OPEC is no longer an Apex Predator

I have commented ad nauseum about my view that $70.00 Brent seems to be the optimum, sustainable, suitable, long term balance between *most* oil producers globally and *most* oil consumers globally.

Certain OPEC producers keep agitating for $80+ or $100+ oil.  Stupid move : too high, too greedy, not sustainable.  Perhaps they are deserving of Darwin Awards for refusing to adapt to global reality and global changes.  

● OPEC is no longer an apex predator. ●

$40 Brent (too low) and $100 Brent (too high) are both unsustainable in the long term.

$70.00 Brent seems to be the magical Goldilocks number that lubricates global GDPs, and keeps the global economy humming along nicely.
 

Anyway, here be the local Malaysia business news about O&G:

Oil and gas rally: New dawn or false start?

 

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(edited)

I suspect that new technology will be the undoing of your $70 figure.  I base this on the proposition that any material containing carbon components, specifically including plastics and organic wastes, can be converted into gasoline (and apparently diesel) by catalytic reaction at 400 C.  with a catalyst, in a reactor kettle. 

Now,obviously, this only works if the financial numbers work.  But if the numbers ultimately work, then remember that the waste stream of plastics and printed whiteboard and all the food scraps and even the waste cooking oils can be converted into a salable, pure gasoline.  

The implication is that the waste plastic, now a huge societal problem, can be disposed of easily, and it gets the politicians off the hook. So you are not going to get into permitting obstacles from bureaucrats, as no bureaucrat is going to want to have his name attached to some project that turns the avalanche of scrap plastic into a usable product. There is no "royalty payment," that raw material is waste that is a headache, and there are no costs for fracking sand and water and pumps and all the rest of it.  A reactor kettle is just that:  a big metal pot, into which you toss the witches' brew, and you heat it up with a natural gas flame from below.   The conversion into pentane and octane is essentially instantaneous. 

What you are doing is stripping hydrogen from another compound, probably from water, and stripping the carbon atoms off the waste plastic, which after all is itself created by polymerization of oils. Then the hydrogen and the carbon combine in the presence of the catalyst and heat, and bingo!  out from the bottom of that reactor kettle comes a stream of pure gasoline.  You have just converted a waste stream, which people will pay you to take, into a valuable commodity, which people will pay you to buy and take away.  You make money  at both ends. 

Once you develop the technology to the thousand-ton level, your unit costs are going to dramatically decrease.  And at that point the need for, and the purchases of, crude oil as a source material for gasoline will take a hit.  The extent of that hit depends on lots of other factors, of course, but to think that mass conversion of organic material in reactors is not going to suppress demand for crude oil is whimsical.  It will.  It always does.  It is the nature of developing technology, and man's understanding of chemistry. 

Why pay $70 for mineral slime when someone else will pay you money to take that plastic raw-material stuff off their hands?  

Edited by Jan van Eck
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41 minutes ago, Jan van Eck said:

< snip >

Why pay $70 for mineral slime when someone else will pay you money to take that plastic raw-material stuff off their hands?  

All good points, Jan.  But is it realistically feasible for your idea to be ramped up to meet the current global oil demand of 100 million barrels of oil per day?

At best, I can see a small, single figure percentage, similar to wind power percentages, maybe in a decade or so. 

But producing the equivalent of 100,000,000 barrels of oil a day?  Nope, that does not appear realistic to me.  Much in the same way that I don't see solar or wind or hydro or thermal taking over for hydrocarbons any time soon.

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Just now, Tom Kirkman said:

All good points, Jan.  But is it realistically feasible for your idea to be ramped up to meet the current global oil demand of 100 million barrels of oil per day?

At best, I can see a small, single figure percentage, similar to wind power percentages, maybe in a decade or so. 

But producing the equivalent of 100,000,000 barrels of oil a day?  Nope, that does not appear realistic to me.  Much in the same way that I don't see solar or wind or hydro or thermal taking over for hydrocarbons any time soon.

All true. 

But as you know well, oil is an inelastic good.  Small changes in volumes lead to large price shifts.  What would be happening in the case of a plastics-to-gasoline conversion is a fairly large shift in demand for conventional oil as a source for gasoline.  What pushes this is the felt need to deal with the truly dramatic amount of plastic waste that is being generated, and cannot be readily disposed of.  Also, plastic waste is in some instances inter-mixed with plastic hospital waste, and nobody wants to go there.  For a kettle-reactor converter, hey he does not care one bit. It all goes into that reactor, gets heated to 400 degrees, and whatever biologicals are there, are gone. 

