Re: UNITE! Info #221en: 1/2 Gold was right: Plenty of oil

From: Rolf Martens (rolf.martens_at_mailbox.swipnet.se)
Date: 08/28/04 

Date: Sat, 28 Aug 2004 09:33:55 +0200

In article <20040827122723.24921.00001478@mb-m20.aol.com>,
longmuirg@aol.com says...
>
>
>Rolf Martens noted:
>>It's a question of finding oil at depths of the order of
>>7,000 m down, and extracting it from there.
>>
>>And this gives lots of net energy. The main cost lies in
>>its discovery. Wells drilled to such depths cost some
>>$10 million each, I've read. And I understand that often,
>>10-20 or more probing wells will be needed before some
>>big deposit is hit. An investment of up to $200 million,
>>then. But after that, the oil will just surge up to
>>the surface, at no big extra cost at all. And vast
>>amounts of it.
>
>Full disclosure -- I would love to see a proper test of Gold's
hypothesis, but
>I think your cost estimate is way too optimistic.

Now something that you're writing below shows that
you've actually been involved an in oil exploration
project. (In case you're not just bluffing. Please
excuse my considering this possiblity too. This really
in general is necessary, in Net discussions with people
whom you don't know much about.) Obviously, you have
some knowledge, in general, about these things. I on
my part am absolutely an amateur, concerning oil.

It surprises me to learn that you have *not* "seen a
proper test of" "Gold's hypothesis" (Mendeleev's
theory, from 1877), although you've already shown too
that you do have some information about that project
here in Sweden which, according to Gold and others,
precisely did prove that theory to be correct.

Why, in your opinion, were the results here in Sweden
*not* conclusive proof of that theory? - Well, you've
already answered that question, I see after having
read some lines of yours below. (See my reply again.
after that.)

As for production costs, I first of all must admit
again: I'm pretty igorant on that subject. I did
learn a few things about it, some years ago, which
unfortunately, I in the main have forgotten again.

But browsing through the web now, I've seen the
following statements, by various people, which I
assume are approximately correct at least:

1) Onshore oil production in general costs some
$5 per bl.

2) One bl of oil, that is 159 litres, is some 1/7
tons of oil. That is, the onshore production price
is some $5·7 = $35 per ton.

3) In Nigeria, the production price is somewhat
lower, or $4 per bl.

4) I've learned much earlier that the production
price was particularly low in Saudi Arabia, and
even lower in Iraq. But just now, I could not find
the more precise figures for those countries.

5) According to one Russian writer, the "pre-crisis"
production price in Russia (whatever that means
more precisely) was $12.5 per bl.

6) China, its said somewhere else, is buying
equipment from South Africa for convering coal into
liquid fuel, which would cost some $15 per bl.

7) What's the cost of offshore oil production, such
as that in the North Sea, I've been unable to find
just now.

8) There's some talk about a possible future
production price of $20 per bl - something of a
"horror story", it seems.

Now how about a possible production here in Sweden,
from that very large deep deposit which, lots of
observations clearly show, does exist here? what
might be the cost of such production?

Something which Gold himself wrote in the Swedish
daily Svenska Dagbladet, on 21.08.1989, may interest
you. I have that clipping. At that point, one
probing well had been evaluated. The headline of
Gold's article was: "Drill another well!" (Which
was later done too; it was that probing well that
I and some friends of mine were "in on". But after
that, and despite some more equally positive results,
the whole project was killed.)

[QUOTE:]

The evidence from [Lake] Siljan is extremely strong,
if you put all the facts together....The outlays
for the efforts so far correspond to no more than
four days of average fuel imports to Sweden. The
goal of energy independence of course must be worth
a much bigger investment than that.

[END OF QUOTE]

Now Sweden's imports of petrol, diesel and fuel oils
in 1996 (that is, somewhat later) were some 5 Mtons
(or 35 Mbl) per year. At a cost then of, say, $20 per
bl, that would correspond to $700 million per year,
or some $2 million per day.

If the price was about the same in 1989, those 4 days
of imports mentioned by Gold would correspond to some
$8 million. I believe that, actually, the very first
probing well cost a little more than that. Anyway,
the cost figure I've seen mentioned for each later
probing well to a depth of 7,000 m is $10 million, as
I've mentioned before.

It seems likely that after 20 such wells (or less),
the big reservoir would be hit. Someone mentioned that
the big Ekofisk field in the North Sea was found only
after 34 probing wells had been drilled - rather many,
I understand. But that field obviously is quite
profitable.

