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Peak Oil Matters

A fresh perspective on the concept of peak oil and the challenges we face

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Tag: tar sands

In a recent post (here), I discussed the unfortunate practice by Peak Oil dissenters of cherry-picking facts to suit their skewed perspectives on the reality of oil production, conveniently neglecting to provide readers with the relevant background information needed to properly understand the issue at hand. An equally discouraging exercise is their use of vague, impressive-sounding but ultimately meaningless words and phrases to try and bolster their side of the argument. Perhaps they count on apathy or ignorance on the part of their readers, but regardless of the rationale, it does little to help. (Why do they insist on doing this? The Boston Globe published an interesting piece on Sunday that may provide answers.)

A recent and particularly egregious example can be found here. Feel free to read this glowing exhortation about the bazillion years of oil we have at our beck and call via oil shale. The author of that snarky piece excels at long division, but note the complete failure to mention even a single fact as to what is actually required to produce the oil shale this writer so ardently touted. Why let the truth get in the way of nonsense? (Hard to be kind to this narrow-minded wing-nuttery, so this is the best I can do.)

Just for the heck of it, take a peek at these prior posts (here and here) offering information about what is involved in mining oil shale and how utterly ineffectual efforts have been for most of the past few decades.

Facts are indeed an annoying intrusion into the puzzling reality of some.

This past weekend I came across yet another article where the full range of information was conveniently omitted. When you write a piece like this offering up at best fuzzy details and are hoping/praying/counting on your readership being uninformed and thus reliant on whatever details you do or do not provide, I can only assume there is some benefit to be derived. Engaging in open and honest debate, however, would not appear to be on that list. If all the facts aren’t on the table, then what does that suggest about the argument being made?

“Resources in the ground are clearly abundant. Canadian Association of Petroleum Producers Vice President Greg Stringham, pointing to the 175 billion barrels recoverable from the Canadian oil sands, says, ‘It won’t be a lack of resources that causes a shift away from oil. There’s lots of oil.’ The United States Geological Survey recently updated their estimates for recoverable oil from Venezuela’s Orinoco Belt to 513 billion bbl. Compare this to BP’s estimate of some 1200 billion bbl of global conventional oil reserves. Some shale formations, such as the US’s Bakken and Eagle Ford, contain substantial amounts of oil and natural gas liquids too, a form of unconventional oil which has emerged from nowhere in the past few years.

“Traditional onshore light crude, though often inaccessible to the international oil companies, remains plentiful too.”

(My bold italics were added for emphasis)

I’ve already acknowledged, as have many other Peak Oil advocates, that there are indeed hundreds of billions of barrels of oil in the ground. We’re not running out of oil. Those are not facts in dispute, unless you are arguing whose estimates are correct. But as is frustratingly obvious yet again, this Oil Council article fails to make mention of a single fact about the difficulties, costs, environmental degradation, time factors, or energy expenditures incurred in producing these resources. Uninformed readers are left with the impression that a shovel and sturdy straw are pretty much all that’s needed to extract this “plentiful”, “clearly abundant” oil from underground. (How many barrels are in a “plentiful”?)

Hello?!

The simple truth is that there is a big difference between what’s in the ground and what’s feasible or even possible to get out of the ground (or in deep water). So just tossing out large numbers or unquantifiable phrases like “substantial amounts” without a corresponding explanation that these tidbits don’t necessarily mean that we can actually extract or produce them is misleading. I always find it very difficult to understand the purpose or intent of such efforts, and remain dismayed that the fear of engaging in honest debate trumps the importance and necessity of having that honest discussion, regardless of outcome. Aren’t we all better served when we can deal with full truths rather half-ones, painful though it may be? What is gained otherwise?

If facts are wrong—mine included—then they’re wrong, and we are all better off knowing that and moving forward with better information. I wish it could be that simple….

“Kuwait and Abu Dhabi recently updated ambitious plans for production gains.”

And…? They can “update” their “ambitious plans” until pigs fly, but what does any of that prove? That’s a solution?

