Wednesday, November 07, 2007

Oil or Liquids?

Two camps stare at one another across the dividing gulf of oil supply. In one are the "peak-oilers" while the other contains the "cornucopians" (otherwise known as peak-oil deniers). The latter group argue that the Hubbert Peak analysis is invalid because supplies of oil, when they enter their inevitable phase of depletion, will be substituted by other sources, often referred to as unconventional oil or "liquids". One category of such "oil" includes "condensates" and "Natural Gas Plant Liquids (NGPL)". Condensates are very pure mixtures of straight-chain hydrocarbons in the range C2 - C12 (containing molecules with between 2 and 12 carbon atoms), cyclohexane (and other naphthenes) and various aromatic compounds (e.g. benzene, toluene and xylenes). NGPL are mostly ethane, propane, butane, isobutane and some C5 and higher homologue hydrocarbons.

Many gas-wells are rich in NGPL. "Condensate wells" are gas-wells that are rich in hydrocarbons of the kind referred to vide supra. When they are first struck, oil-wells expel oil under the natural pressure of gas that they also contain, but the pressure drops as they are exploited and ultimately artificial pressure (e.g. from compressed CO2) must be applied, or pressurised water, among the range of enhanced recovery methods that are employed. There are also "dry-wells" which produce principally methane, but the relative composition of gas and liquid in a well varies enormously according to the local geology and origin of the hydrocarbon resource, overall.

To the tally of unconventional oil is then added oil (tar) sands, such as exist in massive quantity in Alberta, Canada; bitumens ("extra-heavy oil"), for example in the Orinoco belt in Venezuela; and oil-shale, as found for example as a large resource in Colorado. To make up the grand total of 3.7 trillion tonnes, as it has been proposed there is, oil from gas-to-liquids (GTL) and coal-to-liquids (CTL) processes are then costed-in. GTL is a useful means to produce high quality (clean) diesel oil from natural gas, by conversion to syngas and processing via Fisher-Tropsch (FT) methods into hydrocarbons. In the two CTL methods, coal can be converted (indirectly) to syngas and thence hydrocarbons using FT, or it can be hydrogenated (directly) to diesel fuel, based on the Bergius process, where coal powder is reacted with hydrogen under pressure as dispersed in a heavy hydrocarbon oil.

Deep offshore oil, such as that under the Gulf of Mexico, which can only be got by drilling through thousands of feet of water before the underlying rock is drilled, again through thousands of feet, is also accounted for under the heading of unconventional oil, as is true of the potential oil under the Antarctic and Arctic polar regions.

In this last May, the US Department for Energy began to speak of "liquids" rather than "oil", when making projections of exactly how much there will be available in the future, which looks like an ushering-in of the Oil Dearth Era. They predict that there will be a 400% increase in the production of unconventional oil in the US, from 2.4 million barrels a day to a daily 10.5 million barrels in 2030. This may be taken by cornucopians as a rallying-cry, in confirmation that peak oil is not important, in the sense that falling supplies of conventional crude oil will be more than matched by unconventional sources.

However, it is not a mere matter of how much "oil" there is in the ground (in some form or another) but how easy it is to get at, and frankly none of it can be obtained as readily as crude oil can. Bioethanol (corn ethanol) is a separate and much vexed issue, but most vexations rotate around an axis of costing-in other sources of energy used by the necessary agriculture and processing and that there must come the time eventually when growing crops for vehicle fuel conflicts with growing them for food to fuel humans and animals.

Making oil from tar sands is highly intensive in terms of other resources such as natural gas and indeed water. It has been proposed to build two nuclear reactors in Alberta to provide the energy for steam with which to drive the sticky bitumen out of the "sandy" mineral and to crack it into a suitable fuel. Then there are numerous issues surrounding pollution of the environment, and so it is not a happy solution on either count.

According to geological surveys, there are some 2.1 trillion barrels of oil (around twice what is believed to be left worldwide, in the form of recoverable conventional crude oil, if we believe the Saudi estimates of their reserves) present in shale rock in the US, but once again, extracting it is highly energy intensive, and bad for the environment too, since it will be necessary to strip-mine a huge area of wilderness to obtain the rock, which then needs to be heated to around 500 degrees C to get the oil out; then the resulting mountain-sized detritus of waste material, rubble and so on will need to be dumped somewhere.

Conventional oil is almost at $100 a barrel, and that makes many of these alternative approaches to unconventional oil appear attractive on economic grounds. It has been pointed out that the level of viability of these alternative technologies always seems to be about $10 above current crude oil prices. A few years ago it was $25 a barrel and now it is $75; in fact way below the latest $96 barrel. Hence on economic grounds, it would appear that anything goes! However, the EROEI (energy returned on energy invested) will ultimately decide whether a given source is "economic" or not, and clearly the answer is "not" when it takes more energy and other resources to extract oil from a given source than can be recovered from the oil itself when it is burned.

We should not be fooled by estimates of how much "oil" there is in the form of "liquids", the supply of which must inevitably fall. Our best option is to look toward means for reducing the amount of oil that we use, almost certainly by curbing the need for transport via a relocalisation of society, and other more efficient living strategies, rather than waging war on other nations or on the environment in an ultimately vain effort to preserve the status quo of excess.

Related Reading.
(1) "It's no longer "oil", it's "liquids". By Jerome A. Paris. "The Oil Drum" blog, posted October 30th, 2007.


Anonymous said...

I once asked a (by USA standards) right wing economist "what is the replacement value of oil?". He deferred, saying that it was (if I recall correctly) an academic question. By comparison, one answer I found here -
"..He cited Francois de Cha(r)denedes' view that petroleum, from the standpoint of its replacement cost out of our current energy "budget", essentially the incoming solar flux, had cost nature "over a million dollars" per U.S. gallon (US$300,000/L) to produce. From this point of view its use as a transportation fuel by people commuting to work represents a huge net loss compared to their earnings.[12].."

The geologist's name is also spelled without an r (de Chadenedes). This was a calculation made 30 to 40 years ago. It is quite controversial. Yet it does explain in part the "addiction" to oil and its consequences.

Professor Chris Rhodes said...

Yes, I had come across this figure, though not the detailed calculation. Undoubtedly, the cost per litre would be millions of dollars in today's money!

I think the truth is that the resource is effectively "priceless", since at least within foreseeable lifetimes once it is gone it is gone!

A relocalisation of society into smaller communities that demand less transportation would apply the brakes on the current and relentless surge in wasting oil.


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