1/22/01
Kenneth writes:
>-----Original Message-----
>From: asa-owner@lists.calvin.edu [mailto:asa-owner@lists.calvin.edu]On
>Behalf Of Kenneth Piers
>Sent: Monday, January 22, 2001 4:40 PM
>To: asa@calvin.edu
>Subject: RE: Energy and Jan. Atlantic
>
>
>Speaking of depleting petroleum resources, the Jan 2001 Atlantic Monthly
>has an essay by Jonathan Rauch (The New Old Economy: Oil, Computers, and
>Reinventing the Earth) in which he claims that we are not in danger of
>running out of oil. Through adoption of new economy technology
>(3Dseismic imaging, Directional drilling, "smart" drill bits, computers,
>etc.) we are now finding oil more successfully, at a higher rate and
>more cheaply than we were 20 years ago. Knowledge, not oil, limits the
>amount of oil we find. So, he says, by the time we move to a new energy
>economy (hydrogen, fuel cell, photovoltaic, whatever...) there is still
>likely to be large amounts of oil left in the ground unused.
>Paradoxically, the more oil we remove from the ground the more oil we
>find, says Rauch. This sounds very much like the cornucopian worldviews
>propounded by the likes of Julian Simon, Herman Kahn, and Calvin Beisner
>. Is there any legitimacy to these arguments?
There will always be oil in the ground. There is many times more oil in the
ground than we have burned. The problem is that it is too dispersed to be
extractable economically. No one is going to spend $10 to get $9 of oil.
Occasionally we do that in the oil industry, but I assure you that heads
roll at those times. What limits the amount of oil we find is economics and
the laws of physics. An example, I once had an override on a well we were
drilling in Fayette Co. Texas. An override means that I owned a few
percentage points of the well and didn't have to pay for the drilling of the
well. I was licking my chops at the prospect of getting rich. What fun I
could have with the money. We were drilling right next to an old well which
had 35 feet of oil pay that no one had recognized when they drilled it
several years earlier. They had abandoned the well and poured cement down
it. We drilled 120 feet away from that other well, drilled up dip hoping to
get more than 35 feet of pay. What we found was 8 feet of pay on a different
water level. (the fact that the oil floated on water at a different depth
meant that we were not in the same reservoir and that there was no
connection to the 35 feet of oil just 120 feet to the south.) Instead of
getting rich, which I thought I was about to do, we plugged our well and
walked away. Why? It would have taken about 50 dollars to get 5 dollars of
oil. Who wants to do that? If you do, please send me your money and I will
find you lots and lots of oil. Better yet, tell that author to send me his
money.
The oil left in the ground unused can not be moved. Oil is often found in
sandstones. It is actually found in the pores spaces between the sand
grains. Thus the sand is kinda like a sponge. We can measure the oil
saturation and the water saturation of a sandstone reservoir. However, when
we pump oil out of the ground, there is an irreducible saturation beyond
which the oil won't move. So, your correspondent is correct there will be
lots of oil left unused in the ground, but it won't come out of the ground
so what use is it?
As to finding more oil the more we find, that is pure fantasy. In the 1960s,
people working the North Sea found fields of 1-2 billion barrels each. Today
the average field size is around 30 million barrels--almost a 100 fold
reduction. (In the Frio trend of Texas 80 years ago, they found billion
barrel fields--in the 1990s the average field size found was 4 million
barrels). Now, if that 30 million barrel field is far from infrastructure
(pipelines), it takes almost as big a platform to produce the 30 million as
it does to produce a billion barrel field. Lets say that a platform costs
$500 million, which isn't far from the truth in some fields. For a billion
barrel field that is fifty cents per barrel cost. For a 30 million barrel
field it is $16 dollars per barrel. and that is just for the cost of the
platform. That doesn't count the cost of running the platform, paying the
salaries (my salary), paying the refinery costs, the pipeline costs, the
wellhead processing costs, and don't forget royalties (about 1/6 of all the
oil which goes to the government) and taxes on top of that & etc. No one can
make money off of operating costs of $16+ / barrel.
Now, as to the hydrogen economy, I wish someone would tell me where the
hydrogen mine was. To manufacture hydrogen requires energy--which is exactly
what we won't have without oil. If there is a significant increase in
photovoltaic efficiency, it will go a long way towards solving the problem.
glenn
see http://www.glenn.morton.btinternet.co.uk/dmd.htm
for lots of creation/evolution information
anthropology/geology/paleontology/theology\
personal stories of struggle
>
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