What Would Happen If the World Ran Out of Crude Oil?

(edited)

2 hours ago, BakoDave said:

When I was in College in the Mid 80s one of my Economics Professors told us that we (the US) have over a 200 year supply available in the ground. So that now leaves 170ish years to go.

If a professor said it in the 80's it must be true!  https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFallacies/21/Appeal-to-Authority

 

Edited by Enthalpic

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On ‎4‎/‎10‎/‎2019 at 2:48 PM, ceo_energemsier said:

Ah, technology!!!! you seem to favor and believe in technology for everything but oil...... EVs, hybrids for oil subs, wind , solar, geo etc, but dont think the technology for exploration and production of oil and gas will have breakthroughs?

I am an equity investor in natural resources (oil, gas, metals , minerals, non food crop based biofuels etc), health, medical and biomedical tech, pharma and tech as well as a direct investor i oil gas operations , companies , WI , royalties and ovverides etc. We have been producing in the Eagle Ford since 2005 and are still growing and producing more oil and gas, NGLs, condensate with very low decline rates. Each well drill and complete stands to the test of time in terms of its longevity, productivity and sustainability.

FYI, breakeven prices have scaled down from the 60s down into the 40s for for many shale operations. What some people keep on parroting about 60s and 50's was true a few years ago, today it is not. Example , the breakevens in the Eagle Ford are down into the 30s and 40s.

It is also the same case in the Permian in many locations.

Yes everything in the oil and gas industry is based on technology and there is no limit on it as there is also no limit in technology for other industrial sectors as well.  There are many factors involved in making an oil and gas prospect profitable and sustainable and technologies whether existing, evolving, emerging or combination of all those and existing techs and coupling techs from various other sectors are all beneficial and result in success. We are not walking around marking drill sites dowsing with a stick.

In a newer industry their is much more potential for technological breakthroughs, this has always been true and will always be true.

Most oil industry guys have claimed that there really has been no breakthrough in tight oil, very high oil prices made a very high cost of oil production barely profitable and allowed existing technology to be applied in new ways that were not profitable at lower oil prices.  There have been some incremental improvements in the application of those technologies.  Full cycle economics for the average well in the Eagle Ford and Permian basin are not nearly as low as you suggest.  For the average 2017 Permian well breakeven is about $53/b at the wellhead or $58/b at the refinery gate, eventually sweet spots will run out of room and well productivity per foot of lateral will fall, as pipeline constraints are relieved the Permian will be profitable unless oil prices fall.

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On ‎4‎/‎11‎/‎2019 at 1:10 PM, ronwagn said:

You need to understand that natural gas and biogas will be abundant long after oil is largely depleted. That is a very good thing because it is a very clean fuel source, It would take revolutionary discoveries to find economical replacements for fossil fuels. Natural gas is also used to make plastics and other products. It can even be transformed into gasoline but that would be wasteful IMHO. 

 https://www.igu.org/natural-gas-abundant-and-accessible

Natural Gas is Abundant and Accessible

 

MarcellusField.jpg

A well pad in North America's abundant Marcellus Shale formation.

 

The world’s natural gas reserves are so substantial that they will be enough to fuel the world’s thirst for energy and electricity for the next 250 years – and that’s before taking into account the development of increasingly efficient power generation technologies.

Global proven reserves of natural gas amount to 187.3 trillion cubic meters at the end of 2012.   

Natural Gas can fuel the world’s energy needs for 250+ years.

This combination of abundance and accessibility is hardly matched by other fossil fuels. The search for oil is getting harder and more expensive. There aren’t any new conventional supergiant fields to be found, outside of the Antarctic.  No new supergiant since Caspian in 1980s] Even renewable energy sources are significantly challenged in meeting growing demand. While the sun shines and the wind blows in many places, the ability to convert that technology into electricity is constrained by the limitations of available technology to transmit and store that energy. 

See

http://peakoilbarrel.com/world-natural-gas-shock-model/

For my medium case the peak occurs in 2037, but based on data through 2017 and using the 19000 TCF URR estimate and assuming peak occurs when about half of natural gas URR has been produced we might expect a peak in about 2040, if natural gas growth in production is 3% per year.  Note that as oil and coal peak, natural gas demand might accelerate, the growth in natural gas production was 4% in 2017, the higher rate of production growth would move the peak to an earlier date.

It is also possible that the falling cost of wind and solar, might reduce demand for natural gas, in which case the peak might be later, though it will depend in part on the price of natural gas and whether it continues to be profitable to produce at lower prices.

