Monday, April 5, 2010

Understanding the Oil News of the Day

One of the more challenging aspects of the entire Peak Oil conversation is the fear of "running out of oil." I can stand here today and tell you with 100% confidence, we will never run out of oil! Why is that? Because there is still a lot it in the ground, and as we continue looking we are quickly seeing that the vast majority of the oil that is left is getting harder and more expensive to get out of the ground and refine into gasoline.

For example. A few years ago in 2006, British Petrolium (BP) announced that it hat hit it big with the Kaskida field in the Keathley Canyon region of the Gulf of Mexico. A very sophisticated and expensive submersible called Deepwater Horizon, drilled the well to 32,500 ft in 5,860 ft of water and encountered an 800 foot deep pocket of sand which was saturated with oil. In 2009 they drilled a second exploritory well and learned that the oil pocket extend into another part of the same canyon. Three years and two wells.

That sounds promising on the surface, but let's take a minute to drill down a bit deeper (pun most defiantly intended). This is not like drilling a 500 foot well in your backyard and hitting a gusher. British Petroleum went out 250 miles southwest of New Orleans, and with a very specialized submarine went down over a mile to the bottom of the Gulf and then proceeded to drill a 5 mile deep well to discover sand soaked oil.
That is an incredible feat. And a very expensive one as well. The bigger challenge is what will be necessary in both time and money to create an ongoing pumping and refining complex to get this oily sand out of the ground, pump or ship it hundreds of miles to the nearest refinery and do what needs to be done to make this liquid ready to be used in your car or truck. That process can easily take 10 years to accomplish. If BP is very fortunate and the oil field turns out to be a "Super Giant Field" with at least 5 billion recoverable barrels of oil, this discovery will feed the world at our current rate of usage for 90 days. If you want even more details about the challenges of this kind of project, please read this.

So this is what BP calls hitting it big!

The challenge we are faced with is not running out of oil but figuring out how we will ever afford oil that takes this level of effort to get out of the ground and into our gas tanks.

I suggest we seriously focus on how to re-organize ourselves to avoid needing that oil in the first place.

I think creating Peak Communities may be a big part of the answer.