Guest “divestment my @$$!” by David Middleton
Jude Clemente rocks!
Sep 29, 2019
The U.S. Department Of Energy Says More Oil, More Natural GasJude Clemente Contributor
Energy
I cover oil, gas, power, LNG markets, linking to human development.Numerous energy headlines from this past week alone caught my attention. They perfectly illustrate the massive scale of investment plans for oil and gas projects around the world. Here are just a few:
*”Japan to invest $10 billion in global LNG infrastructure projects.”
*”Tellurian Signs $7.5 Billion LNG Pact With India’s Petronet.”
*”LNG investments hit record of $50 billion in 2019.”
*”Brazil’s Huge $25 Billion Oil Auction Clear Very Important Hurdle.”As fate would have it, on Tuesday, a day after my birthday (I turned 25 again), the U.S. Department of Energy’s EIA released its International Energy Outlook 2019. It’s a glorious read, and one that I deem mandatory for all Americans, and even those globally interested in energy. We should all take advantage of the fact that we have such government information freely available to us open-source online.
You should know that the vast majority of countries have no such access to their own governments. Again, this is the official modeling from the U.S. Department of Energy and its National Energy Modeling System. This is not from ExxonMobil, the Sierra Club, or the American Wind Energy Association trying to sell you something or make you think a certain way. This is the outlook of the U.S. Department of Energy.What’s past is prologue: more oil, more natural gas. No kidding. These two essential fuels supply nearly 65% of the energy used in the U.S. and global economies. Global annual oil demand has been surging ~1.4 million b/d since 2000 alone, with gas usage up 8 Bcf/d per year.
[…]
The simple reason why we see such huge investments in oil and gas as seen in the above headlines is because we know that the world will need even more of them. In particular, the still developing world is looking at the oil and gas consuming West to see how affordable and reliable energy can grow economies and improve human development.
[…]
The main reason for the following graphic is that oil is the world’s most vital fuel and has no significant substitute whatsoever. Oil is the basis of globalization, utilized in practically everything that we do, and the most internationally traded commodity in the world. Oil’s value is so immense that too high of a price can cause a global economic recession.
[…]
Next comes the world’s go-to fuel: natural gas.
Just last year alone, global gas demand jumped over 5% to a staggering 137 trillion cubic feet.
That’s a Marcellus’ shale worth of production devoured every three weeks.
[…]
Forbes
Mr. Clemente’s graphs…
INTERNATIONAL ENERGY OUTLOOK 2019
Looks like Peak Oil won’t be getting here before 2050…
•In the Reference case, world production of crude oil and lease condensate increases from about 80 million barrels per day (b/d) in 2018 to 107 million b/d in 2050. Total liquids production increases from 100 million b/d in 2018 to 127 million b/d in 2050.
•Liquid fuels consumption increases 45% in non-OECD countries and falls 4% in OECD countries.
•In the High Oil Price case, world liquid fuels consumption in 2050 is 4 million b/d higher than in the Reference case. Primarily, emerging, non-OECD nations drive faster economic growth, which contributes to higher energy demand. In the High Oil Price case, proportionally higher amounts of crude oil are supplied by countries that are not part of the Organization of the Petroleum Exporting Countries (OPEC).
•In the Low Oil Price case, world liquids consumption in 2050 is 1 million b/d higher than in the Reference case. Slower non-OECD economic growth assumptions lead to lower energy demand, but the lower prices mean that consumers use more liquid fuels. Low-cost producers located in OPEC countries supply more crude oil and condensate to the global marketplace.
US Energy Information Administration
Too fracking funny for words…
•End-use fuels include those fuels consumed in the industrial, transportation, and buildings sectors and exclude fuels used for electric power generation.
•Liquid fuels, because of energy density, cost, and chemical properties, continue to be the predominant transportation fuel and an important industrial feedstock.
•Electricity use in the residential and commercial building sectors increases rapidly because of growing income, a growing population, and increased access to electricity in non-OECD regions.
•Electricity use in the industrial sector and transportation sector also grows, respectively, as a result of increasing product demand and increasing use of electric vehicles.
•Coal continues to be an important end-use fuel in industrial processes, including the production of cement and steel.
US Energy Information Administration
Here’s the really funny bit…
•Use of all primary energy sources grows throughout the Reference case. Although renewable energy is the world’s fastest growing form of energy, fossil fuels to continue to meet much of the world’s energy demand.
•Driven by electricity demand growth and economic and policy drivers, worldwide renewable energy consumption increases by 3% per year between 2018 and 2050. Nuclear consumption increases by 1% per year.
