The Manhattan Institute is not an objective source of information on this topic, whatsoever.

That we've exceeded the planetary carrying capacity of the planet for the effluent of fossil burning is not in dispute among credible scientists. We've had 30 yrs to deny and bargain, which are stages of grief. Time to get on with making the transition. It won't be free, it will require compromises and change on an enormous scale. New inventions will make it easier and cheaper, but we won't get there until we decide that fossil carbon sources cost us too much to use, regardless how convenient they are. We need carbon pricing to deal with the negative externality which makes fossil fuels seem so tempting that we can't even imagine replacing them.

That's right, attack the source.

But I agree with part of your statement, moltenmetal, the part about "we've exceeded the planetary carrying capacity of" HUMANS. But we have to adapt, not attempt to redirect the inevitable at all cost.

I don't attack the source unless I've got good evidence ABOUT the source, which I do in this case. Every single thing the Manhattan Institute says about climate change should be taken with an appropriate measure of salt. I suggest that the required measure is closer to an excavator bucketful than to a pinch.

We humans are about to become the only species in the history of life to voluntarily limit our population below the instantaneous limits set by immediate resource availability, reproductive success, disease, predation etc. We should be proud of that fact- it didn't take a big die-off nor draconian 1 child policies to get there- just educating people, providing access to healthcare, providing access to birth control, and ensuring that children have a better chance of surviving into adulthood so fewer of them are required in poor countries as a de facto life insurance policy.

"Institute" gets it a 99.95% complete BS rating in my book. Somewhat correct, but we are currently at low efficiencies. Efficiencies are increasing.

Proud? Save proud for when you win the race. We have only just now realised the race started without us.

Population control is currently voluntary, but how long will it be before other factors start doing that job for us? Climate change migration is also a form of local population "control", but it has opposite effects on other localities. Climate change related spread of diseases and pandemics are other possibilities that we only barely understand.

Everything we do has limitations. That's what got us here. We now need to determine if the limits are caused by lack of knowledge, resources and money, i.e. mc², because no society I know of has significantly reduced consumption of E. In fact, pretty much the opposite. And since E consumed is directly proportional to $GDP = k * E * R, R = Resources, k = conversion factor, ts pretty much destined to increase until E, R or k, approach 0.

No capitalist is thinking of voluntarily cutting $GDP. Supply of E, the most prominent climate change related variable, (primarily fossil fuels) has temporarily increased, mostly due to fracking, however it is still very much, if not even more so, limited. Fracked wells have accelerated production decline curves, so we have apparently extended our E supply curve a bit farther into the future, but we have also set it up for a hell of a fast and furious ride to E=0. The forced E-conversion point, when there will be only more limited and mostly less desirable options, currently coal, nuclear, or renewables. So, regardless of climate change, and given current opposition to the others, renewable energy sources will soon be essential one way or another.

It is not only a question of sourcing E.

Sourcing E is a choice that will not remain optional for much longer. It is pretty obvious that, while cheaper alternatives are available, we will take the fast and furious ride to oblivion. Gradually reducing $GDP, by for example a carbon tax, or carbon credit-purchasing scheme, or some other artifical means, potentially has the ability to achieve a smooth transition from the fossil-fueled economy. The only other alternatives currently involve rapid decline of $GDP and the associated total disruption of civilization in the process. If you think you have seen oil wars before, get ready for the mother of them all. Do you think that's alarmist? Do you think the major powers will just stand by and reduce $GDP voluntarily while tolerating "price extortion" from those that have. while it gets hotter and hotter. OK fine, but that has never happened before. I might suggest you do not have an understanding of the full implications of E=0. Why does that never enter the renewables conversation? Is it too far removed to follow that line of reasoning. A good deal of WWII was fought over E required to keep the machine running. Why is this situation different?

I keep hoping the eco-extremists reduce their energy use to the point the rest of us don't have to listen to their bassackwards logic nor continue to pay for their lobbying as we have for 50+ years. The simple fact of the matter is that we struggle to keep up with increasing demands for energy. We need every form of energy whether renewable or fossil fuel based. We also need all of those hydro dams the greenies successfully lobbied for the removal of in recent decades to "restore" nature.

