An honest, informative discussion on energy/oil

C150J · May 7th, 2008, 16:36

I'd love to get an educational discussion going on oil, seeing the critical role it plays in our vocation. I'd like to discuss the following:

- Are we running out?
- Are we relying too heavily on certain sources of crude?
- What needs to be done in the aviation community to conserve? APU usage, tugs, flex climbs?
- What do you see as the best alternative to Jet A?

I'll start by posting this paper - http://www.ncpa.org/pub/bg/bg159/. It seems a bit optimistic, and I'd be interested to hear JC's thoughts.

granlistillo · May 7th, 2008, 18:59

We will never run out of oil. With current technology, the recoverable portion of oil in an average field is 50% before the energy expended almost equals the energy recovered. Then there are oilsands, shale, TFisch techniques etc. There are even depolymerization techniques than can manufacture petroluem.

The issue is Peak oil and its effect on economic growth. many experts including TBOone Pickens say we are there worldwide. We hit it in the US in the early 70s. Peak oil is where new fields are not coming as fast as fields petering out.

We are approaching the exact type of crisis that caught up to us in the carter years. Hi oil and gas, inflation and higher interest rates. There is plenty energy available, but the problem is automotive transportation is dependent on oil. With lithium ion battery technology, and the advances made in hybrid drive trains, we may see a solution in the plug in hybrid. That would free up a lot of petroleum for aviation use. But with worldwide demand (ie china, india, etc) for crude oil rising, when we are at peak oil, it is gonna get worse before it gets better. Aviation will suffer in the mean time. Trying to look at oil from an aviation viewpoint without looking at the overall worldwide demand, doesnt help us much. I am hoping the new series plug in hybrid that gm is coming out with (Volt) and the other new electrics, hybrids and plug hybrids. We can get away from the ICE and use electrics. Then all sorts of energy sources can drive our transportation use. Aviation has a problem of weight, and nothing comes close to the energy densities of avgas or jet fuel. We need oil or biodiesel type fuels.

Maurus · May 7th, 2008, 22:37

Are we running out? We will one day but with new huge fields being found in the U.S and continued stalling of actually tapping these fields will make any possibility of running out of oil much faster.

Are we relying too heavily on certain sources of crude? Yes, The middle-east gets a majority of the money for crude oil. For national defense reasons, we import way too much oil, then again this is one reason why we need to keep our oil reserves as well.

What needs to be done in the aviation community to conserve? APU usage, tugs, flex climbs? Flying slower is about the best option. It seems to be working for southwest as they saved I believe $42 million on making flights a couple minutes longer.

What do you see as the best alternative to Jet A? I believe the only alternative is Biodiesel, but that comes with a lot of problems such as rising food costs and gelling at cool temperatures.

wheelsup · May 7th, 2008, 23:31

I think Algae will provide an excellent biodiesel source. Research is continuing in this area. We can't expect change overnight - small cars are now just starting to see an uptick in sales and SUV sales are dropping.

My only concern is with the water required to grow the Algae. I haven't seen anything that addresses this yet.

http://www.treehugger.com/files/2008...s_solazyme.php
http://blog.wired.com/cars/2008/01/driving-around.html
http://www.solazyme.com/

granlistillo · May 7th, 2008, 23:52

Quote:

Originally Posted by Maurus

Are we running out? We will one day but with new huge fields being found in the U.S and continued stalling of actually tapping these fields will make any possibility of running out of oil much faster.

No person with even a rudimentary understanding of energy markets would make the prediction that we will run out oil. We will run out of cheap oil way before that happens, and if our economy doesnt make the transition to other energy sources, the economic distress would be catastrophic. The question is peak oil, and whether we are there. The huge fields you speak of, in the GLOBAL markets are a proverbial drop in the bucket. By the way "oil" can be manufactured. It is just a matter of economics. That is how the germans kept flying planes right up to VE day.

tonyw · May 8th, 2008, 04:11

There is a finite amount of oil available to us. Sooner or later, it will run out.

And we're definitely burning it quicker than it's being made. It took millions of years and millions of dinosaurs to make it.

