The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed(bloomberg.com)
bloomberg.com
The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed
https://www.bloomberg.com/news/articles/2019-04-02/saudi-aramco-reveals-sharp-output-drop-at-super-giant-oil-field
113 comments
So 52 years worth of reserves assuming maximum capacity of 12mm barrels harvested a day. Now I am no mathematician but given a 1-2mm per day average and what will likely become a declining demand for oil over next 20-30 years, they have half a millennia worth of oil lying around. This well seems like a non issue to me.
It's a big problem for them.
In the case of Saudi Arabia, it's the combination of oil production ceiling vs population, that is almost guaranteed to be the Kingdom's undoing. Their population growth is slowly unsettling their stability by debasing the per capita well-being. This has resulted recently in record unemployment and a struggling economy.[1] The record youth unemployment in particular is very concerning in a region where that can lead to severe destabilization and the formation of revolutionary groups (desperate youth seeking change). Their oil reserves in 1990 were similar to today, except now they have twice as many people and oil's outlook is getting more dim by the year. In 1990 they had a mere 16m people, in ~2035 they'll have 48m people dividing even fewer oil resources than in 1990.
Unlike, say, Russia, which has a fixed population (net unchanged in 30 years), Saudi Arabia has rapid population growth and is almost entirely dependent economically on subdividing those oil resources per capita (in one form or another). Their efforts to diversify the economy have failed repeatedly and wealthy developed nations are less interested in doing business with them than at any other time in decades. They've lost 1.5 million expat jobs in just a few years, and haven't been able to replace them with new domestic jobs.[2]
Saudi has to figure out how to produce eight million (or more) jobs in just roughly 15 years, when so far they've demonstrated they can hardly produce any net new jobs at all (for Saudis). And these can't be just any jobs, they need to match the present relatively high expectations for a standard of living that Saudis have. If they fail at that vast job creation requirement, the Kingdom is going to fall into violent revolution in some manner.
[1] https://www.reuters.com/article/saudi-unemployment/saudi-une...
[2] https://www.bloomberg.com/news/articles/2019-04-03/as-expats...
In the case of Saudi Arabia, it's the combination of oil production ceiling vs population, that is almost guaranteed to be the Kingdom's undoing. Their population growth is slowly unsettling their stability by debasing the per capita well-being. This has resulted recently in record unemployment and a struggling economy.[1] The record youth unemployment in particular is very concerning in a region where that can lead to severe destabilization and the formation of revolutionary groups (desperate youth seeking change). Their oil reserves in 1990 were similar to today, except now they have twice as many people and oil's outlook is getting more dim by the year. In 1990 they had a mere 16m people, in ~2035 they'll have 48m people dividing even fewer oil resources than in 1990.
Unlike, say, Russia, which has a fixed population (net unchanged in 30 years), Saudi Arabia has rapid population growth and is almost entirely dependent economically on subdividing those oil resources per capita (in one form or another). Their efforts to diversify the economy have failed repeatedly and wealthy developed nations are less interested in doing business with them than at any other time in decades. They've lost 1.5 million expat jobs in just a few years, and haven't been able to replace them with new domestic jobs.[2]
Saudi has to figure out how to produce eight million (or more) jobs in just roughly 15 years, when so far they've demonstrated they can hardly produce any net new jobs at all (for Saudis). And these can't be just any jobs, they need to match the present relatively high expectations for a standard of living that Saudis have. If they fail at that vast job creation requirement, the Kingdom is going to fall into violent revolution in some manner.
[1] https://www.reuters.com/article/saudi-unemployment/saudi-une...
[2] https://www.bloomberg.com/news/articles/2019-04-03/as-expats...
I think the point is that they will likely destabilise long before they run out of oil. The price/demand/Saudi's share of OPEC's allowance will mean that the dire economic situation that you describe will play out no matter how much oil they have left. Whether that's true or not, I don't know, but that's what I understood from the OP's post.
Another factor is that the rapid population growth combined with subsidised oil prices means their own population uses a large and increasing amount of its own production - around 1/4 of total production is already consumed domestically, some even burned to generate electricity. That ratio is likely to keep rising with population growth and resistance to any attempts to reduce subsidies, so even if production remains flat, exports will decline.
This chart is a few years old already but shows over 3m barrels/day being consumed internally by 2014, must be significantly higher by now:
https://www.theglobaleconomy.com/Saudi-Arabia/oil_consumptio...
This chart is a few years old already but shows over 3m barrels/day being consumed internally by 2014, must be significantly higher by now:
https://www.theglobaleconomy.com/Saudi-Arabia/oil_consumptio...
> but given a 1-2mm per day average
Where did you get this number from? They are not pumping at their maximum capacity but I understand it's pretty close on average
"Saudi Arabia briefly pumped a record of more than 11 million barrels a day in late 2018."
Where did you get this number from? They are not pumping at their maximum capacity but I understand it's pretty close on average
"Saudi Arabia briefly pumped a record of more than 11 million barrels a day in late 2018."
"what will likely become a declining demand for oil over next 20-30 years"
based on what?
based on what?
20+% increase by 2015-2030
https://www.statista.com/statistics/547100/projected-base-oi...
A more realistic assessment from Shell Oil is that oil demand continues to grow over the next 20 years, a view shared by rival BP and energy consultants like Wood Mackenzie. https://www.forbes.com/sites/daneberhart/2018/09/18/forecast...
Long-term oil demand is expected to increase by 15.8 mb/d, rising from 95.4 mb/d in 2016 to 111.1 mb/d in 2040 https://www.opec.org/opec_web/flipbook/WOO2017/WOO2017/asset... (page 101)
A more realistic assessment from Shell Oil is that oil demand continues to grow over the next 20 years, a view shared by rival BP and energy consultants like Wood Mackenzie. https://www.forbes.com/sites/daneberhart/2018/09/18/forecast...
