Well, the title of this post is probably no surprise to you. What you're going to see in the video probably is also not a surprise to you, but I thought of sharing it because this is part of a DVD that I found very interesting.
This DVD was played to us in our freshman year when we took Introduction to Petroleum Engineering. It was kind of scary to some students as they thought that this video was telling them that they were not on the right track, but other students thought otherwise. Interestingly enough, different people have various opinions and theories about the issue of peaking out. You can see by yourself that the professionals interviewed in this video have different opinions about the issue. Also, different people in the industry that I talked to have various opinions about this which is very interesting...
My two cents:
Peaking out doesn't necessarily mean that we are running out of oil. Different peaks can take place at different periods of time. While I don't believe that we are actually running out of oil, I do definitely acknowledge that we are running out of the "easy stuff" that flows out to the surface by itself once the well is drilled. These days oil companies put a lot of money on producing heavy oil and deep deep deep oil wells, which means that we are running out of the easy stuff.
Thursday, June 11, 2009
Oil Production Has Peaked
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5 comments:
I hate the oil industry, the people that's apart of it come off as a bunch of GREEDY people. All they care about is money, money, money. That's the main reason why people are in that industry. To get rich.
SLC - I beg to differ.
Not because I'm studying petroleum engineering and will be part of the industry soon, but because this is illogical.
Oil companies are no different than other companies. Company = business, and oil = business. In order to survive, oil companies need to profit. They make their big shots when the economy is booming and the demand is high, they get their most jobs while oil prices are high. When oil prices are low, they barely make any money. So they need to make up for that when prices and the demand are high. If they don't do that, they're not going to survive.
Like any other businesses, oil companies need to profit, and they do so whenever they get a chance, and that's absolutely legitimate.
I know the oil industry is a business but it's a greedy business, just like most. When oil prices are low they barely make any money? I doubt that. I can't wait for the day when the world can have cheaper and reliable fuel, or anything that will put these greedy people out of business.
It's not legitimate nor moral to "purposely" drive up oil prices to make huge profits to benefit your net worth. The people in the oil industry that are responsible for driving up oil prices are going to hell. I don't mind people making a profit, it's the greed I don't like.
Sorry to hear that you are going to be part of that industry. I'm sure you'll make a VERY GOOD living though.
What type of petroleum engineer do you want to be?
SLC - Contrary to popular belief, oil companies and oil exporting countries have no control, whatsoever, on oil prices. OPEC claims that it can bring oil prices up again by cutting production, but technically that is not possible because neither OPEC nor oil companies have control over oil prices. Oil prices depend on the economy and/or supply & demand. If it was under the control of oil companies and oil exporting countries, they would have always kept the oil prices high then to profit as much as possible. And yes, oil companies really don't make that much when oil prices are low. Today, it costs much more to produce one barrel of oil than 20 or 30 years ago. We are running out of the easy stuff that flows out of the ground by itself. Hence, oil companies today invest more money in production operations than 20 or 30 years ago. In some places in the US, especially the deepwater of Gulf of Mexico, it costs close to $50 to produce only one barrel of oil! In Canada it costs a lot more than that. That's why when oil is at $30/bbl, oil companies don't profit much. People who are not involved in the industry do not take into account the rising production costs, that's why they end up saying that oil companies are just greedy, when they are really not, because they really do suffer when oil prices are low. Production doesn't cost a couple of bucks per barrel like before. We're talking tens of bucks per barrel here.
The type of petroleum engineer I want to be is a production engineer, because I have this strong belief that today, oil companies should not invest a lot of money on exploration/drilling operations. They should rather invest that money and focus on production operations, and treating old oil wells instead of looking for new ones. Reservoir and production engineers find ways to pump out more oil out of existing wells, and treating the old wells to last longer and keep producing oil. There are many techniques used today for pumping out heavy oil and extending the life of oil wells. With investment and advanced technology, we can extend the life of existing oil wells, so I believe oil companies should focus and spend more money on such operations rather than spending money on exploration. As someone in this video said, all the promising oil reserves have already been discovered, so there is no need for spending money on exploration operations. Better invest that money on production & enhanced oil recovery.
P.S.: Sorry for the long comment, especially if it sounds boring to you.
Production costs my ass. Last year when oil prices were high there were some that said the industry greedy exes were involved with tampering with prices and people began to investigate and found that those greedy bastards made billions in revenue. Those prices that they tampered with was the reason for the high cost of food and that's the main reason why I'm so mad, because it affected the food prices.
Thanks for explaning to me the type of petroleum engineer you are going to be and why. As far as all the promising oil reserves have already been discovered. I don't beleive that, but I do beleive that none will be discovered anytime soon. I've always beleive that it's something out there that the world haven't discovered yet, and it won't be discovered until it's time for it to be discovered.
I hope you keep your morals while you're in that business.
What made you wanna go into this type of business? I promise I won't ask another question, ha ha.
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