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2 hours ago, D Coyne said:

See

http://peakoilbarrel.com/world-natural-gas-shock-model/

For my medium case the peak occurs in 2037, but based on data through 2017 and using the 19000 TCF URR estimate and assuming peak occurs when about half of natural gas URR has been produced we might expect a peak in about 2040, if natural gas growth in production is 3% per year.  Note that as oil and coal peak, natural gas demand might accelerate, the growth in natural gas production was 4% in 2017, the higher rate of production growth would move the peak to an earlier date.

It is also possible that the falling cost of wind and solar, might reduce demand for natural gas, in which case the peak might be later, though it will depend in part on the price of natural gas and whether it continues to be profitable to produce at lower prices.

I think we will still be using mostly gasoline and diesel, for transportation fuel, in 2037. We have no worries about natural gas running out for far over 100 years. That is without using methane hydrates from the ocean. Methane hydrates contain far more natural gas than the land does. That guess is not even deducting all the biogas that can be produced from all the plant and animal waste produced during that time. 

IMHO we should start using natural gas as the main transportation fuel as soon as possible. That would allow for a comfortable and less expensive transition when oil becomes too expensive. Natural gas is far cleaner than coal and cleaner than petroleum. Renewables should also be used whenever they are truly cost efficient and competitive.

See http://www.ngvglobal.com/

Part Eleven of Natural Gas News https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

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On 4/9/2019 at 1:56 PM, ceo_energemsier said:

If the world ran out of oil, it would be a good thing (sarcasm), the climate change will end and the earth will survive , only downside is the population of people wont LOL !!!

However distilled, when the value of a bbl of oil extracted exceed the cost to extract it, no matter the bbls left in the ground, not matter the economics then prevailing, then at that point we are basically out of oil, fair enogh?

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32 minutes ago, JCR said:

However distilled, when the value of a bbl of oil extracted exceed the cost to extract it, no matter the bbls left in the ground, not matter the economics then prevailing, then at that point we are basically out of oil, fair enogh?

Pretty sure you meant to say...

"when the value of a bbl of oil extracted is less than the cost to extract it ..."

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(edited)

10 minutes ago, Tom Kirkman said:

Pretty sure you meant to say...

"when the value of a bbl of oil extracted is less than the cost to extract it ..."

I think I said it properly. When the value is more than the cost to extract, then effectively you're out of oil. JR

 

Edited by JCR
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1 minute ago, JCR said:

When the value is less than the cost to extract, then effectively you're out of oil. JR

Agreed.

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It would mean turning other hydrocarbons with large reserves such as bitumen, tar sands, oil shale, coal, methane etc. into liquid fuels.

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21 hours ago, ronwagn said:

I think we will still be using mostly gasoline and diesel, for transportation fuel, in 2037. We have no worries about natural gas running out for far over 100 years. That is without using methane hydrates from the ocean. Methane hydrates contain far more natural gas than the land does. That guess is not even deducting all the biogas that can be produced from all the plant and animal waste produced during that time. 

IMHO we should start using natural gas as the main transportation fuel as soon as possible. That would allow for a comfortable and less expensive transition when oil becomes too expensive. Natural gas is far cleaner than coal and cleaner than petroleum. Renewables should also be used whenever they are truly cost efficient and competitive.

See http://www.ngvglobal.com/

Part Eleven of Natural Gas News https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

Oil output is likely to peak by 2025, but we might still be using gasoline and diesel for more than 50% of transportation miles on land in 2037.  Just because there methane hydrates exist does not mean they will ever be profitable to produce.  Wind and solar are already cheaper than natural gas in many places for electricity production and their costs continue to fallwhile natural gas prices will eventually rise.  Also note that if natural gas is used for transportation as you suggest, peak output for natural gas will be reached much sooner.

Some resources such as kerogen for liquid fuel or methane hydrates for natural gas are highly unlikely to ever be profitable.

For a very optimistic resource scenario, natural gas might peak as late as 2050, but such a scenario assumes very high natural gas prices can be sustained because there are no alternative types of energy which can substitute for natural gas.  In practice, this is a highly unlikely scenario (maybe 1 in 10 odds).

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4 hours ago, canadas canadas said:

It would mean turning other hydrocarbons with large reserves such as bitumen, tar sands, oil shale, coal, methane etc. into liquid fuels.

No, just turn to natural gas as it is. It can be compressed without liquification. 

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On 4/23/2019 at 12:05 AM, ronwagn said:

I think we will still be using mostly gasoline and diesel, for transportation fuel, in 2037. We have no worries about natural gas running out for far over 100 years. That is without using methane hydrates from the ocean. Methane hydrates contain far more natural gas than the land does. That guess is not even deducting all the biogas that can be produced from all the plant and animal waste produced during that time. 

