Archive for the ‘Energy and Oil’ Category
Thursday, July 22, 2010 | Written by Jacob Dearolph
Posted under: Economics, Energy and Oil, Government |
Tags: bp, Congress, obamacare, Oil, small business, Tax Increases, Taxes, Us Government |
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Oil Spill Numbers and Small Business 
- According to official US government figures, more than 270,000 barrels of oil (11.3 million gallons) have been burned in controlled operations since the start of the spill in April.
- That is more than all the crude that spilled into the seas off Alaska in the Exxon Valdez disaster in 1989.
- 270,000 Barrels of Oil Burned – at 78.90 a barrel that’s $21.3 million up in smoke
- The US government also said that some 34.6 million gallons of oil water had been recovered from the Gulf since the BP-leased Deepwater Horizon exploded and sank in April.
- $65.2 million saved in oil recovery
- $3.12 billion spent on cleanup by BP
- $20 billion commitment by BP for damages controlled by Oil Spill Czar, Kenneth Feinberg. (Great article here – must read http://money.cnn.com/2010/07/22/smallbusiness/feinberg_bp_claims/index.htm)
Other Interesting Numbers on Small Biz and Entrepreneurship
- Small Business among highest rated institutions in which Americans have confidence – Ranked 2nd behind the military
- Congress and HMO’s at the bottom
- Loans to small business down 5.6% – $40 billion in 2 years (from $710 billion to $670 billion)
- House votes to spend $34 billion to extend jobless benefits
Tax Numbers:
(**Must Read Article – Tax Tsunami Coming)
- Tax increases starting in 2011 “the lowest bracket moves up 50% — to 15% from 10%. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.”
- Letting the Bush cuts expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.
- ObamaCare Tax – The Tax Policy Center, no right-wing group, says that the failure to index the AMT will subject 28.5 million families to the tax when they file next year, up from 4 million this year.
- ObamaCare Tax – “Small businesses can normally expense (rather than slowly deduct, or ‘depreciate’) equipment purchases up to $250,000,” says ATR. “This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be ‘depreciated.’”
Soucres:
http://www.google.com/hostednews/afp/article/ALeqM5hkmir-yGBuclKUXtje0SJQ1d9IKQ
http://money.cnn.com/2010/07/05/news/companies/bp_costs/index.htm
http://www.gallup.com/poll/141512/Congress-Ranks-Last-Confidence-Institutions.aspx
http://www.investors.com/NewsAndAnalysis/Article/541131/201007211841/The-Tax-Tsunami-On-The-Horizon.aspx
Tags: bp, Congress, obamacare, Oil, small business, Tax Increases, Taxes, Us Government | Posted under Economics, Energy and Oil, Government | No Comments
Wednesday, June 30, 2010 | Written by Jacob Dearolph
Posted under: Creativity and Ideation, Energy and Oil |
Tags: business idea, charity, gulf oil spill |
1 Comment
One of the concepts The Entrepreneur School teaches about creating a business idea is to look for opportunities created as a result of some change. The change could be in politics, trends, new products, etc… Even disasters open doors for entrepreneurs. Remember an entrepreneur is always looking to solve a problem or fill a need therefore change opens the door for just that.
Check this business out: OilSpillWater.com. They are selling oil spill water as a way of keeping the topic relevant for people. They are giving half of the sales dollars to different groups serving in the cleanup the oil spill. The other half goes to covering their costs. Basically they are offering something for a small “donation.”
This is a great business idea; it combines seeing opportunity in a time of difficulty, creating and maintaining awareness of the gulf oil spill, and providing funds to organizations working to help the environment. If you want to read more here’s an article by NBC Miami: South Florida Brothers Selling Oil Spill Souvenirs
Tags: business idea, charity, gulf oil spill | Posted under Creativity and Ideation, Energy and Oil | 1 Comment
Thursday, June 24, 2010 | Written by Erik Rostad
Posted under: Energy and Oil, General Thoughts |
Tags: backstreet boys, boycotting bp stations, bp, creed, korn, lady gaga, misguided response, oil spill |
2 Comments
The music bands Korn, Creed, Backstreet Boys, and Lady Gaga have all made the headlines recently calling for a boycott of BP stations. That’s interesting since these bands directly use a ton of gas each year for their tours and indirectly lead to the consumption of gas by concert-goers making their way to the shows. That’s not to mention all the plastic drink bottles used at the shows. Oil is necessary in the production of plastic bottles. If t-shirts are sold that contain any portion of polyester, this is also derived from oil.
But on top of all of that, boycotting BP stations does very little to hurt BP. That’s the conclusion from a NY Times article a few weeks ago. Instead of punishing BP, these misguided bands are actually promoting the punishment of small business owners around the country who own and operate the BP stations.
