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Plot Device
06-16-2008, 07:35 AM
The following is a for-dummies list of oil terminology that I whipped up myself from the past six weeks of self-eduction I've been doing on the oil industry. If you find it helpful, please say so. And if you find I made a mistake, DEFINITELY say so (this means YOU blacbird! ;) --caw).

I deliberatly did NOT put it in alphabetical order. Instead, I suggest you read it in the order I've arranged it because each succesive definition is dependant upon the prior one.

The Vocabulary of Oil

One barrel of oil = 42 gallons.
Current US oil consumption is slightly more than 20 million barrels per day (20 mbpd)
Current US oil imports stand at 14 million barrels per day (14 mbpd), which mean 6 million a day is still domestic oil (mostly from Texas, Alaska, the Gulf of Mexico, and a few other sources like Arkansas, Louisiana, New Mexico, etc). But this 14/6 ratio will likely keep shifting as US oil wells run dry.
Current planet-wide oil consumption is currently 87 million barrels per day (87 mbpd) and this growing human appetite for oil has darkly been called "a thousand barrels a second."
Cargo capacity of one ocean-going oil tanker is anywhere from a half million barrels to 2 million barrels.
Gigabarrel or Gb = 1000 million barrels. (Therefore, 500 supertankers can collectively carry one gigabarrel, or 1 Gb.)
OPEC is the Organization of Petroleum Exporting Countries, a global oil cartel, currently consisting of 13 nations (http://en.wikipedia.org/wiki/OPEC#Membership). Membership in OPEC is by invitation only (and it's also possible to get "un-invited" right out of OPEC). The roster of nations has undergone changes over the years because 1) some nations that used to export oil in the past have either run their wells dry, or else decided to keep the oil for themselves (such as Indonesia which was recently "uninvited"), and because 2) some nations that never knew they even had (any significant) oil only recently discovered their own substantial reserves, and after five or ten years of developing their own oil industry they finally became exporters for the very first time. OPEC makes the decision to invite (or "uninvite") nations in and out of OPEC based (primarily, but not exclusively) upon how much oil a nation is capable of regularly (reliably) pumping and exporting into market on a daily basis. OPEC is very concerned with price stability among its member nations (one unstable nation in the group can ruin everyone else's prices for the combined "basket" of prices that they corporately set for themselves as a unified group). So oil stability and oil quality and oil quantity are heavilly scrutinized before an invitation is extended. The most powerful nation at the OPEC table is Saudi Arabia, setting the tone for the cartel for the past 40 years, essentially dictating all OPEC policies to the other OPEC nations. The majority of all OPEC nations are Middle Eastern and/or Islamic. The official language of business spoken by OPEC when it deals with the world is English, but the unofficial language spoken around the water cooler is Arabic/Farsi. The official currency used by OPEC is the US dollar, but in the past 8 months (since November of 2007) OPEC has been complaining about the devaluation of the US dollar and is loudly declaring a desire to shift away from the US dollar over to the Euro.
World Petroleum Congress or WPC is the governing body which sets industry standards, especially measurements and definitions. Such as, some nations measure oil according to tonns, but the Congress prefers that oil be mesaured according to the American barrel (which is 42 American gallons). They have little or no power over OPEC except to insist that OPEC keep their communications with the rest of the world as clear as possible by using the scales of measurement and definitions set by the Congress.
International Energy Agency aka the IEA is an energy advisory committee representing 27 industrial nations (mostly from the West) including the United States. The agency was initially formed as a reaction to the Oil Embargo if 1973-1974, and eventually grew into a proactive organization seeking to maintain energy stabilty, especially among nations that need to import energy from other nations.
Energy Information Agency aka EIA is the official source of energy information from the US government.
Organisation for Economic Co-operation and Development or the OECD is an international organisation of 30 industrialized (and mostly Western) free market nations, including the United States. While their purpose for being does not directly have anythng to do with oil, it turns out that MOST of the OECD nations are also net-energy importers, and therefore are collectively concerned about the global trading of oil in the free market.