Likewise, cornucopian arguments proffered by this article about the “technical potential” of Iraq’s oil fields are pointless! What’s involved in realizing this “technical potential”? How many years? How much money? What are the complex political factors to be addressed? What other resources will be needed? How much energy will have to be invested in order to extract all this potential? When all is said and done, how much production can realistically be expected?

(An aside: Andrew McKillop, writing on Sunday about the Gulf of Mexico oil spill, noted (here) that BP’s Macondo field, thought to contain somewhere in the vicinity of 300 million barrels of oil—three or four days’ worth, by the way—could realistically have been expected to extract no more than 50 million barrels, and over 15 years or more. These are the types of facts we need to be dealing with and explaining to others instead of pretending that all will be well because we still have “lots” of oil left.)

And touting the 21 billion barrels of oil Iran has produced in the past dozen years sounds terrific up until the moment you realize that’s about 7 months’ worth of supply. Probably want to hold off rushing out the door to buy that soon-to-be-extinct Hummer you’ve always dreamed of….

“Kazakhstan’s long-delayed Kashagan field will finally come onstream around 2013 and yield more than 1 million bbl per day.”

Pulling out my trusty calculator, I conclude that 1 million barrels per day times 365 days in a year means that the Kashagan field will yield about 365 million barrels per year, or … Gasp! almost five day’s worth of oil! Hallelujah! Our prayers have at last been answered! Wow, that was close! I thought we all might actually have to start giving up things and changing lifestyles, but oh, no! Just a handful of these producing oil fields could get us enough oil to last until … uh, uh, a few weeks.

These resources and finds are surely better than a stick in the eye, but really? This is what’s being touted as the answer to Peak Oil’s discouraging message and worrisome impact? Oil production is on the decline, and these feverish efforts to paint a rosy picture help no one prepare for and plan the changes societies will need to implement. Whatever transitions away from fossil fuels we can collectively fashion will carry their own hardships. Let’s not make it worse by avoidance.

I understand that no one really wants to have to deal with the problems and challenges of declining oil production. Sure as hell I don’t! There is nothing even remotely enjoyable to contemplate about the onset of Peak Oil and its impact on my own pleasant, suburban multi-car, two-home lifestyle. Millions and millions of others who understand the implications and consequences will be/are just as dismayed for their own reasons—selfish or otherwise.

Making do with less is not anyone’s idea of progress or pursuit of the great American Dream. I understand the instinct to avoid, deny, or just pretend otherwise. The problem is that those strategies are not only not going to work, they will ultimately make things worse for all of us. They may serve some weirdly narcissistic, narrow-minded short term interests, but we are all in this together—deniers, too. Their magical thinking won’t prevent Peak Oil from impacting their lifestyles and businesses. Unless you have managed to carve out a lifestyle entirely independent of fossil fuels, either by avoiding personal use of it or avoiding goods and services that require it, Peak Oil is going to affect you, and perhaps quite dramatically.

Let’s not wait until we’re all in full-fledged panic mode over what is happening when supply can no longer match demand. It’s not that far away … and much too soon for us to avoid all the nasty consequences Peak Oil is going to impose on us. Disingenuous “information” is thus not at all helpful unless perpetuating a lack of understanding and awareness are the objectives.

If this deliberate obfuscation of facts and the true import of Peak Oil’s impact is the best that the deniers can offer, doesn’t it contain at least a seed of suggestion that perhaps we all ought to be thinking a bit more seriously about what needs to be done? We’re years behind as it is. As painful as it will be to confront the possibilities of having to make do with less for many years to come, having some say in how we collectively prepare for and deal with the impact of declining oil production seems a better long-term option.

Relying on these half-baked missives of optimism is an exercise in foolishness none of us can afford

An interesting news item this past week concerning Royal Shell’s Athabasca Valley oil sands project. I spoke about the Athabasca tar sands in my January 20 post (here).

