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00 a barrel
mauesj@gmail.com
ABSTRACT
The starting point of this work was to attempt to answer the following questions:
1 - Oil at $ 140.00 in 2008 is really expensive?
2 - If positive, why Alternative Energies calls do not turn into reality?
3 - What is the source of energy that would be better able to replace oil in the
medium term?
Our conclusions were that oil at $ 140.00 is not expensive and therefore
alternative sources of energy are still in the same situation they were in the late
70s / early 80s. They continue to be alternatives.
Besides not being expensive, it becomes clear that in the short term
hardly a barrel remained at a level of $ 140.00 situ air must be at a
level around 15-20% down or even returning to levels less than $
100.00.
Regarding the above statement can not forget the huge influence suffered by the
oil with facts generated by political instability and therefore able to completely
reverse the price scenario in the previous paragraph.
A condition to be met by a new source would be, like oil, an energy available in
large quantities and not localized form and economically acceptable calorific
value.
Despite recent developments of energy like wind, solar, geothermal, biomass
and even different ethanol, none of them meets the above requirement.
What we perceive analyzing readily available data, is that apparently only the
Coal and nuclear energy generated by fission m can take charge of this task.
It may seem ironic, and it remains that the current horizon energy solution for
the world can be an energy source once widely usad the (Coal) and almost
completely replaced by oil threatens to replace it today.
One possible solution would be present in the past and not the future
development of different and new energy sources.
With the new technologies now obsolete coal would again have the same
importance it had for nearly 200 years in the future waiting to be replaced again,
this time possibly permanently, by a further advantageous energy source than
oil.
- A LITTLE HISTORY
Been known since biblical times, we can chose the year 1854 as the year of the
beginning of the oil industry, known as Stone oil, then found in Pennsylvania, and
believed to be possible to process it to produce a fluid that would be burned in
lamps as "illuminating" in an advantageous replacement for O oils from coal.
The society of the mid-nineteenth century desperately needed an "illuminating"
cheap and high quality.
Names like George Bissell, Benjamin Silliman, James Townsend and Edwin L. Drak
and among others were the responsi ble for cria will of the oil industry in
America and therefore the world.
When in August 1859 Dr ake found oil in Titus ville, Pennsylvania he certainly did
not imagine the enormous impact of this discovery in the history of the world.
A simple "Illuminating" the oil, due to its versatility and range as energy and raw
materials changed and shaped the world we know.
Does not exist in the history of mankind a product that has been the importance
of oil.
Its high power Calorif ico, ease of transport, storage and handling, versatility of
uses (energy and raw materials), relative simplicity of processing (a single plant refinery - responsible for the production of all derivatives), acceptable
environmental impacts its exploration and production, abundant availability and
attractive prices, not only built immense fortunes and a gigantic industry as
mainly shaped the world as we know it today.
Revolutionized transport, industry and agriculture with fertilizer production
allowing urbanization happen quickly and irreversibly.
No oil or other form of energy and source of raw materials with their
characteristics, certainly the big cities would not exist and would still be living in
over the next s areas of food production smaller units.
The world oil production increased from 59.48 million barrels per day in 1973 to
81,533 in 2007 (37% growth).'s USA, responsible for 25% of world oil
consumption, produce only 33% of its needs.
In 2007, China's share in world energy consumption grew by 52%.
The world oil consumption grew 1.1 0% from 2006 to 2007 while the press
laughed energy was 2.4% 0.
In 1987 the proven oil reserves were estimated at 910.20 billion barrels growing
to 1237.80 in 2007 of which 61% in the Middle East.
Considering the reserves at the end of a given year and the production in the
same year, we get the same duration in years if production remain at the same
level (ratio R / P).
For 1987 this ratio indicated 41 years while in 2007 we had 41.6 0 years.
Also for 2007, the coal indicated more than 130 years and natural gas 60 years.
Today, with the advent of mobile phones, computers and the Internet, we find
that the telecoms were responsible for what we usually call globalization, but
that would not have existed if before the oil and its derivatives have not molded
the world to allow their need and existence.
- 1977: start of commercial operation of the Campos Basin field with Anchovy.
- 1979: 2nd shock (due to production stoppage Iranian fundamentalist revolu
will + action Arah bia Arabia aiming at increasing target price of oil) prices per
barrel reached the mark of $ 35/40 Seizure in the world with the feeling that the
end of oil is near.
- 1979: start of operation of the Santos Basin.
- March 1979: Nuclear Power Plant accident at 3 Mile Island in the USA.
- 1979/1983: intense activities around the world, studies of alternative energies.
- 1981: IBM announces its 1st PC.
- 1982: inauguration of Itaipu (08 years of construction). 20 generating units,
14,000 MW of installed pot NCIA provides 19% of the energy consumed in Brazil,
total investment of $ 16 billion (US $ 1,143 / kW running) against US $ 5,385 /
kW of Angra II not working.
- 1983: price of crude begins to fall and reaches values that definitely unfeasible
Alternative Energies.
- 1986: Oil back to the level of $ 20.00 (currency).
- April 1986: accident at the Chernobyl Nuclear Power Plant in Russia.
