[Vwdiesel] It's peak oil, duh. [Fwd: Re: Diesel prices]

James Hansen jhsg at sasktel.net
Wed Mar 12 12:17:31 PDT 2008

That was true three or four years ago, but oil hitting 70 a barrel 
really touched off some major expansion.  Since the expansion, 
efficiency of scale and other extraction processes that were previously 
experimental are now in use, the breakeven point really has dropped. 
It's now around the 50 dollar mark, when it was at 63 years ago up at 
the Fort.  The changes are especially significant in the 
extraction-in-place technology that happens further south, where open 
pit mining like at Fort McMurray is far from practical.  The vein is 
exposed in the riverbank not too far north of Ft McMurray, and plunges 
deeper the farther south you go.  The focus will certainly shift to the 
much more environmentally friendly and much cheaper than 50 a barrel 
breakeven asphaltum that is further south (Cold Lake AB area), and the 
deposit is huge.  In sheer volume it makes Saudi look like a wee can of 
oil on your garage shelf.  Once a reactor goes in to supply electricity, 
rather than burning oil to supply the extraction process with steam and 
hydrogen, the costs come down further still.
(We're talking 36" high pressure steam supply line here- BIG volume) 
IIRC, in McMurray there is a third of a barrel being burnt to provide 
extraction steam and more in natural gas for a hydrogen source, which is 
fully costed in the breakeven price.

If you think waste veg oil is going to save you, dream on.
Here in hootersville, there is currently no waste oil available for 
free, which means that there will very soon be a market for it, because 
it has value.  Once it has value, you pay for it, just like everything 
else.  Enjoy it for free while you can, 'cause that is limited.

Canola seed pressed for oil is waaaay above breakeven for fuel. Canola 
is 40% oil, and is currently at $684/tonne, then subtract the crush and 
conversion costs as well.  Biodiesel is a long way off...

Erik Lane wrote:
> But isn't the point that the oil from the sand is so hard to extract
> that the price would have to be MUCH higher before it was worth it?
> As far as how much, it surprises me that it's that much, but I've
> never heard an amount, just that it was too difficult to get, at least
> with current prices. (Although that was a couple years ago, so prices
> have gone up a bit since then...)
> Erik
> On Wed, Mar 12, 2008 at 10:12 AM, James Hansen <jhsg at sasktel.net> wrote:
>> Maybe not.
>>  I have quite a number of friends that work in the oil and gas industry,
>>  and not as rig hands either.  Peak oil is a nice concept that sells
>>  papers, and generates market response at the commodity exchange level
>>  which is usually the desired effect all along, but in reality, it won't
>>  be here for quite some time.  QUITE some time.  There is asphaltum
>>  galore in the tar sands, more oil than all the developed fields have
>>  produced to date around the world. Yeah, that much.
>>  Unfortunately, suburbia will be here for quite some time.
>>  Perhaps the fear can be used to change usage patterns which would be a
>>  triumph unto itself.
>>  -james
>>  Will Taygan wrote:
>>  > In other words: it's peak oil, baby..
>>  >
>>  > In other other words: everybody wants oil, there ain't enough supply and those with the cash will pay more for it.
>>  >
>>  > My favorite peak oil film is "The End of Suburbia."  It's well made, and uses petroleum experts and international bankers to make the argument rather than the standard greenies.
>>  >
>>  > The website is a little hyped up, but the film itself is more reasoned and thought-out.
>>  >
>>  > http://www.endofsuburbia.com/index.htm
>>  >
>>  > Maybe your local library has a copy.
>>  >
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