9 ms·

The High Cost of Oil

53 points by pmcpinto 12y ago

oldspiceman 12y ago
They'll never stop drilling. But there's hope in solar. Check out the chart in this article. http://www.bloomberg.com/news/2014-10-29/while-you-were-getting-worked-up-over-oil-prices-this-just-happened-to-solar.html http://www.bloomberg.com/news/2014-10-29/while-you-were-gett...
- danieltillett 12y ago
  They will never stop drilling because oil is an amazingly useful resource - using it as a source of energy is about the least useful thing you can do with it.
  - lunarcave 12y ago
    Explain?
    - guard-of-terra 12y ago
      Everything is made out of plastic, and plastic is made out of oil.
      - seren 12y ago
        Plus our agriculture in the first world is heavily dependent on fertilizers, that are mostly oil based. We are eating oil by gallons.
        jjoonathan 12y ago
        Fertilizer is oil based? I thought plants got almost all of their carbon from the air. Are you talking about the hydrogen feeding into the Haber process? Because most of that comes from gas-shifted water and IIRC the energy and carbon for gas-shifting water comes from natural gas. The nitrogen itself comes from air, of course.
        seren 12y ago
        Apparently, I was wrong, thanks for pointing it out, it seems to be actually natural gas dependent.
    - danieltillett 12y ago
      Petrochemicals http://en.m.wikipedia.org/wiki/Petrochemical http://en.m.wikipedia.org/wiki/Petrochemical
      - cowsandmilk 12y ago
        And yet, the majority of petrol is used on energy[1]. Replacing its use for energy will reduce drilling. Other uses will adjust to a smaller supply through adjustments to the cracking operations that will shift the remaining petrol to making chemicals. [1]http://www.eia.gov/dnav/pet/pet_pnp_pct_dc_nus_pct_m.htm http://www.eia.gov/dnav/pet/pet_pnp_pct_dc_nus_pct_m.htm
- seren 12y ago
  Even if those kind of graph are bringing hope, we have to remember that oil is both a source of energy (by burning it) and a compact and cheap way to store energy. A solar panel is only the former. So comparing the cost of energy production is only half the story.
netcan 12y ago
Ultimately, we need energy. Lots of energy. Cheap energy. It's the thing at the core of everything from food & basic materials, to the manufacture of stuff (like houses & shoes) from those materials, energy is a big piece of what goes into it and ultimately the limiting factor. It's also important to remember that there is a negative correlation between wealth in an industrialized economy and sensitivity to energy costs. IE, the poorer you are, the more sensitive your purchasing power is to energy prices. The effect runs up and down the value chains. Steel & concrete are mostly energy. Cheap enough energy opens up the possibility of desalination and improves the productive value of land. Deserts become viable places. A 10X improvement in energy availability (the supply curve) would have an economic effect that permeates everything.
- 7952 12y ago
  >> A 10X improvement in energy availability (the supply curve) would have an economic effect that permeates everything. It is a bit like bandwidth. Everyone agrees that having gigabit internet to every device in the country would be benficial bur we can't agree on who should provide that. As a society we pour most of the money into large providers who have a vested interest in highly centralised systems. What we really need is thousands of small provders who optimise for efficienct delivery of the actual product. Society needs to invest in energy and constantly spending such vast amounts on single projects seems risky. It may deliver energy but in the long run prices will still go up.
- fulafel 12y ago
  Food is a good case to examine in thinking about energy problem from a consumption or supply point of view, because on one hand we are really splurging energy and land area in food production - all that meat production requires 2-3x crop production, not to mention untold animal suffering, for our luxury munchies.
  - netcan 12y ago
