UPDATED: A trillion barrels of oil?
One trillion barrels of oil might be recovered from Colorado oil shale deposits. That’s what the Rocky Mountain News’ Linda Seebach told me last week. A couple of large oil companies’ research teams had visited with the Rocky Mountain News’ editorial board to discuss advances in oil shale recovery techniques.
Instapundit has already linked to the Rocky Mountain News’ article that appears in today’s edition. The Denver Post ran a story last week on the same subject.
Last fall a couple of exploration geologists told me that a sustained $55 to $60 a barrel for oil made Alberta’s oil sands (tar sands) economically feasible. $70 made oil shale pay. Some of the new resovery technologies may make the price point somewhere in the $35 a barrel range– but that is speculative. Still, Saudi Arabia remains the swing distributor. It can whipsaw the price, though increasing Indian and Chinese demand means over the long haul oil won’t be cheap.
The Rocky Mountain News article highlights the “in situ” technique for recovering oil from oil shale. Note the article says that up to 1.8 trillion barrels of oil are inside the shale deposits. Ms. Seebach said the research teams believed around one trillion was recoverable. As I recall, twenty years ago the estimates were in the 500 billion barrel range.
UPDATE: Lots of fine comments, including a note from Linda Seebach at the Rocky Mountain News. Linda told me the “in situ” techniques could be economically productive at a “price per barrel in the high twenties.” I’m aware of at least one ten-year energy cost analysis that put a $33-$35 floor on prices. Is it valid? Time will tell but Indian, Chinese, and rising demand in other markets was a factor in that analysis.
This email arrived this morning and I’m in complete agreement:
I stumbled upon your blog entry, “A trillion barrels of oil?” on Blogniscient today. Most people don’t realize that there are a whole host of alternative energy technologies that become instantly viable when oil gets above a certain price. Of course, the price needs to be sustained in order for the needed investment to flow into these technology areas. In the long run, however, the rise in oil prices may be very good for the U.S. economy by spurring innovation and investment much like PCs and software in the 80’s and 90’s. I am glad I found your blog, and I look forward to reading more of what you have to say in the future.
Again, price swings (especially steep dips) undercut capital-intensive alternative energy technologies. The price rise does spur innovation.
UPDATE 2: I’m also curious about the statement in Comment 13. So when will the Israeli announcement be made?
Oil Shale was a big deal in Western Colorado in the late 70s. Exxon spen about a billion dollars trying to develop it only to pull out when the price plummeted in the early 1980s. The bottomline is that the world is swimming in oil, its just that some of it is harder to get at than others of it.
Comment by John — 9/21/2005 @ 4:19 pm
Austin, The way Shell has discovered to recover oil from the shale is so cool and so environmentally sound, you’ve got to read about it - WOW! What if this works?” http://www.estatelegacyvaults.com/elv/001948.html
Comment by Jill Fallon — 9/21/2005 @ 4:27 pm
They’ve been talking about oil shale for a very long time, but it’s all just a lot of talk. No one’s going to want to invest in oil that’s not going to payback unless prices are sustained above $70/barrel. Furthermore, large amounts of energy will be required to get the oil out of the shale, and that means nuclear power plants, something the American publi doesn’t like very much.
Comment by Half Sigma — 9/21/2005 @ 4:35 pm
Kerogen (shale oil) is a viable petroleum substitute.
Comment by Jimmy Cotner — 9/21/2005 @ 4:53 pm
Hold your horses and take a deep breathe. This process is in itself energy intensive. That means to get oil out you have to put thermal energy in. TThe ratio of input to output is Energy Returns on Energy Invested (EROEI). Where is this energy to come from? Most likely it will require burning natural gas. If the assume they would burn oil than you suck up a lot of product getting something to sell. This has a lot in common with other alternative oil sources like tar sands and heavy oil. the former only works today because of nearby natural gas that doesn’t have a pipeline to any other market. That’s not to say that these projects won’t work, just that they will eat up a lot of capital to get a return.
Comment by Whitehall — 9/21/2005 @ 5:04 pm
Estonia has been using oil shale as an energy source for at least 20 years. This news might make it an exporter at some point. Good times.
Comment by Scott — 9/21/2005 @ 5:07 pm
Half Sigma, you’re right, but the amount of energy required is only half the story. What I want to know is where exactly will we find enough water here in the arid West to extract these 1.8 trillion barrels of oil.