I predict that, once the technology gets proven out for commercial reasonableness, these will be cloned on a vast scale, if only to get rid of the colossal tonnage of plastics and organics.  Lots of urban areas have no place to landfill these wastes, and for example NY trucks its garbage all the way to Ohio for landfilling.  That is very expensive.  All that cash is saved by the City when it is handed over to a Converter.  So the pressures on doing the Converter thing are pushing that agenda.  Oil?  It is inherently disadvantageous, it has to be shipped to some refinery a thousand miles away, then the product has to be re-shipped to some terminal, and then re-shipped again to the retail distributors - and you have to pay all these people for those efforts. Using crude oil is inherently expensive, a lot more so than when your feedstock is handed to you, plus they pay you to take it.  It will be a nice business for anyone with the foresight to get into it. 

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It's actually a good idea, Jan.  It would help solve a global environmental problem of too much plastic waste.  However, I simply don't see it being a big disruption to the oil industry any time soon.

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18 minutes ago, Tom Kirkman said:

It's actually a good idea, Jan.  It would help solve a global environmental problem of too much plastic waste.  However, I simply don't see it being a big disruption to the oil industry any time soon.

I guess it depends on your definition of soon. For the IOCs that invest in mega projects with 30 - 40 years lifetime I would say that 10-15 years is soon. 

I am with you that fossil fuels will be in our energy-mix for atleast my lifetime, but I think that their overall share will decrease. And I think that, that will wreck havoc on the oil industry - change happens at the margin. And once marginal demands starts changing, it will effect the service suppliers which will start the domino effect. Just look at offshore service suppliers and OSV owners. 

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6 hours ago, Tom Kirkman said:

It's actually a good idea, Jan.  It would help solve a global environmental problem of too much plastic waste.  However, I simply don't see it being a big disruption to the oil industry any time soon.

The proposition was to convert anything with carbon in it, but the process @Jan van Eck describes sounds like it's designed to convert just oil products.  Let's start by asking, "How much petroleum isn't combusted?"  That would include plastics, used lubricants, etc.  A quick search indicates that 10-15MMbpd isn't combusted:

image.thumb.png.09be7722a8c01d872ed81707a116332e.png

https://www.greentechmedia.com/articles/read/bp-forecast-autonomous-electric-vehicles-peak-oil

I didn't vet that article, and I'm skeptical of anything called "greentechmedia", but 10% of global oil demand sounds reasonable for a back-of-envelope calculation.  Most countries would be interested in reducing oil imports/landfills, so I imagine this would catch on quickly.  Let's assume 50-75% of "noncombusted" oil can be recovered.  What would an additional 5-11MMbpd supply do to oil prices today?  What would it do in a world where EVs are rapidly destroying demand for combusted oil? 

That's just a start.  The original proposition was to convert any carbon-based material.  I'm not sure the process Jan described could handle any feedstock, but a gasification process can.  Beyond "noncombusted" oil, we could also convert:
1)  Forestry waste
2)  Farm byproducts
3)  Municipal yard waste (city trees and grass clippings go somewhere when homeowners and utilities cut them down)
4)  Waste from clearing land
5)  Food waste
Basically, the entire earth is constantly fixing carbon, and we're constantly handling that fixed carbon.  It would cost nothing extra to drop it off at a conversion facility instead of a landfill.  If every major city in the world started converting waste organic carbon, would that be an extra 5MMbpd?  10MMbpd?  Whatever it is, it's enough to matter. 

Long term, we're looking at a scenario where carbon combustion decreases (electrification), we recycle non-combusted carbon, and we add organic carbon to our product streams.  We need only pump the difference between what we lose and what we add.  That could end up being less than 30MMbpd. 

That said, coal is also carbon - and we have a nigh unlimited supply of it.  The price of oil will be set by the lesser of the cost to pump oil and the cost to convert non-oil carbon. 

At least, that will be true in a free market.  Historically, oil has traded at a premium because of geopolitical risks, volatility, OPEC, etc.  Fundamentals seem to have little to do with it.  Will that continue to be the case when most country's imports are dramatically reduced (less strategic risk => less fear influencing prices) and we have a plethora of sources (OPEC decides to play games?  Build a coal-to-oil facility at $50/bbl).  I.e. could we enter an era when oil is just another cheap commodity? 

