My bubble was pretty thoroughly burst by the U. S. Geological Survey report on the study of the Bakken oil fields.
The USGS study has been released and estimates that about 3.5 Billion barrels of oil may be recoverable in the Bakken Formation.
That's a long way from the 200 Billion barrels that some optimists had predicted. It is about half what this country burns in any one year- hardly another Gwahar.
We can hope that more discoveries are made, and estimates revised upwards. The 3.5 billion figure is much larger than the 600 million barrels once thought to be the topside for these fields.
Meanwhile, in Brazil, the "Sugar Loaf" fields are thought by Petrobas to contain as much as 33 Billion barrels, of which 10% to 15% is recoverabe, which means, at most, another 4.5 billion barrels by the most optimistic projections.
The United States alone tears through 7.3 billion barrels a year, so do the arithmetic.
As I stated previously, even were the Bakken the size and magnitude of Gwahar, it would not change the fact of peak oil and its implications for our industrial societies, for at our current rates of consumption, U.S. consumption alone would deplete the fields in less than 35 years, even if there were no competition for supplies.
Time to stop daydreaming and confront the stark truth of the situation.
Tuesday, April 15, 2008
Saturday, April 12, 2008
The Bakken Fields: The Dangers of Lotto Winnings
There's nothing like receiving an unexpected windfall for lifting the spirits and triggering fantasies.
You know the feeling. Here you are, treading water on your measly little salary, wondering where you're going to find the spare change to refresh your wardrobe a little, or replace the sofa, let alone fund your retirement, when an unexpected bonanza lands in your lap.
It might be $150 for participating in a focus group, say, or $1200 in unclaimed property from an old car insurance policy in another state, that you didn't know you were owed.
Or,rarely, it could be something like a $300,000 bequest from a deceased relative you never knew had two nickels to rub together. I hope I have relatives like that somewhere, and if you are one of them, please feel free to contact me here.
Anyway, here is this manna from heaven, and the rush you feel is incredible, even if it is only a $57 rate rebate from ComEd. But the little bounty is soon spent, because we all have unending demands on our money, and almost everybody who isn't Bill Gates has some long-deferred item to spend the money on. In the case of a really large windfall, some people might sit down and carefully consider just how best to apply it to permanently alter their lives for the better, while others will go on a spree and shoot it all in a week of frenzied consumption.....which is what we will probably do with the newly available reserves of a monster oil field here in North America, that we never really knew we had because it had been so long considered unavailable to us.
The energy field is now abuzz with talk of the newly revisited Bakken Formation, a shale-and-dolomite formation that covers large parts of Montana, South Dakota, and Canada, and that may (or may not) contain as much as 500 billion barrels of high-quality sweet crude, of which as much as 50% may be recoverable.
The formation was discovered in 1951, but generated little interest until recently, because of the difficulties of recovery. Not until 2007, when a Texas oil entrepreneur named Findley discovered a field that is now producing about 48,000 barrels a day, from 300 wells, did the petroleum industry once again take a passionate interest in exploring and developing this vast formation, which could turn out to have the largest reserves of recoverable oil in the world. Mr. Findlay's discovery has helped trigger interest among the big oil companies, who have formed partnerships with the wildcatters and are providing horizontal drilling equipment.
Estimates of the reserves vary widely, from a low end of about 20 billion barrels to one optimistic estimate of 900 billion barrels, but most geologists estimate that there are anywhere from 100 billion to 400 billion barrels of sweet crude sheltered between the layers of low-permeability rock, of which anywhere from 3.5 billion to 200 billion are recoverable- a very wide range that indicates that industry experts don't yet have a real handle on how much may be truly available to us. Recoverable is the key word here,and recoverability has been the obstacle to the development of this vast formation that has, until now, defeated the efforts of every oil company that has attempted to exploit it.
However, improvements in recovery technology coupled with prices high enough to justify the risk and generate profits from resources formerly not thought worth exploiting, have made further exploration and development of these fields look like a good bet, and estimates of recoverable reserves range from 10% to 50%.
That would mean that if indeed there are 400 million barrels in reserves, and as much as 50% can be recovered, that we have a gift package of 200 million barrels of recoverable sweet crude here in North America, a bounty much larger than that of Saudi Arabia.
