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WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices


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2011 Feb 9, 1:18am   6,709 views  48 comments

by Vicente   ➕follow (1)   💰tip   ignore  

Well this should throw a little oily spice....BAM!.... on our commodities salad.

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices

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15   justme   2011 Feb 12, 5:19am  

Kevin says

My prediction: By 2050, oil is mostly used for manufacturing of petrochemical products like plastics, and not as fuel.

Because oil is too expensive to use to fly jet airplanes, or because there is too little left, or both?

16   Vicente   2011 Feb 12, 6:40am  

If there's one application that benefits from oil refined into fuel, it's airplanes. It packs a lot of energy by weight. When the oil becomes too scarce, the ability to run a LOT of passenger aviation all over the planet will end. No more jetting off to Paris for a week, then Switzerland for a weekend of skiing before heading back to your cubicle. Not to say people won't travel, but it won't be as cheap and easy.

17   justme   2011 Feb 12, 6:54am  

Vicente says

When the oil becomes too scarce, the ability to run a LOT of passenger aviation all over the planet will end.

Agreed. Airplane travel is THE WORST form of oil waste on the planet. And a huge portion of it is just vanity travel weekend trips, and equally vain business trips that are quite unneccessary and serve no real purpose except status and self-importance.

NASCAR is bad, but the airline industry is the worst offender. Number two is excessive driving and commuting in oversized cars with oversized and inefficient engines.

18   Â¥   2011 Feb 12, 7:01am  

I think we'll be able to create Jet A via biologic processes.

We need 20 billion gallons of the stuff, about 1M 55 gallon drums' worth a day.

Air travel is less than 10% of our oil draw, cars burn 40%. So if we can eliminate the car draw we'll be in much better shape. This goes for China and India, too, they need to stop copying us cuz this planet isn't big enough for 4 major consumer economies.

19   pkennedy   2011 Feb 12, 12:36pm  

For those areas where we still need oil, we'll probably get it from algae. We're decently close to creating a system now, of all the bio fuels, it's the most likely to generate the most fuel with the best energy return. Planes should be able to use it as well, and planes will find better ways to conserve as well. The latest boeing is supposed to get 30% better fuel economy which is pretty massive.

20   nope   2011 Feb 12, 1:56pm  

Vicente says

If there’s one application that benefits from oil refined into fuel, it’s airplanes. It packs a lot of energy by weight. When the oil becomes too scarce, the ability to run a LOT of passenger aviation all over the planet will end. No more jetting off to Paris for a week, then Switzerland for a weekend of skiing before heading back to your cubicle. Not to say people won’t travel, but it won’t be as cheap and easy.

Airplanes are amongst the easiest vehicles to retrofit for new propulsion technologies, so as soon as there's a viable replacement it'll happen very quickly.

The most likely fuel source for airplanes in the future is hydrogen. GE already produces such an engine, and Boeing has built two prototype planes that use it.

Airbus seems to be more interested in liquified natural gas.

Basically, I'm not worried.

21   nope   2011 Feb 12, 1:56pm  

Vicente says

If there’s one application that benefits from oil refined into fuel, it’s airplanes. It packs a lot of energy by weight. When the oil becomes too scarce, the ability to run a LOT of passenger aviation all over the planet will end. No more jetting off to Paris for a week, then Switzerland for a weekend of skiing before heading back to your cubicle. Not to say people won’t travel, but it won’t be as cheap and easy.

Airplanes are amongst the easiest vehicles to retrofit for new propulsion technologies, so as soon as there's a viable replacement it'll happen very quickly.

The most likely fuel source for airplanes in the future is hydrogen. GE already produces such an engine, and Boeing has built two prototype planes that use it.

Airbus seems to be more interested in liquified natural gas.

Basically, I'm not worried.

22   justme   2011 Feb 12, 2:44pm  

It's time for everyone to do some basic energy homework:

Troy says

I think we’ll be able to create Jet A via biologic processes.

The energy still has to come from somewhere. I'll give you the homework problem: What is the average power consumption of a 747 airliner in full service over a 24 hour period? What is the average insolation (W/m^2) of solar energy on prime farmland in the US? What is the conversion efficiency of solar energy to soybean oil or other biofuel feedstock of your choice? What other conversion losses have to be accounted for? As a result, how many acres of farmland does it take to keep a 747 flying on a normal international schedule?

I think people need to get involved in making the calculations for themselves, then they will see how big a problem this is.

pkennedy says

For those areas where we still need oil, we’ll probably get it from algae

Same question as for Troy, but use the conversion efficiency of solar energy to algae oil. Show your work :-)

Kevin says

The most likely fuel source for airplanes in the future is hydrogen.

Hydrogen is an energy carrier, not an energy source. What energy source will be used to turn water into hydrogen, and at what cost and efficiency? I know some of the answers, but what is your thinking and your calculations?