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1 hour ago, BenFranklin'sSpectacles said:

I.e. could we enter an era when oil is just another cheap commodity? 

Yes, that is where it is headed.  Technology, landfilling costs, political pressures will be the drivers.  The costs of "tipping" at landfills are rising dramatically.  All that pushes the conversion of waste to "something else."  The logical end product is some new hydrocarbon, either a long-chain such as octane  (c8-H18), or a pentane isomer, or even propane or butane.  It does not really matter, as long as it is a combustible fuel.  Once that goes to a low-cost commercialization, then who really needs oil any more? 

Think about it: nothing to stop a converter operator to obtain a license to open up some old landfill, strip away the surface earth that is covering it, and proceed to remove, and put into those reactor kettles, the contents of that landfill.  Effectively you eat the landfill.  With all the closed landfills out there, you have a century of raw material to feed into the converters. 

Landfills and tipping dumps become the oil wells of the future.  There for the drilling.  Help yourself. 

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2 hours ago, Jan van Eck said:

Yes, that is where it is headed.  Technology, landfilling costs, political pressures will be the drivers.  The costs of "tipping" at landfills are rising dramatically.  All that pushes the conversion of waste to "something else."  The logical end product is some new hydrocarbon, either a long-chain such as octane  (c8-H18), or a pentane isomer, or even propane or butane.  It does not really matter, as long as it is a combustible fuel.  Once that goes to a low-cost commercialization, then who really needs oil any more? 

Think about it: nothing to stop a converter operator to obtain a license to open up some old landfill, strip away the surface earth that is covering it, and proceed to remove, and put into those reactor kettles, the contents of that landfill.  Effectively you eat the landfill.  With all the closed landfills out there, you have a century of raw material to feed into the converters. 

Landfills and tipping dumps become the oil wells of the future.  There for the drilling.  Help yourself. 

I know the CEO of this company. Met him at a conference and he's been bugging me to invest ever since. He's attempting to do exactly what you've described. I recommend you invest. Cheers

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11 hours ago, Tom Kirkman said:

All good points, Jan.  But is it realistically feasible for your idea to be ramped up to meet the current global oil demand of 100 million barrels of oil per day?

At best, I can see a small, single figure percentage, similar to wind power percentages, maybe in a decade or so. 

But producing the equivalent of 100,000,000 barrels of oil a day?  Nope, that does not appear realistic to me.  Much in the same way that I don't see solar or wind or hydro or thermal taking over for hydrocarbons any time soon.

HI Tom,

I imagine you have heard of the exponential function.  Solar power output grew at an average rate of 31% from 2011 to 2017.

Of course consumption of solar power was a tiny part of total World energy consumption (0.74% in 2017, BP data), in 19 years at a 30% annual growth rate, solar power would surpass the level of total World primary energy consumption and in 20 years would provide all World primary consumption.

Of course the 30% growth rate is not likely to continue for 20 years, but exponential growth even at 15% or 20% per year can lead to rapid change.

Oil and natural gas consumption grew at 7% per year from 1930 to 1970, limited only by demand for energy.  Higher growth rates are possible with low prices and adequate demand.  Solar cost continues to fall, while oil, natural gas, and coal prices will rise as resources deplete.

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27 minutes ago, Ward Smith said:

I know the CEO of this company. Met him at a conference and he's been bugging me to invest ever since. He's attempting to do exactly what you've described. I recommend you invest. Cheers

ICF claims a price of $47/b, seems this type of process would be more widespread if that were accurate.

Wonder what the real cost is?  A 2012 piece I found said synthetic fuel is competitive if oil is $60 to $100/b with an average price for the synthetic fuel at $95/b (in a 2012 Princeton study).

https://oilprice.com/Energy/Crude-Oil/It-is-Possible-to-Replace-Crude-Oil-with-Synthetic-Oil.html

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2 hours ago, D Coyne said:

ICF claims a price of $47/b, seems this type of process would be more widespread if that were accurate.