So, it's a question of an investment of, say, $200
million or something of that sort. The discovery
costs, that is. After that, presumably, extraxtion
costs will be very low, more or less negligible,
I'm assuming for the moment.

Now how big a reservoir of oil would you have to hit,
after having invested $200 million (and not much more),
for the production cost of that oil to be as low as
the obviously "normal" onshore one of $5 per bl?

Obviously, only 200 / 5 = 40 million bl, or some
40 / 7 = approximately 6 million tons.

That is, a little more than the 1996 annual imports
to Sweden. That possible "oil field" would be quite
"profitable", even if it only contained oil enough
for little Sweden for one year. With an oil import price
at $20 per bl, the country by producing its own during
one year would save $15 per bl in that year.

Compare to that "pre-crisis" Russian production
price, then, of $12.5 per bl. Then you'd only have
to find 16 million bl, or a little more than 2
million tons, to "break even".

And the likely amounts in that Siljan deposit,
some experts have guessed, were/are not in that
order of just a few measly millions of tons.

It could eaily be, of the order of the entire North
Sea deposits, it has been said. (Though I must
admit, that on this point there is co clear
information.) That is, possibly *billions* of
tons. Even a deposit, at 7,000 m, as relatively
small as, say, 100 Mtons would be extremely profitable
(now that we're talking about capitalist conditions
- under socialism, the same "effort vs output"
caclulations would apply too, of course). In particular,
with an oil selling price, as today, of $40 per bl
or so.

Concerning "net energy gain", really no problem
at all, with extraction from sources 7,000 m deep,
if only the deposits are relatively large.

>Personally, I worked on a project where one well exploration cost, in
today's
>dollars, close to $200 Million. It was a dry hole, by the way. At
least one
>other well in that area was almost as costly.

Interesting. As much as that for only *one* well? Such
a thing I never heard of. As I mentioned, the estimate
for one well as deep as 7,000 m was $10 million.

>You may be optimistic, too, about the depth needed. Gold himself
suggested
>about 15 kilometers.

This I've not seen, in any of the articles on his
homepage - I've read or at least glanced through
them all - nor in any other article or statement
by Gold. I've only seen mention of 7 km or so.

Clearly, 15 km, that's to the very bottom of the earth's
crust or so - that crust does vary in thickness. And the
deepest wells ever drilled so far are only some 11-12 km,
aren't they?

When and where did Gold suggest 15 km? That would
interest me to know. Can you find the source?

And drilling to 15 km, that's clearly difficult and
expensive. But even *if* that indeed were necessary,
in some cases, that product, oil, is so valuable
that if really big deposits were found at 15 km,
even these could be quite "profitable" too, could
they not?

In that connection, it woul interest me all the more
to learn about that project you were involved in which
cost as much as $200 million for just one - dry - hole.
That figure does seem fantastically high to me. What
kind of well was that, and when and where?

>The key issue Gold pointed out was the compression of pore space in
rock. At
>shallower depths, fluid can flow up out of the pores as matrix pressure
>increases. As the depth increases, the growing difference between
matrix
>pressure and fluid pressure eventually will close all the pore space,
forming
>an impermeable layer. Below that depth, pore space could again be
open, since
>the fluids in those deeper pores would have been unable to escape. And
that is
>where Gold's hypothesised abiotic oil might accumulate.

Yes, that's the theory - proven today too.

>Because of inadequate depth and actions taken to counter difficult
drilling
>problems, reasonable people can discount the limited results from the
Siljan
>Ring drilling. I think Gold's hypothesis is still essentially
untested.

Clearly, you're wrong. Certainly, the depth, some 7 km, was
*not* inadequate. (Again, where did you get that "Gold
statement" about "15 km" from?) And really *reasonable* people,
such as the Swedish expert writer Jan Bergström, the Russian
expert Kropotkin (as mentioned in my original posting) and
Gold himself all said that Mendeleev's theory (once again,
*not* "Gold's hypothesis") indeed *was* conclusively
proven to be correct, by the results of the Siljan Ring
drilling.

Once again: It very clearly was *political* action,
extremely reactionary such, that killed that very
promising (production) project here in Sweden.

More about "your" $200 million dry well, this I'd
certainly like to read (it does seem fantastically
expensive to me, when a 7 km deep well is said to
cost $10 million, as far as I know) - and also some
information about when and where Gold said/wrote
that depths of "15 km", not 7 km or so, would be
needed for deep-gas exploration and extraction.

Rolf M.

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