    I don't think it's a product of inequalities. I think it's a matter of preferences. People value luxuries. Food may not be efficient in the resources/calories sense, but it is nonetheless the food people are eating and a big part of its cost is its energy cost. In industrialized countries, less/more expensive energy will lead to an increase in inequality as the basic items that everyone (including the poor) consume a lot of are very energy dependent. Transport, heating & home electricity are easy enough examples. Richer people might use slightly more energy for these (bigger houses, cars, etc.) but not much, energy consumption of this kind does not track income. Steel, concrete and other building materials are very energy intensive. Being heavy means there is a tradeoff between manufacture near high energy sources and high cost transport. Lets leave aside the carbon effects and/or other externalities. It seems to be bad for the quality of the debate to mix the discussion about the cost of reducing energy consumption and the necessity of doing so. I don't personally have very strong opinions about the carbon-climate debate. I do think the "reduce energy consumption" side of the debate underestimate the cost of drastic cuts especially on below median economic strata.
kitsune_ 12y ago
I watched a German / French documentary [1] about the Yamala peninsula [2], and the impact Russian gas drilling has on the native inhabitants of the peninsula, the Nenets people [3] - It is absolutely jarring to see how the homeland of these last nomads and their reindeer herds is being cut up by ultra-modern, gargantuan Gazprom operations. Vast road networks are being constructed across the Tundra, entire gas cities are being built, there are even futuristic drilling rigs that travel on rail roads, a fast and cheap way to lay gas taps across the landscape. [1] http://www.arte.tv/guide/de/044102-000/360-geo-reportage http://www.arte.tv/guide/de/044102-000/360-geo-reportage [2] http://en.wikipedia.org/wiki/Yamal_Peninsula http://en.wikipedia.org/wiki/Yamal_Peninsula [3] http://en.wikipedia.org/wiki/Nenets_people http://en.wikipedia.org/wiki/Nenets_people
pmoriarty 12y ago
The End of Suburbia[1] [1] - https://www.youtube.com/watch?v=Q3uvzcY2Xug https://www.youtube.com/watch?v=Q3uvzcY2Xug
arca_vorago 12y ago
I'm currently working in the industry in the Permian Basin area (Texas/New Mexico) and can say that my main concern is environmental. With the fracking operations, you get a huge load of oil, saltwater, and sand/crud/junk/chemicals. They truck them to a SWD disposal facility (my company does PLC's and controls etc for these) which then separate the oil out. The problem is that, at most of the SWD disposal places I have been too, disposal consists of pumping the junk/crud/chemical water straight back into the ground. They say they drill below the Ogillalah aquifer, but what if they don't? Having actually been a contractor for one of the bigger public oil companies, I can just say I don't really trust them to do things like that properly, and my guess is that within a few years we will find out, oh shit, "Someone poisoned the water hole". That's when T. Boone Pickens will unleash his high-priced water. I don't thing people realize how close the south is to major water shortages and is vulnerable to a drought. Hopefully this upcoming winter will help offset some of that.
- adolph 12y ago
  Maybe you are referring to aquifers other than the Ogallala in terms of poisoning? Since Pickens seemed to have been trying to sell Ogallala water, it'd be strange time to unleash it. http://www.businessweek.com/stories/2008-06-11/there-will-be-water http://www.businessweek.com/stories/2008-06-11/there-will-be...
  - arca_vorago 12y ago
    The Ogallala (thanks for the correction, I don't spell it out very often), is a huge aquifer. T Boone's well is up North and not technically in the Permian Basin area.
josephschmoe 12y ago
I'll be honest. I much prefer these oil sands operations that ruin sparsely populated bits of remote wilderness in the Canadian Arctic to other operations that destroy pristine wilderness near somewhere livable to more than ~300 people or contaminates water supplies for hundreds of thousands of people.
- adrdr 12y ago
  In other country like Indonesia, they actually "ask" local people to destroy their house for drilling spot without good compensation for the house they destroyed.
ArkyBeagle 12y ago
I have never had an effective counter to the following argument: We can use human population in 1790 as a rough estimate of Earth's carrying capacity for humans pre-industry. There were roughly 1 billion people then. Now we have 7 billion. So we need to be extra careful in our thinking about energy policy.

