15 September, 2005

Oily irony

According to the New York Times, the oil industry is freaked out because climate change is destroying their oil platforms and refineries. The story obliquely mentions the greenhouse effect in the second-to-last paragraph.

On the other hand, the industry can benefit from climate change. At a lecture yesterday in Berkeley, Calif., long-time exploration insider Greg Croft said the industry's best prospects for future oil are off the coasts of Greenland, Canada and Russia in the Arctic. These areas have never been exploited because of ice. With a hint of an ironic smile, he noted that ice is becoming less of an obstacle.

Croft also responded to a question about why the oil industry has built no new refineries in so long in North America. An audience member asked whether the industry was concerned that they wouldn't recoup their investment because we might not be able to pump any more oil than we are now. "They don't think that," Croft said. "They know that." The oil companies have known since about 1992, he said, that no matter how hard you squeeze the earth, you're not going to get much more oil than we're getting right now.

This gives the lie to the recent U.S. energy bill, which offers all sorts of incentives to get industry to build refineries. The situation is the reverse of 1979, he said. Then, the oil problem was political, but the government responded with technical fixes to improve efficiency. Now, the problem is technical -- there is little new oil to be found -- and the government is responding with political incentives.

Croft also said there is no one oil peak. There was a peak in 1979, he said, after which the world grew more efficient and went into recession, dropping consumption by 10 million barrels per day (about 4 supertankers). The next peak, he said, will be this decade, and possibly this year. Then some time in the future, the oil sands of Canada and Venezuela -- by far the biggest hydrocarbon deposits in the world -- will peak.

This page is powered by Blogger. Isn't yours?