Long-term oil demand is expected to increase by 15.8 mb/d, rising from 95.4 mb/d in 2016 to 111.1 mb/d in 2040 https://www.opec.org/opec_web/flipbook/WOO2017/WOO2017/asset... (page 101)
Just going off of memory, I believe I read that gasoline consumption has plateaued, meaning we're weaning off of it and it's being supplemented by alternative sources. I think it's a fair assumption that this indicates a shift that will lead to declining numbers in the next 20-30 years, if not sooner.
Plateaued where? In California and Europe maybe but not in the rest of the world.
It's more complicated than that. Some things keep growing (air traffic for instance), some not (power plants planning/construction for instance) and some seem in decline (ICE cars).
If you can read .de-ese: https://www.sueddeutsche.de/wirtschaft/1.4371221
You can add the apples and oranges up and get different results, depending on your judgment. And you get to choose what to assume: You may assume that what happens in California in 2019 definitely won't happen in the rest of the US in the coming years, or that it will. Et cetera.
If you can read .de-ese: https://www.sueddeutsche.de/wirtschaft/1.4371221
You can add the apples and oranges up and get different results, depending on your judgment. And you get to choose what to assume: You may assume that what happens in California in 2019 definitely won't happen in the rest of the US in the coming years, or that it will. Et cetera.
thanks it translated pretty well.
So I think this story sounds incomplete. I do not think it is mutually exclusive to say that the Bosch burner factory is shutting down and that 95% of all new cars sold worldwide are combustion engine powered. German labor is extremely expensive and German taxes are incredibly high. Welcome to the global economy.
I find it much more likely that much like everything else, the Chinese car market wants cars manufactured in China and that those China factories source from Chinese vendors. It's no different than the electronics industry.
So I think this story sounds incomplete. I do not think it is mutually exclusive to say that the Bosch burner factory is shutting down and that 95% of all new cars sold worldwide are combustion engine powered. German labor is extremely expensive and German taxes are incredibly high. Welcome to the global economy.
I find it much more likely that much like everything else, the Chinese car market wants cars manufactured in China and that those China factories source from Chinese vendors. It's no different than the electronics industry.
If you follow the links, you see that the reduced demand forcecasts are worldwide and most of the layoffs involved are in low-cost countries. Most the companies mentioned are global leaders in their small field (like one of the companies mentioned, which produces not cars, not engines, not cylinders, but parts for cylinders, and 80% of its workforce are in low-wage countries, and its customers are all over the world).
A region in Germany is likely to be badly affected and that gets most of the wording. Don't let that fool you. When the investor guidance says "challenging outlook", it doesn't mean "we'll lay off a few people at HQ but the factories will be fine".
A region in Germany is likely to be badly affected and that gets most of the wording. Don't let that fool you. When the investor guidance says "challenging outlook", it doesn't mean "we'll lay off a few people at HQ but the factories will be fine".
i agree. the German factories will not be fine.
> based on what?
Rising popularity of electric cars, increasing vehicle efficiency in general, potential legislation targeting climate change, etc.
Rising popularity of electric cars, increasing vehicle efficiency in general, potential legislation targeting climate change, etc.
- Electric cars are still less than 5% of new car market. Hardly impactful
- The increase in efficiency is more than offset by the growth in overall car market
- Potential legislation in China? India? Emerging markets? Sorry but nothing suggests that is happening
- The increase in efficiency is more than offset by the growth in overall car market
- Potential legislation in China? India? Emerging markets? Sorry but nothing suggests that is happening
> Electric cars are still less than 5% of new car market. Hardly impactful
That is up from <1% five years ago, in a market where demand spurs demand by increasing availability of charging points etc. Meanwhile the EV market is currently production capacity constrained and multiple companies are expanding production capacity.
I doubt we're going to be at 100% electric cars in ten years but I would not be surprised if it was somewhere in the mid double digits by then. And by that point it becomes a lot easier to target ICE cars with legislation because there is a proven viable alternative.
> The increase in efficiency is more than offset by the growth in overall car market
Any given factor is more than offset by the growth in the overall car market. But you add them all together.
> Potential legislation in China? India? Emerging markets? Sorry but nothing suggests that is happening
China has a slate of domestic electric car companies and it's exactly their style to pass legislation that favors domestic companies over foreign competitors. Climate change provides them a really good justification to do that here.
And carbon taxes generate revenue, which makes it easy to make them revenue neutral. Use the money to lower other taxes or fund a UBI. This knocks out the "harms the poor/developing countries" argument because the cost becomes only the cost difference between fossil fuels and alternatives, which is rapidly approaching zero.
Moreover, most of the current oil demand comes from the US and Europe. If either of them, much less both, passed relevant legislation then not only would their own demand fall off, the increased economies of scale and network effects that would spur in alternatives would also make them more cost effective in countries without any such legislation.
That is up from <1% five years ago, in a market where demand spurs demand by increasing availability of charging points etc. Meanwhile the EV market is currently production capacity constrained and multiple companies are expanding production capacity.
I doubt we're going to be at 100% electric cars in ten years but I would not be surprised if it was somewhere in the mid double digits by then. And by that point it becomes a lot easier to target ICE cars with legislation because there is a proven viable alternative.
> The increase in efficiency is more than offset by the growth in overall car market
Any given factor is more than offset by the growth in the overall car market. But you add them all together.
> Potential legislation in China? India? Emerging markets? Sorry but nothing suggests that is happening
China has a slate of domestic electric car companies and it's exactly their style to pass legislation that favors domestic companies over foreign competitors. Climate change provides them a really good justification to do that here.
And carbon taxes generate revenue, which makes it easy to make them revenue neutral. Use the money to lower other taxes or fund a UBI. This knocks out the "harms the poor/developing countries" argument because the cost becomes only the cost difference between fossil fuels and alternatives, which is rapidly approaching zero.
Moreover, most of the current oil demand comes from the US and Europe. If either of them, much less both, passed relevant legislation then not only would their own demand fall off, the increased economies of scale and network effects that would spur in alternatives would also make them more cost effective in countries without any such legislation.
Bosch and about six other manufacturers of car parts disagree with you and expect sharply reduced demand for ICE-specific car parts.
