Friday, September 11, 2009


The abiotic oil theory gets a boost. It has long been supported in Russia and the Ukraine -- and one notes the Russian connections of the authors below -- but has had little support in the West. Publication in a major Western journal would however seem to mark a turning point. As I have been pointing out in my sidebar, the claim that oil is a fossil fuel has long been a patent absurdity. I wonder if any of the peak-oilers will ever apologize for their foolish certainty? Unlikely

KTH is an abbreviation of Swedish words meaning "Royal Institute of Technology". It is one of Sweden's largest and oldest universities

Researchers at KTH have been able to prove that the fossils of animals and plants are not necessary to generate raw oil and natural gas. This result is extremely radical as it means that it will be much easier to find these energy sources and that they may be located all over the world. "With the help of our research we even know where oil could be found in Sweden!" says Vladimir Kutcherov, Professor at the KTH Department of Energy Technology in Stockholm.

Together with two research colleagues, Professor Kutcherov has simulated the process of pressure and heat that occurs naturally in the inner strata of the earth's crust. This process generates hydrocarbons, the primary elements of oil and natural gas. According to Vladimir Kutcherov, these results are a clear indication that oil supplies are not drying up, which has long been feared by researchers and experts in the field.

He adds that there is no chance that fossil oils, with the help of gravity or other forces, would have been able to seep down to a depth of 10.5 kilometres in, for example the US state of Texas, which is rich in oil deposits. This is, according to Vladimir Kutcherov, in addition to his own research results, further evidence that this energy sources can occur other than via fossils - something which will cause a lively discussion among researchers for a considerable period of time.

"There is no doubt that our research has shown that raw oil and natural gas occur without the inclusion of fossils. All types of rock formations can act as hosts for oil deposits," asserts Vladimir and adds that this applies to areas of land that have previously remained unexplored as possible sources of this type of energy.

This discovery has several positive aspects. Rate of success as concerns finding oil increases dramatically - from 20 till 70 percent. As drilling for oil and natural gas is an extremely expensive process, costs levels will be radically changed for the petroleum companies and eventually also for the end user. "This means savings of many billions of kronor," says Vladimir.

In order to identify where it is worth drilling for natural gas and oil, Professor Kutcherov has, via his research, developed a new method. The world is divided into a fine-meshed grid. This grid is the equivalent of cracks, known as migration channels, through strata underlying the earth's crust. Good places to drill are where these cracks meet.

According to Professor Kutcherov, these research results are extremely important not least as 61 percent of the world's energy consumption is currently based on raw oil and natural gas. The next stage in this research is more experiments, especially to refine the method that makes it easier to locate drilling points for oil and natural gas.

The research results produced by Vladimir Kutcherov, Anton Kolesnikov and Alexander Goncharov were recently published in the scientific journal Nature Geoscience, Volume 2, August.


Journal abstract follows:

Methane-derived hydrocarbons produced under upper-mantle conditions

By Anton Kolesnikov et al.

There is widespread evidence that petroleum originates from biological processes1, 2, 3. Whether hydrocarbons can also be produced from abiogenic precursor molecules under the high-pressure, high-temperature conditions characteristic of the upper mantle remains an open question. It has been proposed that hydrocarbons generated in the upper mantle could be transported through deep faults to shallower regions in the Earth's crust, and contribute to petroleum reserves4, 5. Here we use in situ Raman spectroscopy in laser-heated diamond anvil cells to monitor the chemical reactivity of methane and ethane under upper-mantle conditions. We show that when methane is exposed to pressures higher than 2 GPa, and to temperatures in the range of 1,000-1,500 K, it partially reacts to form saturated hydrocarbons containing 2-4 carbons (ethane, propane and butane) and molecular hydrogen and graphite. Conversely, exposure of ethane to similar conditions results in the production of methane, suggesting that the synthesis of saturated hydrocarbons is reversible. Our results support the suggestion that hydrocarbons heavier than methane can be produced by abiogenic processes in the upper mantle.

Nature Geoscience 2, 566 - 570 (2009), 26 July 2009


It's all bad news for the peak-oil freaks

The potential of Brazil to become one of the biggest oil producers in the world was highlighted today when BG - the former exploration arm of British Gas - reported a "supergiant" field with up to two billion barrels of recoverable reserves.

The Guara discovery builds on a series of other major successes in very deep waters off Brazil and dwarfs rival strikes such as Tiber in the US Gulf which was announced with great fanfare by BP last week.

The Brazilian oil rush not only undermines claims that the world may run out of oil soon but threatens to upset the political balance in Latin America where Hugo Chávez's Venezuela has held sway as the continent's dominant energy provider.