Ultimately hokie is correct, the biggest cause of pollution worldwide is mankind and not due to our use of energy. Cities are simply naturally filthy environments due to high population densities and lack of vegetation. If we stopped running ICE vehicles in our cities tomorrow local pollution levels would increase, not decrease as a result. Blanket statements claiming all "credible scientists" believe oil to be some big bad boogie-man is just nonsense devoid of science leaving the rest of us to wonder if the speaker is devoid of knowledge or ethics.

Just one problem with wind power. Where do you get all the copper required for manufacturing wind turbines, when the greenies don't want you to mine it? Oh, and the steel (requiring coal) and the other stuff.

https://www.americanexperiment.org/2018/04/mines-o...

hokie, That's an interesting point, however why is your question significant. It implies that it is possible to generate more electricity using a lesser amount of copper and/or steel if using generators not powered by wind? Does any one type of generator use less less materials per Watt of rated capacity than any other?

My thinking is that a generator's material use is probably independent of whatever is used to drive them. I note that appears to definitely not be true of the driver being employed ,I.e. nuclear, natgas, gasoline, diesel, solar thermal sources, water turbines, etc. or wind turbines "propellers". I'm not sure, but I would think that composite, carbon fibre reinforced wind turbine blades might just be considerably more efficient users of copper and steel than a massive boiler, diesel and gasoline engines, or pretty much any other method that you could use to drive a generator.

Wind turbines have many disadvantages, but I doubt that overly inefficient use of copper or steel is one of them.

If think the issue is "unintended consequences". "Everybody" thinks electrical power is "green" 'cause it doesn't produce CO2 when the fuel is used. We're cutting down on the CO2 produced in creating the fuel (getting rid of coal burning power stations), ok, good. But there're a lot of hidden costs to "green" power … more copper for more grid (possibly a lot more grid if we have to transmit power for where it's produced to wherever it's needed) and generators and motors, rare earths and materials for batteries, etc. There's no easy solution.

another day in paradise, or is paradise one day closer ?

Certainly a wind turbine project built 500 km from its demand location will need tons of wire, as would any type of power station, refinery, steel plant, or whatever put in the wrong place. It is a mistake and very misleading to consider a poor location a direct consequence or a disadvantage to wind turbines. It is however valid to consider those factors as detrimental to the project in question, but that falls under a concept very different than the one which was stated.

From where do you get anything, other than a headache, that doesn't ultimately trace back to an Earth resource?

I think most people that want alternative energy get that some mining might be involved. Don't confuse them with others that don't want a mine in their back yard, or drilling oil on the North Slope.

Quote (CWB1)

If we stopped running ICE vehicles in our cities tomorrow local pollution levels would increase, not decrease as a result.

How do you figure that? There was a marked decrease in pollution haze early this year, when everyone was staying home.
Photos show impact of temporary air pollution drops across the world from coronavirus lockdown


If anything, non-point pollution from ICE vehicles is harder to reduce than point-source pollution from power plants charging EVs. The greater overall efficiency of EVs also plays a role.

My glass has a v/c ratio of 0.5

Maybe the tyranny of Murphy is the penalty for hubris. - http://xkcd.com/319/

The question of amount of material used to manufacture the generator itself vs it's electricity output is likely a utilization issue. A wind tower is incapable of running the generator anywhere near rated output capacity continuously, whereas a base load nuclear or gas plant is capable of doing that.

Material vs electrical output is a different question too, but an entirely valid point. I believe it is certainly a disadvantage of wind turbines. They virtually never come close to delivering their rated capacity and their average output decreases as the region of interest increases. I think it is however more related to site characteristics, as there would be no reason I know of that a WTG would not produce at rated capacity, if the wind velocity remained at design speed. It also fits with the larger area theory, as the larger the area if interest becomes, it would be reasonable to expect that more and more less favorable sites are included. I believe that WTG are extremely dependent on a near constant wind velocity and direction. Too much swivelling around and oblique angles of attack do not appear to be well considered when locating WTG projects. One thing that is clear in the data is that the average output to installed rated capacity decreases with area. I have found that for areas over 250,000 sq miles, average yearly output from WTGs varies between 12 to 21% of rated installed capacity, although evaluating WTGs in a smaller very favorable area can approach 50%. I personally have not evaluated any reaching higher ratios, but at least theoretically, they should exist, right?