Quotas are the daily amount of oil that an "oil interest" (such as one oil field in Texas, or even one entire oil producing nation in the Middle East) promises to deliver to the oil markets. Sometimes these quotas are required to be no less than a certain amount --such as Kuwait promised the USA back in 2003 that it would deliver no less than 2 million barrels per day to American refineries (a number they failed to sustain beyond 2005 because their feilds began to run dry). In other instances these quotas are required to be no more than a certain amount --such as some OPEC nations might be required by OPEC to export no more than a half million barrels per day. As an example, back in the 1980's, OPEC placed tight bpd restrictions on their member nations, not allowing them to export too much (in an attempt to keep the prices higher in the face of the surging oil production from the North Sea, a non-OPEC feild). Some OPEC member nations flouted this order and cheated on their quotas, covertly selling more oil than the quotas allowed just to make some extra cash.
Below Ground Issues are issues and obstacles that can hinder oil drilling and quota-making, specifically related to the practical, geologic realities that confront the scientists and oil drilling teams who are on-site at an actual well. Examples can include rock density, salt formations, underground rivers, and gas pockets.
Above Ground Issues are those issues and obstacles that can hinder oil drilling and quota-making, specifically related to business complications that confront oil executives who are trying to run a business back at the office. Examples can include difficult road access to an on-shore oil field, difficult sea access to an off-shore oil field, weather conditons (hurricanes, etc), and also local, national, or even global politics including taxes, union negotiations, ecological restrictions, wars, coups, and embargos.
Oil Reserves is a very generic term to describe the oil that's still in the ground -- in any given field, or even any given nation (or even any given planet). This number is almost always stated in barrels (sometimes in gigabarrels) is usaully very high, and (it is rumored) often very very VERY over-stated. (Other natural resources use the same terminology --coal reserves, natural gas reserves, etc.)
Estimated Reserves is the number of barrels (or gigabarrels) still below ground that has only been initially guessd at but not proven.
Proven Reserves is the number of barrels in an oil reserve that has been demonstrated to actually exist via extensive geologic surveys, as well as peer reviews/third-party audits of those surveys.
Recoverable Reserves is that portion of an oil reserve that a commercial oil interest believes is realistically and economically (i.e. in a commercially profitable manner) able to be extracted, refined, and sent to market. "Recoverable reserves" are always substantailly less than "Proven reserves" because some oil is simply unable to be extracted and/or refined while it is in its current state, from its current geologic and/or geographic location, and with current technology.
Ultimate Recoverable Reserves or URR is oil that can be physically and scientifically recovered, whether it's commercially profitable or not.
Oil Initially in Place or OIIP is a VERY tricky definition that needs to be paid close attention to. It refers to the oil that IS in the ground right now, as well as the oil that USED TO BE in the ground but has already been drilled and extracted, and it also refers to the oil that MIGHT be in the ground but has yet to be discovered. And it also includes all the oil that is deemed unrecoverable. The OIIP of any given field or nation or planet is always the absolute most over-inflated number of all, and so it needs to be used with extreme caution. It is almost always stated in gigabarrels (Gb).
Recovery Factor or RF of a given field is determined to be URR/OIIP.
Light Crude is a crude oil low in "wax." It runs very freely and liquid-y, and so it can be easily pumped up a well, through a pipeline, into an oil tanker, and eventually to a refinery. Light crude usually floats on the top of all other grades of crude when the undreground reserve is still sitting untapped in the rock, and so it's usaully the first type of oil to come out of a "young" oil well. This grade of oil is very easy-going on all of the machinery involved in the entire oil industry: from the drills to the pumps to the valves to the refineries. As an oil well ages, the light crude eventually comes to an end and the oil drilling team starts to notice the oil getting thicker and heavier.
Heavy Crude is a crude oil with lots of "wax" making it very high in viscosity (thick and sludgey).
And here's an editorial comment from Miguelito of Alberta, Canada, voiced by him down in Post #5:
Just a note: you know why it's called heavy oil? Because, unlike light oil (think of vegetable oil, which floats on water), heavy oil is denser than water and sinks.