60% of new cars sold in Norway recently were EVs. That's a start, and a good one at that. I'd be highly doubtful that EVs won't continue to gain steam over the next decade, as VW, Porsche, Audi, Volvo, Ford, GM, and Toyota continue to expand EV production lines and models.
> Rising popularity of electric cars
Currently very slow - needs to accelerate a lot to be significant in 2030 (thats only 11 years).
> increasing vehicle efficiency in general There is not much to gain, the vehicles are gaining weight in the last 2 decades (SUVs etc.). Thats eating up the small improvements in efficiency. A real big improvement is not in sight.
> potential legislation targeting climate change We can hope for that, but with Trump in charge and Merkel in Auto-Germany ruling the EU it won't really happen. Hopefully this will change.
> increasing vehicle efficiency in general There is not much to gain, the vehicles are gaining weight in the last 2 decades (SUVs etc.). Thats eating up the small improvements in efficiency. A real big improvement is not in sight.
> potential legislation targeting climate change We can hope for that, but with Trump in charge and Merkel in Auto-Germany ruling the EU it won't really happen. Hopefully this will change.
> Rising popularity of electric cars Currently very slow
Starting from the 2019 the range and price came to the point where they are suddenly viable in EU.
Then there will be a used electric car wave because of the low-power charging infrastructure catching up and making older short range models actually useful.
Starting from the 2019 the range and price came to the point where they are suddenly viable in EU.
Then there will be a used electric car wave because of the low-power charging infrastructure catching up and making older short range models actually useful.
Currently the prices of the used electric cars are crazy. You get a brand new gasoline car for the same price as an 6 year old VW e-up!. The Renault Zoe is still 30k EUR (including battery) for a small car with low to mid range (150 - 300km; depends on the model and year).
> Rising popularity of electric cars Currently very slow - needs to accelerate a lot to be significant in 2030 (thats only 11 years).
S-curve, man, S-curve. The experts say that around 2023-25 sales prices of EV's will be down to equal ICE's, and EV sales will take off like a rocket.
S-curve, man, S-curve. The experts say that around 2023-25 sales prices of EV's will be down to equal ICE's, and EV sales will take off like a rocket.
Well, we will see. As a German I can not believe it will happen, all our big car companies talking about it for like 8 years now. We had the goal of 1 mio. EV cars by 2020 in 2017 we have 54.99 (pure EVs) and about 160k hybrid. Thats 0.1 % EVs. Our gov pays you 4000 € bonus if you buy a EV, they still have budget for this campaign because of the low EV sales. Even the diesel-gate did not had a real effect, now everybody is buying gasoline cars.
VW announced the I.D. and a new e-up! But it is all only announcements, currently the cheapest car, the e-up! isn't even order-able. BMW announced the i2 (cheaper version of the i3) but it will take till 2021 to get one.
I hope you are right, but at least here it does not look like it.
VW announced the I.D. and a new e-up! But it is all only announcements, currently the cheapest car, the e-up! isn't even order-able. BMW announced the i2 (cheaper version of the i3) but it will take till 2021 to get one.
I hope you are right, but at least here it does not look like it.
52 years is a blip in human civilization. I'd be curious to see how in the grand scheme the depletion of oil looks. Will our tech/development boom grind to a halt all of a sudden? Do we switch to nuclear?
The Canadian & Venezuelan oil sands have about 4 trillion barrels of "Original Oil in Place". At current oil prices and level of technological development, only about 10% of this oil is considered recoverable and as such counted as reserves. But technology marches on, and if we start running out of oil from other sources, so will oil prices. So really, the world has hundreds of years worth of reserves.
Much more concerning is that we have to keep ~80% of those 52 years worth of oil in the ground to keep climate change under the 2 degree goal...
Much more concerning is that we have to keep ~80% of those 52 years worth of oil in the ground to keep climate change under the 2 degree goal...
> Much more concerning is that we have to keep ~80% of those 52 years worth of oil in the ground to keep climate change under the 2 degree goal...
Says who?
Says who?
What I am the most worried about the depletion of oil is that most people assume it will be a bell curve, like US' (conventional) oil production was.
Thing is, it was a bell as people switched to other more profitable sources of oil as US' oil was becoming more expensive. I fear the depletion of world's reserve could look a lot more like a cliff.
The absence of alternatives changes a lot the fundamentals of the problem.
Thing is, it was a bell as people switched to other more profitable sources of oil as US' oil was becoming more expensive. I fear the depletion of world's reserve could look a lot more like a cliff.
The absence of alternatives changes a lot the fundamentals of the problem.
the seneca cliff: https://thesenecatrap.blogspot.com/
I wouldn't be too concerned as renewables and nuclear technology should be at the point where it would be able to pick up the slack - we know the end is coming and we can prepare for it.
An interesting thought experiment is whether or not humans (or some future species) would be able to reproduce the technological advancements that oil enabled given some sort of apocalypse scenario that resets us to year zero.
An interesting thought experiment is whether or not humans (or some future species) would be able to reproduce the technological advancements that oil enabled given some sort of apocalypse scenario that resets us to year zero.
I remember watching a video in which it said how most current engineering jobs these days are really just destructive jobs.
They basically take an existing natural resource from the environment and turn it into another form of resource that human could make use of. But this in turn destroys that very same environment we human also live in, effectively wiping out ourselves in the process.
Those engineering jobs basically only convert one form of resource/energy into another, but they actually didn't create anything new out of thin air themselves.
They basically take an existing natural resource from the environment and turn it into another form of resource that human could make use of. But this in turn destroys that very same environment we human also live in, effectively wiping out ourselves in the process.
Those engineering jobs basically only convert one form of resource/energy into another, but they actually didn't create anything new out of thin air themselves.
I think it is fair to say most engineers do not violate laws of nature.