Another related contemporary disadvantage to installing more WTGs is that all the "good sites", those with ideal wind and close to demand centers, have already been taken. Adding more capacity will come only at reduced output per W of future capacity installed, providing that all other variables remain equal.

There also must be lots of fossil fueled MW peak generators that do not have high percent utilisation ratios. There are some very large fossil fueled base load generating plants that are now shut down for years (Boston) due to alternative sources having priced that plant's total natgas fired capacity out of the market. Former customers are being required to pay for "standby".

No matter what the technology, when used inappropriately it is not going to do anybody any good, but that arguement should not be generalized and used to deride the technology itself.

The best point (that I've heard) about the Green New Deal is that we can't replace our current energy needs with magic unicorn farts. We need real, practical and perhaps incremental improvements in our carbon emissions.

1) Nuclear energy is carbon free. Produces less waste than burning coal. We need the climate alarmists to dramatically embrace nuclear power in order for us to make significant changes / improvements. This may take 20 years to get these plants built, so we need to start now.

2) We need to get replace our coal power plants ASAP. We don't have the capability to replace them with solar, wind or such now. But, if we were to replace them with combined cycle gas turbiness, that would be the biggest bang for the buck in terms of immediate CO2 emissions.

3) Solar and Wind have there place. But, they are much more expensive both in terms of cost to the consumer and cost per ton of CO2 reduction (probably, though I have to admit I haven't got the numbers). They also have extreme reliability issues that require other means of maintaining power for the grid.

There are plenty of other things we can do to incrementally improve things:
4) Higher fuel efficiency requirements for cars.

5) Taxes / Tariffs on imported goods that are produced in locations that use coal or such. These taxes could be used to pay for some of our green energy solutions.

6) There is an innovative (and partly successful) solar plant in California just this side of Nevada. The Ivanpah Solar Power facility. There are similar plants elsewhere in the western united states. But, what's neat about them is they use mirrors to reflect sunlight and heat up water to generate power via a traditional steam turbine. I say that it's only moderately successful because it's never generated as much power as they'd hoped. Plus, it uses natural gas to generate steam in the first part of the day. Making it more carbon reliant than we'd like.... Though it's still less than a third of the carbon emissions you'd get from a combined cycle gas turbine that generated a similar amount of power.

Why do I like #6 when it clearly still has flaws? Because it's much more scalable than rooftop arrays and wind. I can see efficiencies improving at some point. You create a plant that has BOTH combined cycle gas turbines and this type of reflective solar based steam generation and you might have a great reduction in CO2 that still provides power at night and during cloudy days and such.

What's the recycling rate for copper? If it is anything like gold then processing it from ore now is admittedly a short term CO2 investment, but makes no odds in the long term.

Cheers

Greg Locock


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I'd add 7 Fund Fusion research.

Inside 1 I'd include develop novel powerplants that lessen the potential issues (of pressurised water reactors) and research other fuel sources (eg Thorium)

Ontario has already done 2. Europe too ? but not China ??

Sure 3 … renewables are "good", and very PC.

another day in paradise, or is paradise one day closer ?

Thanks to everyone for participating in this discussion !!

I have learned some things

Implementing alternative Energy systems and the "green New Deal" are massive complex issues with implications for all of society.

We all benefit when many diverse viewpoints can be examined and debated ...

MJCronin
Sr. Process Engineer

rb1957 -

Excellent point!. Don't just build new nuclear plants, we also need to Fund research into making these plants run better and safer. That includes Fusion in a big way. If we can find a way to make Fusion feasible, then we (presumably) eliminate the biggest drawbacks with our current fision power plants.