It's an extremely difficult grade of oil to try and pump up through a well. The deeper the well is, the more problematic it is to get heavy crude up vertically through such long distances. It's also difficult to force heavy crude to travel horizonatlly along a pipeline, especially in arctic regions where the cold makes the oil (and the wax in the oil) even more sluggish. Various techniques can be used to "loosen up" heavy crude while it's still in the ground, such as pumping water down into the rock, and even pumping massive injections of nitrogen gas down into the rock. These techniques are expensive and drive up operating costs (which can often get passed on to the consumer). The "wax" found in the oil eventually gets separated out at the refinery, and this is where petroleum jelly (yes--Vasoline!) comes from.
Sweet Crude is crude low in sulfur (less than 0.5%). If you were to taste it with your tongue it would LITERALLY be sweet. The low sulfur content is an important factor in the grading and refining of oil because sulfer is what causes engine damage to cars, trucks, aircraft, etc. So sweet crude is highly sought after by those refineries that lean toward making transportation fuel.
Sour Crude is crude oil high in sulfur (having 0.5% or more).
Light Sweet Crude is a very high grade of crude that is the ultimate standard of the oil industry.
Heavy Sour Crude is the worst grade of crude. When a well starts pumping heavy sour, it's usually time to shut 'er down.
Brent Crude aka London Brent is a British grade of crude oil originating in the North Sea Oil Field, a field which Britain developed in cooperation with Norway. Brent crude is considered a medium grade of light sweet.
West Texas Intermediate aka WTI --no it's not the name of a middle school in the El Paso suburbs. West Texas Intermediate is a grade of crude oil found in the United States. It's considered one of the lightest and sweetest crude oils in the world, and goes for the highest dollar amount, (around 1 or 2 dollars more than Brent Crude and the OPEC Basket). It's also very rare (and getting rarer).
OPEC Reference Basket aka the OPEC Basket is not a grade or blend of crude but rather it is a pricing formula. Specifically, it's a weighted average of the prices of oil put out by all the OPEC member nations. OPEC is very protective of the prices that land in that Basket each day, and therefore very picky about which nations are allowed to be OPEC nations. Only those countries that can consistently deliver quantity and quality on a daily basis for years at a time are allowed in the club house (and allowed to impact the all-important Basket).
Well Output is how much oil (the number of barrels) that a well is actually putting out on a daily basis. A well's output can rise and fall as its quotas rise and fall. If a well (and the drilling team assigned to that well) is pressured to increase output, they may or may not be able to according to the "current capacity" and "spare capacity" of that well.
Capacity is the maximum output of oil which a well (or even an entire field) is capable of pumping. Capacity is not to be confused with output. Output is the actual measurement of realized/recovered barrels per day, while capacity is what the well is capable of, regardless of whether it's pumping or just lying dormant. Capacity of a well is never static and it changes gradually over the lifecycle of a well. "Young" wells often have an excellent capacity, freely (and quickly) flowing with light crude. But then that capacity slowly declines as the well ages, most often due to the increasing recovery of difficult (thick/viscous or "heavy") oil as time goes on. It is a wise oil foreman who deliberately keeps his well's targetted "output" far far below his well's actual "capacity" so that he has wiggle room for the coming days when the oil becomes more difficult to pump. Seventy percent capacity is deemed a good place to hover at, leaving a "spare capacity" of thirty percent. This allows for down-time and repairs and even for ocassional absenses in the drilling crew.
Spare Capacity = Capacity - Output. As a well gets progressively older, and the oil crews continue to pump it, the spare capacity continues to diminish, unless the quotas for the well's output are (mercifully) lowered by the oil executives back at the head office. When spare capacity reaches a value of ZERO, the well is said to be operating "flat-out."
Flat-out is when an oil well is operating with zero spare capacity and the oil drilling crew is working around the clock trying to keep up its quota. This is an unenviable situation because it will only keep going downhill from there and will never improve. The well is old, the light crude is gone and the heavy stuff is all that's left. Operating flat-out is dangerous because there is little time given to needed repairs and maintenance, the crew can often be very tired, and these two factors combined can cause accidents to happen. And while falt-out is indeed a dangerous situation for a drilling team, truth is that the most dangerous situation of all is to operate at "full-bore."