Seeing how there are no more dinosaurs left, I think you can say the replenishment rate of oil is zero.

planesiscool · May 8th, 2008, 09:06

Quote:

Originally Posted by C150J

I'd love to get an educational discussion going on oil, seeing the critical role it plays in our vocation. I'd like to discuss the following:

- Are we running out?
- Are we relying too heavily on certain sources of crude?
- What needs to be done in the aviation community to conserve? APU usage, tugs, flex climbs?
- What do you see as the best alternative to Jet A?

I'll start by posting this paper - http://www.ncpa.org/pub/bg/bg159/. It seems a bit optimistic, and I'd be interested to hear JC's thoughts.

I don't mean to sound arrogant but on this site I see a lot of people make interesting claims and predictions about oil. Some understand the fundamentals and some do not. I work in oil and have for the past five years. I work for a services company; we make the technology that finds the stuff and gets it out of the ground. I am a market analyst and it is my job to scope out these things you are talking about; I am also training to be a pro pilot so that is why I frequent this forum. I certainly have no crystal ball but I can make some educated guesses/predictions.

Your first question:
Are we running out?

The simple answer is NO. A lot of oil is yet to be discovered and new types of oil are known about but haven't been reached yet. The reason oil prices have gotten so high is because of a kind of shock to the system. Several years ago we were producing plenty of oil to meet the world's demands but the Indian and Chinese economies exploded with a growth in demand. This threw things out of whack and the supply side of the market struggled to keep up, which in turn drove prices up to uncharted territory. However, the supply side of the market is now catching up to demand. The complicated part in all of this is how long can supply keep up with demand or vice versa. Everyone says that we are running out of oil and they keep pushing the peak oil stuff on us constantly. The problem with peak oil theory is that Hubbert didn't have heavy oil, and deepwater oil in mind when he thought up his theory. Another thing some people dont' know is that inventory is finally starting to accumulate, which is a natural function of supply and demand to level out prices. I don't think that we are even close to "running out of oil." We may never see $30/bbl again but prices, right now, are artificially inflated due to speculation because until this point demand has been outpacing supply. On a side note, which is probably what you want to know. Oil companies such as Shell and Exxon Mobil are not worried about shortages of oil with in the next 20 years. I've read a few articles with the CEO of Shell where he says they have no supply worries for foreseeable future. He says that supply is very adequate for demand and that the fundamentals of supply and demand are not supporting $120/bbl oil. I'm not saying it can't get to $200/bbl but I am saying that it can't stay that high for long. Unfortunately I can't define what "long" means but I would not think it to be more than a few months. I think $60-70/bbl is the real market value for oil. There are many other historic fundamentals that point to a popping of oil and commodity prices bubble. i can share them with you in a pm if you like...it's too much for here.

Are we relying too heavily on certain sources of crude?

Yes. I am in total agreement with a couple of these guys on this forum. We rely too much on the middle east and if we would use our own reserves, develop Natural Gas-to-Liquid fuel capabilities, and use Coal to Liquid for US supply we would be much better off. However, I think that the US in addition to achieving these short term solutions should pursue long term solutions for ground transportation. I know many of these guys think that electric is going to be the long term permanent solution to cars but I completely disagree. I think the way going forward is going to be hydrogen fuel cells or liquid hydrogen. It will be able to deliver performance like we are used to all though infrastructure must be put in place. I think hydrogen will be the solution to this hook we have in our mouths called oil. Even planes could get the thrust capabilities they require from hydrogen. Technology will have to be developed but it is possible and I may see it before I die(I am 25).

What needs to be done in the aviation community to conserve? APU usage, tugs, flex climbs?

This question I don't really know. The guys on here probably know more than me about this.

What do you see as the best alternative to Jet A?
there is no alternative to Jet A at this time. Making blends of Bio-Diesel and Jet A may help conserve but someone else put it perfectly. Bio-Diesel starts to gel at about 20 degrees F. There are additives you can blend that will take it below 0 without a problem but they can't get to where they need it yet. however, Jet A can be made out of coal liquification and a Natural Gas to Liquid version of Jet A is possible as well. Byt the way the US has some of the largest reserves of coal and natural gas in the world.

planesiscool · May 8th, 2008, 09:33

Oh I read the paper you posted and I disagree with you. It doesn't sound optimistic...it sounds realistic.

frequentflya · May 8th, 2008, 10:04

Quote:

We rely too much on the middle east and if we would use our own reserves, develop Natural Gas-to-Liquid fuel capabilities, and use Coal to Liquid for US supply we would be much better off.