Reduction of CO2 is not the only driver. We may be about to lose our golden egg. At this point every iron we have needs to be in the fire, because if it wasn't for development of horizontal drilling, fracking and other enhanced oil production tech, we'd have already gotten well used to $120-150/bbl, maybe even considering those prices a bargain. That new tech has extended petroleum's dominance for the time being, but there is no guarantee that it can continue forever, even without considering climate change related actions. Petroleum is still thought to be a finite resource, but regardless of if it is not limited in quantity, finding more of it and producing it economically is not trending in the most beneficial direction. Frankly IMO we've been pretty lucky that the tech came when it did and we only experienced marginal pains adapting to it and it worked so well that half the frackers are now declaring bankruptcy, which is another problem. We'll have to see how far that has to go yet. We thought the jig was up a few times before, but managed to drill our way out of it, however it is certainly not getting any easier. This is BP's current world production status and projection to 2030. Anything can happen after that and most of it ain't good. It suggests to me that beginning right now we should be squeezing every rock we can find, sharpening every tool in the box, and forging every alternate technology we can think of before we have to light the burners with coal to gasoil again. If you think that development costs of all that will be excessive and will deduct too much from GDP, wait until there is next to nothing of GDP left to do it with and we'll be lighting bush fires by rubbing two sticks together again. The golden egg is getting smaller and smaller.

https://peakoil.com/geology/world-oil-production-o...

I thought that we were possibly getting short on cheap (accessible) petroleum, but that there was plenty of oil in the ground (even at wells we're no longer using) 'cause it's "hard to get at". Fracking may well be a short term boon, I hope the future judges us well on it … pumping a soup of nasty stuff into (ok, close to) our water supply sounds problematic. In any case we have large reserves of shale oil (yes, more expensive than other sources but much better than nothing … 'cept perhaps if you're living in the area).

I herd long ago that the petro-chem folks were saying that petroleum stocks should be reserved for them, 'cause if we run out of plastic stock materials we're really screwed. Funny how we all view the world from our own corner !

another day in paradise, or is paradise one day closer ?

Getting at and producing that shale oil is basically what fracking is doing. Fracturing separates layers of shale to create void spaces allowing oil to collect and flow towards the well column. Prior to fracking being applied to shale formations, some shale oil was produced by surface mining of shale, crushing, heating and washing much the same as done with tar sand oil. Unfortunately generally considered a more environmentally unsound practice as large surface areas are affected. These are also expensive because of the large volumes of materials that have to be mined and the expenses involved in rehabilitation of those large surface areas after the oil bearing materials have been removed. Tar sand oils are high density, high viscosity and considered to come with high heavy metals content, which is why pipeline leaks involving tar sand oils are so problematic. And fracturing itself is troublesome, because of the fluids injected into the shale layers used to do the fracturing, of which some may migrate a bit too far away from the well and resist cleaning attempts before oil production actually begins. Plus, in some formations, the extent and degree of fracture is more difficult to control.

So fracking, and some other enhanced oil recovery (EOR) techniques, water injection, hot water, steam, CO2 injections, etc. have liberated a lot of that "oil in the ground", that oil which could not have been produced economically prior to the advent of EOR technologies, to which you refer. Unfortunately many of the wells using EOR are experiencing faster declines in production rates than those wells that did not require the use of EOR. It is thought that more rapid declines in EOR well production rates will tend to make much of the recent increases in total aggregate world oil production, but especially the USA total, which has increased mostly due to adding many fracked shale oil wells, decline that much faster as those wells come to end of life. And of course all of that work costs money, so the breakeven oil price from EOR wells typically have floors above $60-70/BBL even in the easiest to get at locations. Additionally EOR typically requires significant amounts of water and produce at least the same amount of contaminated water and mud, a lot of which is radioactive and which all of it must be properly disposed.

All in all, the best scenario currently looks like feeding the $GDP Beast is going to get considerably more difficult and expensive during the next 10 to 30 years. Interestingly the silver lining behind the Covid cloud, if there is one at all, may be that we might be able to learn how to significantly reduce HC consumption simply by changing some of our habits. We might also think of other ways to ease the transition off of cheap, inefficient use of HC. Tax air travel to fund high efficient mag-lev hi speed trains, but only where the two have coincident routes??? That's going to get a comment or two.

Dont worry about reserving oil production for petroleum processing companies, as they are the only ones that can turn it into useable stuff anyway, even if its only turning it into a feed stock for some additional use. There's hardly anything worse than handling crude oil, bitumen and tars.