Full-bore is when a well is being pumped 24/7 with zero downtime. This is a desperate state of affairs where the equipment itself is being destroyed by the relentless abuse. Full-bore is what the Soviet Union resorted to back in the late-1980's and early 1990's when it was trying desperately to extract as much oil as possible from its declining oil fields to sell it on the open market for the hard cash that the dying Soviet economy needed. The Soviet Union eventually collapsed in 1991. Their collapse has been attributed to many factors, but I'll name just three here today: 1) the arms race with the USA which ran up their national debt to cosmic heights, 2) the failed war in Afghanistan which also added quite savagely to their debt and deeply demoralized their citizens, and 3) the plumetting price of oil in the world market which was brought on by a glut of oil rushing in from the brand new and suddenly-robust oil fields of the North Sea (run by Britain and Norway, two jolly good pals with the USA).
Elephant Field is the industry term for a giant oil field estimated to have 100 million recoverable barrels or more.
Mega-field is the industry term for a giant oil field estimated to have 500 million recoverable barrels or more, and have an estimated capacity of no less than 100 thousand barrels a day. There are few mega-fields left in the world and no new mega-fields have been discovered since 2002.
Gusher is an industry term for a very new/young oil well that has only just begun to be drilled and which starts (literally) to gush. When the oil gets reached by the drill, the oil gushes up out of the ground with force due to the presense of gas (usually natural gas) trapped along with the oil in the ground and under very high pressure. A gusher is dangerous because the gas is often explosive, but it's also very desirable because the oil can be almost effortlessly pumped under its own power for as long as the gas pressure holds out. As a gusher well ages, the pressure slowly subsides to a steady stream, and then to a trickle, and then it slows to a stubborn sluggishness. At that point the oil must be forced from the ground with very agressive and expensive pumping techniques --they are expensive because they require lots of 1) manpower, 2) mechanical energy (usually this energy gets supplied by an oil-burning generator, so they are spending oil in order to get oil ), 3) water (sometimes fresh water and sometimes sea water depending on the application, and the decision to use any of the techniques that require fresh water is a difficult one for those regions where drinking water is scarce), and 4) nitrogen injection into the rock (nitrogen is a petroleum product --so they are again spending oil to get oil-- and it gets flushed downward into the rock strata via very high pressure techniques, and achieving that much pressure once again requires a powerful oil-burning generator --so yet again they are spending oil to get oil).
Energy Returned on Energy Invested or ERoEI is the net gain of oil energy that can be achieved after persuing an oil well or oil field or national oil reserve. All oil wells/fields/reserves require the oil drilling team to ship in and employ a pre-existing supply of oil in order to run the equipment that will get the well into operation. When a well's performance shrinks down to stubborn sluggishness, powerful oil-burning generators get employed, causing the ERoEI to go down drastically. And then when nitrogen injection into the rock gets employed, the ERoEI again gets diminished even further. A gusher of an oil well can give a very generous ERoEI of anywhere from 30-to-1 all the way up to 100-to-1 --and that literally means that in order to lift 30 barrels out of the ground, they need to expend only 1 barrel of oil. But once the ERoEI starts to dip below 20-to-1, the oil team needs to decide if it's worth it to continue any further. Many oil wells that are clearly not yet dry get capped over anyway because the ERoEI of those wells became too narrow to be bothered with.
Conventional Oil is oil that exists below ground in a conventional liquid medium, and can be obtained via conventional drilling technology.
Unconventional Oil is oil that cannot be gotten via conventional drilling and instead must be extrapolated from the Earth via unconventional and non-drilling techniques. Unconventional oil includes, Tar Sands, Shale Oil, Bio-Fuels, and Cellulotic Fuels.
Tar Sands aka Oil Sands are deposits of dark gray or even black clay (called bitumen) that has oil mixed in with the clay as a thick muddy sludge. Rather than drilling for the bitumen, it is strip mined with heavy earth moving machines and the dirt/clay/bitumen is then trucked to a bitumen processing plant/refinery. Extracting oil from tar sands/bitumen is an expensive process that requires a massive expenditure of fresh water as well as pre-existing oil. The ERoEI for tar sands is very low, but not unprofitable. Currently, only Canada has a viable tar sands industry, while Venzuela is starting to build up their own tar sands productions in a bid to compete with the Canadian industry. Utah has a substantial tar sand deposit and American oil companies are exploring the potentiel of the Utah fields.

