Oil and The Future of Canada

PIK · October 5, 2015

We will be pumping and burning oil for many yrs to come. So if anybody tells you otherwise is full of it.

msj · October 5, 2015

Oil prices will never see $40 a barrel again.

Given that oil currently hovers above $40 per barrel you may want to wait until the price is well below $40 prior to making a prediction.

Unless you mean Western Canadian Select - yeah, that may not see $40 for a while.

waldo · October 5, 2015

We will be pumping and burning oil for many yrs to come. So if anybody tells you otherwise is full of it.

of course... anyone with genuine understanding recognizes that; however, the degree of dependence on fossil-fuels will be significantly diminished, decade over decade, over the next 40-50 years. Nations that recognize this are early adopters towards diversification and will favour positioning within the growing so-called green economy. Alternatively, nations that presume to keep the status quo or even extend on fossil-fuel reliance will be left behind. Where do you currently see Canada being positioned in that regard?

msj · October 5, 2015

Not just because of all the shale oil down South but Lockeheed has recently developed Tesla's technology of endless energy and it will only be 3-5 years before it is in commercial form. Also Google "Thorium Plasma Battery Technology". Oil consumption will be cut in half within th enext five years and may only be used for lubricants and plastics production. I predict $10 a barrel within 5-6 years.

I share your optimism but I think the timeline is out by several decades.

Decarbonization will likely lead to a decline in the use of coal in the grid. Natural gas is already rapidly replacing coal and will likely also replace oil within the grid.

Already we see wind/solar power supplied in the UK doubling in the past year to almost 12% of their grid power supplied at the cost of coal. In fact, by this time next year, coal may be a smaller part of their grid than S/W.

If it is happening there then it will happen elsewhere which will put pressure on oil prices which is good for us consumers.

Transportation is a different story and will likely take much longer than the 5 years you indicate.

But I look forward to the day when Saudi/Iran/Russia have to live with smaller cash flows fro oil and they have to reduce their funding of terrorism accordingly.

If that means oil is a smaller part of our economy then it is a small price to pay.

Edited October 5, 2015 by msj

Topaz · October 5, 2015

Enbridge just got an ok from the EB to reverse oil from E-W to west to east to Quebec, which means if those 1979 built oil pipes burst, any where from Sarnia On to Quebec, it will take billions and billions to fix the damages, if that is possible. I think there is a pipe line that is under a golf curse in the area affected, plus 401 and the cities in the area. http://www.cbc.ca/news/politics/enbridge-gets-ok-to-reverse-pipeline-flow-east-1.1135832

Smeelious · October 5, 2015

Anyone who thinks that electric cars will replace fuel powered cars in the near future is just plain kidding themselves.

Last I knew, it would take something on the order of 127 Nuclear power plants to replace the power generated through fuel. And that's Ontario ALONE.

kimmy · October 5, 2015

Oil prices will never see $40 a barrel again. Not just because of all the shale oil down South but Lockeheed has recently developed Tesla's technology of endless energy and it will only be 3-5 years before it is in commercial form. Also Google "Thorium Plasma Battery Technology". Oil consumption will be cut in half within th enext five years and may only be used for lubricants and plastics production. I predict $10 a barrel within 5-6 years.

That's science fiction being peddled by scammers trying to part you from your money. I have seen so many ads like this on the web.

"Free Energy! Power Companies Hate This! Buy it before it's banned!" And there's a picture of some ridiculous contraption that looks like a blower motor, or a Dalek, or a toaster with a satellite dish mounted on it, or Ahmed's clock.

There's no "free energy".

-k

msj · October 5, 2015

There's no "free energy".

-k

I agree. But even just cheap energy can be revolutionary.

S/W is already effecting peak pricing in some US markets. This is where a spike in prices occurs and, usually, natural gas power plants kick in to supply the energy needed.

Once it effects prices at the margins it is only a matter of time before it does it for the market itself.

We have seen low interest rates for many years now.

Who knows? Maybe we will see cheap energy for many many years too.

Which likely will mean lots of volatility in oil prices but with a general trend down from the historic highs of the 2000's.

waldo · October 5, 2015

Anyone who thinks that electric cars will replace fuel powered cars in the near future is just plain kidding themselves.

Last I knew, it would take something on the order of 127 Nuclear power plants to replace the power generated through fuel. And that's Ontario ALONE.

? depending on how one might presume to delineate reactor versus plant, there are currently 3 commissioned and operating nuclear plants in Ontario providing ~57% of Ontario's generated power:

TimG · October 5, 2015

S/W is already effecting peak pricing in some US markets. This is where a spike in prices occurs and, usually, natural gas power plants kick in to supply the energy needed.

This statement makes no sense because solar/wind cannot be turned on to meet transient demand. It can happen but it is fluke because most of the time solar/wind causes huge dips in spot prices because they have to sell even if their is no demand. That is why a lot of Ontario wind power is sold at huge discount to the US. In Texas wind operators actually pay the grid operator to take the power because they only get the subsidies for power delivered (the price is slightly less than the subsidy). Edited October 5, 2015 by TimG

msj · October 5, 2015

This statement makes no sense because solar/wind cannot be turned on to meet transient demand. It can happen but it is fluke because ...

It happens during heat waves which is not a fluke at all.

waldo · October 5, 2015

That is why a lot of Ontario wind power is sold at huge discount to the US.

a lot? How much is a lot? Citation request

In Texas wind operators actually pay the grid operator to take the power because they only get the subsidies for power delivered (the price is slightly less than the subsidy).

you've had much to say about Texas wind in the past... and your unsubstantiated claims have been dealt with accordingly! You made me look... I see the state has now hit the 10% level for wind's percentage of overall production. Now, of course, much has been made of negative pricing for wind in Texas; unless you can show otherwise, I'm going to suggest it's more an atypical practice usually associated with rare periods of "over production":

The What, When And How of Texas Electricity Prices Going Negative

The Night They Drove the Price of Electricity Down - Wind power was so plentiful in Texas that producers sold it at a negative price. What?

