10.05.2016 Quote of the Day

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“The evolution of our knowledge of petroleum since Colonel Drake’s discovery of oil in Titusville, Pennsylvania, nearly a century ago, resembles in many striking respects the evolution of knowledge of world geography which occurred during the century following Columbus’ discovery of America. During that period several continents, a number of large islands, and numerous smaller islands were discovered, but how many more might there be? Also during that period geographical charts had to be continuously revised in order to incorporate the new discoveries that were repeatedly being made, and also to correct some earlier speculations which had proved to be seriously in error. In addition, more detailed knowledge of the shore lines and other features of the areas discovered earlier was rapidly accruing, which also had to be added to the charts.

Then, as now, a voyager starting out on a major expedition of discovery needed to equip himself with charts of two kinds. He needed the large-scale detailed charts for piloting along known shores, and the comprehensive charts of whole oceans, or even of the known world, as a guide for his major navigations.

Likewise, for the petroleum industry the last century has been a period of bold adventure and discovery. Whole petroleum provinces analogous to the continents have been discovered and partly explored; a few tens of very large fields, corresponding to the large islands, and hundreds of small fields, the small islands, have been discovered. But how far along have we come on our way to complete exploration?

In the petroleum industry, for the last several decades -particularly in the United States – we have been conscious of a need for charting our progress, and thanks to the services of the American Petroleum Institute, the American Gas Association, the Petroleum Branch of the American Institute of Mining, Metallurgical, and Petroleum Engineers, the American Association of Petroleum Geologists, the United States Geological Survey and Bureau of Mines, we have been able to chart with considerable accuracy our past accomplishments, and our present status with regard to a short-term outlook. Longer-range reviews have had to be made with respect to specific problems, such as whether to build a given pipeline or refinery. But for the most part our outlook has been dominantly contemporary with concern principally for the next few years, and with only occasionally (Weeks, 1948 1950a, 1950b; Ayres, 1948, 1952, 1953a, 1953b, 1955; Hubbert, 1950a; Ayres and Scarlott, 1952; Putnam, 1953; Brown, 1954) a bolder adventure into the more distant future.

To continue the navigation analogy, what we seem to have achieved is an abundance of detailed charts of local areas, with only an occasional attempt to construct, shall we say, a map of the whole world which, despite its inherent imperfections, is still necessary if we are to have even an approximate idea of where we are now, and where we are going. The object of this discourse will be to see what can be done in this direction with the information presently available.

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As a general orientation, let us consider that the petroleum industry is primarily an energy industry and secondarily a chemical industry. As an energy industry it utilizes the energy content of certain naturally occurring chemicals, namely the liquid and gaseous hydrocarbons. As a chemical industry it utilizes the material content of these same resources as constituting a complex array of organic molecules which have already been synthesized and are therefore available as the starting point of a series of enormously complex organic chemical products. In this respect it is again only one aspect of a much broader chemical industry utilizing coal, inorganic minerals, and plant and animal raw materials, in addition to petroleum.

The fossil fuels, which include coal and lignite, oil shales, and tar and asphalt, as well as petroleum and natural gas, have all had their origin from plants and animals existing upon the earth during the last 500 million years. The energy content of these materials has been derived from that of the contemporary sunshine, a part of which has been synthesized by the plants and stored as chemical energy. Over the period of geological history extending back to the Cambrian, a small fraction of these organisms have become buried in sediments under conditions which have prevented complete deterioration, and so, after various chemical transformations, have been preserved as our present supply of fossil fuels. When we consider that it has taken 500 million years of geological history to accumulate the present supplies of fossil fuels, it should be clear that, although the same geological processes are still operative, the amount of new fossil fuels that is likely to be produced during the next few thousands of years will be inconsequential. Therefore, as an essential part of our analysis, we can assume with complete assurance that the industrial exploitation of the fossil fuels will consist in the progressive exhaustion of an initially fixed supply to which there will be no significant additions during the period of our interest.

