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November 29, 2007


Sepp Hasslberger

Sounds like there is plenty of room for oil production at affordable prices.

So much for the "peak oil" scenario, which seems largely self-generated by the oil industry to increase prices and sell oil expensively. In confirmation of this view, oil companies are raking in record profits.

Your question: what does this do to further development of renewable energy ... is a good one.

My view is that renewable energy is going to be developed no matter what is the size of recoverable oil resources. There is plenty of momentum to get off oil.

Oil has been and remains a polluting and relatively inefficient energy technology. It has helped industrialization and will be the bulk supplier of energy for some time to come. But there are a host of cleaner alternatives, many of them just about ready to come on line.

What should be done to keep promoting the development of alternatives before it develops into an emergency is to tax oil based fuels. Such a tax should aim at stabilizing the end user price of fuel. When a cheap new source of oil becomes available, such as the THAI system, and when such a system (or a new discovery of a huge oil field) actually lowers prices, the slack should be taken up by taxes so as not to let consumer prices drop. This way, the incentive to develop alternatives remains, and we will eventually be able to phase out oil as an energy source, preserving the reserves as an abundant raw material for other uses.

Look at the situation in Europe. Fuels such as diesel and gasoline are MUCH MORE expensive than in the US and Canada. They are more heavily taxed, precisely because the price is being kept high. The reason is to discourage the use of oil because most of it has to be imported. And it seems to work. There is more efficiency in EU energy use than there is in North America, precisely because fuel prices are high.

Eventually, with proper alternatives coming to maturity, we may see much lower energy prices and even a change from centralized to distributed energy generation.

Al Fin

THAI is only one of many new high-tech ways of more cheaply recovering heavy oils, bitumens, kerogens, etc. Given that Canadian and US nonconventional petro-deposits exceed Saudi Arabia's reserves by up to a factor of 10, it would seem that such technologies may very well have an impact on "peak oil" scenarios.

Oil and coal are dirty, nasty ways to power a world economy. We need to get away from them as soon as possible. But making up false scare stories that lead to massive economic hardship for billions of people is not the way.

Read Leonardo Maugeri's excellent book, The Age of Oil. It is a fine companion to Yergin's "The Prize," for understanding the dynamics of the oil business as practised by national oil enterprises and big oil.


Here is a link to an extensive discussion of this technique on The Oil Drum website from a few months back.

How much oil is lost in the burning process?

This is addressed in the link above. IIRC, the amount burned is about 10%. The interesting part is that what is burned is the bitumen, the heaviest fraction (the most difficult to recover and upgrade) of the oil. This makes sense, as the heavy fraction is not going to move much if at all, so it becomes the fuel to heat the lighter fractions. Thus the resulting oil that is recovered is of a higher grade than that which was in the ground at the start.

Benjamin Cole

The features in The Energy Blog are amazing. I do not think there is much to be gloomy about. We will have the "oil crisis" whipped in a few more years. And we may be able to do it while cleaning the air.
PHEVs, or alternatives fuels (including heavy oil).
I would not want to be a one-export country in oil right now. This is the peak, the zentih for oil prices.


Another chunk out of the 'peak oil' thesis, first postulated in 1969; but repeated endlessly by people whose intellectual curiosity was frozen in the Sixties.

My 500 shares of PLAINS ALL AMERN PIPELINE L P (PAA) are up to 51.05. Plains is a major carrier of Alberta oil.

Reality check

Wow, great news!

Uh, unless you do the math. The U.S. currently goes through 20.7 millions barrels of oil EVERY DAY. So, while

"The 50,000 acre site owned by Petrobank contains an estimated 2.6 billion barrels of bitumen."

that'll only last the U.S. about 125 days. So much for the death of Peak Oil. Say hi to Mrs. Pollyanna for me!


The Petrobank site is not the only one to contain oil.
The oil sands resource base is huge, if this technology can exploit it at the levels they say.
Whether that is a good thing or not given the possibility of man-made Global warming is of course another issue!


This may not end peak oil, if peak oil is measured by peak world production rate. If a significant fraction of heavy oil becomes producable it will mean that reserves are larger than what has been consumed to date. My reading is that the rate of production of heavy oil will likely be fairly low, probably not enough to make up for rapidly declining conventional oil production. It will likely mean that the production decline after peak-oil-production should be a slow one. That should give the world plenty of time to adjust to oil as a scarce commodity.

If THAI works out as advertised it would help a lot with heavy oil in sand. It is not applicable to oil-shale, it won't enable the US to produce oil shale. The big deposits of these resources are in Canada, Venezuela, and Russia.

Al Fin

"Peak Oil" is a misnomer. "Plateau Oil" is a more accurate descriptor of what will be experienced over the next decade or two.

Since demand for energy has not plateau'd, upward pressure on oil prices will be maintained.

Heavy oil is more expensive to refine than lighter oils, which will also keep prices high.

Unfortunately for true believers in "peak oil," there is still a huge amount of light oil under the ground in the middle east, Russia, etc. If THAI scales up well in Canadian tar sands, complacent monopolists in Russia and the middle east may have to demonstrate their ability to scale up production.

But that would require investment in exploration, maintenance, and more advanced production. That means most of the rich slobs would have to pay outsiders who actually know what they're doing. They hate it when that happens!


If it really does cost less than $10 per barrel to produce oil, it should be economic when crude oil sold for $40/bbl. No need to wait for $100/bbl. I wouldn't blame the rising price of crude oil on $10/bbl production costs. I wonder if they're afraid of the price dropping back below $40, or if it just normally takes 17 years to get a new idea into commercial production in the oil industry.


What has held the rate of innovation down in the oil industry is that marginal prices of production in the Gulf have been so low - everyone has been too frightened that demand might fall, and the bottom drop out of the market, as happened after the oil price rise in the 70's
You are reluctant to risk shareholders money in ventures which have a higher base cost in those circumstances.
Demand form China and India now probably means that kind of event is unlikely, so there is more confidence to invest.


What difference is Thia from Fire Flood? The old Gulf Oil Company (now Chevron) had a pilot project in the Bakersfield, California (USA) area in 1982 that injected air into heavy oil sands and ignited the oil in a similar method to Thai to produce the oil. The drawback was that the method completely destroyed the oil sands after the fire had burn the oil. No oil left for future extraction methods. Gulf Oil abandoned the project for unknown reasons after Chevron bought them.

Alex Oil Rig

always coming up with new methods. Always new drawbacks

UK thesis

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Thus the resulting oil that is recovered is of a higher grade than that which was in the ground at the start
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THAI™ is very efficient, recovering about 70 to 80 per cent of the oil, compared to only 10 to 40 per cent using other technologies. (an amazing number if true) . . .
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A new method developed in Britain over the past 17 years for extracting oil is now at the forefront of plans to exploit a massive heavy oilfield in Canada.

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A new method developed in Britain over the past 17 years for extracting oil is now at the forefront of plans to exploit a massive heavy oilfield in Canada.

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Thus the resulting oil that is recovered is of a higher grade than that which was in the ground at the start

Rhys Little

Fear over future power shortages in the UK here: http://bit.ly/9pFM05

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Air Purifier

Very interesting, cheap oil is always good of course!

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