News When will the world reach peak fossil fuel production?

[mheslep]

I'm inclined to think Cera is at least as reliable as the Economist . But anyway, shouldn't you really be citing their most recent revised version of this graph?

https://www.cera.com/aspx/cda/client/report/reportImageDisplay.aspx?KID=5&CID=10720&IID=21246

Or the full report download...
https://www.cera.com/aspx/cda/filedisplay/publicfiledisplay.ashx?KID=5&CID=10720&PK=38356

Thanks

Your earlier Cera graph shows plenty of growth in conventional oil production yet. The latest one looks to, err, have peaked, sorry to say.

Why are you sorry?

Average across all the spurious bumps of their undulating plateau and the line looks pretty flat at 85 mbd to me.

So?

Unconventional oil still does roar away. But not nearly to the same extent as in the earlier graph.

Things overall look flat from 2020 at around 110 mbd. Then compare this current prediction to the one you cite which says supply will soar in a straight line to 135 mbd by 2035, only then peaking and flattening out.

So Cera may be reliable. It also seems to have changed its tune drastically in the space of a few years.

About resources? If you read the report you'd know that, no, they have not. The changes in production are due to changes in other factors, primarily demand. In neither the older or the newer report to they show any calamitous decline in production. As I said above about the earlier CERA production estimate, "if the demand is there and I don't think it will be." As CERA says in the recent report:

Supply evolution through 2030 is not a question of resource availability.

there should be more than an adequate inventory of physical resources available to increase supply to meet anticipated levels of demand in this time frame. Post-2030 supply may well struggle to meet demand, but an undulating plateau rather than a dramatic peak will likely unfold. Moreover, if the “peak demand” now evident in the OECD countries is a precursor of later developments in the emerging markets, world demand itself could eventually move on to a different course.*

But much will happen before then that will affect demand—from changes in the automobile engine and the electric battery to changes in demographics and values. That is why the concept of “peak demand” is so important. Ironically, it may come to be viewed in retrospect as the main driver of peak supply. In that case what happens aboveground will have set the tempo for what happens belowground.

 

[apeiron]

About resources? If you read the report you'd know that, no, they have not. The changes in production are due to changes in other factors, primarily demand. In neither the older or the newer report to they show any calamitous decline in production. As I said above about the earlier CERA production estimate, "if the demand is there and I don't think it will be." As CERA says in the recent report:

But the problem here is that you are asking us to trust people like the Economist and Cera when these are not transparent sources. You call them reliable. On what basis?

Cera is a private firm that keeps its data to itself. The report is a gloss. We don't know the methodology and we don't have the raw figures. And the fact their own projections can jump around so much should ring alarm bells. Why are you so unconcerned?

When you have one projection that says the world will produce a total of 3.6 trillion barrels by 2070, then a second one that says it will be now 2.4 trillion, well that is quite a gap.

Surely something must have changed even if, as you agree, Cera's rhetoric hasn't .

Cera's position is that we can ignore oil reserves because they are effectively unlimited. But as said, the data that might justify that view is not being made public by Cera and is contested by, among others, the recent head of production at Aramco.

Given that stance, then of course Cera's argument becomes that we will produce as much as the market demands. We can model some demand damping due to the rising cost of unconventional production, or due to more conservative pumping to eke out fields for the longest, etc.

But assuming no constraint on actual reserves is such a big leap that it needs to be properly sourced here.

 

[nismaratwork]

...And again, there are compelling reasons for people with a great deal of money and influence to make "peak oil" a surprise... you know... like the housing crash. Ultimately oil is a kind of Ponzi scheme at the highest level, with principalities and wealth awarded to some, diffusing down the line. When that goes, it's going to go all at once, and given the stability of the region:weapons...

 

[mheslep]

But the problem here is that you are asking us to trust people like the Economist and Cera when these are not transparent sources. You call them reliable. On what basis?

I am not asking you trust them apeiron, these are forecasts after all. Make up your own mind, as you will certainly do anyway without my encouragement. I list them here only as mainstream sources, which is the habit of this forum. That is, they're not crackpot or conspiracy or "myoiltruthblog.org" sources, but they're no more the final truth on a subject than an article from the NYT or the WSJ. CERA is different in that it is not a news source but a private consulting firm. I find them more reliable than the numerous other forecasters out there because they are a longstanding professional organization, with an excellent reputation, including numerous experts in economics, the energy industry, and scientists. Its founder is a world famous pulitzer prize winner on energy.

Cera is a private firm that keeps its data to itself. The report is a gloss. We don't know the methodology and we don't have the raw figures. And the fact their own projections can jump around so much should ring alarm bells. Why are you so unconcerned?

When you have one projection that says the world will produce a total of 3.6 trillion barrels by 2070, then a second one that says it will be now 2.4 trillion, well that is quite a gap.

Surely something must have changed even if, as you agree, Cera's rhetoric hasn't [...]

Yes indeed something has changed! As the report says, and I'll say one more time before moving on, demand has changed; demand forecasts are changing drastically in OECD countries from five years ago. World petroleum consumption did not increase, it actually dropped in 2008. US oil consumption in particular has declined every year since 2005. That doesn't mean it will continue to do so, but the recent consumption history facts certainly are a large change from the ever increasing oil consumption forecasts of a few years ago.

Cera's position is that we can ignore oil reserves because they are effectively unlimited.

That's a strawman, they say the opposite.

Of course looking further ahead, it is important to recognize that oil is a finite resource ...