•As a share of primary energy consumption, petroleum and other liquids declines from 32% in 2018 to 27% in 2050. On an absolute basis, liquids consumption increases in the industrial, commercial, and transportation sectors and declines in the residential and electric power sectors.
•Natural gas is the world’s fastest growing fossil fuel, increasing by 1.1% per year, compared with liquids’ 0.6% per year growth and coal’s 0.4% per year growth.
•Coal use is projected to decline until the 2030s as regions replace coal with natural gas and renewables in electricity generation as a result of both cost and policy drivers. In the 2040s, coal use increases as a result of increased industrial usage and rising use in electric power generation in non-OECD Asia excluding China.
US Energy Information Administration
While EIA forecasts an explosive growth in renewable energy, it doesn’t replace fossil fuels. It just get piled on top of the energy mix… Just like fossil fuels and nuclear were piled on top of biomass.
More good news…
While they forecast that renewable energy sources will account for nearly half of global electricity generation by 2050, total demand more than doubles. The growth in renewable energy barely keeps up with total demand growth.
Oops!
Did I mention that Peak Oil has been postponed… Again?
Even better news…
•Non-OPEC crude oil and lease condensate production grows 23% between 2018 and 2050, reaching 59 million b/d in 2050. These increases are driven by growth in Russia (22%), the United States (11%), Canada (126%), and Brazil (59%).
•United States crude oil and lease condensate production increases from 11 million b/d in 2018 to approximately 14 million b/d from 2025 to 2040, driven by hydraulic fracturing of tight resources in the U.S. Southwest. Subsequent production falls to 12.2 million b/d by 2050, as development moves into less productive areas and well productivity declines. Nevertheless, 2050 production increases 11% from 2018 levels.
•Russia’s 2.3 million b/d increase in production by 2050 comes mainly from non-tight resources, but the country also sees accelerated growth in tight oil production after 2030.
•Canada’s 5.4 million b/d increase in production by 2050 is a result of oil sands development, particularly toward the end of the projection period, as easily accessible global resources are increasingly depleted and global oil prices gradually increase.
•Brazil’s 1.5 million b/d increase in production by 2050 results from continued development of offshore pre-salt oil resources.
US Energy Information Administration
More offshore drilling and oil sands development! Too fracking cool.
The US will continue to kick @$$ when it comes to natural gas…
And now for the pièce de résistance…
Could the EIA Projections Be Wrong?
Sure they could. EIA totally missed the shale revolution.
According to the EIA charts, the world will be consuming nearly 130B barrels a day by 2050. That won’t happen at $55 WTI. US production has quit growing this year and with a declining rig count and declining completions that trend looks to continue as long as prices stay this low. The world consumes approximately 36B barrels of oil a year. New discoveries have just been a fraction of that number for years. We are surviving on US shale growth and other countries putting more straws into the same reservoir. Very few countries can add production at these levels outside Iraq, Russia and completing the Brazilian sub-salt fields discovered a decade ago. To get to 130B barrels a day of production it’s going to require significantly higher oil prices. Interestingly, even the climate zealots root for higher oil prices so EVs can narrow some of the economic disadvantages they have versus IC automobiles.
Marc, I think you have a couple of typos in your comment – you used ‘130B’ twice instead of ‘130 M’ barrels/day of consumption. And Iam sure that there are quite a few substantial untapped oil resources in places like Alaska and Victoria, Australia which if allowed to be developed would change the equation. Finally, regarding EVs, what about mentioning the significant economic advantages like subsidies and exemptions from various taxes and tolls, etc. that EVs currently have versus IC vehicles? Personally I think that hybrid (IC/EV) vehicles make a lot more sense than EVs, and seem to be selling quite well globally without significant subsidies. Let’s let the market decide – it seems to achieve better economic outcomes than the government trying to pick winners.
You are correct. My “B’s” should be “M’s”. But what’s an extra billion among friends. There is certainly oil to be found in places like the Arctic and the deep water. Its just more expensive and most won’t be drilled at $55 WTI. For that matter, if you opened the entire world to exploration by the most efficient exploration companies there is likely more oil to be found in places like Mexico and Venezuela. But access has always been a problem in the industry and is likely to remain that way.
David,
A couple of days ago there was article in Wall Street journal on how shale oil production is slowing
https://www.google.com/amp/s/www.wsj.com/amp/articles/shale-boom-is-slowing-just-when-the-world-needs-oil-most-11569795047
Couple of points from article:
– wells producing less than expected
– estimate of peak shale production in 2030 in USA
What are your thought ?
