Huge oil discovery enough to kill green energy for another decade.

zod

When there's cheap oil, it will be next to impossible to do anything with green energy.

http://news.bbc.co.uk/2/hi/business/8233504.stm

They should put a floor on oil now at $70 a barrell.

Sleipnir

They don't know if it's commercially viable yet. Until then, it might be just another big well that might be too difficult or two expensive to develop.

It won't do much to the price of a barrel until then either.

BendiBus

The industry-wide definition for a "giant" discovery is at least 250 million barrels of oil "in place"

250 million barrels is less than 3 days supply! If they've found 3 billion barrels it's barely enough to defer the end of oil by a month.

Also, as it's so deep it will probably be more expensive to extract.

Sleipnir

BendiBus wrote: »

250 million barrels is less than 3 days supply! If they've found 3 billion barrels it's barely enough to defer the end of oil by a month.

Also, as it's so deep it will probably be more expensive to extract.

and that's the total amount there, not the total amount recoverable. You typically only get 20-30% out of the ground.

rs

The green party supporter in me is sad.

The BP shareholder in me is happy.

It's quite complicated really.

Tabnabs

Sleipnir wrote: »

They don't know if it's commercially viable yet. Until then, it might be just another big well that might be too difficult or two expensive to develop.

It won't do much to the price of a barrel until then either.

They are drilling in places today that 5/10 years ago would have been unthinkable. Viability is directly indexed to price.

Sleipnir

Meh, it won't do much for either I'm afraid.

I'm sure this annoucement has nothing at all to do with the fact that the US Senate is a few weeks away from voting on the lifting of the 25-year ban on offshore drilling around U.S. coasts.

Last year, a few months before the Mexican parliament was to vote on Pemex's (state owned) budget and rights to expand drilling, Pemex announced a "huge oil discovery", of a possible 10 billion barrels, which was quietly revised this year to around 43 million barrels, a downward revision of 99.57%.

Sleipnir

Dyflin wrote: »

They are drilling in places today that 5/10 years ago would have been unthinkable. Viability is directly indexed to price.

Drilling is quite different to recovering. The last large field they discovered in GOM was in 2006 and this year, 2009, they are drilling an appraisal well in that field. So they're still nowhere near actually bringing the well into production. They probably will in the next 5-7 years.
This new field will take even longer.

Also, there's no pipeline meaning that tankers need to be filled directly at the field, which is far more expensive and also affects the daily production. You can't do anything with the oil if there's no pipeline to shore and you're waiting for a tanker to fill.

It's also probably mosty natural gas not oil and NG tends to be deeper than oil and this well is quite deep.

Judgement Day

rs wrote: »

The green party supporter in me is sad.

The BP shareholder in me is happy.

It's quite complicated really.

I assume you're joking? How on earth could anyone square being a shareholder in BP and being a green given the poor environmental record of that company?

hick

in one way it's quite good cos they have to fill the space with water when the oil has been removed so at least it's somewhere for all the melting ice cap water to go, every cloud etc etc

This will be incredibly expensive to bring up so it will still push up the price, and with oil being so expensive alternative are still gonna come. There's still plenty of oil out there but the easy oil is on the way out. the tipping point will come when realistic alternatives are cheaper to develop an produce than oil reliant technology, India and China are going to rip through any new fields in no time!
We'll all still be diving electric cars in the next 10 years.

asdasd

This will be incredibly expensive to bring up so it will still push up the price, and with oil being so expensive alternative are still gonna come.

it works the other way.

We'll all still be diving electric cars in the next 10 years.

powered by hydrogen extracted from water how?

hick

don't see how it works the other way, expensive drilling gets passed out the other end pushing the price of the barrel up, as I mentioned you hit a tipping point where oil gets to expensive to drill.

I also never mentioned hydrogen, although a viable option, fuel cell or capacitor technology is more likely and less complicated

asdasd

don't see how it works the other way, expensive drilling gets passed out the other end pushing the price of the barrel up, as I mentioned you hit a tipping point where oil gets to expensive to drill.

Er, no. the expensive drilling happens because the price is high ( and expected to stay high). The cost of oil depends on market conditions. The guy with the expensive oil sells his oil for the same price as the guy with the oil that is easy to extract.

I also never mentioned hydrogen, although a viable option, fuel cell or capacitor technology is more likely and less complicated

alright where does the electricity for any of this come from? Not a rhethorical question. There is one sane answer.

hick

I say black now you say ....

asdasd

nuclear. but that might derail the thread. Just putting it out there.