From what I've read, recent claims of lower prices rely on newer catalysts which allow smaller, less capital intensive facilities.  If that's true, we haven't seen widespread commercialization because:
1)  New technology is always risky.  Investors may be demanding a higher rate of return than the $47/bbl figure provides.
2)  Investors may be concerned about oil price volatility.  If their pockets aren't deep, they may not be able to handle a 1-2 year price slump. 
3)  There just hasn't been time to build the plants.  The first, full-scale example must prove itself, which takes some years.  Then it takes some years to build additional plants, all the while refining the technology.  It could take some decades after profitability is proven to make a significant dent in oil markets. 

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3 hours ago, Ward Smith said:

I know the CEO of this company. Met him at a conference and he's been bugging me to invest ever since. He's attempting to do exactly what you've described. I recommend you invest. Cheers

Actually, I intend to compete with him.  My proposal is location-specific.  Vermont has only one landfill, and it is located smack upstream of Lake Memphremagog, a 30-mile lake that straddles the US and Canadian Border.  My proposal will be to set up a catalytic conversion system plant right smack next to that landfill and remove the material from it, and go process it, so as to remove the material from the landscape, get cheap gasoline, and keep that monster from contaminating the pristine lake, which is used as drinking water by over 100,000 Canadians.  I think that is a worthwhile project.  

My system is a little different than Fischer-Tropsch.  F-T is great for manufacturing diesel and aviation gasoline and the Germans ran their war effort on the stuff, using Rhineland coal.  At one time the governor of Montana was touting the process and drove a Volks Jetta with a little diesel in it, to demonstrate to one and all the benefits of Montana coal.  that never went anywhere, but it sure was a good idea.  Note specifically the cetane number of 76 for the diesel, you don't even get remotely close with straight oil diesel. 

What your chum at Illinois Clean Fuel needs to do is secure a total tax exemption for his company and product.  Absent that, he should set up somewhere else, or Illinois will take all his earnings to pay for their horrendous debt and deficit.  the State Democrats have wrecked the place with their program cost over-runs.  Cheers.

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20 minutes ago, Jan van Eck said:

Actually, I intend to compete with him.  My proposal is location-specific.  Vermont has only one landfill, and it is located smack upstream of Lake Memphremagog, a 30-mile lake that straddles the US and Canadian Border.  My proposal will be to set up a catalytic conversion system plant right smack next to that landfill and remove the material from it, and go process it, so as to remove the material from the landscape, get cheap gasoline, and keep that monster from contaminating the pristine lake, which is used as drinking water by over 100,000 Canadians.  I think that is a worthwhile project.  

My system is a little different than Fischer-Tropsch.  F-T is great for manufacturing diesel and aviation gasoline and the Germans ran their war effort on the stuff, using Rhineland coal.  At one time the governor of Montana was touting the process and drove a Volks Jetta with a little diesel in it, to demonstrate to one and all the benefits of Montana coal.  that never went anywhere, but it sure was a good idea.  Note specifically the cetane number of 76 for the diesel, you don't even get remotely close with straight oil diesel. 

What your chum at Illinois Clean Fuel needs to do is secure a total tax exemption for his company and product.  Absent that, he should set up somewhere else, or Illinois will take all his earnings to pay for their horrendous debt and deficit.  the State Democrats have wrecked the place with their program cost over-runs.  Cheers.

Frankly it's surprising to me how long it has taken everyone to come up with an F-T replacement. It's not just the catalysts it's the reactor vessel plus some other pieces and process tricks. We've done something, just waiting on the patent to be granted. I expect 6 months or so and we'll be more aggressive about promoting it.

@ceo_energemsier seems to be involved with some Chinese on a Canada thing but it's not clear how they differentiate. I can proudly say we use the cheapest solvent on the planet and can recover 99.999999% of it. I'm not really interested in running it once it gets going, I'll just hire good Chem E's and turn them loose. If some evil oil company comes along and buys us out, I'd probably vote yes with my shares. Hopefully they'd only sit on it while they finished depleting their fossil fuel resources. 

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(edited)

18 hours ago, Jan van Eck said:

I suspect that new technology will be the undoing of your $70 figure.  I base this on the proposition that any material containing carbon components, specifically including plastics and organic wastes, can be converted into gasoline (and apparently diesel) by catalytic reaction at 400 C.  with a catalyst, in a reactor kettle. 

Now,obviously, this only works if the financial numbers work.  But if the numbers ultimately work, then remember that the waste stream of plastics and printed whiteboard and all the food scraps and even the waste cooking oils can be converted into a salable, pure gasoline.  

