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The Next Oil Revolution
Energy Tribune ^ | November 17, 2012 | Peter C Glover

Posted on 11/17/2012 9:08:10 PM PST by neverdem

The Next Oil Revolution

By Peter C Glover

Far from running out of oil, new studies confirm the world is headed for the next oil revolution with growing US production playing an nascent role. And, as with the unconventional shale gas revolution, nearly all new unconventional oil development is taking place despite pre-election White House energy polices through development on private, rather than on federal, lands.

A new IHS CERA group study America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy, spells out how unconventional oil and gas production in the US is changing the US energy landscape and contributing significant economic growth, job creation and federal revenues. The report shows how the unconventional oil and gas sector will support over 1.7 million jobs at higher than average wages. That figure is anticipated to increase to 2.5 million by 2015 and 3.5 million by 2035.

According to IHS vice chairman Daniel Yergin, “The United States currently has the highest rate of growth in crude oil production capacity in the world” while being “virtually self-sufficient in gas, except for some from Canada.” All a stark contrast to the doom and gloom predictions envisioning a heavy dependence on oil and gas imports just a few years ago. Yergin points out how the growth of unconventional oil and gas capacity, “is creating a new energy reality for the United States” that has “contributed to U.S. energy security” and is proving “a significant source of new jobs and economic activity at a time when the economy is the top priority.”

The report’s findings include:

John Larson, IHS Vice president for public sector consulting, further observes that the collusion between unconventional oil and gas production and the high capital-intensive supply chain will make the US a “world leader” with “most of the dollars spent here and supporting American jobs.”

All of which bears out what former oil executive and research fellow at The Belfer Center, Leonardo Maugeri was predicting in August. After a field-by-field analysis of the bulk of the world’s major oil exploration and development projects, Maugeri’s report(PDF) concluded that, “by 2020, the world’s oil production capacity could be more than 110 million barrels per day (bpd), an increase of 20 percent.” And Maugeri predicts that the four leading producers will be Iraq, the United States, Canada and Brazil. Neither is it hard to see where it will come from as new technologies have made formerly difficult to extract deposits more commercially viable. Maugeri even predicts a global “glut of oil” after 2015 that could lead to a collapse in prices. He also foresees that the coming oil boom will become a fault-line environmentalists and the oil industry.

Such are the opportunities elsewhere that even the lure of vast oil and gas resources in the Arctic may be on hold – though the US Interior Department is selling 4.5 million acres of Arctic land leases for exploration in November.

According to the International Energy Agency (IEA) and the US Energy Administration (EIA) between 89 and 90 million bpd will be consumed in 2013. Global oil production has never exceeded 74 million bpd. In recent years, natural gas liquids and other liquids have made up the difference and will, together with already stored oil and innovations like natural gas to drive trucks and buses, continue to do so in the short term. However, the contribution from Canada’s oil sands, US shale oil, Brazil’s presalt oil among other resources is set to have an increasingly dramatic impact ushering in a new age of plentiful oil.

As one commentator on the coming oil boom put it, “It’s yet another reminder that what the expert consensus assure us to be true very often isn’t” adding “It was equally apparent we were running out of oil – until we weren’t.”

Equally, aiding the discovery of an abundance of relatively cheap hydrocarbons is something President Obama could claim as a vote-winning personal achievement – except it isn’t.



TOPICS: Business/Economy; Culture/Society; Politics/Elections
KEYWORDS: energy

1 posted on 11/17/2012 9:08:13 PM PST by neverdem
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To: neverdem

I bet its Kills Obama


2 posted on 11/17/2012 9:09:55 PM PST by scooby321 (AMS)
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To: scooby321

I bet its Kills Obama


I bet Obama tries to kill it.