 

[nismaratwork]

I am not asking you trust them apeiron, these are forecasts after all. Make up your own mind, as you will certainly do anyway without my encouragement. I list them here only as mainstream sources, which is the habit of this forum. That is, they're not crackpot or conspiracy or "myoiltruthblog.org" sources, but they're no more the final truth on a subject than an article from the NYT or the WSJ. CERA is different in that it is not a news source but a private consulting firm. I find them more reliable than the numerous other forecasters out there because they are a longstanding professional organization, with an excellent reputation, including numerous experts in economics, the energy industry, and scientists. Its founder is a world famous pulitzer prize winner on energy.

Yes indeed something has changed! As the report says, and I'll say one more time before moving on, demand has changed; demand forecasts are changing drastically in OECD countries from five years ago. World petroleum consumption did not increase, it actually dropped in 2008. US oil consumption in particular has declined every year since 2005. That doesn't mean it will continue to do so, but the recent consumption history facts certainly are a large change from the ever increasing oil consumption forecasts of a few years ago.

That's a strawman, they say the opposite.

re bold: Hardly; it's just an observation that the CERA model has plentiful oil long after we're all dead... hence "effectively.

Oh, and I'd be much happier of the founder was a Nobel rather than a Pulitzer winner.

 

[apeiron]

This should be a thought provoking graph. It shows the close relationship between oil prices and food prices. So for anyone arguing for energy substitution scenarios, one question here is whether there is a substitute for oil when it comes to food production. And also what are the prospects for political stability in the world's poor and populous countries if oil prices must double, treble, etc, as they would do if we have to move heavily into unconventional sources of petroleum.

http://www.paulchefurka.ca/Oil_Food.html

http://www.paulchefurka.ca/Oil_Food.png

 

[PhilKravitz]

It all seems to be unfolding just as projected in "The Limits to Growth" book from 1972(?).

 

[mheslep]

This should be a thought provoking graph. It shows the close relationship between oil prices and food prices.

Yes, and it shows why oil prices and not necessarily corn based ethanol production should be the place to look for as a cause in the spikes in food prices.

So for anyone arguing for energy substitution scenarios, one question here is whether there is a substitute for oil when it comes to food production.

Why not? Food is not literally made from oil; it is the ancillaries - transportation, etc - that need alternatives.

And also what are the prospects for political stability in the world's poor and populous countries if oil prices must double, treble, etc, as they would do if we have to move heavily into unconventional sources of petroleum.

Treble? Tar sand oil is making money at $40/bbl. Why must unconventional fossile fuels, renewable liquids, and electric transportation reach an equivalent of 3X current $/bbl costs?

 

[PhilKravitz]

Why not? Food is not literally made from oil; it is the ancillaries - transportation, etc - that need alternatives.

The primary energy input is human made fertilizer.

 

[apeiron]

Why not? Food is not literally made from oil; it is the ancillaries - transportation, etc - that need alternatives.

As Phil says, fertilizer is a major input. Agricultural machinery and world transport rely on a portable liquid fuel source. So petroleum is behind the green revolution - in a way that nuclear or wind can never be directly, and indirectly, well that quickly becomes expensive.

But an aside you might quickly be able to answer. What about the fact that both commodities are denominated in US dollars here, so the correlation could merely reflect currency fluctuations - dollar against a world average?

I didn't think this was a factor, the dollar being the de facto world currency, but maybe it is?

Treble? Tar sand oil is making money at $40/bbl. Why must unconventional fossile fuels, renewable liquids, and electric transportation reach an equivalent of 3X current $/bbl costs?

Do you have a good analytical paper to back up the $40 figure? I know it is widely quoted. But history also shows that the oil industry goes for the cheapest, easiest development first, so what is break-even for early fields is not going to be the cost when production is in earnest.

If Canadian voters force producers to factor in the cost of environmental degradation, then again, the numbers will not seem so pretty.

The simple EROEI means that tar sands can never match the cheapness of sweet crude. The Canadians might accept wafer profit margins instead of extracting an Opec style profit on each barrel. Or then again, in a free market, they might sting the US for all it is willing to pay eventually.

 

[PhilKravitz]

"Tar sand oil is making money at $40/bbl." I do not support or deny this statement. But one of the major inputs to making tar oil is natural gas to cook the sand. So we have to modify the statement to say "at X $ per cubic foot for natural gas tar sand is profitable at $40/bbl" I do not know what X is assumed by those making the statement.

 

[apeiron]

More on tar sands...the criticisms run along the lines of too much carbon produced, too much water consumed, and even just physically scaling up the production is a major constraint.

http://www.ceres.org/Page.aspx?pid=1251

Shrinking profit margin: The costs of producing oil sands - already the world's most expensive source of new oil - are rising and will continue to do so due to the onset of carbon pricing, higher input commodity prices, and rising costs for water treatment and land reclamation. As a result, global oil prices will need to remain high - possibly approaching $100 per barrel - to ensure a competitive rate of return on $120 billion in planned expansion projects. Oil sand operators must also be mindful that if global oil prices get too high, between $120 and $150 a barrel, it will likely reduce global oil demand and shift markets in favor of alternative fuels.

Water and Other Resource Constraints: Oil sands production is highly water intensive, with up to four barrels of freshwater consumed for every barrel of oil produced from surface mining extraction. Water withdrawals from the Athabasca River watershed are already restricted during winter months to protect fish habitat. If oil sands production volume grows according to companies' estimates, some oil sands mining operations could exceed their wintertime allowances as early as 2014, causing possible production interruptions. Climate change may also exacerbate this situation; glaciers feeding into the Athabasca River watershed are already shrinking.

Growing Land Reclamation Costs/Liability: After 40 years of production, no oil sand companies have yet fully reclaimed the extensive tailings ponds used for holding polluted wastewater. This is because the fine tailings in these ponds take decades to settle out. These tailing ponds, already covering an area the size of Washington D.C., pose risks of contaminating adjoining lands and water resources, and present health problems in downstream communities. Alberta's Directive 74 requires oil sands miners to speed up remediation of existing ponds – an order that creates especially large liabilities for the industry's legacy miners such as Suncor and Syncrude.

