Critique of Scientific American's October, 09 essay: Squeezing More Oil from the Ground
The essay, Squeezing More Oil from the Ground, by Dr. Leonard Maugeri, in the October, 2009 issue of Scientific American, elicited some subtle reactions which at first I couldn't put my finger on until I re-read it again.
The uneasiness came from the fact that every time the United States and advanced OCED countries of the world embark upon a major investment thrust into alternative energies, the hydrocarbon industries use their vast political and media power to choke off progress and investments.
A vice-president of Shell Oil goes on 60 Minutes and states that the Canadian Tar Sands (now benignly referred to as "oil sands") contain two-trillion barrels of oil! The US Geological Survey announces a "new" discovery, 500 billion barrels of oil in the Bakken Trend in North Dakota, Montana, and Saskatchewan.
Likewise, at the Denver meeting of the Association for the Study of Peak Oil and Gas on October 11, 2009, former explorationist for Petrobras, Brazil, Dr. Marcio Mello, electrified the audience with details of immense oil reserves off the coasts of Brazil and Africa, in the Amazon and Congo regions, and in the deep water on the continental shelves of the Gulf of Mexico.
The thrust of the Energy Phalanx is to make sure government orchestrated and assisted investment into environmentally friendly solar, wind, and geo-thermal energy installations, and the associated power distribution networks required, are starved for capital. Think Boone Pickens reneging on his own plans to install vast wind farms across the Great Plains because the electrical power grid was insufficient to accept the influx of additional energy.
Dr. Leonard Maugeri is the latest oil industry sophisticate to trumpet the line that the world is not facing diminishing hydrocarbon supplies in the near future.
In the essay, Dr. Maugeri spends an inordinate amount of time describing the production history of the Kern River oil deposits, one of the very successful stories of oil history. The casual reader is supposed to take the lesson away that all such oil deposits can turn out as well as the one in California, that all or most deposits can be manipulated to yield upward of forty to fifty percent of current estimated reserves. To anyone who has worked in the industry, has studied the geology of the myriad formations, and understands the failures and complexity of oil discovery, production, transport, and refining, that outlook smacks of simplicity, if not outright deceit.
The reader is also left with the impression that most formations today have not been worked to the maximum with every technology and treatment that can be conceived. Dr. Maugeri's view seems to suggest that an additional fifteen percent or more of the 1.245 trillion barrels of the petroleum the entire world has used to date will be extracted from nearly every known producing site in the world.
The North Sea and the North Slopes of Alaska have been subjected to every tertiary process known, yet both areas have declined precipitously. Britian's North Sea Brent deposits are nearly exhausted and Norway's are producing at 37 percent of their 2002 level. The same story prevails in New Zealand, where the deposits are virtually gone, and Australia whose hydrocarbon reserves continue to diminish rapidly. When production flattened, Indonesia became alarmed and stopped exporting oil.
THE WORLD MAP
When I saw the map of the sedimentary regions of the world, my unease with the thrust of the essay intensified. The assumption a lay reader could come away with from studying the map was that only a fraction of promising oil and gas deposits in the entire world have been explored and developed.
I worked on extraction, oil production and distribution facilities in Iran, the Arabian Gulf area, and on India's Bombay High North oil recovery operations in the 1970s and '80s. I also Scuba-dived with a Scripps Institution of Oceanography diver-geologist in the 1970s, who was at the time mapping New Zealand's continental shelves for the oil majors. It was natural for me to follow-up on exploration and development activities closely in subsequent years.
The map appears to indicate large areas of unexplored sedimentary deposits in India and on their continental shelves, an illusion. Since the 1980s, India has had the industrial expertise, the capital, and the borrowing capacity to vastly increase their oil and gas production. They ramped up production quickly between 1980 and 1995 from 100,000 barrels-per-day to an average of 750,000. Since then, even with a desire to be self-sufficient in energy and with damaging high imported-oil prices, the country has barely managed to hold at that level. (The country does suffer from rampant corruption and bureaucratic inertia; the government auctioned 70 blocks for oil and gas projects recently and didn’t receive a single bid for 34 of them.)