Oil isn't somehow magical in any manner - everything that oil does today can be boiled down to supplying kinetic energy. We don't use its chemical properties in any special way, it just happens to be among the most efficient in terms of calories per kg. With advances in battery tech, and large-scale shift to renewables, I think running out of oil is largely a non-issue in the long run (of course we'll have pains in shifting, but there will not be any long term drawbacks)
are sure? how many plastics including textiles would have to be replaced if we did not have the chemical properties of oil to create them? Any idea? I bet you are wearing at least one item of clothing with a textiel created with oil chemicals..such as nylon or others
There are processes that create crude oil given energy and some basic resources.
It is pretty useful as a base for all kinds of chemicals. All plastics for example are made from oil.
> We don't use its chemical properties in any special way, it just happens to be among the most efficient in terms of calories per kg.
As far as I am aware a lot of oil is used as raw material in chemical industry, not only as energy source.
As far as I am aware a lot of oil is used as raw material in chemical industry, not only as energy source.
The biggest issue is actually food - most of the seeds grown today are engineered to depend upon fossil-fuel based chemical fertilizers, and cannot actually survive on their own without both the chemical fertilizers and a large helping of herbicides/pesticides/fungicides (many of which are also produced by the chemical industry). Break that dependency and you have to undo the Green Revolution that multiplied agricultural output by 10x. Do that and instead of the world's current food production being able to support a population of 9B if they were all willing to eat a vegetarian diet, you'd be looking at 900M, i.e. about 85% of people on earth would have to die.
I suspect that if you took away all the demand for oil from powering cars, though, there'd be plenty left at reasonable prices for growing food and maybe even flying planes. So you do need some fossil fuel production, but get rid of its use in automobiles, heating, and electricity and the remaining reserves can be allocated much more efficiently.
I suspect that if you took away all the demand for oil from powering cars, though, there'd be plenty left at reasonable prices for growing food and maybe even flying planes. So you do need some fossil fuel production, but get rid of its use in automobiles, heating, and electricity and the remaining reserves can be allocated much more efficiently.
Oil is not used in the production of fertilizers.
Here's a quote I found in [1]
"The macronutrients required by plants are N (Nitrogen), K (Potassium) and P (Phosphorus). Oil is hydrocarbon, made from H (Hydrogen) and C (Carbon). There are no plant nutrients in oil.
Nitrogen fertilizer (N) is made from ammonia, which in turn is manufactured from natural gas, not oil"
[1] http://peakoildebunked.blogspot.com/2005/08/28-isnt-fertiliz...
Here's a quote I found in [1]
"The macronutrients required by plants are N (Nitrogen), K (Potassium) and P (Phosphorus). Oil is hydrocarbon, made from H (Hydrogen) and C (Carbon). There are no plant nutrients in oil.
Nitrogen fertilizer (N) is made from ammonia, which in turn is manufactured from natural gas, not oil"
[1] http://peakoildebunked.blogspot.com/2005/08/28-isnt-fertiliz...
> We don't use its chemical properties in any special way,
We do, 99% of plastics is made using fossil fuels. Big players are trying to shift to sustainable alternatives though, for example LEGO: https://www.lego.com/en-us/aboutus/news-room/2018/march/pfp
We do, 99% of plastics is made using fossil fuels. Big players are trying to shift to sustainable alternatives though, for example LEGO: https://www.lego.com/en-us/aboutus/news-room/2018/march/pfp
How would you argue that the answer is not, "no"?
I mean, we only really started to use oil industrially in like the mid 1800s, right? We'd already developed a lot of technology, doesn't seem ridiculous to think we could have gotten from there to here without oil. And maybe we'd have developed biofuels sooner?
To me as a casual observer it has always been obvious that the price of energy over the long term is going to zero. Ultimately all provided by renewalable sources.
Sure the price of certain forms of energy (wood fire, oil ...) may go up over time but while that happens cheaper sources appear and ultimately take over.
Sure the price of certain forms of energy (wood fire, oil ...) may go up over time but while that happens cheaper sources appear and ultimately take over.
"Renewable" doesn't mean "free energy". Constructing renewable energy sources (wind, solar, etc) takes more energy than constructing an equivalent non-renewable energy source - this is the EROEI (energy returned on energy invested). There's also space limits - see https://www.youtube.com/watch?v=E0W1ZZYIV8o
What's apparent to me is that we live in a unique era where energy is abundant and cheap, which may never be repeated (unless fusion power is developed).
What's apparent to me is that we live in a unique era where energy is abundant and cheap, which may never be repeated (unless fusion power is developed).
His conclusions seemed suspect to me - I remember doing out the calculations myself and came out with the conclusion that a 50x50 mile solar array in the Arizona desert could power the U.S. A 150x200 mile array in the Sahara could power the world. These are large arrays - they would be visible from space - but they are far from "country-sized", and quite doable if production costs come down (which they are - solar and wind are now cheaper than coal).
(You can check my math yourself: total world energy consumption = 109,136 TWh [1] / 8760 hours/year = 12.45 TW / 15 W/foot solar panel output [2] = 830B square feet / 27878400 ft^2/mi^2 = 29772 mi^2 = 150x200 mi array.)
Working through his math, I think the problem is that the UK is unique in a.) having a high population density b.) with a large per capita energy consumption and c.) a lot of cloud cover. On his chart, only Japan, South Korea, the Netherlands, and Bahrain had it worse. The U.S. and China both had an order-of-magnitude better energy consumption per unit area; most of the world had two orders of magnitude. That's an argument for why Britain is fucked in the new globally-warmed, fossil-fuel-limited world, but not why the world is fucked. A lot of developing areas could see their energy consumption rise to rival the U.S. and still not bat an eye with solar power.
The EROEI of solar panels is between 8.7 - 34.2; wind is 20-50. [3] As long as this number is > 1 (which it is for nearly every energy source except biofuels) you can keep building production capacity indefinitely; you just invest the energy from previous capacity into building new capacity. Higher numbers of course let you do more other stuff while this is going on and build out faster, but it's just like capitalism. As long as you turn a profit on each panel, you'll have more as time goes on.
[1] https://en.wikipedia.org/wiki/World_energy_consumption
[2] https://www.solarpowerrocks.com/solar-basics/how-much-electr...
[3] https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve...
