Saudis talk oil

[Skeptik]

I caught this one on "60 Minutes" last night. Quite interesting, especially in light of the vertiginous rises and declines in the price of oil, the controversy about how best to solve our energy problems, and whether oil has "hit is peak" already.

Saudi Arabia Bullish On Oil's Future

(CBS) The good news is that the price of oil is falling - a lot; it's also the bad news if you're determined that the U.S. should kick its addiction to foreign oil. President-elect Barack Obama says now is the time to do that, even with the economy in recession.

But Saudi Arabia, the world's largest oil supplier - with the U.S. as its number one customer - is pulling all the levers and spending billions to keep the oil age going.

There's more oil in the Khurais field than in the entire United States. It's the largest oil facility to come online anywhere in the world in nearly three decades with, the Saudis say, 27 billion barrels of oil.


Abdulqader said it will take more than 50 years to deplete the field.

That kind of makes one wonder about the idea of "Drill, baby, drill" in the US to find enough oil to bring the price down, doesn't it?

And, if that one field will last 50 years, then it would seem we have plenty of time to develop alternative energy.

Still, Saudi costs for producing oil are the lowest in the world: according to Ali Al-Naimi, the cost to produce one barrel is less than $2.

Where else can oil be produced for $2 a barrel?

"Well, I mean, different countries want different levels, different cuts. But in the final analysis, reason prevails," Al-Naimi said. "This is Saudi Arabia's influence on OPEC."

It's an influence so strong now that he was able to quash Iran's attempt to double the price of oil, which Tehran needs to support its budget, including its nuclear program and the bankrolling of militias like Hezbollah and Hamas. Still, Al-Naimi says oil is no longer used as weapon.

Of course, the Saudis don't want oil to become so expensive that the development of alternatives becomes a top priority, nor so cheap that they can't continue to make money. What do they consider to be a reasonable price?

The Saudis recently announced the price they would like to see oil selling for, $75 a barrel. That's about 50 percent higher than the current price.

Which would logically have gasoline at just over $2 a gallon in the US. We can continue the status quo for a long time at that rate, don't you think?

Meantime, for our own national security, we still need to work towards energy independence, or do we? What do you think?

 

[auditor0007]

I caught this one on "60 Minutes" last night. Quite interesting, especially in light of the vertiginous rises and declines in the price of oil, the controversy about how best to solve our energy problems, and whether oil has "hit is peak" already.

Saudi Arabia Bullish On Oil's Future






That kind of makes one wonder about the idea of "Drill, baby, drill" in the US to find enough oil to bring the price down, doesn't it?

And, if that one field will last 50 years, then it would seem we have plenty of time to develop alternative energy.



Where else can oil be produced for $2 a barrel?




Of course, the Saudis don't want oil to become so expensive that the development of alternatives becomes a top priority, nor so cheap that they can't continue to make money. What do they consider to be a reasonable price?




Which would logically have gasoline at just over $2 a gallon in the US. We can continue the status quo for a long time at that rate, don't you think?

Meantime, for our own national security, we still need to work towards energy independence, or do we? What do you think?

27 billion barrels of oil isn't very much, lol. We, the US, use around 7 billion barrels per year. Now, if we can figure out how to effectively extract kerogen from shale, then we have 1.5 trillion barrels of oil right here in the US. That would be 200 years worth, or 400 years worth of oil if we only used it to supply half of our needs.

 

[Skeptik]

27 billion barrels of oil isn't very much, lol. We, the US, use around 7 billion barrels per year. Now, if we can figure out how to effectively extract kerogen from shale, then we have 1.5 trillion barrels of oil right here in the US. That would be 200 years worth, or 400 years worth of oil if we only used it to supply half of our needs.

And the cost of extracting that oil would be.. how much again?

Sure, we have oil shale, oil sands, and oil under the sea. If the cost of oil were to go up sufficiently, it would pay to extract it. The Saudis seem to understand that, and to be pretty committed to making sure that it doesn't get to that point.

 

[Gord]

The Alberta oil sands are the second largest reserve to the Saudi's. I think the last price I heard was that it cost about $40 per barrel to produce, but it is very high quality, heavy crude and probably returns signicantly more than Texas light. Next door in Saskatchewan they are gearing up to produce another large find in the south of the province, but it will take a significant amount of horizontal drilling, so it will not be cheap to produce either. And there is talk of eventually expanding oil sands production in the north into their province as well. All in all, there is more than enough oil in Canada to meet up to 50% of America's needs for a couple of centuries. It is all about production costs though, which is much more expensive than Saudi or Kuwaiti or Iraqi or Iranian fields.

 

[Epsilon Delta]

The status quo is unsustainable anyway you look at it. Oil's gonna run out. Even the tar sands and shales are both expensive and absolutely catastrophic for the environment.

The discovery:use ratio for oil is around 1:4 now and demand's supposed to increase 60% for 2000-2040. And if China and India keep getting their people out of poverty, expect it to be much worse.

Alberta only has 300 billion barrels of actual recoverable oil, but to get it you pretty much have to strip mine a block down a huge area, the energy/profit rate is only half that of other oil, it has more greenhouse gas emissions, and every barrel needs some 2 tons of sand.

Sorry to break it to you guys, but the only long-term fix is to stop using petrochemicals for everything. You have to invest in public transport everywhere and switch to renewable energy, and cut consumption, and everything. There's no "magic bullet" or big breakthrough coming. Our entire civilization is addicted to a geological accident, and it's running out. Who wants to deal with the withdrawal?

 

[Gord]

The status quo is unsustainable anyway you look at it. Oil's gonna run out. Even the tar sands and shales are both expensive and absolutely catastrophic for the environment.

The discovery:use ratio for oil is around 1:4 now and demand's supposed to increase 60% for 2000-2040. And if China and India keep getting their people out of poverty, expect it to be much worse.

Alberta only has 300 billion barrels of actual recoverable oil, but to get it you pretty much have to strip mine a block down a huge area, the energy/profit rate is only half that of other oil, it has more greenhouse gas emissions, and every barrel needs some 2 tons of sand.

Sorry to break it to you guys, but the only long-term fix is to stop using petrochemicals for everything. You have to invest in public transport everywhere and switch to renewable energy, and cut consumption, and everything. There's no "magic bullet" or big breakthrough coming. Our entire civilization is addicted to a geological accident, and it's running out. Who wants to deal with the withdrawal?

Oil is not running out. There are new finds every year. Just a few months ago two new, huge fields were confirmed off the coast of Brazil. Russia has vast tracks of land that has not been explored. Both the arctic and antarctic are still virgin. Saudi Arabia is still finding new oil. Much of the Middle East is still untouched. Oceanic drilling is still in its infancy. There is even more coal in the world than oil, and it can be turned into oil. Old wells that have been closed for years and decades are being pumped again with new technology. Hell, chicken and cow guts can be turned into oil. Anthropogenic global warming has been proven to be a sham, and even if it is for real, we can only learn to adapt to it, because there is no way to stop it, and history tells us that man thrives in a warmer climate anyway.

So quit the-sky-is-falling rhetoric will ya?