53 points by pmcpinto 12y ago

They'll never stop drilling. But there's hope in solar. Check out the chart in this article. http://www.bloomberg.com/news/2014-10-29/while-you-were-getting-worked-up-over-oil-prices-this-just-happened-to-solar.html http://www.bloomberg.com/news/2014-10-29/while-you-were-gett...

danieltillett 12y ago
They will never stop drilling because oil is an amazingly useful resource - using it as a source of energy is about the least useful thing you can do with it.
- lunarcave 12y ago
  Explain?
  - guard-of-terra 12y ago
    Everything is made out of plastic, and plastic is made out of oil.
    - seren 12y ago
      Plus our agriculture in the first world is heavily dependent on fertilizers, that are mostly oil based. We are eating oil by gallons.
      - jjoonathan 12y ago
        Fertilizer is oil based? I thought plants got almost all of their carbon from the air. Are you talking about the hydrogen feeding into the Haber process? Because most of that comes from gas-shifted water and IIRC the energy and carbon for gas-shifting water comes from natural gas. The nitrogen itself comes from air, of course.
        seren 12y ago
        Apparently, I was wrong, thanks for pointing it out, it seems to be actually natural gas dependent.
  - danieltillett 12y ago
    Petrochemicals http://en.m.wikipedia.org/wiki/Petrochemical http://en.m.wikipedia.org/wiki/Petrochemical
    - cowsandmilk 12y ago
      And yet, the majority of petrol is used on energy[1]. Replacing its use for energy will reduce drilling. Other uses will adjust to a smaller supply through adjustments to the cracking operations that will shift the remaining petrol to making chemicals. [1]http://www.eia.gov/dnav/pet/pet_pnp_pct_dc_nus_pct_m.htm http://www.eia.gov/dnav/pet/pet_pnp_pct_dc_nus_pct_m.htm
seren 12y ago
Even if those kind of graph are bringing hope, we have to remember that oil is both a source of energy (by burning it) and a compact and cheap way to store energy. A solar panel is only the former. So comparing the cost of energy production is only half the story.

netcan 12y ago

Ultimately, we need energy. Lots of energy. Cheap energy. It's the thing at the core of everything from food & basic materials, to the manufacture of stuff (like houses & shoes) from those materials, energy is a big piece of what goes into it and ultimately the limiting factor. It's also important to remember that there is a negative correlation between wealth in an industrialized economy and sensitivity to energy costs. IE, the poorer you are, the more sensitive your purchasing power is to energy prices. The effect runs up and down the value chains. Steel & concrete are mostly energy. Cheap enough energy opens up the possibility of desalination and improves the productive value of land. Deserts become viable places. A 10X improvement in energy availability (the supply curve) would have an economic effect that permeates everything.

7952 12y ago
>> A 10X improvement in energy availability (the supply curve) would have an economic effect that permeates everything. It is a bit like bandwidth. Everyone agrees that having gigabit internet to every device in the country would be benficial bur we can't agree on who should provide that. As a society we pour most of the money into large providers who have a vested interest in highly centralised systems. What we really need is thousands of small provders who optimise for efficienct delivery of the actual product. Society needs to invest in energy and constantly spending such vast amounts on single projects seems risky. It may deliver energy but in the long run prices will still go up.
fulafel 12y ago
Food is a good case to examine in thinking about energy problem from a consumption or supply point of view, because on one hand we are really splurging energy and land area in food production - all that meat production requires 2-3x crop production, not to mention untold animal suffering, for our luxury munchies.
- netcan 12y ago
  I don't think it's a product of inequalities. I think it's a matter of preferences. People value luxuries. Food may not be efficient in the resources/calories sense, but it is nonetheless the food people are eating and a big part of its cost is its energy cost. In industrialized countries, less/more expensive energy will lead to an increase in inequality as the basic items that everyone (including the poor) consume a lot of are very energy dependent. Transport, heating & home electricity are easy enough examples. Richer people might use slightly more energy for these (bigger houses, cars, etc.) but not much, energy consumption of this kind does not track income. Steel, concrete and other building materials are very energy intensive. Being heavy means there is a tradeoff between manufacture near high energy sources and high cost transport. Lets leave aside the carbon effects and/or other externalities. It seems to be bad for the quality of the debate to mix the discussion about the cost of reducing energy consumption and the necessity of doing so. I don't personally have very strong opinions about the carbon-climate debate. I do think the "reduce energy consumption" side of the debate underestimate the cost of drastic cuts especially on below median economic strata.