And here's a full-blown correction from Miguel, who lives in Alberta, Canada (the region where tar sands are found), on current tar sands technology:

A correction about the oil sands or tar sands:

A big portion of Canada's oil-sands production comes from drilling wells and that number is only going to get bigger. It's really difficult, but they can get the tar to flow. One of the techniques is called SAG-D (Steam assisted gravity drainage): they drill two horizontal wells, one over the other, and pump steam in the top one. This lowers the viscosity of the tar, allowing it to flow. It seeps down to the second, lower well, where it is pumped out.

Another technique they're trying (it's experimental) is called a fireflood: they set fire to the bitumen in a well to produce steam and carbon dioxide. Both of these things lower the viscosity of the tar and it can flow out of another well. This one is kind of important because it's less energy and water intensive (because you need natural gas and water to create the steam otherwise).Canada is currently able to produce over 2 million barrels per day (2 mbpd), most of which is exported to the United States. That supplies the USA with 10% of its current daily oil consumption, and also makes Canada our #1 source of foriegn oil. The majority of the 2 mbpd has been used for transportation fuel. Unfortunately, the USA was recently outbid by China on the Canadian tar sands futures, so the USA is about to lose that stream of oil and will need to find some other source of oil to replace it, or else will need to come up with an alternate energy supply to offset it, or else will need to cut back its daily oil consumption by 10%.
Shale Oil aka Oil Shale aka Oil Shales is a deposit of very dark, often black rock which has kerogen molecules bound up in the rock. If the kerogen can be extracted from the rock, that kerogen can then be processed into a synthetic form of crude oil. This two-part process (first extracting the kerogen from the rock, then converting that kerogen into synthetic crude) is an expensive process that requires a massive input of fresh water as well as pre-existing oil. The ERoEI for shale oil is very low and close to zero. The financial investment is prohibitively expensive, and the net cost per barrel exceeds the current market price per barrel--but that gap is closing fast as the price per barrel escalates each day. The largest depoits of shale oil in the world are found in the United States of America in a region called the Bakken Shale Formation (aka the Bakken Oil Field, which I think is a misnomer). The Bakken Formation stretches from South Dakota, into North Dakota, across parts of Montana and Wyoming, and up into Canada. It is estimated that there are over 400 billion barrels of oil in the Bakken Formation, but that only 1 percent of it is deemed recoverable. If the global price of oil continues to rise, then regardless of the crappy ERoEI, oil developers will indeed go for it for no other reason than the short-term profits, regardless of the long-term destruction it will exponentially inflict upon global oil supply. I personally am deeply opposed to this type of oil extraction because the ERoEI on shale oil is frequently at or near zero, and so this whole undertaking constitutes what I shall here call "resource suicide." Unless the tehcnology for the kerogen extraction and refinement can be greatly improved or even revolutionized, we will be burning oil to get oil, and so we will always come out at a net loss of oil with every single refinery-load that we process of the stuff. The only acceptable alternative that I can see with current technology is to employ the energy produced by nuclear power plants for the kerogen extraction and refinement process--that way we don't burn oil to get oil.
Here's another editorial comment from Miguelito of Alberta, Canada:
And, about the Bakken: the oil was already generated naturally and just stuck in the rock, ie. it's a bit too mature to be an oil shale. To produce from the Bakken, the rock has to be fracced really hard (the rock has to be rubbleized to make tiny pathways for the oil to flow out). A real oil shale would be the Eocene Green River Formation, where it's really immature and needs to be baked to get the oil out of it.
