Article is here: http://www.nytimes.com/2007/03/05/business/05oil1.html?pagewanted=2&_r=3
I know. Who does she think she is, taking on a New York Times article?!
This… article just seems so… flawed to me. Let’s read through it together, shall we? (Only the parts I’m commenting on have been pasted here, you really should read the whole article to ensure I’m not taking anything out of context.)
…higher oil prices have made it economical for companies to go after reserves that are harder to reach.
And later
Many oil executives say that these so-called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies.
Ok. Let’s review what “peak oil” means. It means the running out of oil which is cheap. Or, it means that the oil prices have risen. Wait. Wasn’t this article trying to prove that peak oil didn’t exist? (I certainly stumbled across it from someone trying to use it that way ) And right here they’re stating that this magical new technology is only useful when oil prices are as high as they are!
Oil companies say they can provide enough supplies — which might eventually lead to lower oil and gasoline prices — but that they see few alternatives to fossil fuels.
Y’know, I can make enough widgets to meet supply. Honest. And, there isn’t anything that will replace my widgets. No siree bob!
Of course the oil companies aren’t going to admit to alternatives! C’mon, that’d be just stupid! Businesses don’t tend to hand consumers over to their competition willingly. And if the oil companies went, “oh, yes, solar panels attached to the roof of a car would work even better than fueling up with gasoline,” that’s exactly what they’d be doing. (Disclaimer: I have no idea how well solar panels attached to the top of a car would work. I’ve never tried it and never seen research on it. This example was for concrete purposes only.)
Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors.
Rough translation: Oil companies are desperate to find more oil and since they’re out of new land to drill in, they must find a way to get more oil out of their old fields.
Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline.
… Yes.
Two [out of three barrels of oil] usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity.
To me, this screams, “we’re so desperate for oil that we’re going back to the stuff that we previously said wasn’t worth getting.” It’s like waiting until the last minute to buy a prom dress. And going to every store in town, only to return to the first store and buy the ugly, over price dress, since all of the other stores are right sold out. Sure, it’s better than nothing, but you never would have taken it if there had been other options. Why are the oil companies going back to the oil they’ve already said is “too expensive” to get? Is all the other oil gone?
Each well produces about 10 barrels a day at a cost of $16 each. That compares with production costs of only $1 or $2 a barrel in the Persian Gulf, home to the world’s lowest-cost producers.
Now, I’m not sure I understand this part. Do the entire ten barrels cost $16? As saying it is comparable to $1 or $2 a barrel implies. (Ten barrels for $16 would be $1.60 per barrel) or is it right when it said that each barrel costs $16? In which case, there’s no comparison: This new technology costs eight times (we’ll be generous) the amount the cheapest oil costs. Again, peak oil is about oil becoming more expensive than the economy can handle. Upping the costs by eight times is supposed to keep the prices down (therefore avoiding peak oil)… how, exactly?
But as these light sources are depleted, a growing share of the world’s oil reserves are made out of heavier oil. … [heavy oil] can be turned into liquid fuel by enhanced recovery methods like steam-flooding.
So, we’re out of the light stuff that’s cheap to extract and are left with the heavy, expensive-to-extract stuff? Or did I misunderstand something?
After years of underinvestment, oil companies are now in a global race to increase supplies to catch the growth of consumption.
Desperate to produce enough to match the demand.
Back in California, the Kern River field itself seems little changed from what it must have looked like 100 years ago. The same dusty hills are now littered with a forest of wells, with gleaming pipes running along dusty roads. … Each year, the company drills some 850 new wells there.
So, 850 new oil wells every year doesn’t change the scenery? What kinda tripe is this?!
“Yes, there are finite resources in the ground, but you never get to that point,” Jeff Hatlen, an engineer with Chevron, said on a recent tour of the field.
Someone needs to go back to elementary school, and do the exercise where they take buttons out of a cup to learn subtraction. Basic truth: if something is finite, and you’re taking some of it away/using some of it, you will run out. Unless of course, he meant that the company will never be able to get all of the oil out of the ground. Maybe he’s right. But they will still reach a point where they cannot get anymore oil out of the ground. Or where the consumers cannot afford to pay the price to have some new miracle technology (that can only be used after a certain price threshold) extract more oil.
Well, the problem is that its impossible to extract and refine the heavier oil and still maintain any sane kind of energy efficiency. Take the Alberta tar sands as an example. Its predicted that once they upgrade that operation to nuclear power they’ll be able to extract and refine the oil with a 75% energy efficiency. That is ofcourse not taking into account the already low (under 40%) energy efficiency of oil as a fuel. from a strictly economic standpoint it would be alot cheaper just to switch entirely to nuclear power. I mean we would still totally be destroying the environment, but we’de be paying alot less.
Although…
“Back in California, the Kern River field itself seems little changed from what it must have looked like 100 years ago. The same dusty hills are now littered with a forest of wells, with gleaming pipes running along dusty roads.”
See…now theres the problem. Add a few nuclear cooling towers to that vista and you’ve competely destroyed its charm.