Throughout all human history until about the thirteenth century, the human race, in common with all other members of the plant and animal complex, had been solely dependent upon the contemporary solar energy which it had been able to command. This comprised the energy from the food it was able to consume, that of the wood burned for fuel, and a trivial amount of power obtained from beasts of burden, from wind, and from flowing water.

The episode of our present concern began when the inhabitants of northeast England discovered that certain black rocks found along the seashore, and thereafter known as “sea coles,” would burn. Thus began the mining of coal and the first systematic exploitation of the earth’s supply of fossil fuels. Its greatest significance, however, lay in the fact that for the first time in human history mankind had found a huge supply of concentrated energy by means of which the energy that could be commanded by one person could be greatly increased. The industrialization of the world with its concomitant consequences for the human population has been the direct result of that initial discovery.

To the energy obtained from coal there has been added, since about the middle of the last century, that from petroleum and natural gas, and a limited amount from oil shale.

Time does not permit of even a summary of the major consequences of the utilization of these two sources of energy, but as history shows, the immensity of human operations has been increased by several orders of magnitude.

Rise of Production of Fossil Fuels

"Oil well"  Flcelloguy at en.wikipedia - Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons -
“Oil well” Flcelloguy at en.wikipedia 

No better record exists of the history of the exploitation of the fossil fuels than the annual statistics of their production. In Figure 1 there has been plotted the world production of coal since 1860 (United Nations, 1955), in Figure 2 the world production of crude oil, and in Figure 3 the combined production of energy from coal and crude oil.

The production of coal in the United States is shown in Figure 4, that of crude oil in Figure 5, and the production of marketed natural gas in Figure 6. The production of crude oil in Texas is shown in Figure 7, and that of marketed natural gas in Figure 8.

Since these curves embody just about all that is essential in our knowledge of the production of energy from the fossil fuels on the world, a national, and a state scale, it is worth our attention to study them briefly. In the first place, it will be noted that there is a strong family resemblance among them. Each curve starts slowly and then rises more steeply until finally an inflection point is reached after which it becomes concave downward. For the world coal production this point was reached about the beginning of World War I, and for world petroleum production it appears to have been as recently as 1951 or 1952.

For the production of coal in the United States the inflection point also occurred about 1914, and the inflection points for petroleum and natural gas apparently about 1952. The inflection points for the Texas production of oil and gas occur at about the same dates as those for the United States.

A more informative representation of the rate of growth of the production can be obtained by plotting the logarithm of the production rate versus time on semilogarithmic graph paper. This has been done in Figures 9 and 10 for the United States production of coal and crude oil, respectively. It will be noted in each case that the curve approximates a straight line until some definite date and then breaks away sharply downward. In the case of coal this departure from a straight line occurred about 1910, and for crude oil about 1930. All the other production curves shown in the preceding figures behave in a similar manner.

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The significance of this is that during the initial stages all of these rates of production tend to increase exponentially with time. Goal production in the United States from 1850 to 1910 increased at a rate of 6.6 percent per year, with the production doubling every 10.5 years. Crude-oil production from l880 until 1930 increased at the rate of 7.9 percent per year, with the output doubling every 8.7 years.

During the corresponding growth phases, world production of coal increased at the rate of 4.3 percent per year, with production doubling every 16 years, and world production of crude oil increased at a rate of 7 percent per year, with the rate of output doubling every 10 years.

These facts alone force one to ask how long such rates of growth can be kept up. How many periods of doubling can be sustained before the production rate would reach astronomical magnitudes? That the number must be small can be inferred from the fact that after n doubling periods the production rate will be increased by a factor of 2n. Thus in ten doubling periods the production rate would increase by a thousandfold; in twenty by a millionfold. For example, if at a certain time the production rate were 100 million barrels of oil per year – the U.S. production in 1903 – then in ten doubling periods this would have increased to 100 billion barrels per year. No finite resource can sustain for longer than a brief period such a rate of growth of production; therefore, although production rates tend initially to increase exponentially, physical limits prevent their continuing to do so.

