More Problems For Oil

Problems in no certain order…

Number one problem…crude oil is now at $74 per barrel and may top out at $95 per barrel by fall.   This week even the National Petroleum Council (NPC) is expected to release a report suggesting the global demand will exceed supplies in the next 25 years.  Meaning your gas price at the pump is going to stay this high.

How much oil is left? The U.S. Energy Information Administration’s International Energy Outlook 2007 calculates that world proven reserves of oil are 1.3 trillion barrels and projects that world consumption will rise to 118 million barrels per day by 2030. In 2002, U.S. Geological Survey researchers estimated that 3 trillion barrels of conventional oil remain to be recovered. “It’s not peak oil: it’s in the ground, we know where a lot of it is, but it’s getting it out,” said Leo Drollas, an oil expert at the Centre for Global Energy Studies in the Guardian.

What do we do? What do we do?…Craig says as he runs around room with his arms in the air.

Offshore oil was once unconventional and depending on technology and economics ultra-deep sea oil and tar sands may become conventional sources of crude.

Whew were saved?! As I said here in the past…

So what of these massive offshore deposits? There is Lease Sale 181 in the Gulf of Mexico, large enough to support 2/3 of the annual need for mobile homes in the U.S. for 15 years. The North Sea oil field hit peak production in 2004 and fell 18.5% in 2005. The USGS estimates that the total unexplored, offshore reserve is 300 billion barrels. So the amount we have not accessed as of yet would last the world 9.5 years (at 84,000,000 barrels a day).

Problem number two…

Decommissioned oil rigs off Australia’s coastline could become hubs for marine-based businesses such as coral harvesting for aquariums, a fish expert says. Professor David Booth, of the Sydney Institute of Marine Science and University of Technology, Sydney, says there are up to 60 oil rigs in Australian waters that are due to be decommissioned in the next decade. I am am not in agreement with Dr. Booth. Where I am in agreement is with his latter comments.

“There is no easy answer … you can’t just say take them all away,” he says, adding the issue will have to be dealt with on a case-by-case approach. Booth says, for example, the removal and towing of the rig to Singapore or India for dismantling could have a negative impact on the environment due to the carbon cost of towing the rig and the risk of oil spills. “If you did all the sums it might not be an environmentally friendly thing to do,” he says. The marine ecologist says one of the programs he highlighted in last year’s government talks was the “rigs to reefs” project in the southern US state of Louisiana. He says there are about 3000 oil rigs in shallow waters off Louisiana’s Gulf of Mexico coastline. Under the program, some decommissioned oil rigs have been used for marine-based industries including fish and oyster farming, dive tourism and growing coral for aquariums. “It has brought amazing economic benefits to the place,” he says.

8 Replies to “More Problems For Oil”

  1. Peak oil is not the problem of running out of oil. There is plenty of oil around. The problem is getting it out of the ground and into a product. The oil we used to pump was nice and easy. These days getting the oil out is more work requiring lots of clever stuff. As demand grows the problem is keeping the supply levels high enough. reserves are not an issue.

    Oil sands in Canada have enormous amounts of hydrocarbons but turning that into fuel or even just synthetic crude is a major operation. It is no longer a matter of opening up the tap a bit more if we need a bit more….

  2. The evidence appears to be mounting that moving large amounts of carbon locked in fossil fuel material to the atmosphere in gaseous form is harmful to our environment. Maybe it’s just as well that it’s getting more difficult to get it out of the ground and into a product.

  3. Thanks for the comments. I agree with that extraction is getting more difficult. But I also think that we cannot assume that plenty of oil is around. I believe the problem is an interaction of the two. As a tangent to my own posts. I have been pondering a lot lately on the relatively role of population on these issues. To what extent all of us driving hybrids would make a difference? Is the real problem just too many people not matter how minimal our individual requirements?

  4. I think the entire world is build around oil. If we all change to hybrids it would only make a small dent in oil consumption. Oil is used for everyting. All plastics, as a fuel in other manufacturing processes, as a source for fertilizers, etc etc etc.

    Moving to renewable biofuels is already causing problems. Food prices are going up and so are other raw materials. There is now serious competition for agricultural crops for fuel and food.

    My guess is that oil will continue to rise in price but that demand will slow down a bit. There are a lot of countries currently subsidizing fuel and oil. They will have to stop doing that.

    Right now there is no easy solution for any of these issues. I would hope that we go for the low hanging fruit first and provide the most efficient energy sources to the developing nations. Make sure they start things the right way.

    Even with global warming and peak oil I think we are just to addicted to oil to make a quick change. I think it will be a tough transition but we will make it. Unfortunately it will be the poor and thrid world countries taking the brunt of the misery…

  5. when opec was formed in the 80’s it was agreed by the members that production quotas would be based on proven reserves. suddenly saudi “reserves” nearly doubled, hummm? I don’t know what the other members did, but there was a strong incentive to exagerate. this leads me to question the veracity of “proven reserves” in general.

  6. Is the real problem just too many people no matter how minimal our individual requirements?


  7. All the members had the same sudden discovery that their reserves were twice the size… These reserves have also stayed the same over the past few decades…

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