Archive for May 9th, 2009
How Much Oil Have We Used?
How Much Oil Have We Used?
Green Car Congress
9 May 2009
Estimates of how much crude oil humans have extracted from the planet vary wildly (as do estimates on how much remains). UK researchers have published a new estimate of total crude oil extracted in the International Journal of Oil, Gas and Coal Technology that suggests we may have used more than we think.
In 2008, chemists Istvan Lakatos and Julianna Lakatos-Szabo of the Hungarian Academy of Sciences theorized that less than 100 billion tonne of crude oil has been produced since 1850 and that the average annual production rate is less than 700 million barrels per year.
They compared proven reserves and estimates of yet-to-find (YTF) resources and echoed the sentiment that we will soon face oil shortages even though a substantial part of those reserves remain in the ground untapped.
Now, John Jones in the School of Engineering, at the University of Aberdeen, UK, suggests that the figures cited by Istvan Lakatos and Julianna Lakatos-Szabo for which they give no references grossly underestimates how much oil we have used already. Jones says that we have used at least 135 billion barrels of oil since 1870, the period during which J.D. Rockefeller established The Standard Oil Company and began drilling in earnest.
The oil industry now spans several generations, says Jones, and has historically been as uninterested in how much oil has been drawn as were economists, day-to-day and annual figures being of much greater concern. However, in 2005, The Oil Depletion Analysis Centre (ODAC) in London provided a total figure of almost 1 trillion barrels of crude oil (944 billion barrels) since commercial drilling began. Even that figure does not add up, Jones explains.
He has calculated an estimate by using the volume of a barrel (42 US gallons, or 0.16 cubic metres) and a crude oil density of 0.9 tonnes per cubic metre. ODAC’s 944 billion barrels is thus the equivalent of 135 billion tonnes.
Jones explains that this figure is of the same order of magnitude as the estimate offered by Lakatos and Lakatos-Szabo, but is nevertheless 35% higher than ODAC’s figure. “Their assertion that less than 100 billion tonnes has been produced is significantly inconsistent with the ODAC,” says Jones. The implication is that either ODAC or the Hungarian team are incorrect in their estimates, and suggests that clarification of this important figure is now needed.
Resources
- J. Jones (2009) Total amounts of oil produced over the history of the industry. Int. J. Oil, Gas and Coal Technology, 2009, 2, 199-200 doi: 10.1504/IJOGCT.2009.024887
- Lakatos and Lakatos-Szabo (2008) Global oil demand and role of chemical EOR methods in the 21st century. Int. J. Oil, Gas and Coal Technology, 2008 1, 46-64 doi: 10.1504/IJOGCT.2008.016731
About Renergie
Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita. Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol. Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector. On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline. Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.
Read Full Post | Make a Comment ( None so far )Valero May Close Memphis Plant if State Law Passes
Valero may close Memphis plant if state law passes
May 8, 2009
NEW YORK (Reuters) – The future of Tennessee’s only oil refinery is in jeopardy if a law passes the state’s general assembly on May 13 that would require it to supply unblended gasoline to fuel wholesalers.
Valero Energy Corp (VLO.N: Quote, Profile, Research), which owns and operates the 195,000-barrel per day refinery in Memphis, has said the cost of complying with the bill does not make sense in the poor refining economics environment.
“Passage of the bill would result in Valero being forced to seriously consider closing the Memphis refinery with an immediate loss of employment for over 500 Tennesseans,” said Rich Marcogliese, Valero’s executive Vice President, in a May 4 letter to Tennessee Governor Phil Bredesen.
Valero, which has contracts to supply already blended gasoline, estimates it would cost between $130 million and $150 million to duplicate the storage tanks, piping, pumps, wiring, and modify the truck rack to provide facilities for unblended fuel as House Bill 1517 is requiring.
The bill, which has already passed the Senate as Bill 1931, will be voted on in the general assembly subcommittee on May 13.
Federal law mandates each gallon of gasoline sold contains a percentage of renewable fuel such as ethanol. It gives the tax credit to the blender, which in Tennessee is now Valero but, if the law passes, will be whoever blends the fuel.
Adding in the loss of tax credits, Valero estimates it will cost 5 cents per gallon — in an weak demand economy where refiners are shuttering or cutting back on runs.
“The impact on refining is real — there is weekly speculation among industry analysts as to which refineries maybe closing because of weak demand coupled with geographic or regulatory disadvantages,” Marcogliese wrote.
