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Oil firms find reserves elusive
Norval Scott, Globe & Mail
For investors looking for the cheapest reserve replacement costs, don’t turn to Canada
—
CALGARY — This decade’s high crude prices mean there’s plenty of incentive for Daniel O’Byrne, chief operating officer of Calgary-based Provident Energy Trust, to keep finding oil and gas for his company to produce. But he faces a problem – there’s less and less reserves to locate, and the costs of developing them haven’t stopped going up.
“Finding and development costs have had a huge ramp up in the last few years, but the size of the prize is getting smaller,” Mr. O’Byrne said. “Hunting [for reserves] in Western Canada has become much more challenging than it used to be, and it will be a struggle for the whole basin to stay competitive in a global market.”
It’s a problem Provident, one of Canada’s better performers in finding new reserves, is far from alone in facing.
(25 July 2007)
The Energy Return on Time
Nate Hagens, The Oil Drum
While writing the recent piece on home heating, I was surprised to calculate many different numbers for the energy return on firewood.
Though the outputs were only slightly different in quantity of BTUs, there was a wide range of inputs. But the primary reason for the return disparity was the presence of the market economy – those processing firewood for their own use had higher energy returns than those selling wood for profit – the accelerated drying time to process large amounts of wood required an additional wood input which dropped the energy return.
Graphically this showed up as a tradeoff between maximizing energy return on TIME versus maximizing energy return on ENERGY.
This reminded me that energy return is not a hard-and-fast principle, and also that society, obviously, will optimize its resources based on what it perceives to be its most limiting input(s). However, in an upcoming world constrained by energy, or any limiting variable other than time/money, we can increase our energy available by reducing the return on other inputs, such as time.
…CONCLUSIONS
Net energy is a physical measurement but can be meaningfully influenced by cultural valuations of other inputs (e.g. time). To me, net energy is most important in the following 2 senses:
- given that we are beginning to acknowledge that the market does not provide perfect information, using net energy analysis to compare mitigation/adaptation strategies for the coming era of oil depletion is like looking 2 cars ahead in a snowstorm (the market is fixated on just the car taillights ahead). In this way one gets a truer sense of whats really happening up ahead because decisions are based on (at least partially) physical principles.
- Second, society continues to grow on a certain summation of energy density/quality and BTU total. As we exhaust the low hanging energy fruits, not only in oil, but in hydroelectric, coal, and other sources, to find the remaining, lower quality/density sources, more energy will have to be used. This energy doesn’t come from the sky, but will be subtracted from the also declining amount of oil, natural gas, and electricity produced annually. Therefore the combination of these new energy technologies with end-use consumer efficiency improvements will have to overcome depletion and the increased energy requirement needed for lower EROI sources in order to maintain economic growth. It’s really quite simple.
Ironically, net energy principles only purely work when time is not a factor. Given unlimited mitigation time, policymakers can use net energy analysis to determine the best use for our remaining high energy gain assets. But if fuel shortages develop, fixed infrastructure on the current declining energy return technologies may deliver more of an energy service payload to society than a new investment and scaling up of new technologies due to time lags.
The market is expensive in its use of energy, not the least of reasons is that it incentivizes us to repeat iterations making money as often and quickly as possible. Getting things done quicker is much more important than getting them done using less energy. The market mechanism can coexist with oil depletion, but rules will eventually have to be created that coordinate our expected energy profit with our “E” (actual energy used), limit energy waste, choose what E brings the most meaningful and consistent human utility, and perhaps reduce our EROTI- energy return on time, thereby boosting the return on energy, or whatever the limiting factor is to human systems. A return to slower ways may not only provide us with more energy, but make us happier at the same time. How to get there?
(25 July 2007)
$100-a-barrel oil may be only a few months away
Mark Shenk, Bloomberg News
The $100-a-barrel oil that Goldman Sachs Group said would prevail by 2009 could be just a few months away.
Jeffrey Currie, a commodity analyst in London for Goldman Sachs, the largest brokerage firm, said that $95 crude was quite likely this year unless OPEC unexpectedly increased production and that declining inventories were raising the chances for oil prices to reach $100.
Jeff Rubin, chief strategist at the brokerage unit of Canadian Imperial Bank of Commerce in Toronto, said $100 a barrel could come next year.
John Kilduff of the New York office of the futures trading firm Man Financial said, “We’re only a headline of significance away from $100 oil. The unrelenting pressure of increased demand has left the market a coiled spring.”
New disruptions of Nigerian or Iraqi supplies, Kilduff said, or any military strike against Iran might cause the rise.
(24 July 2007)
The third trillion barrels of oil: the three steps to finding them
Tony Meggs, Engineer Live
Today the mind-set of assumed surplus appears to be changing rapidly. People (and governments in particular) are increasingly concerned with where the next barrel is coming from. The prevailing mind set is becoming one of anxiety and insecurity. And not just about the quantity of supply – but who controls it. Concern about climate change adds to our fears. Energy has risen to the very top of political agendas around the world, and it’s likely to stay there for the foreseeable future. That is the context in which we are looking for the third trillion.
So where do we look for the third trillion?
I think there are three main areas:
- We can get more out of what we have already discovered.
- We can find more of what we have already got, and
- We can diversify the sources of supply by using different feedstocks.
There is also a fourth major area of opportunity, which is to use what we have much more efficiently, but I do not propose to tackle that here.
Tony Meggs is BP Group Vice President for Technology
(25 July 2007)
After Peak Oil: Will America Survive?
Mike Adams, The Daily Scare
As public awareness about peak oil continues to grow, and even the big oil companies like Exxon Mobil Corp. are now starting to admit that the future supply of oil looks troublesome (see this Boston Globe article), there’s an increasing focus on renewable energy solutions. But most members of the public still don’t understand energy very well, and they generally have no idea whether alternative energy sources like solar, wind or CSP (see below) can replace oil.
Many people are concerned about a potential collapse of modern society due to the end of cheap oil. So to help answer some of these questions, I’ve put together a set of uncensored, science-based answers about oil, renewable energy and the future of modern civilization. This is offered in a Q&A format.
Mike Adams is a natural health author and technology pioneer with a passion for sharing empowering information to help improve personal and planetary health.
(23 July 2007)
Contributor Rick Dworsky writes:
Cicero tells us that Damocles sought gold and luxuries only to realize such things came with a sharp sword hanging by a slender thread above his head. And here we all sit, as the slender thread of oil thins.
ODAC News – Wednesday 25 July
Douglas Lowe, Oil Depletion Analysis Centre
Headlines and commentary from a peak-oil perspective.
(25 July 2007)