Comment by Chris — 9/21/2005 @ 5:07 pm
Is the $70/barrel profitability point a steady value, or will that price decrease once initial principle investment is recouped and the technology improved?
Comment by Gamer — 9/21/2005 @ 5:23 pm
Thanks, Austin! The Shell people said the life-cycle ratio of energy out to energy in is likely to be about 3.5 to 1; since about a third of the product is actually natural gas, it’s not obvious why they would need nuclear power. Also, they estimate the break-even point for their method is somewhere between $25 and $30 a barrel, which makes the whipsawing process less feasible; if world demand, rather than cartelization, keeps the price about $30/bbl, the cartel’s actions may not matter. 9/3 column here: http://ww2.scripps.com/cgi-bin/archives/denver.pl?DBLIST=rm05&DOCNUM=20000 9/21 news story here: ww2.scripps.com/cgi-bin/archives/denver.pl?DBLIST=rm05&DOCNUM=21336
Comment by linda seebach — 9/21/2005 @ 5:32 pm
Yeah, we invested a lot of dough in Tosco (The Oil Shale Corporation) in the ’70’s. What with all that subsidy money from Jimmy Carter and all… we should have known it would tank. Ahead of our time. The price point then was +-$35/barrel so anything like today’s market looks good. I’d watch out for Laurie David and her Prius, though. She doesn’t like petroleum all that much and she’s got Arianna and HuffPo on her side. If we can keep her busy with auctioning Larry David’s cars for a while, maybe we can tap into the world’s largest untapped petroleum reserve… and hey! What about all that damned coal? We could have a lot of Appalachian energy barons if we just give it a try!
Comment by Alvie Singer — 9/21/2005 @ 5:33 pm
I first read about Shell’s in situ extraction process in Linda Seebach’s first column on the subject three weeks ago. Shell says that it’s economically feasible at a barrel price of $30 and has a 3.5:1 energy out/energy in ratio. With all the news about Katrina, this got lost in the shuffle, but the fact that Shell and other big oil companies are talking about commercial operations up and running within 5 years means that this isn’t hype.
Comment by ronnie schreiber — 9/21/2005 @ 5:39 pm
Shale Oil? Is it a long term answer? Austin Bay One trillion barrels of oil might be recovered from Colorado oil shale deposits. ThatÂ’s what the Rocky Mountain NewsÂ’ Linda Seebach told me last week. A couple of large oil companiesÂ’ research teams had visited with the Rocky Mountain …
Trackback by Red State Rant — 9/21/2005 @ 5:53 pm
#3 is working on old and busted assumptions. We’re swimming in seas of energy, and in literal seas of oil. Shell is also determined to exploit hydrogen fully. General Motors has bet their farm on fuel cells, even unto powering your house with stand alone units, and Israel is any day now going to announce a find that makes the Saudis look like pikers. In terms of energy and oil e’re going to be just fine, but the paradigm shift of Old Powers to new powers is apparently going to be bloody and violent.
Comment by Jack Mackenzie — 9/21/2005 @ 6:29 pm
This shale oil will be very big if oil sustains above $50 per barrel. Americans are loving nuclear power now, since global warming. Frenchman get 80% of energy from nuclear, Japan is too. Nuclear needs non-proliferation safety guards, but elsewise is reasonable.
Comment by Arput Mehdi — 9/21/2005 @ 6:33 pm
Much the same thing was said about Alberta oil sands in the 1970’s and 1980’s. Now it is a multi billion dollar industry which has a breakeven at $18.75 a barrel. The Alberta government has so much money it is sending every Albertan man woman and child a $400.00 cheque in the New Year. (No, not all from oil sands; but at the present rate of recovery and the known reserves those cheques could be coming for decades even after the conventional wells run out.)
Comment by Jay Currie — 9/21/2005 @ 6:36 pm
IIRC, the Saudis themselves are exporting somewhat less oil than in years gone by (tho the Saudis themselves were claiming markedly higher domestic demand as being responsible for that, if you believe in the booming Saudi economy, I guess), which usually indicates that a field, such as Ghawar, has peaked (see pg 15) and that even tho you’ll still get many more years of service from it, the cost per barrel is gonna have to rise.
Comment by ras — 9/21/2005 @ 6:38 pm
I don’t think anyone is going to seriously consider developing shale until traditional production techniques have really been stretched to the limit. OPEC can go into overtime production and cause a drastic price reduction, strangling shale oil (inelasticity goes both ways, so I don’t think they need to ramp it up that much). With China and India coming into the market, maybe this will be a reality in the not too distant future anyway.
