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Title: Can Royal Dutch Shell's Shale Extraction Technique End 'Peak Oil' Paranoia?
Source:
Yahoo! Finance
URL Source: http://biz.yahoo.com/seekingalpha/070410/31884_id.html?.v=1
Published: Apr 10, 2007
Author: Jack Brynaur
Post Date: 2007-04-10 22:32:47 by Indrid Cold
Keywords: None
Views: 201
Comments: 16
Over the past few years, more and more apocalyptic stories have been popping up about a supposed phenomenon known as "peak oil." The theory is that we're running out of oil, the big powers are keeping it quiet, and as supplies dwindle, world-wide economic chaos will ensue. This is hardly a new theory. According to the Chicken Littles of the world, we've been "about to run out of oil" for over thirty years. Obviously it hasn't happened yet. With the recent upswing in strife in the Middle East, however, the notion has gained in popularity. The thing is, this theory is utterly false, and can be laid to rest with a single well-established fact: there is more oil in the Colorado shale fields than the entire Middle East had at its peak. The only reason we're still importing oil is that, at present, it is cheaper to do so than to extract it from shale. Until recently, getting oil out of shale has been a nasty and expensive business. That's about to change, though, as engineers at Royal Dutch Shell have applied for a patent on a new method of extracting shale oil cheaply and cleanly. (As an interesting side note, it is the largest patent application in U.S. history.) Amazingly, this method: * Is cleaner than conventional drilling * Generates the highest grade of light-sweet crude oil, which burns cleaner than other varieties * Becomes profitable with oil just north of $30 a barrel (which we've already blown past) In other words, with Shell's new technique, it actually benefits the environment to switch to shale oil. I found this hard to believe at first, but seeing as I am a patent lawyer, I decided to pull the patent application to see for myself. When I saw the invention laid out on paper, I was convinced that it would work. As with most great ideas, the basic concept is simple. In brief, engineers dig holes around the extraction area, into which they insert giant cooling rods. The water in the soil freezes, and forms an "ice-bowl," which traps the oil and prevents seepage. The center of the formation is then heated, causing the oil to bubble up through the rocks, from which it may then be extracted with ease. The ice-bowl prevents all the nasty chemicals released by this process from getting into the water table. This Wikipedia Article provides more details. Shell has been granted rights to a small patch of shale field in Colorado to make an experimental run with its new method, and all present signs suggest it will be a success. Make no mistake, however. Even if Shell's idea is a disastrous failure, existing technologies can get oil out of the shale — it's just expensive. Other new extraction methods are also being tried by a number of companies. Here's a partial list: # Petrobras (NYSE: PZE - News) # Shell Frontier Oil and Gas # Exxon Mobil (NYSE: XOM - News) # Chevron Shale Oil Company (NYSE: COP - News) # EGL Resources # Milennium Synfuels # Oil Shale Exploration, Inc. The absolute worst case scenario I can fathom is that oil prices could get high enough to make existing shale extraction techniques economically feasible (some estimates put the break-even point at about $75 a barrel). At that point, we could tap our shale reserves and continue on, whether any of the new methods work or not, without any significant changes in infrastructure. Sure, gas would be more expensive, but probably no more-so than Europeans pay now. The economy may go through a rough patch during the transition, but the theory of a global economic meltdown over peak oil just isn't credible. In fact, once shale production takes off, we could easily become the world's biggest exporter of oil, with China as our biggest customer. Strange as it may sound, it is quite possible that, within our lifetimes, Chinese government officials may take to fretting about their dependence on "Middle-Western" oil. In short, don't buy into the peak oil paranoia. It is nothing more than a fairy tale, and is dangerous in that it distracts attention from the real impending crisis within our energy policy: global warming. It makes no sense to waste our time fretting about running out of oil when we in truth should be concentrating on figuring out how to curb our usage of it. After all, even if we were running out, wouldn't the best solution be the same?
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#1. To: Indrid Cold, anxeolith (#0)
Was not it you IC who pointed out that gas at 2.60/ gal today is equal to gas at $1.10 in 1990? No, as I type this it was anxeolith. I have a cousin who was allways worried about Denver running out of water. He read that Demver uses a Bronco football field full of water every day, and it seemed like an impossible amount. Then one day, mush to my surprise, he said he was on a plane, looked over Denver, looked at the stadium, and was amazed at how little water Denver used. Well. I still thing the west is being collossialy stupid in their development policies, and water is going to, one day, be a disaster to the region.
