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Where the US crude oil imports have come from
Posted by Heading Out on June 8, 2005 - 6:28am
Every now and again it is helpful to remember that the United States produces less than half of the amount of crude oil that it uses, and to remind ourselves where the rest comes from. Prof G last did this on May 10th in terms of annual numbers just recently, but having just been persuaded of the value of a picture, I am appending one from the EIA showing the growing dependence on foreign oil and where, in the years up to 2003, that it came from.
These plots will probably pop up again as the picture changes. For example note that we have been getting oil from the UK. Well the UK production is declining to the point that it is about to become a net importer of oil, so we can assume that that source will be potentially be denied to us (or we may, as we have recently, refine it into diesel and sell it back). Mexico is now anticipated to peak in production this year, and then perhaps decline by the same 14% that appears to be happening in the North Sea. There is now some debate as to whether Nigeria is peaking, and the situation is Venezuela is, to put it mildly, somewhat in question these days. In the past Columbia supplied some of the "other", and Norway is included in the North Sea bit, but they too are now in decline. You may begin to understand why we spend a lot of time on this site talking about the potential supplies from the Middle East and OPEC in general.
Rigzone just noted that ConocoPhillips is trying to help the Russian production (a la Oil Storm) in the hope of getting some 200,000 bd for a project cost of $1.5 billion, by developing a new field in Russia. Given the time that it will take to develop the property, the increasing worries about overall Russian production and the European expectation that Russian supplies will provide their long term needs, as well as the hopes of the Chinese and Japanese, this may be a concern. And it raises questions as to future vulnerability, as the Ukraine and the UK might have just noticed.
And the Russians themselves are getting increasingly pessimistic, as Rigzone also reported
Kevin Drum was one of many places that picked up the Washington Post story on the ongoing decline in Alaska (which hardly changes with the well that we mentioned coming on stream at the end of last month). There is one point that needs to be made about places such as that. In the center of the United States it does not cost too much to put a small donkey engine on a well to keep stripping production from reservoirs that are almost, but not quite done. And they can remain that way for many years adding the odd barrel or two to the inventory. That option is not the case in places such as the North Sea and Alaska. There, at a certain point, the game is called over, the platforms are removed, the pipes that feed from under the seabed are cut off (well below the sea floor), the holes are filled with concrete and it is absolutely over. At least in the current version. As CO2 becomes more of an issue wells might be used for sequestration, but that is another issue for another day.
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Technorati Tags: peak oil, oil
These plots will probably pop up again as the picture changes. For example note that we have been getting oil from the UK. Well the UK production is declining to the point that it is about to become a net importer of oil, so we can assume that that source will be potentially be denied to us (or we may, as we have recently, refine it into diesel and sell it back). Mexico is now anticipated to peak in production this year, and then perhaps decline by the same 14% that appears to be happening in the North Sea. There is now some debate as to whether Nigeria is peaking, and the situation is Venezuela is, to put it mildly, somewhat in question these days. In the past Columbia supplied some of the "other", and Norway is included in the North Sea bit, but they too are now in decline. You may begin to understand why we spend a lot of time on this site talking about the potential supplies from the Middle East and OPEC in general.
Rigzone just noted that ConocoPhillips is trying to help the Russian production (a la Oil Storm) in the hope of getting some 200,000 bd for a project cost of $1.5 billion, by developing a new field in Russia. Given the time that it will take to develop the property, the increasing worries about overall Russian production and the European expectation that Russian supplies will provide their long term needs, as well as the hopes of the Chinese and Japanese, this may be a concern. And it raises questions as to future vulnerability, as the Ukraine and the UK might have just noticed.
And the Russians themselves are getting increasingly pessimistic, as Rigzone also reported
There is no sign of a major acute falling off in production. And there is no palpable sign of a reserve problem, at least not yet. The Wall Street Journal reported: "In a recent interview, Vagit Alekperov, president of No. 1 Russian producer OAO Lukoil, said he expects industry production to stabilize between 9.2 million and 9.4 million barrels a day over the next several years after ["slight growth"] this year. Rising domestic demand is likely to leave less crude for export, he said. Government forecasts also see production stagnating through at least 2008, after rising 9% or more annually in recent years."
