The major oil companies are not known for being stupid, or they would not still be in business. Why would (or should) they invest in technology beyond their areas of expertise and in ways they consider un-economic? They are not in the business of drilling dry holes.
Unless of course they are owned by the government, like General Motors (GM) perhaps. Then the government can force them to waste their talent and resources. If the government imposes this insane "cap and trade" tax and other punitive measures on the oil and gas industry, America is in bigger trouble than we can imagine.
Peter
Oil Giants Loath to Follow Obama’s Green Lead
By JAD MOUAWAD (source)
The Obama administration wants to reduce oil consumption, increase renewable energy supplies and cut carbon dioxide emissions in the most ambitious transformation of energy policy in a generation.
But the world’s oil giants are not convinced that it will work. Even as Washington goes into a frenzy over energy, many of the oil companies are staying on the sidelines, balking at investing in new technologies favored by the president, or even straying from commitments they had already made.
Royal Dutch Shell said last month that it would freeze its research and investments in wind, solar and hydrogen power, and focus its alternative energy efforts on biofuels. The company had already sold much of its solar business and pulled out of a project last year to build the largest offshore wind farm, near London.
BP, a company that has spent nine years saying it was moving “beyond petroleum,” has been getting back to petroleum since 2007, paring back its renewable program. And American oil companies, which all along have been more skeptical of alternative energy than their European counterparts, are studiously ignoring the new messages coming from Washington.
“In my view, nothing has really changed,” Rex W. Tillerson, the chief executive of Exxon Mobil, said after the election of President Obama.
“We don’t oppose alternative energy sources and the development of those. But to hang the future of the country’s energy on those alternatives alone belies reality of their size and scale.”
The administration wants to spend $150 billion over the next decade to create what it calls “a clean energy future.” Its plan would aim to diversify the nation’s energy sources by encouraging more renewables, and it would reduce oil consumption and cut carbon emissions from fossil fuels.
The oil companies have frequently run advertisements expressing their interest in new forms of energy, but their actual investments have belied the marketing claims. The great bulk of their investments goes to traditional petroleum resources, including carbon-intensive energy sources like tar sands and natural gas from shale, while alternative investments account for a tiny fraction of their spending. So far, that has changed little under the Obama administration.
“The scale of their alternative investments is so mind-numbingly small that it’s hard to find them,” said Nathanael Greene, a senior policy analyst at the Natural Resources Defense Council. “These companies don’t feel they have to be on the leading edge of this stuff.”
Perhaps not surprisingly, most investments in alternative sources of energy are coming from pockets other than those of the oil companies.
In the last 15 years, the top five oil companies have spent around $5 billion to develop sources of renewable energy, according to Michael Eckhart, president of the American Council on Renewable Energy, an industry trade group. This represents only 10 percent of the roughly $50 billion funneled into the clean-energy sector by venture capital funds and corporate investors during that period, he said.
“Big Oil does not consider renewable energy to be a mainstream business,” Mr. Eckhart said. “It’s a side business for them.”
Shell, for example, said it spent $1.7 billion since 2004 on alternative projects. That amount is dwarfed by the $87 billion it spent over the same period on its oil and gas projects around the world. This year, the company’s overall capital spending is set at $31 billion, most of it for the development of fossil fuels.
Industry executives contend that comparing investments in oil and gas projects with their research efforts in the renewable field is misleading. They say that while renewable fuels are needed, they are still at an early stage of development, and petroleum will remain the dominant source of energy for decades.
In its long-term forecast, Exxon says that by 2050, hydrocarbons — including oil, gas, and coal — will account for 80 percent of the world’s energy supplies, about the same as today.
“Renewable energy is very real,” David J. O’Reilly, the chief executive of Chevron, said in a speech in New York last November. “We need it. It will be an essential part of the future I envision. But it’s not realistic to suppose we can replace conventional energy in a timeframe that some suggest.”
