RE: Ethanol from corn (was Kuwait oil)

From: Al Koop <koopa@gvsu.edu>
Date: Thu Nov 17 2005 - 16:36:47 EST

>>> "Charles Carrigan" <CCarriga@olivet.edu> 11/17/05 1:33 PM >>>
Dear All,
 
I find this discussion of fuels fascinating. I teach a course here at Olivet Nazarene University on natural resources, so I know a little about the subject matter. But I must admit that there is so much to learn about these incredibly complex social, economic, political, and geological issues that no matter how much I know, it seems there is always 10x more that I don't know.
 
A few questions for those of you who have posted comments on this thread recently:

 
Well, I will take a crack at this. Glenn or Don or another geologist can clean up any of my mistakes. All the petroleum geology I know is completely self-taught, based on my readings over the past three years.

A site that has some interesting graphics in many pdf presentations can be found at

http://www.simmonsco-intl.com/research.aspx?Type=msspeeches

These are the slides from the talks given by Matthew Simmons, an oil investment banker in Houston, who now travels the globe warning about the impending depletion of oil production. He is one of the main pessimists concerning world oil production levels, and he has the written the book, Twilight in the Desert, which outlines Simmons' case that the major fields in Saudi Arabia cannot maintain their present production for much longer.

To answer your questions:

1. Depletion means generally one of two things. A field (defined by geographical and geological considerations) or a country may decline in oil production. This means that the production of barrels per month continuously decreases from a maximum level. If you look at Simmons slide 16 of his latest presentation you see the production of four fields over time. Prudhoe Bay in Alaska produced about 1.5 million barrels a day for 10 years until 1998 and since then has steadily declined until today when it is producing less than 500 thousand barrels per day. (Thus the decline of Prudhoe Bay begins in 1998.) As I understand it, once a field is brought on line, the reservoir engineers decide how much to produce, taking account the economics of the situation and the geology of the field. They don't produce at a maximum initially, I am guessing, for infrastructure reasons and economic reasons. You don't want to build facilities to handle the maximum for just a year and for econom!
ic reasons you want to plan on a level amount for a long period. Apparently if you extract the oil faster, generally the overall yield of the field decreases for geophysical reasons. If you could get 10 billion barrels over 25 years, you might be able to get 13 billion barrels over 40 years. As apparently happened in Oman, Shell Oil had a contract that expired somewhere around 2000. Of course they managed the field to maximize their company's return, apparently at the expense of reducing the total yield from the country. Thus you need to make decisions how big to make the pipes leading out of the field, how much to pump out initially, and then when and how much of the secondary and tertiary procedures you initiate to maintain production levels. Apparently today with better technology the engineers are able to use such things as horizontal drilling techniques and remove more oil faster. There is some evidence that when these fields start to decline they will do so faster!
 than the older fields did with different technology.

What drives most of the realists crazy is that optimists, who tend to be economists, is that the optimists assume that we only have to find new fields to meet the increasing demand of the world, and they do not seem to take into account the depletion of the old fields. The economists' projections have Burgen producing 2 million barrels for another decade or more, and if we can only get 1.7 million today, what will this look like in 2020? Meanwhile with Saudi Arabia now producing 9.5 million barrels a day and telling the world that they can ramp up to 15 million barrels a day (and the optimistic economists putting that in their calculations), we have Matthew Simmons and many retired petroleum geologists doubting that they can even keep up the 9.5 million for any long period of time, and thes pessimists are claiming that it is almost impossible that the Saudis can get past 12 million barrels a day ever.

2. You are correct that the problems of oil and natural gas are somewhat unconnected. But the Northeast US uses oil heat to a significant degree, Also natural gas in North America is near the peak just like oil is near a peak for the world. It is much more difficult to import natural gas across the seas than is oil. LNG ports in the US are few and new ports are subject to the NIMBY phenomenon. Tankers are at a premium as well. Most chemical plants and fertilizer plants in the US are closing and going to oversea sites where there is natural gas for their feedstock. We will have trouble heating our homes because natural gas supplies are also tight as well as oil, and likely will become increasingly so. The energy companies have some slack in deciding on producing electricity from oil or natural gas or heating from oil or natural gas, so a severe shortage in one can be somewhat alleviated by the other. However, it looks like we will be using coal more and more in the near!
 future to make up for tight supplies in oil and natural gas.

3. As I understand it, most oil wells (once drilled) are either soon brought on line or completely closed. By definition, if a well is shut up, it is already very small. There are not many significant oil fields that are known and shut down that would be opened up with increasing prices. Outside of Saudi Arabia, which has been the major swing producer, there aren't any 'mothballed' wells waiting around to be opened as the price goes up. There are stripper wells that will be brought back on line as the price increases. These however won't make up the difference between the loss of 300,000 barrels per day from Burgen . The thing to appreciate here is that the oil business is so enormous (30 billion barrels a year) that if you can get a millionth (30,000 barrels a year ) of the piece of the pie from stripper wells, as some Texans have been doing today for even smaller amounts, you can do OK for yourself financially. But those 30,000 barrels a year are like spitting in the oc!
ean as far as the world depletion is concerned.

If you wish to read a well referenced paper on ethanol from various sources, take a look at

http://petroleum.berkeley.edu/papers/Biofuels/NRRethanol.2005.pdf

Here the authors conclude that ethanol from corn is better than ethanol from switchgrass and sunflowers, but not as good as soybeans, although more acres of soybeans would have to grown to get the same amount of energy.

Al
Received on Thu Nov 17 16:37:32 2005

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