[Ok-sus] As more data emerges about the realities of future oil production. . . .
bwaldrop1952 at att.net
Wed Dec 5 15:02:45 CST 2012
. . . not surprisingly, the back-pedaling continues on the rosy predictions of
recent weeks about new Saudi Arabias springing from the dusty fields of
Oklahoma, Texas, North Dakota, et al.
Said rosy predictions will require "tens of thousands of hydrofracked wells",
because as it turns out, production in said hydrofracked wells declines 40-80%
IN THE FIRST YEAR of production. Zooms up and zooms right back down. And how
much water does it take? Millions of gallons per well, only 20-25% of that is
recovered, the rest of it disappears into the ground, never to be seen again.
13.5 billion gallons of water in Texas alone in 2010. (Now we know why Texas
is so interested in Oklahoma water resources.)
Science 30 November 2012:
Vol. 338 no. 6111 p. 1139
* NEWS & ANALYSIS
An Oil Gusher in the Offing, but Will It Be Enough?
1. Richard A. Kerr
View larger version:
* In this page * In a new window
* Download PowerPoint Slide for Teaching
It's a plan, anyway. IEA's scenario has world crude oil production (blues on
bottom) nearly holding steady, a possibly iffy expectation. Increasing demand
would be met by expensive unconventional oils (red and yellow), but NGLs
(lavender) would be needed, too.
Some stunning headlines followed the International Energy Agency's (IEA's)
release earlier this month of its World Energy Outlook 2012. “U.S. Oil Output
to Overtake Saudi Arabia's by 2020,” blared Bloomberg, for example. That may be
true, but the more significant aspect of theOutlook's projections was the
prospect for world oil. Under the right conditions, the report says, the world
could produce increasing amounts of oil right through 2035 and meet the world's
growing demand for energy as oil.
The catch is “under the right conditions.” Everyone agrees that the oil is out
there. The trick will be wresting it from the ground under difficult
circumstances as fast as the world needs it. The United States would have to
triple its production of so-called tight oil, requiring tens of thousands of new
hydrofractured wells. Fragile Iraq would have to triple its current production.
And the world would have to figure out how to run motor vehicles on a sort of
petroleum gas currently of little or no use in transportation. As IEA's chief
economist, Fatih Birol, says of the Iraq situation, “there are many
The challenges are there because, according to IEA, the world will never again
produce crude oil—the familiar black goo that pours from a well with little or
no encouragement—as fast as it did in 2005 at the peak of crude production. If
drillers frantically drain currently producing fields, develop known fields,
and find new ones, they can only hope to keep crude oil production roughly
level until 2035. No increase in crude is coming.
In the Outlook's featured scenario, increasing population and rising standards
of living push the demand for oil from 2011's 87.4 million barrels per day to
99.7 mb/d in 2035. In this scenario, to help meet that increased demand,
oil-producing countries would have to double their production of so-called
unconventional oil. That's oil locked up in rock or sand so tightly it won't
come out of a well on its own, like U.S. tight oil trapped in nearly
impermeable rock or Canada's tarry oil stuck to sands. These unconventional
oils are abundant, but tight oil requires hydraulic fracturing of the rock, and
oil sands need to be steamed underground or bodily dug up and processed.
Only high oil prices make such efforts worthwhile, oil analyst Richard Nehring
of Nehring Associates in Colorado Springs, Colorado, notes. With the high
prices of recent years, U.S. tight oil production has soared from next to
nothing to almost 1 mb/d, mainly from North Dakota. In the Outlook scenario,
U.S. tight oil production continues its steep ascent toward 3.2 mb/d in 2020.
“That's in the range of feasibility,” Nehring says. If that happened, it would
help put the United States ahead of Saudi Arabia and prop up world oil
But it will take more than continued high oil prices for unconventionals to
help save the day. As tight oil production rises further, “the drilling rates
get interesting,” says oil analyst Richard Miller of Addlestone, U.K. Any new
oil well's output peaks and then goes into decline, but tight-oil well
production peaks quickly and drops precipitously, 40% to 80% during the first
year of production. That means lots of new, expensive wells need to be drilled
into large volumes of oil-rich rock. But estimates of the amount of accessible
tight oil “are poorly known as of now,” Birol notes.
Tight oil alone won't meet rising demand, of course; more natural gas liquids
(NGLs) will be needed. Actually liquid only when pressurized or chilled, NGLs
are the hydrocarbons that fall between the methane of natural gas, the lightest
hydrocarbon, and the larger molecules heavy enough to be included in crude oil.
NGLs are mostly a byproduct of natural gas production; they end up in gasoline,
plastics, and your backyard gas barbecue.
Lately, though, many energy organizations have been lumping NGLs in with crude
oil and calling it “liquids” or, as IEA does, just plain oil. IEA does adjust
its scenario's 50% increase in NGL production by 2035 to account for the 40%
lower energy content of NGLs compared with crude oil. But that does not
entirely reflect the way NGLs are used today. Fifty-four percent goes into
petrochemicals, according to an analysis by Anne Keller of Wood Mackenzie in
Houston, Texas. Only 17% ends up in gasoline for transportation, and only 19% is
burned as fuel. If NGLs are to meet a growing demand for transportation fuel,
especially diesel, their processing will have to be rejiggered somehow.
Finally, the IEA scenario calls for Iraq's oil production to triple.
“Geologically, it's clearly possible,” Nehring says, “but it's everything else
that's problematic,” as IEA points out in some detail. To increase its current
production of 2.6 mb/d to 8.3 mb/d in 2035—more than double its previous
production high—Iraq would have to consolidate its shaky political stability,
invest billions to supply water to stimulate production, and “remove impediments
to investment,” among other challenges. Things are already looking tough in the
investment arena. Earlier this month, Exxon Mobil told Iraq that it wants to
withdraw from a $50 billion oil project there, reportedly because the country's
increasingly restrictive fiscal terms for the deal meant Exxon Mobil would not
be making any money.
Indeed, money may be the most uncertain factor in the IEA scenario. It has the
price of a barrel of oil rising to $125 in real terms by 2035. Such an increase
would fund the maintenance of crude oil production, drive up production of
unconventional oil, and encourage transportation's shift toward NGLs. The
catch: The Organization of the Petroleum Exporting Countries would have to
restrain its production as non-OPEC production surges to allow prices to rise.
The scenario is silent on the chances of that.
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