Quote (1503-44)

That new tech has extended petroleum's dominance for the time being, but there is no guarantee that it can continue forever, even without considering climate change related actions.

I get what you're saying and it certainly makes sense intuitively.... And, since you're a petroleum engineer, I'll assume you know more about it than I do. But, I'd like to make a statement and ask you a question.

Statement:
I've heard a similar statement for 40+ years. That we're going to run out of oil within the next 20 years. But, then 20 years later, the world had MORE total reserves than they did 20 years before. Therefore, history suggests that statements like this have not been even remotely close to accurate. Now, I haven't seen numbers recently. But, I looked into is some years ago and the numbers were correct, the amount of total world reserves were up in a big way. This may have been due to opening certain areas up for development that were previously (certain types of off shore drilling, Russia, et cetera).

Question:
Why is this time different? Obviously, this isn't a renewable resource and eventually it will eventually run out. But, is there really evidence that the world is genuinely running out of oil/gas/petroleum?

Oil production of late has become both a question of advancing technology and economics of the price of oil. I imagine that they used to think that smoke signals and homing pigeons were the ultimate technologies for sending messages, until the advent of the pony express, telegraph, telephone, undersea cables, satellite and email. The short answer is... We keep on inventing and applying new tech to help us get more oil out of the ground. Necessity is the mother of invention and necessity has kept us going. Nobody foresaw the advent of EOR technology, or if they did, they realised nobody could afford to do it when oil was $6/BBL and not really ever expected to go higher. As conventionally produced oil became more scarce and the price rose, it opened up opportunities to explore new technologies, which turned out to be successful, at least as long as the oil price remained high. Oil production now draws from a vast array of technologies that have each experienced tremendous advances over the last 30 years and just about each and every one managed to make oil production possible for a X more years, but none were really seen as necessary or economically viable prior to the drop in convential oil production and higher prices started to look like they would form the predominate trend line. Before that time we just had to move the drill over a bit, later to the next country, later to deeper water, and keep on drilling.

Advances in geophysics and computer processing power have increased the chance of discovering smaller oil fields and lessened the risk in finding commercially viable oil reserves. Offshore exploration and production technology in deeper and deeper waters has helped. Development of more and better materials to suit higher pressure and temperature environments. EOR and all the above plus new drilling techniques have all combined to make it possible to keep adding to ever decreasing conventionally produced oil reserves. Still today 70% of world's oil is conventionally produced and in decline for many years now. 30% is produced through the use of enhanced techniques. We hope to be able to keep up with demand by utilising advancing technology, but it isn't easy to see what tech will be developed next when you're pushing every technology that you have available today to the limits already and each and every advance comes at a higher and higher cost. We have long since past the point of talking about new advances in oil production making oil cheaper. Now we're just doing everything possible to hold on to what we've got, no matter what the cost. So when the price falls, because we were so successful with one technology or another, as it has currently, it really makes it difficult to hold on while we're searching for still newer and better ways to get our hands on more.

So far we can't really say that oil will "ever physically run out", because there almost always seems to be some we left down there that we cannot produce today because of limitations of technique, material, knowledge and price. That could change tomorrow, but there is no guarantee that it can, or will. All we really know is what we know today, which is where we are and where the trends look like they will take us. So, those trends have looked for a long time now that, if our ability to buck the trends becomes impossible or difficult for any reason, we will run out of whatever oil we can produce using our existing technology within the next 15-20 to ..30-50? years. The current wisdom is that we've been rolling sevens for many years and managed to stay in the game, but the game keeps getting more difficult, farther away from home and more expensive and dangerous and the payoff looks like smaller and smaller fields to find and there's more and more work involved squeezing the rocks (expenses).

OK that's the short answer. I have to go now because my Magic 8-Ball says, "Ask again tomorrow".

PS. I'm actually not a petroleum engineer, but work in the biz. I read BP's "Yearly Energy Forecast" every Sunday morning with my breakfast.

"when will oil run out ?" ... "not today" (GoT reference)

you need better reading material for breakfast !

another day in paradise, or is paradise one day closer ?

IMO the world's proven oil reserves are not so much an indication of the actual proven reserves, but a geo-political-economic-influence-media game played by countries and people who don't know or care what the "actual" number is, even if it were known with an accuracy better than +/- 100%

Best to look up and understand what the word "reserves" means in reference to ANY mined material.

