Better enjoy our Z3s now... see this link...

[Lobo]

I believe I can speak with a bit of authority.

Petroleum reserves are calculated based on what is economically feasible to recover. In other words, if it is going to cost me $70 to drill and produce each barrel of oil in a certain location and the current price of oil is $50 per barrel, I'm not going to drill for and use whatever other technology is necessary to produce that oil. No way. I'd lose a ton of money. That oil is not counted as part of proven reserves.

Now, if oil goes above $70 per barrel, it becomes economically feasible for me to recover it, so it now becomes part of proven reserves. Proven reserves thus increase.

Likewise, in a given oilfield, I may have produced oil from it for years. Eventually it gets to the point that all is left is residual oil that clings to the surface of the rock's pores and won't come out by conventional means. I might be able to get more out by some existing technology, such as CO2 flooding, but again, only if it's economically feasible. Even if you do that, there is still oil left that is only recoverable by more extraordinary measures -- ones that have more cost or need technology not yet invented. Again, unless I can economically recover it, it isn't proven reserves. Once price or technology makes it economically feasible to recover, it's added to the reserves.

Bottom line: As oil prices rise, reserves increase. As oil prices rise, it becomes more feasible to explore new areas, such as the deep ocean, that would have been cost-prohibitive before. It's basic supply and demand theory. As price goes up, supply goes up.

[Tangential lesson: Most people have the impression that oil reservoirs are simply large cavities under the earth that are filled with oil. They are not. Oil and gas are found in the microscopic pore spaces of rocks such as sandstone, limestone, and shale, so, you can't simply just dip into the reservoir and start pumping. (Same is true for water wells.) Thus, as I said earlier, if you pump out all you can, there will still be residual oil, a fair percentage, clinging to the surfaces of these microscopic pores. You can think of it like trying to get an oil stain out of your driveway. Once you sop up what you can, you're going to need a steamer or detergent to get more of the stain up, but even then you won't likely get the whole stain out.]

[Lobo]

[Lobo]

How did the oil companies benefit?

Let's see...Was the oil not available before? Well, only because of U.N. sanctions was production limited. Saddam Hussein would have gladly sold as much to the west as we wanted. Then he could have built a couple of dozen more palaces.

What Middle Eastern country has withheld oil from us because of a difference in politics, religion or whatever? None that I know of. They'd rather sell what they have and make money from it. Better for them and their countries economically than refusing to sell it. Even if a country doesn't sell directly to the U.S., the oil still gets on the world market. If country X buys it instead, that just frees up oil that country X would have gotten somewhere else and makes it available to everyone else.

OK, so we invade Iraq to get/keep oil prices lower. Lower oil prices mean lower profits for Bush's buddies in the oil industry. Hmmm... someone told me it was to benefit Bush's buddies. Guess they were wrong.

Damn! I'm having a heck of a time figuring out how invading Middle Eastern countries is helping Bush's oil buddies or is helping us keep our cars going. Someone straighten me out.

[Lobo]

As oil prices climb, other energy production technologies become more feasible. Once the price per BTU (British thermal unit, a measure of energy) in a barrel of oil reaches beyond that of, say, wind energy (or conversely, the price per BTU of wind energy drops because of improved technology) people will start using the alternative energy sources more and more. And for that portion of the oil used to make other chemicals, such as plastics, the higher price will make it more economically feasible to use substitutes derived from other sources, such as plants.

No crisis, just a gradual conversion of technologies and lifestyles.

So, <b>someone concerned with the environment should be praying for higher and higher oil prices</b>. As the price goes up, people will begin buying more fuel efficient vehicles, drive less and use public transportation more. All of these will lead to fewer greenhouse gas and other pollutant emissions. More environmentally friendly energy sources (solar, wind, geothermal, etc.) will become more economic to use and more preferable to everyone.

[Rusty]

I'd just about submitted an identical response and for some reason I looked back at the list of posts, noticed yours and took a look. You hit on a very good point, the cost of secondary recovery methods and the fine line between profit and loss. Seems a whole lot of people just don't understand that.

Also noticed you mention CO2 injection. Little trivia, meaningless to everyone but me, but I worked on one of the first major C02 recovery simulators during my days at Gaffney, Cline and Associates, who you may be familiar with as a pretty major player in the consultancy/advisory role for oil and natural gas companies and governments. Project Manager was Dr. Julius Aranofsky (sp?) who was a professor at SMU and an associate of ours. Brilliant man who always seemed to ask for something that pushed what brain cells I had to the brink (project coincided with my lost years). :) I left the company (downsized) before the project was complete and I really haven't kept up with that aspect of the oil business since, but it was one helluva ride while it lasted.

Anywho, glad to see at least one good intelligent response on this subject. I miss the oily days. The travel and most of all, the $$$salaries$$$!!!!. lol

Rusty
'05 330i ZHP in Imola

[jtp]

Thanks for nothin'! ;o)

JTP
'00 Bright Red II, Black, Black 2.3

<b>PERFORMANCE: </b>Dinan Stage II suspension, Dinan strut tower brace, Porterfield R4S brake pads, Yokohama AVS es-100 tires, UNGO MS8300 alarm, Sylvania Silverstar headlights and fog lights. <b>COSMETICS: </b>OEM chrome exhaust tips, Magnetic stone guards, Roundel valve stem caps, Trunk-mounted Dragon sticker, WI plates: RES IPSA. <b>COMFORT: </b>Premium Package, Heated sport seats, “Z3 Roadster” heated vest (for GF), In-dash CD, LeatherZ MarkII armrest, OEM mesh windscreen. <b>CAR CARE: </b>Porter Cable random orbit buffer, Meguiars car care products, NOAH car cover, Plexus, Raggtop. <b>EXTRAS: </b>Z3Solutions warning triangle.

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[Z3BigDaddy]

[jtp]

I was doing a search through the archives to confirm my oil capacity in prep for an oil change and came across this thread. Looks from the comments below that Z3BD is entitled to collect in his bets! I wonder if MY3RDZ is still wearing his aluminum hat?

JTP
'00 Bright Red II, Black, Black 2.3

<b>PERFORMANCE: </b>Dinan Stage II suspension, Dinan strut tower brace, Porterfield R4S brake pads, Goodyear Eagle F1 GS-D3 tires, UNGO MS8300 alarm, Doug Whalen Seat Bushings, Sylvania Silverstar headlights and fog lights. <b>MAINTENANCE: </b>Peake Research R5/fcx-II and SRS Reset Tools, Mity-Vac oil evacuator w/ brake bleeder, BMW Battery Tender. <b>COSMETICS: </b>Dinan Badge, OEM chrome exhaust tips, Magnetic stone guards, Roundel valve stem caps, Trunk-mounted Dragon sticker, WI plates: RES IPSA. <b>COMFORT: </b>Premium Package, Heated sport seats, “Z3 Roadster” heated vest (for wife), In-dash CD, LeatherZ MarkII armrest, OEM mesh windscreen. <b>CAR CARE: </b>Porter Cable random orbit buffer, Meguiars car care products, NOAH car cover, Plexus, Raggtop. <b>EXTRAS: </b>Z3Solutions warning triangle.

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[Z3BigDaddy]

Thankfully I have plenty of Jersey connections now just in case.

[NorthZ]

For fear of raising a real ruckus. All it means is that the price of gas is going to go up. If you want to drive, be willing to pay! Think of what Europe pays for a litre/ gallon of gas. Or, for that matter what we Canadians pay currently 1.07/litre of regular and anywhere from .10 to .14 extra for premium. (Roughly 3.6 litres per US gallon) We are producer of oil from the nasty oilsands.

[z3bigdaddy]

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