Production will always keep up with prices. At least half of the wells ever drilled produce less than expected. Deepwater GOM conventional is where the growth is.
Deepwater GOM contributed mightily last year causing GOM production to approach 2M barrels a day of production for the first time. But I don’t see a lot coming on line over the next couple of years to offset the significant decline rates most GOM wells experience.
Shell’s Appomattox is just now coming online. It’s the first production from the YUGE Norphlet play. The Lower Tertiary play is still maturing. And many of the largest deepwater fields are still growing.
David,
Your comment is succinct, news-worthy information.
Thanks.
From the article: “Driven by electricity demand growth and economic and policy drivers, worldwide renewable energy consumption increases by 3% per year between 2018 and 2050.”
“Renewables” are a huge waste of time and money and wildlife and human health.
One of the reasons that North Slope oil production has dropped off
is that about half of the hydrocarbons produced from some wells is
natural gas.
In the past, the gas has been flared, but now must be pumped back
into the ground, making production much more expensive. We need
a gas pipeline from the North Slope. Maybe ANWAR and Trump will
provide the impetus for such a line.
When we learn how to harvest the vast stores of natural gas hydrates
in the world’s oceans without blowing ourselves up, there will not be
peak hydrocarbons until we build the number of nuclear plants,
including breeders, required for electricity.
For the origin of natural gas please read the attached link.
https://www.gia.edu/gems-gemology/winter-2017-worlds-biggest-diamonds
These diamonds were formed 360 to 750 km deep in the earth, and carried
natural gas inclusions from their formation when the rose to the surface.
Natural gas does form abiotically.
“Renewables” will die when they must compete unaided in the energy
market place.
“The fluid is not thought to have existed as a free fluid phase while the diamond grew. Rather, it is interpreted to have formed as a result of hydrogen atoms exsolving out of the metallic liquid, and perhaps to some extent the silicates as well, forming CH4 and H2 by reacting with the surrounding diamond”
So this natural gas was formed by dissolving diamond. Probably not a very promising production method.
Hydrocarbon inclusions are found in lessor diamonds which form
at less depth. Some appear to be carbon black. The point is that
hydrocarbons form at great depth, abiotically, deeper than possible
for the “fossil” thing to work.
However the isotope ratios of diamond indicates that the carbon is at least partly organic:
“The source of the carbon that crystallized into diamond is also important. Carbon has two stable isotopes, 13C and 12C, whose ratio varies according to the source, such as ambient mantle carbon or subducted, organic carbon. Variably light carbon isotopes in CLIPPIR diamonds, having 13C/12C ratios lower than the convecting mantle (Smith et al., 2016), suggest derivation from organic carbon (e.g., Kirkley et al., 1991; McCandless and Gurney, 1997), which implies the carbon was originally sourced at Earth’s surface and then subducted.”
It is a good idea to read and if possible understand a reference before linking it.
If anyone did that, abiotic oil would never be mentioned again… 😉
Periodically I drive by an existing oil field….sometimes the pumps are humming…..sometimes idle. By happenstance I talked to a guy who was responsible for whether they were humming or idle. He said it was simple….selling price beats marginal cost….or vice versa….whether the pumps had a positive contribution to overhead. He said the same applies to fracking….once done it is very quick to put a marginal hole back into production upon a selling price signal.
True across the industry??? Or did I possibly misunderstand something?
If true is this measured somehow?
THANKS for everyone’s contribution.
It depends on a lot of factors.
Late-in-life wells that are producing at submarginal rates or with too high of a water cut will often be intermittently produced. Often this is done to extend the lease and/or delay plugging and abandoning (P&A) the wells.
When oil companies lease mineral rights, it is usually for a specific length of time (primary term). If they establish production on a lease, it becomes “held by production” (HBP). The oil company gets to hold the lease so long as they have production and are paying royalties to the mineral rights owner. If all of the wells on the lease go off production, the oil company has a limited amount of time to either reestablish production or relinquish the lease. For Federal leases in the Gulf of Mexico, the length of time was recently extended from 180 days to 1 year.
In the Federal waters of the Gulf of Mexico, once that 1-year clock expires, the platform and all infrastructure above the seafloor has to be removed. This can be very expensive. A lot of effort goes into keeping marginal and submarginal wells “limping along” for as long as possible to delay P&A costs. It’s actually economic keep a cash flow negative platform on production simply to delay P&A expenses – It’s a time-value of money thing.
Thanks David
Aha! Interesting
David, you have said that natural gas is produced in a depth range.
What is that range?
As for isotopes, the Russians say that when natural gas is stored in caves, microbes eat the
lighter, C12 preferentially, changing the ratio.