The Shale Oils are Going to Save Us game plan has been around since the late 1970s. There are two reasons they haven't been widely harvested. One is environment. The other is cost. In Canada, they're called Sand Tars, and Canada has been harvesting them for over 20 years. Under typical harvesting, mass quantities of shale or sand are processed to extract the petroleum within them. Canada's shale oil or sand tar reserves make it one of the best long term sources of non renewable energy. I'm not one who thinks the world revolves around peak oil. When demand goes up, as it has been, and production is impaired by war and threats of war in the mideast, the price shoots up. Our current price is part demand, part fear premium, part speculator premium, and part war premium. In real dollars the price of oil has still doubled since Bush started the Iraq war. If we can get to January of 2009 without Bush starting another war, oil will drop back down to a more reasonable figure.
In 2001, I was paying $1.00 a gallon for gasoline. Just last year, we were paying upwards of $3.00 a gallon or more. This year, we're paying close to $2.60 a gallon. The price of gas hasn't doubled, it's nearly tripled. The thing is, in 2001, they were making hefty profits at a buck a gallon. Now they might as well own the goddamned mint. You're right, all of the prices of oil are based on speculation, but you better believe there is a healthy dose of LIES AND TREACHERY there too. If you think it's bad now, just wait til those idiots in congress pass that Global Warming UN Tax. Expect to be assfucked like nobody's business once that happens.
Dying for old bastards, and their old money, isn't my idea of freedom.
I used the term "more than doubled" because oil has just dipped some in price, and I was allowing for inflation, which accounts for a small portion of the increase. Gasoline is the consumer product, and the AVERAGE nationwide has more than doubled since Clinton was president. It was about $1.35 a gallon on average in 2000, and it's a little more than twice that now, on average, nationwide. Right now, California is paying significantly more than most of the US for gasoline.
It will only work if you get more energy from the oil extracted than you put into extracting it. Otherwise, it is a total loser.
Press 1 to proceed in English. Press 2 for Deportation.
That's why the bulk cost is ~$30 a barrel, that includes extraction energy costs. BTW, that "small experimental parcel" opened is ~16,000 square miles. The biggest problem with the original oil shale processing technology was that it involved mining the shale, and ending up with huge quantities of tailings that were essentially worthless, or worst, cost money, to manage or get rid of. With Canadian kerogen sands, they at least end up with sand which has a potential use as engineered fill. The articles implied connection with oil and global warming kind of spoiled it for me, as TTMA mentioned, the whole issue is a silver platter feast of fear to get the masses to turn complete energy, and subsequently economic power, over to elites. Global warming is solar and the end result will be better climate than now. And the freakin' polar bears and penguins and all the other cold clime critters made it through the last few dozen cycles fine...
"pound pastrami, can kraut, six bagels – bring home for Emma"
Humans being the primary cause of Global Warming is a crock to anyone who looks at the figures anyhow. The Earth's atmosphere is made up currently of 0.04% CO2. Something like 98% of that is due to animal respiratory processes, volcanoes, forest fires, swamp gas, etc. Assuming that 98% figure, humans then contribute a 'rounding error' of around 0.0008% at best. (taking 2% of that 0.04% gives you that number) What I'm more curious about is the energy return on investment in terms of BTUs or other measures. Measuring it in dollars doesn't tell me if they're pumping more energy in than they are getting out or not, unfortunately. It just says that it is currently *economically* viable, not whether it is a net return on energy invested, alas :(
Press 1 to proceed in English. Press 2 for Deportation.
It's funny about this global warming thing, and I rarely if ever see it mentioned. Jupiter, the planet famous for it's red storm that has never actually stopped, developed a SECOND red storm that is also running across the surface of that planet. The reason why that second storm came to be, is that the temperature of Jupiter ALSO has gone up. Now, last time I checked, there weren't any SUV's driving around on that planet. Not to mention the fact that the last 3 years have seen the greatest amount of solar flare activity in recent history. With that said... What is a solar flare? Wouldn't you think a gigantic plume of fire, that sends gigantic waves of radiation, would raise the temperature of this planet a bit??? Apparently not according to scientists, so solar flares really shouldn't be anything to worry about. What a bunch of fucking morons. Whoever believes the lies of global warming being caused by humankind, needs to have their asses kicked. Morons.
Dying for old bastards, and their old money, isn't my idea of freedom.
You're exactly right. Almost all global warming is caused by cyclical variations in the sun. Right now, there is global warming on Mars. So the seas might rise by a few inches temporarily. Boo hoo. Then someday they'll go down again. And yes, the polar bears and the penguins will survive, just like they always have. The "elites" mean for us to live in shacks and ride bicycles while they live in mansions and are driven around in limousines. Al Gore's mansion uses 30 times the energy of the average house. He's not going to give that up, being that he believes he is morally and intellectually superior to all us unwashed masses in Flyover Land.