If these bands truly cared about punishing BP instead of small business owners, they would start with looking in the mirror. They would learn about ways that they themselves could decrease their oil consumption. They would then challenge their concert-goers to make better choices in their lives, such as living in smaller houses closer to jobs so that they can walk or drive. It’s easy to choose an Exxon station over a BP station but very hard to ride a bike to work instead of your car.
The hope is that these bands begin to realize that they are hurting small business owners instead of BP. We welcome your comments below…
Tags: backstreet boys, boycotting bp stations, bp, creed, korn, lady gaga, misguided response, oil spill | Posted under Energy and Oil, General Thoughts | 2 Comments
Tuesday, May 11, 2010 | Written by Kristin Diver
Posted under: Business Ownership, Energy and Oil, General Thoughts |
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I can’t believe what I am hearing from BP regarding the oil disaster in the Gulf of Mexico. It’s not their fault because they hired a contractor to do the work and it was the contractors, not BP, that made the mistake. So what can we small biz people learn from this corporate fiasco?
You shouldn’t run away from responsibility. Ever.
If it is your company and you hire someone to do a job, you can’t head for the hills and forget about supervising to make sure the job is being done the way you want. And if that person (or contractor) makes a mistake, you need to look at yourself first:
Photo: Reuters
- Did you teach them what they needed to know to do the job well?
- Did you check in to see if it was getting done as expected?
- If you noticed any slip-ups, did you address it immediately?
- Did you set up clear consequences if they continue to mess up?
- Did you communicate all this to them?
- Have you been slack with other employees and not followed through – so now no one takes you seriously?
Fine, BP’s contractor made a BIG, BAD mistake. But it is sad that BP is not stepping up and admitting their responsibility – they either hired a contractor that was under-par or they failed to supervise them well enough so that a disaster like this wouldn’t happen. A small business owner would not have the luxury of doing so, they’d just have to fold.
Posted under Business Ownership, Energy and Oil, General Thoughts | No Comments
Tuesday, November 17, 2009 | Written by Jim Beach
Posted under: Energy and Oil |
Tags: abiotic oil, hubbert's peak, oil forever, peak oil, scarcity myth |
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This lecture is entitled “The Scarcity Myth.” Today, we’re going to do Part Five, which is our final piece, discussing the thesis, “How we will never run out of oil.”
We’re on agenda item 9 today, which is “Proven Resources Are Undercounted.” Proven Resources is a phrase that has a definition, which is “oil deposits that there are current plans to extract.” In other words, if we know of oil, but have no plans to extract it at that time, if no oil company has announced that they are going to go drill and get that oil right now, that oil does not count as part of our proven reserves. This gives us billions and billions of barrels of oil that are not counted. Roger Bentley from the Association for the Study of Peak Oil and Gas said, “Proved reserves (43 years worth) have been very conservative (counted) indeed. They do not reflect the total oil that has been discovered, but only that small portion for which definite plans are in place for current access.” The SEC, the Securities Exchange Commission, which is part of the United States government, has very strict rules about what type of oil can be counted as part of your reserves. Of course, a company like Exxon is worth more the more reserves that they have. But the SEC does not allow you to count tar sand, polar oil, coastal oil, ANWR or deep-sea oil. Some of our best resources are not counted by the SEC, which severely limits how much proven reserves the U.S. has. Our proven reserves are vastly undercounted.
Remember, that Canada has three times as much oil as Saudi Arabia and none of that is counted! The United States has even more oil than Canada and of course it’s not counted, because most of it falls into the categories that are not counted, such as coastal oil and tar sands. The G7, the group of economic superpowers in the world, has pushed for greater transparency and has requested that the oil-producing super nations like Saudi Arabia be more open in their actual reserves. The Saudi response was very predictable; they said, “Western nations are not dealing with the oil producers as partners why should they have the advantage of knowing details of oil producers reserves data on reserves is information and information is power.” It makes sense that the Saudi’s would not want us to know how much oil they have. If we knew how much oil was really available, the price would fall dramatically.
Let’s look at undercounting of proven reserves on a country-by-country basis, Saudi first. One of the huge advantages that Saudi Arabia has is that oil only cost one or two dollars per barrel to produce. It’s almost like you could stick a straw in the ground and have oil come out. They have 80 known reservoirs with about 261 billion barrels, but that data is over 40 years old, which makes me wonder two things. Remember yesterday when we discussed how reserves are almost always undercounted at first? And secondly how the technological factor surely would allow us to find more oil than the 261 billion barrels that they quote? Currently Saudi Arabia is just using 11 of their 80 known reservoirs. Why would they use all of their reservoirs? The market would literally be flooded with oil and the price would plummet. In December of 2004, the Minister of Petroleum and Natural Resources announced that in fact that the 261 billion barrels was really 461 billion barrels! Even Saudi Arabia has been dramatically underestimating the amount of oil that they have. And the final kicker: there has been no exploration in Saudi Arabia for the last 35 years, because they don’t need to find any more oil. Why spend the money to find it when that would suppress the market price?
