The Ergosphere
Friday, October 28, 2005
 

Quote without comment

westexas writes at The Oil Drum:

"Technology and politics--not geology--determine how much we pump and what it costs."

Every time I hear this argument, I ask "what about Texas?"

We have had essentially zero political limitations on drilling, and we have tried every technological advance known to the oil industry. Exactly as predicted by M. King Hubbert, Texas oil production has fallen relentlessly for 33 years. If Texas were the sole source of crude for the world, for every four gallons of gasoline that we bought in 1972, we would be bidding for one gallon today.

Perhaps when Americans can't afford to heat their McMansions--after they listened to Peter Huber, et al, and bought Hummers to commute to large energy inefficient homes--they can burn books by Huber, et al in their fireplaces to generate heat.

 
Comments:
U.S. production has been declining for at least 3 decades. The number of wells have also been declining.

Now the question remains: is decline production a result of ALL oil in the ground declining or that U.S. policies have discouraged new exploration resulting in the natural decline of EXISTING OLDER wells?

I suspect the answer is yes. Certainly, the U.S. market has not encouraged exploration when one compares the cost of production with the price of oil. http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/cost_indices_equipment_production/current/coststudy.html
(figure 2)

The impact of foreign oil on U.S. oil production is analagous to the current impact of "outsourcing" manufacturing to China and India. We will really see the impact in another 20 years.
 
Well the Texas Railroad Commision played a curious role in there for a while. Not sure what effect they had on the production curve ... though I suppose they might have slowed it.
 
Until 1970, there were quotas on the production of oil in Texas (to maintain prices against a collapse).  After 1970, the quota was 100%.  The USA had hit peak oil.

There have been booms and busts in oil exploration in the USA; the Asian financial crisis and its attendant collapse of crude prices was a particularly bad time for US drillers.  But I don't see how that is a "U.S. policy", it was just an uncertainty.

Behind the claim that the U.S. market does not encourage domestic production is the assumption that there could be domestic product if someone was willing to pay enough.  Aside from the question of why we should pay more for domestic product than someone overseas wants to charge for their stuff plus shipping (which may have good answers in energy security), I question the assumption that oil can be produced just because there's more money in it.  If it were possible, wouldn't one of the price shocks in the 1970's have made it happen?

Think about it.  The production of oil requires first, that there be oil to produce, second, that the production not consume more oil-equivalent than it makes (usually abbreviated as EROEI, Energy Return On Energy Invested), and third, that the rate of production is geologically feasible.  The U.S. has huge numbers of stripper wells in operation.  I gather that many of them pump far more water than oil, which requires separation; faster pumping does not produce more oil, and is pointless.  While these wells may continue to produce at a decreasing rate for decades, the production curve is going in the opposite direction from our rising demand.  How, other than $60/bbl oil, would one encourage more production?  What else is necessary?

What if even that can't change the geological facts under the ground?

We've been seeing the impact of foreign oil and its implicit control over our economy since 1973, yet 32 years have not created more oil.  I think that 3 decades, plus numerous arguments from geology, physics and the other science, are enough:  it's time to give up on oil (simultaneously acknowledging that Huber is peddling bovine effluent) and move to make it irrelevant.
 
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