Comment by Jacob — 9/21/2005 @ 6:44 pm
A friend worked for Occidental in the early ’80’s on the Western Slope at a pilot shale oil retort, and while interesting, a whole infrastructure would have to be built to get the recovered petroleum to reineries, etc. Don’t get your hopes up. The anti-industial left and greenies will throw up roadblocks all along the way. Figure out why methane hydrates are not developed off the coast of the Carolinas (est 75 years of natural gas supply for US in those reserves).
Comment by David — 9/21/2005 @ 6:45 pm
I saw an earlier article from that newspaper that said that Royal Dutch/Shell had the price point down to $30 a barrel”.
Comment by HaroldHutchison — 9/21/2005 @ 6:57 pm
Shell had approached the Rocky Mountain News a few weeks ago with information on a new technology for extracting oil from oil shale that isn’t terribly expensive or energy intensive. The gist is that instead of extracting the shale then heating the shale, Shell came up with a strategy to heat the shale underground where it was. This then caused the oil to rise to the surface where it was collected… Much cheaper, much less energy intensive, much cleaner.
Comment by Eric Anondson — 9/21/2005 @ 7:07 pm
Actually, it’s more like 2 trillion barrells
Comment by JD Pendry — 9/21/2005 @ 7:26 pm
It’s viable if the price of oil is above $30, and it’s more like 2 trillion barrells.
Comment by JD Pendry — 9/21/2005 @ 7:30 pm
Last fall a couple of exploration geologists told me that a sustained $55 to $60 a barrel for oil made Alberta’s oil sands (tar sands) economically feasible. The production cost of a barrel of Alberta tar sands oil is between US$10 and US$15, about half of what it was when the first large-scale projects started up 15 years ago. The main factor holding back expansion has been fear that the world price of oil would drop below that, which it actually did in 1999.
Comment by CJ — 9/21/2005 @ 7:40 pm
A trillion barrels? Dream on. Read a few Peak Oil books (the ones by Deffeyes are great) and learn about the difficulty of actually extracting this supposed trillion barrels.
Comment by Payton James — 9/21/2005 @ 7:56 pm
My father was involved in some of the preliminary surveys of Colorado shale oil back in the mid 80’s before he retired from Mobil Oil. The two problems they had then are still with us today. Shale oil is in the upper end of the cost scale, $25 per barrel back when crude ranged from $10 to $40, and shale oil will probably cost $35 to $45 now. But as high prices lead to conservation, reducing demand, increased prices will increase supplies and the price per barrel will come down. Then profits from high end shale will become marginal (risky). At the same time oil companies have been so demonized and environmental lobby’s so powerful that litigation will drive up the cost per barrel and cause delays in construction. Western Colorado may be sparsely populated but that hasn’t stopped environmentalists from clogging up Alaskan oil. Expect the Colorado Rockies to become sacred to many people who have never heard of Rifle Colorado and look for another Snail Darter or Gray owl to suddenly need to be saved from Big Oil. Shale oil will never happen. (Besides Mexico has more oil than Saudi Arabia in unexploited oil fields.)
Comment by Rob Finch — 9/21/2005 @ 8:08 pm
I am sure that if a serious effort was going to be made to get shale oil, we would learn immediately of some endangered species.
Comment by Rich DiNardo — 9/21/2005 @ 8:16 pm
I’m a geologist so I know a bit about these things and it’s kind of hard to express how much oil that really is without violating Austin’s comments policy! I think the current estimates for Saudi Arabia’s reserves are about 250 billion BBL, Iraq about 200 (I think, I’m a bit hazy on that one)and Saudi Arabia is supposed to have about 1/4 of the worlds known reserves, so hopefully that puts how big that deposit is in perspective. Most of the talk about, what price needs to be sustainable for a project to be viable is in my opinion a bit misleading. What I think is more accurate is to say, this price is required, for a certain amount of time, so to pay for the infrastructure; mining equipment, processing plants; pipelines etc. as this essentially a major mining project. This is the experience we’ve had here in Australia where with the coal boom, lots of previously uneconomic projects have been able to get off the ground, noone is expecting the current high prices to continue indefinately. That said, this is all very interesting.
Comment by Richard Haselwood — 9/21/2005 @ 8:40 pm
Love comment #3 - not much faith in technology and ingenuity.
