RE: Educated Opinions on Climate Change . . . . Peak Oil 3

Reading in Forbes recently suggests that the natural gas finds recently are a concern to experts, because the number of expiring leases, and the amount of gas found will result in a sharp drop in gas prices, to the point that the US may become the worlds largest exporter of natural gas.

This point has not been missed on companies who are gearing up to use compressed natural gas in some trucking fleets.

The other concern is that much of the fleet of power plants will switch to natural gas, and become more volitle in energy prices to consumers.

I recomment reading if you can.

I recall when switching a boiler from fuel oil to natural gas, we got a temporary reduction in boiler capacity. I think it was the low luminosity of the gas flame that cause the loss. Capacity came back to par when we went back on fuel oil. If all these power plants switch from coal or oil to gas, will there be a significant drop in capacity? Perhaps we can match any drop by conserving.

HAZOP at

I believe that abiotic (abiogenic, non-organic, etc.) oil is a possibility.

The point that scares me about this is what happens if we tap into an extremely difficult (impossible) to control reservoir of it?

I also believe that the carbon credit issue has arisen because of the knowledge, in some circles, that oil is not really the scarce resource, but oxygen and the capacity of the atmosphere to absorb the products of combustion.

In the 1970's, average recovery of oil from onshore oil reservoirs was 30% of original oil in place. Using 1970's technologies and techniques (wellhead price of WTI crude was around $8) the industry was leaving 70% of the original oil in the ground at abandonment. Prices increased until in 1986 people were rewriting computer programs to allow for the possibility of three digit oil prices, recovery estimates went to almost 40%. When the price collapsed in late 1986, research came to an abrupt halt and recovery numbers started trending down. In the years since, prices have rebounded very slowly, and technology advances have been evolutionary, but steady. An oil well drilled in 2012 will probably have reserves booked at nearly 50% of original oil in place.

The above should indicate that the price of oil drives the recovery. If it cost me $25 USD to get a barrel of oil to the surface, then in a $20 USD/bbl market I'm not going to bother, but at $100 USD/bbl I'm kind of excited to increase the number of barrels I get to market and will spend a bit of money.

The old Soviet Union mostly didn't bother. They had several monster fields that they were just skimming the very top of the cream off of. This satisfied their demand and refining capacity so why spend an extra Ruble? A friend of mine spent several years in Baku while it was still Soviet and his estimate was that they would get less than 15% of the original oil in place in that field. Today, there are good pipelines to deep water ports and the old Soviet fields have access to world oil prices. Spending money on the old monster fields (some have been producing for over 100 years to recover less than 10% of the oil that is there) makes all kinds of economic sense. Hence the rejuvenation successes that are being reported today.

Many plants (and vehicles) that have switched to CNG have experienced huge losses of available power. Not all. What people try to do is take the old petrol (or fuel oil) lines and try to shove natural gas at very low pressures into them. The reason for the low pressure is that air supply pressure is low--maybe naturally aspirated or at most a 1.5 compression ratio blower. If I can get my air pressure up to around 4 bar(a) (call it 43 psig at sea level) and supply the methane at that pressure, I generally don't see any reduction in output capacity, but I do have to pay the fuel price of the air compressor.

The first article I saw on Peak Oil was in 1981, and the authors saw $1,000 USD/bbl oil by the year 2000 because peak oil was 2 years out. There have been hundreds of meaningless predictions since. We ain't hit "peak oil" yet, and I don't see it on the horizon. Peak oil assumes declining supplies with increasing demands. Macro economics theory would say that you can only balance that equation through rationing (by increasing prices). At oil price hovering around $100 USD/bbl, people are finding amazing new ways to increase the recovery from old fields (many people said the Permian Basin in West Texas would be totally abandoned by 1990, I was through there last month and saw dozens of drilling rigs and thousands of pump jacks going up and down).

If the politicians can get out of our way, Shale Gas and bio-gas have the ability to turn the U.S. back into a net exporter of energy. That assumes that we get serious about developing gas-to-liquids technology to covert methane into a room-temperature liquid fuel. Existing technologies works, but they have some serious hair on them. Generating methane from organic wastes (or even from crops) is well-understood technology that works really well. I think that the only hurdles to increasing this technology is the price of natural gas and the farm lobby that is so focused on ethanol.

David

Sort of what I thought. The decrease in capacity from switching fuels is in the design of the burner. If the burner is designed for the fuel, then there is no reduction in the heat output, given the exaust mass equasion is also taken into account. But in general, natural gas uses less excess air, so the switch shoulden't be restricted by the lower exaust mass.

With natural gas you may use a compressor, but much of the coal handeling equipment, or attomizing air won't be required. So the over all drag of overhead should come out some what simular.

However, there is a concern from NERC, about the freezing up of natural gas wells in the colder Winter, reducing the short term deliverability.
I myself am concerned about the price volitility of gas or oil, verses coal (which is usually purchased on long term contracts).

