New Fields May Propel Americas to Top of Oil Companies’ Lists

[Judi Lynn]

Source: New York Times

New Fields May Propel Americas to Top of Oil Companies’ Lists
By SIMON ROMERO
Published: September 19, 2011

RIO DE JANEIRO — Brazil has begun building its first nuclear submarine to protect its vast, new offshore oil discoveries. Colombia’s oil production is climbing so fast that it is closing in on Algeria’s and could hit Libya’s prewar levels in a few years. ExxonMobil is striking new deals in Argentina, which recently heralded its biggest oil discovery since the 1980s.

Up and down the Americas, it is a similar story: a Chinese-built rig is preparing to drill in Cuban waters; a Canadian official has suggested that unemployed Americans could move north to help fill tens of thousands of new jobs in Canada’s expanding oil sands; and one of the hemisphere’s hottest new oil pursuits is actually in the United States, at a shale formation in North Dakota’s prairie that is producing 400,000 barrels of oil a day and is part of a broader shift that could ease American dependence on Middle Eastern oil.

For the first time in decades, the emerging prize of global energy may be the Americas, where Western oil companies are refocusing their gaze in a rush to explore clusters of coveted oil fields.

“This is an historic shift that’s occurring, recalling the time before World War II when the U.S. and its neighbors in the hemisphere were the world’s main source of oil,” said Daniel Yergin, an American oil historian. “To some degree, we’re going to see a new rebalancing, with the Western Hemisphere moving back to self-sufficiency.”



Read more: http://www.nytimes.com/2011/09/20/world/americas/recent-discoveries-put-americas-back-in-oil-companies-sights.html?_r=1&partner=rss&emc=rss

[Supersedeas]

1. when oil rigs collide

[NickB79]

2. Another wonderful example of oil addicts looking for crack crumbs in the couch cushions

All the fields mentioned in the article are either A) small potatoes compared to the ones that were used to build out the 20th century's infrastructure (Cuba's "major" oil find), B) are in such hostile environments that it costs a small fortune just to drill there, thus adding to the cost per barrel of the oil (super-deep sea oil fields), or C) are in rock structures that only allow a trickle of oil to be released at a time despite the large size of the reserve (Bakken oil field).

Nuclear submarines? Wells drilled 5 miles deep? Tar sands that require you clear entire forests, divert rivers, and then have the sands be cooked by massive amounts of nat. gas to yield oil? These are all massively expensive. Anyone think that those costs won't be passed down to the consumers? Hell, most of these ventures wouldn't even be economically viable with oil at less than $60-$70/barrel.

Time to face the fact that the era of cheap oil has passed, and unless we start developing new energy solutions and/or use less energy overall, the pain at the pump you feel today will be nothing compared to what you'll feel a few years from now.

[Kaleko]

3. Members of the Canadian contingent of my family who are working in the oil business

would agree with your assessment. They've studied the issue of peak oil from every conceivable angle because their livelihood depends on it. Their verdict is that oil will become ever more expensive; that alternative energy sources have to be developed NOW (they're looking to invest in it); and that Daniel Yergin is a lying piece of a BushCo shill who gets to use the NYT to keep the old oil and gasbag propaganda circulating for a little while longer. Until it's too late for the rest of us.

[boppers]

6. Meh.

Alternatives will flourish as carbon product spikes. It doesn't matter when we "invest" in alternatives (other than from a stock portfolio sense), when the tipping point hits where it's cheaper to harvest current power sources than legacy ones, the rush will be on, the money flow will change directions.

[NickB79]

7. Energy experts who wrote the Hirsch report would disagree with you there

http://en.wikipedia.org/wiki/Hirsch_report

"Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period"

snip

"Mitigation efforts will require substantial time.
Waiting until production peaks would leave the world with a liquid fuel deficit for 20 years.
Initiating a crash program 10 years before peaking leaves a liquid fuels shortfall of a decade.
Initiating a crash program 20 years before peaking could avoid a world liquid fuels shortfall.
Both supply and demand will require attention.
Sustained high oil prices will cause forced demand reduction (recession and unemployment).
Production of large amounts of substitute liquid fuels can and must be provided.
The production of substitute liquid fuels is technically and economically feasible."

And just to be clear, we're already at or almost at the peak, with very little real mitigation brought online yet. Waiting until peak hits to start developing new energy resources is the absolute WORST-CASE scenario the panel came to.

[boppers]

8. 2005, 2015....2025?

"Waiting until peak hits to start developing new energy resources...."