Chevron has spent about $3.2 billion since 2002 on “renewable and alternative energy and energy efficiency services,” according to Alexander Yelland, a spokesman. It plans to spend $2.7 billion in the three years through 2011 on a variety of projects, including a business that helps improve energy efficiency for companies and government agencies, he said.
Despite Washington’s newfound green enthusiasm, industry executives argue that replacing any significant part of the fossil fuel business will take decades, at best. Just to keep up with growth in demand for conventional sources of energy, producers will need to invest more than $1 trillion each year from now to 2030, according to the International Energy Agency.
“Many of these companies see the world is changing,” said Daniel Yergin, the chairman of Cambridge Energy Research Associates and a historian of the industry. “But the challenge for a very large company is to get critical scale. People tend to forget the scale of the energy business.”
The world consumes about 85 million barrels of oil a day. The United States alone would require six times its arable land — and 75 percent of the world’s cultivated land — to supply its needs with ethanol made from corn, according to calculations by Vaclav Smil, an energy expert at the University of Manitoba.
More realistic, and modest, targets are proving tough to reach. Congress’s ethanol mandate, which requires oil companies to use 36 billion gallons of ethanol by 2020, cannot be achieved, experts say, without major technological advances that are still years away.
To increase supplies, most companies are looking to tar sands in Canada or converting coal or natural gas into liquid fuels, technologies that emit far more carbon dioxide than conventional oil does.
Shell, a major investor in Alberta in Canada, says that traditional oil supplies will not be enough to meet the growth in the world’s energy needs over the next half-century. In 2007, BP invested in Canadian tar sands, prompting criticism that it was “recarbonizing” itself.
John M. Deutch, a professor at the Massachusetts Institute of Technology and a former director of central intelligence, said there was little point in criticizing oil companies without first establishing federal rules that set a price on carbon dioxide emissions. Once that happens, he said, companies will adapt their strategies.
“What role will oil companies play in the future in alternatives to conventional hydrocarbon? The correct answer is nobody knows,” Mr. Deutch said. “The important thing is for the government to establish a carbon policy. You can be absolutely confident that oil companies will pursue that, as will any other companies.”
One area where companies are increasingly focused is the development of liquid fuels from plants. BP said it would soon build a demonstration plant in Florida for a type of ethanol made from plant material; Shell has worked with several firms since 2002 to develop ethanol from nonfood crops. Last year, it signed agreements with six companies, including one in Brazil, and decided to drop its other renewable efforts to focus solely on biofuels.
“Biofuels feels closest to our core business,” said Darci Sinclair, a company spokeswoman.
Other areas also hold significant promise for the industry, like technologies to capture carbon dioxide emissions and store them underground, and energy-efficiency programs, especially in the transportation sector. Exxon, long the most skeptical of the oil companies toward alternative energy investments, is working on long-term programs to improve fuel economy and reduce emissions.
In the end, many analysts say they believe that oil companies are waiting for a winning technology to emerge. Alan Shaw, the chief executive of Codexis, a biotechnology company in Silicon Valley that works with Shell, said oil companies were not blind to the new political reality but they were also in the business of making a profit.
“Don’t lose heart with Big Oil,” Mr. Shaw said. “They aren’t at a point where they are ready to invest yet, but they are getting there. I think in the next 10 years, they will invest hundreds of times more than they have in the past 10 years.”
Showing posts with label foreign oil. Show all posts
Showing posts with label foreign oil. Show all posts
Wednesday, April 8, 2009
Friday, May 9, 2008
Some Simple Truths About Oil
Many people have misconceptions about how oil is found, produced, refined, and supplied to consumers, most noticeably in the form of gasoline. The oil industry has been so demonized over the years that few people fully understand where oil actually comes from, who really owns it, how costly it is to find and produce, and how much actual profit oil companies make. It is this ignorance, I believe, that leads to bad government laws, more taxes, higher costs, (like we're seeing now) and serious damage to our economy. Here are ten simple truths everyone should know.