After his death, some of Dr.Gold’s friends did an experiment that he had proposed.
They put the requisite ingredients in a diamond anvil and created CH4. The isotope was
C12. The isotope proves nothing. The kind of microbes it travels through and the isotope
available when it is created establishes the ratio.
The sheen on oil proves that it traveled through biological life.
What biological life do you propose lives 360-750km below the earth’s
surface.
If you want to understand evidence for the deep, hot biosphere and why it doesn’t provide evidence for Abiotic oil, read, and try to understand, the paper I linked to.
David, how do you propose that the hydrocarbons on Titan, Saturn, Jupiter,
all the outer planets, and all the exoplanets which have had their atmospheres
analyzed were formed?
Can you not grasp the fact that methane is not oil?
Do we agree that natural gas is abiotic?
I have always thought of the earth as a large petroleum distillery. As the hydrocarbon rise the
amount of temperature, metals, and pressure can increase molecule size, and Lawrence Livermore
Labs program agrees with me.
https://www.llnl.gov/news/hydrocarbons-deep-earth
Natural gas is not abiotic.
Methane can be abiotic, biogenic or thermogenic.
While natural gas is composed of anywhere from 60-90% methane, it’s not methane.
Lawrence Livermore Labs don’t agree with you. They made a computer model…
The Fischer-Tropsch process can generate more complex hydrocarbons from carbon monoxide. The only clear natural example of this is the Lost City hydrothermal field, where minute, almost undetectable, traces of heavier hydrocarons have been detected, possibly even octane… And octane isn’t oil either. Octane is one of the end products refined from oil.
The chemical equations can be balanced. There’s just no evidence that this process has generated any significant volumes of complex hydrocarbons.
And it is natural gas, not just methane.
It is not natural gas. Even if it was, natural gas is not oil either.
The exact composition of the hydrocarbons on Titan, etc. are unknown. The most likely candidates are methane and ethane.
Natural gas, including methane, ethane, propane, etc. perks up from deep
in the earth and the deep, cold ocean freezes it in what is known as the
zone of stability. The weight of the clathrate accumulates until the back
pressure is great enough to stop additional flow until some of the gas is
relieved in some manor. Think of a stopper in a soda bottle, except that
there is no end to the gas. I
https://scholar.google.com/scholar?hl=en&as_sdt=0%2C14&q=natural+gas+hydrates+including+ethane&btnG=
Which has nothing to do with oil or natural gas being abiotic.
Oil & thermogenic gas form deep in the Earth.
The citation I thought was attached to above
https://scholar.google.com/scholar?hl=en&as_sdt=0%2C14&q=natural+gas+hydrates+including+ethane&btnG=
That’s not a citation. It’s a Google search.
If you will click on it you will see that methane hydrates are
actually natural gas hydrates.
Man cracks methane to diesel, gasoline, etc.
The rock layer which your theory calls source rock is
actually the sedimentary layer which captures the upwelling
hydrocarbons.
I previously described the test that I used to confirm that
natural gas perks up all around the earth, all the time.
Have you tried it?
In your area of Texas, if the shield is deep, you will get
a positive for hydrocarbons.
Yes… Methane hydrates can form from natural gas that has seeped to the surface. Your point?
No. “Man” does not crack “methane to diesel, gasoline etc.” “Cracking” breaks complex hydrocarbon molecules down to less complex hydrocarbons.
The fact that oil & gas can seep to the surface is totally irrelevant to how they formed.
There is no “shield” in Texas.
http://geologylearn.blogspot.com/2016/03/basins-and-domes-in-cratons.html
https://www.technologyreview.com/s/410611/natural-gas-to-gasoline/
Man converts natural gas to gasoline, as referred on the internet,
called cracking.
Man “cracks natural to Diesel” powers the North Slope/
https://www.bing.com/images/search?q=natural+gas+cracked+to+diesel+on+the+north+slope&qpvt=natural+gas+cracked+to+diesel+on+the+north+slope&FORM=IGRE
That’s a Bing search… Not an example of something that is impossible.
Natural gas can be used to make gasoline (GTL). That’s not a “cracking” process.
https://en.wikipedia.org/wiki/Cracking_(chemistry)
GTL is the opposite of cracking…
https://en.wikipedia.org/wiki/Gas_to_liquids
So the “Popular Press ” uses the term differently than the industry.
They call rearranging molecules of natural gas to diesel cracking.
I did not understand how you thought hydrocarbons appear elsewhere
in the universe.
No one calls “rearranging molecules of natural gas to diesel cracking.”