3 posted on 11/17/2012 9:22:07 PM PST by volunbeer (We must embrace austerity or austerity will embrace us)
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To: scooby321; All

Well, at least Interior is selling 4.5 million acres of oil land leases in Alaska. That sounds like a fairly large area. I have heard that one of the issues on public lands has been that companies were just sitting on leases and not doing anything with them so a bunch were canceled to be reactivated, or something like that. Hopefully someone here is more knowledgeable and can clarify this issue.


4 posted on 11/17/2012 9:22:11 PM PST by gleeaikin
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To: neverdem

You have a regime which by design was driving up the costs and uses of energy the most a basic resource because it suits its socialist matrix. What’s even worse is the massive corrpution resulting from that regime doling out tons of funds towards its campaign donners for so called alternate forms which don’t work or are laughingly inefficient . That’ got a pass by the Romney campaign and a huge mistake because this policy affected everyone. It was a bread a butter issue affecting all Americans.


5 posted on 11/17/2012 9:23:26 PM PST by mosesdapoet ("A voice crying in the wilderness make streight for the way of the Lord")
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To: neverdem

Thank God for Big Oil and the coming American oil boom. It’s one of the few reasons for optimism these days.


6 posted on 11/17/2012 9:30:11 PM PST by Yardstick
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To: neverdem
The one piece of bad news:

"Unconventional oil and gas activity will generate over $61 billion in federal and state tax revenues in 2012, rising to $91 billion annually in 2015 and $111 billion by 2020."

We need to starve the beast, not feed it. Cut the size and scope of government, not increase funding.
7 posted on 11/17/2012 9:32:26 PM PST by uncommonsense (Conservatives believe what they see; Liberals see what they believe.)
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To: neverdem
If the government and environmentalists don’t stop them we desperatly need refineries.

For starters, start up the refinery on the California coast that they have stopped from using for over 40 years.

8 posted on 11/17/2012 9:34:45 PM PST by dalereed
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To: neverdem

is there some reason that shale oil
only exists in North America?

is shale oil existed worldwide,
the Arab hegemony would be broken


9 posted on 11/17/2012 9:40:08 PM PST by RockyTx
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To: RockyTx

Oil shale is not exclusive to the U.S.A.

I believe it requires specialized equipment to find it, however.


10 posted on 11/17/2012 10:06:38 PM PST by SatinDoll (NATURAL BORN CITZEN: BORN IN THE USA OF CITIZEN PARENTS.)
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To: Yardstick
Around 12 years ago it was selling for $ 10 barrel. Today it seems impossible, but who knows.
11 posted on 11/17/2012 10:51:26 PM PST by Orange1998 (Please DO NOT PRESS CTRL W)
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To: mosesdapoet
One can take a good guess that those who are in the northeast after hurricane Sandy who were effected and are still left in the dark, without fuel will take a good long hard new look of hydrocarbon fuels.
Yes, those " GREEN " energy technologies are laughable and probability won't mature for a long time.
If the " GREENIES " want to help mature those " GREEN " energy technologies they can use the current technologies, the current use of hydrocarbon fuels to help fund and pay for the research by relaxing some of the regulations, taxes and let the economy and the new OIL BOOM flourish.
12 posted on 11/17/2012 11:15:46 PM PST by American Constitutionalist
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To: dalereed
Start building smaller scale refineries at a cheaper cost but more of them all over the place.
Same thing with building smaller pebble bottom safer nuclear power plants all over the place.
One reason that drives up the cost for most of these things is that they are centralized.
The same thing with government... when it's centralized it's less efficient.
Build more and more smaller scale refineries that could possibly made mobile ? modular ? that can be taken down and set back up in another area as needed.
Make more use of modular designs.
Have them put more funds into research and development into more smaller refineries, make them more modular, more efficient.
With a oil refinery that is not centralized it becomes less prone to risk of terrorism or some other accident.
13 posted on 11/17/2012 11:25:24 PM PST by American Constitutionalist
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To: SatinDoll
Perhaps the reason Oil Shale is big in the USA is because the USA has more of it than the rest of the world ?
Maybe other countries do have it but there is so little of it that it's not worth the capital cost to go after it.
14 posted on 11/17/2012 11:27:56 PM PST by American Constitutionalist
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To: Orange1998
The USA now enjoys perhaps the cheapest cost and source of natural gas than other counties.
We even have out paced Russia in natural gas development.
15 posted on 11/17/2012 11:29:58 PM PST by American Constitutionalist
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To: gleeaikin

I wonder whether these particular leases are the best leases?