Peter
Ten Simple Truths about Oil
Alan Caruba
The Democrat Party has long made “Big Oil” their favorite punching bag, confident that the public has no idea what influences the price and supply of oil. Saying anything favorable to Big Oil is immediately deemed evidence that one is in their pay and whatever facts are offered are therefore invalid.
There are, however, some simple truths about Big Oil that cannot and should not be ignored. To do so leaves everyone at the mercy of energy policies that have created the situation in which the United States finds itself today.
Fact #1. The combined ownership of oil reserves by the independent, investor-owned oil companies such as ExxonMobil, Conoco-Phillips, BP, Chevron and others is barely 4% of the total known oil reserves in the world. By itself, ExxonMobil’s share is 1.08%.
Fact #2. Oil is a global commodity sold on mercantile exchanges for whatever price it can command. Speculation in oil prices is the primary reason they have been driven to utterly insane costs per barrel. It has nothing to do with actual supply and demand.
Fact #3. No nation on Earth is or can be “energy independent.” The geopolitics of oil is complex, but as nations such as China and India have seen their economies grow, their need for oil grows with it and thus they compete with long established industrialized nations for existing oil supplies. This competition has an impact on prices.
Fact #4. The OPEC nations, those in the Middle East and including Venezuela, control 77% of the world’s known oil reserves. Like Russia and Mexico, where the oil industry is controlled by the state, it is generally poorly managed. Several Big Oil companies that were induced to undertake exploration and development in Russia and Venezuela actually had their assets nationalized or stolen at prices well below their investment and value.
Fact #5. Energy is the master resource. All nations with any hope of growing their economies require it, mostly in the form of electricity, but also for oil’s role in transportation. The failure to have a national long-range energy policy that is based in reality can severely impact energy prices.
Fact #6. The United States has, for years, pursued an energy policy based on environmental myths such as “biofuels” in which corn is turned into ethanol to reduce the import of oil, but it costs as much to produce ethanol as to refine oil and it provides less mileage per gallon, thus negating any reason for this additive. Likewise, suggesting that wind or solar energy can generate anything more than its current 1% of the nation’s electricity needs ignores their unreliability and the fact they are heavily subsidized, a form of hidden consumer tax.
Fact #7. It costs billions to explore, discover, extract and transport oil. It takes lots of lead-time as well. The United States Congress has, for decades, refused to permit the extraction of vast oil reserves in ANWR despite the fact it would have little or no impact on the Alaskan wildlife reserve. In addition, Congress has declared 85% percent of the nation’s coastal, offshore areas off-limits to any exploration for oil or natural gas.
Fact #8. The U.S. Environmental Protection Agency, under the mandate of Congress, requires Big Oil to refine oil into some 17 different formulations in the name of clean air. With three grades of gasoline, that means that refiners must produce some 45 different blends. The quality of air in America is excellent, but the cost of gasoline at the pump continues to rise as the result of these mandates.
Fact #9. America imports two-thirds of the oil it uses. All of its transportation runs on oil. The population continues to grow. Failure to encourage the construction of a single new refinery since the 1970s puts a further strain on the ability of Big Oil to provide the nation’s oil and diesel fuel needs.
Fact #10. Democrats continue to demand that Big Oil’s profits be confiscated in some fashion and some of the inducements offered to explore for more oil be ended. Because the costs of exploration, extraction, refining, and transporting of oil represents billions, the actual profit margin of a company like ExxonMobil is about 10%, well below what industries such as pharmaceuticals and banking enjoy.
For these and many other reasons, Americans are being impoverished at the gas pump because Congress has dithered and failed in one of its most important responsibilities.
Peter
Ten Simple Truths about Oil
Alan Caruba
Ten#"> source
The Democrat Party has long made “Big Oil” their favorite punching bag, confident that the public has no idea what influences the price and supply of oil. Saying anything favorable to Big Oil is immediately deemed evidence that one is in their pay and whatever facts are offered are therefore invalid.