As reported by the Financial Times and in its lengthy Q & A session with Royal Dutch Shell chief executive Peter Voser, that company’s planned expansion of its existing tar sands project has been “clearly scaled down.” The previously-planned quintupling of growth (in stages) from the Athabasca project will now proceed “very much slower”.

At current trading prices, the profit margin is apparently too thin for Royal Dutch Shell to proceed. The Times referenced the development project as being a “costly distraction” for Royal Dutch Shell, and an increase to an eventual 255,000 barrels of oil per day is about all that can now be expected, rather than the 770,000 barrels per day originally envisioned by the expansion.

It’s hard to see this as anything but a blow to those who continue to claim that these tar sands and oil shale are the key, great solutions to the continuing decline in the availability of conventional oil resources worldwide. Merely mentioning “trillions of barrels of oil” underground doesn’t get it from there to here for free, or easily, or quickly—if at all.

Sources:

http://www.investorschronicle.co.uk/Companies/ByEvent/TradingNews/Analysis/article/20100127/5c1d623a-0b44-11df-8109-00144f2af8e8/Shell-forced-into-oil-sands-Uturn.jspShell forced into oil sands U-turn. Created: 27 January 2010 Updated: 28 January 2010 Written by: Daniel O’Sullivan

http://blogs.ft.com/energy-source/2010/01/26/shells-ceo-peter-voser-interview-transcript-on-canadas-oil-sands-jobs-acquisitions-us-gas-iraq-nigeria-copenhagen-and-more/  – Shell’s CEO Peter Voser interview transcript: on Canada’s oil sands, jobs, acquisitions, US gas, Iraq, Nigeria, Copenhagen and more.  January 26, 2010 by Ed Crook

As was also reported in today’s Energy Bulletin (see the link in my Blogroll), Canada’s new Energy Minister has indicated a shift in his country’s previous policy advocating essentially unlimited growth in the tar sands projects.

Ron Liepert has stated that Canada

needs to examine ways to moderate the pace of oil sands development … [and he] wants to make sure future oil sands development does not again overstretch the capacity of the province’s infrastructure.

An interesting political development….I’ll keep you posted

You can read the entire article here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/alberta-to-study-pace-of-oil-sands-growth/article1431612/

Looks like Shell Oil’s stockholders are not unanimously in favor of the company’s investment in the tar sands of Alberta, Canada.

As noted in this article (http://www.guardian.co.uk/business/2010/jan/18/shell-shareholders-fury-tar-sands):

A coalition of institutional investors has forced a resolution onto the agenda calling for the Anglo-Dutch group’s audit  committee to undertake a special review of the risks attached to the carbon-heavy oil production at Athabasca in Alberta

Good to know that profits aren’t always investors’ most important concern. Kudos to this group

There are estimates suggesting that the tar sands of Alberta, Canada may contain more than 1.5 trillion barrels of synthetic crude oil in an area roughly the size of New York State. Given that the citizens of this planet consume about 30 billion barrels of oil per year, it seems that Peak Oil is another fallacy consigned to the proverbial dust bins of history. At that annual consumption rate, 1.5 trillion barrels will last a good long while! It’s an awe-inspiring number to say the least….

Of course, what the deniers of Peak Oil neglect to mention (facts can be so annoying!) is that perhaps 10% of that total will ultimately be produced, and that will take many decades if not centuries. This estimated reserve nonetheless represents the second largest resource on the planet, exceeded only by Saudi Arabia. But it is, sad for the deniers, not the solution to our energy woes.

Canada is already the United States’ leading supplier of oil, and about half of that comes from the tar sands in Athabasca Valley. The tar sands (some prefer the more benign term “oil sands,” as if we’re discussing beach sand that one just scoops up with a shovel and then wrings the oil out) are actually a mix of ingredients including bitumen, which is a dense congregation of heavy hydrocarbons (think paving material). At room temps bitumen is so thick that it does not flow, and fifteen or twenty degrees cooler than that, it’s as hard as a hockey puck.