16 posted on 11/18/2012 4:41:45 AM PST by gotribe
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To: scooby321
I bet its Kills Obama

I hope it kills Biden too!

17 posted on 11/18/2012 4:44:19 AM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: SatinDoll

You are correct. China has the largest holdings in the world. The U.S. has the lead in exploration technology and knowledge - after all we started the oil industry, from exploration and production to refining. That leadership is something most politicians don’t ever appreciate. It’s a leadership lead as wide as our IT technology lead. So you can bet that as China and others seek to use their new-found reserves, they will turn to U.S. companies for help.


18 posted on 11/18/2012 4:45:13 AM PST by gotribe
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To: gleeaikin
Well, at least Interior is selling 4.5 million acres of oil land leases in Alaska.

Don' let em bamboozle ya kid!

What good is a lease if they won't let you have a drilling permit, won't approve the site construction, the well plan, etc.?

If you find oil, you still have to get it to market, no road, no pipeline permit, no EIS approval for the righto-of-way, you aren't going to make a dime, but the costs can run into the billions (right, with a 'b'). Oil companies are visionary in that they are always looking for 'the next big thing', but even so, dumping a lot of money into Exploration with little chance for payout is a great way to crash your company.

For now, the easier pickings are in the lower 48, on private leases, especially with the administration making noises about ending "subsidies" (which are the ordinary business expenses other industries deduct, not a payment by the government to the oil industry).

In reality, most oil companies pay three times as much in taxes as they make in profit.

19 posted on 11/18/2012 4:54:41 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: American Constitutionalist
Start building smaller scale refineries at a cheaper cost but more of them all over the place.

So you want lower inefficiencies combined with more infrastructure being built, to duplicate existing capacity.

And you think that lowers cost?

20 posted on 11/18/2012 5:17:26 AM PST by thackney (life is fragile, handle with prayer)
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To: American Constitutionalist
One school of thought on mini-refineries would build 'topping facilities' to remove distillates (diesel, napthalenes) from the crude oil, use the diesel locally and ship the napthalenes and the heavier feedstock via pipeline to larger facilities for further refining. Topping facilities are relatively simple, especially compared to a major refinery.

There is an economy of scale involved in the refining of oil, and larger facilities are already tied into existing pipeline networks--both incoming and outgoing. Permitting a new facility would be tougher than expanding existing ones, as the past few years of refinery development have shown (refiners opted for the latter).

Guarding myriad facilities is perhaps more difficult than guarding one or two, even though larger facilities might be more of a terror target.

Refineries are surrounded by chemical plants for a reason: ship the feedstocks for the chemical plants next door, rather than ship them longer distances. Shipping those same multiple and more specialized feedstocks to chemical plants would negate some of the economic advantage of the more localized refineries. (Think ethylene, tolulene, etc.), especially when the costs of environmental compliance are factored in.

Where modular facilities might pay off is for the production of fertilizer or electricity from otherwise flared wellhead gas, especially if those facilities could be moved in a few truckloads. Some separation of heavier gasses, water, etc. might have to occur onsite for the process to be efficient, and the units would have to be able to be tuned to differing gas mixtures inherent in different wells and over the well's production history. Plus, all that would have to get EPA approval, which could be a real bugaboo (along with allocation of extraction taxes and royalty issues--something for the lawyers to sort out).

Still, something only flared at the production site could conceivably be turned into a viable resource.