(You can check my math yourself: total world energy consumption = 109,136 TWh [1] / 8760 hours/year = 12.45 TW / 15 W/foot solar panel output [2] = 830B square feet / 27878400 ft^2/mi^2 = 29772 mi^2 = 150x200 mi array.)
Working through his math, I think the problem is that the UK is unique in a.) having a high population density b.) with a large per capita energy consumption and c.) a lot of cloud cover. On his chart, only Japan, South Korea, the Netherlands, and Bahrain had it worse. The U.S. and China both had an order-of-magnitude better energy consumption per unit area; most of the world had two orders of magnitude. That's an argument for why Britain is fucked in the new globally-warmed, fossil-fuel-limited world, but not why the world is fucked. A lot of developing areas could see their energy consumption rise to rival the U.S. and still not bat an eye with solar power.
The EROEI of solar panels is between 8.7 - 34.2; wind is 20-50. [3] As long as this number is > 1 (which it is for nearly every energy source except biofuels) you can keep building production capacity indefinitely; you just invest the energy from previous capacity into building new capacity. Higher numbers of course let you do more other stuff while this is going on and build out faster, but it's just like capitalism. As long as you turn a profit on each panel, you'll have more as time goes on.
[1] https://en.wikipedia.org/wiki/World_energy_consumption
[2] https://www.solarpowerrocks.com/solar-basics/how-much-electr...
[3] https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve...
Your figure of 15W/sq foot assumes no gaps between panels - hard to imagine on a 50mile+ array. The bigger problem is that it assumes overhead, direct sunlight. You'd have to cut that at least in half ;)
Yes, the UK does have issues by these metrics, and the US is in the unique position of a huge per capita energy consumption and huge land reserves. Therefore, it is somewhat feasible in the US to just keep building wind and solar farms. However, I wonder how the economics of the non-renewable minerals needed would affect the price. It also doesn't (as far as I know) take into account all the extra infrastructure required to support the fluctuating nature of renewable energy sources.
Yes, the UK does have issues by these metrics, and the US is in the unique position of a huge per capita energy consumption and huge land reserves. Therefore, it is somewhat feasible in the US to just keep building wind and solar farms. However, I wonder how the economics of the non-renewable minerals needed would affect the price. It also doesn't (as far as I know) take into account all the extra infrastructure required to support the fluctuating nature of renewable energy sources.
Also, with a higher cost to manufacture these energy sources, it's inevitable that the cost to consumers will rise.
The gaps easily get canceled out by using newer solar panels; I took the low end of commercial solar power outputs I found on the web, many of the more recent ones do 20W/sq foot or more. 25% gaps seems generous.
I thought about the rare-earth issue, but there's a simple solution that bypasses both it and the energy-storage issue: use solar-thermal plants instead of photovoltaics. These require only mirrors and steam turbines, both made out of abundant materials. Efficiency is actually higher than photovoltaics (30% or so), and energy can be stored as heat for up to 5 hours before it's used. (Ironically, they have the same issues relative to photovoltaics that photovoltaics have over fossil fuels; in theory they're simpler and more environmentally friendly, but implementing the theory correctly requires solving a number of engineering problems that together make them cost more and generate more hiccups than photovoltaics have.)
The higher cost isn't actually true anymore, for photovoltaics and wind at least. Solar hit grid parity with fossil fuels in late 2015, and is now actually cheaper than coal power plants. This (rather than subsidies) is why the coal industry is in deep shit: it just doesn't make economic sense anymore, and the electric industry is rapidly switching over to renewables & natural gas.
I thought about the rare-earth issue, but there's a simple solution that bypasses both it and the energy-storage issue: use solar-thermal plants instead of photovoltaics. These require only mirrors and steam turbines, both made out of abundant materials. Efficiency is actually higher than photovoltaics (30% or so), and energy can be stored as heat for up to 5 hours before it's used. (Ironically, they have the same issues relative to photovoltaics that photovoltaics have over fossil fuels; in theory they're simpler and more environmentally friendly, but implementing the theory correctly requires solving a number of engineering problems that together make them cost more and generate more hiccups than photovoltaics have.)
The higher cost isn't actually true anymore, for photovoltaics and wind at least. Solar hit grid parity with fossil fuels in late 2015, and is now actually cheaper than coal power plants. This (rather than subsidies) is why the coal industry is in deep shit: it just doesn't make economic sense anymore, and the electric industry is rapidly switching over to renewables & natural gas.
The EROI literature suggests EROI needs to be much higher than 1 to sustain economic growth. Also, some estimates of solar panel (PV) EROI are as low as 3. This short article addresses both of these points: https://www.sciencedirect.com/science/article/pii/S254243511...
> To me as a casual observer it has always been obvious that the price of energy over the long term is going to zero.
This is not at all obvious to this casual observer. Earth radiates heat away at a constant rate. We can never produce more energy than the earth radiates away, for obvious reason. With current trajectories we will release more energy than earth radiates away in less than 200 years. I'm not sure how the price of a limited resource can go to zero, but I'm also not very well versed in economics.
This is not at all obvious to this casual observer. Earth radiates heat away at a constant rate. We can never produce more energy than the earth radiates away, for obvious reason. With current trajectories we will release more energy than earth radiates away in less than 200 years. I'm not sure how the price of a limited resource can go to zero, but I'm also not very well versed in economics.
Earth radiates heat away at a constant rate only because Earth's temperature is approximately constant. Actual black-body radiation is governed by the Stefan-Boltzmann law [1], and is proportional to temperature^4. A small increase in temperature significantly increases the amount of energy radiated, which then serves to moderate the temperature.
In practice, the total energy consumption of the Earth is bounded by the amount of solar energy that falls on the earth, which is about 100,000 times greater than current total world energy consumption. For what civilizations might look like that exceed that, check out the Kardashev scale [2], which classifies civilizations by the size of the astronomical object whose energy they harness. Type 1 civilizations harness a planet, Type 2 harness a star, Type 3 harness a galaxy. We're a lowly Type 0 civilization, which means that we have not yet attained the technology needed to make full use out of all of our planet's resources.
