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2003-04-21 Home Front

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Posted by Old Patriot 2003-04-21 10:18 am|| || Front Page|| [11128 views since 2007-05-07] Top

#1 Hmm... Whenever I read something like this I think of the Perpetual Motion Machines and the alchemists trying to turn lead into gold.

I can only hope it is feasible, though--I'd love to see us pull out of the Middle East, thumb our nose at OPEC, and leave the whole "Arab Street" to suck on rocks.

Posted by Dar 2003-04-21 10:32:16|| 2003-04-21 10:32:16|| Front Page Top

#2 "feathers, bones, skin, blood, fat, guts" Yuck. That sounds like a perfectly offal way to make petroleum...

Posted by Dave D. 2003-04-21 10:38:00|| 2003-04-21 10:38:00|| Front Page Top

#3 Saw a somewhat more in-depth report in some such magazine this month. As I happen to believe nothing short of the direct and miraculous intervention of God will bring order to that ridiculous region, we should be grasping to anything that'll pull us out of there.

Posted by FormerLiberal 2003-04-21 10:53:36|| 2003-04-21 10:53:36|| Front Page Top

#4 an offal joke there Dave ;-)

Posted by Frank G 2003-04-21 11:20:16|| 2003-04-21 11:20:16|| Front Page Top

#5 We'll see. We already are spending money to take care of waste, so if the cost per barrel is competitive AND takes into account how much it costs to dispose of the original stuff, then its possible.

Posted by Ptah 2003-04-21 11:27:58|| [www.crusaderwarcollege.org] 2003-04-21 11:27:58|| Front Page Top

#6 http://www.sagia.gov.sa/whyinvest/EconomicSectors.asp "The cost of production is $1.50 per barrel in Saudi Arabia, compared with a global average cost of $5 per barrel and more than $10 per barrel in some areas."

So at $8-12 (see article) this would be extremely uncompetitive with Saudi light crude. But it might be competitive with domestic production, especially if they could hit the low end of their estimate. I'm not an economist but it seems to me that the main effect of this would be to bring OPEC prices down by some amount, not wipe out OPEC alltogether. It would probably also need massive government subsidies since the ROI would suck. Still, you might want to do it for strategic reasons.

Another area where it might make sense to do this is in semi-closed, developing economies like India and China. It provides jobs, uses up garbage, and doesn't mess up your foreign exchange balance, therefore saving cash for capital investment.

Posted by 11A5S 2003-04-21 12:27:06|| 2003-04-21 12:27:06|| Front Page Top

#7 At $8-$12 cost per barrel, this oil would be EXTREMELY competitive by world standars. Last time I heard, extracting oil from Alberta tar sands is just slightly more expensive(around $13/barrel), and development of this resourse is going on at breakneck speed. In fact, they were developing it even when oil was at $15-$18 a barrel 10 years back or so. In the oil buisness, as little as a $2 diff between cost and price is enough to get you a great ROI (at least better than most investments). That's why they keep developing the deepwater offshore fields in the Gulf of Mexico. You cannot compare cost of producing oil in Saudi to anything else. They hit the lottery, that's all that is. And you have to remember, this is only the 1st generation of this technology, subsequent generations will undoubtably drive costs down. Plus, producing this bio-oil in low cost third-world countries would lower costs considerably. This is tremendous news. At the very least it will drive down oil prices and shut out the high-cost producers. Bye-bye Canada, Venezuela and Russia. And oil at $15/barrel will HUMBLE mid-east producers. Saudi is already in debt. In the mid-seventies, their average wage rivalled the US at around $18,000/year, now it is around $8,000/year while the US is about $27,000/year. This technology would bring about the complete humbling of Saudi, as oil would then be just another commodity where it is a buyers market. They would be reduced to third-world status with little superfluous cash to finance Wahabhi-inspired Islamic terror gangs. This is wonderful news.

Posted by jlc 2003-04-21 13:00:21|| 2003-04-21 13:00:21|| Front Page Top

#8 I'll be interested to hear Policy Pete's take on this. I'm not sure how often he updates his site, but it seems to be a site for people in the know regarding the petroleum industry.

Posted by Dar 2003-04-21 13:13:37|| 2003-04-21 13:13:37|| Front Page Top

#9 Mmmmmmm sOILent green!

