Hard Choices Are Upon Us
The reason energy (oil) & water prices will rise
I was at a conference the other day and a man named Chris Edmonds spoke about oil and water.
Here is the gist of what he said:
The Oil Boom days are over, it seems.
Everywhere in the middle east, there are fields of oil under the ground, but each field is between 40-60 years old and are producing less each day now and have been since 2004 (Peak Oil Theory). Don’t get me wrong, everyone is drilling like there is no tomorrow, but the finds are less than satisfying, to be sure. So much less that when oil almost hit $150/barrel; all the Middle East could produce was 32 Million barrels/day (bpd). The world then needed 36 Million bpd. Now it needs less due to the depression, somewhere around 28 Million bpd, but this won’t last forever, even though it seems like it will when we are in it. Maximum production is down to 30 Million bpd. To show you how profitable oil is, it costs between $11-$17/barrel to get the oil out of the ground. Then shipping costs take over.
Will Shale or Tar help the situation? Chris says no because those methods are more expensive, way more expensive. Colorado Shale takes $60/barrel to get out the oil and Canadian Tar Sands take $45/barrel to get out the oil. Now, you can see why no one is beating down our door in Colorado. Let alone this oil is heavier than the Light Sweet crude we are used to and take way more environmental controls to make it as clean as light sweet crude. Shale and Tar production rates decline faster too.
The same thing is true with Fracing a well. It costs bunches more than just pumping it out. You have to get really creative with drilling these days to get anything to pay off like the old days and it seems that the production rates decline real fast anymore. Bakken oil shale has proved more difficult than at first thought due to the methods of extraction. Horizontal drilling largely involves fracing and that is how the Baaken shale oil has been developed. The porosity and permeability of the rock is very low in the Bakken Basin.
Offshore drilling rigs are risky at best because of the high seas around the rigs and the depth one has to go to get to the oil. It seems that the most productive drilling is right in the middle of hurricane row. The fight to build these rigs is more complicated now by the Exxon Valdez dumping. Once again, the environment controls everything we do.
Viable supply is now an issue into the far future and that means high oil prices will be the norm. As the price goes higher, new alternatives become available, but the new alternatives carry a high price tag with them. The problem is our whole economy is based on oil. We make the most of the by-products.
Is natural Gas in much better shape? Chris again says no, due to the production rates of new gas fields decline extremely rapidly. Then more expensive methods have to be used to get the gas out of the rock and shale, like horizontal drilling and fracing. After all, T Boone Pickens is an oil man and he has his motives.
Then there is the business of infrastructure, refineries have not been built because of the greenies and their need to go to the stone age of Avatar. Once you get past the 5-10 years of Environmental Impact Statement (EIS), then you have another 5 years at least of construction. New laws in California that were accepted by the USA congress make it impossible to build refineries that accept shale or tar sand oil due to the possible chemicals that have to refine the heavy oil.
It’s worse with nuclear plants, since 3 Mile Island puffed its small cloud that did not hurt anyone, but scared us very badly; we have built very few nuclear plants. With nuclear, an EIS takes 10-15 years, with the same for construction of the plant because of all the inspections that have to happen. The waste issue is the worst as no one wants it at all.
Let’s talk electric energy for awhile.
Because of sulfur emissions, coal plants are almost outlawed anymore. Coal is still plentiful, but low sulfur coal is hard to get anymore. We have developed technologies to get the sulfur out, but these methods are extremely expensive, therefore we have delayed building more coal plants.
Natural gas is far cleaner and the preferred choice, but here too, any plant is viewed dimly by the greenies, who prefer Avatar. An EIS for a Natural Gas electric plant takes at least 7 years, with construction taking another 5 years minimum.
Hydro plants are almost a thing of the past because the greenies like their natural waterways above all. A dam EIS can take 20 years minimum and then at least 10-12 years to build. Denver Water gave up on the Twin Forks Dam 20 years into the EIS and 2 billion given away.
Solar Photovoltaic Arrays are a neat way to collect the energy of the sun, if the sun shined all the time, these panels would be great. To date, the problems much outweigh the benefits. The panels in construction now are 12-18% efficient. The efficiency depends on the angle you face them and if the panels track the sun. Technologies to build batteries to store the energy have not kept pace with the need to store energy. This alone makes clean energy unreliable because what do we do when the sun doesn’t shine, especially in the eastern USA, where it is gray most of the time.