IMHO we should start using natural gas as the main transportation fuel as soon as possible. That would allow for a comfortable and less expensive transition when oil becomes too expensive. Natural gas is far cleaner than coal and cleaner than petroleum. Renewables should also be used whenever they are truly cost efficient and competitive.

See http://www.ngvglobal.com/

Part Eleven of Natural Gas News https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

With the cost of wind, solar and storage falling rapidly I suspect exploitation of Methane Hydrates will go in the same direction as Nuclear. 

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Your assessment is totally out of line with all other natural gas assessments. You have offered nothing to back up your claims. No one alive today will ever see natural gas depleted, nor will their children. You need to go back to your research because obviously, you have not done much. Please refer to the information already provided. 

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2 hours ago, NickW said:

With the cost of wind, solar and storage falling rapidly I suspect exploitation of Methane Hydrates will go in the same direction as Nuclear. 

That could be. Time will tell how cost efficient they are over time. They create a lot of visual pollution along with their other problems. Public acceptance will be important. Methane hydrate cost efficiency is still unknown. There are centuries of land based natural gas and biogas to use. 

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(edited)

5 hours ago, D Coyne said:

Oil output is likely to peak by 2025, but we might still be using gasoline and diesel for more than 50% of transportation miles on land in 2037.  Just because there methane hydrates exist does not mean they will ever be profitable to produce.  Wind and solar are already cheaper than natural gas in many places for electricity production and their costs continue to fallwhile natural gas prices will eventually rise.  Also note that if natural gas is used for transportation as you suggest, peak output for natural gas will be reached much sooner.

Some resources such as kerogen for liquid fuel or methane hydrates for natural gas are highly unlikely to ever be profitable.

For a very optimistic resource scenario, natural gas might peak as late as 2050, but such a scenario assumes very high natural gas prices can be sustained because there are no alternative types of energy which can substitute for natural gas.  In practice, this is a highly unlikely scenario (maybe 1 in 10 odds).

Your assessment is totally out of line with all other natural gas assessments. You have offered nothing to back up your claims. No one alive today will ever see natural gas depleted, nor will their children. You need to go back to your research because obviously, you have not done much. Please refer to the information already provided. 

Natural_gas_production_world.PNG

 

 

See   https://en.wikipedia.org/wiki/List_of_natural_gas_fields  

 

 

Gas_Hydrates_Map-20150320.png

Edited by ronwagn
added reference

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11 hours ago, ronwagn said:

Your assessment is totally out of line with all other natural gas assessments. You have offered nothing to back up your claims. No one alive today will ever see natural gas depleted, nor will their children. You need to go back to your research because obviously, you have not done much. Please refer to the information already provided. 

Natural_gas_production_world.PNG

 

 

See   https://en.wikipedia.org/wiki/List_of_natural_gas_fields  

 

 

Gas_Hydrates_Map-20150320.png

You missed the point of his post. He was talking about peak demand in 2025, not peak availability. 

Oil and gas are simply being displaced as the energy source of choice, with little hope of a comeback. We are very unlikely to every run out of oil and gas. We will just stop burning it.

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(edited)

14 hours ago, ronwagn said:

Your assessment is totally out of line with all other natural gas assessments. You have offered nothing to back up your claims. No one alive today will ever see natural gas depleted, nor will their children. You need to go back to your research because obviously, you have not done much. Please refer to the information already provided. 

Natural_gas_production_world.PNG

 

 

See   https://en.wikipedia.org/wiki/List_of_natural_gas_fields  

 

 

Gas_Hydrates_Map-20150320.png

How much natural gas has been produced from Gas hydrates?  I believe the number is pretty close to zero.

See 

https://www.dropbox.com/s/pqzqkbueso6papm/Steve Mohr Thesis.pdf?dl=0

and especially pages 75-106 as well as references on pages 173 to 187.

An update to this work can be found at

https://www.researchgate.net/publication/267870440_Projection_of_world_fossil_fuels_by_country

You can believe natural gas will never deplete, but you would need to assume there will be demand for natural gas at very high price levels.  Methane hydrates will always be the energy of the future, along with nuclear fusion reactors. :)

Also see

https://nationalpost.com/news/world/china-japan-extracts-combustible-ice-from-seafloor-a-step-towards-harnessing-a-legendary-frozen-fossil-fuel

The consensus within the industry is that commercial development won’t happen until at least 2030. Smaller scale output could happen as early as 2020, said Tim Collett, a scientist with the U.S. Geological Survey.

 

Edited by D Coyne
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32 minutes ago, D Coyne said:

How much natural gas has been produced from Gas hydrates?  I believe the number is pretty close to zero.

