Skip to comments.The Next Oil Revolution
Posted on 11/17/2012 9:08:10 PM PST by neverdem
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 Americas 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 reports 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 worlds major oil exploration and development projects, Maugeris report(PDF) concluded that, by 2020, the worlds 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 Canadas oil sands, US shale oil, Brazils 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, Its yet another reminder that what the expert consensus assure us to be true very often isnt adding It was equally apparent we were running out of oil until we werent.
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 isnt.
I bet its Kills Obama
I bet its Kills Obama
I bet Obama tries to kill it.
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.
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. Whats 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 dont 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.
Thank God for Big Oil and the coming American oil boom. It’s one of the few reasons for optimism these days.
"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.
For starters, start up the refinery on the California coast that they have stopped from using for over 40 years.
is there some reason that shale oil
only exists in North America?
is shale oil existed worldwide,
the Arab hegemony would be broken
Oil shale is not exclusive to the U.S.A.
I believe it requires specialized equipment to find it, however.
I wonder whether these particular leases are the best leases?
I hope it kills Biden too!
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.
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.
So you want lower inefficiencies combined with more infrastructure being built, to duplicate existing capacity.
And you think that lowers cost?
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.
Around 12 years ago, ground beef was on sale for 99 cents a pound, too.
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!
-——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
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.
“..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.
Human beings are the ultimate resource. Yet, liberals keep getting elected by using resource scarcity to terrorize people. Go figure.
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.
That would depend on feedstocks, I would think. No H2s in Bakken oil.
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.
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?
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.
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
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.
“...Too bad the industrys 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.
>>and their governments are totally insane.
We’re working on that one. Lisa Jackson’s people are on it!
Exciting times ahead and it looks like the US is poised to benefit if proper choices are made! Nice tag by the way.
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.