And that means that the Peak Oil prophets are all wrong, and our energy problems are solved, right? The cornucopians have wasted no time trashing the Peak Oil doomsayers. "I think the Peak Oil folks got it wrong. Capitalism trumps fearmongers. Again." trumpets blogger Simon in his April 9 post on his blog, Classical Values. I'll confess that I immediately felt lighter of heart, as though a huge, overshadowing burden had been lifted from my shoulders, when I read of the recent discoveries. At the very least, I figured, it means we will at least not have to do without lights and heat, at least not in my lifetime, and that I could, dare I dream, even justify a two-bedroom condo, rather than squeezing myself and my business and artistic activities into three and one-half rooms. It may mean that we will not have to resort to rationing gasoline in order to maintain social order. It may mean that further utility rate hikes can be forestalled for a while longer.
Most of all, it might mean that we could, with effort, at least prolong the "bumpy plateau" of the peak for many years.
But it does not mean that our energy problems are "solved", by any means. It does not mean immediate, or even future, relief in energy prices, because recovery will be much more difficult and expensive than with the great oil fields that we've already depleted, like Spindletop, or that are declining and don't belong to us anyway, such as the Gwahar fields of Saudi Arabia and Mexico's rapidly collapsing Cantarelle, upon which we've relied for the monster chunk of our oil supplies for the past 30 years.
At best, it means that we have a temporary reprieve from the most severe hardships of the inevitable decline in oil production, and that we could slow that decline enough to make the preparations necessary to maintain an acceptable level of technological amenity, complete with motorized transportation, if not the type of auto dependence we have now.It means we should have enough to heat and power our homes and industries,and enough to keep the economy humming, though with much more economical use of energy; and most of all, enough to supply the necessary fossil fuel agricultural imputs necessary to feed our present swollen population at a cost that will allow most of us to live and eat decently.
But it won't suffice to maintain the current insane levels of energy consumption in the United States, let alone slake the rapidly increasing demand for oil of developing countries, or buy "American" lifestyles for the denizens of these places. It won't support a rapidly expanding population forever, or at least not in lifestyles that are even reasonably comfortable by modern standards, let alone in the typical suburban American lifestyle complete with a 3500 square foot, badly insulated house fifty miles from work, with two or more large automobiles and 11.5 auto trips per household a day.
Has the American public, or the rest of the western world, been sufficiently frightened, and chastened, by the rapidly escalating fuel prices, with the wobbling of the economy and increasing geopolitical problems that accompany them, to appreciate what a wondrous gift the Bakken fields might be? Do we appreciate how it is just that: a gift, manna that we had no right to expect and that may be the very last reserve of this magnitude left for us? I doubt it.
We'd like to think that we will make the best use possible of it, which means practicing an ethic of conservation and efficiency, while working to develop means of discovering and developing what reserves may be left that are currently completely unavailable to us. We'd like to think we will continue working to fully develop alternative energy sources that will relieve the demand on our oil supply and produce less pollution, and to buy time to re-arrange our lifestyles and our towns and cities to permit us to live, work, and travel with steeply lower energy usage.
It might even open further the narrow window of opportunity now available to us, to explore nearby planets known to possess vast mineral wealth, such as Mars, which appears to have large supplies of deuterium, along with other valuable minerals. Such an undertaking would take careful planning and large supplies of energy, and the development of much more advanced technology than we have right now, so was seen as impossible, and certainly unjustifiable, given current realities.
However, like most lottery winners, we probably won't do any of these things, but will instead just ramp up our consumption while looking for more extravagances to blow our bounty on. Just as most lotto winners blow their megamillions within a few years, and end up not only broker than ever, but with with financial problems they never imagined back in their days as factory workers or office hacks. We will not only not alter our habits one bit, but will devise evermore extravagant and wasteful lifestyles,and become even more dependent upon cheap energy, in the expectation that when we once more start to run low, we will be rescued by another windfall of relatively cheap oil. Alternative energy research will be abandoned, and the outer expansion of the suburbs will commence once more, while more and more urban sci-fi fantasias completely dependent on endless supplies of cheap oil, such as Dubai and Las Vegas are set down in the middle of the harshest climates in the world.
So, in thirty years, we will end up in steep depletion, with alternative technologies arrested at their current levels of development, and with an infrastructure and lifestyles much more demanding of high energy imputs, along with far larger population. Keep in mind that we currently consume 7.3 billion barrels of oil yearly in the United States alone, which means that our consumption alone could deplete these fields within 25 years, and there is no assurance that we will ever again encounter such a large reserve beneath the seas or anywhere else on earth. Additionally, our estimates of the lifespan of reserves are based on current rates of usage, which will increase drastically if the population considers to grow at the current rate. Worse, China and India are developing rapidly, and their demand for oil is increasing just as rapidly as their populations demand modern lifestyles like those of the Western countries. If even 5% more of China's 1.6 billion denizens acquires an auto, this will mean another 80 million cars on the road, and as it is, the Chinese highway system is second in size only to that of the U. S., and will soon surpass it.