Other countries are also dramatically underestimating how much oil they have. Iran claims to have about 125 billion barrels, but outsiders believe that it is actually closer to 500 billion barrels. Iraq was thought to have 115 billion barrels in reserve and after the United States oil companies entered after the war that number was determined to be 467 billion barrels. The Gulf of Mexico was originally estimated to have around 6 billion barrels, and it’s already produced 13 billion barrels, and it’s still going. Yesterday we said that it may have as many as 1 trillion barrels of oil, but again they’ll were not counted because of the regulations of the United States government. Prudhoe Bay in Alaska originally was estimated at 9 billion barrels, but so far it’s produced over 15 billion barrels and is still going.
Tupi field in Brazil was originally estimated at 5 billion barrels (in 2007) and when drilling began they discovered that it really had closer to 30 billion barrels. The same is true in Italy where they underestimated by 400%, and the United States Geological Service estimated that in North and South Dakota there were 151 million barrels of oil. They changed their estimate to over 3 billion barrels of oil.
Agenda item number 10: proven reserves are uncounted. We just gave you a definition of what proven reserves are and obviously we’re not counting a lot of things. We’re not counting the 1.6 trillion barrels of Canadian oil shale. We’re not counting any of Venezuela’s heavy oil, because it falls outside of the definition the United States rules. Western states oil shale of several trillion dollar barrels is not being counted. Trillions of barrels that are not counted.
Agenda item number 11: oil is being priced in the depreciating commodity, the dollar. For every barrel of oil that you sell today you get less dollars than you did say 2001. As the dollar continues to weaken, the cost of oil goes up and it becomes more expensive, in dollars, to buy a barrel of oil. So when people say that the price of gas is going up, it is not because of Saudi Arabia, it is not because of the war in Iraq. The price of oil is going up is because President Bush and Pres. Obama, both Democrat and Republican, have let the dollar become so weak, which makes our gas more expensive. If you’re at the pump and you’re upset about the cost of gas, get mad at both political parties.
Finally, I want to sum up with a discussion of in whose interest it is to tell us the truth. This is agenda item number 12. Who has a reason to tell us how much oil that we have? If it were common knowledge that there were trillions of barrels of oil, we wouldn’t pay four dollars a gallon. Europeans wouldn’t pay seven dollars a gallon. The price would plummet. Governments also make a tremendous amount of their revenue based on taxing gasoline, and it is usually based on a percentage of the sales price. The governments of the world like it when the price of oil goes up, as they make more money. Pres. Obama has even announced that he hopes that the price of gasoline doubles. This is for environmental reasons, but is also for tax reasons.
Interestingly, OPEC doesn’t want the price to get too high, because if the price of oil gets too high, then the Western industrialist entrepreneurs are encouraged to start looking at other energy alternatives. So Saudi Arabia and OPEC will work very hard to keep oil somewhere within the $50 to $100 per barrel range. This brings up one of the most interesting points, that the oil industry’s biggest worry is over abundance, not scarcity. In the 1980s, oil prices plummeted. One of the reasons is because for the first time ever we instituted conservation programs. As I said at the very beginning of this, five days ago, I am an environmentalist. I’m in favor of conservation. I’m in favor of cars having high miles per gallon. Conservation makes oil prices plummet.
Our final vested player is the oil industry. Judging from their profits, it is clear they are doing well. There’s no incentive for them to do anything except to support high cost of gas. They also generally make a percentage of sales price, meaning high prices help them as well.
OPEC wants the price to be high. Governments want the price to be high. Oil companies want the price to be high. Everyone makes more profit because of the supposed looming shortage. It justifies high prices. High prices will only be paid if you think you’re going to run out of oil.
We have come along way in the last five days. The number one thing that I hope I’ve opened your eyes or is a possibility that we may never run out of gasoline. Clearly, we are playing games when it comes to counting the amount of gas that’s available, but more importantly I think it’s safe to say that my grandchildren’s grandchildren’s grandchildren’s grandchildren will have plenty of oil to run their cars and they heat their houses.
In about an other month, I’m going to have another lecture series, this one on global warming, which I’m sure will be just as controversial as this oil scarcity myth lecture series.
Have a great day.
Tags: abiotic oil, hubbert's peak, oil forever, peak oil, scarcity myth | Posted under Energy and Oil | No Comments
Monday, November 16, 2009 | Written by Jim Beach
Posted under: Energy and Oil |
Tags: abiotic oil, oil scarcity, peak oil, refilling oil fields |
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This is part four of our lecture series, “The Scarcity Myth.” Last time we were together, we were speaking about abiotic oil, and the possibility that oil is not a fossil fuel. Today, I’ll present some of the most exciting evidence that supports this theory.
