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REFLECTIONS ON OIL @ $ 140.

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

industry and agriculture with fertilizer production allowing urbanization happen quickly and irreversibly. The world oil production increased from 59. The world oil consumption grew 1. known as Stone oil. Revolutionized transport. Today. Pennsylvania he certainly did not imagine the enormous impact of this discovery in the history of the world.48 million barrels per day in 1973 to 81. not only built immense fortunes and a gigantic industry as mainly shaped the world as we know it today.4% 0. A simple "Illuminating" the oil. abundant availability and attractive prices.'s USA. versatility of uses (energy and raw materials). we can chose the year 1854 as the year of the beginning of the oil industry. When in August 1859 Dr ake found oil in Titus ville. then found in Pennsylvania.responsible for the production of all derivatives). responsible for 25% of world oil consumption. Its high power Calorif ico. No oil or other form of energy and source of raw materials with their characteristics. In 2007. James Townsend and Edwin L.20 billion barrels growing to 1237.533 in 2007 (37% growth). we get the same duration in years if production remain at the same level (ratio R / P). Also for 2007. Considering the reserves at the end of a given year and the production in the same year. due to its versatility and range as energy and raw materials changed and shaped the world we know.6 0 years. with the advent of mobile phones. Benjamin Silliman. Names like George Bissell. In 1987 the proven oil reserves were estimated at 910. Does not exist in the history of mankind a product that has been the importance of oil. we find that the telecoms were responsible for what we usually call globalization. the coal indicated more than 130 years and natural gas 60 years. relative simplicity of processing (a single plant refinery . acceptable environmental impacts its exploration and production. produce only 33% of its needs. but . 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. China's share in world energy consumption grew by 52%. ease of transport. storage and handling.80 in 2007 of which 61% in the Middle East. computers and the Internet.1 0% from 2006 to 2007 while the press laughed energy was 2. certainly the big cities would not exist and would still be living in over the next s areas of food production smaller units. Drak and among others were the responsi ble for criaç will of the oil industry in America and therefore the world.Been known since biblical times. For 1987 this ratio indicated 41 years while in 2007 we had 41. The society of the mid-nineteenth century desperately needed an "illuminating" cheap and high quality.

.1867: invention of the internal combustion engine by Nikolaus Otto.00 Assuming an annual inflation rate of 2. . . . . Exxon.1911: breakup of Standard Oil by the American Government (Mobil. . . . 1880: Edwin Drake. Benjamin Stillman distills experimentally raw. s establishes the bases of industry in Pennsylvania nia to find that the oil could be commercially distilled to produce lubricants and kerosene for lighting and cooking.1893: Rudolf Diesel creates 1st diesel engine that works efficiently. .5% for the period 1908/2008. the man who drilled the 1 producing well petrol and dies in misery. XVIII (1760?): Starts in England called the Industrial Revolution as having abundant energy based on coal. Atlantic.1938: Creation of the National Petroleum Council (NPC). Iraq 1st commercial oil well in an Arab country.Geology for Children by Monteiro Lobato.000. Amoco and others).00.Mid-sec.1870: founding of Standard Oil (Rockefeller). . .1937: 1st edition of The Well of the Viscount .1914/1918: 1st World War. .1920: begins in Brazil the assembling of Ford T. .1925: GM (Chevrolet) initiates the assembly of cars in Brazil.1859: beginning of the stria chemical ind in the USA in Titusville. .1833: Prof.1908: launch of the Ford T (start of Automobili stica industry) at the price of USD $ 850. .1933: ARAMCO (Saudi government).1927: discovered in Kirkuk. Mr.1929: crash of the New York Stock Exchange. .1907: founding of the Royal Dutch Shell Group of Companies. Pennsylvania with the drilling of 1 well by Colonel Drake.1855: The Chemical Engineer Benjamin Stillman Jr.IMPORTANT EVENTS OF THE OIL INDUSTRY INCLUDING SOME OTHER ENERGIES AND OTHER RELEVANT FACTS . . .November 8.that would not have existed if before the oil and its derivatives have not molded the world to allow their need and existence. .1939/1945: 2nd World War. . Chevron. comes 2008 at a price of $ 10. .

