measure of a gain in useful energy.

Between Jan 2005 and Jan 2011, global production barely moved. This coincided with the period of rapid demand growth for refined products in China. A static global production of crude oil supply and a rapidly growing demand, led to soaring prices. This resulting in high inflation in prices of many goods and services. Central banks dealt with this by raising interest rates. This led to the economic recession of 2007 - 2008. Peak conventional oil was the root cause of the financial crisis.

The increase in output that occured in the second decade of the 21st, can be seen on the graph. This came from three sources, US tight oil, Canadian tar sands and Iraq. Compared to previous growth periods it really is impressive. The US tight oil and the Canadian tar sand industries, grew hand in hand. Both products are blended to produce syncrude, which has sufficient heat capacity and specific gravity to be processed by US refineries. Both grew during a period where three factors combined in their favour: (1) Interest rates that were effectively beneath zero for large investors; (2) High oil prices exceeding $100/bl up until 2014, allowing the industries to become established; (3) Very cheap materials available in huge quantities from China. Two out of three of these supporting factors is now undone. How long China can continue providing cheap refined metals is uncertain. The effects of depletion are now evident in US shale plays outside of the Permian. But the Permian appears to have enough Tire 1 acreage remaining to allow growth for a few years yet. This growth must be sufficient to offset declines almost everywhere else if global supply is the continue growing.

Last edited by Calliban (2024-03-25 04:53:05)

tahanson43206 · 2024-03-25 06:21:21

This post is reserved for an index to posts NewMars members may contribute over time.

This is clearly an important topic, and it is good to see it included in the forum offerings.

(th)

kbd512 · 2024-03-25 07:36:25

When are we going to discuss the simple and undeniable fact that 2/3rds of all investment dollars have been removed since about 2010 or so?

How are we expecting all these green energy machines to be built when hardly any of it presently exists?

Are we going to miracle all of it into existence?

If not, then I suspect we're going to burn coal, oil, and gas like gangbusters, whether any of our green energy fanatics admit to that or not.

We can't "talk" all this new stuff into existence. It takes a lot of energy. We don't have a large excess supply of that anymore because we quit putting money into hydrocarbon fuels without any kind of substitute energy source, and governments are actively preventing people from investing in hydrocarbon fuels, without so much as plan to create all this nonexistent stuff they're betting the farm on. The universe itself doesn't care where the energy comes from to transform ore into metal, but it won't simply "give you the metal" because you delivered a speech that you found to your liking. That's not how energy works.

Throwing crap at the wall to see if something sticks is only planning to fail. If you had any clue about what to do, then you wouldn't throw crap at the wall. People who have real plans organize, execute, check to see how well reality aligns with their plans, and then adjust if the solution results don't match their plan. They certainly don't double-down or triple-down on something that isn't working. Oddly enough, that's what real management looks like for people who have never been blessed with the opportunity to witness such a thing in action.

Calliban · 2024-03-25 08:58:15

As a percentage of GDP, overall investment in oil and gas production is about the same as it was in the early 2000s. It is above the levels seen between 1985 - 2000.
https://www.gisreportsonline.com/wp-con … 40x576.png

Of course, in 2023 dollars the investments now would be much larger than those that took place in previous decades, because nominal global GDP is much higher. This graph only goes up to 2015, which is a while back now. But look how much investment has exploded higher since 1973.
https://www.eia.gov/todayinenergy/detail.php?id=23072

What is concerning is that production is not proportionately higher. Investment does not stretch as far as it once did, because the remaining oil and gas reserves are more challenging and expensive to extract. And much of what we are getting is lower quality. Things like NGLs, condensates, tight oil, etc. These liquids have their uses, but they don't produce as much or any diesel, which is the lifeblood of the global economy.

This is a slow motion problem. Falling net energy returns on oil and gas investments are slowly squeezing the wealth out of industrial economies. Many people jumped onto the peak oil bandwaggon in the early 2000s, expecting that industrial society would very soon come to a shuddering halt due to shortages and they would get to remake the world in their image. But it doesn't work that way. Resource bases are like pyramids. There are more resources that aren't profitable today because of the energy, technology and investment needed to harvest them. This was the position that shale was at in the 1990s. Everyone knew it was there, but it took high oil prices and huge investment to develop the infrastructure and technology to bring it online. Those investments required a combination of low interest rates, high oil prices and cheap industrial materials before they were viable.

The problem is that new technology doesn't change the physical nature of the resource. It takes a lot more drilling and upfront investment for each barrel of oil than it used to. And that problem isn't going to reverse itself unless we find a vast new basin of untapped conventional oil that was previously overlooked. Otherwise, we remain trapped in a paradigm that requires us to continye investing more and more money to extract from the ground the liquid fuels that we need. At some point, the cost will end up being more than people can afford to pay. At that point, we get some kind of breakdown.