Posted by Shipman 2003-04-21 13:13:43|| 2003-04-21 13:13:43|| Front Page Top

#10 Other thought to consider is that most people PAY to have there waste carted off. If this works an outfit like this could start to charge people less than most landfill prices, decreasing the real cost per barrel.

Posted by Anonymous 2003-04-21 13:14:01|| 2003-04-21 13:14:01|| Front Page Top

#11 agreed, Dar: too good to be true

wish it is true, though, it'd be great.

Problems could include:

a) too expensive
b) uses too much energy to extract the fuel in the first place - uses more than it produces!

i know this is pessimistic, after all i know nothing about the machines at all bar what is written here. It just sounds too good to be true...

i mean it takes anything - from ground up computers to people...

naaah too good to be true.

why aren't we just burning ethanol now , that is far simpler? it's been around for ages... why haven't car manufacturers started making ethanol-compatable engines for the domestic car market? Why isn't ethanol getting burned in power plants?

why aren't there fields of non-THC (ie: non smokable, no drugs at all) hemp being grown to service this?

if the simple options aren't being pursued, why would the complex/expensive options stand a chance?

Posted by anon1 2003-04-21 21:13:54|| 2003-04-21 21:13:54|| Front Page Top

#12 Next your going to tell me that the Boston Red Sox will face the Cubies in the World Series.

Posted by Brew 2003-04-21 22:58:59|| 2003-04-21 22:58:59|| Front Page Top

#13 But what about the Environment? What about all those poor pigs and turkeys, cruelly slaughtered to further our fuel interests? What about the loss of earth biomass that would otherwise be destined for green and growing things? I demand an enviromnental impact assessment. It'll only take about 15 to 20 years.

/sarcasm *off*
But really folks, you're probably going to be hearing this.
And it really does sound too good to be true. Nobody's invented perpetual motion--but it is possible to turn lead into gold. It just tends to be highly radioactive and consumes more energy than it's worth.

Posted by therien 2003-04-21 23:15:01|| 2003-04-21 23:15:01|| Front Page Top

#14 I hope this is for real,but there's been like millions of scams that start just like this.After the investors have lost all their money,someone finally looks inside the machine and finds an empty oil barrel with a hose attached.

Posted by El Id 2003-04-21 13:53:09|| 2003-04-21 13:53:09|| Front Page Top

#15 jlc: I don't disagree with any of your political analysis. I just believe that from a business standpoint, it will be difficult to incentivize most investors to fund such a project. (Throughout all of this, I am assuming that Offal Oil's cost projections aren't overly optimistic. If you've ever worked with start ups before, then you know how risky this can be.) If I can invest in ARAMCO (even if I can't invest directly, there are ways to invest indirectly) which has gross margins of $27.50 per barrel ($29 spot price - $1.50 production cost), why the heck am I going to invest in Offal Oil that only has gross margins of $19 per barrel ($29 spot price - $10 average production cost). I bring up this point because this is where these kinds of projects always fail. Investors get tired of all of the years of poor returns and then move their money to more profitable investments. The result: the project goes into bankruptcy. The way to prevent this is through subsidies. I assume that this is what the Canadians have been doing with the oil sands project. American governments have been wary of subsidizing non-defense and agriculture related businesses since the late 70's, which is one of the reasons that we have such a great economy. This is why I think that it would be good project for India or China where the governments aren't so subsidy-adverse and have strong economic reasons to develop their own energy businesses.

Posted by 11A5S 2003-04-21 13:57:10|| 2003-04-21 13:57:10|| Front Page Top

#16 Do you suppose they'll be modernizing the old Exxon slogan: "Put a Turkey in Your Tank"?

Posted by Dar 2003-04-21 14:13:42|| 2003-04-21 14:13:42|| Front Page Top

#17 Well being a chemical engineer I can tell you that nothing is more cheap than free. Which is essentially what crude oil is. You stick a pipe in the ground and it comes out. Any time you have to produce anything it cost much more than getting it for free. I work in alternative energy, and my experience has told me when oil runs out we're going to natural gas. The US and Canada have the worlds largest supply enough to last 90 years. When that's gone we go to Coal, we're tied with Russia at 25% each of total worls supply; that's about 300 years. There is no miracle, because even if you can produce it cheap enough the raw material is not sustainable. I know it sounds like it is--until you do the math.