[1] https://en.wikipedia.org/wiki/Black_body#Radiative_cooling
[2] https://en.wikipedia.org/wiki/Kardashev_scale
In practice, the total energy consumption of the Earth is bounded by the amount of solar energy that falls on the earth, which is about 100,000 times greater than current total world energy consumption. For what civilizations might look like that exceed that, check out the Kardashev scale [2], which classifies civilizations by the size of the astronomical object whose energy they harness. Type 1 civilizations harness a planet, Type 2 harness a star, Type 3 harness a galaxy. We're a lowly Type 0 civilization, which means that we have not yet attained the technology needed to make full use out of all of our planet's resources.
[1] https://en.wikipedia.org/wiki/Black_body#Radiative_cooling
[2] https://en.wikipedia.org/wiki/Kardashev_scale
As I see it price is driven by our ability to consume energy and our ability to produce. The first part will peter out (you can only use so much heating, only so much transport) whereas the second part continues to grow long before we hit any sort of fundamental limit.
>A small increase in temperature significantly increases the amount of energy radiated,
The temperature in the formula is given in Kelvins, so for all practical purposes (300K less than 10°K variation), the 4th power means every degree increase the amount of energy radiated by ~1.3%
The temperature in the formula is given in Kelvins, so for all practical purposes (300K less than 10°K variation), the 4th power means every degree increase the amount of energy radiated by ~1.3%
I think you meant going to infinity.
Planes? There's no other alternative than biofuels unless you are happy landing every 2 hours.
Nuclear works too. The Burevestnik apparently (accorfing to WP) is flying a tubojet or turbofan nuclear engine.
Also conventional fuel can be made from pretty much any carbon using https://en.m.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_proc...
Hydrogen would also work vas a fuel.
Also conventional fuel can be made from pretty much any carbon using https://en.m.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_proc...
Hydrogen would also work vas a fuel.
Biofules are easy to make from crops. Getting jetfuel aka. Diesel from fatty seeds is trivial.
This is the cheapest oil to pump in the world, therefore it is likely to be the last to ramp down production. All the others will become uneconomical before this one does and therefore, unless they tap out while prices are still high, will stay in the ground longer.
Less CO2 released into the atmosphere I guess?
I always wonder about news like this. Is it wrong to assume that the company knew about this years ago already and made the rational decision not to tell everyone until the last minute? And how long have they known?
I always wonder about news like this. Is it wrong to assume that the company knew about this years ago already and made the rational decision not to tell everyone until the last minute? And how long have they known?
When I started studying economics the most baffling thing I learned was that the total amount of Oil we had was increasing and not decreasing. That weird fact kind of made me learn the basic concepts better and I think I have learned not to read too much into these sort of news items. Journalist often lack this outlook.
The world is not going to run out of Oil ever. The world is more likely to run out of "need for oil" sooner than the oil running our scenario. A particular oil field is fading means really nothing because Saudi has far too many unproven oil fields which it has not even bothered to explore yet. Now that this field might be running out very soon they will explore that oil and soon their production will grow up. The capital investment of discovery would reflect in slightly higher oil prices may be.
Coming back to the CO2 emissions point you raised, even if the Oil in that Oil field goes to zero in 1 year, it wont matter. There will be more supply available soon enough. CO2 emissions will probably go down unrelated to Oil production as developed countries move to electric cars and better power plants fired by nuclear, solar and wind energy.
The world is not going to run out of Oil ever. The world is more likely to run out of "need for oil" sooner than the oil running our scenario. A particular oil field is fading means really nothing because Saudi has far too many unproven oil fields which it has not even bothered to explore yet. Now that this field might be running out very soon they will explore that oil and soon their production will grow up. The capital investment of discovery would reflect in slightly higher oil prices may be.
Coming back to the CO2 emissions point you raised, even if the Oil in that Oil field goes to zero in 1 year, it wont matter. There will be more supply available soon enough. CO2 emissions will probably go down unrelated to Oil production as developed countries move to electric cars and better power plants fired by nuclear, solar and wind energy.
> The world is not going to run out of Oil ever
This is technically true but not really a great way to look at the issue. We will always have oil; it will just get progressively more difficult to extract it. The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.
This is technically true but not really a great way to look at the issue. We will always have oil; it will just get progressively more difficult to extract it. The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.
> The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.
It is actually getting easier and easier to extract oil an not difficult. Fracking is a great example. Earlier you needed thousands of wells working round the clock these days you only need an area as big as a football field to trap into a large reserve.
Your meta-point however is correct, it is not that Oil is going to run out but better options and cheaper options will come into existence. Also this probably will happen as a step change function and not something that can be extrapolated.
Very likely fusion cells, battery cells etc. would become ridiculously cheaper to the extent that many oil fields will stop being profitable and hence will be closed down. That will be the time where "oil runs out" and in general a great day for humanity.
It is actually getting easier and easier to extract oil an not difficult. Fracking is a great example. Earlier you needed thousands of wells working round the clock these days you only need an area as big as a football field to trap into a large reserve.
Your meta-point however is correct, it is not that Oil is going to run out but better options and cheaper options will come into existence. Also this probably will happen as a step change function and not something that can be extrapolated.
Very likely fusion cells, battery cells etc. would become ridiculously cheaper to the extent that many oil fields will stop being profitable and hence will be closed down. That will be the time where "oil runs out" and in general a great day for humanity.
I think that there’s going to be an equilibrium for a long time. The less oil we use, the cheaper it will become and we will probably just be using the cheapest and most accessible oil fields.
Or, if history and the Malthusian fallacy is any indication, increasingly advanced technology for cheap oil extraction will always put prices in equilibrium, regardless of the demand for oil and the cost of extraction.
Or, if history and the Malthusian fallacy is any indication, increasingly advanced technology for cheap oil extraction will always put prices in equilibrium, regardless of the demand for oil and the cost of extraction.