.

TimG · October 5, 2015

It happens during heat waves which is not a fluke at all.

With solar - not wind as you suggested. Heat waves usually mean wind production drops. And heat waves don't mean more solar power (the sun does not get brighter). If solar is meeting the peaking demand during a heat wave that means it is producing a lot of power which has to be dumped on days when demand is not high. And if the peak comes at other times (e.g. due to cold nights) then solar is useless so you still need to build the natural gas generators.

Smeelious · October 5, 2015

? depending on how one might presume to delineate reactor versus plant, there are currently 3 commissioned and operating nuclear plants in Ontario providing ~57% of Ontario's generated power:

What I was trying to say, is that replacing fuel altogether would require an additional 127 nuclear plants to be commissioned.

waldo · October 5, 2015

What I was trying to say, is that replacing fuel altogether would require an additional 127 nuclear plants to be commissioned.

not to belabour the point... too much... over half the production in Ontario is provided by 3 nuclear plants; the graphic suggests to you the existing percentages of the mix that reflect on... fuel (gas/coal). Your number needs clarification.

Smeelious · October 5, 2015

not to belabour the point... too much... over half the production in Ontario is provided by 3 nuclear plants; the graphic suggests to you the existing percentages of the mix that reflect on... fuel (gas/coal). Your number needs clarification.

Ah.

That graph suggests that 14.7% of current electrical generation is from gas.

The energy I'm talking about is the amount of energy produced by combustion engines in motor vehicles, which would not be accounted for in that graph. Replacing all current combustion engines with electric engines would require the equivalent of 127 new nuclear plants. How that energy would be generated, and more importantly distributed is the key limiter in the adoption of all electric vehicles.

Keep in mind that number is likely out of date, and the source is a lobbyist from the oil and gas sector.

waldo · October 5, 2015

speaking of the "power generated by vehicle combustion engines"... and presuming to draw an equivalence to nuclear power plants... has what significance to anything?

Smeelious · October 5, 2015

In that you can't remove fossil fuel from the equation.

As such, the oil and gas industry will continue for a long, long time.

ToadBrother · October 5, 2015

In that you can't remove fossil fuel from the equation.

As such, the oil and gas industry will continue for a long, long time.

I give the industry 20 years.

waldo · October 5, 2015

I give the industry 20 years.

in a distant past thread there was much discussion on why new refineries weren't being built...

Exxon Mobil Corp. says it believes that, by 2030, hybrid gasoline-and-electric cars and light trucks will account for nearly 30% of new-vehicle sales in the U.S. and Canada. That surge is part of a broader shift toward fuel efficiency that Exxon thinks will cause fuel consumption by North American cars and light trucks to peak around 2020 -- and then start to fall.
"For that reason, we wouldn't build a grassroots refinery" in the U.S., Rex Tillerson, Exxon's chairman and chief executive, said in a recent interview. Exxon has continued to expand the capacity of its existing refineries. But building a new refinery from scratch, Exxon believes, would be bad for long-term business

dre · October 5, 2015

Ah.

That graph suggests that 14.7% of current electrical generation is from gas.

The energy I'm talking about is the amount of energy produced by combustion engines in motor vehicles, which would not be accounted for in that graph. Replacing all current combustion engines with electric engines would require the equivalent of 127 new nuclear plants. How that energy would be generated, and more importantly distributed is the key limiter in the adoption of all electric vehicles.

Keep in mind that number is likely out of date, and the source is a lobbyist from the oil and gas sector.

Your numbers are wrong... not even remotely close.

Lets assume that the portion of total energy use associated with transportation in Ontario is about the same as in the US. A little less than a third.

Ontarios total enegery consumption is roughly 2000 PetaJoules, or 555 TW Hours.

That puts transportation about about 200 TB Hours.

A largest nuclear plant we are likely to build today produces 4000MW. Thats the largest plant in the US, the Palo Verde plant in Arizona. Assuming its up 100% of the time 4000 * 24 * 365 is 35040000MWH which is 35 TWH.

So about 6 of these huge plants would be required to power the transportation sector. Not 127. Or if the plants were half the size and only up half the time then it would take 24, etc.

Edited October 5, 2015 by dre

dre · October 5, 2015

I give the industry 20 years.

I give it a lot longer than that. Maybe 200 years, but it wont be a primary source of energy beyond about 2060.

ToadBrother · October 5, 2015

I give it a lot longer than that. Maybe 200 years, but it wont be a primary source of energy beyond about 2060.

Not even close to two hundred, and not even until 2060.

If you hold stock in an oil company or fossil fuel extraction company, I would think about divesting yourself in about ten to fifteen years.

dre · October 5, 2015

Not even close to two hundred, and not even until 2060.

If you hold stock in an oil company or fossil fuel extraction company, I would think about divesting yourself in about ten to fifteen years.

Even after FF is no longer a primary energy source we will be using petroleum and petrochemicals. The industry will be scaled back but its not going away any time soon.

And petroleum is used for hundreds of other applications besides producing energy. Is used to make most of the things you own.

ToadBrother · October 5, 2015

Even after FF is no longer a primary energy source we will be using petroleum and petrochemicals. The industry will be scaled back but its not going away any time soon.

And petroleum is used for hundreds of other applications besides producing energy. Is used to make most of the things you own.

Yes, but the predominant use of long-chain hydrocarbons is for energy. As to other uses, there are other ways to produce plastics. I'll wager by 2100, we'll be using bacteria and algae for a lot of industrial processes.