Comment by mk — 9/21/2005 @ 8:55 pm
BETTING ON SHALE: OIL FIRMS APPLY FOR FEDERAL PERMITS Despite Bill Clinton’s wishes oil companies are moving to extract the trillion+ barrels of oil in Colorado shale: Eight U.S. companies have filed applications with the federal government to lease land in Colorado for oil-shale development, a sign that…
Trackback by Cabal of Doom — 9/21/2005 @ 9:31 pm
Half Sigma, the recent news is that the new way Shell has discovered to get the oil potentially cuts the price dramatically. It may be an exaggeration or wishful thinking but they were talking about the $30-35/bbl range.
Comment by Rick C — 9/21/2005 @ 10:37 pm
Could half sigma please explain to me how nuclear power plants can be used for the energy required to recover shale oil? Nuclear power will not solve the oil problem. Any one who says so is blowing smoke.
Comment by M. Simon — 9/22/2005 @ 12:27 am
Methanol/ethanol is the future of mobile fuel cells. Hydrogen is a dead end. The energy density is not high enough. Batteries have the same problem. Low energy density. Hydrogen fuel cells have been known for 140 years. Why aren’t they further along? Simple. The technology is neither economical nor viable. The odds are that any technology that cannot make it after 140 years of development is unlikely to ever meet the requirements of a transport system except in specialized cost is no object systems. i.e. space transport. Even in that case solar cells are preferred over fuel cells. Folks ignorant of the physics of transport (not to mention the economics) continue to tout solutions that are not viable. The same attitudes retarded the development of hybrids because they were not the perfect solution. So we wasted ten years on battery cars. Why? Because lawyers and enviros made the rules rather than engineers. When ignorance rules the result is disaster. Einstein is still correct. Stupidity is more common than hydrogen.
Comment by M. Simon — 9/22/2005 @ 12:43 am
What does Bill Clinton have to do with anything? He’s been out of office for 5 years! Or do you miss him so much that you think he’s still President? That’s like someone on the left saying “Yup, that’s a great idea, but ‘ol Reagan will make sure THAT never happens”. Yup. I am on the left and an environmentalist, though a pragmatic one. And this is a GREAT potential opportunity. Imagine the US being a net exporter of oil! Wow!
Comment by AJ — 9/22/2005 @ 1:25 am
Nice, someone finally noticed what shell has been doing? This is not new and was out at least several years ago as to what shell was doing with the cold wall tech. and heating. Looked good then. Where to get the energy to get the oil out. NW Colorado, East Utah, and S. WY all have coal fired electric plants and the coal to run them plus more. Pipelines for oil already exist in the area. Water: Colorado already has water plus, it supplies AZ,NV,CA with what they are bound to plus whatever they can take. Colorado may be looking at putting a large dam on the Colorado river so the downstream users do not get to used to rocky mountain water. Enviros will be the ones to shut this down, I will bet you that the sage grouse or get this even the vernerable ruffed grouse(a small band was found along the green river on the colorado side several years ago, these grouse do not live in Colorado but are no way a protected species anywhere) will be the chosen species, or maybe the gray wolf? Yea some one is dreaming that this will happen anytime soon, at least that we will see in our gas tanks, maybe our grandchildren. Oh, did you hear, Ford is going to have half its fleet in hybrids by 2010. The economics of this will not work for years.
Comment by patrick — 9/22/2005 @ 1:42 am
The gov’t should put a “price stabilization” tax on oil to keep it at some $60 / bbl. (+inflation increase), meaning if the spot price is above this, they sell from the Petrol Reserve and eliminate the tax; if below it they increase the tax so refineries pay the $60. The US should adjust to much more expensive oil.
Comment by Tom Grey - Liberty Dad — 9/22/2005 @ 1:52 am
My grandfather worked for the railroad in Rifle, Colorado and I now have the photo he took of the first tanker car of shale oil and the story of the thousands of jobs that would come to the Wester Slope of Colorado and again the projection was a trillion barrels of oil. I worked for the Rifle Tribune when Exxon came and spent one billion dollars building the plant and the town of Battlement Mesa and i was there when Black Sunday came and the thousands or so workers threated to burn down the town. Today, again the jobs and technology is coming to the Western Slope. Oil Shale is viable, and will work as long as the cost of a barrel remains high, but watch them run again if the Saudis’ flood the market and drop the price. I have a building for sale to any of you oil companies who need one…………
Comment by MIKE COOK — 9/22/2005 @ 2:22 am
They’ve been talking about CO oil shale since I was in highschool in the early 70’s. At some point, yes, it will make sense to recover it (Or, perhaps not, if tech renders oil obsolete). But, can we please get working on the 9 billion bbls of real, actual, and easily recoverable oil in ANWAR first? The stuff we can get RIGHT NOW? Thanks.