See 

https://www.dropbox.com/s/pqzqkbueso6papm/Steve Mohr Thesis.pdf?dl=0

and especially pages 75-106 as well as references on pages 173 to 187.

An update to this work can be found at

https://www.researchgate.net/publication/267870440_Projection_of_world_fossil_fuels_by_country

You can believe natural gas will never deplete, but you would need to assume there will be demand for natural gas at very high price levels.  Methane hydrates will always be the energy of the future, along with nuclear fusion reactors. :)

Also see

https://nationalpost.com/news/world/china-japan-extracts-combustible-ice-from-seafloor-a-step-towards-harnessing-a-legendary-frozen-fossil-fuel

The consensus within the industry is that commercial development won’t happen until at least 2030. Smaller scale output could happen as early as 2020, said Tim Collett, a scientist with the U.S. Geological Survey.

 

May 8, 2017 / 3:15 AM / 2 years ago

Japan reports successful gas output test from methane hydrate

TOKYO, May 8 (Reuters) - Japan’s trade ministry on Monday reported success in producing gas last week by extracting methane gas from methane hydrate deposits offshore Japan’s central coast.

The tests being run at two different wells are the first since 2013, when Japan achieved the world’s first-ever extraction of gas from offshore deposits of methane hydrate, a frozen gas known as “flammable ice”.

Japan’s Ministry of Economy, Trade and Industry (METI) said the methane hydrate production tests will continue for a combined four to five weeks. Japan’s first methane hydrate tests in 2013 ended abruptly after less than a week due to problems with sand flowing into the well.

 

Japan, which imports nearly all of its energy sources, has been aiming to launch private sector commercial production of methane hydrates by between 2023 to 2027, but METI officials have said the goal will still be a challenge as many obstacles remain to be solved.

Japan is the world’s top importer of liquefied natural gas (LNG), and its need for domestic gas resources has become greater since the Fukushima nuclear crisis in 2011 shut down most of its nuclear power plants and sharply raised fossil fuel imports such as LNG and coal.

 

Methane hydrate is formed from a mixture of methane and water under certain pressures and conditions. India, Canada, the United States and China are among the countries also looking at exploiting hydrate deposits as an alternative source of energy, the trade ministry said.

A Japanese study has estimated that at least 40 trillion cubic feet (1.1 trillion cubic meters) of methane hydrates lie in the eastern Nankai Trough off the country’s Pacific coast, equal to about 11 years of Japanese gas consumption. (Reporting by Osamu Tsukimori; Editing by Tom Hogue)

__________________________________________

 

http://www.bbc.com/future/story/20181119-why-flammable-ice-could-be-the-future-of-energy

 

https://arstechnica.com/science/2017/05/energy-dense-methane-hydrate-extracted-by-japanese-chinese-researchers/

 

https://www.japex.co.jp/english/business/innovate/methanehydrate.html

 

 

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3 hours ago, Bill the Science Nerd said:

You missed the point of his post. He was talking about peak demand in 2025, not peak availability. 

Oil and gas are simply being displaced as the energy source of choice, with little hope of a comeback. We are very unlikely to every run out of oil and gas. We will just stop burning it.

I hope you are right Bill. Maybe you can discover some of the optimal choices. Mine is natural gas for now. Always stay open minded though.

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3 hours ago, Bill the Science Nerd said:

You missed the point of his post. He was talking about peak demand in 2025, not peak availability. 

Oil and gas are simply being displaced as the energy source of choice, with little hope of a comeback. We are very unlikely to every run out of oil and gas. We will just stop burning it.

Bill,

In a sense you are correct, basically methane hydrates from the ocean floor will be very expensive to extract responsibly.  It is doubtful at $100/boe (in 2019 US$) that might be the price needed to make the extraction of this resource profitable, that there would be much demand.

It will not be able to complete with wind and solar at that price (and that price estimate may be far too low).

see also

https://energy.mit.edu/wp-content/uploads/2011/06/MITEI-The-Future-of-Natural-Gas-Supplementary-Paper-2.4-Methane-Hydrates-and-the-Future-of-Natural-Gas.pdf

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12 minutes ago, ceo_energemsier said:
May 8, 2017 / 3:15 AM / 2 years ago

Japan reports successful gas output test from methane hydrate

TOKYO, May 8 (Reuters) - Japan’s trade ministry on Monday reported success in producing gas last week by extracting methane gas from methane hydrate deposits offshore Japan’s central coast.

The tests being run at two different wells are the first since 2013, when Japan achieved the world’s first-ever extraction of gas from offshore deposits of methane hydrate, a frozen gas known as “flammable ice”.