Here is a useful quotation from the seldom-read but all-important Appendix to the USGS Mineral Commodity Summaries:

USGS Mineral Commodity Summary: Appendix C- Reserves
“ Reserves data are dynamic. They may be reduced as ore is mined and/or the extraction feasibility diminishes, or more commonly, they may continue to increase as additional deposits (known or recently discovered) are developed, or currently exploited deposits are more thoroughly explored and/or new technology or economic variables improve their economic feasibility. Reserves may be considered a working inventory of mining companies’ supply of an economically extractable mineral commodity. As such, the magnitude of that inventory is necessarily limited by many considerations, including cost of drilling, taxes, price of the mineral commodity being mined, and the demand for it. Reserves will be developed to the point of business needs and geologic limitations of economic ore grade and tonnage. For example, in 1970, identified and undiscovered world copper resources were estimated to contain 1.6 billion metric tons of copper, with reserves of about 280 million metric tons of copper. Since then, almost 500 million metric tons of copper have been produced worldwide, but world copper reserves in 2015 were estimated to be 720 million metric tons of copper, more than double those of 1970, despite the depletion by mining of more than the original estimated reserves. Future supplies of minerals will come from reserves and other identified resources, currently undiscovered resources in deposits that will be discovered in the future, and material that will be recycled from current in use stocks of minerals or from minerals in waste disposal sites. Undiscovered deposits of minerals constitute an important consideration in assessing future supplies. USGS reports provide estimates of undiscovered mineral resources using a three-part assessment methodology (Singer and Menzie, 2010). Mineral-resource assessments have been carried out for small parcels of land being evaluated for land reclassification, for the Nation, and for the world.
Reference Cited: Singer, D.A., and Menzie, W.D., 2010, Quantitative mineral resource assessments—An integrated approach: Oxford, United Kingdom, Oxford University Press, 219 p.”

Quote (1503-44)

Still today 70% of world's oil is conventionally produced and in decline for many years now.

Thank you (and others) for indulging my trip down this rabbit hole. I included this one sentence from your response because I think this likely gets to the heart of what you're saying.

When I was referring to the 1980's and such when oil reserves were constantly increasing despite many anti-petrochem folks talking about it being a dying industry for 20+ years....I realize that this was likely when those reserves and oil production was pretty conventionally extracted.

Your point with the quote above is that conventional extraction is going down significantly and that we've been developing alternative means from conventional extraction.... Which is an indicator of how much more difficult and expensive extraction is becoming.

I accept that and believe it to be a good argument. While I will never be much of an expert on this subject, it gives me enough insight to continue to have intelligent conversations on the subject.

Thank you again!

OK, so 30% of the oil comes from non-conventional methods because those methods have been refined until they are cheaper than the conventional methods. But did the conventional extraction cost rising drive this or did ongoing research into cheaper and better extraction methods drive this. Producers are always trying to figure out faster and cheaper means of extraction regardless of the current extraction costs, it'd be silly to try and argue the opposite.

The price of a barrel of crude seems to vary more due to stock market and political pressures than possible availability.

Many shale and EORed fields could already be in decline. There has been notable drops in some output already, but it can take 5 years or so for long term trends in fields to get confirmed.

Attached file is BP's current global production forecast. Declines are indicated in both conventional and tight oil, well production from fracked or other more difficult to produce oils. Tight oil production appears to have been in decline since 2018.

I built a pipeline to an offshore platform in 1980 at Galveston Block 144. In 1990, while working for a different company, I needed to build an offshore platform so we could join several pipelines together and build a metering station offshore Louisiana. Galveston 144 had stopped producing by then and the equipment was for sale. I arranged to buy the platform and have it towed to Lousiana. We pulled it up and floated that platform to Louisiana and reinstalled it there. We set up our pipeline junction on top. So I know that some fields definately run out. I also it can be an eventual outcome for any of them. That made me believe that sooner or later we will be dealing with a finite resource. But we don't actually have to run totally dry to have a problem. All that has to happen is for demand to significantly exceed supply for a significantly long time. That's when the oil price goes ballistic and the economy goes bad for 5 years afterwards while we learn how to get more oil at the new higher price. I also figure we'll know when we're running out of oil for sure when the economy has been bad for 10 consecutive years and nobody has enough money to buy it.