"Natural gas" is online.
"Clean coal" is online.
Nuclear power is online.
Solar power is online.
Wave power is online.
Wind power is online.

The crash didn't happen, and we have new tech.

It's a bit like dealing with a ditzy grandma who always worries about imaginary future disasters....

[NickB79]

9. Actually, no, most of the things you pointed out are not online

At least, not in any scalable fashion.

Natural gas has only been able to keep up because of gas fracking, and that has quite the list of issues surrounding it, such as flammable tapwater. Oh, and it appears that shale gas reserves have already been over-hyped by 100%: http://thinkprogress.org/romm/2011/08/05/289389/stunning-analysis-u-s-shale-gas-reserves-may-be-over-stated-at-least-100-percent/.

They're also depleting faster than expected: http://thinkprogress.org/romm/2011/06/26/254269/shale-plays-ponzi-schemes-natural-gas-fracking/. I wouldn't make any long-term plans based on nat. gas just yet.

Clean coal isn't online anywhere short of research facilities, and isn't actually clean at all but rather industry greenwashing.

Nuclear power isn't looking so hot anymore after Fukushima, what with countries scaling back and phasing out their nuclear fleets.

Solar power is growing well, but not enough yet to make a significant dent in global energy demands. It also has the downfall of little installed storage, making it dependent on back-up generators.

You can count the number of commercial wave power installations around the planet on one hand, so that's hardly "online", and their growth rate is nowhere near wind or solar.

Wind power is the only one that has come online in a significant way, but it's also highly dependent on natural gas as a back-up when winds die down. That would be the same natural gas we're now getting from the overhyped, depleting faster than expected frack wells I pointed out earlier.

With regard to "the crash didn't happen", do you honestly think $140/barrel oil and $4/gal. gas had nothing to do with the latest crash we just saw in 2007? Or that $100/barrel oil isn't creating a serious drag on our current economic recovery (what little there is of it)? The economy keeps getting smacked down by high energy prices every time it starts to recover, which is exactly one of the predictions of the Hirsch report.

[boppers]

12. They have to hit a cost point to scale.

$4/gal for gas is still too cheap, compared to other methods. Once we hit $6-8/gal, money into alternatives will flow like a torrent.

[NickB79]

10. Hirsch Report: "The problem is liquid fuels for transportation"

"The lifetimes of transportation equipment are measured in decades.
Rapid changeover in transportation equipment is inherently impossible.
Motor vehicles, aircraft, trains, and ships have no ready alternative to liquid fuels."

All of the things you mentioned do nothing to replace liquid fuels in the next decade, with perhaps the exception of using liquefied natural gas in modified diesel engines. The energy advancements you listed are all related to the production of electricity, and while this would be helpful if we had decent numbers of electric cars on the road, it will be decades before electric cars make up a sizeable portion of the world auto fleet.

[boppers]

13. Wow, a traditional "begs the question".

"The lifetimes of transportation equipment are measured in decades."

Thus sayeth the zeppelin-makers, the cruise-ship enterprises, the railroad magnates, the buggy-whip makers, the US "muscle car" industry...

Don't get me wrong, there will be transitions, but we're already flying planes on solar power. We're already running cars on wind power. The transition has already started.

"The energy advancements you listed are all related to the production of electricity"

Yes. Because it is the current top replacement for semi-portable energy.

"while this would be helpful if we had decent numbers of electric cars on the road, it will be decades..."

When did you last ride a zeppelin?

It all changes.

It can change really fast when people ask "Huh, two cars, one costs n cents a mile, the other, nx2 cents a mile". They don't give a damn about the power source.

[itsrobert]

4. J.R. Ewing of Ewing Oil was way out ahead of these companies

I remember him doing some dealings in South America back in the early 80s.

[ronnie624]

5. It's interesting

how the propagandists speak of "Middle East turmoil" as if it was a phenomenon unrelated to U.S. foreign policy.

[Imajika]

11. But whatever happened to Peak Oil?

Doesn't seem to be panning out.

Looks to me like we are finding lots of new fossil fuel fields and are in no danger of running out anytime soon.

[Celefin]

14. Nothing much

Production peaking is not the same as 'running out' in a sudden crash.
Just means that we really, really should start looking for replacements, as all the new discoveries aren't enough to make up for the slow decline of existing sources.
We'll have oil in 200 years - just at what price is anyones guess.



Never trust a pretty graph, so here's some solid data (as pdf, from the EIA)
http://www.eia.gov/totalenergy/data/annual/pdf/sec11_11.pdf