There is plenty of oil but . . .

[Javaman]

http://www.energybulletin.net/node/50964

This is a post related to a talk I am giving this week. (A PDF can be found here).
There is a huge amount of oil which theoretically can be extracted, but the question is whether the cost will be cheap enough for us to be able to afford to extract it. If the oil is too expensive to extract, the shortage of oil seems to cause a recession, similar to what we are having now. I discuss this in purely monetary terms, but it is also an issue with respect to low energy return on investment (EROI), for those of you used to thinking in EROI terms.

>snip<

What economic theory really says is that oil prices will rise, and substitutes will be found, which will tend to bring prices back down. When oil prices rose, we found substitutes, but they were poor substitutes. They are more generally more expensive, when all of the costs are included. Biofuels interfered with food supply; wind is a substitute for natural gas and coal in electricity production, but it is not as a transportation fuel, which is one of the things that we specifically expect to be short of.

>snip<

In the above slide, I purposely exaggerated the impact of an oil price rise on food and gasoline. The effect would be greatest on a low income individual. It would also be very great, if the price rise were to something like $400 barrel.

[chandler2]

1. Oil co's WANT for there to be less recoverable oil

Oil co's favor conservation, hybrids etc. because it means they can make substantially higher profits by virtue of
lower production costs. They can sell gasoline at $3.00 per gallon and make lots more profit because they don't have
the very high labor, production, storage, and other costs associated with extracting, producing, refining, and distributing
large amounts of oil and related products.

[GliderGuider]

2. "Oil co's favor conservation, hybrids etc.." Really???

Can you support that rather outrageous assertion?

[chandler2]

3. It allows them to earn even more per gallon, because of

what I said above about the costs of production etc.

[GliderGuider]

4. And how do you know that outweighs the drop in demand?

Especially during a recession?

[hunter]

10. Oil companies only care about their share prices.

They've no problem lying about their reserves if it raises their share prices. They all know the game will end. It's already impossible for the big oil companies to increase their market share as world oil production declines and they find themselves competing directly with China, India, and other rapidly industrializing nations beyond their political control. That's why Big Oil began to consolidate, Chevron/Texaco, Exxon/Mobil, etc.

Conservation may be part of their game plan, but only if it keeps them in the game longer, continuing to profit, their share prices steady or increasing.

But at the end of the day it's all about the money and not about the oil. When theres no money to be won in the game anymore the insiders will offload their falsely valued shares on gullible investors and governments and they will sail away in their gilded lifeboats, leaving the rest of us aboard a sinking ship.

[Ready4Change]

5. 3 issues with recovering those reserves.

Economic: what you are referring to. I won't elaborate, except to say that the only people who win when these materials are recovered is the oil companies.

Ecologic: (A two parter) Because of the nature of these other forms of oil reserves, recovering them does more harm to the environment. In many cases you have to literally dig them out of the ground, rather than just sticking in a pipe and sucking them out. Think of it like coal strip mining. Only likable if you love big, industrial holes in the ground.

Also, these types of oils are far dirtier than what we are burning today. They put out a lot more contaminants when they are refined, which makes the current GHG issue even worse. Bad.

Energy Budget: These oils take more energy to dig up, and more energy to refine. As a result they become less viable as a source of energy. (ie: if it takes one unit of energy to dig up and refine one unit of energies worth of this oil, then you haven't gained anything. You are just using that resource as a CARRIER of energy you must generate elsewhere.) In this case it would be better to use that energy to somehow bind the carbon we've already released into the air, and recycle it into a carrier fuel, than to dig up new oil and add to the existing problem.

[GliderGuider]

6. Good summary.

:thumbsup:

[Javaman]

7. Oh I know...

I was just posting this because yesterday there was a tool in the forum that told me that EROEI didn't matter anymore and there was plenty of oil out there.

I just didn't have the energy to debate such a dolt so, oddly I came across this article and posted it as a general reply.

[Ready4Change]

8. Gotcha.

I've been in the same conversation. Some people believe that, if it makes enough money, you can overcome the energy equation.

Maybe by burning all the dollar bills you earn. Hmmm, wonder what the EROI on burning $$$'s is?

[Strelnikov_]

9. Thermodynamic reality does not facilitate the 'market will find a answer' meme

The market may indeed 'find a way', but it will be a way that consumes a hell of a lot less energy.

The living room on four wheels is going the way of the dinosaur.

[MH1]

11. There is a toolbox

full of tools in this forum lately.

Almost makes me miss the nuclear tool-in-chief who I haven't seen here lately. (But only almost.)

Anyway thanks for your post!