The BG find comes as the Brazilian government proposes laws that will tighten its grip on its newfound oil wealth through a state-owned management company.

Frank Chapman, the BG chief executive, could not hide his excitement about the latest results emanating from appraisal drilling of the Guara area. He said: "The well-test results on Guara were excellent and underscore again the potential in BG Group's extensive position in the world-class Santos Basin."

Chapman has never before given a figure for the size of Guara's reserves which are on par with fields like Forties, the biggest find in the North Sea. Neither has he commented on Tupi, in which BG also has a stake, where operator Petrobras has talked about recoverable reserves of between five and eight billion barrels.



As CEO of Delek Drilling, an Israeli oil and gas exploration company, Zvi Greenfeld is a self-proclaimed optimist in an extremely risky business. But even Greenfeld was taken aback by the news on Aug. 11 that the huge natural gas reserves off the country's central and northern Mediterranean coast discovered by Delek and its partners in January are 16% bigger than estimated just one month ago. Independent energy experts reckon this once energy-poor country now has enough natural gas to meet its needs for the next two decades and may ultimately even transform itself into an energy exporter.

The discovery has raised hopes of further gas finds in a region that to date has been largely unexplored.


But Britian's socialist government is bent on Britain's destruction -- as usual

As many as 900 million barrels of UK oil reserves could end up abandoned unless ageing fields are exempted from carbon trading, according to one of the industry's most senior figures.

John Manzoni, president and chief executive of Talisman Energy, told the Offshore Europe conference in Aberdeen that plans to extend the European carbon trading scheme to such fields would make them uneconomic. He estimated that this might force Talisman to abandon 50 million barrels-worth of reserves.

He said: "Older fields have higher costs with relatively low throughputs, even though they still have significant oil in place... If we have to buy carbon permits it will result in earlier abandonment."

As part of a volley of calls for looser regulation at the conference, which previously drew veiled criticism from First Minister Alex Salmond, Manzoni said his company was already investing overseas rather than in UK territorial waters because he could get "better rates of return".

Sir Ian Wood, chairman of John Wood Group, told an audience that the UK government could be missing out on a share of a £1 trillion prize unless it improved the regulatory regime. He warned tax revenues from the remaining 13 billion to 25 billion barrels of North Sea reserves would be unlikely to be extracted as things stood, comparing his industry with the "huge subsidies" received by the renewable sector.

On the basis that the lower-estimate 13 billion barrels would sell at an average $100 (£60) each, he said: "That's $1300bn over 20 or 30 or 40 years. I am going to repeat that: $1300bn of economic activity to the UK over the next period. That's something that has to be a priority [for the government] given the economic crisis."



The great petroleum geologist Wallace Pratt famously said that "Oil is found in the minds of men." Discoveries depend on visionary theory, technical innovation and commitment to risky drilling. Plus luck. Peak Oil theory, by contrast - which asserts that global oil production has, or soon will, peak, and that this has powerful policy implications - is found in the limitations of the minds of men. It is less geological theory than unevolved intellectual shortcoming, although it certainly has its political uses.

The fruits of the "greatest resource," as economist Julian Simon dubbed the human mind, appeared yet again this week with the announcement by BP that it had found a "giant" field at unprecedented depth in the Gulf of Mexico, an area that twenty years ago was regarded as played out. By contrast, the limitations and conceits that characterize Peak Oil were nicely summed up by a report on BP's find in the leftist British newspaper, The Guardian.

According to that report, BP's Tiber well, and another recent huge find in Iran, "have encouraged skeptics of theories which say that peak production has been reached, or soon will be, to hail a new golden age of exploration and supply."

Note how the use of the term "skeptics" suggests that Peak Oil is the mainstream view, which it is not. The word also links unbelievers to beyond-the-pale climate change "skeptics." Finally, the report suggests that these people are suggesting a "golden age of exploration and supply" although in fact the only relevant quote is from Peter Odell, professor emeritus of international energy studies at Erasmus University in Rotterdam, who merely says, "It's an amazing turnaround from the gloom of the last 10 years. All these finds will take a long time to bring on stream, but it shows the industry is capable of finding more oil than it uses and shows we have not come to any peak."

Peak Oil theory represents a combination of economic ignorance and moral rejection of markets as greed-driven and short-sighted. These all-too common attitudes usually go with a profound faith in effective government policy, despite the monumental weight of evidence to the contrary.