Bio-Fuels are fuels derived from living plants being grown today (as opposed to living plants that were grown millions of years ago). The plants used include switchgrass, corn, soy, palms, coconuts, and sugar cane. Bio-fuels in general have been criticized for two very vital reasons: 1) Because they take farmland away from the task of growing food, which contributes to shortages in the world food supply. And 2) because they require massive petroleum inputs up front, including nitrogen-enhanced fertilizers (nitrogen is a petroleum product) and the petroleum used in the farm equipment to grow the plants and then to harvest the plants, and finally to process the plants into a petro-additive. And even then, all bio-fules really are is an additive to existing petroleum products, not a 100% replacement of them. So all of this means that bio-fuels have a terrible ERoEI of at or near (even below) zero. Sugar cane has among the most advantageous ERoEI of any plant available, approximately eight times as much as corn (I know I sure do get a jolt from eating sugar--not so much from eating corn). The burning of sugar cane also has a low carbon output because it is so efficiently burned with little waste left over. The Continental USA can't grow sugar cane because it isn't in a tropical zone. I am opposed to Bio-Fuels because I see no net energy gain from it, I only see a net energy loss, and I also see a needless rise in food prices as our cars compete with our refrigerators.
Cellulotic Fuel is derived from the plant waste leftover after the food has been removed from the plant for human consumption. This includes the empty stalks of corn. This I have no dispute with because we were growing the corn for human consumption anyway, and we were just going to grind up the corn stalks as waste, possibly as mulch.
Petrobras is the nationalized oil company of Brazil.
Pemex is the nationalized oil company of Mexico.
Rosneft is the nationalized oil company of the Former Soviet Union.
Gazprom is the nationalized natural gas company of the Former Soviet Union, and the biggest supplier of natural gas in the world.
Saudi Aramco is the nationalized oil company of Saudi Arabia.
Petroleos is the nationalized oil company of Venezuela.
Bapco is the nationalized oil ompany of Bahrain.
ADNOC is the nationalized oil company of Abu Dhabi.
Petronas is the nationalized oil company of Malaysia.
Sonangol is the nationalized oil company of Angola.
Statoil is the nationalized oil company of Norway.
The Six Supermajors are the six largest non-nationalized, private oil companies in the world. None of these six (which are really puny little guys) are anywhere near as huge as the titan-sized nationalized oil companies like Saudi Aramco and Petroleos, but they are still considered "respectable" because of their long standing presense in the world (dating back over 60 years, some of them over 80 years). They are: Exxon Mobil, Royal Dutch Shell, BP, Chevron-Texaco, Conoco Phillips, and Total (France).

Where EXACTLY does 87 mbpd even come from?

The world consumes 87 mbpd of oil (or a thousand barrels a second). The largest oil fields in the world have the following daily outputs:

1) Ghawar in Saudi Arabia produces about 5 million barrels per day, meanwhile ALL of Arabia is able to produce about 10 million barrels per day from ALL of their fields combined (including Ghawar). It is important to note that the Ghawar field is perhaps the only one left in the world that is not operating flat-out and not declining. Ghawar has possibly 71 billion "recoverable" barrels left in its reserves (but the Saudis claim it's much more than that).
2) Burgan in Kuwait produces only 1 million barrels per day. Five years ago in 2003 it was producing 2 million per day, but it hit peak around 2004-2005 and production has steadilly declined since then. They were loathe to tell the rest of the world the truth of their decline, but evetually had to confess that their feild was drying up because they simply could not meet their quotas anymore. Burgan has maybe 55 billion "recoverable" barrels left.
3) Cantarell in Mexico used to produce just over 2 million barrels per day (2 mbpd). But it has been in steep decline for four years, so right now it only has an output of 1.4 mbpd. They tried a few magic tricks like injecting water and nitrogen into the rock, but that just produced a lot of watered-down oil. AT this time, Cantarell is estimated to only have about 10 billion "recoverable" barrels left.
4) Daqing in China used to produce over a million bpd, but is now down to just 600,000 bpd. It has about 3 billion "recoverable" barrels left.