 

[PhilKravitz]

I am sure Canada will be left just as clean as Nigeria.

 

[apeiron]

Reflecting the difficulties of ramping up production to "commercial scale", the actual goals are quite modest anyway.

Oil sands companies in Alberta are already producing 1.3 million barrels a day, and their goal is to triple production by 2030.

http://www.globe-net.com/articles/2010/may/24/financial-risks-of-oil-sands-greater-than-bps-gulf-oil-spill.aspx?sub=12

 

[nismaratwork]

I am sure Canada will be left just as clean as Nigeria.

When has Nigeria ever been anything like Canada in terms of geography, population density, or social and religious divisions? I don't see Canada being worried, but rather pleased as they sit on something that is more and more valuable: fresh water. We CAN live without oil, however it might set us back; no water = dead. Oil and fuel have started wars, but they're open to a lot of economic room too... water often leads to conflict.

So, I guess Canada might be terrified that they'll make lots of money, unless you think the USA is going to follow the script of a South Park movie?

 

[PhilKravitz]

. water often leads to conflict.

Yes water from the Canadian northwest is important to continued development of the US southwest.

 

[nismaratwork]

Yes water from the Canadian northwest is important to continued development of the US southwest.

...And how does that lead to Canada as Nigeria?

 

[PhilKravitz]

...And how does that lead to Canada as Nigeria?

it addresses the question of water needs can lead to conflict.

Nigeria has oil and is being exploited by the global corporations (no clean up), Canada has oil (oil sand) and is being exploited by the global corporations. Already the government is unhappy with the slow rate of clean up. How will they force clean up? They have failed to do so over the past 20 years according to a previous post not mine.

 

[Evo]

it addresses the question of water needs can lead to conflict.

Nigeria has oil and is being exploited by the global corporations (no clean up), Canada has oil (oil sand) and is being exploited by the global corporations. Already the government is unhappy with the slow rate of clean up. How will they force clean up? They have failed to do so over the past 20 years according to a previous post not mine.

Please post links to the valid sources that prove your statements to be facts.

You have been making a lot of statements of *facts* in a number of threads without ever providing evidence when asked. Do not post here again until you furnish proof.

 

[nismaratwork]

it addresses the question of water needs can lead to conflict.

Nigeria has oil and is being exploited by the global corporations (no clean up), Canada has oil (oil sand) and is being exploited by the global corporations. Already the government is unhappy with the slow rate of clean up. How will they force clean up? They have failed to do so over the past 20 years according to a previous post not mine.

I'm going to do this, because I suspect you've never been taught about causal vs. casual relationships. Beyond that, would've just asked what Evo is: where do you get this stuff?


So: Here it is...

I found a good version via 'teh googlez..zuh':

Probably the single most important concept that I learned in a college class was the importance of the having the right comparison information when evaluating the importance of a statistic. The question should always be: relative to what?

Example: Someone says 90% of serial killers drink milk. People instinctively think milk somehow causes serial killers. Putting aside the fact that correlation is not necessarily causation, the statistic is only one of four pieces of information you need to evaluate the significance of the claim. What you really need is below:
Serial Killers Non-Serial Killers
Drink Milk 90% 89%
Don't Drink Milk 10% 11%

Now the claim is seen for the more or less trivial thing that it is. But so often just one of those numbers is given, and people assume the rest.

@http://www.metafilter.com/99598/What-scientific-concept-would-improve-everybodys-cognitive-toolkit


Note, that's not a citation, but it's a good example of a logical principle you need to get on, right away.

 

[apeiron]

Please post links to the valid sources that prove your statements to be facts.

You have been making a lot of statements of *facts* in a number of threads without ever providing evidence when asked. Do not post here again until you furnish proof.

It twas I that cited the Ceres study...

Growing Land Reclamation Costs/Liability: After 40 years of production, no oil sand companies have yet fully reclaimed the extensive tailings ponds used for holding polluted wastewater. This is because the fine tailings in these ponds take decades to settle out. These tailing ponds, already covering an area the size of Washington D.C., pose risks of contaminating adjoining lands and water resources, and present health problems in downstream communities. Alberta's Directive 74 requires oil sands miners to speed up remediation of existing ponds – an order that creates especially large liabilities for the industry's legacy miners such as Suncor and Syncrude.

The WWF has a campaign going...

Oil sands extraction uses significant amounts of water (2-4.5 barrels per barrel of oil produced), which ends up in toxic tailings lagoons that have never been successfully reclaimed. An analysis using industry data estimated that these lagoons already leak over a billion gallons of contaminated water into the environment each year.
http://dirtyoilsands.org/thedirt/article/quick_facts/

More detail from the actual Ceres report...

In 40 years of oil sands production, no tailings ponds have yet been fully reclaimed. That is because, while mature fi ne tailings settle out after three to fi ve years, the fi ne tailings remain suspended. As a result tailing ponds could substantially alter the surrounding ecosystem by contaminating soil and water sources, presenting both health problems to downstream communities and the potential of a catastrophic breach. This issue is one of the oil sands industry’s biggest long-term environmental challenges, especially for legacy oil sands miners like Suncor and Canadian Oil Sands Trust.

As discussed in Chapter 2, Alberta’s Energy Resources Conservation Board (ERCB) is tightening oil sands tailings management under Directive 74. Th is directive requires mined oil sands producers to remediate existing tailings ponds, where disposal has been completed, within fi ve to eight years, and progressively recycle more tailings in the future. Because fi ne tailings (FT) take as long as 40 years to settle, and current technology is not yet able to expedite this process, companies may be forced to use alternative processes such as bioremediation or Suncor’s proprietary MFT drying and accelerated dewatering process to meet the schedule set by the ERCB.