Wind farms have become in vogue today, but getting the wind to cooperate is another thing. If one of the large wind turbines goes into over speed, it stops or tears itself apart. Then there is the lightning to contend with. Wind turbines are great lightning rods, it seems. A couple of lightning strikes can badly degrade the hull of these wind turbines.
Wind and solar takes a lot of space that the east does not have. This means that the west is the place to be for these technologies. In the west, there are huge transmission problems with getting the energy to the population centers. It seems that people only want clean energy if they don’t have to look at the panels, turbines, or transmission lines. At a cost of more than 1 million dollars a mile of transmission line, it adds up quick; and this is over level land, not mountains. In the mountains, the cost triples. Our main infrastructure in America is over 50-60 years old. This means that when things get tight, the aging infrastructure just fails. It is just like the bridges and roads of America.
Both Chris Edmonds and my wife think that Ocean wave energy is largely overlooked and could supply a lot of energy if properly harnessed.
Conservation has been touted to be the only good way to the future, but with America’s love of new electronic gadgets it is hard to realize. Every new gadget has a small electronic power supply that stays on all the time. It adds up quick when you look at all the computers in sleep mode today, with their screens and printers in sleep mode too. All the coffee pots have little red /amber lights on them. Think of all the cell phone charging that goes on in America. How many home furnaces out there are below the 98% energy star rating for new furnaces? Most furnaces are 85% at best in today’s homes.
Conservation comes into play also with cars. There is a push for home workers these days, mostly from the workers themselves, since bosses cannot micro-manage their workers at home. Fuel efficient cars are the rage too. Americans still go to work where they can find work; we have made almost no progress on that front. With at least 10% of Americans out of work, they are at home with the TV on most of the time, or computer hunting for a job. Unfortunately the job situation does not look good for the future since the global economy has taken hold and our workers are paid more than what the rest of the world is.
Now, let me shift to the lack of potable water in the world today. We need it and we are having problems finding enough of it that is easily distributed among the population of the world. The oceans have plenty of salt water which can be desalinized, but there is a large energy price tag that comes with Desalinization Plants. The facts are that getting the salt out takes a lot of energy and technology. There is little money in the places that do not have developed water resources to supply the fuel for desalinization. If one develops the power plants for desalinization, one quickly finds that power plants use a lot of water too.
In the modern world, computer servers have to be kept cool so Computer Room Air Conditioning (CRAC) units require large cooling towers that evaporate the water into the air.
Famine is prevalent in Africa. Growing food takes a lot of water away from the cities and the aquifers everywhere are drying up and can’t keep up with demand.
In short, the world is fast approaching a time when hard choices will have to be made. Our generation has no will to make these hard choices so it will fall to the next generations to make them. Money will have to be set aside for huge projects in every area of the world. Technology will have to come to the aid of the future people on earth to help with the cost of living on the earth without destroying it.
An easy lesson is one of war. When hard choices have to be made, human beings are quick to find the easy choices of taking what someone else has even if it kills them or the other people. War is the easy choice that has always been made. Pretty soon, even war will not save us, unless a large enough war is made to seriously reduce the number of humans on the planet. To me, it is outright sad the way we save the whales and the polar bears, but continue to kill ourselves in larger and larger numbers just because we fail to see the other guy’s point of view.
The religions of the world are going to have to wake up to the reality that people like to have sex for recreation and if contraceptives or condoms are not used extensively then we will overpopulate the earth eventually, if only by accidental births. Of course, the religions of the world are the major proponents of wars on earth so this fact possibly counteracts the other idea about overpopulation becoming an issue.
It has taken us quite awhile to come around to our senses about the global warming situation, which is based in the belief that we have the more effect on our planet than anything “nature” supposedly does to the planet. If we want our stability of temperature we cannot overlook this item. While the jury is still about how much we affect the climate of the earth we live on, everyone would agree by now that we have some effect. One only has to look at the jet stream on its way to America from China to observe that fact; or to look at the pile of plastic on the ocean in the spots it collects in.
While humans only do things when they are faced with a panic situation; we have become like the frogs that boil in water just because it is gradually heating up, rather than hot right away. Like cutting down our forests to make way for more cities eliminates the plants ability to create our own oxygen we fail to see how soon the crisis is upon us.
We will have to become very creative in the future to have enough resources to go around. The world’s future will look very different from the 20th Century we once knew of easy choices for energy and water resources.
