The Future of Oil

Here is a link to an interview I did for the Fuzzy Logic Science Show on Canberra (Australia) community radio:

The Future of Oil

I haven’t listened to it myself, but if anyone picks up any errors in my comments, please let me know. We covered quite a lot of ground in the interview, but primarily talked about the extent and implications of our dependence on oil.

26 thoughts on “The Future of Oil”

  1. I just got back from GTC last night. Had some very interesting conversations with technology vendors and catalyst folks. I don’t think technology is holding us back from moving towards more energy diversity and independence. It is politics, government and the financial mess.

  2. King-
    What is GTC. And what is the good news (barring politics, government and the Bush Administration financial good-bye party?

  3. GTC is the Gasification Technologies Conference. About a thousand or so engineers, scientists, business professionals, and government officials get together to discuss turning stuff (coal, biomass, etc) into synthesis gas and then turning that into other stuff. For example, I got to speak to David Henson and Chris Peters from CHOREN.

    The good news is that there a number of breakthrough technologies on converting coal to fuels that are now being proven on a commercial scale. Many of these plants are in China. We are also looking at ways to use the Chinese supply chain to build plants elsewhere, substantially reducing costs.

    Oddly enough, one of our problems is a shortage of labor in the US.

  4. King-
    I wish I was young again, I would become an engineer of some sort.
    I sure hope American industry is adjusting. For some reason, there is a bias that an engineer is not worth as much as an MBA or lawyer.
    So, smart guys headed into MBA or law school.
    The market system works, but slowly sometimes, and especially as lawyers and MBAs control the purse, in most companies.
    Lawyers in LA charge $400 an hour. So, why not go to law school?
    But, if salaries rise high enough, and engineering can be made sexy, then I predict floods of new entrants.
    I listened to the chipmunk broadcast too — RR’s process for wood is absolutely fascinating.
    That is great news about CTL in your GTC conference. We have tons of coal.
    On this score, I think RR is too dark. The price mechanism in commodities markets — even markets deeply flawed by speculation — should never be underestimated.
    I own land in Thailand (well my wife does), and palm oil is looking very promising, due to much higher yields obtained from new hybrids. Cold-tolerant palms have been developed, by using trees found in African highlands.
    Unlike corn, you don’t plow palm trees under every year, and the seeds are picked by hand. It is not energy intense.
    From 5 tons per hectare a few years back, now 10 tons is becoming the norm, and new hydrids are yielding as much as 36 tons of oil per hectare.
    Tere is nothing holding back more palm oil output — even McCain and Obamam can’t stop it.
    I am just wondering how long until S. Texans and Louisianans figure out there is money to be made. You can sell vegetable oil through craigslist for $2 to $3 a gallon all day long. An impeller (seed crusher)is a few thousand bucks.

  5. Is it just me or is the audio playing at 2x speed, making it sound like an interview with chipmunks?

    King, I always talk really, really fast like that. 🙂

    No, I just listened to it and it sounded fine to me (except I always hate the sound of my own voice played back).

    I got to speak to David Henson and Chris Peters from CHOREN.

    I have met David as well, and had quite a bit of correspondence with him. Good guy, and I wish him success with Choren.

    RR

  6. RR-
    I hate the sound of my voice too, but, like King, I got the chipmunk version. I guess the broadcast is quicker this way.

  7. NETL says that you need $84/barrel oil to make biofuels to syngas work without any sort of CO2 credit. Given some of their other work, they are likely about 30-50% low on costs. So you really need something north of $100 oil. It isn’t looking too good.

    I can’t say who or what products, but we talked to several technology companies that are working on single reactors capable of taking syngas all the way to products. If we can make this work it substantially reduces the capital costs.

    One of our competitors is planning to build a methaol to gasoline plant in the US. They believe it is possible to ramp up to produce 10 million barrels per day of gasoline this way.

  8. I just got back from GTC last night. Had some very interesting conversations with technology vendors and catalyst folks.
    Do tell us more! Perhaps you should write a guest column on the subject.

    Did you come accross wet gasification? Turning all that municipal wastewater sludge… eh, biosolids into fuel has got to be a winner!

  9. king-

    They believe it is possible to ramp up to produce 10 million barrels per day of gasoline this way.

    Did you mean gallons?

  10. I’d like to reassure you that it really was Robert, and not a chipmunk in that interview.
    My apologies to those who downloaded a Squeaky Robert. If I can find out why that happens I’ll correct it asap.

    – Rod

  11. ~One of our competitors is planning to build a methanol to gasoline plant in the US. They believe it is possible to ramp up to produce 10 million barrels per day of gasoline this way.

    That sounds promising. It’s fairly easy to make methanol from coal.

  12. King-
    If your numbers are correct, this would lead to huge gluts of gasoline in the United States…..

    by the way, Brent spot crude now just barely above $80…likely down into the $70s soon…crude trading at one half of the peak…….

  13. King, COP down 13% today? PE at less than 5? That is insane. When oil was at $80 on the way up, COP was trading in the $80’s. But on the way back down, it’s at $53? If I was Mulva I would load up right now on the buybacks.

    RR

  14. ROBERT–

    COP or most stocks at this time have no relationship to fundamentals. it’s convert to cash regardless of circumstance/outcome. Mulva would be wise to pause/hoard cash for a period of time

    KINGOFK–

    is the methanol to fuel DKRW/ACI? or are there others? if so, could you name please.

    the idea expressed above for article/summary of GTC would be appreciated. if not in cards, reference to website or pub appreciated.

    fran

  15. There’s an interesting discussion going on about energy, both sustainable and non-sustainable one which is accomplished by the European Science Parliament and might be interesting for you. The headline is “Europe energised – will lights go out in 2050?” and there’s also a live-blog:
    http://www.science-parliament.eu/blog/275

  16. I liked the interview. Ya’ll managed to cover a lot of topics. I think the near future is pretty much what you said. PHEV’s. Biofuels from companies like LS9. We COULD go all electric any time we chose. We can do it without importing a thing. We won’t,but we could. Now I’m wondering what kind of reception the Volt and plug-in Prius receive with $2.00 gas.

  17. The Volt, a $40,000 science project, with good looks, is dead in the water.

    The Prius will continue to sell modestly, like everything else.

  18. Oil dumping hard, hard, hard.
    Down below $80, even lower on the Brent.
    Half of the peak, and the year is not over.
    Is there anyone left at all who does not know the price of oil is set by speculators?
    That we just witnessed (2000-2008) the largest transfer of wealth in history to Mideast thug states, based on a rigged oil price?
    That it happened while Bush (kissyface with Saudi sheiks) was prezzy?
    A real question: Does Bush answer first to the Saudi throne or the people of America? Based on his actions and policies and social friends, I can’t tell.

  19. I bet the Volt does well in Europe. Even at 40MPG,someone driving 20,000 miles a year is spending $4000 annually on gas if it’s $8 a gallon. The Volt would pay for itself in 10 years.

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