I dont think we are going to be doing this any time soon. Capitalism pretty much gurantees you will be getting your oil from the lowest price which is almost always oversees markets.

planesiscool · May 8th, 2008, 10:17

Coal liquification is profitable at $50-55/bbl...this is cheaper than the current cost of oil. However, if oil prices fall we may still rely on the Middle East.

Bog · May 8th, 2008, 10:25

This picture is not of the greatest level of quality. It's an ad hanging in an FBO at TEB. If I remember correctly, it was for Shell Oil. I'll double check next week.

Will we eventually run out of naturally produced oil? Sure. Man-made? At some point in time, most likely. Is burning oil the cleanest, most effecient way to do things? No.

Granlistillo: can you give us a quick how-to on making oil? Just curious.

Champcar · May 8th, 2008, 11:11

Who cares. We'll be lucky if anything is remotely done about it in our lifetime. It is what it is.

DenverPilot8 · May 8th, 2008, 12:13

As it relates to aviation it is a fact that air travel is still growing exponentially worldwide. The demand for oil and gas for aviation is always increasing. The fact that oil is $122 at least in the domestic market means that at current ticket prices it is IMPOSSIBLE for an airline to make a profit. So talking about long term solutions for oil is great but as it relates to aviation in America I think we have a lot more short term concerns.

DenverPilot8 · May 8th, 2008, 12:21

[quote=granlistillo;867876]

We are approaching the exact type of crisis that caught up to us in the carter years. Hi oil and gas, inflation and higher interest rates.

Interest rates are very low right now..

I heard on NPR that eventhough Exxon Mobil made a 10 billion profit last quarter their cost of crude production and materials has gone up 70% while the prices at the pump have only gone up 30%.

Piperflyer · May 8th, 2008, 12:25

I just got a CNG car and sold my gasoline car. I pay 64 cents per gallon and just filled it for 3.15. I think natural gas is great for an alternative

tonyw · May 8th, 2008, 12:27

I don't know how anyone can claim they're having an honest and informative discussion on oil if they don't accept the premise that there is a finite amount of oil.

There is not an infinite supply of oil like some people have suggested here. There's not an infinite supply of ANYTHING!

ladder360 · May 8th, 2008, 13:20

Quote:

Originally Posted by Piperflyer

I just got a CNG car and sold my gasoline car. I pay 64 cents per gallon and just filled it for 3.15. I think natural gas is great for an alternative

Piperflyer, I don't know the first thing about how a CNG car operates. How long will a fill-up last you? What kind of performance are you getting? I see a lot of municipal and government vehicles going that route, and industrial equipment has been using it for a long time. I'm trying to figure out why it hasn't been a bigger item for the mainstream.

Piperflyer · May 8th, 2008, 13:33

Quote:

Originally Posted by ladder360

Piperflyer, I don't know the first thing about how a CNG car operates. How long will a fill-up last you? What kind of performance are you getting? I see a lot of municipal and government vehicles going that route, and industrial equipment has been using it for a long time. I'm trying to figure out why it hasn't been a bigger item for the mainstream.

Yeah I dont know why its not that popular, I have seen it all over the place in Ukraine, Russia, Peru, etc. It gets the same milage and same power. Im wonderign if a piston powered plane could run off of it.

planesiscool · May 8th, 2008, 13:41

Quote:

Originally Posted by tonyw

I don't know how anyone can claim they're having an honest and informative discussion on oil if they don't accept the premise that there is a finite amount of oil.

There is not an infinite supply of oil like some people have suggested here. There's not an infinite supply of ANYTHING!

only one person here said we will never run out. Yes that is patently untrue and absurd but it isn't absurd to say we won't run out this century.

planesiscool · May 8th, 2008, 13:47

Quote:

Originally Posted by Piperflyer

Yeah I dont know why its not that popular, I have seen it all over the place in Ukraine, Russia, Peru, etc. It gets the same milage and same power. Im wonderign if a piston powered plane could run off of it.