10-10-20

The oil companies aren't stopping at anything to allow them to identify their sources of oil. They are putting large amounts of cash into HPCC clusters capable of identifying oil deposits through seismic imaging.
http://www.westerngeco.com/technology/4d.aspx

They are being forced into this process because of declining stocks in the easily accessable upper-crust resevoirs, so they need to work smarter and deeper to get to the remaining stocks.

While these fields may remain untouched for some time coming, once the price is right, they will start extraction.

johnathan woss

Dyflin wrote: »

They are drilling in places today that 5/10 years ago would have been unthinkable. Viability is directly indexed to price.

If you need two barrel's worth of energy to get one barrel out, it doesn't matter if oil is selling for $10,000 a barrel, you're not going to extract, are you?

10-10-20

johnathan woss wrote: »

If you need two barrel's worth of energy to get one barrel out, it doesn't matter if oil is selling for $10,000 a barrel, you're not going to extract, are you?

That's obscure. How would oil be viable if you had to expend more energy to recover it than is available? It's not even possible unless you use an other energy source.
What's happening is that the deeper wells are being sought using new technology - hence the reassessment of the oil fields off Ireland.
Eventually the return on investment from the major Euro oil fields will fall to a level low enough to justify deeper wells.
Here's how they are achieving this and keeping the cost down - get a computer to do the searching.
http://www.platform.com/industries/oil-and-gas/og_marketbroch.pdf
and..
http://www.hpcprojects.com/features/feature.php?feature_id=240

Even if these deep finds are currently difficult (expensive) to exploit, future technolegy is likely to be able to extract the oil more efficiently than now.

Another thing to remember is the "floor" of oil prices will gradualy rise as the cheaper to extract oil is being depleted. If prices fall, producers will simply shut down any operation that is unprofitable, thus limiting supply and driving prices back up again.

There are for example huge reserves of Canadian oil sands that are uneconomic to exploit when the price is below $80 or so a barrel. If the price was to stabalize at $100 then these fields will come on stream, quite likely when the world comes out of the current recession.

zod

Deleted User wrote: »

There are for example huge reserves of Canadian oil sands that are uneconomic to exploit when the price is below $80 or so a barrel. If the price was to stabalize at $100 then these fields will come on stream, quite likely when the world comes out of the current recession.

The Tar sands are an environmental disaster

https://www.youtube.com/watch?v=VjjnEzoxEI8

zod

zod wrote: »

The Tar sands are an environmental disaster

https://www.youtube.com/watch?v=VjjnEzoxEI8

I know, but these fields will be exploited if the price is right!

squod

zod wrote: »

When there's cheap oil, it will be next to impossible to do anything with green energy.

http://news.bbc.co.uk/2/hi/business/8233504.stm

They should put a floor on oil now at $70 a barrell.

Most bizzare comment I've read here. :mad:

quiche

Fast approaching a point where there is so much money from VC's and investors into green energy technologies that incremental oil discoveries will have less and less impact, as the amount of speculation money in green investment will drive the industry.

zod

squod wrote: »

Most bizzare comment I've read here. :mad:

there is plenty of discusion on setting a floor on the price of oil so as not to undermine the viability of renewables while in their infancy

see http://www.businessweek.com/magazine/content/08_31/b4094000658012.htm

squod

zod wrote: »

there is plenty of discusion on setting a floor on the price of oil so as not to undermine the viability of renewables while in their infancy

see http://www.businessweek.com/magazine/content/08_31/b4094000658012.htm

And unfortunately these studies are just b0llox and misinformation.

zod

squod wrote: »

And unfortunately these studies are just b0llox and misinformation.

What are your sources with regards to this misinformation ?

Here is an excert from a google tech talk on biofuels* referencing a floor on oil.

https://www.youtube.com/watch?v=iOUjkvdSKao

* whether you agree with biofuels or not is not important here .. cheap oil prices would affect all green energy sources.

squod

zod wrote: »

What are your sources with regards to this misinformation ?

Here is an excert from a google tech talk on biofuels* referencing a floor on oil.

https://www.youtube.com/watch?v=iOUjkvdSKao

* whether you agree with biofuels or not is not important here .. cheap oil prices would affect all green energy sources.

Maybe I'm not coming accross clearly enough. What your saying is that the government should raise inflation by putting further taxes on fuel while simultaneously raising the costs associated with industry and pushing up the cost for homeowners to install green energy devices or switch to more efficient (newer) vehicles.

Is that what you're suggesting? Have I missunderstood?
Is your arguement that we should tax our way into a 'greener' future. Because that doesn't work.

zod

squod wrote: »

Maybe I'm not coming accross clearly enough. What your saying is that the government should raise inflation by putting further taxes on fuel while simultaneously raising the costs associated with industry and pushing up the cost for homeowners to install green energy devices or switch to more efficient (newer) vehicles.