..If bioremediation were used to treat new tailings production, our analysis indicates that Imperial Oil could see a 6-17% increase in its debt-to-capitalization ratio, and Canadian Oil Sands Trust (COST) could see a 10–26% increase, in order to cover the added asset retirement obligations for existing tailings sands projects.

..Taken together, water management and land reclamation are major issues that get minimal attention on oil sands producers’ balance sheets.

Nigeria = Canada might be hyperbole, but - along with the Nafta arrangement I cited in #245 - Canada does seem surprisingly compliant about doing what it takes to get oil sands up and going. Compare for instance US reaction to a little spillage in its gulf.

“What is happening at the moment in the oil sands of Alberta is kind of like the Gulf spill, but playing out in slow motion,” [said] RiskMetrics study co-author Doug Cogan.

 

[PhilKravitz]

Please post links to the valid sources that prove your statements to be facts.

You have been making a lot of statements of *facts* in a number of threads without ever providing evidence when asked. Do not post here again until you furnish proof.

I was citing post #264

"Growing Land Reclamation Costs/Liability: After 40 years of production, no oil sand companies have yet fully reclaimed the extensive tailings ponds used for holding polluted wastewater. This is because the fine tailings in these ponds take decades to settle out. These tailing ponds, already covering an area the size of Washington D.C., pose risks of contaminating adjoining lands and water resources, and present health problems in downstream communities. Alberta's Directive 74 requires oil sands miners to speed up remediation of existing ponds – an order that creates especially large liabilities for the industry's legacy miners such as Suncor and Syncrude."

if you do not like post 264 please tell him/her to also stop.

 

[nismaratwork]

I was citing post #264

"Growing Land Reclamation Costs/Liability: After 40 years of production, no oil sand companies have yet fully reclaimed the extensive tailings ponds used for holding polluted wastewater. This is because the fine tailings in these ponds take decades to settle out. These tailing ponds, already covering an area the size of Washington D.C., pose risks of contaminating adjoining lands and water resources, and present health problems in downstream communities. Alberta's Directive 74 requires oil sands miners to speed up remediation of existing ponds – an order that creates especially large liabilities for the industry's legacy miners such as Suncor and Syncrude."

if you do not like post 264 please tell him/her to also stop.

Oh don't do this... it's not a fight you could win if you were RIGHT, and you're not. You drew some link between the fate of NIGERIA, which has been a basket case for longer than we've needed their oil, and Canada! One is a poor african nation ruled by a small elite, and the other is an advanced nation with international allies and a good military.

The US shares a HUGE border with Canada... they would be INSANE to ever attack them outright, and besides, why fight for what you can just BUY? We provide extra security from those who WOULD invade, and we import.

You keep making your problems the problems of WhoWee, or me, or another post... and now Evo?! I'm telling you, if she's asking for something, it's a HUGE favor and hint; she could just delete your posts and you! Please, stop for a minute or a night, then just don't make a claim you can't source in accordance with PF rules. Nothing that's being asked is unreasonable, even in a CASUAL conversation given what you've claimed, and this is a STEM forum.

 

[apeiron]

I don't see Canada being worried, but rather pleased as they sit on something that is more and more valuable: fresh water. We CAN live without oil, however it might set us back; no water = dead.

I like a good dust-up as much as anyone but the issues here a little more important than the usual.

And I have already highlighted how tar sands and water resources are entwinned.

Here in Canada...a new water management framework under development for the lower Athabasca River will place tighter limits on the amount of water that can be withdrawn from the river to support the world’s largest energy project, the Alberta oil sands.

http://watercanada.net/2010/water-footprints/

So Canada's water is already under stress so far as tar sands exploitation goes.

 

[nismaratwork]

I like a good dust-up as much as anyone but the issues here a little more important than the usual.

And I have already highlighted how tar sands and water resources are entwinned.



So Canada's water is already under stress so far as tar sands exploitation goes.

Yes, but how does this lead to the state of hell that is Nigeria? I can see conflict; I don't believe that conflict will follow the Nigerian model, or even be military. I'd add... Canada is big. Saying that tar sands = All of Canada being stripped and will end like Nigeria strikes me as being naive on the order of expecting to be, "welcomed as liberators."

 

[apeiron]

Yes, but how does this lead to the state of hell that is Nigeria? I can see conflict; I don't believe that conflict will follow the Nigerian model, or even be military. I'd add... Canada is big. Saying that tar sands = All of Canada being stripped and will end like Nigeria strikes me as being naive on the order of expecting to be, "welcomed as liberators."

Err, all Phil actually said was that Canada would be left as

clean

as Nigeria (and he could have meant "mighty clean" so far as this bare statement went). So you have jumped to a pretty extreme interpretation of a quick quip.

Canada is certainly in a position to impose its own environmental clean-up standards. The question is how well is it handling tar sands so far?

About as well as a corrupt, poor and exploited third world nation? Or like the country with a proud tradition of foresight and social responsibility that I have long imagined it to be?

If you have evidence that pertains to this specific question - the one Phil clearly implied - then this is certainly the time to bring it to the table. All the rest is some personal feud.

(Hey, maybe PF should have a forum for "give me your best shot" flaming. And bring back all those who've departed with a ---------- through them.)

 

[nismaratwork]

Err, all Phil actually said was that Canada would be left as as Nigeria (and he could have meant "mighty clean" so far as this bare statement went). So you have jumped to a pretty extreme interpretation of a quick quip.

