Re: Gas/Fuel War!!!

Posted by BrianS on April 10, 2005 at 19:47:06 from (24.206.150.57):

In Reply to: Gas/Fuel War!!! posted by Dixieland on April 10, 2005 at 07:50:52:

Everybody take a listen and bear with me for a different perspective, some facts and ideas.

I started out working on the oil rigs in Wyoming. Worked for oilfield service companies for 15 years and have had my own service / consulting company for 8 years. I also farm 200 acres of alfalfa in So Dak and pay about $5000 per year for diesel for farming and irrigation. Nobody likes to pay high fuel prices including me. Here are some things to think about.

- Most industry analysts agree that we are nearing the peak of world oil production. Despite a lot of exploration there just have been very few major oil discoveries in the past 30 years. Most agree that there just not many "big structures" (where giant oilfields are found) left out there. As a recent National Geographic article stated we really are near "The End of Cheap Oil". (I hate to cite Nat. Geo. though I enjoy some of their articles I think they are largely enviro-whackos IMO).

- I have worked with oil and gas people for 25 years. They are geologists, secretaries, landmen, engineers - people trying to make a living like everyone else. (Enron executives excepted.) I and most of the rest of these people have bounced through 25 years of layoffs, good times, lean times. (Reminds me of farming.) In fact I may be a perfect oil and gas worker, smart enough to learn it and dumb enough to keep doing it! Sure oil and gas companies are making big bucks this year but it ain't all been roses believe me! 1998 - 2001 my wife made our house payment while my big money oil businees made zip.

- Here is another fact - most of these folks are 45 to 55 years old and getting ready to retire. And the oil and gas industry has developed such a bad reputation for layoffs that very few people choose it as a carreer. In other words nobody is "in the pipeline" to fill the shoes of the gray-hairs. And the Saudis are facing the same thing - many of the experienced hands retiring, struggling to find new help.

- Saudi has most of the known world oil reserves. They have one field called Ghawar that make 65% of their oil. Many oilfields slowly "water out" as they are produced and Ghawar is already at about 35% water. Saudi experts say that Ghawar will produce for 50+ years. Some experts say Ghawar may water out very soon. One thing for sure - when that field starts to go belly up we will see oil price spikes like you won't believe. See the follwoing link for example; http://www.energybulletin.net/1269.html

- The decline rate for gas wells in the Gulf of Mexico on the continental shelf is very high (30 to 50% per year) and this has been the the go-to place for natural gas in the past. All the gas drilling in Wyoming and the Rockies helps a little but cant really offset the decline in the Gulf.

- So here we all are (ALL OF US) in this boat together, we may be in way more trouble than any of us realizes, facing increasing demand for oil and natural gas, not really any new places to drill, (yeah theres Alaska, but that won't have the needed impact), and 70% of the industry expertise about to retire. It does not look good from where I stand.

Answers?
- Biodiesel, ethanol, wind, solar, conservation, more drilling, nuclear, build new refineries in the US for the first time in 30 years. You bet! The American farmer has a central role in this. None of these by themselves will do the trick by itself but until nuclear fusion or something like that comes along - everything helps! In short, this is one oilman that believes that this country needs to wean itself from imported oil ASAP! I would like to see something on the order of a "Manhattan Project" for energy independence. As someone pointed out we are nearing 70% oil imports!!

- Boycotting gas stations? It would make us feel good, may drive the price down a bit in the short term locally, but this is really not an issue of the local gas stations screwing people over. Oil price in real terms was $90 a barrel and we are nowhere near that.

Great discussion - just wanted to throw in my view.

Follow Ups:

• tar sands -Oil reserves Hayman 11:54:40 04/11/05 (2)
  • Re: tar sands -Oil reserves BrianS 04:00:16 04/12/05 (0)
  • Re: tar sands -Oil reserves Uh-huh 01:30:09 04/12/05 (0)
• Re: Gas/Fuel War!!! Paul in Mich 20:06:02 04/10/05 (0)

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