Is that what you're suggesting? Have I missunderstood?
Is your arguement that we should tax our way into a 'greener' future. Because that doesn't work.

did you listen to the video ? a floor on the price of oil with a zero sum gain delivers no revenue while simultaneously protects green energy from cheap oil due to temporary gluts or price manipulation.

the price of oil is now $72 .. say you put a floor of $60.. price is unaffected, green energy is viable, investors in green get paid and so on.

oil companies notice market is growing for green, force price down to $30 temporarily to kill competition ( akin to below cost selling for supermarkets), with no floor.. infant green energy companies go under.

if floor in place price never falls below 60, green still viable, investment continues, extra 30 is kept until price of oil drifts above 60, money raised is used to keep oil at 60 until used up (zero sum gain, no tax actually collected)

Has to be done in collaboration with other developed nations .. similar to cap and trade.

squod

zod wrote: »

did you listen to the video ? a floor on the price of oil with a zero sum gain delivers no revenue while simultaneously protects green energy from cheap oil due to temporary gluts or price manipulation.

the price of oil is now $72 .. say you put a floor of $60.. price is unaffected, green energy is viable, investors in green get paid and so on.

oil companies notice market is growing for green, force price down to $30 temporarily to kill competition ( akin to below cost selling for supermarkets), with no floor.. infant green energy companies go under.

if floor in place price never falls below 60, green still viable, investment continues, extra 30 is kept until price of oil drifts above 60, money raised is used to keep oil at 60 until used up (zero sum gain, no tax actually collected)

Has to be done in collaboration with other developed nations .. similar to cap and trade.

It's as easy to flip that idea on it's head supporting green energy in times when oil is cheap. You can't see it but placing floors on oil effects the entire economy.
These effects raise inflation thus making it harder for emerging green energy companies to gain customers. Raising inflation equals bad news for every business including green business. My point stands, this is just more missinformation.

zod

squod wrote: »

These effects raise inflation thus making it harder for emerging green energy companies to gain customers. Raising inflation equals bad news for every business including green business. My point stands, this is just more missinformation.

How does a ZERO SUM GAIN mechanism raise inflation ?, it helps keeps oil prices stable, it only reduces swings in the price down and UP with no net tax take.

squod

zod wrote: »

How does a ZERO SUM GAIN mechanism raise inflation ?, it helps keeps oil prices stable, it only reduces swings in the price down and UP with no net tax take.

We're already experiencing artificially high oil prices. Oil companies won't accept caps on oil prices. We've seen this before. Putting a floor on oil will raise inflation. I don't understand how you could reach any other conclusion.

As I've already said this is simply bizzare. It makes a whole lot more sense to control the costs that you can control. I stand by my point, this is just more misinformation.

Who controls oil prices anyway??

Is it OPEC, well they trim production if the price falls too much.
Is it Oil companies, not really, the costs involved in refining and transportation are fairly constant - relatively speaking, exploration is the only cost that's rising.
Is it government taxation, This has the largest impact on the end user!
Is it oil brokers/investors/speculators, Last years spike in oil prices can largely be blamed on speculators who pulled their money out of stocks and shares and bought oil jacking up the price then selling for a huge profit!

Who is going to "put a floor on prices" or cap prices.

KevinH

Deleted User wrote: »

Last years spike in oil prices can largely be blamed on speculators who pulled their money out of stocks and shares and bought oil jacking up the price then selling for a huge profit!

What evidence do you have for that ?

KevinH

KevinH wrote: »

What evidence do you have for that ?

I don't have it to hand..

When prices jumped, there was no collapse in supply, no jump in demand and no major military action going on in any oil producing areas.

But the stock markets had just crashed, banks had failed, investors were running scared.

KevinH

Deleted User wrote: »

I don't have it to hand..

When prices jumped, there was no collapse in supply, no jump in demand and no major military action going on in any oil producing areas.

But the stock markets had just crashed, banks had failed, investors were running scared.

Prices had been rising consistently for years.
The rate of increase just started to increase in 2008. I believe the market was starting to price oil more realistically.

The run-up in oil price was one of the main causes of the financial crisis, and the price crashed when the financial crisis hit and demand crashed.

squod

I'm gonna discontinue my conversations on the green issuse threads.
Spread disinformation all you want, I don't see this thread advancing any green causes. Its obviously a sham.

djpbarry

squod wrote: »

Spread disinformation all you want, I don't see this thread advancing any green causes.

An opinion that differs from yours is not "misinformation". Please refrain from referring to it as such.