1957: 1st commercial nuclear reactor fission. . .1970: 1st large oil discovery in the UK sector of the North Sea.1974: start of construction of Itaipu. . 1973: right ear of John Paul Getty III delivered to a newspaper in Rome. . .1958 oil becomes an industrial fuel cheaper than coal.1956: Mr Hubbert (one geophysicist of Shell USA) and the theory of Peak Oil (the point where the maximum production of crude oil is reached and irreversible decline starts). . .1953: PETROBRAS. . .1965: 1st gas discovery in the North Sea.1944: World Bank. .1971: USA. .1957: Felix Wankel puts into operation the 1st rotary engine "piston" or Wankel engine. Angra II at a cost of $ 7 billion for a 1. . according to Hubbert peaks.1957: start of the Brazilian automobile industry with the production of DKW two times and three cylinders.1976: start of production from the Campos Basin.5 billion! .1951: 1st nuclear fission reactor to produce electricity although in very small quantities. .1961: Yuri Gagarin . .I Vostok.November 1976: Brazil signs agreement with Germany to build 08 nuclear reactors. . .. The truth is no q ue until today was really ready (neither I nor Angra I Angra II).1945: UN. convincing his father to pay a ransom of $ 2. . . . .November 8.300 megawatt reactor is still not ready and could be purchased today for about $ 1. .1975: PROALCOOL. . High prices of USD 2.1960: OPEC (predominantly an Arab organization).1945: IMF.65 (in cash).1973: 1st shock (Yom Kippur War).1957: First artificial satellite Sputnik.9 Maize es.1976: Denmark installed the 1st commercial wind turbine connected to the public power grid..1956: Suez Canal crisis of bringing concerns to the oil market in Europe.90 a barrel to 11. . Production started in 1975.

.March 2003: top again following divine commands (again his statement). 14..29% against Euro. . .00. Bush invades Iraq again oil does not react.1990: Creation of the World Wide Web (www).September 2001: aque at the twin towers and the gono Penta and the price of oil or moves.2002: Creation of the Euro.1986: Oil back to the level of $ 20. total investment of $ 16 billion (US $ 1. . .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. .March 1979: Nuclear Power Plant accident at 3 Mile Island in the USA.. . . . .1983: price of crude begins to fall and reaches values that definitely unfeasible Alternative Energies. 2000: The BBC airs the "The Last Oil Shock" program. . .1990: i nvasão of Kuwait by Iraq.1991: Brazil (FAPESP) makes his 1st Internet connection. .143 / kW running) against US $ 5.October 2001: commanded by God (! told by Bush).1998: founding of Google. Bush invades Afeganistã the Oil or move.1979: 2nd shock (due to production stoppage Iranian fundamentalist revoluç 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.1982: inauguration of Itaipu (08 years of construction). 20 generating units. studies of alternative energies. .00 (currency).November 8.1993: Internet grows 341.1979/1983: intense activities around the world. .1977: start of commercial operation of the Campos Basin field with Anchovy.1994: Real Plan.000 MW of installed pot NCIA provides 19% of the energy consumed in Brazil. . . . . -1997: Brazil starts to produce more than 1 watergrass the barrels per day.000% in 1 year. .1979: start of operation of the Santos Basin.April 1986: accident at the Chernobyl Nuclear Power Plant in Russia. .! .1981: IBM announces its 1st PC.385 / kW of Angra II not working. Petró leo back momentarily to $ 40.