I have no idea how simple hydrocarbons form elsewhere in the Universe. No one really knows. Abiotic methane is a very common organic molecule on Earth and elsewhere. It’s just not oil.
acetylene
The “crack” the natural gas to form “acetylene, a simpler hydrocarbon” and then use it to make ethylene, a more complex hydrocarbon. Only the first step is a form of cracking.
The article you cited says that the methane comes from the
inside of Titan. I believe that all the outer space hydrocarbons
come from inside the sphere where all the ingredients are available.
Do you believe that physics and chemistry are different on earth
then elsewhere in the universe? I don’t.
The test I described to you has been positive for hydrocarbons
every where I have tried it, with the most in Kansas with the very
deep, rich topsoil. Rich upland topsoil is an indicator of upwelling
natural gas. Microbes consume it, using the hydrogen for energy,
and excreting the carbon.
Try the test, David.
Jerry… Your nonsense is indistinguishable from a series of random words.
Try the test David. It will change your paradigm.
What test? You keep babbling incoherent nonsense.
Find a nice piece of upland topsoil in which you can dig a hole.
The hole needs to be at least 14″ in diameter and dug completely
through the topsoil into the subsoil, through any roots and
worm castings.
Take a 12″ stainless steel, invert it, and drill a hole in the now top.
Solder in a 1/4 in copper tube fitting, attach the tubing, lower
it in to the bottom of the hole. Refill the hole, reconsolidating
the soil as you refill. When you reach the original surface,
cut the copper tubing off about six inches high. Add a closed
gas valve,
Two days later, attach a hydrocarbon gas detector with a vacuum
pump and take a reading.
I have used a hydrocarbon detector from Amazon which cost about
$250. The first tester I used was a FID type. I have since acquired a
Sensit Gold with the chip to detect hydrocarbons. It cost about
$2000. at the time I purchased it. You probably have access to a much
more sophisticated meter.
I have done this test many times in east Tennessee, where I live, Middle,
Tennessee which has very good soil, and in the deep, black soil in
Eastern Kansas. The black soil there was more than 1 meter deep.
I have gotten a positive reading for hydrocarbons every time.
I have described this test many times and thought that I had
done so on your threads. I apologize if I haven’t.
Doing this test will help you understand why I am so positive
about my statements.
Hydrocarbons perk up all around the world, but they
are not evenly distributed. In the presence of adequate
moisture, microbes consume it, enriching the soil.
An example of the way this upwelling causes confusion
is the way flooding rice paddies causes the methane to
rise faster than the microbes can consume it. When
the paddy is dry, the microbes bloom to the extent of
food available, so no methane is detected. The rising
methane upon flooding is mistakenly called human
contribution to the atmosphere,
The natural gas found in topsoil has been explained
as being absorbed from the atmosphere. When natural
gas hits the atmosphere, it rises.
This erroneous explanation is the reason my test must
be below any potential contribution from the atmosphere.
Incoherent nonsense.
Read it slowly David. It will come to you.
It’s abject incoherent nonsense.
To:
Jerry H Henson
…“It must be remembered that there is nothing more difficult to
plan, more doubtful of success, nor more dangerous to manage
than a new system. For the initiator has the enmity of all who
would profit by the preservation of the old institution and
merely lukewarm defenders in those who gain by the new ones.”
~ Niccolò Machiavelli
More nonsense.
Simpler tests:
Take a similar stainless steel bowl, put a good adhesive around the rim,
invert it on some 20 mil poly sheet. Allow the glue to dry. Trim out
the poly on the inside of the bowl and leave a 6″ skirt around the outside
of the bowl, and invert it on flat piece of topsoil. Take your CO2 meter,
put it on continuous read and put it under the bow. Place a 10 lb rock
on the inverted bowl and place sand on the skirt around the bowl.
Remove the CO2 meter and read.
When I last did that test, ambient CO2 was 403 PPM. After 12 hours, the
reading was 960 PPM.
If your area is really dry, you can test for natural gas at the surface,
as your area “has no shield”. take the same bowl, solder in a 1/4″
brass fitting, attach a 1/4″ copper tube, and attach the closed gas
valve to the tube. Weight the bowl and skirt as above. Wait 48 hrs,
and attach your hydrocarbon tester to the tube and open
the valve, and red the meter.
If your spot is very dry, the microbial culture will be very inactive,
so the gas will pass through mostly unoxidized.
The first test will be a clue. If the ambient CO2 reading and the
lapsed time reading are close, the microbial culture is nearly
to mostly inactive.
Some papers say the culture in deserts areas has a more diverse culture
than areas with more moisture.
Simple tests.