21 posted on 11/18/2012 5:18:13 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: Orange1998

Around 12 years ago, ground beef was on sale for 99 cents a pound, too.


22 posted on 11/18/2012 5:25:46 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: RockyTx

Shale oil and gas are plentiful throughout the world’s energy basins. China, Europe, and Argentina have huge resources. The problem is the infrastructure. To develop on a massive scale, you need roads, pipelines, and processing facilities. You also need some economic sanity (Europe has effectively banned hydraulic fracturing, which is the only way to unlock the hydrocarbons). Major oil service companies must be set up with yards, equipment and personnel - this alone will take years to establish overseas. You need the right kind of proppant (spherically-grained white sand works best, found exclusively in the upper Midwest of the U.S.).

All of these are up and running in the U.S., which is why we are the front lines of the unconventional resource revolution!


23 posted on 11/18/2012 5:29:48 AM PST by pghoilman (Earth First. We'll drill the rest of the galaxy later.)
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To: Smokin' Joe

-——Where modular facilities might pay off is for the production of fertilizer or electricity from otherwise flared wellhead gas-——

On Monday I visited a very large American company building equipment for an electric generating plant in Abu Dhabi. It was like the tower of Babel........ engineers of many national origins with two common languages. Those were English and American engineering project management methods. (but I digress)

The electricity generated by the flare gas is used to smelt aluminum. When complete, it will be the largest capacity aluminum smelter in the world


24 posted on 11/18/2012 5:38:08 AM PST by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
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To: gleeaikin

As a rule, at least here in Texas, if a company leases property for production, they have to drill it within a specified time on the lease or they lose it. After they drill it they have to produce something(amount varies, I think) or the lease will still expire. They can drill, however and cut production back to a minimum and still hold the lease indefinitely. At least that is case with my own property that is leased.


25 posted on 11/18/2012 6:05:03 AM PST by Quickgun (I came here screaming and covered in someone else's blood. I can go out that way if I have to)
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Donate here!

FReepathon is still on. Day 49
If not now, when?



26 posted on 11/18/2012 7:32:56 AM PST by RedMDer (May we always be happy and may our enemies always know it. - Sarah Palin, 10-18-2010)
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To: pghoilman

“..All of these are up and running in the U.S., which is why we are the front lines of the unconventional resource revolution!...”
Yep. You are correct on every point you made. Other places in the world have those shale resources as well, but little, or no, physical infrastructure and their governments are totally insane.
The horizontal drilling and fracking technologies were developed right here in the good old US of A. As I type this, I’m sitting in the middle of the Eagle Ford trend in south Texas working on an oil/gas processing facility overseeing a major equipment/piping upgrade to get this little puppy up to about 30,000bbl/day capacity. Oh, one of the companies down here has bought into the fracking sand business...BIG TIME. Not only for their own corporate use, but for when the rest of the world eventually wakes up and digs their head out of the butts.


27 posted on 11/18/2012 7:33:41 AM PST by lgjhn23
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To: neverdem

Human beings are the ultimate resource. Yet, liberals keep getting elected by using resource scarcity to terrorize people. Go figure.


28 posted on 11/18/2012 7:54:11 AM PST by 1010RD (First, Do No Harm)
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To: Smokin' Joe

A simple topping plant is very unlikely to meet current EPA requirements of ULSD.

Cost of Diesel climbed because cost of making ULSD climbed. It isn’t made with simple topping.


29 posted on 11/18/2012 8:32:06 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

That would depend on feedstocks, I would think. No H2s in Bakken oil.


30 posted on 11/18/2012 9:31:43 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: Smokin' Joe

I have never seen an oil assessment for any location that meets the 0.0015% sulfur requirement of the EPA.

While much or most of the Bakken is classified as sweet, I don’t think anything is that sweet without sulfur removal processes.

Have you seen anything meeting that criteria?