Japan’s Ministry of Economy, Trade and Industry (METI) said the methane hydrate production tests will continue for a combined four to five weeks. Japan’s first methane hydrate tests in 2013 ended abruptly after less than a week due to problems with sand flowing into the well.

 

Japan, which imports nearly all of its energy sources, has been aiming to launch private sector commercial production of methane hydrates by between 2023 to 2027, but METI officials have said the goal will still be a challenge as many obstacles remain to be solved.

Japan is the world’s top importer of liquefied natural gas (LNG), and its need for domestic gas resources has become greater since the Fukushima nuclear crisis in 2011 shut down most of its nuclear power plants and sharply raised fossil fuel imports such as LNG and coal.

 

Methane hydrate is formed from a mixture of methane and water under certain pressures and conditions. India, Canada, the United States and China are among the countries also looking at exploiting hydrate deposits as an alternative source of energy, the trade ministry said.

A Japanese study has estimated that at least 40 trillion cubic feet (1.1 trillion cubic meters) of methane hydrates lie in the eastern Nankai Trough off the country’s Pacific coast, equal to about 11 years of Japanese gas consumption. (Reporting by Osamu Tsukimori; Editing by Tom Hogue)

__________________________________________

 

http://www.bbc.com/future/story/20181119-why-flammable-ice-could-be-the-future-of-energy

 

https://arstechnica.com/science/2017/05/energy-dense-methane-hydrate-extracted-by-japanese-chinese-researchers/

 

https://www.japex.co.jp/english/business/innovate/methanehydrate.html

 

 

That is a research test.

I should have said how much has been produced commercially at a profit?

That number is zero.

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4 minutes ago, D Coyne said:

That is a research test.

I should have said how much has been produced commercially at a profit?

That number is zero.

It is not going to remain " a test " forever.

Companies are also testing commercial production in the GoM as well.

 

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6 minutes ago, ceo_energemsier said:

It is not going to remain " a test " forever.

Companies are also testing commercial production in the GoM as well.

 

Get back to me when they make money producing natural gas from methane hydrates, the amount that can be produced profitably will be much less than the pie in the sky resource estimates, most of which are Gas in place (GIP) estimates rather than technically recoverable resource (TRR) estimates.  Perhaps in 2050 there may be a few cubic feet of natural gas produced profitably from methane hydrate, most likely from North Slope, but perhaps Japan, China, or GOM.  It will depend on the cost relative to other energy sources.

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Just now, D Coyne said:

Get back to me when they make money producing natural gas from methane hydrates, the amount that can be produced profitably will be much less than the pie in the sky resource estimates, most of which are Gas in place (GIP) estimates rather than technically recoverable resource (TRR) estimates.  Perhaps in 2050 there may be a few cubic feet of natural gas produced profitably from methane hydrate, most likely from North Slope, but perhaps Japan, China, or GOM.  It will depend on the cost relative to other energy sources.

It will also depend on the demand for it not just for fuel but as a rich petchem feedstock.

The ultra deep water and sub seabed drilling tech is there and being improved, the production, recovery, processing and bringing it top side will be fixed too.  How about I give you an update on a small scale production output in say about 14 months which might equate to about 7,500boepd? is that a good start for a commercial volume? ;)🍾 Cheers!!

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7 hours ago, D Coyne said:

Get back to me when they make money producing natural gas from methane hydrates, the amount that can be produced profitably will be much less than the pie in the sky resource estimates, most of which are Gas in place (GIP) estimates rather than technically recoverable resource (TRR) estimates.  Perhaps in 2050 there may be a few cubic feet of natural gas produced profitably from methane hydrate, most likely from North Slope, but perhaps Japan, China, or GOM.  It will depend on the cost relative to other energy sources.

Methane hydrates can become more economical because harvesting them also can generate semi-desalinated water which should have increasing value in the future - especially if combined with a membrane desalination plant that runs off gas.

When salty water and methane freeze together into a hydrate some of the salt is excluded - therefore when you melt the hydrate you generate methane gas and semi-fresh (low density) water.  If you run a long tube down to the hydrate source and warm it, the fresh water and gas mixture rises in the pipe (due to the bubbles and the lower density fresher water).  As it rises in the pipe at some point the outside ocean water is colder and can re-freeze some of the fresh water in the pipe (because salt water freezes colder) which creates even lower density and fresher ice crystals which rise faster (ice is less dense than liquid water) which further desalinates the water. This process repeats essentially an infinitesimal number of times (calculus).  At the surface you can get pretty clean gas and fairly fresh water.

"Many people have lived without love, nobody has lived without water."

Edited by Enthalpic

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