This rapid rate of growth shown by the production curves makes them particularly deceptive with regard to the future length of time for which such production may be sustained. For example, coal has been mined continuously for about 800 years, and by the end of 1955 the cumulative production for all of this time was 95 billion metric tons. It is somewhat surprising, however, to discover that the entire period of coal mining up until 1925 was required to produce the first half, while only the last 30 years has been required for the second half.

Similarly, petroleum has been produced in the United States since l859, and by the end of 1955 the cumulative production amounted to about 53 billion barrels. The first half of this required from 1859 to 1939, or 80 years, to be produced; whereas, the second half has been produced during the last 16 years. …

oil peak oil

That the production of exhaustible resources does behave in this way can be seen by examining the production curves of some of the older producing areas. In Figure 12, for example, there is shown the crude-oil production curve for the state of Ohio. In this case the production began its initial sharp rise in 1884, passed through three maxima between 1890 and 1900 with the peak about 1896, and since then has undergone a slow, steady decline.

In Figure 13 is shown the corresponding curve for the state of Illinois, which is distinguished by having two widely separated and well-defined maxima, the second considerably larger than the first. The reason for these two maxima is well known. With the exception of occasional outcrops in local areas, the state of Illinois is almost completely blanketed by glacial drift. The first period of discovery, beginning about 1905, was based on surface geology with meager outcrop data. Consequently in about five years most of the discoveries amenable to this method had been made and for the next 25 years these fields continued to produce at declining rates with no new discoveries being made. It was well known geologically, however, that the whole Illinois Basin was potentially oil bearing, which was later verified when a new cycle of exploration using the seismograph was initiated in 1937. The peak of this cycle of production was reached in 1940, with the subsequent decline continuing until 1953 following which there has been a slight increase of production.

The present outlook for Illinois has recently been summarized by Vincent and Witherspoon (1955) of the Illinois State Geological Survey. Cumulative production until July 1, 1955, was 1.8 billion barrels, and reserves from existing fields were estimated to be 0.5 billion barrels by primary methods of production and 1.0 billion barrels by water flooding. In addition, the rocks of Middle Ordovician age (below the St. Peter sandstone) have not yet been explored, so that undiscovered reserves are estimated at from 0.5 to 1 billion barrels. The ultimate cumulative production from Illinois is estimated, therefore, at about 4 billion barrels.

On the graph of Illinois production (Figure 13), each square of the grid represents 0.5 billion barrels so that a total of eight squares can be allowed under the curve before it declines to zero. Three and one-half squares have already been used up, leaving about four and one-half still to go. This implies that a third cycle of discovery and production is still due to occur in Illinois, yielding about as much oil as has been produced already, but no fourth cycle appears likely.

Reserves of the Fossil Fuels

Coal.—In order to predict the future of the production of the fossil fuels, therefore, it is essential that the best possible estimates of the ultimate reserves he made. In the case of coal world-wide inventories have been made and revised intermittently since 1913. During the last decade an extensive re-examination of the coal reserves of the United States has been In progress by the United States Geological Survey, whose staff has also maintained current information on the reserves of the world. The results of the latest progress report of the Geological Survey (Averitt, Berryhill, and Taylor, 1953), of the recoverable coal reserves of the world, are shown graphically in Figure 14. The total recoverable coal and lignite reserves of the vorld are now estimated to be about 2500 billion metric tons, of which the United States has about one-third, the U.S.S.R. about one-fourth, and China about one-fifth of the total.

The sharp contrast between these figures and earlier estimates of about 6000 billion metric tons for the whole world requires explanation. The earlier estimates included both thin and deep beds of coal without too much regard for practicable minability. The later estimates have been restricted to beds that are more workable; this has resulted in a reduction from around 6000 to about 5000 billion metric tons. More seriously, however, the earlier estimates were of coal in place, whereas the data given in Figure 14 represent recoverable coal assuming a 50-percent loss in mining. This makes the coal reserves directly comparable to the data for petroleum reserves, which also are based upon recoverable oil rather than oil in place.