There are, however, some simple truths about Big Oil that cannot and should not be ignored. To do so leaves everyone at the mercy of energy policies that have created the situation in which the United States finds itself today.
Fact #1. The combined ownership of oil reserves by the independent, investor-owned oil companies such as ExxonMobil, Conoco-Phillips, BP, Chevron and others is barely 4% of the total known oil reserves in the world. By itself, ExxonMobil’s share is 1.08%.
Fact #2. Oil is a global commodity sold on mercantile exchanges for whatever price it can command. Speculation in oil prices is the primary reason they have been driven to utterly insane costs per barrel. It has nothing to do with actual supply and demand.
Fact #3. No nation on Earth is or can be “energy independent.” The geopolitics of oil is complex, but as nations such as China and India have seen their economies grow, their need for oil grows with it and thus they compete with long established industrialized nations for existing oil supplies. This competition has an impact on prices.
Fact #4. The OPEC nations, those in the Middle East and including Venezuela, control 77% of the world’s known oil reserves. Like Russia and Mexico, where the oil industry is controlled by the state, it is generally poorly managed. Several Big Oil companies that were induced to undertake exploration and development in Russia and Venezuela actually had their assets nationalized or stolen at prices well below their investment and value.
Fact #5. Energy is the master resource. All nations with any hope of growing their economies require it, mostly in the form of electricity, but also for oil’s role in transportation. The failure to have a national long-range energy policy that is based in reality can severely impact energy prices.
Fact #6. The United States has, for years, pursued an energy policy based on environmental myths such as “biofuels” in which corn is turned into ethanol to reduce the import of oil, but it costs as much to produce ethanol as to refine oil and it provides less mileage per gallon, thus negating any reason for this additive. Likewise, suggesting that wind or solar energy can generate anything more than its current 1% of the nation’s electricity needs ignores their unreliability and the fact they are heavily subsidized, a form of hidden consumer tax.
Fact #7. It costs billions to explore, discover, extract and transport oil. It takes lots of lead-time as well. The United States Congress has, for decades, refused to permit the extraction of vast oil reserves in ANWR despite the fact it would have little or no impact on the Alaskan wildlife reserve. In addition, Congress has declared 85% percent of the nation’s coastal, offshore areas off-limits to any exploration for oil or natural gas.
Fact #8. The U.S. Environmental Protection Agency, under the mandate of Congress, requires Big Oil to refine oil into some 17 different formulations in the name of clean air. With three grades of gasoline, that means that refiners must produce some 45 different blends. The quality of air in America is excellent, but the cost of gasoline at the pump continues to rise as the result of these mandates.
Fact #9. America imports two-thirds of the oil it uses. All of its transportation runs on oil. The population continues to grow. Failure to encourage the construction of a single new refinery since the 1970s puts a further strain on the ability of Big Oil to provide the nation’s oil and diesel fuel needs.
Fact #10. Democrats continue to demand that Big Oil’s profits be confiscated in some fashion and some of the inducements offered to explore for more oil be ended. Because the costs of exploration, extraction, refining, and transporting of oil represents billions, the actual profit margin of a company like ExxonMobil is about 10%, well below what industries such as pharmaceuticals and banking enjoy.
For these and many other reasons, Americans are being impoverished at the gas pump because Congress has dithered and failed in one of its most important responsibilities.
Friday, February 15, 2008
Some Ways To End Our "Dependence" On Foreign Oil
The following article was on MSNBC from Esquire Magazine. It contains ideas for solving America's dependence on gasoline made from foreign oil. The ideas are not new; they involve using biofuels, made from a variety of sources. What is new is how to achieve this transition. Here, Gal Luft, presumably an Israeli, and "energy "expert" proposes government mandates, or what he calls an "energy policy" that is not political. Not "political"? I say "good luck"! Actually, we must take a good hard look at these alternative (to oil) fuels, sooner, or later.