The Memphis refinery, which Valero bought with other refineries from independent refiner Premcor back in 2005, distributes products to the Midwestern markets primarily via truck-loading racks at three product terminals, barges, and a pipeline directly to the Memphis airport.
Fedex (FDX.N: Quote, Profile, Research), the world’s largest airline, is located in Memphis.
“We have alternate arrangements and don’t believe it will have an impact on Fedex,” said Jim McCloskey, a spokesman for the airline.
He would not speculate on the cost of the alternate arrangements.
In 2006, Valero had conducted an strategic review of its assets and put Memphis on the sales block before taking it off as the refining business and prices for refinery assets began to decline.
The Tennessee Fuel and Convenience Association, which represents fuel wholesalers and convenience store operators, said there is no support for Valero’s contention.
“The facts do not support Valero’s claims that the legislation would require expensive new equipment or that the company has been hard hit by the recession,” said Jonathan Edwards, president of TFCA and president of Edwards Oil Company, which is headquartered in Lawrenceburg, Tennessee.
Edwards says there’s no evidence to support Valero’s claim that it would cost between $130 and $150 million to buy new equipment to store unblended ethanol. According to legislative testimony from Valero representatives, the company spent $7 million to install ethanol storage tanks and blending equipment, the TCFA said.
Tennessee’s legislators Jamie Woodson, who sponsored the bill in the state’s senate and Charles Curtis, who is the house sponsor were not immediately available for comment. (Reporting by Janet McGurty; Editing by Marguerita Choy)
About Renergie
Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita. Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol. Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector. On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline. Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.
Read Full Post | Make a Comment ( 1 so far )Laboratory Will Not Certify Pumps for Gas With 15 Percent Ethanol
Laboratory Will Not Certify Pumps for Gas With 15 Percent Ethanol
By CHRISTOPHER JENSEN
The New York Times
May 10, 2009
GROUPS representing the nation’s service station operators say they fear the possible legal and economic consequences of increasing the amount of ethanol in gasoline to 15 percent, from 10 percent, a change that ethanol producers have urged the Environmental Protection Agency to make.
The station owners say they fear lawsuits from customers claiming their cars were damaged by the E15 fuel. But they also note that existing pumps are not certified by Underwriters Laboratories as safe for use with E15 — and U.L., which certifies the safety of a wide range of products, says it will not provide that certification.
John Drengenberg, U.L.’s consumer safety director, said previous testing showed that the existing pumps were safe for up to 15 percent ethanol. But U.L. will not guarantee them for 1 percent more, he said.
That means E15 certification cannot be given because there can be slight variations in the mixture of gas and ethanol, Mr. Drengenberg said — E15 might actually include 16 percent ethanol. “It cannot ever be said that this is exactly 15 percent.”
Furthermore, while U.L. says 15 percent ethanol would be acceptable, it cannot retroactively and officially certify the existing pumps for dispensing E15, a spokesman, Joseph Hirschmugl, said.
That is a problem because state and local fire codes usually require stations to use equipment that a third party — typically U.L. — has certified as compatible with the fuel being sold. A fuel with much higher ethanol content, E85 — which can be used only in flexible-fuel vehicles — is dispensed through a different type of pump, which the U.L. has approved.
That leaves service station owners wondering what they will do if E15 is approved.
Those retailers will have two choices, said John Eichberger, vice president for government relations at NACS, an association for convenience stores and gas stations. “One, sell a product with noncompatible equipment, violate those rules and open themselves up to gross-negligence lawsuits,” he said. “Or try to find compatible equipment and replace their entire system. Unfortunately there are no dispensers certified for E15.”
Joseph Hirschmugl, a spokesman for U.L., said his organization knew of no specific problem but must be cautious because adequate testing had not been done.
For the gas station owners, the scary thing is the possibility of an accident or mishap that could result in a lawsuit, said Tim Columbus, general counsel for another service station trade group, the Society of Independent Gasoline Marketers of America. Then people might start asking why uncertified equipment was being used, he said.
In Growth Energy’s request to the Environmental Protection Agency to allow an increase to E15, it insists that service stations won’t have a problem. It says U.L.’s research “supports that existing dispensers may be used successfully with ethanol blends up to E15.”
But Mr. Drengenberg of U.L. says that is not true. U.L. approves of using up to 15 percent ethanol in existing dispensers, he said, but it does not approve of E15.
About Renergie
Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita. Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol. Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector. On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline. Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.
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