"Be convinced that to be happy means to be free and that to be free means to be brave. Therefore do not take lightly the perils of war." -- Thucydides
Just last year, we were paying upwards of $3.00 a gallon or more. This year, we're paying close to $2.60 a gallon. And in 1990, when Iraq invaded Kuwait, gasoline went to $1.33 a gallon. The 2001 price is not a reasonable baseline.
I agree, I think global warming is mainly due to the solar cycle.
Well, not quite. They could use "free" energy like solar to generate the current necessary for extraction. I think you're more worried about burning lots of fossil fuels in order to reclaim fossil fuels from the shale, which is a valid point (especially with ethanol), but not necessarily a problem here.
The "Department of Defense" has never won a war. The "War Department" was undefeated.
ice core samples going back 800,000 years say it is more than a solar cycle "The line separating good and evil passes not through states, nor between classes nor between parties either — but right through the human heart." — Aleksandr Solzhenitsyn
The ice cores on earth don't explain why Mars is heating up as well. It is a certainty that exhaust from SUVs here on Earth is not providing Mars with global warming. There is more here than the simply fuzzy-headed "your car is doing it all" explanation Al Gore is talking about.
Press 1 to proceed in English. Press 2 for Deportation.
I suspect so too. But something strange is happening.
"The line separating good and evil passes not through states, nor between classes nor between parties either — but right through the human heart." — Aleksandr Solzhenitsyn
Yup. But would not common sense say we need more data before embarking on a draconian solution that may or may not have any effect whatsoever? If it turns out to be the Sun (and we know that CO2 levels rise as the earth heats) then how do the emissions nuts propose to cool the Sun off? The whole thing seems like hysteria being whipped up by the 'elites' to regulate more of peoples' lives. Keep in mind, every living animal, insect, human, fish, and many forms of bacteria emit greenhouse gases as part of the respiratory process. Further, every volcano (Hawaii anyone?) and forest fire (which 'environmentalists' make nastier and hotter by disallowing logging) emits more carbon into the atmosphere than every car on the planet. The eruption of Mt. St. Helens ALONE threw more greenhouse gases into the atmosphere than 20 years' worth of US emissions. How many volcanoes go off each decade? Didn't we just have a couple out in the Pacific Rim recently? Forest fires anyone? How many wildfires do we get in the US alone each year burning up how many thousands of acres throwing how much carbon into the atmosphere? My favorite "counterargument" to the greenieweenies who want to blame the whole thing on "human activity" is to remind them that the average human emites 20 *TONS* of C02 over his/her lifetime. If they want to put a cap on greenhouse gas emissions, they can lead by example and NOT BREATHE. Thus, a fine counterargument is that population growth adds to carbon emissions which is something the environmentalists will NEVER accept. Further, if one overlays a graph of population growth and energy usage, it shows a DIRECT correlation. As the human population increases, so does energy use. To sum up, using global warming peoples' own arguments, one can prove conclusively that population growth leads to global warming -- and is the main cause of it -- and they can lead by example by NOT BREATHING.
Press 1 to proceed in English. Press 2 for Deportation.
#2. To: Indrid Cold (#0)
#3. To: Paul Revere (#2)
#4. To: TommyTheMadArtist (#3)
#5. To: Indrid Cold (#0)
#6. To: mirage (#5)
It will only work if you get more energy from the oil extracted than you put into extracting it.
#7. To: Axenolith (#6)
(Edited)
#8. To: mirage (#7)
#9. To: Axenolith (#6)
Global warming is solar
#10. To: TommyTheMadArtist (#3)
In 2001, I was paying $1.00 a gallon for gasoline.
#11. To: TommyTheMadArtist, YertleTurtle, mirage (#8)
Not to mention the fact that the last 3 years have seen the greatest amount of solar flare activity in recent history. With that said... What is a solar flare? Wouldn't you think a gigantic plume of fire, that sends gigantic waves of radiation, would raise the temperature of this planet a bit???
#12. To: mirage (#5)
It will only work if you get more energy from the oil extracted than you put into extracting it. Otherwise, it is a total loser.
#13. To: Diana (#11)
#14. To: robin (#13)
#15. To: mirage (#14)
There is more here than the simply fuzzy-headed "your car is doing it all" explanation Al Gore is talking about.
#16. To: robin (#15)
I suspect so too. But something strange is happening.
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