With any luck, these fields will be difficult and expensive enough to work that they yield their wealth slowly and over a long period of time. Let's hope that they play out slowly, so that we don't create another glut like that generated by the rapid and overly efficient exploitation of Britain's North Fields, which are now depleting at the rate of 19% a year, far faster than projected, and which will be totally played out in a few more years. That way, these reserves will last us for a long time,and prices will stay close to present levels, high enough to inspire us to conserve and most of all, to revamp our individual lifestyles,urban planning and transport infrastructure to require at least 50% less energy than we currently use, and within a relatively short time frame.
Let's not be typical lotto winners.
You know the feeling. Here you are, treading water on your measly little salary, wondering where you're going to find the spare change to refresh your wardrobe a little, or replace the sofa, let alone fund your retirement, when an unexpected bonanza lands in your lap.
It might be $150 for participating in a focus group, say, or $1200 in unclaimed property from an old car insurance policy in another state, that you didn't know you were owed.
Or,rarely, it could be something like a $300,000 bequest from a deceased relative you never knew had two nickels to rub together. I hope I have relatives like that somewhere, and if you are one of them, please feel free to contact me here.
Anyway, here is this manna from heaven, and the rush you feel is incredible, even if it is only a $57 rate rebate from ComEd. But the little bounty is soon spent, because we all have unending demands on our money, and almost everybody who isn't Bill Gates has some long-deferred item to spend the money on. In the case of a really large windfall, some people might sit down and carefully consider just how best to apply it to permanently alter their lives for the better, while others will go on a spree and shoot it all in a week of frenzied consumption.....which is what we will probably do with the newly available reserves of a monster oil field here in North America, that we never really knew we had because it had been so long considered unavailable to us.
The energy field is now abuzz with talk of the newly revisited Bakken Formation, a shale-and-dolomite formation that covers large parts of Montana, South Dakota, and Canada, and that may (or may not) contain as much as 500 billion barrels of high-quality sweet crude, of which as much as 50% may be recoverable.
The formation was discovered in 1951, but generated little interest until recently, because of the difficulties of recovery. Not until 2007, when a Texas oil entrepreneur named Findley discovered a field that is now producing about 48,000 barrels a day, from 300 wells, did the petroleum industry once again take a passionate interest in exploring and developing this vast formation, which could turn out to have the largest reserves of recoverable oil in the world. Mr. Findlay's discovery has helped trigger interest among the big oil companies, who have formed partnerships with the wildcatters and are providing horizontal drilling equipment.
Estimates of the reserves vary widely, from a low end of about 20 billion barrels to one optimistic estimate of 900 billion barrels, but most geologists estimate that there are anywhere from 100 billion to 400 billion barrels of sweet crude sheltered between the layers of low-permeability rock, of which anywhere from 3.5 billion to 200 billion are recoverable- a very wide range that indicates that industry experts don't yet have a real handle on how much may be truly available to us. Recoverable is the key word here,and recoverability has been the obstacle to the development of this vast formation that has, until now, defeated the efforts of every oil company that has attempted to exploit it.
However, improvements in recovery technology coupled with prices high enough to justify the risk and generate profits from resources formerly not thought worth exploiting, have made further exploration and development of these fields look like a good bet, and estimates of recoverable reserves range from 10% to 50%.
That would mean that if indeed there are 400 million barrels in reserves, and as much as 50% can be recovered, that we have a gift package of 200 million barrels of recoverable sweet crude here in North America, a bounty much larger than that of Saudi Arabia.
And that means that the Peak Oil prophets are all wrong, and our energy problems are solved, right? The cornucopians have wasted no time trashing the Peak Oil doomsayers. "I think the Peak Oil folks got it wrong. Capitalism trumps fearmongers. Again." trumpets blogger Simon in his April 9 post on his blog, Classical Values. I'll confess that I immediately felt lighter of heart, as though a huge, overshadowing burden had been lifted from my shoulders, when I read of the recent discoveries. At the very least, I figured, it means we will at least not have to do without lights and heat, at least not in my lifetime, and that I could, dare I dream, even justify a two-bedroom condo, rather than squeezing myself and my business and artistic activities into three and one-half rooms. It may mean that we will not have to resort to rationing gasoline in order to maintain social order. It may mean that further utility rate hikes can be forestalled for a while longer.
Most of all, it might mean that we could, with effort, at least prolong the "bumpy plateau" of the peak for many years.