We’re on agenda item 6 if you’re following along on the slides. Oil fields are renewable! One of the most interesting things that I’ve learned in my study of oil is that oil fields that are declared empty frequently all of a sudden full again. Of course, this doesn’t make much sense, especially if we believe in a fossil fuel theory, where old swamps and dinosaurs are compressed over time and turn into gas. But if we believe the abiotic oil theory, that oil is simply seeping out of the middle of the earth, this theory becomes much more believable. Take for example the Eugene Field in the Gulf. It began production in September of 1972, but by 1989, production had fallen to about 4000 barrels per day. Suddenly without any explanation that jumped to 13,000 barrels per day and scientists were called in to re-measure the field. It was estimated to have 400 million barrels of oil left, up from only 60 million barrels a year earlier. The Wall Street Journal reported that Eugene “is rapidly refilling itself.” Since then, the field has produced over 1 billion barrels of oil, all from an oilfield that at one time was almost empty.
This was confirmed by the Woods Hole Oceanographic Institute (WHOI). For those of you who do not know about WHOI, it is the organization that discovered the Titanic (Dr. James Ballard). Of course, they’re one of the preeminent geological and oceanographic groups in the world, and one of their scientist Dr. Whalen declared, “I believe that there is a huge system of oil migrating deep underground” that explains how these types of fields could refill themselves. This phenomenon is not limited to the Eugene Field, as it has been seen all around the world, in the North Sea, in the Niger Delta, in Indonesia, in the Trinidad basin, the Taiwanese basin, and in the Alaskan North Shore. Amazingly fields that are declared empty are refilling and of course this only goes to support they abiotic theory. Nothing else could explain how this could happen.
Moving onto agenda item number seven, depleted fields. We have many examples of fields that are declared empty, and all of a sudden have oil. My favorite example is the Kern River, California example. That field was discovered in 1899 and in 1942 it was declared empty with 54 million barrels remaining. Sometimes, technology does not permit a field to be entirely drained and that’s what happened with the Kern River field. Since 1942, 736 million barrels, that’s three quarters of a billion barrels of oil, have been pumped out, and now they estimate that there are 970 million barrels left. How can this be possible? The only way that makes sense is if the field is refilling itself from underneath! This is also happening in the South China Sea off of Vietnam. The field was declared empty their 1981 and it is still producing. The White Tiger field off the continental shelf, where they dug a little bit deeper and went down to 2.5 miles, is now producing 280,000 barrels per day. The Black Island field was producing 80,000 barrels per day, but that recently increased to 200,000 barrels per day. In all of these fields, they are drilling in a granite base, not in sedimentary rock. How do we explain this? Well, the only explanation of course is that the oil is coming from someplace other than fossil remains.
Agenda item number eight; the fields that we have are also growing in size. This is an incredibly unintuitive thing to realize and to discuss, but it’s true. For example, we have the Kashagan field in Afghanistan, which was discovered in 1996. At that time, it was estimated to have 2 to 3,000,000,000 barrels of oil. Wells were dug. They discovered that it actually had 13 billion barrels and now they estimate that it has 38 billion barrels. In other words the amount of oil in a given field is increasing as we technologically learn how to extract it.
From 1981 to 1996, the volume of the largest 180 oilfields of the world went from 617 billion barrels to 777 billion barrels, and this does not count any of the new discoveries that we were talking about couple of days ago. For 15 years, while we were taking oil out of these fields as fast as we possibly could, the amount of oil in those fields increased by over 150 billion barrels! Again, I ask how is this possible? The only possible way is that oil is coming from the center of the earth, and somehow being released to the surface areas.
The recovery rate 20 years ago was around 20 or 30%. Today, we’re getting closer to 40% of the available oil out of each field. A good question is, “How much higher will that go in 30 years? Is it safe to say that we’ll be able to get 50%?”
In the 1990s, we were starting to believe that the Gulf of Mexico oilfields were drying, but in 2006 geologists announced that there were 1.5 trillion barrels of oil left in the Gulf of Mexico. The Wall Street Journal reported on April 30, 2009 that the northern Louisiana fields, also declared empty at one point, now had about 200,000,000,000,000 ft.³ of natural gas, which is the equivalent of 33 billion barrels of oil!
Tomorrow, we’re going to finish up in this talk with a little bit about the political reasons for all this. I hope that at this point you’re fairly convinced that the abiotic oil is at least a possibility. Have a good day.