Posted by George 2003-04-21 14:17:33|| 2003-04-21 14:17:33|| Front Page Top

#18 George, sticking a pipe in the ground and having a gusher only works in a few place, like the ME. That's why Saudi's cost is $1.50/ba. Everywhere else, producing black gold COSTS! But the problem (or good thing, depending on your POV) is that the ME cannot pump it out fast enought to suppy all the world. The US alone uses 4.2 billion barrels per year! Saudi, the biggest producer in the world (Russia is close), produces about 7.5 million ba/day when it is going full kilter. That's only 2.7 billion ba/year.
Canada's experience with tar sands was that it was subsidized in the 70's in the hopes that prices would eventually reach around $50/ba which would then make it economical at the then current cost of producing the stuff. Technology then gradually reduced costs until subsidies were no longer necessary. In fact technology and economies of scale improved so much that even when prices hit rock bottom at bet. $15-$18 / ba, oil companies (including US ones) were still making money there and investing! This is because, even with only a few $'s spread between cost and price, you still get a great ROI with oil. The reason being that once production gets going, you can pump out large quantities of this stuff (like millions of ba/year). As far as investing in cheap oil producers goes, there is only so much of that to go around, and the price of thoses share usually reflect their potential value, which means MORE. There is no free ride. The question is, what is the ROI for expensive oil, as opposed to investing in OTHER businessses. The answer is usually good! With the added benefit that there is always a market for the product for the foreseeable future.
As for the bio-oil, especially this method, the pilot plant was built, it operated and made the grade with flying colors. They are now building a full scale actual production plant. The only problem I can forsee is that for some reason the technology does not scale up very well. But I'm sure that they have studied this pretty well. Even with some unforseen circumstances, oil at $30/ba will make this a very profitable enterprise. Even at $15/ba it would still probably be a great investment. If after a few years in operation, the annual reports show a thriving, successful enterprise, these things will start sprouting up like mushrooms all over the world.

Posted by jlc 2003-04-21 15:44:56|| 2003-04-21 15:44:56|| Front Page Top

#19 George- I wonder how many BTUs they have to put into this process? I'd be surprised that getting usable fuel out of this is any more efficient than the dubious route of ethanol production.

Posted by Craig 2003-04-21 15:49:15|| 2003-04-21 15:49:15|| Front Page Top

#20 Craig,
According to the article (need to read the entire thing to find it), they get 150btus for ever 15btus invested - 10 times as much. Since most of the material going into the hopper is stuff that COSTS to get rid of (turkey guts, medical refuse, even grass clippings, if I read it correctly), the return would be even higher in places where there's a premium paid for waste disposal. While I don't think it'll every put Saudi Arabia out of business, it may be a good bet in the long run just to reduce the amount of space required for landfills. Getting the organics out of garbage allows the reduction of other products (metals, glass, etc.) to be done almost economically.

Posted by Old Patriot 2003-04-21 17:01:12|| 2003-04-21 17:01:12|| Front Page Top

#21 Enough with the fowl jokes!

Posted by raptor 2003-04-21 18:21:53|| 2003-04-21 18:21:53|| Front Page Top

#22 In just reducing waste and green house gass' alone makes this a viable enterprise .
Turning byproduct into usable full is gravy.Besides Large cities(N.Y.,Chicago),ask any major hog farmer what he would do if he could turn his waste into usable fuel.Even a drop of 25% operating expense would be a substaintal savings.

Couple this with fuel cell/fusion tech. and it is possible we could be enrgy indepentant,or close to it.

Posted by raptor 2003-04-21 18:40:50|| 2003-04-21 18:40:50|| Front Page Top

11:32 Anonymous
11:27 Anonymous
11:20 Anonymous
11:07 Anonymous
09:42 raptor
09:30 raptor
08:57 raptor
08:18 raptor
08:06 raptor
21:00 Ed Becerra
20:58 anon1
20:46 Bomb-a-rama
19:56 KP
19:45 Bomb-a-rama
19:41 Lu Baihu
19:35 KP
19:24 Anonymous
19:15 Ed
19:14 Sassafrass
19:06 KP
19:05 11A5S
19:04 KP
18:59 Better safe than sorry
18:48 john