Comment by Hucbald — 9/22/2005 @ 2:47 am
Well, it’s not much to write home about. This is nothing new, it’s costly to mine and the only way it will be economical is once global demand reaches the peak production point, at which point oil will be so expensive we sure as hell better be working towards other energies. BTW the best case scenario for these fields is just that. The reality is we’ve known about these fields for years, and if the potential is as you say, every international oil company would be suckin at the nips of the US to get drilling rights. You’re delusional if you just blindly buy into this shit.
Comment by Frank — 9/22/2005 @ 3:24 am
Half Sigma, I’ll bet any amount of money you care to name that most Americans would prefer building a few nuclear plants in Colorado over paying $80/barrel to the Saudis. Pick a number.
Comment by rosignol — 9/22/2005 @ 5:08 am
Let’s talk about oil shale This report has everyone a-twitter over the fantastic volume of 1.5 to 1.8 trillion barrels of oil reserves in our western oil shale deposits. Now, before we start celebrating and immediately withdraw from the Middle East so that they may get on abou…
Trackback by Mark in Mexico — 9/22/2005 @ 5:41 am
M. Simon: the Shell process uses electric resistive heaters in wells to convert the kerogen to gas, oil, and char. The electricity to power these heaters could come from nuclear plants. Alternately, the gas could be burned to generate the power, but it may be more economical (especially at today’s natural gas prices) to use nuclear. Of course, Powder River Basin coal would be even cheaper. Interestingly, wind could also be used, especially if the heaters allow some variation in the power input. The enormous thermal inertia of the rock would completely level out any intermittency in the power source. As I recall, a 100,000 bbl/day field would require a 1.1 GW(e) powerplant. There’s also the possibility of heating the field by in-situ combustion, but as I understand it there are practical problems with this approach. I understand Shell considers tar sands, and then Fischer-Tropsch liquids, to be closer to commercialization than oil shale. Tar sands are also being considered as an application of nuclear energy, btw: nuclear-generated steam from CANDU reactors is being considered for horizontal injection to liquify the tar for pumping to the surface. Canada’s a Kyoto signatory, and if they can avoid burning some of the tar to make the steam they save on CO2 emissions (carbon in exported oil apparently doesn’t count?).
Comment by Paul Dietz — 9/22/2005 @ 10:53 am
The fact that world oil production from ‘traditional’ sources is going to peak in the next decade or two, even as world demand generally increases, means that the world is going to look vastly different in a couple of decades. A lot of the discussion about oil production of the “world awash in trillions of barrels of oil” type envisions a simple substitution of one input for another and life as usual. I strongly urge you read Defyes’s books (and Jared Diamond and so forth) and consider that the problem is not just what fuel to put in existing vehicles. The whole economy is going to change. Cheap fuel and highway construction subsidized suburbs and guess what we got? America today, geographically and demographically, is vastly different from what it was in 1950. Throw in a US federal bankruptcy/default/currency crisis or two, a few nuclear/bio attacks Western cities, the effects of uncertainties these things generate on capital-intensive projects such as refinery investment, and it becomes impossible to believe that people’s lifestyles and economic behavior will essentially be unchanged. Probably most of us will be poorer, and more fearful socially and politically. Possibly we will be much less democratic. Almost certainly we will devastate our landscape (our entire history points this way–look at how coal was extracted in Appalachia, how gold was mined, and the total deforestation of much of the East by the end of the last century, which led to the National Forest legislation–not to preserve Nature for tree-huggers, but to protect powerful economic interests by providing the necessary conditions for the habitability of major urban areas.) Civilization is a lot more complicated and vulnerable than the parts of it which traditional economics attempts to describe.
Comment by Craig Butcher — 9/22/2005 @ 11:11 am
Also, while we are on the topic of accessible reserves, the potential of coal bed methane is in some regions a proven, viable, and cheaply produced natural gas that has risen to 9% of the total US natural gas production from zero in 1980. Look up the Black Warrior Basin in Alabama.