Last edited by Calliban (2024-03-25 09:21:04)

Calliban · 2024-03-25 13:26:12

Oil geolologist Art Berman discusses the impending decline of US shale production.
https://m.youtube.com/watch?v=6J9vmQYoiSg

kbd512 · 2024-03-25 14:13:32

Calliban,

Businesses cannot secure a short term loan from a bank in the United States of America to merely pay their own oilfield workers. That is a fact. The banks' stated reason for this is ESG. Ideology about energy has become untethered from reality. That is also a fact. If you removed 2/3rds of all investment dollars from farming, then within 10 years, you should expect to have a lot less food available, and whatever is left will demand higher prices.

Calliban · 2024-03-25 16:35:57

Upstream oil & gas capex has not dropped by 2/3rds globally. Though it has dropped considerably since the highs reached after 2008.

https://www.hellenicshippingnews.com/oi … il-prices/

It is a lot higher now than it was back in the early 2000s. Investment in oil and gas is still high by historical standards. It just isn't quite so crazy high as it was during the 2008 - 2014 period. The point is, we are investing much more now than we did 20-30 years ago. But we aren't getting that much more oil. And a lot of what is being produced is condensates.

Even North America is investing substantially more now than it was before 2005. After 2005, investment went to crazy highs. The tight oil boom is a legacy product of that investment. And it did produce a lot of oil. But it was only sustainable at almost zero interest rates. Compared to that surge in investment, todays spending is about 60% lower. But it is still high by historic standards. Will it continue in a high interest rate environment? That is an open question.

Last edited by Calliban (2024-03-25 16:50:46)

SpaceNut · 2024-03-26 18:25:53

bump as I saw that the US output is the highest that it's ever been and that we are importing less due to it happening.

Calliban · 2024-05-02 10:15:33

This graph from Peak Oil Barrel is sobering.

This is world crude oil production from 1900 until 2023. It looks to me like we are past global peak oil. Were it not for North American shale & syncrude, the peak year would have been 2005. Those things pushed it out another 13 years. God bless America! The graph refers only to crude. There are other liquids like NGLs, condensates, biofuels, etc. But the direction of travel is clear enough. Could solar synfuels fill the gap?

Last edited by Calliban (2024-05-02 10:23:40)

Void · 2024-05-02 12:31:17

The USA and I think Canada also have a lot of "Oil Shale" which is not to be confused with "Shale Oil". If prices got high enough or technology improvements allowed it this might also be tapped. (Ignoring climate implications).

https://en.wikipedia.org/wiki/Oil_shale

But if nuclear or orbital solar or other develop, probably it stays in the ground.

https://www.usgs.gov/centers/central-en … /oil-shale
Quote:

The USGS Energy Resources Program has studied oil shale resources of the United States, with a significant effort on the Eocene Green River Formation of Colorado, Utah, and Wyoming. This formation contains the largest oil shale deposits in the world. Oil shale, despite the name, does not actually contain oil, but is a precursor of oil that is converted to crude oil when heated.

Done

Last edited by Void (2024-05-02 12:35:13)

SpaceNut · 2024-05-05 15:29:21

New study shows American wells leak triple the amount of gas as previously stated — and it's costing us

Researchers analyzed 1 million measurements taken by aircraft flying over oil and gas sites across the country. They determined that about 3% of the natural gas produced in the U.S. is escaping into the atmosphere.
That's a staggering 6.2 million tons of methane leaking every hour during the daytime. This wasted gas is worth around $1 billion per year. But the true cost is even higher when you consider the damage to our atmosphere.
The study covered over half of all American oil wells and nearly a third of the nation's total gas production and delivery infrastructure. While more research is needed to calculate a precise national average, the 3% leak rate was consistent across the six regions examined.

Damning report sheds light on country's continued financial support of big oil: 'That level of funding could have retrofitted millions of homes'

New Mars Forums

Announcement

#1 2024-03-25 04:29:44

Oil, Peak Oil, etc.

#2 2024-03-25 06:21:21

Re: Oil, Peak Oil, etc.

#3 2024-03-25 07:36:25

Re: Oil, Peak Oil, etc.

#4 2024-03-25 08:58:15

Re: Oil, Peak Oil, etc.

#5 2024-03-25 13:26:12

Re: Oil, Peak Oil, etc.

#6 2024-03-25 14:13:32

Re: Oil, Peak Oil, etc.

#7 2024-03-25 16:35:57

Re: Oil, Peak Oil, etc.

#8 2024-03-26 18:25:53

Re: Oil, Peak Oil, etc.

#9 2024-05-02 10:15:33

Re: Oil, Peak Oil, etc.

#10 2024-05-02 12:31:17

Re: Oil, Peak Oil, etc.

#11 2024-05-05 15:29:21

Re: Oil, Peak Oil, etc.

Board footer