Peter said.... The main reason oil production declined in the US is that the holes are dry -- lots of drilling and pumping around here, but the stuff that comes out of the ground looks like road tar and is 5% or more sulfur.
They can't get oil out of most of the older fields in Texas, nothing comes up even with salt water injection, etc. Production is going down in the Gulf, too, and the "new deposit" everyone was blowing about last year is WAY down there. There are no new refineries because the oil companies are still choosing to loose 10% of their product rather than upgrade, oil was cheap, margins high, and they are STILL choosing to play the "if we drag our feet long enough about environmental concerns everyone will forget about us" that even GE quit doing a decade or two ago. Pure choice, regulations have NOTHING to do with it -- it would be cheaper to build new refineries, they are much more efficient, but Big Oil would much rather invest in Congress. Peter *** Not sure where you get your "facts", but your sources are wrong. I worked in the oil bidness for 20 years both as a petroleum engineer and in the IT support area. I have a MS in Petroleum Engineering so I know what I'm talking about. The most any oil well produces is the first day it produces. After that, the production usually declines exponentially as the pressure to push it out of the rock declines. That's the result of the laws of physics and fluid dynamics. In certain cases, the pressure is maintained by water pressure coming in and production may decline more slowly, but the bottom line is that it WILL decline. The only way you increase overall production is to find more oil in the ground or get more effective in getting it out of the ground. The amount of oil you can get out of a reservoir rock is limited to about 15%-20% because the oil "sticks" to the rock, and recovery may be as low as 5%. Sometimes you can slow the production decline by injecting water into the field to help maintain the driving pressure. That's called waterflooding and may get you an additional 5% of the Original Oil In Place (OOIP). You can also add chemicals to the injection water and potentially change the "wettability" of the rock so that the oil doesn't "stick" to it as much. That's called tertiary recovery and may get you another 5% of OOIP. All of those additional activities add to the cost of producing the oil, and if it costs more to produce than you can sell it for...you don't produce it. What comes out of the ground is a function of the composition of the hydrocarbons in the reservoir and ranges from pure gas to highly volatile liquid to heavy oils. The more heavy molecules in the oil, the more it looks like road tar. Sulfur is a contaminant that is sometimes present, and has to be removed before the oil can be used. The removal process is done by refineries. It's true that there have been no new refineries built since the 70's, but I'll guarantee you that the refineries in place today look nothing like they did 30 years ago. The equipment and facilities have been continuously upgraded and replaced in an attempt to increase efficiency over the years. The amount of scrutiny that these folks get from the regulatory process is unbelievable. If you know where there is 10% being "lost", you would be very wealthy indeed. "Margins" are not and have never been more than 5%-10%. You can read any oil company's SEC reports and run the numbers yourself. I lived through $8/bbl oil back in the mid 80's and I don't remember anybody shedding any tears for all the oil field folks who lost their jobs then. Not whining, just reminding you that it is a two sided coin. Sorry to make this so long...I just couldn't let it go unchallenged. OBTW...I'm out of the awl bidness now...working in the software business for the last 10 years. Royce Engler _______________________________________ http://www.okiebenz.com For new parts see official list sponsor: http://www.buymbparts.com/ For used parts email [EMAIL PROTECTED] To Unsubscribe or change delivery options go to: http://okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