But it does not mean that our energy problems are "solved", by any means. It does not mean immediate, or even future, relief in energy prices, because recovery will be much more difficult and expensive than with the great oil fields that we've already depleted, like Spindletop, or that are declining and don't belong to us anyway, such as the Gwahar fields of Saudi Arabia and Mexico's rapidly collapsing Cantarelle, upon which we've relied for the monster chunk of our oil supplies for the past 30 years.
At best, it means that we have a temporary reprieve from the most severe hardships of the inevitable decline in oil production, and that we could slow that decline enough to make the preparations necessary to maintain an acceptable level of technological amenity, complete with motorized transportation, if not the type of auto dependence we have now.It means we should have enough to heat and power our homes and industries,and enough to keep the economy humming, though with much more economical use of energy; and most of all, enough to supply the necessary fossil fuel agricultural imputs necessary to feed our present swollen population at a cost that will allow most of us to live and eat decently.
But it won't suffice to maintain the current insane levels of energy consumption in the United States, let alone slake the rapidly increasing demand for oil of developing countries, or buy "American" lifestyles for the denizens of these places. It won't support a rapidly expanding population forever, or at least not in lifestyles that are even reasonably comfortable by modern standards, let alone in the typical suburban American lifestyle complete with a 3500 square foot, badly insulated house fifty miles from work, with two or more large automobiles and 11.5 auto trips per household a day.
Has the American public, or the rest of the western world, been sufficiently frightened, and chastened, by the rapidly escalating fuel prices, with the wobbling of the economy and increasing geopolitical problems that accompany them, to appreciate what a wondrous gift the Bakken fields might be? Do we appreciate how it is just that: a gift, manna that we had no right to expect and that may be the very last reserve of this magnitude left for us? I doubt it.
We'd like to think that we will make the best use possible of it, which means practicing an ethic of conservation and efficiency, while working to develop means of discovering and developing what reserves may be left that are currently completely unavailable to us. We'd like to think we will continue working to fully develop alternative energy sources that will relieve the demand on our oil supply and produce less pollution, and to buy time to re-arrange our lifestyles and our towns and cities to permit us to live, work, and travel with steeply lower energy usage.
It might even open further the narrow window of opportunity now available to us, to explore nearby planets known to possess vast mineral wealth, such as Mars, which appears to have large supplies of deuterium, along with other valuable minerals. Such an undertaking would take careful planning and large supplies of energy, and the development of much more advanced technology than we have right now, so was seen as impossible, and certainly unjustifiable, given current realities.
However, like most lottery winners, we probably won't do any of these things, but will instead just ramp up our consumption while looking for more extravagances to blow our bounty on. Just as most lotto winners blow their megamillions within a few years, and end up not only broker than ever, but with with financial problems they never imagined back in their days as factory workers or office hacks. We will not only not alter our habits one bit, but will devise evermore extravagant and wasteful lifestyles,and become even more dependent upon cheap energy, in the expectation that when we once more start to run low, we will be rescued by another windfall of relatively cheap oil. Alternative energy research will be abandoned, and the outer expansion of the suburbs will commence once more, while more and more urban sci-fi fantasias completely dependent on endless supplies of cheap oil, such as Dubai and Las Vegas are set down in the middle of the harshest climates in the world.
So, in thirty years, we will end up in steep depletion, with alternative technologies arrested at their current levels of development, and with an infrastructure and lifestyles much more demanding of high energy imputs, along with far larger population. Keep in mind that we currently consume 7.3 billion barrels of oil yearly in the United States alone, which means that our consumption alone could deplete these fields within 25 years, and there is no assurance that we will ever again encounter such a large reserve beneath the seas or anywhere else on earth. Additionally, our estimates of the lifespan of reserves are based on current rates of usage, which will increase drastically if the population considers to grow at the current rate. Worse, China and India are developing rapidly, and their demand for oil is increasing just as rapidly as their populations demand modern lifestyles like those of the Western countries. If even 5% more of China's 1.6 billion denizens acquires an auto, this will mean another 80 million cars on the road, and as it is, the Chinese highway system is second in size only to that of the U. S., and will soon surpass it.
With any luck, these fields will be difficult and expensive enough to work that they yield their wealth slowly and over a long period of time. Let's hope that they play out slowly, so that we don't create another glut like that generated by the rapid and overly efficient exploitation of Britain's North Fields, which are now depleting at the rate of 19% a year, far faster than projected, and which will be totally played out in a few more years. That way, these reserves will last us for a long time,and prices will stay close to present levels, high enough to inspire us to conserve and most of all, to revamp our individual lifestyles,urban planning and transport infrastructure to require at least 50% less energy than we currently use, and within a relatively short time frame.
Let's not be typical lotto winners.
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