New energies impact in oil prices

[0707]

“The discovery of new oil fields has caused people to expect lower oil prices. The US has discovered a new oil field in the Mexican Gulf. It's expected that the amount of oil in storage in the US will double because of this field. This will push down world oil prices.
The pressure in international 'hot spots', such as Iran, has decreased, and even if some countries do impose sanctions on Iran, they will not be related to the export of oil.
It is predicted that this northern winter will be a warm one, so the demand for oil will not be as high as expected.
It remains to be seen whether or the current low price of oil will last. After all, oil is a strategic material and limited resource that is in great demand. There is a lot of extra money in the world financial market but few products worthy of investment, so oil remains an important area of investment. It is unlikely that the price of oil will drop back to what it was 8 years ago. In the long run, the conflict between supply and demand will only be eradicated by a breakthrough in alternative energy resources. Based on the current technology, only when the price of oil is above $40 per barrel, will coal conversion technology have a commercial future. Other emerging technologies will take time to perfect. Therefore, the opinion of the mainstream is that the price of oil will fluctuate between $40 and $60 per barrel in the current international political and economic environment.“

Coal, Natural gas, nuclear power, hydroelectric and geothermal power generation are the traditional oil alternative energies.

As recyclable energies we have:

· Photovoltaic power generation
· Wind power generation
· Solar heat utilization
· Temperature difference energy
· Waste power generation
· Thermal utilization of waste
· Production of fuel from waste
· Biomass power generation
· Thermal utilization of biomass
· Biomass fuel production
· Snow ice heat utilization
· Clean-energy motor vehicles
· Natural gas cogeneration
· Hydrogen Fuel cells

How much does represent these both energies (oil alternative energies and recyclable energies) in comparing to oil?

Can oil prices be push down by near future developments increasing in recyclable energies?

Are policies of dependent oil countries through taxes on crude imports limiting the demand and flooding OPEC producers with oil?

 

[sms]

The vast majority of a barrel of oil goes to vehicle fuels, gasoline, jet, diesel. Home heating oil, is basically diesel. The byproduct of oil exploration is natural gas, which primarily goes to run electric power plants and heat homes in the winter. There are few oil fired power plants any more, most are either natural gas, coal, or nuclear.

So you are kind of making an apples and oranges comparison, it you go on a BTU basis, the alternative are a small small percentage and would have little effect on oil price. Wind, and hydro do offset the use of natural gas, and thus may have some impact on natural gas price, but not much...

-The future's so bright I gotta wear shades!

 

[zdas04]

SMS,
Natural gas has not been a "byproduct of oil exploration" in a couple of decades. In fact there is an order of magnitude more drilling activity searching for new gas than there is searching for new oil in countries with a long history or Oil & Gas production. Countries like Egypt and Trinidad are hunting for gas much more actively than they are looking for new oil. New "easy" oil fields just aren't happening any more. The deep offshore stuff is still focused on oil, but those fields take decades from discovery to commercial production and even these fields are being much more careful in they way they develop the associated gas than companies have been in the past.

0707,
You should know (being in the industry from your tag) that the hype around a new deep-water discovery has very little to do with the realities. BP discovered what is now Thunder Horse over 10 years ago with all the fanfare of it being bigger than the North Slope and will end dependence on foreign oil, etc. ad nauseum. Today we're still waiting for it to come on line. The discoveries earlier this year will be the same sort of thing. They may replace the decline in domestic production between now and the time they come on line, but then again population will have increased in the interum and imports will be higher than today.

The last time prices were high (late '70's), the tar sands projects were very well funded by both industry and government. When the oil-price collapsed in 1986 the projects were shut down with a whimper. Sustained prices above $60/bbl would certainly stimulate high levels of research activity in coal sands, tar sands, coal-to-gas, and hydrate mining--some of those alternatives may get cheep enough to survive the next price drop, others won't.

The standard list of renewables will all have a sideshow place until petroleum products get really expensive (say $250/bbl?) and then some of them will find a way to play a major role. Short of outrageous prices I don't see any of them being anything but a political toy.

David

 

[KENAT]

Agree with SMS. With a few exceptions most of the sources you list are probably best suited to electricity generation.

Until we find/implement a way to efficiently/economically use the energy from those sources to supply transportation for both people and goods (might be directly powering personal vehicles or maybe better/more public transport that can take advantage of it, such as electric trams, trains, trolley buses etc) the impact will be limited.

 

[sms]

Zdas, sorry, you are certainly right and I should not have minimized natural gas as a valuable product in itself. Much of what I do is in places like deep offshore where there is no infrastructure to move natural gas, so gas is a problem not a product....

