Venezuela May Yield Twice as Much Oil as was Thought.
25 Jan, 2010 04:23 pm
The Orinoco oil sands belt in Venezuela may yield 513 billion barrels of oil, or more than twice as much as was previously reckoned. Although this appears as around twice as much oil as Saudi Arabia has, the Orinoco bestowal is "heavy oil" and needs a whole new swathe of refining capacity to turn it into useful fuel. We are still on the way to a re-localised society as supplies of cheap, light oil (e.g. from Saudi) begin to wane.
Nonetheless the Venezuelan President Hugo Chavez and his government have drawn-up plans to bring foreign investors including companies from China and India into the region, even though contract disputes reign with previous partners, based in the United States. The heavy oil is present in the form of oil-sands, similar to the tar-sands in Canada’s Athabasca region, and is highly intensive in terms of energy to provide heat to extract the bitumen and supplies of water too. Orinoco is the largest oil accumulation ever to be assessed by the United States Geological Survey, and the amount of recoverable oil is derived from estimates that 40 - 45% of it may be recovered, although there is some scepticism about this and one Venezuelan geologist, Gustavo Coronel, has amended this down to 25%, noting that even then much of it would be too expensive to produce.
The latter does however depend on the prevailing price of a barrel of oil, which is now around $80 and rising. Sources of oil from Mexico (e.g. Cantarell) are in decline and American home-production of oil is falling even in the face of lessening demand for it as driving-habits change. The Canadian tar sands are looking increasingly ripe, as supplies of conventional oil from the Middle East are set to become more expensive and it is in no way certain that President Chavez will sell his oil to the U.S. anyway. In short, light crude oil will become an increasingly precious and scarce commodity, and heavy oil will be extracted instead.
As to the likely outcome of this, even if sufficient quantities can be recovered it is to the EROEI (Energy Returned On Energy Invested) that we should look to determine the viability of sources of “oil”. Middle East oil has various estimates of EROEI ranging from about 30 down to 8 (i.e. for each barrel of oil worth of energy, 30 to 8 barrels of oil may be recovered), while “oil” from tar sands is costed at anywhere from 3 down to 1.5. Clearly, whatever amount of hydrocarbon liquid fuels may be produced in the future, cheap, easily refined oil must soon peak, and along with it our global transportation network. It is the relocalization of civilization whose silhouette appears on the future horizon.
“Venezuela oil ‘may double Saudis’.” http://news.bbc.co.uk/1/hi/world/americas/8476395.stm
“Oil Estimates in Venezuela Doubled,” Jan Mouawad. http://greeninc.blogs.nytimes.com/2010/01/22/oil-estimates-in-venezuela-doubled/
“Why the U.S. needs all the tar sands oil it can get,” By Jeff Rubin. http://www.theglobeandmail.com/blogs/jeff-rubins-smaller-world/why-the-us-needs-all-the-tar-sands-oil-it-can-get/article1436274/