I have if I'm wrong, and that's based on more than one quip. Let me ask you, because I know you enjoy a good debate and I don't want to jump to conclusions: do you think I jumped to a conclusion here? I've been to Nigeria, so, "clean as Nigeria", and "Mighty Clean" are oxymoronic, and since Canada is already pretty damned clean compared to many other large nations (low population density... key)... it's absurd.

Given that, it's an extraordinary claim based on literally nothing except the conjecture of the kind of people who failed to predict far more proximal events such as Tunisia and Egypt. Prognostication is a losing game, to summarize a wiser person.

Canada is certainly in a position to impose its own environmental clean-up standards. The question is how well is it handling tar sands so far?

About as well as a kid with a new toy, but that's a long way from any social, political, or environmental element of Nigeria. I'm sorry, it's a terrible comparison, and thus much of what follows is necessarily based on this flawed premised.

About as well as a corrupt, poor and exploited third world nation? Or like the country with a proud tradition of foresight and social responsibility that I have long imagined it to be?

More towards the latter, but with strong elements of the former. Until I see actions that aren't just irresponsible and newly runaway, but actually malicious, it's not very similar at all. You could compare mining around the world, but really, you'd be mad to compare the life of a coal miner in Whales, to a blood diamond miner who gets cavity searched once a day, and paid crud.

Canada is likely to do some serious damage before they reign in the desire to make money in this hysterical market. That said, they could turn Alberta into a wasteland, and you'd still have Nigerians marveling at the overall beauty of Canada. In short, it's just an absurd comparison in every sense; scale, social justice, ability to rapidly change course without engendering chaos... it goes on.

Besides, their water is ALSO a monetary investment in their water staying clean, and destroying that would be foolish. That doesn't mean it won't happen, but it would be surprising.

If you have evidence that pertains to this specific question - the one Phil clearly implied - then this is certainly the time to bring it to the table. All the rest is some personal feud.

(Hey, maybe PF should have a forum for "give me your best shot" flaming. And bring back all those who've departed with a ---------- through them.)

You're entitled to your opinion, including reporting me; I'm guessing your standing is far better than mine so you'd likely do well. I can only say that only "personal" element here is that his posts consistently make gross generalizations with no support. Maybe you should read some more of them before you leap to his defense, to the point of near absurdity on the, "clean" issue.

We both know you're too bright to believe that, and this is politics, not philosophy... there is less wiggle room when you have to deal with objective reality.

 

[mheslep]

But an aside you might quickly be able to answer. What about the fact that both commodities are denominated in US dollars here, so the correlation could merely reflect currency fluctuations - dollar against a world average?

I didn't think this was a factor, the dollar being the de facto world currency, but maybe it is?

I'm not sure. Price of gold correction? Other than that I don't know. The http://www.goldprice.org/gold-price-history.html" in the last two years, tailing off just in the last month. So if one accepts gold as a standard, a constant supply commodity, then you could take that 40% out of the oil price as a currency correction, leaving the balance to supply and demand factors.

Do you have a good analytical paper to back up the $40 figure? I know it is widely quoted

No not handy; I'm also just relying on common statements in the mainstream media. Empirically, we know the Canadians kept tar sands substantial production going when oil was down at $55/bbl in early '09, and started operations there years ago when the price was consistently $65-$70/bbl in '06-'07

But history also shows that the oil industry goes for the cheapest, easiest development first, so what is break-even for early fields is not going to be the cost when production is in earnest.

Well there's a couple of cost of production factors in play there. First, yes as the tar sands get harder to produce cost will go up, but I don't know that they are anywhere near that point yet. Second, there's the economics of scale - as the operation scales up the cost of production per bbl goes down.

The simple EROEI means that tar sands can never match the cheapness of sweet crude.

That may be, but it does not mean 'unconventional oil' sources must cost 3X that of crude.

The Canadians might accept wafer profit margins instead of extracting an Opec style profit on each barrel. Or then again, in a free market, they might sting the US for all it is willing to pay eventually.

In a single huge buyer, medium sized seller model market, the buyer also has a lot of authority.

 

[mheslep]

The primary energy input is human made fertilizer.

As Phil says, fertilizer is a major input.

I'm wondering about this one. Best answer I can pull for now is MacKay's swag estimate. He has fertilizer as http://www.inference.phy.cam.ac.uk/withouthotair/c13/page_78.shtml" , or 13% of the total.

As far as the fertilizer mass itself, apparently the only fossile fuel energy use goes into the production of ammonia (NH₃) based fertilizer via the http://en.wikipedia.org/wiki/Haber_process" use. In any case what's needed to make NH₃ as you might guess is not natural gas, per se, but the hydrogen that tags along natural gas, and water.
N₂ + 3 H₂ ⇌ 2 NH₃

 

[mugaliens]

In any case what's needed to make NH₃ as you might guess is not natural gas, per se, but the hydrogen that tags along natural gas, and water.
N₂ + 3 H₂ ⇌ 2 NH₃

Given that Nitrogen is plentiful in the atmosphere, and Hydrogen is plentiful in water, I suspect the primary reason natural gas is used is to provide both energy for the conversation as well as hydrogen in a chemical form with less binding energy than it exists in water.

Is this correct?

If so, is there an electrochemical process which can be used to manufacture NH₃ from just air and water, perhaps a catalyst or two, with no other ingredients used in the process?

 

[mheslep]

Given that Nitrogen is plentiful in the atmosphere, and Hydrogen is plentiful in water, I suspect the primary reason natural gas is used is to provide both energy for the conversation as well as hydrogen in a chemical form with less binding energy than it exists in water.

Is this correct?