All, please do the calculations and show your work. Look up the unknowns, many of them can be found in Wikipedia. The results will not be all that encouraging.

23   justme   2011 Feb 12, 2:47pm  

Also:

Anyone who believes that hydrogen cars or hydrogen airplanes is an efficient solution to transportation needs should read the following paper by Ulf Bossel. The paper was published in the quite prestigious journal Transactions of the IEEE in 2006. The laws of physics have not changed since then.

http://www.efcf.com/reports/E21.pdf

24   American in Japan   2011 Feb 12, 3:02pm  

>Hydrogen is an energy carrier, not an energy source.

I agree, unless you are talking about getting Elemental hydrogen (H2) efficiently from space.

25   pkennedy   2011 Feb 12, 3:44pm  

Compared to Corn or Sugar cane? Massively better rates. Not to mention the short time to grow and replenish.

As for how much land? Converting the sugar cane and corn crops over would go a long ways. Lots of land, yes, far greater yields, far less energy expended to get the energy back. One quick look says we do 1.5% of our gas in ethanol now.

http://www.worldwatch.org/node/5391

This says corn gets about 420gallons per acre/year, while algae is getting 5000gallons per acre/year. That works out to about 18% of our oil needs from algae just by converting corn fields over.

Currently corn is grown on 72M acres. http://www.epa.gov/oecaagct/ag101/cropmajor.html

There are some major problems they are working on with algae. If they can overcome them, they could greatly increase the yields per acre. Doubling it or tripling it would give us 40-60% of our energy needs. So the math works out.

26   Â¥   2011 Feb 12, 4:04pm  

justme says

I’ll give you the homework problem

55 million gallons of Jet A a day is 1.7e8 kgs.

@ 43.15 MJ/kg that's 7.2e9 MJ, 2e9 kwh of energy per day.

Going with conversion efficiency being the inverse of daily insolation (5 kwh/day x 20% efficiency)

we get 2e9 m2 of energy input required -- 2000 sq km of collectors -- ~30 x 25 miles.

Doable @ less cost than "taking out Saddam" I would think, then again what isn't.

27   Â¥   2011 Feb 12, 4:21pm  

justme says

The laws of physics have not changed since then.

http://www.efcf.com/reports/E21.pdf

This is a really weak paper in that he ignores the costs of battery storage in cars, both their out-of-car lifecycle and the added energy required to haul their weight around with the car. Then again I see the Prius pack only weighs 70kg so maybe that's not a big deal.

There is also tons of work to be done on figuring out the best carrier for hydrogen. We may be able to improve on the 72% efficiency at this stage.

Or, better yet, use nickel-hydrogen and get fusion going directly . . .

http://www.eetimes.com/electronics-news/4212428/Italian-scientists-claim-cold-fusion-success

28   nope   2011 Feb 12, 7:41pm  

justme says

What energy source will be used to turn water into hydrogen, and at what cost and efficiency? I know some of the answers, but what is your thinking and your calculations?

Coal, nuclear, and hydrolectric for now. Nuclear in particular, being the single best source of energy currently available.

Eventually solar will replace most energy sources, but not without at least a few more decades of research. In the meanwhile, there's enough uranium alone to provide all of our energy needs for at least a thousand years.

29   justme   2011 Feb 13, 1:11am  

I'll be grading the homework over the weekend. Stay tuned ;-).

30   pkennedy   2011 Feb 13, 1:15am  

@Kevin
Natural Gas, it's called steam reforming and the end product is hydrogen, and co2. Everything about hydrogen is painful. I used to like the idea of fuel cells, now I think battery storage is the way to go. Leave in a very small engine, maybe even a natural gas engine to keep the car going beyond the battery.

http://en.wikipedia.org/wiki/Steam_reforming

31   nope   2011 Feb 13, 9:33am  

pkennedy says

@Kevin

Natural Gas, it’s called steam reforming and the end product is hydrogen, and co2. Everything about hydrogen is painful. I used to like the idea of fuel cells, now I think battery storage is the way to go. Leave in a very small engine, maybe even a natural gas engine to keep the car going beyond the battery.
http://en.wikipedia.org/wiki/Steam_reforming

Battery is definitely the way to go for automobiles, no argument here. I would go so far as to argue that viable battery powered cars have arrived already, at least for people who live in urban or suburban areas.

Batteries aren't viable for airplanes though. A liquid combustible fuel remains the best option, and likely will for a very long time to come. Hydrogen seems to be the easiest choice for liquid fuels over the long run, since you can produce it from any electrical source.

32   MarkInSF   2011 Feb 13, 3:50pm  

Like with most of the WikiLeaks, this is hardly surprising.

RE: Fracking above. Yeah, we've figured out a great way to lick the bowl clean after eating the bowl of pudding. I doesn't really change much.