Crude Oil and Natural Gas.— The comparable data for world crude-oil reserves are presented in Figure 15. Here the distinction must be borne in mind between crude oil or petroleum and total “liquid hydrocarbons” or “petroleum liquids •” In.the early stages of the petroleum industry, the usable products were crude oil and natural gas, and most petroleum statistics still pertain to those two products. During recent decades, however, due to improved technology there has been an increasing yield of the so-called “natural-gas liquids” obtained as a by-product of natural gas. Statistics on total petroleum liquids, or liquid hydrocarbons, comprise both crude oil and natural-gas liquids.

Since the production curves here considered are of crude oil only, then the pertinent reserve data must also be limited to crude oil. The data in Figure 15 represent the estimated amounts of crude oil initially present which are producible by methods now in use. The cross-hachured part of each column represents the amount which has been consumed already. These estimates of ultimate potential reserves are, with two exceptions, those obtained by L. G. Weeks (1948, 1950a, 1950b, 1952), of the Standard Oil Company of New Jersey, in his detailed studies of the various sedimentary basins of the world. Weeks estimated the ultimate potential reserves of the world to be 6l0 billion barrels for the land areas, and 400 billion barrels for the continental shelves, or roundly 1000 billion barrels in total. These estimates included 110 billion barrels for the land area of the United States, and 155 billion barrels for the Middle East, including Egypt.

Ottoman Empire postage stamp Double M flickr
Ottoman Empire postage stamp Double M flickr

Subsequently the Middle East has developed into a petroleum province of unprecedented magnitude and Weeks’ estimate is now known to be seriously too low. Recently Wallace E. Pratt (1956), in the Report of the Panel on the Impact of the Peaceful Uses of Atomic Energy, gave as the proved reserves of liquid hydrocarbons for the Middle East the figure of 230 billion barrels. Since probably not less than 200 billion barrels of this is represented by crude oil, the estimate of the ultimate potential reserves of crude oil in the Middle East has been increased to 375 billion barrels, which can only be regarded as a rough order-of -magnitude figure.

In the case of the United States, Weeks’ estimate of 110 billion barrels (based upon production practices of about 1948) was for the land area. The United States Geological Survey (1953) has estimated potential offshore reserves of the United States, based upon the productivity of comparable adjacent land areas, to be as follows:

Olaf P. Jenkins (1955) of the California Division of Mines has estimated the offshore reserves of California to be 4 billion barrels. Combining this with the U.S. Geological Survey estimate for Louisiana and Texas gives 17 billion barrels, which has here been rounded off to 20 billion.

The production record of the past two decades, due in part to Improved recovery practices, indicates that Weeks’ figure of 110 billion barrels for the land may also be somewhat low. This has accordingly been increased to 130 billion, giving a total ultimate potential reserve of 150 billion barrels of crude oil for both the land and offshore areas of the United States.

Although arrived at independently, this figure is in substantial agreement with Pratt’s (1956, p. 94) figure of 170 billion barrels for the total liquid hydrocarbons of the United States. The ratio of crude oil to liquid hydrocarbons can be obtained approximately from the latest American Petroleum Institute (1956) release on proved reserves. As of January 1, 1956, the proved reserves of crude oil were 30.0 billion barrels, while those of total liquid hydrocarbons was 35.4 billion barrels. Applying this ratio to Pratt’s figure of 170 billion barrels of liquid hydrocarbons gives 144 billion barrels of crude oil.

With these modifications we obtain a figure of about 1250 billion barrels for the ultimate potential reserves of crude oil of the whole world.

Since crude oil and natural gas are genetically related, probably the most reliable procedure for estimating the ultimate reserves of natural gas is from the ratio of gas to crude oil in current production and in the proved reserves. No attempt has been made to do this for the whole world for which gas statistics and reserve estimates are largely lacking; but for the United States the net gas production during 1955 was 10.1 trillion cubic feet and the crude-oil production was 2.42 billion barrels, giving a production gas-oil ratio of 4200 cubic feet per barrel.