• https://files.engineering.com/getfile.aspx?folder=5d702a22-6271-4d31-ba5b-a

Quote:

so 30% of the oil comes from non-conventional methods because those methods have been refined until they are cheaper than the conventional methods.

Only when the prices stay relatively high, since the marginal cost is still much higher than with the more easily accessible oil that OPEC and others have; OPEC has attempted a couple times already to kill US production, by allowing prices to drop, but many producers were able to stay afloat, and most of OPEC are loathe to sell their oil at such low prices, so they cut back on production.

TTFN (ta ta for now)
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If 30% of oil produced today is from non-conventional means then that would logically mean the methods used for these non-conventional extraction means have been refined to the point they're competitive with the conventional extraction means. Otherwise, they wouldn't be in use. Further, the current "in the dumpster" crude oil prices would also logically means these alternative methods have gotten rather cheap to use or they wouldn't be in use today. Yet, they still are.

Maybe a better question would be did the non-conventional means become competitive and take over 30% of crude production because crude prices went up or did they become competitive and take over 30% of crude production because companies developed them trying to make more money from the oil rights they have access to?

Lionel, your logic is flawed. The market price of oil is determined by supply and demand and not the cost of production. Buyers do not care how much it costs to produce oil. Enhanced oil recovery always cost more than non-enhanced. EOR has increased the supply of oil and that is what has lowered the price, even though costs have gone up. Profits of oil producers have gone down. Producers cannot just stop producing because prices are down. OPEC did that, and it worked back in the 70's, but there are many other suppliers now and they all have to eat. And when OPEC cut supply they only cut it slightly less than demand. The supply chain cannot just be shutdown or else it will collapse and cannot be easily restarted. Sometimes producers sell at a loss because shutting down will result in greater losses in the short term.

Same thing applies to the price of toilet paper, and to electricity in California. If the demand exceeds the supply by 1% the price of the entire commodity market can skyrocket.

Oh, we're still in the rabbit hole. I have a slightly different take on this.
a) I believe the non-conventional means are STILL more expensive than conventional means of extraction.
b) The oil, gas and petrochem companies will invest in this type of extraction when oil prices are high. That's when they have money to invest in these types of more expensive techniques.
c) When oil prices come down significantly, they will stop investing in expansion of shale oil. But, they've already invested enough that a good amount can be produced at a reasonable MARGINAL rate. But, not at a rate high enough to justify further investment in equipment and land and such. I'll also point out that this shale oil and such benefits from being much more local. You have cost benefits that are unrelated to extraction (i.e. reduced transportation costs, no tariffs, no foreign taxes) and political benefits (employment, not pouring money into countries that hate America and Canada). So, while it's probably still a more expensive procedure, it still makes sense (to some degree) after the initial investments have been made. However, the output will go up much more quickly when prices rise again.

Pretty much true Josh.

Nonconventional oil (NCO) needs $60/BBL minimum, that's why 200 USA companies specializing in NCO have declared bankruptcy the last 2 years. That may also be responsible for some of the production decline experienced since 2018. Some production is shut in because there was no place to put it, even though they've been building tanks in Cushing, OK as fast as possible for years. All of which when combined with Covid demand reduction in March, caused the price to drop to $-20/BBL for a week or so.

Saudi crude ,mostly all CO found at shallow depths, can de delivered FOB in the Arabian Gulf for as little as $8/BBL.

It is thought that both Saudi Arabia and Russia are trying hard to bankrupt North American shale oil producers, not that they needed much help. They were well on their way beforehand from their own actions of producing at rates over previous demand levels.

During the oil/gas glut of the early 80s I worked for the largest producer of natural gas in the USA. Prior gas prices were over $6/1000 CF in some US states. Spot market price then hit $1.50 It was an independent oil company, not a major, that had been in bankruptcy for 11yrs (related to refinery operations). There were a lot of bills to pay and we could fuel all of NYC if we wanted to. Instead of shutting wells in while we waited for prices to rise, all those bills in the mailbox and the long line of creditors knocking on the door worked against us. We had to open up more of our wells to reach our max flow to keep our required cash flow going. The price dropped down further to 1.18 and we still kept drilling... for a little bit longer. It did not end well.