Húrin

zod wrote: »

When there's cheap oil, it will be next to impossible to do anything with green energy.

That's a pity because without cheap oil, hardly anyone will be able to build the required amount of renewable energy capacity without breaking the bank.

zod wrote: »

The Tar sands are an environmental disaster

Indeed. That's why they're so famous to us.

Bee

Húrin wrote: »

That's a pity because without cheap oil, hardly anyone will be able to build the required amount of renewable energy capacity without breaking the bank.



Indeed. That's why they're so famous to us.

The strongest indicator of the myth of peak oil is that BP et-al have pulled back from their major investments in re-newables.

Too many vast quantites of exploitable oil finds have been discovered recently for them to keep the sham going of oil running out.

ECo nuts shouting about "Peak Oil" allowed the oil price to increase significantly and phenomenal profits to be made in the last 2 years (yes I made a lot of money in shares as well)

Old style capitalist oil companies did well to exploit the major tax concessions for investing in so call renewables by well meaing eco nuts who they ran rings around by increasing their captial value in their own industries increasingly down to the Eco nuts shouting about "PeaK Oil"

I always think its a litle sad how the Green movemnt are so dumb that they can't see how; though they may be well meaning; have allowed the tax payer be screwed, as they do in Ireland with the likes of Eamonn Ryan subsidising Irish re-newables (though it does nothing for either the enviornment or climate change) but of course they never really check where their political masters invest their money I suppose

http://news.bbc.co.uk/2/hi/business/8266200.stm

The head of oil giant Total has told the BBC the world could face a shortage of oil because of underinvestment.
Chief executive Christophe de Margerie warned that too little has been spent trying to tap into new oil reserves because of the economic crisis.
"If we don't move [now] there will be a problem," Mr de Margerie said. "In two or three years it will be too late."
He also said he thought oil prices would rise to more than $100 a barrel, from their current level of around $70

KevinH

Bee wrote: »

The strongest indicator of the myth of peak oil is that BP et-al have pulled back from their major investments in re-newables.

Too many vast quantites of exploitable oil finds have been discovered recently for them to keep the sham going of oil running out.

ECo nuts shouting about "Peak Oil" allowed the oil price to increase significantly and phenomenal profits to be made in the last 2 years (yes I made a lot of money in shares as well)

Old style capitalist oil companies did well to exploit the major tax concessions for investing in so call renewables by well meaing eco nuts who they ran rings around by increasing their captial value in their own industries increasingly down to the Eco nuts shouting about "PeaK Oil"

I always think its a litle sad how the Green movemnt are so dumb that they can't see how; though they may be well meaning; have allowed the tax payer be screwed, as they do in Ireland with the likes of Eamonn Ryan subsidising Irish re-newables (though it does nothing for either the enviornment or climate change) but of course they never really check where their political masters invest their money I suppose

I get the impression from this post that you do not understand what peak oil is ..... it has nothing to do with the amount of oil in the ground.

P.S. What vast quantities of oil finds have we had recently ?

Bee

KevinH wrote: »

I get the impression from this post that you do not understand what peak oil is ..... it has nothing to do with the amount of oil in the ground.

P.S. What vast quantities of oil finds have we had recently ?

A small sample here

http://www.guardian.co.uk/business/2009/sep/02/bp-oil-find-gulf-of-mexico

"Giant oil find by BP reopens debate about oil supplies Discovery could be as large as Forties field in North Sea and comes hard on heels of 8.8bn barrel find by Iran"

One of the issues with many recent finds is not how large, but how difficult it is to extract!

The oil companies may have to consume the equalivilant in oil of more than half the field's extractable reserves to get the first drop out! Just look at the amount of infrastructure that some of these remote fields need!

Capt'n Midnight

Deleted User wrote: »

One of the issues with many recent finds is not how large, but how difficult it is to extract!

Take for example the Alberta tar /oil sands. HUGE resevoir of hydrocarbons TWICE the size of know oil reserves. The only problem is that it is not very economic in either the $ sense or the % of fuel you can recover.

As the price of oil goes up then the tar sands will become more economically viable. But there comes a point where the energy / resources you use to recover the fuel are worth more than the fuel , and as long as there aren't any funny tax exemptions then the oil sands should be a valuable source for plastics and pharamaceuticals for a long time to come. Bio Ethanol from Corn is one example of a fuel where the energy inputs don't really justify it as worth doing. One German study found that Bio Diesel was also energy neutral as it took a litre of fossil fuel to get a litre of bio-fuel , it was economic because farm fuel had zero tax and bio fuel had a subsidy.

Well to wheel efficiency is dropping since the amount of energy need to extract fossil fuels is constantly increasing.