33   TechGromit   2011 Feb 13, 10:58pm  

jvolstad says

Peak Oil here we come. BTW, the military is very concerned about future oil supplies.

I thought that was the whole point of the strategic reserves, to make sure the military has enough fuel to run it, not to lower prices a couple cents a gallon for consumers gas guzzling SUV's. There also several federal lands with untapped gas reserves set aside for this purpose. While the U.S. consumer and economy may be crippled by a oil shortage, I do not think it will seriously affect the U.S. military anytime i the near future.

34   pkennedy   2011 Feb 14, 3:47am  

Collecting enough Hydrogen via electrolysis isn't going to happen, as it is just too energy intensive and probably too slow. However, using Natural gas is possible, and how we currently get our hydrogen supplies.

I think I saw something about airlines using bio fuels though, which could give them a new fuel if algae gets going.

35   justme   2011 Feb 14, 8:45am  

Troy says

justme says

I’ll give you the homework problem

55 million gallons of Jet A a day is 1.7e8 kgs.
@ 43.15 MJ/kg that’s 7.2e9 MJ, 2e9 kwh of energy per day.
Going with conversion efficiency being the inverse of daily insolation (5 kwh/day x 20% efficiency)
we get 2e9 m2 of energy input required — 2000 sq km of collectors — ~30 x 25 miles.
Doable @ less cost than “taking out Saddam” I would think, then again what isn’t.

The arithmetic is correct AFAICT, but there is a problem with the assumptions:

A 20% NET efficiency of converting sunlight into biofuel is wildly optimistic. Per wikipedia one can get 1500-3000 gal/acre/year for what I can only assume is "future" algae technology, and 300gal/acre/year today. At 1500 gal/acre the efficiency is about 0.76%. At 300 gal/acre, it is 0.15%.

55e6 * 365 / 300 = 67 M acres
55e6 * 365 / 1500 = 13.4 M acres
All of year 2000 corn harvested was 73 M acres

And this is just for airplanes, what about all the cars and other vehicles that need fuel before we can start flying airplanes in large numbers?

And the areal numbers do not account for infrastructure: roads, housing, water canals, processing plants, etc. What will be the final land use factor? Yes, people say they will grow algae in a rocky desert in New Mexico, but where is the water and the FLAT land that is needed to build efficient SHALLOW watertight containers?

I'll give the calculation a B-.

36   justme   2011 Feb 14, 8:52am  

Kevin says

justme says

What energy source will be used to turn water into hydrogen, and at what cost and efficiency? I know some of the answers, but what is your thinking and your calculations?

Coal, nuclear, and hydrolectric for now. Nuclear in particular, being the single best source of energy currently available.
Eventually solar will replace most energy sources, but not without at least a few more decades of research. In the meanwhile, there’s enough uranium alone to provide all of our energy needs for at least a thousand years.

Hmm, no calculations here, which means an automatic "F". Sorry.

Kevin, read the paper linked above. You will find a lot of information about the falsehoods of the usefulness hydrogen as an energy carrier. The energy density and efficiency that can be accomplished is very limited. It turns out hydrogen makes no energy sense for cars, and it gets even worse when you consider the amount of fuel (under high pressure) that will be needed for an airplane.

This just isn't realistic as an efficient alternative.

37   pkennedy   2011 Feb 14, 8:56am  

Math looks good. Of course you're considering corn.

http://en.wikipedia.org/wiki/Algae_fuel

"Microalgae have much faster growth rates than terrestrial crops. The per unit area yield of oil from algae is estimated to be from between 5,000 to 20,000 US gallons per acre per year (4,700 to 18,000 m3/km2·a).[16] This is 7 to 30 times greater than the next best crop, Chinese tallow (700 US gal/acre·a or 650 m3/km2·a)"

5000 gallons per acre vs 300gal/acre creates a vastly different scenario. Now genetically modifying it will yield some huge positive results. Then this is diesel (actually able to burn in planes) vs ethanol, and a higher energy density.

38   justme   2011 Feb 14, 8:56am  

pkennedy says

This says corn gets about 420gallons per acre/year, while algae is getting 5000gallons per acre/year. That works out to about 18% of our oil needs from algae just by converting corn fields over.

The 5000 gal/acre/year is not realistic.

And what will you eat when all the corn fields are gone? Seriously, this is not a joke.

You get a D for at least trying to do some calculations :-).

Seriously guys, all this believing in future technology has a certain charm, but it just isn't going to happen at the rate it needs to. My main point is that we need to start saving NOW!