If so, is there an electrochemical process which can be used to manufacture NH₃ from just air and water, perhaps a catalyst or two, with no other ingredients used in the process?

1. The current process does NH3 from N from the 'air', and the H from natural gas. The required H could also be produced from water of course, given a lot of energy, taking us back around to the point that energy is nearly always the bottleneck, not material.
2. From what I recall of Bio 101, ammonia is used as fertilizer because plants http://en.wikipedia.org/wiki/Light_reaction" , but they're unable to fix N from the air (there are a few exceptions IIRC) as they are able to do for carbon, and can only get N via their root systems.

 

[Proton Soup]

1. The current process does NH3 from N from the 'air', and the H from natural gas. The required H could also be produced from water of course, given a lot of energy, taking us back around to the point that energy is nearly always the bottleneck, not material.
2. From what I recall of Bio 101, ammonia is used as fertilizer because plants http://en.wikipedia.org/wiki/Light_reaction" , but they're unable to fix N from the air (there are a few exceptions IIRC) as they are able to do for carbon, and can only get N via their root systems.

yeah, i think it's just the cheapest way to get the H. iirc, besides electrical hydrolysis, there is also a thermal process for cracking water that uses heat from nuclear power. this was one of the proposals for that "hydrogen economy", which would be more efficient.

 

[mheslep]

there is also a thermal process for cracking water that uses heat from nuclear power. this was one of the proposals for that "hydrogen economy", which would be more efficient.

That depends on the source of energy available. Given a ready source of heat from combustion or even a nuclear reactor then yes thermal chemical cracking is more efficient of the primary energy than first converting the heat to secondary energy in the form or electricity, followed finally by electrolysis. Given the starting point is electricity from, say, PV solar or wind turbines, then I doubt that converting to heat, rather than electrolysis, is more efficient given any practical system that inevitably wastes some heat.

 

[al loomis]

nuclear isn't an answer, it's just a delay. there is a finite amount of uranium, just like coal and oil. but it's only other use is bombs, it might be a good idea to use up uranium first. that way carbon compounds will be available longer and they are handy for toys.

 

[apeiron]

But remember also the US wants Saudi to push production up to 15 mdb this decade. Which is what will show whether Saudi is actually mature as a producer or is stiil sitting on a hidden stash.

More confirmation on this front from our friend wikileaks. Bear in mind that the cable dates from late 2007, so knock about three years off all projections .

http://www.guardian.co.uk/business/2011/feb/08/oil-saudiarabia?intcmp=239

Al-Husseini, who maintains close ties to Aramco executives, believes that the Saudi oil company has oversold its ability to increase production and will be unable to reach the stated goal of 12.5 million b/d of sustainable capacity by 2009. While stating that he does not subscribe to the theory of "peak oil," the former Aramco board member does believe that a global output plateau will be reached in the next 5 to 10 years and will last some 15 years, until world oil production begins to decline.

It is al-Husseini's belief that while Aramco can reach 12 million b/d within the next 10 years, it will be unable to meet the goal of 12.5 million b/d by 2009. The former EVP added that sustaining 12 million b/d output will only be possible for a limited period of time, and even then, only with a massive investment program.

By al-Husseini's calculations, approximately 116 billion barrels of oil have been produced by Saudi Arabia, meaning only 64 billion barrels remain before reaching this crucial point of inflection. At 12 million b/d production, this inflection point will arrive in 14 years. Thus, while Aramco will likely be able to surpass 12 million b/d in the next decade, soon after reaching that threshold the company will have to expend maximum effort to simply fend off impending output declines. Al-Husseini believes that what will result is a plateau in total output that will last approximately 15 years, followed by decreasing output.

Al-Husseini estimates that moving forward, satisfying increases in global demand will require bringing online annually at least 6 million b/d of worldwide output, 2 million to satisfy increased demand and 4 million to compensate for declining production in existing fields.

He estimates that the current floor price of oil, removing all geopolitical instability and financial speculation, is approximately 70 - 75 USD/barrel. Due to the longer-term constraints on expanding global output, al-Husseini judges that demand will continue to outpace supply and that for every million b/d shortfall that exists between demand and supply, the floor price of oil will increase 12 USD.

He stated that the IEA's expectation that Saudi Arabia and the Middle East will lead the market in reaching global output levels of over 100 million barrels/day is unrealistic, and it is incumbent upon political leaders to begin understanding and preparing for this "inconvenient truth."

Al-Husseini was clear to add that he does not view himself as part of the "peak oil camp," and does not agree with analysts such as Matthew Simmons. He considers himself optimistic about the future of energy, but pragmatic with regards to what resources are available and what level of production is possible.

The last comment is a little amusing given the bleak assessment. If you check what people were saying even five years ago, you will see who was closer to "the truth" on this subject.

 

[Al68]

nuclear isn't an answer, it's just a delay. there is a finite amount of uranium, just like coal and oil...

Sure, but it's a very, very long delay. http://en.wikipedia.org/wiki/Uranium_mining" long just counting the uranium that can be mined very cheaply. And that's only a small fraction of the total supply.

Long before we ever get to the point where uranium supply is a problem, nuclear power will be "too cheap to meter", as was once predicted by advocates. If uranium supply was the limiting factor, it would be too cheap to meter now, and would be for a very long time.

 

[al loomis]

declining energy resources are the best possible news: so far, the only practical way to reduce fossil fuel use is to raise the price and induce economic collapse., this may save us from the venus solution, at the cost of mass starvation, another positive actor on energy use, and the first world food war. it might be the first water war too, but aside from desal, energy neutral.

political management of humanities problems have absurdly ineffectual, but gaia has a range of mechanistic solutions which are coming into play.