The implication is that the waste plastic, now a huge societal problem, can be disposed of easily, and it gets the politicians off the hook. So you are not going to get into permitting obstacles from bureaucrats, as no bureaucrat is going to want to have his name attached to some project that turns the avalanche of scrap plastic into a usable product. There is no "royalty payment," that raw material is waste that is a headache, and there are no costs for fracking sand and water and pumps and all the rest of it.  A reactor kettle is just that:  a big metal pot, into which you toss the witches' brew, and you heat it up with a natural gas flame from below.   The conversion into pentane and octane is essentially instantaneous. 

What you are doing is stripping hydrogen from another compound, probably from water, and stripping the carbon atoms off the waste plastic, which after all is itself created by polymerization of oils. Then the hydrogen and the carbon combine in the presence of the catalyst and heat, and bingo!  out from the bottom of that reactor kettle comes a stream of pure gasoline.  You have just converted a waste stream, which people will pay you to take, into a valuable commodity, which people will pay you to buy and take away.  You make money  at both ends. 

Once you develop the technology to the thousand-ton level, your unit costs are going to dramatically decrease.  And at that point the need for, and the purchases of, crude oil as a source material for gasoline will take a hit.  The extent of that hit depends on lots of other factors, of course, but to think that mass conversion of organic material in reactors is not going to suppress demand for crude oil is whimsical.  It will.  It always does.  It is the nature of developing technology, and man's understanding of chemistry. 

Why pay $70 for mineral slime when someone else will pay you money to take that plastic raw-material stuff off their hands?  

I've always thought landfills will just become the "mines" of the future. There has to be literally tons of valuable stuff in them.

Plastic can be used directly as a fuel in some industrial processes - after all it burns.  Some cement facilities already burn old tires.

As for converting plastic into gasoline grade liquid fuel I have some concerns.  First off there are several different kinds of plastics, and they will not all react the same, so a very robust process or additional sorting would be required. Secondly, I fear that any contamination would foul the potentially expensive catalysts.  So the catalyst(s) have to be very cheap and/or not particularly sensitive.

Biodesil from cooking oil is already done and the oil isn't free anymore (they sometimes even lock the grease dumpsters behind fast food places). https://www.youtube.com/watch?v=Gb6iG0w1g6U

Edited by Enthalpic
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10 hours ago, BenFranklin'sSpectacles said:

That's just a start.  The original proposition was to convert any carbon-based material.  I'm not sure the process Jan described could handle any feedstock, but a gasification process can.  Beyond "noncombusted" oil, we could also convert:
1)  Forestry waste
2)  Farm byproducts
3)  Municipal yard waste (city trees and grass clippings go somewhere when homeowners and utilities cut them down)
4)  Waste from clearing land
5)  Food waste

Cellulose from wood etc. is hard to break up - if anyone figures out a cheap way to do that oil is done. 

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The Canadian Press 
Published Wednesday, May 8, 2019 4:45AM EDT 

CALGARY -- A researcher at the University of Calgary says she has developed a method of turning greenhouse gases into valuable carbon nanofibres.

Mina Zarabian came up with the concept while completing her doctorate in chemical and petroleum engineering at the university's Schulich School of Engineering.

Zarabian and her professor, Pedro Pereira Almao, worked together to come up with the technique.

The nanofibres have multiple industrial uses that included replacing metal in cars and airplanes, wind turbines, battery manufacturing and construction.

"This is a process that turns natural gas and CO2, carbon dioxide, both known as greenhouse gases, into solid carbon nanofibres which can be sold in a brick or powder for a lot of industries that utilize them," Zarabian said during a tour of her lab.

"It can be used everywhere that you can imagine ... transportation vehicles to make them lighter and more durable so they can be more fuel efficient."

The transformation moved from its theoretical beginnings in the chemistry lab to a working model at the university.

Lines from tanks of carbon dioxide and methane feed into a small chamber the size of a balloon. Once it's exposed to extreme heat, black powdery residue appears in a glass tube. A piece of metal in the tube acts as a catalyst.

"It's the secret sauce of our process," said Zarabian. "The good thing is it's not something very magical or expensive or platinum or some super-fancy expensive metal. It's a normal metal which can be found anywhere with a high amount of resources."

Carbon fibres are expensive and currently cost about $100 per kilogram, she said.

Zarabian would like to see the technology eventually installed at natural gas power plants.