Tags: abiotic oil, oil scarcity, peak oil, refilling oil fields | Posted under Energy and Oil | No Comments
Friday, November 13, 2009 | Written by Jim Beach
Posted under: Energy and Oil |
Tags: abiotic oil, end of oil, oil depletion, oil production, scarcity of oil |
No Comments
This is part three of our lecture “The Scarcity Myth,” and the thesis of this lecture is very simple, 
that oil is not a fossil fuel and that therefore we are very unlikely to ever run out of it. In the last two days, we did a lot of background work building up to today’s lecture which is actually the meet of the entire presentation. We’re on agenda item 5, which is, “Is oil truly a fossil fuel?”
Let’s dig right in. Since the 1860s, when oil was discovered, the belief has been that oil is a fossil fuel, which comes from decaying swamps, dead dinosaurs, and primordial growth that was compacted over millions of millions of years and turns into oil. This is, of course, the fossil fuel oil theory. I think many of you would be very surprised to know that there are other theories about where oil comes from, and interestingly enough, some of these other theories have evidence to support them, while in fact there is no evidence to support the fossil fuel theory.
The other major theory of the origin of oil is called the “abiotic oil theory,” abiotic meaning “not bio related” The abiotic oil theory was proposed in the early 1930s and studied more than 1940s in Russia. Russia, at the time, was considered a very poor prospect for oil, because they had the wrong type of rock. My understanding is that there are three types of rock; sedimentary rock coming from sediments (in other words, the swamp and dinosaurs that are compressed over time), igneous rock which is rock that is from the inner core of the earth where it is heated tremendously over time and cools when it reaches the surface, and metamorphic rock.
Anyway, Russia has very few areas of sedimentary rock, not many areas where the dinosaurs supposedly decayed. In 1951, a Russian professor named Nikolai Kudryavstev proposed that oil is in fact abiotic and comes from material that the earth exudes on a continual basis. In other words, the center of the earth is continually creating oil that bubbles to the surface and collects in the pools that we then drill into. Of course, this theory was dramatically different from the fossil fuel theory and so it was dismissed by Western scientists, but in the Soviet Union, several thousand scientific journal articles have been published supporting this theory. Chemists, physicists and geologists have found strong evidence that this abiotic oil theory is accurate, and now believe it or not Russia, is number two in the world in the production and extraction of oil. They have achieved something that the United States has been unable to achieve, oil independence.
Proof of this is has been found in basins drilled in the Ukraine, where in the Dnieper – Donestak Basin, oil was found. The area was declared empty in 1950, after extensive study found no potential at all of petroleum production, due to a lack of sedimentary rock. Based on the beliefs of the Russian scientist, they drilled anyway and have since extracted 395 million barrels of super-deep oil. Paleontologists have done an analysis of the oil and there are micro-fossil traces in the oil that date from an earlier geological era. The oil that they have found here in the Ukraine is older than any of the dinosaur’s geologic time! How could that be possible? The only way that it’s possible is that the oil came from some other source than from sedimentary decay.
Scientists are getting closer to proving the abiotic oil theory. They have spent a lot of time studying the fossil fuel theory, which says that oil comes from the boggy primeval forest that rotted it was compressed into sedimentary rock. Western scientific literature has never explained to the dinosaur to oil theory and there are so many questions that this theory raises. Did all of the dinosaurs die in one place? Were there massive amounts of dinosaur death in Texas, Alaska, Saudi Arabia and the Middle East only? What about Montana? Montana is one of our richest sources for dinosaur remains but there’s no oil there. How come the fossil fuel oil theory has never been proven, though it’s been studied extensively, while on the other hand, the abiotic theory has lots of evidence to support it?
One of the most interesting bits of evidence is from Sweden. In 1990, the Swedish dug a super deep well in the Siljan region. The hole was much deeper than normal oil wells to study this exact phenomenon. The Siljan area contained absolutely no sedimentary rock, but at a depth of 4 miles, oil was discovered. The important thing is that oil was below any possible source of biological material, which proves the abiotic theory. Fossils are not needed for oil to be produced. The Soviets were able to replicate this experiment in the Kola Peninsula, and achieved the same results after super deep drilling. Oil was discovered below any possible source of biological material.
Please listen to the Podcast at this point to learn about several scientific studies prove the abiotic oil theory.
But before I close today, I want to ask my environmentalist friends a couple of questions. I’ve gotten quite a few e-mails in the last day or two trying to argue with me over some of my ideas and some of the things that I presented about oil. All of the people that are arguing with me seem to think that I’m crazy or doing something wrong for proposing that oil will in fact last forever. And my question is, “Why aren’t you excited that we’re going to have oil forever? What’s so bad about the idea that oil could last for millions of years? Is it because you don’t want to validate because you’re against advancement? What’s the bad thing about oil being an infinite supply?” You are acting like that is something that’s detrimental to the world, when in fact it seems to me that having energy for thousands of years will only help us alleviate poverty, will only help us produce food for people that are starving, will only let us help keep people warm during the winter so that they don’t freeze to death. It seems to me that the only possible outcome of having lots of oil as our economies being strong. That we can solve some of the world’s problems. Is is bad?