A Word About Venezuela

Venezuela used to have a nationwide output back in 2003 of over 3 million barrels per day (3 mbpd). It has fallen in recent years to just 2.2 mbpd (the Venezuelan government denies this).

Veezuea is not exactly on great terms with the USA, but they DO have a lot of oil.


A Word About Russia

Russia, or the Former Soviet Union (FSU) is allegedly experiencing a rennaissance of their oil industry. They disovered new fields in the past ten years which they have been selling in increasing amounts in the foriegn markets. They are making claims that their daily production is growing by leaps and bounds, and are even claiming that they might soon outstrip Saudi Arabia's daily output --a feat no other oil producer in the world has ever come close to.

The Russians have not opened their fields to inspection by outside geoligists and auditors. For now, we simply need to sit back and see if they can sustain their current output which is a staggering 8 mbpd.

One final note about Russia ... trying to export ANYTHING from Russia is a tough trick simply because they are an almost completely landlacked nation. However, they DO conveniently border China. So, like any shrewd drug dealer out to "push" their wares onto some gullible kid in the school yard, they quite wisely made China into an oil customer. And after ten years of that arrangement, China is now just as hooked on the stuff as we Amercians are. It has been speculated by world economists that had Russia NOT spent an entire decade peddling their petro across the border into China, the Chinese economy could never have taken off the way it did, and the current Western-style demand for oil amongst the Chinese never would have surfaced. So, while we grumpy self-righteous Americans are busy raising a holier-than-thou fuss over the way China's growing addiction is now muscling in on our own addiction, we seem to be overlooking the measure of blame due to that dark evil pusher named Russia lurking nearby and selling his junk.

Now some background on Saudi Aramco.


The Arabian fields were first discoverd in the late 1940's, and development of those fields during the 1950's was not very productive. So in the 1960's, at the request of the ruling royal family of Arabia, the Saud family, several American oil companies sent representatives to Arabia to help the novice Arabians with the entire process of drilling for oil and bringing it to market.

This arrangement lasted almost 20 years with an agreed-upon timeframe whereby these American "oil missionaries" from the American oil companies would train the inexperienced Arabian on the ins and outs of the industry. And then when this training period was over, the Americans would remove themselves from the process and allow the Arabians to handle it all on their own. The day of American separation from the Arabian oil machine happened in 1980, and the Arabians (the royal Saud family to be exact) have had total control of their oil ever since.

A current-day oil expert named Matt Simmons (who has been to Arabia many times) says he is very sympathetic to the Arabians because, in his estimation, the 1960's American oil executives arrived in Arabia with a very self-important, patronizing attitude toward the "barbaric" and "primitive" camel herders. (Perhaps one or two epsiodes of the HBO series Mad Men is the best example of what those guys were probably like.) How the Saudis were able to suffer through those many years of American arrogance and degradation is something Matt Simmons marvels at to this day. But when the Arabians finally took the reins in 1980, they were pretty shrewd about it.

The royal family regrettably fell prey to their own greed, and have indulged in some of the most heinously vulgar displays of conspicuous consumption ever conceived in human history. Matt Simmons says he feels a lot of this can certanly be blamed on just plain old fashioned vanity. But he also says that the Arabians were given some terrible misinformation about the reality of oil back in the 1960's when the Americans came to "enlighten" them. Among the many erroneous notions conveyed to the Saud family was the idea that the oil would never run out and would simply last forever. And the Saudis believed them.

Thirty-five years of repugnant excess later, the current king has very recently told his entire family that they are now on warning: cut with the gold-plated Rolls Royces already, stop with the $10,000.00 hotel rooms. This life of insane luxury is coming to a close. Forever.

