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Jon Excell
Editor
The end of the easy oil era
The notion that the world’s supply of oil and gas will soon be gone has been a staple of dire energy predictions for as long as most of us can remember.
But while there’s no doubt that our planet’s store of fossil fuels is finite, the prospect of it running out anytime soon seems pretty unlikely.
Indeed, although the jury’s out on whether we’ve yet reached peak oil production, it’s plausible that there’s more left beneath the ground than we’ve extracted. As well as vast untapped reserves deep beneath the sea and some of the planet’s most environmentally sensitive regions, many of the world’s abandoned oil fields still contain huge volumes of oil.
Conventional recovery techniques drilling a hole and letting it flow recover, on average, around 20 per cent of the oil. And while the recovery factor can be improved slightly by doing things such as pumping water into the well to push out more oil, an oilfield is typically abandoned with around 80 per cent of its original oil still in place.
It’s a shocking statistic and the fact that we’ve been able to afford to do this for so many years is a compelling reminder of just how and why we’ve become so dependent on the black stuff. But as we report in our latest big story all this is beginning to change. With the era of ’easy oil’ drawing to a close, energy firms are returning to abandoned oil fields. And the race to make the remaining oil economically recoverable is fuelling the rapid development of a suite of so-called Enhanced Oil Recovery (EOR) technologies.
“Many of the world’s abandoned oil fields still contain huge volumes of oil”
It’s a fascinating story from a sector that survives and prospers by pushing out the boundaries of what’s achievable. But while some believe the technology could extract every last drop of oil, the question of whether it will ever be economic to do so could have major implications for our relationship with fossil fuels.
Recovering oil through natural depletion is cheap and relatively easy, but a growing reliance on advanced, expensive techniques to tap into abandoned reserves could have a big impact on the cost of production. In the meantime, there appears to be growing evidence that the high price of oil is acting as something of a spur for the development of low-carbon energy sources. According to a recent Ernst and Young energy report that references US Department of Energy figures, by 2031 solar-generated power will be half the price of coal.
Elsewhere, an oil industry report published by Ricardo predicts an imminent ’paradigm shift’ in oil demand and claims that a number of factors, including the increasing efficiency of combustion engines, the rise of low-carbon technologies and an anticipated increase in biofuel yield, will see oil demand enter a long-term decline after 2020. Against this backdrop, it seems probable that our dependence on oil might end long before we use up our planet’s finite reserves.
Readers' comments (8)
Anonymous | 30 Nov 2011 11:41 am
With rising world populations (predicted to double within the next 50years) and the growing prosperity of emerging markets...I very much doubt our demand for oil will do anything but rise over the next 50 years. Biofuels are a dangerous idea in my humble opinion as increasing numbers of mouths to feed is placing ever greater demands on farming land. Using this land to grow Biofuels is potentially very dangerous - especially if it is motivated by profit rather than the need to produce food...
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brian M | 30 Nov 2011 12:48 pm
Difference between renewable and non-renewable is just a matter of time scale, the sun won't be around forever!
Markets will follow the lowest cost solution and will move away from oil as costs go up, no green subsidies required. Higher taxes on 'non-renewable' will move the cross over point, but maybe that's already overdone in the UK!
Green subsidies for wind farms, solar etc. , are not needed, if it's worth doing companies will do it. It's arguable that subsidies are even counterproductive , encouraging immature or wrong technologies - you only have to look at the cowboy home solar market or the first generation low energy light bulbs!
With energy it's a case of build a better (cheaper!) mouse trap and the world will beat a path to your door.
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Sparty | 30 Nov 2011 2:26 pm
As said above the use of liquid fuels is unlikely to decrease over the next few decades... especially with 3 billion Chinese and Indians moving into the middle class over the next two decades.
But how we get our liquid fuels is now undergoing changes.
One small Australian company Linc Energy (ASX: LNC) has been exploring several pathways including: Pumping CO2 into "exhausted" wells to push out the residual oil. And even more promising for large scale production Linc has pioneered the twinning of underground coal gasification and the conversion of the resultant gas to liquids. You can read about the technique here at www.UCG-GTL.com
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Eric | 30 Nov 2011 2:27 pm
Ok, so isn't this article pretty much stating the obvious? Economics drive just about everything around us. The general population will do what is in their best economic interest long before they do what is in their best health interest.
People eat cheap food that is bad for them. People shop at mega stores and buy cheap foreign goods, even though those stores are driving business/jobs over seas and the employees at those stores are treated poorly. People will continue to burn fossil fuels as long as it makes economic sense to do so.
If it were less expensive to use just about any other energy resource, people would use it. That being said, there has to be a reasonable time in which the economics work out. Installing solar on a home that you only live in for 5 years does not make economic sense. Choosing to use public transportation instead of buying a car has an immediate economic impact.
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Tim | 30 Nov 2011 2:58 pm
Teslas founder summed it up well saying the stone age didnt end because they ran out of stones. Things are changing already, but the movement towards a new economy, which has little to do with oil is I feel already slower than technological progress. The oil companies, and those powerful people that do well in the current system will resist the change, and with their close connection, our government will take a while to work out what to do. In anycase the sooner we stop wasting oil in inefficient small IC engines and causing a load of local pollution the better. When I look at my mobile phone, burning oil in a cylinder seems a little old tech.
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Anonymous | 30 Nov 2011 3:11 pm
It has been know for 30 + years that the city of Sydney MT set on a sea of Oil. It is now part of the Baaken field which contains mor oil that the rest of the world combined. Why aren't we drilling and using this oil? Friends of ours in Sydney had 5 oil wells on his property and they would only take two tanker trucks a day from his wells; some of the finest oil found anywhere. Do you smell greed here or what?
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S. Martin | 30 Nov 2011 3:48 pm
There is still more scope for development of alternative or bio fuels from sources such as used cooking oils as one example. These can be used to supplement existing fuels and recycle waste products along with reducing costs.
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Philip Baker | 30 Nov 2011 7:15 pm
The only issue with the use of oil, is the continuing failure of successive UK governments, to develop a strategic long term plan for secure supplies
The UK has no plan which prevents the likes of OAPEC, and other independent oligarch suppliers, from constantly blackmailing the societies that they made dependant on the use oil.
History records that fact, as the cycle of blackmail is repeated again and again.
In 1973, UK business was forced to work rota’s of 3 day working, as electricity was rationed due to the rationing of oil by OAPEC.
OAPECs, behaviour helped to initiate the demise of our manufacturing industries.
Later in the mid 70’s we were forced to barrow funds from the IMF and suffered several years of austerity, a worryingly familiar pattern with today’s events.
Our complacent governments rely so much on oil’s derivatives, petrol and Diesel as a tax revenue, it no longer has any desire to protect our society from oil blackmail, as oil taxation has become to too large to fail.
The development of the North Sea during the 1970’s, brought us some respite from that blackmail, as Brent Crude became a balancing factor.
Today as that source has become severely diminished; we are once again seeing our living standards threatened, not by shortages of oil, but by the return of trading blackmail.
UK governments must carry out its security obligations as an absolute priority, and they are not limited to our protection from military invasion.
Economic invasion is by far the greater danger, and oil and gas supplies are the major commodities that need security planning and investment.
UK business is being ruined, by escalating fuel prices, yet nothing was motioned by the Chancellor on the development of future oil or gas supplies.
He has cast our economy into the fuel fire of world trading
This government doesn’t get it, and neither do some of the earlier corresponds above.
The focus of our discussions should not be about whether oil is good or bad, they have to be about making sure the UK has economically ready available supplies which protect the existence of our society.
We are dependant on it ……..
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