kitsune_ 12y ago

I watched a German / French documentary [1] about the Yamala peninsula [2], and the impact Russian gas drilling has on the native inhabitants of the peninsula, the Nenets people [3] - It is absolutely jarring to see how the homeland of these last nomads and their reindeer herds is being cut up by ultra-modern, gargantuan Gazprom operations. Vast road networks are being constructed across the Tundra, entire gas cities are being built, there are even futuristic drilling rigs that travel on rail roads, a fast and cheap way to lay gas taps across the landscape. [1] http://www.arte.tv/guide/de/044102-000/360-geo-reportage http://www.arte.tv/guide/de/044102-000/360-geo-reportage [2] http://en.wikipedia.org/wiki/Yamal_Peninsula http://en.wikipedia.org/wiki/Yamal_Peninsula [3] http://en.wikipedia.org/wiki/Nenets_people http://en.wikipedia.org/wiki/Nenets_people

pmoriarty 12y ago

The End of Suburbia[1] [1] - https://www.youtube.com/watch?v=Q3uvzcY2Xug https://www.youtube.com/watch?v=Q3uvzcY2Xug

arca_vorago 12y ago

I'm currently working in the industry in the Permian Basin area (Texas/New Mexico) and can say that my main concern is environmental. With the fracking operations, you get a huge load of oil, saltwater, and sand/crud/junk/chemicals. They truck them to a SWD disposal facility (my company does PLC's and controls etc for these) which then separate the oil out. The problem is that, at most of the SWD disposal places I have been too, disposal consists of pumping the junk/crud/chemical water straight back into the ground. They say they drill below the Ogillalah aquifer, but what if they don't? Having actually been a contractor for one of the bigger public oil companies, I can just say I don't really trust them to do things like that properly, and my guess is that within a few years we will find out, oh shit, "Someone poisoned the water hole". That's when T. Boone Pickens will unleash his high-priced water. I don't thing people realize how close the south is to major water shortages and is vulnerable to a drought. Hopefully this upcoming winter will help offset some of that.

adolph 12y ago
Maybe you are referring to aquifers other than the Ogallala in terms of poisoning? Since Pickens seemed to have been trying to sell Ogallala water, it'd be strange time to unleash it. http://www.businessweek.com/stories/2008-06-11/there-will-be-water http://www.businessweek.com/stories/2008-06-11/there-will-be...
- arca_vorago 12y ago
  The Ogallala (thanks for the correction, I don't spell it out very often), is a huge aquifer. T Boone's well is up North and not technically in the Permian Basin area.

josephschmoe 12y ago

I'll be honest. I much prefer these oil sands operations that ruin sparsely populated bits of remote wilderness in the Canadian Arctic to other operations that destroy pristine wilderness near somewhere livable to more than ~300 people or contaminates water supplies for hundreds of thousands of people.

adrdr 12y ago
In other country like Indonesia, they actually "ask" local people to destroy their house for drilling spot without good compensation for the house they destroyed.

ArkyBeagle 12y ago

I have never had an effective counter to the following argument: We can use human population in 1790 as a rough estimate of Earth's carrying capacity for humans pre-industry. There were roughly 1 billion people then. Now we have 7 billion. So we need to be extra careful in our thinking about energy policy.