Some Mideast countries may be reaching the same predicament. Saudi Arabia has already completed an IPO of an offering of a few % of SaudiAramco and has borrowed several hundred billion dollars over the last couple of years. Oman and UAE are considering the introduction of sales taxes! UAE just sold its pipeline system to generate some additional cash. Many other active projects have been put on hold or completely shut down due to low price and other C19 related reduced demand issues. C19 complications being the ultimate trigger.

The future reduction of petroleum supplies looks to me like it will be accompanied by a series of ever increasing price spikes, caused by smaller and smaller disruptions in any part or point in the supply chain, becoming more ond more frequent and of longer duration, until they eventually merge together into one big mother of them all and ... "Ask again tomorrow".

My logic may be flawed, but claiming that 30% of oil being produced today is done at a $20+ per barrel loss also has a flaw in it.

Compositepro - You seem to be claiming that very little production shuts down when the price drops and there is no longer profit. That logic is also flawed.

First of all I'm not claiming anything.

Those that can wait for money shut in wells when price is lower than their production cost. Those that need cash flow don't always have that option.

Saudi is making money. Others are not. Others are breaking even. That depends on the production cost and their sales price.

Selling at a loss isn't fun, but it puts money in your pocket. After you've paid the geologists and drillers and for all bells and whistles you'd like to make your money back, but sometimes you have to sell at any price just to be able to pay the rent.

Quote (CompositePro)

Producers cannot just stop producing because prices are down. OPEC did that, and it worked back in the 70's, but there are many other suppliers now and they all have to eat

This is an argument against the basic concept of supply and demand. When prices go down the produces will extract less oil. They'll shut down the more expensive operations, they'll stop paying overtime for workers, they'll use that time for needed maintenance that temporarily close facilities and such. They'll "trim the fat" from their organizations to be more cost effective. All that results in a lower supply.

Now, I do understand what you're saying... That this is a highly competitive industry with many suppliers. And, once the wells and such are drilled and all the equipment is set up, a lot of the money has been spent. As such, the supply side isn't as vulnerable to wide fluctuations as most other industries.

Even if they aren't making a profit, it can make senses to keep operating. If the variable costs are covered, production will offset some of the fixed costs. Reducing losses isn't as good as making money, but it's better than nothing.

Forcing the fossil industries to internalize their external costs would have a huge impact on the market, though.

My glass has a v/c ratio of 0.5

Maybe the tyranny of Murphy is the penalty for hubris. - http://xkcd.com/319/

The "cost" of oil in mainly the capital investment that was made to find the oil, drill for it, fracture the rock, build pipelines and storage facilities. When this is done with borrowed money, you cannot stop making payments on the loans by stopping the pumps. All that does is stop the cash flow needed to keep up with payments. As noted by others the cost of pumping oil from existing wells is ridiculously low, and therefore,so is the amount saved by not pumping. If you need cash to avoid bankruptcy every dollar is golden.

New projects and exploration will be put on hold.

There is an additional problem with shutting in production, especially fracked shale wells. Many wells cannot be restarted easily and some wells sustain permanent damage and never recover to their previous production levels. Since there is little experience in shutting in shale wells, nobody is certain what might happen on a restart. Its still unknown territory.

The-Major-Problem-With-Shutting-Down-Oil-Wells

How does the depletion allowance play into the laws or physics?

It is not a law of physics. It is a provision of USA tax code.

Quote (MJCronin)

trillions of dollars in subsidies

That figure sounds scaremongeringly excessive.
Even if it is not, there's plenty of subsidies available to be clawed back from Oil & Gas and the Military-Industrial Complex.

"Everyone is entitled to their own opinions, but they are not entitled to their own facts."

Quote (moltenmetal)

The Manhattan Institute is not an objective source of information on this topic, whatsoever.

NO 'thinktank' is an objective source of information on ANY topic, whatsoever.

"Everyone is entitled to their own opinions, but they are not entitled to their own facts."

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