"Then we are going to send clean electricity without carbon to Alberta and then also harvest carbon fibre to build something useful."

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6 hours ago, D Coyne said:

HI Tom,

I imagine you have heard of the exponential function.  Solar power output grew at an average rate of 31% from 2011 to 2017.

Yep, I'm familiar with exponential function.

I really wish that @Don Minter - one of my favorite old troublemakers with an exquisitely functioning set of little grey cells situated squarely above his shoulders - was still lurking around here.  Back on the old Oilpro forum, he repeatedly debunked and disproved the Greenie pie in the sky notion that solar power energy could replace hydrocarbon energy.  Ditto with wind power.  Ditto with wave power.

Oil & Gas are not going away any time soon.  Full. Stop.

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29 minutes ago, Enthalpic said:

Cellulose from wood etc. is hard to break up - if anyone figures out a cheap way to do that oil is done. 

Gasification. 

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(edited)

5 minutes ago, BenFranklin'sSpectacles said:

Gasification. 

Pyrolysis / destructive distillation is ugly.  We already know how to burn wood.  I'm talking about low-temperature enzymes/bioreactors to get ethanol and/or an ionic liquid type reactor.

 

Edited by Enthalpic

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22 hours ago, Tom Kirkman said:

All good points, Jan.  But is it realistically feasible for your idea to be ramped up to meet the current global oil demand of 100 million barrels of oil per day?

At best, I can see a small, single figure percentage, similar to wind power percentages, maybe in a decade or so. 

But producing the equivalent of 100,000,000 barrels of oil a day?  Nope, that does not appear realistic to me.  Much in the same way that I don't see solar or wind or hydro or thermal taking over for hydrocarbons any time soon.

Likewise, I do not visualize where you put 100,000,000 B/D of plastic, every day, forever without resorting to plastic destruction (conversion) such as Jan suggest. Both numbers will be much smaller than the 36,500,000,000 B/Yr that you suggest.

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15 hours ago, Tom Kirkman said:

Yep, I'm familiar with exponential function.

I really wish that @Don Minter - one of my favorite old troublemakers with an exquisitely functioning set of little grey cells situated squarely above his shoulders - was still lurking around here.  Back on the old Oilpro forum, he repeatedly debunked and disproved the Greenie pie in the sky notion that solar power energy could replace hydrocarbon energy.  Ditto with wind power.  Ditto with wave power.

Oil & Gas are not going away any time soon.  Full. Stop.

Tom,

Crude plus condensate is likely to reach peak output by 2025, coal by 2030, and natural gas by 2040.  The fact is the rate of growth for solar power consumption worldwide has been 31% from 2011 to 2017 (see BP Statistical review of World energy), future rates of growth are unknown, but the cost of solar keeps falling while the cost of fossil fuel is likely to rise as resources deplete.  Only a cursory understanding of economics is needed to understand where this leads.

By 2050 Oil and natural gas will not have "gone away", but a lot of it (especially the more expensive resources like oil sands, Arctic, and ultra deepwater) will remain in the ground and will never be extracted.

So basically as oil, coal, and natural gas  decline in output solar, wind, and hydro will fill the gap.  The rising output from alternative energy will lead to economies of scale which will accelerate their reduction in cost to the point where for most energy uses fossil fuel will no longer be able to compete, oil may continue to be used for air and water transport and perhaps on the farm, natural gas will be used in petrochemicals and perhaps a bit for emergency backup power, coal will be used as in input to steel.  Generally fossil fuels will fade away and it will happen more quickly than any of us assume as the economics become unfavorable for fossil fuel.

https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-accord-7-scenarios/

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19 hours ago, Jan van Eck said:

Actually, I intend to compete with him.  My proposal is location-specific.  Vermont has only one landfill, and it is located smack upstream of Lake Memphremagog, a 30-mile lake that straddles the US and Canadian Border.  My proposal will be to set up a catalytic conversion system plant right smack next to that landfill and remove the material from it, and go process it, so as to remove the material from the landscape, get cheap gasoline, and keep that monster from contaminating the pristine lake, which is used as drinking water by over 100,000 Canadians.  I think that is a worthwhile project.  