In the 80's, OPEC tied the amount of oil a country can produce to their stated reserves. This led to the OPEC countries steadily increasing their stated reserves. This, combined with heavy and unconventional reserves being found in South America and Canada, has resulted in a huge increase of stated world oil reserves. The cost of extraction is not factored in to this figure though. This does mean that we will never "run out of oil", but the cost of extracting it will steadily increase, causing other energy sources to eventually become economical or palatable (eg, nuclear, or coal - there's loads of coal still. Good luck stopping China from powering its economy with coal for the next 100 years).
The speculation on whether Ghawar can yield a lot less oil than most people think has been around for more than a decade. People used to worry about this stuff a lot more, back when it wasn't clear whether heavy oil and shale would be able to fill the gap (not to mention renewables).
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Good. The quicker it fades, the quicker the US can stop supporting this brutal, vile regime and its disgusting human rights practices and culture. Also, the more pressure there will be to switch to a non fossile fuel energy source. It can't happen quickly enough.
I agree with everything except for the word can. The US already very much can support stopping that regime. They prefer not to.
Well the US supports another vile regime and its disgusting human rights practices and culture, namely Israel. The U.S. House of Representatives passed a measure that would codify into law a $38 billion aid package to Israel. Clearly the US is about many things but ethics and human rights are only fringe concerns, let’s not pretend that Saudi Arabia is their only shady ally.
He didn't say they were the _only_ shady ally. Why are you derailing a discussion on Saudi Arabia with Israel?
> Well the US supports another vile regime and its disgusting human rights practices and culture, namely Israel.
Oh hello there, a nice example of anti-semitism.
> let’s not pretend that Saudi Arabia is their only shady ally.
Believe it or not, Israel is the only democracy in the area (aside from Kurdish Rojava but that one unfortunately isn't recognized as an independent state).
Oh hello there, a nice example of anti-semitism.
> let’s not pretend that Saudi Arabia is their only shady ally.
Believe it or not, Israel is the only democracy in the area (aside from Kurdish Rojava but that one unfortunately isn't recognized as an independent state).
> the US supports another vile regime and its disgusting human rights practices and culture
It’s possible to come up with examples of this for every country, including the United States. That being said, this is whataboutism.
It’s possible to come up with examples of this for every country, including the United States. That being said, this is whataboutism.
The US was a net exporter of crude oil as recently as December, 2018. Indeed, only an idiosyncrasy of the law, reversed in 2015, prevented the comparably colossal, richest country in the world from being a net exporter until very recently.
This is complete and utter rubbish. I do not know where you got this from, care to share?
The US used to be the worlds largest net importer of crude oil since at least the 1950s, and only recently (2016 or 2017) got overtaken by China. The US is by far the largest consumer of oil, using circa 20 million barrels per day, while producing around 12.5 million. Besides China, no other country even uses as much oil as the US imports.
The US used to be the worlds largest net importer of crude oil since at least the 1950s, and only recently (2016 or 2017) got overtaken by China. The US is by far the largest consumer of oil, using circa 20 million barrels per day, while producing around 12.5 million. Besides China, no other country even uses as much oil as the US imports.
I went digging. I found his claim repeated in a CNN article [1], but also found your claim backed up by government statistics [2][3]. His point was also backed up by a forward-looking government report, though [4].
Basically, the main differences were in products counted (CNN's headline includes natural gas and refined petroleum products as "oil exports", categories where the US is a heavy exporter) and in timescale. The production stats you cite are rising very rapidly - for reference, in 2018 alone U.S. production increased by 3 million barrels/day, almost 30% yearly. That's growing faster than the tech industry. So the government predicts that by 2021, the import/export shortfall will be completely erased and we'll be a net exporter of petroleum.
[1] https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi...
[2] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...
[3] https://www.eia.gov/tools/faqs/faq.php?id=33&t=6
[4] https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf
Basically, the main differences were in products counted (CNN's headline includes natural gas and refined petroleum products as "oil exports", categories where the US is a heavy exporter) and in timescale. The production stats you cite are rising very rapidly - for reference, in 2018 alone U.S. production increased by 3 million barrels/day, almost 30% yearly. That's growing faster than the tech industry. So the government predicts that by 2021, the import/export shortfall will be completely erased and we'll be a net exporter of petroleum.
[1] https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi...
[2] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...
[3] https://www.eia.gov/tools/faqs/faq.php?id=33&t=6
[4] https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf
Good job on doing the research - let me comment as follows:
EIA publishes crude import and export figures directly, see here: https://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_m_cur....
The second line of the above reference shows crude imports at 7.25 million bbls/d and crude exports at 2.57 million, so net imports of crude oil are circa 4.7 million bbls/day. Even this surpasses India (4.5mmbbls/d) and Japan's (3.9mmbbls/d) total usage, and only China and the US itself use more. And of course the original claim that the US is a net exporter of crude oil is completely wrong.
The rest of the statistics needs to be read with caution - what EIA calls "petroleum products" is an odd bunch, ranging from ethane (gas) to petcoke (solid). Such products are not counted in production numbers of Russia and Saudi Arabia, for example, and are also, pound-for-pound, of much lesser value than crude oil. They have a disproportionate share in the US exports. High value products such as gasoline, diesel and jetfuel are consumed "at home".
EIA publishes crude import and export figures directly, see here: https://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_m_cur....
The second line of the above reference shows crude imports at 7.25 million bbls/d and crude exports at 2.57 million, so net imports of crude oil are circa 4.7 million bbls/day. Even this surpasses India (4.5mmbbls/d) and Japan's (3.9mmbbls/d) total usage, and only China and the US itself use more. And of course the original claim that the US is a net exporter of crude oil is completely wrong.
The rest of the statistics needs to be read with caution - what EIA calls "petroleum products" is an odd bunch, ranging from ethane (gas) to petcoke (solid). Such products are not counted in production numbers of Russia and Saudi Arabia, for example, and are also, pound-for-pound, of much lesser value than crude oil. They have a disproportionate share in the US exports. High value products such as gasoline, diesel and jetfuel are consumed "at home".