I suspect the sweetest crudes are going to be nearly 100 time too much sulfur.

http://www.argusmedia.com/Petroleum/Crude/~/media/C21F9F5995164371B7D51651F950F49E.ashx


31 posted on 11/18/2012 10:36:40 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
I bow to your superior knowledge of refining.

I had no idea that the standard was that (insanely?) low. How much of that sulfur would come out in the distillate versus remain in the other fractions?

32 posted on 11/18/2012 11:22:59 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: Smokin' Joe
How much of that sulfur would come out in the distillate versus remain in the other fractions?

I think (but don't know) that the distillate is going to keep the sulfur in similar ratios. A significant part of that sulfur is bound in the molecular string; it isn't pure hydrogen-carbon bonds only.

It is often removed with hydrotreating, which is a milder version of hydrocracking. This process creates H2S in order to make it removable from the product stream. It requires a source of Hydrogen. In a refinery, that is often from steam reformation of Natural Gas.

Takes more than a still these days to stay legal with the EPA.

33 posted on 11/18/2012 6:52:06 PM PST by thackney (life is fragile, handle with prayer)
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To: Smokin' Joe
I had no idea that the standard was that (insanely?) low.

Sorry, I should have supplied some info on that.

A 15 parts per million (ppm) sulfur specification, known as Ultra Low Sulfur Diesel (ULSD), was phased in for highway diesel fuel from 2006-2010.

EPA Home > Transportation & Air Quality > Fuels and Fuel Additives > Diesel Fuel
http://www.epa.gov/otaq/fuels/dieselfuels/index.htm

34 posted on 11/19/2012 5:01:22 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

Thanks!


35 posted on 11/19/2012 5:20:08 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: lgjhn23

Yep - I am up to my eyeballs in the fracking business! It’s incredible technology, and we’re in the early innings of a game that will someday soon make North America energy independent. A worthy cause! Never thought it possible a few years ago. Too bad the industry’s reputation still gets abused by the leftists.


36 posted on 11/19/2012 7:30:12 AM PST by pghoilman (Earth First. We'll drill the rest of the galaxy later.)
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To: pghoilman

“...Too bad the industry’s reputation still gets abused by the leftists....”
Leftists are chronically mentally sick. Liberalism rots out the brain to think straight. EPA isn’t much better since they’re run by liberals. Inmates running the asylum so to speak. They’re hellbent on trying to destroy the USA. Rest assured, they’ll continue trying to find ways to shut us down... Our job is to see that they don’t and to get as much of this out of the ground, treated, and then on to the market as possible. The sheer number of jobs this industry creates is what I think really bothers them as it creates people not dependent on them for anything.


37 posted on 11/19/2012 9:00:25 AM PST by lgjhn23
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To: lgjhn23

>>and their governments are totally insane.

We’re working on that one. Lisa Jackson’s people are on it!


38 posted on 11/22/2012 4:19:21 PM PST by FreedomPoster (Islam delenda est.)
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To: pghoilman

Exciting times ahead and it looks like the US is poised to benefit if proper choices are made! Nice tag by the way.


39 posted on 11/23/2012 8:06:37 AM PST by Eyes Unclouded ("The word bipartisan means some larger-than-usual deception is being carried out." -George Carlin)
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To: Yardstick
Thank God for Big Oil and the coming American oil boom. It’s one of the few reasons for optimism these days.

I'd like to think that way, too. Except that "BIG OIL" doesn't think of themselves as American. They think of themselves as global entrepreneurs in search of maximum profit and while there is absolutely nothing wrong with a profitable bottom line, in the case of energy, it is literally the life blood of the country. Yet the folks at EXXON and SHELL et al will see nothing wrong at all in selling US supplies to CHINA or wherever they can get maximum profit at the expense of our national security. Of course, true to form, OBOZO will do everything he can to help them undermine us.

40 posted on 11/23/2012 8:27:43 PM PST by ExSoldier (Stand up and be counted... OR LINE UP AND BE NUMBERED...)
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