Peter
source:
Four Ways to Solve the Energy Crisis
By Tim Heffernan
You hear it all the time: We've got to reduce our dependence on foreign oil; it's a matter of homeland security. Fine. Nobody's arguing. But the solutions that get offered—drilling in ANWR, mandating better automobile fuel efficiency, pushing ethanol—don't really solve anything. They're politically impossible, or too expensive, or contrary to free-market forces. They're losers.
Energy-independence advocate Gal Luft looks for winners. The former lieutenant colonel in the Israel Defense Forces and counterterrorism expert fervently believes that the only way to make America safe is to make it energy independent. And so as executive director of the Institute for the Analysis of Global Security and cofounder of the Set America Free Coalition, he has set out to do just that.
Luft advises Congress and security companies. He briefs industrial and environmental groups. Yet what separates him from other energy specialists are his pragmatic solutions. He doesn't peddle pie-in-the-sky political strategies. He's a realist. He has a single goal: freeing America from the grip of foreign oil. And he wants to do it now. Here are four steps he says we can—and should—take today.
1. Make gasoline-only cars illegal
"Every gas-powered car has an average street life of seventeen years, which means that the minute you leave the lot, you're signing up for two decades of foreign-oil dependence. The easiest way to change this is to mandate that every vehicle sold in the U. S. is flex-fuel compatible so that it can run on just about any blend of hydrocarbon-based fuels—gasoline, ethanol, methanol, etc. The technology already exists, and the process is cheap, about a hundred dollars per vehicle. Detroit will cry about 'government interference,' but in fact the mandate would open a vast new free market in alternative-fuel development."
2. Kill the Iowa caucuses
"Here's the first thing every presidential candidate who visits Iowa is asked: 'Where do you stand on ethanol?' Why is this a problem? Because the ethanol lobby has managed to place huge tariffs on ethanol produced abroad while freezing out the development of other alternative fuels at home. It portrays itself as this sort of savior, the domestic solution to our reliance on foreign oil, but it really just protects a tiny number of Midwestern corn farmers. Anyone who thinks otherwise, bear in mind: Even if every single kernel of corn grown in America were converted to ethanol, it would still only replace about 12 percent of America's gasoline requirement."
3. Think of the world in terms of sugarcane
"America hasn't been very good about making friends in the Middle East lately, but there are still a few countries in Latin America, Africa, and Southeast Asia that like us. And many of them, such as Panama, Kenya, and Thailand, grow sugarcane, from which you can make ethanol at half the cost of making it from corn. We should direct foreign aid throughout the agricultural sector in these countries to increase their efficiency and create jobs. That will make them happy, and it'll improve our national security. They'll be our friends forever. Unlike the OPEC nations."
4. Revolutionize waste
"Sixty-five percent of our garbage is biomass: food, paper, scrap wood. All of it could be converted to methanol. The process has been around for two hundred years. And it's twice as efficient as cellulosic ethanol, supposedly the next big thing in alternative fuels. Then there's coal—America has a quarter of the world's reserve, but we use it mainly to feed power plants, which is a dirty and inefficient use. Instead, coal can be converted to clean-burning methanol for the equivalent of one dollar per gallon. Last, look to recyclables, like black liquor, a toxic by-product of the paper industry. Right now, paper mills inefficiently recycle it themselves. But black liquor can be converted to methanol. Do so and we'd generate nine billion gallons of methanol a year—almost twice the ethanol we now make from corn."
Actually getting this done
"These are only four of many common-sense opportunities throughout the economy, but we're not taking advantage of them, because there isn't a sustainable market for alternative fuels. Yet. Which brings us back to step one: flex-fuel technology. Get that and the other three will take care of themselves. There will be stiff opposition from the oil, corn, and auto lobbies. There always is. But let's hope that Washington can step up for a change. Because once you take politics out of the energy policy, you get very different—and much better—results."