Kevin Drum was one of many places that picked up the Washington Post story on the ongoing decline in Alaska (which hardly changes with the well that we mentioned coming on stream at the end of last month). There is one point that needs to be made about places such as that. In the center of the United States it does not cost too much to put a small donkey engine on a well to keep stripping production from reservoirs that are almost, but not quite done. And they can remain that way for many years adding the odd barrel or two to the inventory. That option is not the case in places such as the North Sea and Alaska. There, at a certain point, the game is called over, the platforms are removed, the pipes that feed from under the seabed are cut off (well below the sea floor), the holes are filled with concrete and it is absolutely over. At least in the current version. As CO2 becomes more of an issue wells might be used for sequestration, but that is another issue for another day.
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The problem of using wells for CO2 sequestering is that they deteriorate, and CO2 doesn't help corrosion effects. The rock strata are not ":fixed" forever. Water and gases move to higher ground, and the wellbore provides a "chink" in the relatively horizontal stratigraphy of most sedimentary rock. Thus we have to monitor wells for "channeling" up the sides of the cement holding the pipe in place, and we have to periodically inspect for corrosive deterioration. This is especially true for gases, which tend to find every little defect.
Once the wells have been plugged and abandoned, it costs almost as much to find and re-enter them as drilling a new well. And the cost of maintaining stripper wells in harsh locations is a non-starter. Most stripper wells are run by Mom & Pop Oil Inc., as they require TLC which the majors do not have time for.
Our import picture, strangely enough, may not change as much as you would think. Just because it is UK oil doesn't mena they will not ship it to us. Free market oil companies sell to the best buyer at the time, so that end of the business is very fluid. National oil companies tend to opt for bigger contracts, but they are still profit driven. Transportation cost is a separate issue from the purchase contracts. The declining nations will likely still export without intervention from the top, and free market oil companies don't care who the buyer is, as long as they can pay.
Just a few things that came to mind after reading this one.
I wouldn't expect anything to happen in the production picture quickly. We can rock along with increasing oil prices for a decade or more, provided China doesn't go nuts with demand, and that Ghawar doesn't crash. The rest (force majeure, hurricanes, accidents, etc.) will simply be more aggravating and increase price through volatility.
This is what makes the current scenario so dangerous - each price plateau will be many months or years apart if we are lucky. This allows the issue to be "back burnered", and lulls the general public into thinking "oil is well" with the world. Meanwhile, we are at the most opportune time to invest in something else, while oil is NOT $200/bbl.
Thus government officials can fiddle and profiteer while Rome burns, and there is no public outcry. Peak Oilers are scragged as "chicken littles" and the global wealth re-distribution machine rolls on.
While painful, my hope is that in the next 5-10 years Ghawar drops off precipitously and irreversibly. Nothing less will do.
I couldn't find the reference but there was a comment by either an MP or Minister in the UK last week that they see Russia as their long term supply source. I'm trying to put together a better picture of the Russian situation, but if that falls through then Europe is going to be in a world of hurt. They are moving quite quickly, however, to find other solutions (the new wind farm that Shell is going to put in before 2010 for eg).
And there is a fair bit of evidence (at least there was until someone realised what it said) that Ghawar is declining at least at 300,000 bd/year and has been for a while.
Oh and I wasn't suggesting going back into old wells, but rather leaving them open for Carbon dioxide injection - there was a study just released on using one of the North Sea wells and though it is not economic there since they also had to run pipes from the power station among other things, it is something that might become politically economic in the future at abandonment - though it is not now.
J,
I'm not so sure that we won't see a much more substantial market response, along with a shift in mainstream perception about oil supplies, in the short run.
The movement we're seeing already in the U.S. car market toward greater fuel efficiency is more than most people predicted, and prices haven't begun to get "interesting". (My guess is that U.S. gasoline at over $3 will begin to sound the alarm, and that $3.50 to $4 is when you'll start seeing panicked conversions to smaller vehicles, people screaming for the government to "do something", etc.)
Lou -
The reason I say we will probably rock along is that the first knee-jerk response will probably be tight CAFE standards and go to 55 MPH. That will alleviate the first "price plateau" as far as the government is concerned. They will be seen as doing something, and the sheeple will be content again. This is the solution at $4 gas price point. Government will go that way because the people have already swallowed it during the 1970's. The UK has swallowed $4 gas long ago.
This is the point where an administration change coupled with some fervent activism, protests and a coming together of those with vision might actually work.
Then we can rock along with spikes until the next plateau - this is the one where government will need to sh%! or get off the pot. CAFE standards will be seen as not enough, slowing to 30 MPH is not palatable and if rationing or the old "every other day" fill-up is tried, it will not work. Hybrids will be pricey because of their demand, and so Joe SixPack will not be able to buy one. I see this at $7 or $8 a gallon.
