Brazilian Oil Find

[Snaquebite]

I'm wondering what this will do to possibly reshaping some of the political and economic agendas/strategies in the US and other countries. Wonder what might be going through Chavez's mind about his highly vocalized anti- American opinions.

http://www.foxnews.com/story/0,2933,309869,00.html

SAO PAULO, Brazil — Brazil's state oil company said Thursday that it has discovered as much as 8 billion barrels of light crude in an ultra-deep field off the coast of Rio de Janeiro, an amount that could help transform the country into a major world oil exporter.

Petroleo Brasileiro SA's announcement that the Tupi field has between 5 billion and 8 billion barrels of recoverable light oil sent Petrobras shares soaring 26 percent in New York, to a close at a new 52-week high.

[Ret10Echo]

What's going through Chavez's mind....

" I wonder how capable my horizontal drilling technology is?"

[rubberneck]

If we really had our act together we would be trying to develop cheap methods for getting Oil out of Canadian sand. Western Canada has vast oil reserves (second only to Saudi Arabia) trapped in the sand but no efficient way of getting it separated. It would be nice to send our petrol dollars north of the border instead of to some openly hostile or duplicitous regime for a change.

http://www.energy.gov.ab.ca/OurBusiness/oilsands.asp

edited to add: that we have an estimated 12 to 20 billion barrels of oil trapped in the sands of Utah and have done little, if anything to mine it. I doubt we ever will with the likes of Al Gore running around the country dumping on "big oil"

[incommin]

It would be nice to drill in Alaska and off the Florida coast too.... but the tree huggers would rather see our economy tank than "harm the environment"....

Jim

[bravo22b]

I read this article the other day:

http://money.cnn.com/2007/10/30/magazines/fortune/Oil_from_stone.fortune/?postversion=2007103105

Something I had not been aware of before, and certainly something that could might help get us closer to "energy independence", if that is in fact even possible. It sure would be nice to be able to drive around without putting money in the pockets of those who wish us ill.

Another news piece that I heard the other day was a discussion of where the "break even" point is for different oil-producing countries. Somewhere around $50-60/barrel, Hugo Chavez starts losing money. Venezuela has the second highest cost to produce behind Nigeria at appx. $62/barrel. The cost for Venezuela seems likely to go up, as not many are willing to invest in the oil infrastructure for fear of losing their investment to nationalization.

It's probably a pipe dream that prices will go that low again, I suppose. China or India is certainly redy to pick up any slack in the market even if we were able to reduce our demand for imported oil.

[nmap]

The details of the find illustrate the underlying problem with all of the various solutions:

The Pre-Salt rock consists of reservoir that is found under an extensive layer of salt, which extends from the state of Espírito Santo to the state of Santa Catarina. The formation is more than 800 kilometers long and up to 200 kilometers wide, and is located in ultra-deep waters of between 1,500 and 3,000 meters and burial between 3,000 and 4,000 meters.


LINK (http://www.agenciapetrobrasdenoticias.com.br/materia.asp?id_editoria=8&id_noticia=4038)

The deposit is deep, and it will be costly and challenging to develop.

The real problem is, "costly" has two dimensions. The less important one is money. The deeper issue is EROEI - Energy Returned on Energy Invested. If it costs the energy equivalent of 2 barrels of oil to extract 1 barrel of oil, there is a net energy cost. For example, a business that produced a product which cost $2 to make then sold that product for $1, it wouldn't survive very long.

This is where the tar sands and shale deposits come in. They cost a lot of energy (again, this is completely apart from money) to produce. Tar sands, by the way, use natural gas in the extraction process, and lots of it. Lots of U.S. homes are heated with natural gas, and quite a number of electricity generation facilities use natural gas. But U.S. natural gas is depleting, and shipping in LNG is expensive. Not good for the future.

As if that weren't enough, the flows tend to be low. Every little bit may help, but there simply isn't enough flow from any of these sources to fuel the economy.

This is the challenge of our oil situation. We've built up a dependency on oil, often from foreign sources. Replacing oil with some other substance is going to be a very difficult project. (Don't take my word for it - the Department of Energy has a 91 page report on the subject: LINK (http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf) )

By the way...purely my opinion...but the current runup in price on crude oil is only the first few clouds on the distant perimeter of a force 5 hurricane. In a few years, oil may well be priced in the hundreds of dollars per barrel. We appear to have peaked.