The book at the upper right, Black Gold Stranglehold, is great on this topic. Tomorrow, we’ll talk about renewable oil fields and some of the other exciting evidence that supports the abiotic oil theory. Have a great day!
Thanks for the emails I have been getting, on both sides….
james.beach@att.net
Tags: abiotic oil, end of oil, oil depletion, oil production, scarcity of oil | Posted under Energy and Oil | No Comments
Thursday, November 12, 2009 | Written by Jim Beach
Posted under: Energy and Oil |
Tags: abiotic oil, energy, oil myth, oil scarcity, oil shortage, peak oil, running out of oil |
7 Comments
Welcome to Part Two of our lecture called “The Scarcity Myth.” Yesterday, we talked a lot about
some introductory ideas, the idea that we have a long history of predicting the end of oil and we talked a little bit about how much energy we already have here in the U.S. If you refer to our podcast or the posting from yesterday, you’ll see that in fact the United States, and indeed the world, has hundreds, if not thousands, of years of oil left. This leads to a really interesting question “How does oil get created and how could we have so much of it?” How is it possible that we have an infinite supply of oil? I will discuss that tomorrow.
Today, I wanted to talk about points three and four of our agenda (please refer to the slides for the agenda). What do Americans want? We are told by our politicians that Americans do not want us to go and get the oil that we have, that Americans are happy with the situation the way it is. Drilling in the U.S. is out of favor. In fact, 71% of Americans are in favor of increased energy supplies and 75% believe that we should increase our drilling here in the United States immediately. These numbers are contrary to what you hear on the TV or see in the newspaper. Most people here in America believe that we should go and get the oil that we have. 71% of Americans support drilling in coastal areas, even with the threat that there could be a spill. However, let me remind you that in the Prince William Sound in Alaska when the Exxon Valdez crashed, we cleaned it up, and now it is as beautiful as it ever was. And after Hurricane Katrina went through the Gulf of Mexico, not one of those oil rigs had any spills. It seems quite clear that coastal drilling is safe.
59% of all Americans support drilling in Alaska’s ANWR region. We talked yesterday about ANWR. It’s a small tract of 2000 acres in Alaska that would produce years of gasoline for us and with the Prudhoe Bay experience and the Alaska pipeline experience of the 1970s, we have proven that we can very safely get oil out of Alaska. 75% of Alaskans support drilling in ANWR, which is really a quite overwhelming number.
Moving along to other forms of energy, just to get some perspective. 65% of Americans support building more nuclear power plants. As we talked about yesterday, not a single person in the Western world, and I’m including Japan, because they use a lot of nuclear power, not a single person has ever died from nuclear power. Coal causes lots of asthma related deaths or lung. We certainly have gasoline related deaths every year, but not a single person has died from nuclear power, and 65% of all Americans support building more nuclear plants. The question is again, “Why do we not do it then?” Because of the environmentalists, who fight every new plant. There’s that famous expression NIMBY, which stands for “not in my backyard.” Everyone would support a nuclear power plant as long as it’s thousands of miles away from their home.
71% of Americans support more clean coal power plants right now. Coal supplies a huge part of our electrical supplies. The new technologies for clean coal, when waste is trapped the emissions buried in the ground, is a really exciting prospect. The possibility of having super clean coal power plants that provide us the electricity for homes and pretty soon will provide the electricity for our electric cars, such as the Tesla and of course the Chevrolet Volt that are coming out in 2010.
Listen to the Podcast for a long discussion of my views on the environment, and the history of environmental protection. Also, I allude to my next lecture series, which examines global warming.
Agenda point number 4: a word about the environment. Can we drill safely? Yes, offshore drilling is done safely. We have had no major spills since 1980. From offshore drilling there is a .0001% chance of a spill for every well that we have. For every billion barrels of oil that is transported there are just .73 spills, an infinitesimally small percentage. And they’re really good at cleaning those up the few spills. Just remember hurricanes Katrina and Rita that ravaging through the Gulf of Mexico. Two category five hurricanes, back to back, and not a single oil well spill as a result.
Alaska and the ground-based drilling are also done safely. In 1980 Prudhoe Bay had 5000 caribou. Today there are 30,000 caribou. As I said yesterday, I have personally stood on the Alaska pipeline and the animals love it. It does not harm the animals. The animals like it because they can scrape up against it and sometimes when it’s really cold they stand underneath it for protection. Alaskan drilling has been done safely now for the last 30 years and there has only been one major catastrophe and we cleaned it up pretty well.
