Its just another opinion piece about all the oil running out tomorrow.
The reality is the energy industry is one of the largest and most complex systems on the planet.
Oil is nothing less than the suns energy concentrated and stored in a relatively useful way.
And because oil is non-renewable we started to run out of it the second we burned the very first cupful.
Peak Oil, written by Hubbard(a Shell geologist, I believe) years and years ago was certainly a book far ahead of its time.
And by and large the book is probably mostly correct in all its claims.
And its possible we hit "peak oil" as early as the late 70's or mid 80's.
Depends of course on how you define "peak oil"
I recommend reading the book.
Why read other peoples opinions about a book when you can read the real thing?
In short we are probably plateaued.
And we probably have been for years.
And its complicated.
For example some countries have large reserves and don't produce much comparatively speaking like Iran.
Some countries have lesser booked reserves but produce huge amounts like the Americans which are the third biggest producers in the world.
And some countries are assumed to have large potential reserves but produce relatively little and nobody really knows for sure what they have, like Iraq.
And then there is Canada with huge oil sands reserves( second largest booked reserves in the world) which are pricey to develop and environmentally unfashionable.
So oil is going to get more expensive and thats a fact.
There is lots of it out there but every barrel gets more and more costly to produce.
In the good old days you could bang down a well in a week or two in Texas or Leduc for 3 or 4 hundred thousand.
Complete it and tie it in for probably under half a mill.
And thats a crap well relatively speaking.
In Saudi they punched them down and they came in flowing at up to a hundred thousand barrels a day.
Do the math.
Those days are over.
All the easy oil is found.
So lets go offshore and drill into the unexplored deep-water of the American Gulf Coast.
That semi-sub drilling rig is going to run you a half mill a day rental bare bones.
And you start paying the second you start dragging it out to your location.
Lets just say your little exploratory well costs 100 million to drill.
Rule of thumb is 50% to 75% of exploratory wells are dusters depending on region.
Bummer you just drilled a one hundred million dollar dry hole.
Care to try again?
Or perhaps not?
But the real problem is infrastructure and refineries.
Right now North America is awash in oil.
Rigs are idled from sea to sea.
But the Calgary gas stations are all out of gas.
What's up with that?
Virtually nobody in Canada, the United States or Europe is building new refineries to handle future requirements.
Why?
Blame the regulators and the environmentalists.
With a 10 to 15 year lag time no investor is willing to risk his money building a petrochemical complex these days.
Facing the present safety,governmental and environmental regulations it just becomes a non starter.
So everyone just expands and upgrades the existing old grandfathered in refineries.
Which if you think about is the worst thing we could do environmentally.
We need to mothball those leaky, stinky, archaic old refineries.
And build state of the art new refineries with all available environmental and safety
protocols and emission restrictions in place.
It just ain't gonna happen, carbon just isn't cool these days.
So pretty much all that Alberta crude is now going to flow down to the American mid west and gulf coast to be refined in the rusty old American refineries that are currently in place.
And Canada's few refineries are pretty much being run into the ground at absolute maximum capacity.
And thats why we run out of gas in Calgary.
Even when we are up to our ears in crude oil and all the riggers are getting pink slipped.
And don't even get me started on natural gas.
By far the most environmentally friendly non renewable energy source.
Burn it and you get water vapor and CO2 as an exhaust product.
But CO2 is a bad and evil thing we are told and Obama is going after Canadian hydrocarbon production with his "cap and trade" policies.
The United States of America produces over half of its electricity by burning coal.
Burning coal is the dirtiest, most polluting form of energy production in use today.
But Canada is absolutely awash in natural gas.
Energy and utility companies are shutting it in left ,right and center.
Cant give the stuff away.
By simply switching from dirty coal to clean gas Canada and the United States could massively reduce all air born pollutants.
It's not going to happen.
And here is why.
The environmentalists are going to continue to howl about CO2 being produced by burning natural gas.
And they are going to demand we switch to wind turbines,solar cells and bicycles.
So as a result the dirty old coal fired generators will not be replaced by clean gas fired generating facilities.
And there is no way in hell half the generating capacity of the United States is going to be replaced by solar cells, wind turbines or amphetamine enhanced hamster driven generators.
And so the existing creaky, rusting old infrastructure remains.
With no replacements in sight.
So it's not all about the amount of oil we can pump.
Rigs are racked all over the world, Alberta's roughnecks are getting cut loose on a daily basis.
Alberta now has the highest per capita rate of increase in EU claims provincially.
Oil sands projects are being cancelled non stop.
Gas is being shut in all over North America.
And even if we did run out of oil it's reasonably easy to make synthetic oil replacements out of natural gas and coal.
So excuse me if I feel that we probably are OK for a week or two yet energy wise.
But I do agree that gas at the pump has nowhere to go but up.
Trex
