[Rhodes22-list] Opinion on the Pickens Plan - non sailing, non political, educational

Thu Aug 14 22:52:50 EDT 2008

Mike,

I don't spend that much time these days staying current on marginal well
issues at $100+ per barrel oil.  There are no bargains out there on oil
leases right now.  The good news is that the "stripper well" industry is
alive and well.  I'm not a big fan of the DOE but they have done some
beneficial research in the marginal well area - here's their site dedicated
to small producers-

http://www.energy.psu.edu/swc/

One of the biproducts of bio-diesel production is lots and lots of
glycerin.  The glycerin market is pretty depressed and so I had this bright
idea of using it as an emulsifier in a waterflood experiment.  The lease I
was looking at had one well with a deviated rod-string that was a problem
child anyway and would have been a perfect candidate for the experiment.
You are welcome to "run the concept up the flag pole".  The DOE hasn't done
much with the idea.  If you become a billionaire, you owe me a beer!

Brad

On Thu, Aug 14, 2008 at 9:25 AM, Mike Cheung <mikecheung at att.net> wrote:

>
> Nah, my work is unrelated to EOR though the basic science overlaps
> considerably; which is why I knew so many folks in the EOR community in the
> early 80's.  There was a huge effort going on that basically had the plug
> pulled as oil prices dropped to about $15/barrel in the mid 80's and looked
> like they would stay there awhile ... which they did.  My better half
> worked
> for BP at that time in refining technology development and their main focus
> was finding cost savings so the corporation could survive on $15/barrel
> oil.
> Part of that survival from a corporate standpoint at BP and most of the
> other major oil companies was to pretty much get out of the enhanced oil
> recovery research business.
>
> The rest of the crowd may wonder why EOR is potentially such a big deal.
> When an oil field is "done" using conventional oil recovery there is still
> somewhere in the neighborhood of 50% to 70% of the oil still left in the
> ground.  By using various techniques, anywhere from half of that oil to
> nearly all of it can be recovered, but it is: (a) not easy and (b) not
> cheap.  The magic number back in the 80's was $50/barrel oil; at that price
> many of the advanced techniques became economically viable.  Obviously the
> magic number is now higher since 20 to 30 years have passed.
>
> My earlier point, admittedly bordering on a rant, was that good research,
> especially on fairly hard problems, takes time and a community of
> researchers working on it.  What we did with EOR in particular and energy
> in
> general was go from 100+% effort in the mid 70's to early 80's to very
> nearly zero effort from the early 80's to today when suddenly it's 100+%
> effort again because gasoline broke $4/gallon.  Naturally the community of
> energy researchers from the earlier 100+% effort period are now retired,
> dead, or long ago moved on to other work that they could find support for.
>
> What we need, I hate to say, is a sustained period of sufficiently
> expensive
> energy so that we can sustain serious energy research for a long time.
>  Then
> there is hope for real progress.  It would admittedly be better if "cheap"
> oil returned, but we nonetheless made a long term commitment to energy
> research (EOR, solar, nuclear, bio ...).  However, business economics (i.e.
> next quarters profits and share price), politics (what's the crisis du
> jour?), and human nature (if it's cheap now why worry about tomorrow?) make
> it unlikely that would happen.  So the pain is unfortunately necessary and
> I, for one, hope fervently that it continues at a high enough level to keep
> us focussed, but a low enough level that it doesn't kill us.
>
> Mike C.
>
>
>
> Brad Haslett-2 wrote:
> >
> > Mike,
> >
> > Since you were/are kinda/sorta in the neighborhood, were any of your EOR
> > projects in the Illinois Basin Field, specifically the Salem-Louden
> > anticline?  I grew up at the edge of that field and have watched it go
> > through several price and research cycles (it was a former Exxon research
> > project for water flood).  The dumbest investment move I ever made was
> > walking away from a lease in late 2003 because the seller and I couldn't
> > negotiate the last $6000.  He still owns the lease and must be having a
> > good
> > laugh at my expense every month the check arrives!
> >
> > You are 100% correct on the political angle, that's how we got corn based
> > ethanol.  Whether we open E&D for shale oil or coal for a Fischer-Tropsch
> > conversion process (including the 1.7 million acres of high-yield coal in
> > Utah taken off the market), we'll need energy to produce energy, ie,
> > nukes.
> >
> > Four dollars a gallon gasoline seems to be the psychological and economic
> > tipping point for US citizens - or perhaps a world conflict that makes
> > transportation fuel unavailable at any price.  Let's hope it doesn't go
> > that
> > far.
> >
> > Brad
> >
> > On Wed, Aug 13, 2008 at 10:47 PM, Mike Cheung <mikecheung at att.net>
> wrote:
> >
> >>
> >> Let us not make the same mistake(s) again ....
> >>
> >> The last "oil crisis" kicked off a huge surge of effort to conserve
> >> energy,
> >> find "alternative" energy sources, and recover more oil from the ground.
> >> Naturally it also spurred a huge effort to find more oil.  The latter
> won
> >> out and the former were starved for funding.
> >>
> >> While the situation is not identical, the rise of the Asian economies is
> >> one
> >> huge difference, it is similar enough to cause concern.  As a
> engineering
> >> graduate student in a field related to oil recovery at that time, I met
> >> many
> >> of the researchers working on enhanced oil recovery; most of them are
> >> long
> >> gone.  The funding dried up and either they moved on or no one took up
> >> their
> >> work as they passed.  In fact only one of the "old gang" of EOR
> >> researchers
> >> is still plugging away and he's now approaching or into his eighties.
> >>
> >> So, what do we do?  If we say, let the market decide ... well, if a
> >> couple
> >> of decent oil reservoirs are found oil will drop to "reasonable" levels,
> >> say
> >> $100/barrel, and we'll be "happy".  If we say, let the government solve
> >> this, then there will be enormous sums spend on bad ideas in politically
> >> correct districts.
> >>
> >> So what do we do?  From the political standpoint, damned if I know; from
> >> the
> >> technical standpoint my gut says: design a nuclear power plant that can
> >> operate on top of the San Andreas fault and built thousands of them ...
> >> this
> >> is a variation on the French approach, push hard on "darn near anything"
> >> to
> >> liquid transportation fuels (probably via Fischer-Tropsch chemistry)
> >> since
> >> we're pretty much addicted to "pumpable" transportation fuels, find some
> >> way
> >> to reward efforts in wind and solar.  But remember gang, we're fighting
> a
> >> tough battle between fossil fuels and "renewable" fuels.  The fossil
> >> fuels
> >> have a huge advantage, they're the result of the solar energy the earth
> >> received stored up over millions of years, beating them with just this
> >> years
> >> solar energy is not easy, maybe not even possible.
> >>
> >> Mike C. s/v Muireann and a Professor of Chemical and Biomolecular
> >> Engineering, The University of Akron, Akron, OH
> >> --
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> >>
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