 

[apeiron]

Long before we ever get to the point where uranium supply is a problem, nuclear power will be "too cheap to meter", as was once predicted by advocates. If uranium supply was the limiting factor, it would be too cheap to meter now, and would be for a very long time.

What do you actually mean here? It sounds like you are saying nuclear "done right" would be indeed "too cheap to measure" and only some mysterious factor (it's not limited supply) is preventing this being the case.

Please supply an explanation backed up by sources if this is what you mean.

 

[Al68]

What do you actually mean here? It sounds like you are saying nuclear "done right" would be indeed "too cheap to measure" and only some mysterious factor (it's not limited supply) is preventing this being the case.

I made no claim of any "mysterious" factor. The factors preventing nuclear from being "too cheap to meter" are not "mysterious" at all: http://en.wikipedia.org/wiki/Nuclear_power_debate#Economics" are very expensive to build and cost almost as much to operate as a coal plant.

But the http://en.wikipedia.org/wiki/Nuclear_power_debate#Economics"is very cheap relative to other plant types.

A cost factor isn't "mysterious" simply because it's unrelated to uranium supply.

 

[apeiron]

Very interesting to see how various people are spinning the reaction to the leaked cable.

The Wall Street Journal is making sound like el Husseini is backing away from a misinterpretation...
http://blogs.wsj.com/source/2011/02/09/saudi-oil-reserves-and-the-wikileaks-chinese-whispers-effect/

But the meat of the cable is not about the proper interpretation of reserve figures (as mentioned earlier in the thread, even el Husseini's own website is open about this). It is his insider view on actual production.

If the IEA says we are banking on 15 mbd from you guys, and the message back is that we're not sure about getting to 12 mbd yet - and that only for a decade rather than the 50 years Aramco chief recently promised in a public statement - then...whoops.

Meanwhile over at Fox News, there is confusion...
http://mediamatters.org/research/201102090025

"Hey, this is a heck of surprise. Means we better get drilling like crazy in the US again I guess." Where do they get these guys?

And across to the Economist for the most plausible spin...
http://www.economist.com/blogs/freeexchange/2011/02/oil_prices

"The market already knew all this in 2007. And the Saudis have just decided to limit production to get the most dollar out of the decline phase of the Hubert curve."

This is both probably true, and beside the point. The central issue is that the existing economy is based on cheap energy.

If there are other equally cheap substitutes out there (like "too cheap to meter" nuclear), then nothing need change. If basic energy costs double or treble, then this will be a very big shock.

Of course there is huge scope in the most wealthy countries to conserve fuel use. But then also they are the most able to continue to pay the market rate the longest. So cue just huge trouble in the populous poor parts of the world.

Except then, we are talking about some of the major oil producers. Oh well.

 

[apeiron]

I made no claim of any "mysterious" factor. The factors preventing nuclear from being "too cheap to meter" are not "mysterious" at all: http://en.wikipedia.org/wiki/Nuclear_power_debate#Economics" are very expensive to build and cost almost as much to operate as a coal plant.

But the http://en.wikipedia.org/wiki/Nuclear_power_debate#Economics"is very cheap relative to other plant types.

A cost factor isn't "mysterious" simply because it's unrelated to uranium supply.

I remain baffled by what you intended by your comments. If it is just that peak uranium is a good way off even if we cranked up the nuclear industry, then that is true.

But the central issue here is about cheap (and portable) energy. So total cost per watt is what would be "cheap" or "expensive".

 

[Al68]

I remain baffled by what you intended by your comments.

What is baffling? My comments were in response to a post saying that nuclear power wasn't a solution because there was only a "finite supply" of uranium.

If it is just that peak uranium is a good way off even if we cranked up the nuclear industry, then that is true.

Very true and non-baffling and non-mysterious.

But the central issue here is about cheap (and portable) energy. So total cost per watt is what would be "cheap" or "expensive".

Right. And the total cost per watt of nuclear power has almost nothing to do with uranium supply.

 

[mugaliens]

nuclear isn't an answer, it's just a delay. there is a finite amount of uranium, just like coal and oil. but it's only other use is bombs, it might be a good idea to use up uranium first.

All known current reserves will supply the world with power for approximately the next 85 years. However, that's with a conventional reactor, which uses less than 1% of the fissile material. A http://en.wikipedia.org/wiki/Breeder_reactor" uses nearly all of the fissile material, while simultaneously producing fissile fuel out of non-fissile materials.

 

[Argentum Vulpes]

I'd like to add the point that current light water reactors (PWR/BWR) only use up about 3% of the potential energy in the fuel rods. Neutron poisons build up in the fuel making the chain reaction less stable (harder to keep going) after about 24 months of full power days. If the USA got back into the reprocessing business much more of the uranium/plutonium in the fuel rods could be "burnt" and make much more energy.

Also with the use of breeder reactors and LFT reactors to bring thorium into the energy market, the human race would be hard pressed to run out of fissionable material to use.

 

[mheslep]

Even though nuclear the figures above appear fine at a glance, I hope we can keep this thread in the habit of referencing factual claims.

 

[DrClapeyron]

Can anyone really present a factual claim that nuclear breeder reactors threaten to destroy the US coal and oil industry, leaving millions of people jobless?

I've wondered if the above claim is what prevented new nuclear plants from being built in the 70's and 80's while things like 3 Mile and Chernobyl were just convenient rally cries. Think about what the oil industry means for jobs in the financial market; we go to war over this stuff, spending trillions of dollars to protect oil and currency reserves, and sacrificing countless lives and living conditions to insure that power is kept in the same hand.

I mean, if it did collapse the US oil and coal markets, couldn't we just sell the stuff to poor countries that don't have it? Give them cars, bigger houses and better roads while increasing the US's export sector. Yes, I'm a guiness!