39   justme   2011 Feb 14, 9:06am  

Troy says

justme says

The laws of physics have not changed since then.
http://www.efcf.com/reports/E21.pdf

This is a really weak paper in that he ignores the costs of battery storage in cars, both their out-of-car lifecycle and the added energy required to haul their weight around with the car. Then again I see the Prius pack only weighs 70kg so maybe that’s not a big deal.
There is also tons of work to be done on figuring out the best carrier for hydrogen. We may be able to improve on the 72% efficiency at this stage.
Or, better yet, use nickel-hydrogen and get fusion going directly . . .
http://www.eetimes.com/electronics-news/4212428/Italian-scientists-claim-cold-fusion-success

This is not a weak paper. It is by a wide margin the best analysis I have seen of hydrogen as an energy carrier. Everyone should read it in all its gory detail.

It does not "ignore" the cost of batteries. If man-made hydrogen costs

QUOTE:

According to [11], every GJ of hydrogen energy
will cost around $5.60 when produced from natural gas,
$10.30 from coal, and $20.10 from electrolysis of water.
Before taxes, gasoline costs about $3.00 per GJ.

ENDQUOTE

When hydrogen from electricity+water is 6x the cost of gasoline, and even more X the cost of electrical energy from a 55% efficient generator, a battery costing a few 1000s of $ will quickly pay for itself.

Cold fusion? Come on. Someone call me back when that works. I think never is the most likely timeframe for that to happen. But if against all odds this turns out to be possible without violating all known laws of nuclear physics, I'll be very happy to reconsider everything there is to say about energy supplies. In the meanwhile, I will go with the assumption that is not going to happen.

40   pkennedy   2011 Feb 14, 9:08am  

Algae has a far better rate than anything corn can do, and multiple crops per year can be grown. Algae has 60% by weight of recoverable fuel in it, which is huge. There are some modifications that people are working on to speed up growth and of course allow more of it grow in one place.

As of now, 80% of corn is used for livestock, we eat 12%. Considering how much is wasted producing ethanol, we should be fine there.

41   justme   2011 Feb 14, 9:13am  

pkennedy says

Algae has a far better rate than anything corn can do, and multiple crops per year can be grown

When they quote X gal/acre/year, that INCLUDES all the "crops" of algae you can grow in a year. There is no multiplication factor there that has not been accounted for already.

pkennedy says

As of now, 80% of corn is used for livestock, we eat 12%. Considering how much is wasted producing ethanol, we should be fine there.

How many years of eating meat are you going to give up for that weekend airline trip to Paris? Please do the calculation, and you will see that it is NOT GOING TO HAPPEN. You will stay home and eat hamburgers instead.

42   pkennedy   2011 Feb 14, 10:20am  

Current corn yields 1.5% of our fuel, converting that to algae with far better returns without giving anything up. There is no one single solution, but converting our ethanol production to algae that yields many times the returns will do a lot.

Depending on the estimates used, it could easily account for 15-30% of our fuel.

Not to mention it can be grown in areas that aren't hospitable to anything else.

43   zzyzzx   2011 Feb 15, 1:11am  

SF ace says


1% on electrical power — Scrap all pretroleum plant and replace them with renewable. (1/1)

For the most part that's where your used oil goes, like when you get your oil changed. It's not like we are importing more oil just to make electricity. At least that's how it worked when I worked at a power plant.

44   zzyzzx   2011 Feb 15, 1:12am  

pkennedy says

Current corn yields 1.5% of our fuel, converting that to algae with far better returns without giving anything up. There is no one single solution, but converting our ethanol production to algae that yields many times the returns will do a lot.
Depending on the estimates used, it could easily account for 15-30% of our fuel.
Not to mention it can be grown in areas that aren’t hospitable to anything else.

More like algae, switchgrass, and other waste products combined to get to that 15% - 30% figure.

45   EBGuy   2011 Feb 22, 8:43am  

The 5000 gal/acre/year is not realistic.
Do I hear 15000gal/acre/year? Harvard Medical School Professor of Joule Unlimited says he'll use industrial CO2 in a closed process that circumvents downstream refining. Well, that's what the paper says.

46   zzyzzx   2011 Feb 22, 10:34pm  

http://seekingalpha.com/article/223508-doe-update-u-s-crude-oil-production-hits-6-year-high

DOE Update: U.S. Crude Oil Production Hits 6-Year High

U.S. crude oil production increased 1.7% from last week. Year-to-date oil output is up 3.8% from the year ago period. Production is now at the highest level since April 2004.

47   bob2356   2011 Feb 23, 2:17am  

It's very nice to increase production form 4.9 to 5.5 million bpd in 18 months. A big price increase always does that. It's just not a very big deal when total consumption is 20 million bpd or in other words 3.8% of 25% doesn't really matter. Despite the rantings of the drill everywhere crowd there is no way to more than triple US oil production.

48   MAGA   2011 Feb 23, 4:50am  

http://www.greencarreports.com/blog/1055745_2012-honda-civic-hf-joins-the-40-mpg-plus-parade-hybrid-too

2012 Honda Civic HF. Honda sees the future. I had a 1985 CRX HF many years ago. Got over 40 mpg.

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