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The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
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Crude oil and retail gas hit record high prices last week—more than $135 a barrel and $3.83 for an average gallon of regular. During a congressional hearing, lawmakers verbally pummeled oil execs for raking in profits while consumers endure pain at the pump. "Does it trouble any of you when you see what you're doing to us?" Sen. Richard Durbin (D–Ill.) asked industry officials hauled to Capitol Hill to testify on skyrocketing oil prices.
Oil companies are reaping a windfall from soaring petroleum prices driven largely by heightened demand from China starting in 2003. But a combination of geology and changing geopolitics means that increasing the energy supply is not so simple as pumping more of the same old crude. As a result, Big Oil is exploring its technological options.
As rising prices have made oil a more valuable commodity than ever, petroleum-rich countries such as Russia and Venezuela have tightened control over their nations' reserves by essentially raising the rent on U.S.-based oil companies—a development termed "resource nationalism." "The high oil price environment allows them to turn the screws" on the oil industry, says Ian Nathan, senior research analyst for Energy Intelligence Group in New York City.
In prepared remarks, John Lowe, executive vice president of exploration and production for Houston-based ConocoPhillips, the number three U.S. oil and gas company behind ExxonMobil and Chevron, told the Senate Judiciary Committee last week that 75 percent of the world's available oil reserves are "completely controlled by national oil companies and are not accessible." Only 7 percent of those reserves are directly accessible to Big Oil, he said.
Oil companies have traditionally looked to so-called conventional petroleum resources—pockets of underground oil and gas wedged between water and impermeable rock—which gush to the surface when tapped by drilling.
Nathan says high prices have made it increasingly economically viable to extract more unconventional forms of oil, in particular the asphaltlike tar sands (also known as oil sand, or extremely heavy crude oil) plentiful in northern Alberta, Canada. Converting petroleum from tar sands into a type of oil is more costly because it requires strip-mining or the injection of steam to drain the petroleum.
Lou Burke, manager of biofuels for ConocoPhillips, says the company is still largely focused on finding more cost-effective ways to extract and refine traditional oil and gas. But he rattles off a diverse array of research projects that the company is pursuing for the longer term. He says the company has a patent on a process to extract methane gas from hydrates—essentially cages of ice—by exposing it to liquid carbon dioxide, which becomes trapped in the hydrate in return.
"You release a hydrate and then form a hydrate, which is pretty cool," he says, especially given that methane gas hydrates represent the most abundant global natural carbon resource.
In another approach, his group has demonstrated in the lab all the chemical reactions necessary to turn biomass such as corn fiber into biocrude, an intermediate product on the way to gasoline and diesel fuel, he says, although the reactions are not yet efficient enough to operate on a large scale.
ConocoPhillips teamed up with Tyson Foods, Inc., of Arkansas in 2007 to convert waste fat from livestock animals and agricultural waste into conventional diesel fuel. Burke says the company has a commercial refinery in Borger, Texas, turning inedible beef tallow into diesel, and a second plant in Cork, Ireland, doing the same with soybeans.
Burke notes that novel concepts such as renewable diesel are "a very small part of our portfolio" and are unlikely to supply vast quantities of energy, but he says they demonstrate a certain mind-set. "The world needs a lot of energy," he says, "and we need to diversify our sources."
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11 Comments
Add CommentMore typical SA. Oil company profits are exactly what they were two years ago. About 12%. Since I presume SA has people who understand basic arithmetic, it should come as no surprise that an increase in X equals a corresponding increase in .12X. I suppose in the Marxist world SA inhabits, oil company profits should be on a sliding percentage scale to keep absolute profits fixed. Maybe they should lead by example.
Reply | Report Abuse | Link to thisTypical leftist spew. Oil company profits have always hovered around 10%, even when oil was $10 a barrel. The average profit margin of companies on the DJIA is over 12%. Like Walmart, energy companies rely on sales volume to generate profit, rather than margin.
Reply | Report Abuse | Link to thisGeology isn't forcing oil companies to "explore new options." Leftists throw that word in to try to distract people from the truth: Enviromentalist drivel is driving prices up.
"Enviromentalist drivel is driving prices up."
Reply | Report Abuse | Link to thisOh please, if anything enivormental movements would drive oil prices down.
Durbin needs to look in the mirror.