Having said that I am starting to get involved with GTL and LNG, which is really just a matter of moving gas from places with no use for it (like Nigeria) to places that need it (like the US).

-The future's so bright I gotta wear shades!

 

[zdas04]

SMS,
No problem, I work with SPE a lot and am more than a little touchy about the role of gas in the industry's future. SPE has a definite and long standing bias that gas is just something you get out of the way to produce oil. I proposed an "Artificial Lift vs. Deliquification" paper for the ATCE and it was rejected very early in the process. Sent the same idea to Oil & Gas Journal and it was accepted immediatly and published as a cover story last February. When people put gas into a minor role I go on the defensive for all of us who have trouble spelling "oil".

David

 

[DrillerNic]

The "Big discovery" in the GoM was Chevron prooving the GoM deep Jurassic play is oil bearing. However, one discovery does not make a new fairway...look at the West of Shetland hype in the UKCS a few years ago. This Jurrasic play does have a potential upside of billions of barrels acording to the Geology PhDs, but Dr Bit has the final word!

Most of the energies 0707 mentioned are electrical and space heating technologies- not much in the way of suitable transport fuels. As the main demand for oil is now as a transport fuel, demand for oil may not be drastically affected.

Gas has supplanted oil (and coal) in the electrical power market, which is why the oil industry is rapidly becoming the gas industry. However in the US and Northern Europe, gas reserves are dwindling and so these alternative enrgies may become viable to replace gas fied electricity plants. However, it's also possible to replace US and North Sea gas with LNG (several regassification plants being planned or built in the UK and in Baja, Mexico for the US market) and for Europe, with pipelines from Russia or Algiera.

So it's hard to say if local gas will be supplanted by these alternative energies or by imported gas- the big consideration is probably political moves regarding greenhouse gases- if there is a really strong move towards reducing greenhouse gases in electrical power generation (tax breaks, carbon markets, carbon allowances etc), then these a;ternative energies could supplant gas (either local or imported) in the elctrical power generation.

 

[sms]

"HOUSTON – Shell Offshore Inc. (Shell) announced today that it will develop the Great White, Tobago and Silvertip Fields via a Perdido Regional Development host, located in Alaminos Canyon, offshore Gulf of Mexico, approximately 200 miles south of Freeport, TX. Moored in about 8,000 feet of water, the regional DVA (direct vertical access) spar will be the deepest spar production facility in the world. First production from Perdido is expected around the turn of the decade, with the facility capable of handling 130,000 boe/d."

Turn of the decade is 3-4 years, that is pretty agressive....

-The future's so bright I gotta wear shades!

 

[zdas04]

With Shell's track record for meeting published dates (very similar to the rest of the majors) I'd have to ask "the turn of what decade?" 2020 is probably more likely than 2010.

David

 

[sms]

Now now David, I represent that statement... ;-)

-The future's so bright I gotta wear shades!

 

[jmw]

Gas prices have, for consumers, been on the rise due to the "rush to gas" quickly taking up the easily available resources.
However, I hear that just recently the gas price went negative briefly due to excess availability (or a lack of storage for new production).

JMW

http://www.ViscoAnalyser.com

 

[0707]

Starting with significant reduction in OPEC oil supply, prices will go up, requiring equally significant reduction in demand to bring back prices to go down and increase demand again, meanwhile new energies are shyly starting to put pression on this process.

Luis

 

[GregLocock]

There are many technologies in the field we could describe as "oil from..."

None, obviously are as cheap in the short term as "oil from holes in the ground".

But many are cheaper (in the medium term) than $70 per barrel.

So, OPEC have a bit of a balancing act. If the price of oil falls, their income falls. If the price of oil rises, and stays high, "oil from..." starts to look attractive.

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[kenvlach]

Re Greg's remark: In October, OPEC agreed to cut production 1.2 million bpd starting Nov. 1. They seem to be keeping the price ~$60/barrel to avoid making alternatives competitive.

Agree with zdas04's skepticism re "The discovery of new oil fields...the amount of oil in storage in the US will double because of this field. This will push down world oil prices."

Fortuitously (for users), the new find may offset the reduction in production from Mexico's Cantarell offshore field, the world's second-largest oil complex. Becoming played out + saltwater intrusion:
Will Mexico Soon Be Tapped Out?

http://www.energybulletin.net/18505.html

 

[dcasto]

The last three items are not recycleable energies.

 

[25362]

Wonder why nobody included "blue energy" in the list of possible useful complementary alternatives. See:

http://en.wikipedia.org/wiki/Blue_energy

 

[0707]

25362

In my first post Temperature difference energy is blue energy