Michael J. Liesveld 3/7/10
I was at a conference the other day and a man named Chris Edmonds spoke about oil and water.
Here is the gist of what he said:
The Oil Boom days are over, it seems.
Everywhere in the middle east, there are fields of oil under the ground, but each field is between 40-60 years old and are producing less each day now and have been since 2004 (Peak Oil Theory). Don’t get me wrong, everyone is drilling like there is no tomorrow, but the finds are less than satisfying, to be sure. So much less that when oil almost hit $150/barrel; all the Middle East could produce was 32 Million barrels/day (bpd). The world then needed 36 Million bpd. Now it needs less due to the depression, somewhere around 28 Million bpd, but this won’t last forever, even though it seems like it will when we are in it. Maximum production is down to 30 Million bpd. To show you how profitable oil is, it costs between $11-$17/barrel to get the oil out of the ground. Then shipping costs take over.
Will Shale or Tar help the situation? Chris says no because those methods are more expensive, way more expensive. Colorado Shale takes $60/barrel to get out the oil and Canadian Tar Sands take $45/barrel to get out the oil. Now, you can see why no one is beating down our door in Colorado. Let alone this oil is heavier than the Light Sweet crude we are used to and take way more environmental controls to make it as clean as light sweet crude. Shale and Tar production rates decline faster too.
The same thing is true with Fracing a well. It costs bunches more than just pumping it out. You have to get really creative with drilling these days to get anything to pay off like the old days and it seems that the production rates decline real fast anymore. Bakken oil shale has proved more difficult than at first thought due to the methods of extraction. Horizontal drilling largely involves fracing and that is how the Baaken shale oil has been developed. The porosity and permeability of the rock is very low in the Bakken Basin.
Offshore drilling rigs are risky at best because of the high seas around the rigs and the depth one has to go to get to the oil. It seems that the most productive drilling is right in the middle of hurricane row. The fight to build these rigs is more complicated now by the Exxon Valdez dumping. Once again, the environment controls everything we do.
Viable supply is now an issue into the far future and that means high oil prices will be the norm. As the price goes higher, new alternatives become available, but the new alternatives carry a high price tag with them. The problem is our whole economy is based on oil. We make the most of the by-products.
Is natural Gas in much better shape? Chris again says no, due to the production rates of new gas fields decline extremely rapidly. Then more expensive methods have to be used to get the gas out of the rock and shale, like horizontal drilling and fracing. After all, T Boone Pickens is an oil man and he has his motives.
Then there is the business of infrastructure, refineries have not been built because of the greenies and their need to go to the stone age of Avatar. Once you get past the 5-10 years of Environmental Impact Statement (EIS), then you have another 5 years at least of construction. New laws in California that were accepted by the USA congress make it impossible to build refineries that accept shale or tar sand oil due to the possible chemicals that have to refine the heavy oil.
It’s worse with nuclear plants, since 3 Mile Island puffed its small cloud that did not hurt anyone, but scared us very badly; we have built very few nuclear plants. With nuclear, an EIS takes 10-15 years, with the same for construction of the plant because of all the inspections that have to happen. The waste issue is the worst as no one wants it at all.
Let’s talk electric energy for awhile.
Because of sulfur emissions, coal plants are almost outlawed anymore. Coal is still plentiful, but low sulfur coal is hard to get anymore. We have developed technologies to get the sulfur out, but these methods are extremely expensive, therefore we have delayed building more coal plants.
Natural gas is far cleaner and the preferred choice, but here too, any plant is viewed dimly by the greenies, who prefer Avatar. An EIS for a Natural Gas electric plant takes at least 7 years, with construction taking another 5 years minimum.
Hydro plants are almost a thing of the past because the greenies like their natural waterways above all. A dam EIS can take 20 years minimum and then at least 10-12 years to build. Denver Water gave up on the Twin Forks Dam 20 years into the EIS and 2 billion given away.
Solar Photovoltaic Arrays are a neat way to collect the energy of the sun, if the sun shined all the time, these panels would be great. To date, the problems much outweigh the benefits. The panels in construction now are 12-18% efficient. The efficiency depends on the angle you face them and if the panels track the sun. Technologies to build batteries to store the energy have not kept pace with the need to store energy. This alone makes clean energy unreliable because what do we do when the sun doesn’t shine, especially in the eastern USA, where it is gray most of the time.