The seminal image for depletionists - as for apocalyptic climate change theorists - is that of the photo of the Earth taken from Apollo 17; seemingly dramatic confirmation of finite resources on a "small planet." In fact, the interpretation of the Apollo picture is symptomatic of how far technology has outstripped our primitive assumptions about the way the world works. But then people don't have to think about the vast, natural "extended order" of the economy any more than they have to worry about how their spleens work.

Debate between economists and Peak Oilsters tends to be a dialogue of the deaf. Economists often seem to imagine that they are explaining a technical issue. They note that the alleged failure to "replace" production is in fact due to the way reserves are reported. They stress that startling new technologies -- such as the ability to drill in thousands of metres of water to depths of more than 10,000 metres (as at Tiber), or 3-D computer seismic imaging, or horizontal drilling -- are constantly finding new oil and gas, and producing more from old reservoirs.

Again, citing how often alarms over "the end of oil" have been sounded since 1880 holds no sway with Peaksters. Since they see oil supply as essentially "fixed" and economists as deluded and morally deficient, delays in the projected "crunch" will only make it all the more painful when it - inevitably - comes.

Peak Oilsters do not so much refute economics and history as simply ignore them. They are victims of the "psychology of taboo," which prevents them from assessing markets objectively. For example, leading Peakster Matt Simmons has described the market as a "500-pound wrecking ball" and Adam Smith's invisible hand as an instrument of strangulation!

Meanwhile it is not just The Guardian that has an unconscious depletionist slant. One tic that has crept into reporting new finds, or prospects, is to claim that they will "only" supply the world for so many days, or weeks, or months. Even The Wall Street Journal noted that Tiber, if it yielded a billion barrels of oil, would "only" supply the world for two weeks. So does this mean that BP shouldn't bother to proceed?

Yet another way of playing on the limitations of human thinking is to note that "four new Saudi Arabias" will be needed to meet projected global demand in 2030, as if supply and demand were independent phenomena, or such a projection's sheer inconceivability should reflect on the projection rather than on the limits of what most ordinary humans can conceive.

Yet another revealing Peak Oil trope is that the "easy" oil has been found, as if it was easier to drill in a remote, muddy areas of Pennsylvania with rigs brought in by donkeys 150 years ago than it is to drill from a high-tech drill ship (although it certainly is more expensive. A single Gulf well can cost US$200 million).

There are indeed major supply issues. Much of global supply is controlled by governments. Emerging economies, in particular China, have caused a surge in demand. Meannwhile the whole world is engaged in policy hysteria over climate change (which suggests that oil can't run out soon enough). But a free market will provide all the incentive needed to entrepreneurs and innovators to promote energy innovation. More important, there simply is no alternative. The record of government-guided technology - outside war - is overwhelmingly disastrous, from Jimmy Carter's Synfuels to the current wind, solar and ethanol boondoggles.

The oil industry, by contrast, is constantly producing new wonders. In a piece in the latest Foreign Policy magazine, oil historian and consultant Daniel Yergin notes that, "Again and again, in researching oil's history, I was struck by how seemingly insurmountable barriers and obstacles were overcome by technological progress, often unanticipated."

With regard to Peak Oil, Mr. Yergin points out that his own firm's analysis of 800 of the world's largest oil fields "indicates that the resource endowment of the planet is sufficient to keep up with demand for decades to come." Only governments can stand in the way. Supported by our misconceptions.



The European Union has scaled back plans to give billions of euros to poor countries to persuade them to help battle climate change, putting pressure on developing nations to raise their own contributions to a post-Kyoto agreement later this year.

Funding from rich nations to the developing world has emerged as the main stumbling block to progress in climate negotiations ahead of international talks in Copenhagen in December. Ethiopia warned last week that Africa would veto any deal at Copenhagen that was not generous enough.

The 27-country EU is trying to find unity on its contribution to break the impasse. The bloc indicated last week that it might pay 13-24 billion euros annually to the developing world by 2020 to help with a total bill of around 100 billion euros (EurActiv 08/09/09).

But that contribution was lowered earlier this week to 2-15 billion euros, according to a draft European Commission report obtained by Reuters on Tuesday. The numbers are due to be finalised by Thursday and could change again before then.

"We welcome the fact they've put concrete numbers on the table but the figures are too low," said Greenpeace campaigner Joris den Blanken. "There's no time for such political games," he added. "We only have three weeks left of active negotiations."

Much of the reduction in funding came after the EU changed its view of how emissions reductions from industry and power stations should be funded in the developing world.

Around 80-90% of those emissions cuts would be made via improvements in energy efficiency, which would pay for themselves and should therefore be financed by local businesses, the Commission report said.



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