The Saud family has also instituted social welfare programs for their impoverished citizens and are indeed trying to raise the standard of living. They're also investing in the education of their citizens, looking toward a future of educated Arabians who will bring their nation into a fully industrialized economy.

On an industrial level, they have built several new oil refineries recently (at $5 billion a pop) as well as an aluminum smelting plant and a chemical plant. And while I probably don't have to say it, I will: all three of these industries are directly due to the oil --aluminum is an oil dependent product, as are most chemicals, and of course the refineries process oil.

This is a nation that is positioning itself for the future. The ONLY thing they've got is that oil. Everything else needs to be imported: food, clothing, building materials, even water needs to come from other countries. All they have is that oil--and there's a lot of it, and they're using it and leveraging it for the sake of their future survival.


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Don Allen
06-16-2008, 07:44 AM
I have to say,,, you did a hell of a good job on this,,,though I still disagree with you on some of the issues.... nicely done......kudos

shawkins
06-16-2008, 06:50 PM
Truly top-notch post. Many thanks

Miguelito
06-17-2008, 05:27 AM
A correction about the oil sands or tar sands:

A big portion of Canada's oil-sands production comes from drilling wells and that number is only going to get bigger. It's really difficult, but they can get the tar to flow. One of the techniques is called SAG-D (Steam assisted gravity drainage): they drill two horizontal wells, one over the other, and pump steam in the top one. This lowers the viscosity of the tar, allowing it to flow. It seeps down to the second, lower well, where it is pumped out.

Another technique they're trying (it's experimental) is called a fireflood: they set fire to the bitumen in a well to produce steam and carbon dioxide. Both of these things lower the viscosity of the tar and it can flow out of another well. This one is kind of important because it's less energy and water intensive (because you need natural gas and water to create the steam otherwise).

Just a note: you know why it's called heavy oil? Because, unlike light oil (think of vegetable oil, which floats on water), heavy oil is denser than water and sinks.

And, about the Bakken: the oil was already generated naturally and just stuck in the rock, ie. it's a bit too mature to be an oil shale. To produce from the Bakken, the rock has to be fracced really hard (the rock has to be rubbleized to make tiny pathways for the oil to flow out). A real oil shale would be the Eocene Green River Formation, where it's really immature and needs to be baked to get the oil out of it.

Otherwise, great writeup.

johnnysannie
06-17-2008, 04:02 PM
Outstanding post, a lot of research and detail to explain a complicated system!

Good work.

Plot Device
06-17-2008, 06:09 PM
A correction about the oil sands or tar sands:

A big portion of Canada's oil-sands production comes from drilling wells and that number is only going to get bigger. It's really difficult, but they can get the tar to flow. One of the techniques is called SAG-D (Steam assisted gravity drainage): they drill two horizontal wells, one over the other, and pump steam in the top one. This lowers the viscosity of the tar, allowing it to flow. It seeps down to the second, lower well, where it is pumped out.

Another technique they're trying (it's experimental) is called a fireflood: they set fire to the bitumen in a well to produce steam and carbon dioxide. Both of these things lower the viscosity of the tar and it can flow out of another well. This one is kind of important because it's less energy and water intensive (because you need natural gas and water to create the steam otherwise).

Just a note: you know why it's called heavy oil? Because, unlike light oil (think of vegetable oil, which floats on water), heavy oil is denser than water and sinks.

And, about the Bakken: the oil was already generated naturally and just stuck in the rock, ie. it's a bit too mature to be an oil shale. To produce from the Bakken, the rock has to be fracced really hard (the rock has to be rubbleized to make tiny pathways for the oil to flow out). A real oil shale would be the Eocene Green River Formation, where it's really immature and needs to be baked to get the oil out of it.

Otherwise, great writeup.

Thanks, Miguelito. I'm going to try and incortporate your post into the OP. :)

Calla Lily
06-17-2008, 06:22 PM
Great research, Plot.

SHBueche
06-17-2008, 07:00 PM
Ditto, thanks for the education!