Comment by Greg Jones — 9/22/2005 @ 11:12 am
Whether or not it’s feasible today, the shale oil business enforces one thing: contrary to the anti-human crowd, there will be plenty of energy for a long, long time. Whether it’s “conventional” oil, shale oil, tar oil, nuclear, coal, natural gas, hydrogen, methane, solar, wind, etc., etc., the fact is that the sun (the ultimate source of all energy, of course) produces and has already produced enough energy to meet our insignificant energy needs forever. As one source becomes less economically viable, others will become more so, due both to simple economics and technological advance. So, in short: I’m not really worried about it.
Comment by Mark in Chicago — 9/22/2005 @ 11:13 am
This is not exactly breaking news. Shale oil has been discussed for decades, I remember reading about it back in the ’70s. The shale oil extraction idea discussed here sounds promising, but it will require loads of infrastructure and research investment to scale up laboratory/small-scale results to large fields, not to mention environmental analysis, permitting, etc…. I just don’t see it happening soon. It would be economically viable if oil prices remain high, which is likely since we are approaching peak oil. The oil in ANWR is not all that easy to extract, either — weather conditions are extreme there and it is very expensive to drill due to permafrost, etc. We have the technology to do it; sustained high oil prices would make it viable. Also, it took the North Slope field years to become productive. Even if we opened up ANWR to oil drilling today, it would do nothing to alleviate current shortages.
Comment by Nancy — 9/22/2005 @ 11:47 am
I’ve been in the oil business since 1977 and now work in the gas fields of the Western Slope of Colorado. My research has shown that since the first oil was found the doomsayers have been saying we only have 10 to 20 years left. When in an existing field, as the field matures, the oil gets harder to get, but somebody comes up with a new idea to enhance production. The purported great satan of corporate America, Halliburton, has a division called, logically enough, “Production Enhancement”. I think it would be a great idea to go after the shale oil if the price will support it. There are many places I go daily where you can kick the ground and pick up a black rock and see and smell the oil. But beyond that there is a lot of oil in places like offshore California where various levels of govt and the enviros have made it impossible to get. I am very much in favor of emulating the French (never thought I’d say that) and the Japanese and get most of our energy for stationary power from nuclear and use fossil fuels for the best use as a fuel in things that move.
Comment by Chuck on the Western Slope of Colorado — 9/22/2005 @ 12:15 pm
Just a comment concerning Alberta. Suncor has said that it can remain profitable with oil prices around $20/barrel (as other commentors have noted). As well, Alberta didn’t earn the term “All hell for a basement” for nothing. There is an incredible amount of natural gas there. My hometown, Medicine Hat, is nicknamed “the gas city” and my yearbook had “CH4″ on the cover. This natural gas provides a cheap, plentiful energy source for processing the tarsands into a more useable oil source. I don’t know if the shale oil sites have access to as plentiful natural gas, and I’m doubtful that they’d be allowed to construct a nucleaur reactor to provide the energy. A government backed reactor may help to reduce the cost of processing the stuff as well as providing a clean source of energy for the surrounding community. Now all you need is water.
Comment by Half Canadian — 9/22/2005 @ 12:48 pm
This sounds great but we need to make sure that OPEC doesn’t shaft us by trying to drive down prices, the best way to do this would be to put a floor on the price of a barrel of oil at $50.00. This would have to involve an oil import fee. The money raised from this could be directly rebated to taxpayers but the point would be to insure that we can’t get screwed by OPEC, which is full of nasty countries like Venezuela, Saudi Arabia and Iran, driving down the price of oil to push their competitors out of business and then driving it back up. Sure, the bastards in OPEC will make lots of money from selling to China and India, so be it, but we won’t be subsidising them any longer.
Comment by Jamie Jamison — 9/22/2005 @ 12:49 pm
What is the source for #13 saying Israel is on the verge of announcing a large find? Has #13 put his money where his mouth is by, say, shorting oil? Though I’m an optimist rather than a scientist, I subscribe to the abiatic theory. The abiatic theory postulates that hydrocarbons are continuously being generated in the earth’s core and bubble to the surface in forms we call oil and natural gas. Therefore, hydrocarbons are a self-renewing, not finite, source of energy. So while I’m inclined to believe there are big fields out there waiting to be discovered I would not get specific on the place or time. For what it’s worth.
Comment by Paul Castro — 9/22/2005 @ 2:45 pm
Re #13’s comment, I saw something on tv about a Texas oil man looking for oil in Israel using scripture as a guide. It never made sense to me that Moses would lead his people to the one patch of land devoid of oil. Hopefully he’s right and we can tell the Saudis/OPEC to go pound sand . The faster we get away from them the faster we can win this War on Terror.