Thanks zdas04, your answer makes sense. I don't think we had air blowers on the boilers in question. I don't have any expertise in power boilers but I am still guessing that those designed to burn oil and/or coal will lose capacity when switching to nat gas.

HAZOP at

Freezing gas wells is rarely a well issue, it is much more often an issue with wellsite equipment. Usually, raw fuel gas and control gas hits a dead-end point and the moisture condenses out and freezes.

My son is a pumper on a group of gas wells and yesterday he had 30 compressors down due to fuel gas issues. When natural gas prices were in the $10 USD/MCF range, that number would have been 0-2 because there was money to put on extra staff to do restarts and money to upgrade equipment where there was problems. At less than $4 USD/MCF, staff is down and equipment has to be seriously broken to get repaired/replaced.

A wholesale power plant shift to natural gas would put upward pressure on prices; which would encourage long-term contracts (which used to be the norm, but during periods of decreasing prices has fallen out of favor) and improve overall supply reliability. With current demand I haven't seen very many end-users that couldn't be serviced from line pack during supply outages.

A shift to natural-gas derivatives as a motor fuel would accelerate supply-development.

David

An example power plant which produces 600 MW for an hour will burn 100 Tons of coal/ hour. This is called a base load unit. To replace it with natural gas would require an equivlent BTU value of gas if the plants had the same efficencies.

However, many new combined cycle natural gas plants are more efficent than coal/steam plants, so a reduction of total BTU would be seen.

Is the line pack equivlent to 100 tons of coal an hour?

However, this is all subjective to if it is forseen that nat. gas will be lower in price in a longer term than coal.

In a shorter term nat. gas can compete with intermediat and peaker plants.

Realistically would they convert large power plants to Coal? I seem to recall in the UK during the 'dash for gas' that they built new plants, but someone like Scotty may be able to correct my thinking.

Still seems a bit of a waste to use NG large scale for stationary power generation when it could be used for transportation, (no I don't necessarily mean after factory conversion kits for cars) reducing demand Oil for that application when it has so many others where NG isn't such a good stand in.

The greenies HATE coal. It seems to be an irrational hatred, but that doesn't make it any less virolent. A few years ago California (truly the land of fruits and nuts) passed a wooly headed regulation banning power from coal-fired plants being used within the state. Consequently users in CA had to buy themselvs out of long-term contracts with coal-fired plants (at a significant cost). End result? Power users and utilities in Arizona and Nevada that had a share of the big hydro plants sold their contracts (at a premium) to California utilities and then sourced their demand (at a discount) from the dirty coal-fired plants. Net result, California pays more for power and surrounding states pay less. Not a single gram of pollutants has been prevented.

I've seen similar regulations proposed in other states, but so far those states have dodged the bullet. When the greenies get their way, all power will come from wishful thinking. They've hated nuclear for a generation. They hate hydro because it changes the landscape. They hate large scale wind farms because they are dangerous to migrating birds. They don't like large-scale solar because it blocks the ground from sunlight. If you legislate fossil fuels out of existance, all that is left is wishful thinking.

Right now natural gas is really cheep. It makes more sense to supply natural gas to stationary sources than as a motor fuel right now. With improved gas-to-liquids technology, that should turn around, but for now it is a much better fuel for power plants than for trucks. Not as good as coal in a cost/BTU, but way better than fuel oil.

David

I do agree that over the long term we do need to make changes, but we should not allow the force of goverment to direct those. We need to allow the market to deliver those changes, and alternitives.

And I say we need to make those changes not because of carbon, but because the congestion of so many freeways is a tax on our time, just the same as building roads is a tax on our wallet.

I can't say trains or buses are the answer, because neither deliver us door step to door step, and both cost more than other alternitives (cars and planes).

The problem looks like there isen't enough automation in many of the alternitives. Many cities don't have the density required for what they pay drivers to make buses or trains pay for themselves.

What does this have to do with peak oil... In two days, driving to and from work, I have consumed about a gallon of fuel (at 22 MPG). Or about $3. So to get me from my small truck to another form of transportation you need to beat the about cost of $3, or take less than 15 minuites to deliver me to work.

Cranky, surely you realize that there's more than just the cost of gasoline/petrol to running a vehicle?

KENAT - here's my summary of my auto costs in 2011:
Fuel: $2784.09
Insurance and registration: $1622.45
Maintenance: $650.45

That got me to and from work, plus home for lunch every work day (I live 5.7km from work), plus long distance trips totaling 1900km, 1669km, 1650km, and 1280km. Total distance traveled in 2011 was ~25,000km. Where I live, in-city public transit would cost $94/month for a pass. Assuming that the only transit costs would be me (and not my wife or child), transit would cost $1128/year. One-way transit for commuting would take 50 minutes (driving takes 10 minutes). Ignoring that I go home for lunch, transit would add 1:20 to my commute. Every day. If I valued my time at $60/hr (a discount from what work actually pays me...), over the course of a year, transit would cost me ~$18,320 in my time. So, adding in the actual cost of the pass, the annual cost of transit for me is in the $20k range - and this does not include the costs for the long-distance travel...

