On Sat, Dec 27, 2014 'Chris de Morsella' via Everything List < [email protected]> wrote:
> A lot of the bets made in the US shale boom are not going to pay off for > the investors holding on to the debt; holding those one or two year > duration futures hedge contracts priced at $90 a barrel. After all these > investors get burned – or IMO more likely the US taxpayers get stuck with > the bill bailing out the too big to fail banks that have bet heavily in > this sector and are the major holders of these seriously underwater futures > contracts But if you're right and oil production falls then the price of oil will go up; if oil is selling at $200 a barrel and I have a futures contract saying that I can buy oil at $90 then far from being underwater my contract is worth $110. But if oil is selling at $80 and I have a contract saying I can buy it at $90 then it's underwater and worth nothing. I should add that historically the higher the price of oil gets the more money the oil companies make. The way oil companies would get burned is if you're wrong and oil production continues to rise and thus the price of oil continues to fall. > > Oil is there, but getting it out is going to become increasingly hard to > do. > Yes but in general as technology improves we figure out how to do things that are harder and harder to do. Until just a few years ago getting light oil out of porous shale was so hard to do it just couldn't be done, but that is no longer true. > > Tight oil will play a significant role in supplying liquid hydrocarbons > to the global market, but it is not the answer to all our energy woes. It's not the long term solution but it could create trillions of dollars of wealth for the human race in the next decade or two, and that seems like something worth doing to me.The long term answer to our energy woes is liquid fueled Thorium nuclear reactors, and maybe fusion. > >> Concerning kerogen oil shale, I haven't found any credible source that >> says it would take more energy to get oil out of kerogen shale than you >> could get out of it which would mean it would never be economical no matter >> how high the price of oil went. > > > I have seen the EROI figure of 2.5:1 -- e.g. it takes 2.5 times as much > energy in as can be obtained from the produced product. > I don't believe that for one second. Well OK maybe if you include self energy, the heat given off by the kerogen itself as it undergoes chemical change, but if you're talking about external energy that you need to pit in and if it was true (and it would be very easy to prove if it were) that you'd always get less energy out than you put in then oil executives would have had to have been brain damaged to have ever spent one dime on it. It may be uneconomical to obtain oil from kerogen with oil selling for less than $60, but I don't think it's a law of physics that it must always be uneconomical. > There is one specific scenario where this makes some sense. I described > it in detail in my response to spudboy. Basically if the installed base of > wind and solar – a lot of which is sited in the same general areas as these > shale deposits – continues to exponentially grow, then at some point this > installed base will produce a massive surge capacity that will create huge > surpluses of electric energy A solar powered Dyson sphere would be interesting but If in the future wind and terrestrial solar are the best energy sources available then human civilization is doomed. John K Clark > > -- You received this message because you are subscribed to the Google Groups "Everything List" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/everything-list. For more options, visit https://groups.google.com/d/optout.
