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CNN Presents
Sunday, March 19, 2006
CNN Presents has been airing a great documentary this weekend - We Were Warned: Tomorrow's Oil Crisis. It covers the whole range of topics on global energy consumption and alternative energy, while including a 2009 energy crisis scenario which does not sound far-fetched at all.
The final airing this weekend is tonight at 8 PM PST and it is available for viewing online at the link provided above - it is well worth watching.
James Woolsey and Matt Simmons are among the people interviewed by correspondent Frank Sesno. While James Woolsey in his Prius doesn't seem to be a terribly compelling image, Matt Simmons' claim about Saudi oil reserves immediately preceding assurances from the head of Saudi Aramco does make you think (there has been no independent audit of Saudi oil reserves for many, many years).
The story of the Canadian tar sands and Brazilian sugar ethanol are informative and well done, as is the segment where a GM executive is questioned about the vehicles they build - why they build them and what drives them to change their product line mix.
10 comments:
One of the facts I found most interesting is that only 1 out of 75 Chinese holdholds now own a car.
Think gas prices will be rising in the coming years?
One very interesting thing that comes out of the documentary is that Robert Lutz does not seem to be opposed to a gasoline tax hike.
The part about Brazil being completely oil-independent in another year or two was pretty shocking. This is a country of almost 200 million people.
Just today, I spotted a gas station in Saratoga, CA (larger "Silicon Valley" area) that listed $2.999 for Premium gas. Regular @ 2.799. Elsewhere in the area Regular is mostly between 2.60-2.70, Premium concordantly 2.80-2.90.
Indeed trouble is ahead.
Check out my take on the Iranian Oil Bourse
http://globethistle.blogspot.com/
While the story of the Canadian tar sands might be well done, it was not informative.
They said they used hot water to seperate the oil from the sand. The trillion dollar question that did not get asked was how to optain hot water near the polar circle.
They accomplish this by burning natural gas to heat the water. What will they turn to as natural gas runs out? Coal? Nuclear? The tar sand itself? Will the process even be net energy positive post natural gas?
Right now, it's natural gas.
Total S.A. bought Deer Creek Energy and is building an onsite reactor for this purpose.
Yes CNN Presents did skimp on details about the oil sands. Here's one I don't think they mentioned:
Production in the oil sands starts getting profitable when crude trades above $15/barrel. At current prices the gross profits are huge.
That number should also give you an idea of what the net energy extraction is. Natural gas prices are high, yet they still break even at $15/barrel. The net energy extraction must be high, otherwise, the whole operation would not be economical.
iron56, thanks for the link to the report.
However, what exactly do you consider false about my statement?
In that report you found for us, they provide a rule of thumb formula for calculating the costs per barrel produced (page 51). The formula is $2 + 1 Mcf of gas per barrel of oil produced. 1 Mcf is 1 thousand cubic feet. The current cost of 1 Mcf is about $8 US (http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp). So a rough estimate of costs today for thermally intensive extraction techniques is about $10/barrel.
I agree with you that natural gas is the largest operating cost for in situ extraction. However, the proportion of costs associated with natural gas tells us nothing about the overall efficiency of the economic activity of extracting oil from sand.
However, if you know it takes 1000 cubic feet of gas to extract 1 barrel of oil, that tells us something. From http://www.eppo.go.th/ref/UNIT-OIL.html we can see that 1 barrel of oil has the equivalent energy content as 5,487 cubic feet of natrual gas.
5,487 is much larger than 1,000. Therefore, the process is a net energy positive.
When I stated,
"That number should also give you an idea of what the net energy extraction is. Natural gas prices are high, yet they still break even at $15/barrel. The net energy extraction must be high, otherwise, the whole operation would not be economical."
I meant that you don't have to analyse the science, all you need to know is that the market price of the product is much higher than the current operating costs. The market doesn't stray too far from physical reality for too long. We can conclude from prices alone that the operation is net energy positive (ignoring the market value of non-energy uses of oil).
Does the 1000 cft of gas include the gas or energy equivalent of operating the extraction and transport of the gas? It has to be looked at as a closed system.
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