Reply | Report Abuse | Link to thisEvery time we try to increase domestic production, he works like heck to vote it down. Offshore drilling - no. ANWAR - no. Nuclear - no. Coal - no.
I bet he voted yes though on the bill to make it illegal to hold back production. The bill is aimed at OPEC but we ought to be able to use the new law (assuming it becomes law) to arrest him and all the "no" voters.
Here's a suggestion for all us energy consumers fed up with Congress keeping us from drilling for our own oil. Let's vote "no" for Durbin and his cohorts in the next election.
All I know is that we don't appear to be getting much sympathy from the rest of the world. The Brits for example, are paying roughly twice as much as we are. They are most likely unnerved by our wasteful habits, then crying about it when it starts to hurt!
Reply | Report Abuse | Link to thisHopefully the price of oil will stay high and even increase in order to keep the momentum going for the penetration into the market of renewables. If oil prices drop significantly we will really be in trouble when the next rise comes as it surly must.
Reply | Report Abuse | Link to thisCoal, petroleum, hydro and nuclear are by far the least expensive forms of energy generation. These are also the four forms most hated by green nazis. The other methods cost significantly more and usually cause more ecological damage.
Reply | Report Abuse | Link to thisThere are two basic ways to reduce energy consumption: Stop using technology or have fewer people. With the massive global food shortage caused by the ineffectual "biofuels" boondoggle, it is clear that the alternative fuels crowd have turned to mass murder to reduce demand. I'm surprised they haven't teamed up with the tobbacco industry.
There are better ways to reduce demand. Turn off the computer and tv and go read a book or take a walk. Use fluorescent lights (which release poisonous gasses when they burn out) and heat pumps. Use mass transit or ride a bike to work or walk. Wear more clothes when cold and less when hot. Turn off the lights when you are not in the room. Use hand tools for small jobs instead of power tools.
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Edited by bucketofsquid at 06/03/2008 2:34 PM
It is not reasonable that a few countries and their peoples get all or most of the revenues that natural resources provide. It is reasonable to share with all mankind. Already Antarctica is under international controll and likewise the Amazone forest, parts of the Northamerican prairies, eastern Siberia, the Sahara, the Himalaya, the Dreamland of the Australian Aboriginals must be cut loose from states and become undisturbed domain of wild flora and fauna. This will help to make the above sharing easier.
Reply | Report Abuse | Link to thisWhat is the reason for high price of oil is simple, deman is greater than supply; the oil futures price is set by the expectation that demand will be higher than supply. Demand component:- Real demand and speculative demand.
Reply | Report Abuse | Link to thisReal demand: this is a function of units required to meat a real need and depends on the macro econimics of a country. high growth=high demand.
Speculative demand: buyers in the commodities market (which is the market mechanism of setting the price of a give commodity) buy/demand more oil contracts than they need in the beliefe than oil prices in the future(next day, or next month etc) will be higher. The take a "long" position on oil.
Thus to change current demand and future demand for oil we need to efficiently use this resource (to generate the same energy with less). Also if there is a global slow down deman(real & speculative) will drop.
Also the value of the U.S dollar for which oil is priced in.
SUPPLY SIDE. This is effected by real oil production, oil capcity, new oil discoveries, disruption in supply coursed by a number of issues.
IF DEMAND IS GREATER THAN SUPPLY PRICES RISE IF DEMAND IS LESS THAN SUPPLY RISES FALL. THAT IS IT, THERE IS NO MAGIC HERE
BOYS AND GIRLS. WAKE UP AND SMELL THE BLOODY COFFEE.
Natedog you are an ass! Please explain how a bunch of women that don't shave their arm pits that have no job other than to protest capitalist activities, help drive oil prices down! By limiting drilling, thus the supply? You are an idiot that thinks like those shrill broads (both male and female, they are all shrill broads) you tool.
Reply | Report Abuse | Link to thisHey hyphenated name guy, "renewables" and all of those other energy sources (that will not work at all in my estimate) are way off in the future. So you propose that our economy just goes to shit for decades so there will be incentive for these "green" sources to come online? I bet you drive a car and use air conditioning, don't you sir, or ma'am? You obviously use a computer so you are a prototypical hypocrite/sheep/dupe, are you not? I can't stand hypocrites like the retard Al Gores of the world. I wish all of you would commit suicide to help end the "destruction" of the planet.
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