Here’s the big question: this is what it really comes down to, would you rather have China or the United States drill for oil? If you want to do something interesting, Google Beijing Air and see what you come up with. Or Beijing pollution. You will see that the air in Beijing is some of the worst in the world. The Chinese government has not yet endorsed any sort of environmentalism or any sort of environmental protection. They would drill for oil in a way that would be bad for the environment, but with American safeguards and American technology, we can drill for oil safely and cleanly. So not only is there the terrorist question, the issue of the tax dollars, the issue of us exporting all of our money overseas to governments and religions that hate us, there’s also the idea that if we were to become energy independent and drill for oil right here in the United States, the world would be a cleaner place. The environmentalists don’t go to Saudi Arabia and try to get them to stop drilling for oil. Only here in the United States, which really makes me wonder what their motives are.
Of course, the answer is we should drill for oil here in the United States, where we can do it in an environmentally friendly way.
We are now ready for agenda item 5, and this is probably the most exciting part of this lecture series, but unfortunately we’re going to do it tomorrow. Agenda item 5 asks if oil really is a fossil fuel or not. I will summarize some of the scientific research that says in fact oil is not a fossil fuel. It does not come from decaying dinosaurs and I will explain to you how we actually get it.
Tags: abiotic oil, energy, oil myth, oil scarcity, oil shortage, peak oil, running out of oil | Posted under Energy and Oil | 7 Comments
Wednesday, November 11, 2009 | Written by Jim Beach
Posted under: Energy and Oil |
Tags: oil forever, oil myth, oil scarcity, run out of oil |
1 Comment
Slides and Podcast at bottom….
Today, I want to do something a little bit different and instead of talking about entrepreneurship, I want to give you one of my most popular lectures. The Podcast has more detail than this write-up…..
This lecture is about oil and it’s called “The Scarcity Myth.” The thesis of the lecture is that we will never, in 1 billion years, run out of oil. I know that everyone off the top of their head thinks that this is a crazy idea, but I hope that I can convince you that, in fact, oil is a commodity that is as plentiful as air and something that is God-given for us to use. I will divide the lecture into two or three different days, because it’s quite long.
I want to talk a minute about the different things that I will be discussing in this lecture. Please see “the agenda” in the slides.
So let’s dig in, first with a little bit of background. I want to make it very clear that I am an environmentalist. I love the environment. I love going outdoors. I love waterfalls and fields of green grass and trees. I live in a place that has as many trees around it as possible, so I look out my window and see beautiful trees. I love the fall. I love snow skiing and I love being out in the wilderness. I consider myself an environmentalist, however, I also consider myself a realist. I believe in economic growth. I believe in having enough energy to survive and to have a good economic system in an expanding economy. So many assume that environmentalists are only the people who care, but many times they are in favor of stopping economic growth.
Some more background: a couple of statistics just to get these out on the table. Please see the slides or refer to the Podcast for more detail. Is it possible today that science is wrong when it talks about fossil fuels? Are we so arrogant to believe that just because we’re in the 21st century that we’ve gotten it right and it couldn’t be wrong?
Finally, the Department of Energy the Department was created by Jimmy Carter in 1977, with the goal being to lessen our dependence on foreign oil. Of course that hasn’t happened at all, and they now spend $24 billion a year with 16,000 employees and another hundred thousand employees on contract. Could anyone tell me what the Department of Energy does? It certainly has not been filled its goal of decreasing our dependence on foreign oil.
So let’s move now to our first point, reviewing the history of predictions for oil’s end. Please see the slides of listen to the Podcast to see all the prediction’s for Oil’s end. In short, we’ve been predicting that we were to run out of oil since the day we discovered it. Pay particular attention to a Shell employee named Hubbert. He came out with the idea that there is a bell curve of production and that we are very quickly approaching the peak of oil production. He proposed that we would start having decreasing oil production in the 1970s, and it was proven true for the United States. Since the 1970s, we have been producing less and less oil in the United States, but that raises the question, “Why are we making producing less oil in the United States?” Is it because we are running out of oil or is it because the environmentalists won’t let us drill anywhere and get the oil that we do have here in the United States. We will hear a lot about Hubbert and his famous peak theory later.
Colin Campbell wrote a book called “The Coming Oil Crisis” and in that book he predicts “war, starvation and economic recession, possibly even the extinction of Homo sapiens” – the human beings. All because we’re going to run out of oil. My question then is, as I wrap up point number one, is when do these people ever get held accountable? Do we ever go to the oil intelligencia and say guys “You’re just wrong. You predict that oil will run out, but you have no evidence.” I love the quote from Prof. Adelman of MIT who says “that just as the Stone Age did not end for a lack of stones, the oil age will not end because of the scarcity of oil.” My thesis is again that we will never run out of oil.