My system is a little different than Fischer-Tropsch.  F-T is great for manufacturing diesel and aviation gasoline and the Germans ran their war effort on the stuff, using Rhineland coal.  At one time the governor of Montana was touting the process and drove a Volks Jetta with a little diesel in it, to demonstrate to one and all the benefits of Montana coal.  that never went anywhere, but it sure was a good idea.  Note specifically the cetane number of 76 for the diesel, you don't even get remotely close with straight oil diesel. 

What your chum at Illinois Clean Fuel needs to do is secure a total tax exemption for his company and product.  Absent that, he should set up somewhere else, or Illinois will take all his earnings to pay for their horrendous debt and deficit.  the State Democrats have wrecked the place with their program cost over-runs.  Cheers.

Jan,

What price for your gasoline will be needed to make the operation profitable?

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24 minutes ago, D Coyne said:

Jan,

What price for your gasoline will be needed to make the operation profitable?

Key question that should be answered at the beginning.

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(edited)

3 hours ago, D Coyne said:

Tom,

Crude plus condensate is likely to reach peak output by 2025, coal by 2030, and natural gas by 2040.  The fact is the rate of growth for solar power consumption worldwide has been 31% from 2011 to 2017 (see BP Statistical review of World energy), future rates of growth are unknown, but the cost of solar keeps falling while the cost of fossil fuel is likely to rise as resources deplete.  Only a cursory understanding of economics is needed to understand where this leads.

By 2050 Oil and natural gas will not have "gone away", but a lot of it (especially the more expensive resources like oil sands, Arctic, and ultra deepwater) will remain in the ground and will never be extracted.

So basically as oil, coal, and natural gas  decline in output solar, wind, and hydro will fill the gap.  The rising output from alternative energy will lead to economies of scale which will accelerate their reduction in cost to the point where for most energy uses fossil fuel will no longer be able to compete, oil may continue to be used for air and water transport and perhaps on the farm, natural gas will be used in petrochemicals and perhaps a bit for emergency backup power, coal will be used as in input to steel.  Generally fossil fuels will fade away and it will happen more quickly than any of us assume as the economics become unfavorable for fossil fuel.

https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-accord-7-scenarios/

If I understand correctly, you're arguing that the falling cost of solar panels and wind turbines guarantees they'll dominate the electrical grid.  I would argue that generation mix is determined by total system cost, and total system cost increases dramatically beyond some small % of renewables in your system.  In more detail: 

The cost of solar panels and wind turbines will continue to fall for some time, eventually reaching some lower limit.  That much is undeniable.  I don't think that's a relevant question though.  Total system cost also includes:
1)  Transmission lines
2)  Energy storage
3)  Equipment to handle rapidly varying production
4)  Backup generation
5)  Outages

Hydro is a relatively steady source of energy (barring drought), but its potential has mostly been tapped.  It will not increase substantially. 

Wind is intermittent.  We can incorporate a certain amount into the grid w/o increasing other costs, but we're fast approaching the limit.  Nations that have incorporated high percentages of wind power have seen electricity prices increase dramatically.  E.g. Germany.  Those nations also rely on importing base load generation from their neighbors, so on top of costs spiraling out of control, they haven't accomplished what they've claimed to accomplish. 

Solar is interesting in that, in hot, sunny regions, it generates power when that power is needed for cooling loads.  There are limits to this though.  CA is already suffering from the "duck curve".  I could explain the consequences of that in more detail, but the important point is that solar becomes significantly more expensive beyond some small fraction of total generation. 

Like solar, storage can lower costs in certain niche applications.  E.g. incorporating storage into substations can reduce peak loads on transmission lines, reducing the cost of transmission infrastructure.  Also like solar, this only applies to a small fraction of cases.  If we want to run most of a grid off renewables, significant storage becomes necessary.  At that point, it doesn't matter if renewables are free; the storage alone would cost more than the current price of electricity. 

It's been argued that these costs will fall forever, but they won't.  The lower limit is the cost of mining, processing, transporting, and installing necessary equipment.  Since renewables require something like 10X the weight of material as other power sources (not including fuel), these costs are substantial.  It's also been argued that a global grid could stabilize production, but again, that would be prohibitively expensive.  On top of building the global grid, you must build 2-5X as many turbines/panels to ensure some of them are always operating. 

Basically, any renewable system we've envisioned runs into a brick wall of high costs.  It's theoretically possible that renewables could win in the end, but I haven't seen a viable path to that outcome. 

Edited by BenFranklin'sSpectacles
Phrasing.
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