One does not require any technical expertise to realize that converting thousands of tons of hockey pucks each day to liquid oil is a wee bit energy-intensive. And when the facts about extraction are made known (forests are first leveled, then tons of earth are excavated, then the bitumen from those tons of earth are heated to several hundred degrees by a high-pressure steam process known as Steam Assisted Gravity Drainage to liquefy the tar sands—all produced via natural gas at levels which some suggest are enough to heat 3 million homes per day—resulting in carcinogen-laced waste water left in nearby “tailings ponds” which currently cover an area greater than 50 square miles!), it quickly becomes clear that we have some energy-related and environmental issues of considerable magnitude.

It’s been stated that every barrel of synthetic crude produced originated from more than two tons of tar sands dug up and separated by the above-referenced steam process, which itself requires two barrels of fresh water for every barrel of oil produced. Think about that for a moment … this is what we have to do to obtain oil?

Leaks from the tailings ponds and resultant contamination of ground water are of immense concern to the residents of the area, and the significantly greater incidents of cancers among residents have been sources of dispute for years. Thousands of birds and animals have reportedly died from exposure to these contaminant-laden ponds. One Canadian report suggests that for all the efforts to contain those ponds, several million gallons of the polluted water leaks out every day. Not a single one of the tailings ponds have been reclaimed in accordance with the licenses granted. Once the mining stops, what happens when the ponds are left completely untreated and unattended?

(And I’m not even discussing the greenhouse gas emissions caused by this incredibly energy-intensive process, which are estimated to be anywhere from 15% – 40% per barrel higher than conventional oil production. I’m also skipping any discussion of the huge investments in specialized oil refineries needed to process synthetic crude, and the pollution potentials arising from the pipeline networks for transporting that fuel from Alberta to the Great Lakes region of both Canada and the United States.)

The deniers, as they are so skilled at doing, tend to gloss over those pesky truths and instead issue their pronouncements about the trillions of barrels of oil at the ready. They also conveniently neglect to inform that the current rates of oil production from tar sands aren’t even enough to keep pace with annual depletion rates from conventional oil fields. Omitting those facts makes it seem as though we just have all of these billions or trillions of barrels of “extra” oil just waiting for someone to lay claim. The truth is far different.

After thirty years of investments to the tune of several hundred billion dollars and thirty years of production efforts, the Canadian tar sands are producing less than 1.5 million barrels of oil per day … that’s it! In fact, Canada’s energy forecast was recently trimmed, pushing out the estimated higher rates of production by several more years. This past November, the Canadian Energy Research Institute (CERI) released a study showing tar sands production increasing to 4.5 million b/d by 2030 and growing toward a peak of 5.3 million b/d in 2041. Actual production in 2008 was 1.3 million b/d. [1] It seems we have a ways to go….

Even the most optimistic boosters of the tar sands expect no more than 3 million barrels of synthetic crude oil per day in the next 15 – 20 years, and with worldwide consumption rates of approximately 85 million barrels per day, 3 million won’t make much of a dent. It will make even less of a difference once increased demand, depletion rates, and an inability to keep pace via new discoveries are all factored into the mix. Facts truly are annoying at times!

Worse for advocates of tar sands as the solution to end all solutions, the current recession and price volatility in the oil markets have adversely impacted Canadian investments as well. It’s been reported that projects which were expected to deliver more than a million and a half barrels of this synthetic crude per day were cancelled or placed on hold indefinitely [2]

Our industrial needs dictate that we get all the oil we can. But at some point, we need to ask: At what cost? Let’s hope we have the collective wisdom to ask it a day too soon rather than a day too late.

Next: An Intro’ To Oil Shale

Sources:

[1] http://www.energybulletin.net/node/50971 Canadian Oil Sands Misses Unrealistic Projection – Issues Another
Published Mon, 12/14/2009 by ASPO-USA
[2] http://www.newscientist.com/article/mg20427375.900-extreme-oil-scraping-the-bottom-of-earths-barrel.html?full=true Extreme oil: Scraping the bottom of Earth’s barrel 02 December 2009 by David Strahan