
A Fresh Look at Oil’s Long Goodbye - gruseom
http://dotearth.blogs.nytimes.com/2012/06/25/a-fresh-look-at-oils-new-boom-time/
======
tokenadult
The report, "Oil: The Next Revolution: The Unprecedented Upsurge of Oil
Production Capacity and What It Means for the World," underlying the New York
Times piece kindly submitted here:

[http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%...](http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf)

The appendix shows the methodology.

------
ck2
Did anyone ever predict Saudi Arabia would actually reduce the price of oil as
a method of economically attacking it's enemies? Because the USA recovery is
about to be greatly helped by that.

Oil would last a lot longer if car makers would provide the 60mpg cars they
have in Europe, here in the USA too. Instead they just stop advertising with
the average mpg and switch to only advertising highway mpg to make the cars
seem better, while city mpg remains horrible.

~~~
tadfisher
Few gasoline-fueled cars actually get 60 miles per US gallon of gasoline in
Europe, because they advertise MPG numbers in imperial gallons (3.785 L vs.
4.546 L).

They have plenty of small diesel-fueled cars that get around those numbers,
but remember that diesel is less energy-dense and is more expensive in the US,
making owning a diesel car a wash here in the best case.

~~~
ams6110
You mean diesel is more energy-dense. Gasoline has about 114,000 BTU/gal and
#2 diesel has about 130,000 BTU/gal (varies somewhat by season due to
different blending).

~~~
artsrc
I got the impression the grandparent was comparing European diesel to US
diesel. But you compared diesel to Gasoline.

------
etrain
Whether or not you believe we're approaching or passed Peak Oil, it's
astounding the impact that technology improvements in horizontal drilling and
shale gas are having on domestic oil and natural gas prices vs. the rest of
the world.

Currently, natural gas trades for ~$3 in the US vs. ~$12 in Europe. No pure
arbitrage available here, because Nat Gas is extremely expensive to transport.
But, as the US infrastructure develops (natural gas gas stations, more power
plants running on nat gas, etc.), this discrepancy will deteriorate.

Deliberately ignoring the environmental implications, this is a great thing
for the US. For once, we might actually be able to use energy for leverage vs.
the rest of the global economy, not the other way around.

~~~
rdl
If we can move coal and oil loads to natural gas, it's an environmental win,
too. (not as big as nuclear or wind or solar, but still better, especially for
everything except CO2).

I would almost argue for natural gas + global warming abatement (ocean
seeding, atmospheric modification) as the least bad likely path through the
21st century. At the very least, move other fossil fuels to natural gas while
working on other energy sources.

~~~
quantumhobbit
Correct me if I'm wrong, but isn't natural gas a win on CO2 also. Low
molecular weight hydrocarbons, when burned, produce more H20 and less CO2 per
unit energy than the heavier hydrocarbons. CH4 and C2H6 have relatively more
Hydrogen than C7H16 .etc. Coal is almost pure carbon, so all hydrocarbons win
vs. coal.

~~~
InclinedPlane
Quite so. Think of CH4 as sort of half way between burning coal and burning
Hydrogen. Methane and ethane generate about 14 to 15 kg of Carbon emissions
per gigajoule of energy released in combustion, compared to 18 for
gas/kerosene and 37 for coal. So switching from coal to natural gas has a
giant impact on carbon emissions (cutting them by more than half for the same
energy use) while switching from gasoline to natural gas still reduces
emissions by more than 20% (and that doesn't factor in the emissions due to
refining, which are significant).

------
mkr-hn
This means the world won't descend into chaos before we finish the transition
away from fossil fuels.

I'm not worried about advancement in renewable energy. It will slow as oil
gets cheaper, but not too much. Energy companies will continue to develop it
as a long-term plan since they've already spent so much time and money working
on it.

~~~
khuey
Why would they do that? Isn't that the sunk cost fallacy?

~~~
mkr-hn
There are only so many ancient seabeds to scrape and pump. We will eventually
run out. They already have a jump on preparing for the inevitable, so it would
be silly to toss it out the window just because oil has been given a reprieve.

------
einhverfr
I think there are some interesting issues in the theories (as well as peak oil
theories).

The key problem is that with a lower EROI, unconventional hydrocarbon sources
are going to be fundamentally more expensive. So I don't think you can see a
price collapse in oil as a result. Conventional hydrocarbon production also
may or may not have peaked, but the principle reason for any peak is likely to
be economic in nature rather than solely dependant on what's in the ground.

Prior to the 1960's oil discovery was still growing. After the 1960's
conventional oil discovery had peaked, and I see this as a major reason why
the 1973 oil crisis was possible-- there was a growing awareness that oil was
a finite resource that wouldn't be with us forever. After 1973, oil prices
have, adjusted for inflation, never returned to their pre-1973 stability or
level. This represents a shift where oil has been supply-restricted rather
than demand restricted (if peak discovery is peak 1, this is peak 2). Peak 3
may be a peak in conventional oil production (light sweet crude). I think we
are _at_ peak regarding LSC production and have been for some time, and that
peak is political and economic rather than reserve-based.

------
csharpminor
Did anyone else notice that BP was a major contributor of funding to this
report? I'm working my way through this, but it's hard to see it as anything
more than the oil industry using academia as a mouthpiece.

------
bennyfreshness
Although I'm all for energy independence and the benefits of cheap energy I'm
hesitant to think fracking's long term affects are worth it. This documentary
does a decent job of depicting some bi-products of fracking.

<http://www.gaslandthemovie.com/>

~~~
brc
Gasland is propaganda from one person (or groups) point of view. They
definitely had an angle to push, and push it they did.

Not saying there aren't truths in the movie, but I've read enough on the
background to know it was a movie with an agenda. The famous flammable
tapwater, for example, is a naturally occuring phenomonen in many places.

Much more needs to be done on the studying of injecting the ground to see how
this affects groundwater and ground stability. But fracking is not new - it's
been around for a long time.

------
mkramlich
> The report is written by Leonardo Maugeri, a top oil company executive

This is the point where your skeptical Spidey senses should start to tingle.