- 1990: i nvaso of Kuwait by Iraq. Petr leo back momentarily to $ 40.00.
- 1990: Creation of the World Wide Web (www).
- 1991: Brazil (FAPESP) makes his 1st Internet connection.
- 1993: Internet grows 341,000% in 1 year.
- 1994: Real Plan.
-1997: Brazil starts to produce more than 1 watergrass the barrels per day.
- 1998: founding of Google.
- November 8, 2000: The BBC airs the "The Last Oil Shock" program.
- September 2001: aque at the twin towers and the gono Penta and the price of
oil or moves.
- October 2001: commanded by God (! told by Bush), Bush invades Afeganist
the Oil or move..
- 2002: Creation of the Euro.
- March 2003: top again following divine commands (again his statement), Bush
invades Iraq again oil does not react.!
- 2003: the year that Brent Spot Price FOB USD per barrel is greater
than the Euro value per barrel highlighting the growing weakness of the
dollar from 2000 to 2007 prices rose 152.76% at $ 70.29% against Euro.
.
Now comes the 4th moment is broken when in 2008, consistently, the barrier of
$ 100.00 and see the questions:
- 3rd shock?
- Because the world is not reacting to this new price level?
- Alternative energies?
- What is the horizon length of oil reserves? Hubbert was right?
- Expensive oil or cheap dollar?
- Brazil OPEC???
Now what?
- A FIRST CONCLUSION
Here we come to two very interesting and significant numbers.
Q ue for the net oil import in 2007 reached the same percentage of 2000 GDP,
the barrel should be:
- $ 200.00 without considering the natural gas
- $ 350.00 US considering the natural gas
Looking only for numerical findings we see that we are still a bit distant in terms
of prices that characterize a 3rd shock (I'm expanding the beads made of
Brazilian reality for a global context).
But these numbers and statistics are only part of the answer because we know
the enormous interdependence in oil prices not only in the economy as a whole,
but also in politics and psychological reactions of society.
I believe it is very intuitive claim that serious problems occur in the society well
before the $ 3 50.00 being perhaps the s $ 200.00 the new level of the new oil
shock.
- A SECOND CONCLUSION
Given current technologies, which is real can substitute for oil?
My bet based on available data and history, is coal and nuclear energy.
In the history of mankind coal reigned much longer than oil (198 years versus 60
years).
Ok, the impacts of oil on the economy were much larger, long and deep.
And because the coal?
1 - abundant Reservations
2 - Possibility of large and rapid technological advances in both exploration &
production and in use due to all that have virtually stopped in the mid-50s when
oil finally dethroned coal. Plenty of room for all major developments in regard to
coal including items related to the environment ie there.
3 - On a scale of Lower Calorific, coal lies in the range 2950-5700 kcal / kg while
the oil falls to 10,180. No doubt a huge disadvantage. However second only to
the Natural Gas and Coal Plant that, in environmental terms, has far more
problems than the Mineral Coal.
And Nuclear Power?
Explosions reactors, nuclear waste contamination, apparently ... until even as an
environmentalist James Lovelock surrendered to this form of energy as opposed
in recent decades by environmentalists and pacifists.
Current technologies seem to guarantee safe operation of reactors and handling
of waste produced by plants to make fission reactors an attractive option for
electricity generation.
- FINAL COMMENTS
When the new level will be achieved and how much will it actually does not
matter because this happened like it or not, because until the oil reservoirs with
low production cost are all already in operation and new discoveries occur in
areas where exploration costs will superior even to those of the North Sea.
Just as a reference, in 1970 the development of a field of 60,000 barrels per day
in typical conditions of the Middle East was $ 20 million. In 1977 the
development of a similar field in the North Sea over $ 500 million.
The question that really matters is whether we will be prepared when the time
comes which translates in a very simple question:
- If the world has developed a serious and consistent way other forms of energy,
the threshold is reached without characterizing a 3rd shock otherwise we may
attend a worse situation, and this time much longer, that lived in the late 70's /
early 80's.
Interesting to note that according to statistics from British Petroleum, the
"alternative energy" represented 15.10% of total energy consumption in the
world in 1973 rising to 16.40% in 2005.
All suffer the consequences of a new shock that would be larger for poor
countries without oil, further increasing inequalities and fueling greater tensions
between countries / blocks leading the world to inevitable wars and ideological
confrontations fueling the escalation of terrorism.
It is the universal communications that will bring peace and development to the
world, but a new era of global availability of energy at affordable prices and
acceptable environmental costs, enabling the improvement of living conditions of
large pa rt of the world's population today still jettisoned the benefits brought by
economic growth hese ne nearly 175 years of oil, of which 60 years almost
absolute hegemony.
Jurandyr Arone Maus - mauesj@gmail.com
09 / August / 2008
SOURCES:
- Yergin, Daniel, The Prize: The Epic Quest for Oil, Money and Power - 1990
- Several Web sites.
- Central Bank - Central Bank of Brazil
- Ministry of Mines and Energy - National Energy Balance
- ANP - National Petroleum Agency
- BP - British Petroleum
- IEA - International Energy Agency