[Ok-sus] As more data emerges about the realities of future oil production. . . .

Robert Waldrop 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 
DOI: 10.1126/science.338.6111.1139
	* NEWS    & ANALYSIS 
OIL RESOURCES
 
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.
CREDIT: OECD/IEA
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  
challenges.”
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 
production.
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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