Comment by Bill Taft — 9/22/2005 @ 3:33 pm
It seems to me that many of the ‘Peak Oil’ nuts that have crapped in this thread did not even bother to read up on the new Shell Oil extraction technique before posting. I guess they were afraid their strawman argument might be accidentally incenerated by cheap Kerogen.
Comment by Paul Vargas — 9/22/2005 @ 6:36 pm
Here is US Senate Committee on Engergy and Natural Resources testimony from the CEO of Shell Unconventional Resources back in April that discusses the process in detail. http://energy.senate.gov/hearings/testimony.cfm?id=1445&wit_id=4139 Unfortunately I cannot track down the charts referenced in the text. It would be interesting to see more about how the process works. Note the legislative requirements laid out in conclusion. I can’t wait to see how the envirofaction respond during debate over these issues. I can predict one argument now: “We can’t move forward with this, that would double world oil reserves immediately. What would that do to ‘Global Warming’?!”
Comment by Brik — 9/22/2005 @ 8:06 pm
In all of this talk, no one has mentioned this: Why isn’t more effort put towards using what is currently available more efficiently. The cars using USA’s roads are 2-3 times less fuel-efficient as say Europe’s who have been used to high pump prices for many years. There is little real need for 10-15mpg SUV’s for the majority of the USA. As others have said, economics and politics, especially geo-politics almost never arrive at the optimum point, rather the point of least resistance. The Peak Oil debate is about the end of cheap oil, not the end of oil. Cheap oil will last a whole lot longer if the world’s largest consumers decided to use it most efficiently. But world economics and politics work against this, especially when oil men occupy the White House. Also I seem to recall reading that Wyoming also has large shale oil deposits, in the trillion-barrel range. Now who wants to line up and start destroying that beautiful part of the world?
Comment by Mike Mudd — 9/23/2005 @ 1:53 am
REF #47 YES WE HAVE ALL SORTS OF NATURAL GAS IN THE AREA, OUR COUNTY HAS SEEN AN INCREASE OF GAS WELL PERMITS THIS YEAR ALONE TO ABOUT 1200 WELLS, WATER OF COURSE IS STILL A PROBLEM. I PERSONALLY AM NOT OPPOSED TO A NUCLEAUR PLANT, IT WOULD BRING IN MORE JOBS TO OUR AREA AND SOONER THAN OIL SHALE. IN THE LONG RUN WE WOULD HAVE ELECTRICAL POWER AND OIL SHALE. SOUNDS LIKE A WIN, WIN TO ME.
Comment by MIKE COOK — 9/23/2005 @ 3:14 am
Austin, At a guess the Israeli announcement is this: http://thefraserdomain.typepad.com/energy/2005/09/solar_refined_z.html It’s not just oil shale and tar sands that make sense at high oil prices. So do huge numbers of other things….hydrogen (great news from Germany on production via bacteria recently), solar, etc etc.
Comment by Tim Worstall — 9/23/2005 @ 7:33 am
Friday Linkzookery - 23 Sep 2005 Thrillseekers scout out forbidden urban sites This isn’t anything new, but still interesting. Mysterious ’stealth’ boat plying Columbia River An old news story on the stealth speedboat I noted in June. A trillion barrels of oil? Austin Bay on the…
Trackback by Murdoc Online — 9/23/2005 @ 3:01 pm
Petroleum and Energy Judging by all the furor about the cost of gas recently, nobody remembers the Arab Oil Embargo in 1973 and 1974. The cars back then were just as big, and they got worse gas mileage than modern SUV’s. And the price of gas may have been under fifty ce…
Trackback by Searchlight Crusade — 9/24/2005 @ 12:04 am
oil in Israel http://www.givot.co.il/index2.htm&e=10342 has a report on a field “20 km NE of Tel Aviv” estimated at 1 billion barrels, of which 200 million should be recoverable. Not bad - but Saudi Arabia pumps that much in three weeks. Saudi reserves are estimated at around 260 billion barrels. As much fun as it would be to see Israel awash in oil, this is a fantasy. (And half of the oil would be in Palestinian territory.)
Comment by Rich Rostrom — 9/24/2005 @ 3:34 pm
Oil shale retort A number of observers have been pointing to oil shale as the solution to all our energy problems. If oil shale does turn out to be the resource of the future, then our problems are only beginning.