Peter
source:
Four Ways to Solve the Energy Crisis
By Tim Heffernan
You hear it all the time: We've got to reduce our dependence on foreign oil; it's a matter of homeland security. Fine. Nobody's arguing. But the solutions that get offered—drilling in ANWR, mandating better automobile fuel efficiency, pushing ethanol—don't really solve anything. They're politically impossible, or too expensive, or contrary to free-market forces. They're losers.
Energy-independence advocate Gal Luft looks for winners. The former lieutenant colonel in the Israel Defense Forces and counterterrorism expert fervently believes that the only way to make America safe is to make it energy independent. And so as executive director of the Institute for the Analysis of Global Security and cofounder of the Set America Free Coalition, he has set out to do just that.
Luft advises Congress and security companies. He briefs industrial and environmental groups. Yet what separates him from other energy specialists are his pragmatic solutions. He doesn't peddle pie-in-the-sky political strategies. He's a realist. He has a single goal: freeing America from the grip of foreign oil. And he wants to do it now. Here are four steps he says we can—and should—take today.
1. Make gasoline-only cars illegal
"Every gas-powered car has an average street life of seventeen years, which means that the minute you leave the lot, you're signing up for two decades of foreign-oil dependence. The easiest way to change this is to mandate that every vehicle sold in the U. S. is flex-fuel compatible so that it can run on just about any blend of hydrocarbon-based fuels—gasoline, ethanol, methanol, etc. The technology already exists, and the process is cheap, about a hundred dollars per vehicle. Detroit will cry about 'government interference,' but in fact the mandate would open a vast new free market in alternative-fuel development."
2. Kill the Iowa caucuses
"Here's the first thing every presidential candidate who visits Iowa is asked: 'Where do you stand on ethanol?' Why is this a problem? Because the ethanol lobby has managed to place huge tariffs on ethanol produced abroad while freezing out the development of other alternative fuels at home. It portrays itself as this sort of savior, the domestic solution to our reliance on foreign oil, but it really just protects a tiny number of Midwestern corn farmers. Anyone who thinks otherwise, bear in mind: Even if every single kernel of corn grown in America were converted to ethanol, it would still only replace about 12 percent of America's gasoline requirement."
3. Think of the world in terms of sugarcane
"America hasn't been very good about making friends in the Middle East lately, but there are still a few countries in Latin America, Africa, and Southeast Asia that like us. And many of them, such as Panama, Kenya, and Thailand, grow sugarcane, from which you can make ethanol at half the cost of making it from corn. We should direct foreign aid throughout the agricultural sector in these countries to increase their efficiency and create jobs. That will make them happy, and it'll improve our national security. They'll be our friends forever. Unlike the OPEC nations."
4. Revolutionize waste
"Sixty-five percent of our garbage is biomass: food, paper, scrap wood. All of it could be converted to methanol. The process has been around for two hundred years. And it's twice as efficient as cellulosic ethanol, supposedly the next big thing in alternative fuels. Then there's coal—America has a quarter of the world's reserve, but we use it mainly to feed power plants, which is a dirty and inefficient use. Instead, coal can be converted to clean-burning methanol for the equivalent of one dollar per gallon. Last, look to recyclables, like black liquor, a toxic by-product of the paper industry. Right now, paper mills inefficiently recycle it themselves. But black liquor can be converted to methanol. Do so and we'd generate nine billion gallons of methanol a year—almost twice the ethanol we now make from corn."
Actually getting this done
"These are only four of many common-sense opportunities throughout the economy, but we're not taking advantage of them, because there isn't a sustainable market for alternative fuels. Yet. Which brings us back to step one: flex-fuel technology. Get that and the other three will take care of themselves. There will be stiff opposition from the oil, corn, and auto lobbies. There always is. But let's hope that Washington can step up for a change. Because once you take politics out of the energy policy, you get very different—and much better—results."
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