Thread: Oil, its make the wheels go round

Very interesting Hughie, keeping the price high by underestimating supply. I like this bit

"* The Association for the Study of Peak Oil led by Dr. Colin Campbell makes a similar analogy this way:"Understanding [oil] depletion is simple. Think of an Irish pub. The glass starts full and ends empty. There are only so many more drinks to closing time. It's the same with oil. We have to find the bar before we can drink what's in it." My comment: Think of a street full of Irish pubs where the price keeps going up because the proprieters claim to be running out of beer. You can see for yourself, they say, the shelf is almost empty. The Ministry for Pubs says its worried and gives the pubs a depletion allowance and other tax breaks. Invasions of other nations with beer making capability are seen as necessary, but politicians promise they will eventually ease our dependence on beer and promote cola drinks just as soon as the beer runs out. What you don't know is that there is a huge stockpile of beer barrels in the warehouse across town.)"

Hmmm. About 30 years ago there was a bit of a panic, because there was only 10 years supply of oil left in the world.

No matter which model you go for one fact is indisputable...oil is a finite resource and eventually the stuff will run out.

A few more facts:

1. all of the worlds giant oil/gas fields have been discovered.
2. most of the world's giant fields are past their peak production and are depleted (Bass Strait is producing about half of what it produced during its hey day). Many countries (eg Iran) exaggerate their oil reserves...one must ask why a country with supposedly huge oil reserves is investing so much energy into developing a nuclear power industry.
3. most of the large new finds in recent times are in deep water and exploration and development costs are high. $30US million is a reasonable budget for a deep water well off the NW shelf these days. Ive just come off a job where we managed to spend $45US million on one well and I was recently on a job where twice that was blown on a well that proved to be a duster in the end. Bottom line is even if you take a head in the sand simpleton's view of the situation and argue that oil will never run out you cant ignore the fact that the cost of producing the stuff is going up with time and that's not just because of inflation.
4. oil as a commodity is far too cheap...it's why we waste it. If we paid what it was really worth we'd stop treating it like it's never going to run out.

Cheers Martin

No matter which model you go for one fact is indisputable...oil is a finite resource and eventually the stuff will run out.

Is it.

http://www.ias.ac.in/currsci/jul252004/147.pdf

http://en.wikipedia.org/wiki/Eugene_..._330_oil_field

http://www.oilfieldchurch.com/?p=181

Hughie,

The articles discuss oil found in "unexpected places". Hydrocarbons reservoired in non sedimentary rocks is old hat...fractured igneous rocks as reservoirs have been known for a long time. To put things really simplistically oil isnt forming at the present day at the same rate as we're using it. Think of a bucket of oil with a small tap dripping oil into it and a bigger tap in the bottom of the bucket with a torrent of oil draining it. Simple maths dictates that eventually the bucket will become empty

The Eugene Island wiki quote....I don't think you've read the article fully. If you had you would have read this: "... and most petroleum scientists believe that the depletion profile is adequately explained by replenishment from deeper reservoirs of normal biologically derived petroleum."


Note that in the Eugene Island example were NOT talking about in situ generation of oil and recharge of the upper reservoirs....the oil has already been generated lower in the sequence and has accumulated in the lower reservoirs and subsequently migrated into the higher parts of the section (an educated guess would suggest faults as a possible migration conduit). Incidently Eugene Island doesnt class as a Giant Oil Field (note my use of the term in my post)....giant oil fields are those with reserves of greater than 500million barrels of oil.

The formation of oil from organic source material is a process known as catagenesis...a process that requires elevated temperatures and also large amounts of time (were talking millions of years). Before I start arguing with you about how long it takes to form oil I want you to go and brush up on your high school chemistry and in particular familiarise yourself with The Arrhenius Equation.

Cheers Martin (Petroleum Geologist)

Thanks Martin,
It's always nice to see some actual science and someone who knows what they're talking about in these discussions.

Originally Posted by hughie

Is it.


Odd Reservoir Off Louisiana Prods Oil Experts to Seek a Deeper Meaning | OILFIELD CHURCH

Oil Field Church???? Surely you've got to be joking. A right wing religious (and I would say Creationist) website isn't exactly a good source of material to base a scientific argument on and I'm not even going to start reading this stuff.

I used to engage with Creationists for many years but eventually got frustrated and bored arguing with people who's lack of understanding of science was at times embarassing. As soon as you bring religion into the argument were no longer arguing science.

I'll argue science but I wont argue religion...its against the forum rules anyway.

Cheers Martin

Must be going to run out very soon - our local servo price jumped 11c/L between Wednesday and Friday for unleaded and premium has gone from a differential of 5c/L to 11c/L a while back and to think that this process happens regularly with stuff which is already in their ground tanks.

Originally Posted by NCArcher

Thanks Martin,
It's always nice to see some actual science and someone who knows what they're talking about in these discussions.

Not wanting to prolong this thread but most of you will now have witnessed the disaster in the Gulf of Mexico involving the Transocean owned DP semi-sub rig "Deepwater Horizon".

The disaster is a timely reminder of the higher risks associated with searching for hydrocarbons in deepwater permits such as the one the Horizon was working in. It also explains why many forecasters see the price of oil increasing significantly in the near future not only because it's not going to be as abundant but also because there'll be the higher costs associated with producing from deepwater reserves.

For those interested the Deepwater Horizon is about 10 years old and cost around $US150m to build. BP were probably working the rig on a day rate of around $US600,000 a day. The well they were drilling would have probably cost around $US30-40m to get to the stage they were at. The well will be a write off if they cant get the uncontrolled formation fluid ingress under control. They've failed to manually operate the Blow Out Preventer attached to the wellhead using ROV's so the next option will probably be drilling a relief well (or wells) pumping in kill mud via same...which means the added cost of having another deepwater rig on location for at least a couple of months.

On top of the tangible costs we also must keep in mind the loss of 11 lives..something that you can't put a dollar value on.

Cheers Martin

And of course I forgot another major cost to which monetary value cannot be assigned...the unfolding environmental disaster as a huge oil slick spreads across the GOM.