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Energy.. your choice.
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JonSCKs
Posted 7/29/2012 09:22 (#2511348)
Subject: Energy.. your choice.


We all grew up with a "Cheap Energy is our birthright" mantra built into us as Americans.

And.. for a while it was.  West Texas Intermediate is the mother load of energy.. Light and Sweet and plentiful.. once they got the "Big Inch" pipeline built from Texas to the Refineries back east.. it was "game on" as far as developing the country.

WTI is easy to Crack.. and yields a high percentage of saleable products.. Gasoline, Diesel, Jet Fuel etc.. That is why the US became the World's largest producer.. the World's Largest Refiner.. as well as the world's largest consumer.

Even today we are still the World's largest refiner and consumer.. although consumption is down from about 20 million bbls/day to just under 18 (0.9 of which was etoh..btw..)  Crude is really nothing more than buried plant material that has been cooked into Rock Oil.. or "Petroleum."  It is said that every year we burn through the accumulated composition of about 400 years worth of plant material as "Petroleum."

Estimates vary as to how much is left.. Most do not dispute that "Alot" remains.. but some say that where we are using around 80 million bbls per day.. and growing.. that the RATE that we can extract and Convert it is maxing out.  The third world.. especially China and India are growing.. China used something like 5% of the Crude the US did maybe a decade ago.. now it is half.. and growing.. and someday will surpass the US.. if trends continue.. by.. maybe 2020.. ditto India.. places such as Saudi Arabia and UAE and the emerging Middle East are growing and using more of their own production.. leaving less to export.

I'm not really a peak oil type.. although I do read a fair amount of that material.. however, there probably is a peak amount that the US will be able to utilize.. no longer will the rest of the world ship us the majority of it's energy for us to waste... the days of "cheap energy" are probably behind us..

So we must become good stewards of what we have.

Now the next piece to the puzzle is that there are HUGE AMOUNTS of Crude.. just to our North in Canada.."Oil Sands" is the proper term for it.. some call it "tar sands" because well when you see pic's of them mining it you understand.. this is not a liquid without substantial "upgrading" and even then it barely flows.. kind of a wet asphalt.. but doable.. only takes time and $$$ to process.

We may not be running out of Crude.. however the amount of light and sweet crude.. your WTI's your Brent's etc.. are fast becoming PREMIUM products..  Heavy Crude's take ALOT more processing.  I need to dig out the story that NCRA in McPherson when they built thier Coker to break down long chained crude.. as I've said spent something on the order of $500 mln to add something that could process Oil Sands type Crude.. however even after adding that the run rate went down.. because it just takes a LONG TIME and a lot of Heat and Pressure to CRACK that stuff..

So even though we still have the most refineries.. uhum.. not sure how viable the ones built on importing Crude from the East Coast.. paying Brent prices.. are???  We may not have ENOUGH capacity to PROCESS the growing HEAVY junk that is availble today.. we may need to double or even triple that amount (I don't know.. we'll need more..) capacity to MAINTAIN what we are used to from higher yielding Light and Sweet WTI.

We can goose WTI output in the short term.. and deplete it faster.. or we can harbor it as a back up for times like.. well now I guess...but there's only so much.. and so much lifting capacity that we can do.  Before the hurricanes hit in 2005 we produced.. 5.1 mil bbls/day.. now 7 years later with a couple run ups over $100.. we're up all the way to 6.1

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

and we use just under 18..  Yal dog.. about a third of what we use.

Ethanol went from basically 0 to 0.9 in about 30 years.. but mostly from 0.2 to 0.9 in about 5 years.. the "ethanol boom." and that helped mostly as I've said below making low grade gasoline a useable product.

And we did bring the troops home.

Now there's a hitch in the get along and everyone is all up in arms over it.. this is just the latest blip on the radar.. actually not even that big of one.  Between coming off the summer driving season.. and continued growth in domestic production.. we can probably make up for the lost 300 k bbls/day of etoh.. or the "gasoline equivalent" amount of whatever that is..

Part of the problem was that we built too many etoh plants.. which although the market took the production.. strained our ability to feed them.. and crop production is growing.. no doubt we'll see surpluses again...

So at the end of the day.. Do you want to burn through 400 years of crop residue from a million years ago.. do you want to try to ferment part of this years.. do you want to walk?  build a wind turbine.??  A Solar powered car..???  Or what..

Our petroleum industry will adapt.. as best it can.. once we add enough capacity.. we may not need etoh..???  So this period will have it's cost to etoh..

Anywho.. got to go.. all of this is off the top of my head.. It would take a lot longer to document.. and fact check and make it more accurate..  No doubt some of this is wrong.. but close.. as I understand it.. and I don't understand it all.. energy is Complex.. there are MANY factors that go into it.. as Daniel Yergin notes in "the Prize."

"Oil has helped to make possible mastery over the physical world.  It has given us our daily life and, literally, through agricultural chemicals and transportation, our daily bread.  It has also fueled the global struggles for political and economic primacy.  Much blood has been spilled in its name.  The fierce and sometimes violent quest for oil-- and for the riches and power it conveys-- will surely continue so long as oil holds a central place.  For ous is a centruy in which every facet of our civilization has been transformed by the modern and mesmerizing alchemy of petroleum.  Ours truly remains the age of oil."

Daniel Yergin, The Prize.. pg 788.

Ethanol does have a spot.. it's a wonderful blend agent that helps clean the air with a more complete burn.  There is a proper place for it as it also not only creates jobs but extends limited feedstuffs as well as makes a market for lower valued Petroleum products.  It is hard for a 900,000 bbl per day etoh market to RIDE an 80,000,000,000 bbl per day Petroluem market.. occasionally etoh get's bucked off.. so are we going to sit here on our kister.. or get up and fix it?

later.

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