I cannot predict the various plateaus in detail, but I am pretty sure my first one is going to be right. I am sure it will be that type scenario if we do not have a massive meltdown. We might also see a longer static interval if the economy tumbles from the housing bubble, killing demand.
But these are just landings on the long stairway. I am talking about over years of time, not months for these changes to occur. People will be lulled into complacency at every plateau, and just when they think it is fixed, it breaks again.
I think the biggest concern I have is if the Teamsters decide it is all a conspiracy by government and "Big Oil", and then they strike like in the movie. If the trucks don't roll for even a week, then things get dicey in the cities in a big way.
My biggest hope remains that Ghawar is trashed soon. That will remove the crutch of "big reserves" from the world consciousness, forcing the paradigm shift.
HO -
I am still not convinced that injecting CO2 isn't like laying mines for future generations to discover. It is almost (from a geologic POV) like making our own methane hydrates, without the temperature fuse.
And they will require monitoring forever - and what do we do if one blows out?
I would rather place plastic bubbles over trees or jets under their canopies to force grow them into giants with the CO2. At least that is the natural carbon sink...
J,
Here is some information on your idea
http://www.ornl.gov/info/ornlreview/v33_2_00/tree_growth.htm
In 1998, an experimental 10-year-old sweetgum plantation in Oak Ridge National Laboratory's Environmental Research Park showed a 35% increase in growth over a nearby control stand of trees. More wood was produced in the test forest's tree trunks and more fine roots grew in the soil. The 15-m-tall sweetgum trees in the plantation's 25-m-diameter plots grew more because they were being exposed to air containing 50% more carbon dioxide (CO2) than is in the atmosphere, thanks to free-air CO2 enrichment (FACE) technology.
In 1999, the second year of the FACE experiment funded by the Department of Energy, some of the data surprised Richard Norby and his ORNL collaborators Stan Wullschleger, Carla Gunderson, Gerry O'Neill, Paul Hanson, Nelson Edwards, Tim Tschaplinski, Mac Post, Don Todd, and Tony King. The growth rate increase of the experimental plantation was reduced to 15% over that of the control stand. These results differ from those at a Duke University plantation dominated by loblolly pine trees with sweetgum trees in the understory. In the past three years, Duke researchers have observed a sustained growth rate increase of 25% per year in the trunks of high-CO2 pine trees over that of control trees in a normal atmosphere.
Also from
http://www.creationethics.org/index.cfm?fuseaction=webpage&page_id=169
"Our results have been remarkably consistent," says Kruger. "They show that high carbon dioxide increases the growth of young aspen and birch, high ozone decreases their growth, and the gas's effects on growth cancel each other out when both are elevated."
Thanks Rajiv!!
I figured it had been tried, because man first attempts to mimic what he see in nature. Nice to be confirmed that it can be a solution...
HO -
I have a much better use for old oil wells as a power source. I am just having trouble finding a backer with the vision to try it...
I've read about other studies which augment atmospheric CO2 and measure plant growth. Across those studies I think the average result was increased growth, but not enough to gobble up the increased CO2.
That's obvious when you think about it. If plants ate all the extra CO2, we wouldn't be seing long-term increases in the atmosphere over decades. This despite every possible plant, and algae, out there growing wild in the world ...
"We can rock along with increasing oil prices for a decade or more, provided China doesn't go nuts with demand ..."
Expect China to go nuts. They're throwing away (and even banning!!) bicycles. Everyone wants to own a car, and 450m can afford one:
"China's rapidly growing dependence on imported oilone-third of it now for car useis causing deep anxieties about the country's energy security. Petrol consumption will no doubt be curbed by taxes, better technologies or the use of alternative fuels. But demand for cars will go on surging. Ford's David Thomas estimates there are 450m people in eastern China with a purchasing power of over $7,000 a year; $6,000 is the usual threshold at which car-ownership begins to take off."
Oops, sorry, its motorcycles they're banning in the bigger cities, not bikes.
It's interesting that the EIA graph shown starts in 1985. We see a steady increase since then. Take a look at http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_10.pdf especially the one in the upper left corner and you will see how misleading it is to focus on just that one date as a starting point. Oil imports fell dramatically from 1975-1985. It's a good lesson on how easy it is to greatly reduce oil demand when needed. 1975-1985 was not a great period economically, but there was certainly no dieoff.
halfin -
That's exactly why I think we need a crisis of some kind in the oil patch. Government will need to be forced into doing the right thing. We can lengthen and extend the peak to give us time to change and refocus on domestic needs, but only with government intervention. If they continue fiddling while we are driving towards the cliff, then it will hit us like a tsunami. And tsunamis kill.