The proved reserves of gas and oil for January 1, 1956, as given by the American Gas Association (1956) and the American Petroleum Institute (1956), are 224 trillion cubic feet of gas and 30.0 billion barrels of oil, respectively. This gives a gas-oil ratio of 7500 cubic feet per barrel.

Assuming the ultimate potential oil reserves of the United States to be 150 billion barrels of which 52.5 had been produced by January 1, 1956, leaves 97.5 billion barrels still to be produced. Then, if we use the gas-oil ratio of current production, we obtain 410 trillion cubic feet of gas as the future reserve. If we assume the ratio of 7500 cubic feet per barrel, obtained from proved reserves, we obtain a future reserve of 730 trillion cubic feet. Adding to these figures the cumulative production of 130 trillion cubic feet tnen gives as the ultimate potential gas reserve of the United States a low figure of 540 or a high of 860 trillion cubic feet. Of these figures the latter appears the more reliable since the reserves represent a much larger sample than the annual production. It also compares more favorably with the estimate of 750 trillion cubic feet recently made by Pogue and Hill (1956) of the Chase Manhattan Bank, and is in substantial agreement with the figure of 850 trillion cubic feet given by Pratt (1956). Pratt’s figure of 850 trillion cubic feet is accordingly the one that is here adopted.

On the basis of the relative magnitudes of the Texas rate of production and proved reserves as compared with those of the United States, an allotment of 40 percent of the total reserves of the United States to Texas appears to be of a proper order of magnitude. This would then give for Texas an ultimate potential reserve for crude oil of 60 billion barrels and 340 trillion cubic feet for natural gas. If the figure of 40 percent should be too low and the actual ratio more nearly 45 percent, then these reserve figures would be increased proportionately.

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Oil Shales and Tar Sands.—The oil obtainable from oil shales in the United States has been taken to be 1000 billion barrels. This is based upon a revised figure recently released by the United States Geological Survey (cited in The Oil and Gas Journal, February 13, 1956, p. 83) of 900 billion barrels of oil for the shales of Colorado. A. C. Rubel (1955) has recently made a review frcm published literature of all the bituminous shales of the United States which are potential sources of oil, and has arrived at an estimate of a possible 2.5 trillion barrels of oil obtainable from shale.

Outside the United States oil shales are present in various countries; but, with the exception of the shales in Brazil, the magnitudes are negligible compared with those of the United States. The oil shales of Brazil are reported to be of about the same magnitudes as the earlier estimates for those of the United States, which would suggest an oil content of the order of 300 to 500 billion barrels.

The largest known deposit of tar sands in the vorld is that of the Athabaska tar sands in northeastern Alberta, Canada. The extractable oil content of these sands is still not accurately known, but current estimates range from about 300 to 500 billion barrels of oil. As compared with this the readily minable tar sands of the United States would yield only about 1 billion barrels of oil (U.S. Geological Survey, 1951), with a few billion barrels more obtainable from the less minable deposits.

Other large deposits of uncertain magnitude exist in eastern Venezuela and in Mesopotamia. Making liberal allowances for the possible magnitudes of these, Ayres and Scarlott (1952, p. 75-76) have ventured as an educated guess that the total oil obtainable from the tar deposits of the world might be as much as 800 billion barrels.

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Energy Content.—The relative magnitudes of the initial world reserves of all the fossil fuels reduced to a common energy unit of measurement are shown in Figure 16. It will be noted that of all the fossil fuels initially present the recoverable energy of coal represents 70 percent of the total, oil and gas about 14 percent, oil shale about 10 percent, and tar sands about 6 percent.

A corresponding chart of the fossil fuels of the United 15 States is shown in Figure 17. The total of 8.5 X 10 kw-hr of heat for the fuels of the United States represents about a third of the fossil fuels of the world. Again coal represents approximately three-fourths, oil shale about one-fifth, and oil and gas about 6 percent of the total, with one-quarter of the oil and gas already consumed.” M. King Hubbert, Nuclear Energy & the Fossil Fuels; Introduction & Chapter One