Putting my tinfoil hat on: From a geopolitical standpoint, the USA’s longterm strategy likely was to deplete the oil reserves of foreign nations while keeping a large domestic reserve until the end. This has the advantage of being able to force those nations into submission once their oil runs out. When that is the case, domestic production is ramped up to cover domestic needs and the needs of foreign nations … as long as they back the interests of the US.
This decades-long strategy could have worked brilliantly until the end if it wasn’t for clean energy. Now that it’s clear that clean energy sources will replace fossil fuels sooner than later, all the domestic oil sitting in the ground needs to be extracted and sold as fast as possible before it becomes worthless. Since the US and foreign nations won’t depend on oil in the future, the US won’t need its oil reserve and floods the global market with all they’ve got for that sweet, sweet money.
This decades-long strategy could have worked brilliantly until the end if it wasn’t for clean energy. Now that it’s clear that clean energy sources will replace fossil fuels sooner than later, all the domestic oil sitting in the ground needs to be extracted and sold as fast as possible before it becomes worthless. Since the US and foreign nations won’t depend on oil in the future, the US won’t need its oil reserve and floods the global market with all they’ve got for that sweet, sweet money.
I think you're overstating the position of clean energy. The US currently gets 11% of its power from "renewables". 45% of that is from burning biofuels, wood, and a very small amount of bio waste.
What is the value of having principles, or in this case _supporting a brutal, vile regime and its disgusting human rights practices and culture_ if there is a clear upper limit to them?
Interesting to consider the politics of this.
On the one hand Saudi Arabia and others want to give the illusion of the wealth lasting for ever.
On the other hand, lower reserves would lead to higher prices, which is something they'd want to maximise.
On the one hand Saudi Arabia and others want to give the illusion of the wealth lasting for ever.
On the other hand, lower reserves would lead to higher prices, which is something they'd want to maximise.
No, they want to maximize the amount of money they get out of their oil, with money they get now being worth more than money they will get next year, with that being worth more than money they get a decade from now, etc.
Also, the house of Saud isn’t playing only that game. They also want to stay in power. They’re not universally popular in the region, so that means listening to their faraway supporters, who want to keep oil prices low.
Also, the house of Saud isn’t playing only that game. They also want to stay in power. They’re not universally popular in the region, so that means listening to their faraway supporters, who want to keep oil prices low.
I don't get what you're disagreeing with me about?
”higher prices, which is something they'd want to maximise.”
Yes...
You maximise money, by maximising prices (for some value of maximise).
I'm not saying they should be aiming for $1 million / barrel. But clearly $60 is better than $50, assuming that doesn't lower volume.
We seem to agree on that?
I'm not saying they should be aiming for $1 million / barrel. But clearly $60 is better than $50, assuming that doesn't lower volume.
We seem to agree on that?
Not really - they are relying on keeping output high to depress prices. Otherwise, other sources of oil (eg, US shale, South American oil sands) that are more expensive to extract become worthwhile, sending oil revenues to those other countries.
so when the Saudi start realising their spigot of unlimited money is starting to run out, i wonder how they'll behave.
My bet is, invasion forces. I can hope though that they'll push for space industry
My bet is, invasion forces. I can hope though that they'll push for space industry
They're investing in solar, who knows if it'll pan out. Throwing money at a problem works to a certain degree, and there's no question they have a sizable reserve to throw around.
They are rapidly becoming investors.
Their army is not in a good shape.
See: Yemen
I don't get it.
The article states that the Ghawar is "the world’s largest conventional oil field", and "can produce a lot less than almost anyone believed", and is in fact "able to pump a maximum of 3.8 million barrels a day -- well below the more than 5 million that had become conventional wisdom in the market"
The saudi "12 million b/d capacity" was known from before, I assume, so isn't the surprise that other fields make up a larger percentage than "guessed"?
Then how can it be "fading faster than almost anyone believed"?
And, isn't slower fading of their biggest reserve a good thing?
The article states that the Ghawar is "the world’s largest conventional oil field", and "can produce a lot less than almost anyone believed", and is in fact "able to pump a maximum of 3.8 million barrels a day -- well below the more than 5 million that had become conventional wisdom in the market"
The saudi "12 million b/d capacity" was known from before, I assume, so isn't the surprise that other fields make up a larger percentage than "guessed"?
Then how can it be "fading faster than almost anyone believed"?
And, isn't slower fading of their biggest reserve a good thing?
Pumping rate tails off as the extractable oil drops, so the fact that it's dropping off faster than expected in their biggest oil field is notable.
Look up oil and gas decline curves and you'll see that a faster declining oil production means you'll get a lot less oil out of the ground over the next 10 and 20 years.
And given a reasonable discount rate of 6% mean oil in 10 years is worth half of oil today and oil in 20 years is worth a quarter.
You also run into efficiency issues. Running a high volume rig much more expensive than running a low volume rig.
And given a reasonable discount rate of 6% mean oil in 10 years is worth half of oil today and oil in 20 years is worth a quarter.
You also run into efficiency issues. Running a high volume rig much more expensive than running a low volume rig.
Maybe the issue is the production fading, rather than the reserves? Any amount of oil in the ground doesn't do much for you if you can only extract it very slowly.
Generally extracting oil slowly is a good thing, it increases the total amount you're able to pull out of the ground. Increasing immediate flow means having to do things like pumping water into the field to increase pressure, and getting an increasingly watered-down mixture back out. Things that involve a pretty huge increase in complexity.
wow this is quite shocking! this means that we have reached peak oil quite possibly some time ago....OR for the cynical, the Saudi might be trying to pull a fast one by inflating the prices through scarcity...but that seems unlikely here.
What's more curious is that the US reported it as 5.7million barrels in 2004!
What's more curious is that the US reported it as 5.7million barrels in 2004!
So this is the bond prospectus that's replacing the planned float of Aramco?
Wasn't the plan basically to divest/diversify away from oil. This doesn't seem to be doing that, so what's the point?
Wasn't the plan basically to divest/diversify away from oil. This doesn't seem to be doing that, so what's the point?
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