New Zealand also appears on the map to indicate promising oil structures on their continental shelves. The country first began producing oil in 1974. Production peaked between 1996 and 2000 at approximately 50,000 barrels-per-day, and has continued to dwindle ever since.
These examples are mentioned because their geology and history were familiar to me. But Israel, Oman, Syria, Turkey, Egypt, and Jordan were and still are much in the news. If there are any populations in the world that desire oil reserves and have the impetus, wherewithal and resources to explore and produce hydrocarbons, it is these countries, especially Israel. You can bet that their territories have been thoroughly mapped and explored, including the Sinai when Israel occupied it. Yet on Dr. Maugeri's world sedimentary map, they appear to have possibly-favorable sedimentary deposits. There is more to oil discovery and production than mere maps.
Fifty-six of the world's sixty-five great oilfields are now in decline according to public oil records. New discoveries such as Tupi off Brazil and Tiber in the Gulf of Mexico can only marginally affect and offset the massive declines in production now taking place.
If the UK's Brent field is a good example, every enhancement method of recovery known to extract every last barrel of oil, liquids, and gas is being used in these declining fields, contrary to the impression left by the essay. The British have probably accelerated their great field's decline by extracting too much oil, too fast. Likewise with Norway's North Sea oil deposits, the North slopes of Alaska, the Burgan and Ghawar oilfields in the Arabian (Persian) Gulf and Cantarell in Mexico.
A former Saudi executive of Aramco, Sadad al Husseini, in the 2007 Oil and Money conference in London, caused an international sensation by stating that the Persian Gulf countries are inflating their oil reserves by as much as 300 billion barrels. Further, he said that their mature reservoirs are 41 percent depleted! He added that the world faces a 15-year production plateau.
As an example of excruciating efforts now ongoing to recover hydrocarbons, in the Atabaska Tar Sands of Alberta, Canada, operators are moving four tons of sand to ultimately recover one barrel of oil. They use two barrels of energy equivalent of clean natural gas to enrich the bitumen molecules to obtain three barrels of end product. The process creates massive toxic tailing's ponds that seriously affect the environment.
These examples above are tertiary recovery methods gone amuck. And the Tar Sand's extraction is only viable because the cost of environmental cleanup and restoration is not fully deducted from the sale of the end products.
US GEOLOGICAL SURVEY
I shuddered when I saw Dr. Maugeri use the U.S. Geological Survey's estimates of the world's ultimate petroleum legacy: seven to eight trillion barrels. I recalled that they issued a press release in April, 2008 for the estimates for the Bakken Trend: 500 billion barrels of oil. Oil experts and actuaries have now analyzed and worked over the published drilling samples, and corporate press releases and quarterly reports for Bakken. The new best estimate from the USGS of recoverable oil and liquids in the field is 5.6 billion barrels, or one-tenth of one-percent of the flamboyant 2008 press release. In the present oil literature, USGS reserve estimates are sometimes suspect.
The US needs to install massive solar, wind and geothermal production facilities, along with the necessary electrical grids, to produce and distribute energy on a nationwide scale with a goal of national independence. The hydrocarbon energy companies and oil producing countries of the world fear alternative energy. They have in the past used their pervasive political power and information media to block the necessary government efforts. A vast Going-to-the-Moon type of national energy effort, especially now with soaring unemployment, is crucial.
RECENT GAS DISCOVERIES IN THE US
If recent reports are correct, there is enough energy potential from recent gas discoveries in the Marcellus, Barnett, Fayetteville, and Haynesville shale gas discoveries over the last two years to set this process in motion. The deposits have the potential to create the necessary capital, resources, and federal and state tax collections to set the US back on a growth trajectory and provide the monetary resources to implement an alternative energy future. Many of the nationwide gas pipelines are already in place.
Work efforts related to quickly changing power plants from coal to gas, and truck and vehicle fleets from diesel, not to mention personal vehicles operated on natural gas, could be a spur for the economy, albeit with alternate consequences. One can imagine a national thrust akin to the budding Space Programs of the 1960s.
That will not happen if the hydrocarbon companies through their media saturation and political allies are allowed to manipulate policies.