There is something called the life index which is the ratio of proven reserves to current production. Or at the current grade of use, how long will it take us to use up the amount of oil that we have. In 1948, that life index was 23 years. Today most geologists believe that the life index is 43 years, or that we have about 43 years of oil left. We’re going to look into that number and see if we really believe it.
How much energy do we have now? How much oil and other energy sources? First let’s look at oil in 1980 (see above). We had about 600 billion barrels of oil left in the world. Of course since 1980, we all been driving around, heating houses, using up tons of oil in our cars, using oil to produce all the plastics and paints and so if any of the environmentalist or the oil geologists are correct, we should have less than 600 billion barrels of oil today. In fact today, we have about 1.2 5 trillion barrels of oil left. In other words for the last 25 years we’ve been using oil at an incredible rate, but you know what, we have more oil today , double the amount, that we had in 1980. When was the last time an oil company told you that?
Every year, proven reserves of oil is increasing by about 3.75 to 4%. Every year we find 4% more oil. If you read the paper, you see it all the time. They just discovered a huge tract of oil off the coast of Brazil which may have as many as several trillion barrels. In the Gulf of Mexico, they now think there could be several trillion barrels of oil. Montana officials just announced that they’ve discovered huge tracts of oil. We are finding more oil all the time, but of course they don’t want you to know that because if you knew that they were finding oil all the time, would you pay four dollars a gallon?
Then the question then is how fast are we using it up? Every year we use about 2 to 3% more than we did in the preceding year, and 2 to 3% is less than 4%, which means the amount we have left over is increasing every year at 1 to 1.5%. We have more oil every year even though we are using more oil, and that’s just counting the liquefied form. We also have 6000 trillion cubic feet of natural gas and that amount has gone up 10% since 2004. I don’t even know what 6000 trillion is called, is that a bazillion? A zillion? They have buses that run on natural gas here in Atlanta, the Marta buses. Lots of them run on natural gas and we have 6000 trillion cubic feet of it, and we’re concerned about running out of energy!
The United States has 31 billion barrels of oil and 231,000,000,000,000 ft.³ of natural gas on federal lands, not in the entire United States, but just on federal owned land. In addition to that, the United States has about 15 billion barrels of oil and 60,000,000,000,000 ft.³ of gas offshore in areas that current government policies prevent us from exploring. And this is amazing! The United States has 86 billion barrels and 420,000,000,000,000 ft.³ of gas offshore that is currently under explored. In other words that is oil and gas that is we know is there but we’ve made no plans to go get it.
This brings up a really important point. We have 43 years of proven reserves. Proven reserves is a phrase with the definition. Words have definitions. Proven reserves is a phrase with a definition: if there is not an oil well drilled into the oil basin, it does not count as part of proven reserves. We have almost 100,000,000,000 barrels of oil not allowed by the rules of our government to be counted.
In the continental United States, we have, in addition to the figures I was just talking about, something called oil shale. Oil shale is basically dirty oil, oil that has earth mixed into it. Sometimes rock has to be taken out of it. Up in Canada right now T. Boone Pickens is doing a tremendous amount with oil shale. You go and dig up an entire acre of land to send it through a huge machine, extracting oil from it and then you put the dirt back into the hole. Some environmentalists hate this process because it is very, very destructive to the earth, but you know what nothing grows in oil shale. It’s too dirty for plants to actually exist there. Once you take the oil out and put the dirt back into the hole, you end up with usable land and environmentalist are upset! Colorado, Wyoming, and Utah have 800 billion barrels of oil shale, which is more than all of the oil in Saudi Arabia!! And we’re told that we could not be energy independent!! The United States could be energy independent if we wanted to. Also this oil can be profitable at about $25 a barrel. Right now we’re paying $60 or $70 a barrel.
ANWR is the Alaskan oil reserve, the big fields in Alaska that you hear about in the news all the time. ANWR has 10.4 billion barrel barrels of oil, or twice the amount of Texas, and is currently illegal for us to go get. The proposals ask for 2000 acres, which is less than the size of your average airport, 2000 acres of the 19,000,000 acre preserve will be used to drill for oil. And look at the revenue that would be created by drilling in ANWR. Billions of dollars for the government to spend and a trillion dollars that would not leave the US and support terrorism. This is true for all of Alaska. Billions of barrels of oil that we are not allowed to get.
To learn about the role of methane, coal and nuclear power, please refer to the Podcast.
That’s all for now. I will continue to build my case tomorrow. And listen to the Podcast, as it has more detail than this blog…
Tags: oil forever, oil myth, oil scarcity, run out of oil | Posted under Energy and Oil | 1 Comment
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