CNG is not supported by an infrastructure which is why it isn't popular. Utah, which is where I noticed the orginal guy who posted it lives, has quite a few natural gas stations. Also you would have to convert vehicles which is expensive. A piston powered engine could run on natural gas. That, however, is a tall order because you run into infrastructure and plane conversion problems. I think a jet engine could be run on it too but our natural gas reserves are limited as well. To me, it makes no sense to go to a temporary solution that would require massive infrastructure conversion. The only way infrastructure conversion would be worth it would be to convert to a permanent, renewable source. i.e. hydrogen.

Wolfy · May 8th, 2008, 13:48

That's true, and it's possible the people who say we aren't going to run out may be confusing "thousands of years" with "forever". There is a difference. I see three outs to the situation, two of which would keep us from running out of oil for a long time.
1. An alternative to oil is found that fills its energy role and is much less expensive. Oil is only used where oil is specifically required.
2. The price rises dramatically when we don't have a good alternative, and consumption slows down.
3. We hit a wall in production and run out. The world goes Mad Max.

Quote:

Originally Posted by tonyw

I don't know how anyone can claim they're having an honest and informative discussion on oil if they don't accept the premise that there is a finite amount of oil.

There is not an infinite supply of oil like some people have suggested here. There's not an infinite supply of ANYTHING!

38bat · May 8th, 2008, 15:52

Here is my .02 on oil prices. The biggest issue has nothing to do with oil. It has to do with our foreign dependence and our weak dollar. For example, I go fishing every year in Canada. The lodge we go to was a good value because our dollar two years ago was around $1.40 Canadian. Therefore the price has effectively gone up 50% (US Dollar is now around .90) without the lodge raising their price at all. Operator is charging the exact same amount but due to the weak dollar, my cost has gone up 50%. This is a close to home example but the same thing has happened with oil and everything else we import. There is alot more to it and price controls etc. with oil but a strong dollar would be the first thing to bring prices inline, followed by domestic production. Fix the economy and the rest will come inline. Big job I know.

Piperflyer · May 8th, 2008, 16:26

Yes there are quite a bit of them in Utah. I saw prolly 15 or so today. My car was made CNG at the factory. It wasn't a kit or anything. Thats why I think it could be done in GA aircraft. Also natural gas is not limited, its renewable.

In response to the first post about flex climbs, I assume you mean flex takeoffs? That does nothing for saving fuel. Its just a way to save wear and tear on engines.

C150J · May 8th, 2008, 16:31

Quote:

Originally Posted by Piperflyer

In response to the first post about flex climbs, I assume you mean flex takeoffs? That does nothing for saving fuel. Its just a way to save wear and tear on engines.

Flex CLIMBS (flexing through 10,000) saves a considerable amount of fuel. However, we've been requested to stop doing so out of airports like PHL because we're slowing everyone down behind us.

Baradium · May 8th, 2008, 16:41

Flex takeoffs do save some fuel, although they are primarily to help the engines last longer.

For those of you going on about "OIL IS FINITE!" The reason other people aren't talking about it like it is, it's becuase right now there is enough to last long term without any issues.

The reason oil prices are high is speculators, that's it. Thank those guys on wall street that care more about getting some more money than the rest of the country. If you can't tell, I hate the oil speculators and think that oil shouldn't be priced based on a commodity market.

Oil is NOT priced based on supply and demand, it's priced based on the speculators. Oil speculators set the price, and oil companies pay themselves that amount to get the oil they got out of the groudn themselves.

Many of you might not have seen it, but the Saudis recently announced that they would not increase their production of oil because there isn't really a shortage and pricing is becuase of speculators. They actually said they were concerned that the bottom will fall out of the market and it will go back to the $40/barrel range (where it should be).

If there really was a shortage, you'd actually notice a shortage of supply at the pump etc. Instead, enough oil comes out, but speculators keep the prices high.

This is also why no one can accurately predict what prices will do, because there aren't market forces doing it, it's the speculators.

There's a good chance that an initial dip in the price will cascade and collapse the price if the speculators see a drop coming and start to panic and opt out.

Unfortunately, without legal or other changes, there's not much right now to stop the speculators from doing these things to prices (although a public outcry and protests at each individual speculator would go a long way towards accomplishing that).

Remember, oil went above $100 a barrel because a speculator wanted to be able to tell his daughter that he was the reason it passed it.