Wind farms have become in vogue today, but getting the wind to cooperate is another thing. If one of the large wind turbines goes into over speed, it stops or tears itself apart. Then there is the lightning to contend with. Wind turbines are great lightning rods, it seems. A couple of lightning strikes can badly degrade the hull of these wind turbines.
Wind and solar takes a lot of space that the east does not have. This means that the west is the place to be for these technologies. In the west, there are huge transmission problems with getting the energy to the population centers. It seems that people only want clean energy if they don’t have to look at the panels, turbines, or transmission lines. At a cost of more than 1 million dollars a mile of transmission line, it adds up quick; and this is over level land, not mountains. In the mountains, the cost triples. Our main infrastructure in America is over 50-60 years old. This means that when things get tight, the aging infrastructure just fails. It is just like the bridges and roads of America.
Both Chris Edmonds and my wife think that Ocean wave energy is largely overlooked and could supply a lot of energy if properly harnessed.
Conservation has been touted to be the only good way to the future, but with America’s love of new electronic gadgets it is hard to realize. Every new gadget has a small electronic power supply that stays on all the time. It adds up quick when you look at all the computers in sleep mode today, with their screens and printers in sleep mode too. All the coffee pots have little red /amber lights on them. Think of all the cell phone charging that goes on in America. How many home furnaces out there are below the 98% energy star rating for new furnaces? Most furnaces are 85% at best in today’s homes.
Conservation comes into play also with cars. There is a push for home workers these days, mostly from the workers themselves, since bosses cannot micro-manage their workers at home. Fuel efficient cars are the rage too. Americans still go to work where they can find work; we have made almost no progress on that front. With at least 10% of Americans out of work, they are at home with the TV on most of the time, or computer hunting for a job. Unfortunately the job situation does not look good for the future since the global economy has taken hold and our workers are paid more than what the rest of the world is.
Now, let me shift to the lack of potable water in the world today. We need it and we are having problems finding enough of it that is easily distributed among the population of the world. The oceans have plenty of salt water which can be desalinized, but there is a large energy price tag that comes with Desalinization Plants. The facts are that getting the salt out takes a lot of energy and technology. There is little money in the places that do not have developed water resources to supply the fuel for desalinization. If one develops the power plants for desalinization, one quickly finds that power plants use a lot of water too.
In the modern world, computer servers have to be kept cool so Computer Room Air Conditioning (CRAC) units require large cooling towers that evaporate the water into the air.
Famine is prevalent in Africa. Growing food takes a lot of water away from the cities and the aquifers everywhere are drying up and can’t keep up with demand.
In short, the world is fast approaching a time when hard choices will have to be made. Our generation has no will to make these hard choices so it will fall to the next generations to make them. Money will have to be set aside for huge projects in every area of the world. Technology will have to come to the aid of the future people on earth to help with the cost of living on the earth without destroying it.
An easy lesson is one of war. When hard choices have to be made, human beings are quick to find the easy choices of taking what someone else has even if it kills them or the other people. War is the easy choice that has always been made. Pretty soon, even war will not save us, unless a large enough war is made to seriously reduce the number of humans on the planet. To me, it is outright sad the way we save the whales and the polar bears, but continue to kill ourselves in larger and larger numbers just because we fail to see the other guy’s point of view.
The religions of the world are going to have to wake up to the reality that people like to have sex for recreation and if contraceptives or condoms are not used extensively then we will overpopulate the earth eventually, if only by accidental births. Of course, the religions of the world are the major proponents of wars on earth so this fact possibly counteracts the other idea about overpopulation becoming an issue.
It has taken us quite awhile to come around to our senses about the global warming situation, which is based in the belief that we have the more effect on our planet than anything “nature” supposedly does to the planet. If we want our stability of temperature we cannot overlook this item. While the jury is still about how much we affect the climate of the earth we live on, everyone would agree by now that we have some effect. One only has to look at the jet stream on its way to America from China to observe that fact; or to look at the pile of plastic on the ocean in the spots it collects in.
While humans only do things when they are faced with a panic situation; we have become like the frogs that boil in water just because it is gradually heating up, rather than hot right away. Like cutting down our forests to make way for more cities eliminates the plants ability to create our own oxygen we fail to see how soon the crisis is upon us.
We will have to become very creative in the future to have enough resources to go around. The world’s future will look very different from the 20th Century we once knew of easy choices for energy and water resources.
Michael J. Liesveld 3/7/10
posted by Mike Liesveld @ 7:31 PM
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