Given that insurance and maintenance are less variable than fuel, my fuel costs would need to be a factor of 10 higher than what they are right now for it to be attractive to me.

Sorry, but you will be pulling my car keys from my cold dead hands before I consider public transit.

Well, what about depreciation/capital costs of the car? Incidentals like car wash...

Now I'm not particularly interested in pulling anyones keys, you misunderstand my point.

Cars, especially in many parts of the US, are incredibly convenient. I used public transport some back in the UK but most of the time car was more convenient except for trips to central London.

So I'm not some anti car greeny.

Public transportation has to have a benefit to be viable. When I lived in Denver, the bus ride was about 5 minutes longer than driving. Parking in downtown Denver was $12/day at the lot that was the same distance from the office as the bus terminal. The buses ran on an incredibly convenient schedule and were safe and clean. My annual bus pass was subsidized by my employer and cost me $64/year. In every way a no-brainer. Now they have light rail from my old neighborhood to near my old office and the time is about 15 minutes faster. Even more a no-brainer.

On the other hand people in Houston tell me that the only reason to get on public transportation is to buy drugs. Schedule sucks, price is too high, and the buses are neither clean nor safe. Again, a no-brainer, but in the other direction.

I think that everyone should run the economics that were mentioned above and see if their situation makes more sense to drive or ride. If the economics favor one over the other, then that is actually the Green decision. Environmentalism should be based on actual harm to the environment, not on appearances (a Prius on the interstate has worse fuel economy than most SUV). Money is an excellent surrogate for consumption.

David

Car's bought and paid for. Depreciation is an accountant's issue. What matters to me is time and money actually out the door. (And the carwashes are included in maintenance).

Now if I commuted to downtown in my city, the calculus would change substantially. The time factor would be a wash. There would be added costs for parking.

I don't begrudge those who choose transit. As David said, I think that every person really does make the individual calculation themselves. We do choose the cheapest and greenest options available. That said, I don't want to pay for their transit (with my tax dollars)... Oh right, how much of my federal, provincial, and municipal tax go to subsidize transit? That should be included in the cost of transit, too...

Speaking of subsidies and to bring this topic back around to the discussion of peak oil, I read an article yesterday which said that if consumption in Saudi Arabia maintains its current growth pattern, then Saudi Arabia would become a net importer of oil by the late 2030's. Right now in Saudi Arabia, gasoline is $0.12/liter, heavily subsidized by the government.

David,

I have great respect for your contributions to this site,
but "Prius on the interstate has worse fuel economy than most SUV"
Seems way off base. The EPA rating for the Prius is 51mpg/48mpg highway. While inflated, and surely even worse under conditions you're suggesting. Even the most detrimental conditions to a hybrid using braking power recovery systems. An incline, at 80mph, at constant speed, claiming that the mpg is less than 30% of sticker (a fair average SUV mpg on similar conditions would be 15mpg?) is a stretch and I would want to see where the data came from.
On the rest of your point I would have to agree people are led by their wallets more often than not.


Comprehension is not understanding. Understanding is not wisdom. And it is wisdom that gives us the ability to apply what we know, to our real world situations

OK, my little truck is 25 years old, and cost me $10000 new, so to factor that in thats $33/ mounth so far, probally the same for insurance if you subtract the amount of insurance I use for erronds. So far $1.5 for gas+$3.3 for usage and insurance. Add in repair and oil, and maybe $2 more, so the total is $6.80.
The bus would require me to walk about a half mile to the stop, and about half mile from where I get off to work, so a two mile walk each day, plus the time.

However, since I can't move large items from the store to my house on public transportation, I need to have a small truck anyway, so I would pay insurance, and oil even if I did not drive it to work, so it really works out to $4.2 to drive it to work. And because I don't put excessive miles on it my repairs would cost more if I did not drive it.

CastMetal,
Top Gear did a story a couple of years ago where they took a road trip in a Land Rover LR3 and a Prius. They found that in general at highway speeds the Prius was running at significantly higher rpm than the LR3 (V8), and at the end of the trip the fuel consumption was about 20 mpg for the LR3 and 19 mpg for the Prius. Not in any way scientific, but quite an interesting anecdote. There was a Yahoo! news story last week about a woman suing Toyota for her Prius gas mileage not meeting published expectations. Personally, I've never been in or bought fuel for a Prius (I have two full-size Land Rover LR4's the get 20-24 mpg on the highway), and probably never will. If I had a job that required significant start/stop in city traffic I might reconsider that. I don't.

TGS4,
If you assume that federal, state, and community "public" money is going to be spent on public transit regardless of economics or community preferences then you really can't factor that subsidy into your personal calculations--you are going to contribute taxes to it regardless of your preferences. I think of it as similar to school costs, I don't have any kids in school anymore and still pay taxes to support the schools.

The last year I lived in Denver (1997) the city made a big deal that their RTD was self sufficient, paying off their capital bonds, and returning money to the general fund. I know that is the exception, but it is a heck of a good example that a public transit system that is responsive to community needs can make economic sense.

David