 

[mheslep]

Can anyone really present a factual claim that nuclear breeder reactors threaten to destroy the US coal and oil industry,...!

Yes, with some attention one can at least attempt to demonstrate whether that scenario is a) scientifically possible and b) economically feasible. Why not give it a try? The rest borders on https://www.physicsforums.com/showthread.php?t=414380" if anything does. For instance, this

...I've wondered if the above claim is what prevented new nuclear plants from being built in the 70's and 80's while things like 3 Mile and Chernobyl were just convenient rally cries...

Begs for an anti-nuclear hand-waiver to respond in kind: "how could anyone consider nuclear after 3 Mile Island and Chernobyl." And why not, if the only goal is come up with a better conspiracy theory?

 

[apeiron]

One authorative figure in the peak oil debate is Robert Hirsch, ex manager of research at Exxon, RAND Corporation consultant, director of the US nuclear fusion programme and author of Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, written for the United States Department of Energy.

Catching up on what he has to say these days, there is this recent slide presentation...
http://www.businessinsider.com/the-impending-world-energy-mess-2010-11#-1

Of interest is slide 4 that shows oil production hit a peak in 2004 and has since plateaued.

Slide 6 shows the tight correlation between cheap oil and GDP (evidence that burning oil is the economy basically).

Then slide 10 predicts what is going to happen to the economy given even "a best case mitigation scenario" - the cornucopian belief that technological fixes can ride to the rescue once decline begins.

Hirsh and his colleague are forecasting a 10 percent drop in world GDP in just two years following peak production, about an 18 percent drop after a decade.

The mother of all depressions in other words. It will be worse of course if war and mayhem break out says Hirsh.

There is also this recent Le Monde interview with Hirsh...
http://petrole.blog.lemonde.fr/2010/09/16/interview-with-robert-l-hirsch-12
and
http://petrole.blog.lemonde.fr/2010/09/16/interview-with-robert-l-hirsch-22/

Where he alleges an official policy of cover up...

Q: What happened after you published your 2005 report on ‘peak oil’ for the US Department of Energy (DoE) ?

A: The people that I was dealing with said : « No more work on peak oil, no more talk about it. »

Q: People that were high in the administration hierarchy ?

A: The people that I was dealing with were high in the laboratory level. They were getting their instructions from people on the political side of the DoE, at high levels.

After the work we did on the 2005 study and the follow-up of 2006, the Department of Energy headquarters completely cut off all support for oil peaking and decline analysis. The people that I was working with at the National Energy Technology Laboratory were good people, they saw the problem, they saw how difficult the consequences would be – you know, the potential for huge damage – yet they were told : « No more work, no more discussion. »

Q: That was in 2006, under Bush administration. Has anything changed with the Obama administration ?

A: It has not changed. I have friends who simply won’t talk about it now. So I have to assume that they are receiving the same kind of instructions.

...I think in the case of the United States, that there are people inside the government that understand the problem. I don’t think it’s a huge number of people. And one might say that there is a conspiracy to keep it quiet.

 

[apeiron]

I made no claim of any "mysterious" factor. The factors preventing nuclear from being "too cheap to meter" are not "mysterious" at all.

Nuclear is an emotional issue. So in the interest of rational assessments, here is the most current relative cost assessments that I have seen (from a fairly pro-nuclear source).

http://web.mit.edu/ceepr/www/publications/workingpapers/2009-004.pdf

we find that the levelized cost of electricity from nuclear power is 8.4¢/kWh, denominated in 2007 dollars. The levelized cost of electricity from coal, exclusive of any carbon charge, is 6.2¢/kWh, denominated in 2007 dollars. The levelized cost of electricity from gas, exclusive of any carbon charge, is 6.5¢/kWh

Of course, the nuclear option has to deal with the question already raised early in this thread (from about post #240) about the practical speed of ramping up construction at a rate to meet the demand.

My starting question on nuclear is, if it is so cheap and clean, how come countries are not already doing it? We seem on the brink and yet the nuclear renaissance is still awaiting lift-off. So either a) goverments are fools, b) nuclear does not actually pan out, or c) fossil fuels are not seen to be an issue (so back to "governments are fools" then ).

 

[nismaratwork]

Nuclear is an emotional issue. So in the interest of rational assessments, here is the most current relative cost assessments that I have seen (from a fairly pro-nuclear source).

http://web.mit.edu/ceepr/www/publications/workingpapers/2009-004.pdf



Of course, the nuclear option has to deal with the question already raised early in this thread (from about post #240) about the practical speed of ramping up construction at a rate to meet the demand.

My starting question on nuclear is, if it is so cheap and clean, how come countries are not already doing it? We seem on the brink and yet the nuclear renaissance is still awaiting lift-off. So either a) goverments are fools, b) nuclear does not actually pan out, or c) fossil fuels are not seen to be an issue (so back to "governments are fools" then ).

Can't fear and NIMBY, mixed with our electoral process and strong existing energy lobbies explain it well enough? I think I'll choose "a", but with the addition that the people and the government are, as the Egyptians have been saying so eloquently, "One hand". NIMBY comes from the public, not from the top.

One question: the cost for nuclear power is based in the current economic climate, right? Would that change if the US made a real choice to move from coal to Geiger clicks, and made it an exportable industry?

Your points seem to outline a void in a market that sooner or later (whichever view) is going to need filling and FAST. It seems that we could take the lead from other nations in reactor design, and the benefits that come in materials and other areas as a result. We all got together to send some fellows to walk on our moon, it seems reasonable to "moonshot" a project that could be vital to national security and the world economy.

As you say though, if it's that easy, why aren't we doing it... and back at square one. *rubs temples*