Industrialized Cyclist Notepad


Don’t Worry, It’s Not Oil

I’m sure you’ll be able to sell your house, no problem..

Many photos of Exxon’s Mayflower, Arkansas spill (definitely not oil) via EPA On-site Coordinator website: http://epaosc.org/site/image_list.aspx?site_id=8502

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Still more North American energy security

Canadian Prime Minister Stephen Harper approved Cnooc Ltd. (883)’s $15.1 billion takeover of Nexen Inc. (NXY) and Petroliam Nasional Bhd.’s C$5.2 billion ($5.2 billion) takeover of Progress Energy Resources Corp. (PRQ)

via Canada Approves Both Cnooc-Nexen, Petronas-Progress Deals – Bloomberg.



The amazing red mound

The happy talk on future production is crazier than ever in the latest IEA World Energy Outlook, but there are also some stunningly pessimistic predictions buried inside. Wild!

For instance: The US will become number one oil producuh again and rediscover our lost oil-producing prowess with about 11 million barrels/day (Yay!) — which must mean Saudi Arabia won’t approach IEA’s previous prediction for that country of roughly 15 mbd output (Ooof). And the predicted exporter status of the US (Yay!) relies as much on a huge drop in consumption as it does on increases in production (Ooof). So it’s a bit of a sad day in IEA land, where consumption always went up, up, up.

From Tverberg:

The International Energy Agency (IEA) provides unrealistically high oil forecasts in its new 2012 World Energy Outlook (WEO). It claims, among other things, that the United States will become the world’s largest oil producer by 2020, and will become a net oil exporter by 2030.

Figure 1. Author’s interpretation of IEA Forecast of Future US Oil Production under “New Policies” Scenario, based on information provided in IEA’s 2012 World Energy Outlook.

Figure 1 shows that this increase comes solely from the expected rise in tight oil production and natural gas liquids. The idea that we will become an exporter in later years occurs despite falling production, because “demand” will drop so much.

via http://ourfiniteworld.com/2012/11/13/iea-oil-forecast-unrealistically-high-misses-diminishing-returns/

Note that IEA and other maniacs add NGLs, biodiesel and even ‘refinery gain’ to the US oil production number, in a crude attempt to fool y’all.



More on China Buying Up Canadian “Oil Sands”

Recall that American consumers are (strongly) encouraged to think of Canadian production as domestic production.

CNOOC’s blockbuster deal for Nexen, if nothing else, is a stark indication of how far the goal posts have moved not only for Canada’s oil patch, but also for world oil demand. Only four or five years ago, the notion that a state-owned Chinese company could buy—lock, stock and barrel of bitumen—one of Canada’s premier oil names was politically unthinkable. Any such deal was sure to be turned down by Ottawa under its Foreign Investment Review Act (not to mention the hue and cry that would come from Alberta’s provincial government).

Today, that’s all changed. CNOOC’s $15-billion offer for Nexen follows a number of major foreign transactions in Canada’s energy sector. Among others, Malaysian energy giant Petronas is paying $5.5-billion to get at Progress Energy’s natural gas reserves in British Columbia. Earlier this year, PetroChina completed a two-pronged deal for Athabasca Oil Sands Corp. that tallied $2.5-billion. In 2010, Sinopec paid $4.65-billion for a 9 percent stake in Syncrude, which runs Alberta’s largest oilsands mine.

via CNOOC’s Nexen Bid Shows How Far Goal Posts Have Moved | Jeff Rubin.

See this too.



Hamilton on the future of U.S. shale oil

Throwing a little cold water on some recent, loudly reported unscientific predictions. When you read Hamilton, always be sure to read the comments by Jeffrey Brown for an important Big Picture view.

In addition to the uncertainties noted above about extrapolating historical production rates, the rate at which production declines from a given well over time is another big unknown. Another key point to recognize is the added cost of extracting oil from tight formations. West Texas Intermediate is currently around $85/barrel. With the huge discount for Canadian and north-central U.S. producers, that means that producers of North Dakota sweet are only offered $61 a barrel. Tight oil is not going to be the reason that we return to an era of cheap oil, for the simple reason that if oil again fell below $50/barrel, it wouldn’t be profitable to produce with these methods. Nor is tight oil likely to get the U.S. back to the levels of field production that we saw in 1970. But tight oil will likely provide a source of significant new production over the next decade as long as the price does not fall too much.

via Econbrowser: Shale oil and tight oil.



Who Owns the Tar Sands?

http://www.desmogblog.com/tar-sands-oil-companies-71-percent-foreign-owned-cue-ezra-levant-s-outrage

In a recent Bloomberg interview, Dan Yergin suggested we consider Canada as “not a foreign country,” thus oil from Canada is just like oil produced within the United States. Voila! Turns out oil from Canada is not even like oil from Canada.



The Fracking Won’t Save Us Chart

From EIA. Prudhoe Bay also “reversed the decline in domestic oil production” at one point.


click to enlarge



Economic threshold of oil from Canadian tar sands

More commonly, less accurately known as oil sands.

From Canada’s Energy Future (pdf), a 2011 report from the National Energy Board.

The threshold will be highly dependent on the price of natural gas.



Map of US shale plays




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