Trackback by Econbrowser — 9/27/2005 @ 3:57 pm
Just wanted to remind eveyone of project Bronco. This was a proposal in 1967 to test small nuclear explosives to retort shale oil in situ. The radioactive waste remain in the ground, Hydrocarbons no not form secondary radionucleides. The implication is the the cost threshold could be much lower than $50 per barrel if we just were willing to confront environmental hysteria, nuclear phobia, and general scientific ignorance (especially amoung politicians) (sorry about my spelling)
Comment by jtarrand — 10/7/2005 @ 3:03 pm
Don’t forget about coal-to-liquid fuel. We have a lot of coal and the fuel produced is cleaning burning than what we now use.
Comment by JD Pendry — 10/10/2005 @ 7:06 pm
I have written a paper on Nuclear Power and the Oil sands of Alberta The paper maybe too large for posting here but would be of interest to many Americans. You may e-mail me to the above address and I can send you a free copy (PDF).
Comment by Gary D. Lewis — 10/16/2005 @ 5:04 pm
RE: 48. Jamie Jamison I submitted your very idea to a “contest” on “sinceslicedbread.com”. It is an idea I’ve held since the ’70s when oil from shale was actively being researched in the Rifle/Parachute area of Western Colorado. As mentioned in other comments in this blog, OPEC just cuts prices (it’s really supply/demand in action) and drives the price below the economic level for production from shale. So companies are not willing to build an infrastructure to get this started. Remember, OPEC was willing to sell for much less a few years ago. The cartel has been able to jack up the price by limiting production. So it is time to protect the USA. Set the base price for US domestic oil at some value, e.g. $45/bbl. Let imports come in on an as needed supplement to domestic production with a tariff which brings the foreign price up to this same $45 rate. Since investment in domestic production of “synthetic crudes and fuels” needs to be protected, domestic oil would have first priority followed by foreign supplements. The big problem with this approach is getting it started. Until we have capacity to actually significantly affect out reliance on foreign crude, we need a “transition” plan. Any economists out there. By the way, oil from shale has been pursued since I was a boy back in Rifle, and probably before that. The “in-situ” methods now look like the most environmentally friendly and economic method I’ve heard of to date. I don’t know about the water consumption/pollution factors in this technique being tested by Shell.
Comment by Bill Brown — 11/11/2005 @ 4:23 pm
All the coments on oil shale are very good, but we have spent considerable time to address the problems that are involved in the extraction of oil from shale. We have solved these problems such as cost,polution, water,are bye products are Co2 sequestered, sulfur captured,electricty enough to help take care of the western USA.Cement as a feed stock for brick and road bed.Are tech is clean and non poluting,does not require a refinery to process. Cuts are done on site. Water is cleaned up and is reusable and drinkable at end of process. Cost comes out at about $15.00 to $25.00 per b/oil. I wish I could give you more information but it is in the final stage of being set up. We have had to avoid being shut down before we even got started. Thanks Craig
Comment by Craig Capson at American oil production — 2/22/2006 @ 1:30 pm
Update: the water turns out to be good for irragation not drinking, but the amount of oil produced is about 18,000 barrels per day per plant, electricty is 300 mega watts per hour per day, all cuts of diesel, jet fuel, heating oil can be done on site. co2 is sequestered as is sulfur. This is a green energy project. Still working to get it done. thanks craig.
Comment by Craig Capson at American oil production — 4/25/2006 @ 4:46 pm
“Most people don’t realize that there are a whole host of alternative energy technologies that become instantly viable when oil gets above a certain price.” Er, they are only options to trust-fund children and CEOs. The rest of us have to walk or do without. Let’s keep a perspective here. The only real solutions are high-efficiency solar cells (not here yet), cold fusion (where’s that research money, eh?) and nuclear power (and yes there are safe designs that do NOT create the spent rod fuel problems of today). Well, there is that power source that Captain Kirk had but that is a few more years down the road along with a culture that doesn’t include a religion bent on converting or killing everyone else. But that is another whole topic. We need to be doing serious research in cold fusion. The trillions we’re offering to spend on the pointless Kyoto mess comes to mind and represents some serious research money! We know it is feasible mathematically. We just need to develop the physics and materials to make it work. That takes money. Burning $15 TRILLION USD over the next five years trying to lower the global temperature ONE DEGREE is incredibly stupid compared to developing a technology that could wipe out the need to even mine/process/burn most fossil fuels on the planet!
Comment by Jim — 7/9/2007 @ 12:54 pm
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