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.

The Story of Oil

Native Americans for centuries have used oil as a medicine and for waterproofing of canoes as well other objects.

The first discovery of oil by Europeans from North America probably came in 1627 by a Franciscan missionary traveling near Cuba, New York. In 1821, William Hart drilled for and discovered gas at Fredonia, New York, near the shores of Lake Erie, making him the first to do so. A primitive pipeline was constructed from hollowed-out logs, and soon the entire main street was illuminated by natural gas.

On January 10, 1901, on a small hill in southeastern Texas, after drilling down to a depth of 1,020 feet, mud started bubbling back up the hole. Seconds later, the drill pipe shot out of the ground with great force. Then a noise like a cannon shot came from the hole, and mud came shooting out of the ground like a rocket. Within a few seconds, natural gas, then oil followed.

The first oil "gusher" - greenish-black in color, rose double the size of the drilling derrick, rising to a height of more than 150 feet. This was more oil than had ever been seen anywhere in the entire world. flowing at an initial rate of nearly 100,000 barrels per day. This amount, while small today, was at the time more oil than all of the other producing wells in the United States COMBINED!

Since that time, geologists have mapped over 95% of the earth's surface and have estimated that the "total" amount of oil that was in the ground is approximately 2,000,000,000,000 - two trillion barrels. That sound like a lot of oil, and it is. It is also unbelievable to consider, that in the last 100 years humanity has consumed about half of this oil - about 1 trillion barrels of oil.

So much of the debate today is weather we are going to run out of oil or if we have reached a peak in production and what effects that may have on our lifestyles. Let me be perfectly clear, humanity will NEVER run out of oil. There is lots more of it. The challenge facing us is that we have located and pumped out almost all of the easy to find oil.

We are at the end of the age of inexpensive oil.

The oil which remains is both very hard to reach and is of a much lower quality than what we have been pumping for the past 100 years. If people are willing to pay $7.00 a gallon for their gas it will be available but a lot of folks will not be able to afford to drive at that price. Oil priced at $200 or more per barrel will increase the cost of everything that uses oil in its production or transportation... and that covers almost everything these days.

We live in interesting times and from my perspective, it is only going to get much more interesting.

Some Basic Reasons We Need a New Energy Policy

Thank you to Keith Schneider, the Communications Director for the Apollo Alliance for this.

1. America can’t drill its way out of addiction to oil.
2. Efficiency and conservation are consequential pieces of a comprehensive energy strategy.
3. Scaling up wind, solar, geothermal, clean fuel made from grass, and other renewables reduces the triple-barreled risk to our security, economy, and environment.
4. New technology – especially in the development of clean next-generation vehicles, and in dramatically reducing CO2 pollution from burning coal for electricity – is essential.
5. These steps will produce a blossoming economy and millions of good jobs that people can count on, reduce the risk of climate change, curb the $700 billion a year bill for foreign oil, and dramatically improve national security.

The choice is clear and the sooner we all act on it the better our chances of making a smoother transition for all of us.

Lets do it......

Zev Paiss