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

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  • 02-09-2009 3:19pm
    #1
    zod
    Closed Accounts Posts: 2,025 ✭✭✭


    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.


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    #2
    Sleipnir
    Registered Users Posts: 5,514 ✭✭✭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.


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    #3
    BendiBus
    Closed Accounts Posts: 2,075 ✭✭✭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.


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    #4
    Sleipnir
    Registered Users Posts: 5,514 ✭✭✭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.


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    #5
    rs
    Closed Accounts Posts: 365 ✭✭rs


    The green party supporter in me is sad.

    The BP shareholder in me is happy.

    It's quite complicated really.


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    #6
    Tabnabs
    Moderators, Recreation & Hobbies Moderators, Sports Moderators Posts: 15,697 Mod ✭✭✭✭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.


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    #7
    Sleipnir
    Registered Users Posts: 5,514 ✭✭✭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%.


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    #8
    Sleipnir
    Registered Users Posts: 5,514 ✭✭✭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.


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    #9
    Judgement Day
    Closed Accounts Posts: 13,549 ✭✭✭✭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?


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    #10
    hick
    Registered Users Posts: 788 ✭✭✭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.


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    #11
    asdasd
    Closed Accounts Posts: 3,185 ✭✭✭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?


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    #12
    hick
    Registered Users Posts: 788 ✭✭✭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


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    #13
    asdasd
    Closed Accounts Posts: 3,185 ✭✭✭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.


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    #14
    hick
    Registered Users Posts: 788 ✭✭✭hick


    I say black now you say ....


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    #15
    asdasd
    Closed Accounts Posts: 3,185 ✭✭✭asdasd


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


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    #16
    10-10-20
    Registered Users Posts: 6,834 ✭✭✭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.


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    #17
    johnathan woss
    Closed Accounts Posts: 410 ✭✭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?


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    #18
    10-10-20
    Registered Users Posts: 6,834 ✭✭✭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


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    #19
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    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.


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    #20
    zod
    Closed Accounts Posts: 2,025 ✭✭✭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


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    #21
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    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!


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    #22
    squod
    Closed Accounts Posts: 8,704 ✭✭✭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:


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    #23
    quiche
    Closed Accounts Posts: 59 ✭✭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.


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    #24
    zod
    Closed Accounts Posts: 2,025 ✭✭✭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


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    #25
    squod
    Closed Accounts Posts: 8,704 ✭✭✭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.


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    #26
    zod
    Closed Accounts Posts: 2,025 ✭✭✭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.


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    #27
    squod
    Closed Accounts Posts: 8,704 ✭✭✭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.


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    #28
    zod
    Closed Accounts Posts: 2,025 ✭✭✭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.


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    #29
    squod
    Closed Accounts Posts: 8,704 ✭✭✭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.


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    #30
    zod
    Closed Accounts Posts: 2,025 ✭✭✭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.


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    #31
    squod
    Closed Accounts Posts: 8,704 ✭✭✭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.


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