.00 and then the p ra $ 35.2008: After 25 years of relative stability in the price of crude at very low levels (mostly from this period with values less than $ 20. 00 and the world into a panic. legitimized by an organized and strong OPEC raised the price of crude to values up to $ 40. The 1st time occurs between the initial boom when oil are pioneers (1859) and gave its chemical ind stria start until the 70s when the two shocks that occur. . Then we have the 2nd time which is exactly the period of the two oil shocks (1973/1979) with the barrel in the first instance out of $ 2.000 bpd to 14. . unimaginable when compared with values until the Enta less than $ 3.November 2007: anunciad officially Petrobras's Tupi field in the Santos Basin are estimated at 12 billion boe (as it includes oil and gas) reserves.. Then comes the moment when 3rd in 1983.2005: according to the theory of the world Hubbert peaks. the feeling Petro leo is eternal and almost total interruption of studies Alternative Energy. .1 million and 0 . the price per barrel falls fi ing until 2006 peak of $ 3 .4 million barrels per day 0.2005: Brazilian government establishes the obligation of adding a% biodiesel to diesel sold to consumers (2% in 2008.2030: Hubbert peak expected for Natural Gas. during which: .Triples consumption in the USA out of 5. .00.00.00. Beginning of the popularization of the term pre-salt.Western Europe demand increases 15 times going from 970. is broken the barrier of $ 100.December 2007: Brazil reaches the milestone of producing 2 million barrels per day. and then more strongly in 1986. . came the certainty that oil was running out and that the world would go through sé sary difficulties (Lula had not yet been elected. The calm of this period (1983/2007) was affected only in 1990 when Iraq invaded Kuwait and oil fires briefly to $ 40. As people have never thought about it.4 million 0. causing a wave of panic until then unseen.00).00. A shock 3rd? . Initiatives a more substantial price increase in 2007 is reached when the level of $ 70. 00.00 but most of the time below $ 20.OIL INDUSTRY: 04 MOMENTS TO BE UNDERSTOOD We can simplify and divide the history of oil in 04 distinct phases.00 / 40. Within this 1st time it is worth mentioning the period between 1948 and 1972.137 times the consumption in Japan increases 32 thousand barrels per day to 4.00 a barrel.00 to $ 11.8 0 to 16. . . reaching 5% in 2013) minimum. -2006: Estimated 92 million websites online. so it was believed that the worst had already arrived).2150: Hubbert peak expected for the Mineral Coal.

Any equation by simpler q ue is (v = s / t) is a model. An Excel spreadsheet is a template. Reality and how this impacts studies.Now comes the 4th moment is broken when in 2008. The problem is to determine to what extent immune.Alternative energies? . has the learning that happens within institutions with the creation and development of skills and mechanisms making them more agile and efficient in the correct responses to the difficulties that arise. without prior notice and without our control. It's like we had been vaccinated and therefore are immune to panic due to the same disease (price). act on it. conclusions and decisions on energy. consistently.Brazil OPEC??? Now what? -? WHAT ARE MODELS AND BECAUSE OF THE DIFFICULTY (INABILITY?) We do FORECASTS AS ENERGY AFFAIRS First of all let's understand one thing: panic is a function of perspectives / perceptions than properly because of price or other specific factors. try to show q ue is really happening. no human will and not subject to any parents or legislators ideology.00 and see the questions: . After all q ue is a model? A model is nothing more than a mathematical explanation of a reality seeking to understand it.What is the horizon length of oil reserves? Hubbert was right? . Third. and if possible. Does today would have a crisis in the financial market as we had in 1929? Q ue not believe! Room: despite the immunity and learning can NEVER forget the Entropy that at any time. . monitor it. Ie a possible or eventual crisis in global financial merchand could never be equal to 29 but much worse! Before entering the final part of this work which. it is important to talk a little about the concept of models vs. besides the immunity. based on some numbers. may decree the onset of chaos. Systems self regulate and adjust according to universal laws. society is a living being and therefore has a curve of experiences and learnings that changes our reactions to the same events at different times.3rd shock? .Expensive oil or cheap dollar? . The more complex the reality is more difficult to establish a model. the barrier of $ 100. The society does not react logically.Because the world is not reacting to this new price level? . Cartesian and consistently! Second.

but above all honest making use of a suitable methodology to goals. Generally spend more in a longer time. but q ue could not initially identify.Knowledge of the initial conditions and the same . The problem with most of the realities around us is q ue q ue they are so complex q ue can not even identify the variables init ial present. Add to this another typical complication of complex realities: variables that can be a cause and effect also continues q ue feedback modifies the system so UNEXPECTED ada and often disturbing.Knowledge of the variables present in that particular subject / q ue system we want to study. using the model with absolute certainty and preci that are coming out of a city s A to B in the city will be 13:00 to 14:00 if. . we face the difficult problem of figuring out how they interact with each other and therefore are not able to reach an equation (model) that describes such a system. If reality is really simple we can determine. they distarem between another 60km. being affected simultaneously and at all times by numerous agents (individuals. I need to say more? A simple model is the uniform rectilinear motion (reality) established by the equation v = s / t (model). knows the impossibility of hitting within an acceptable range of error. Easy is not it? Let's walk a little more. Even though there are unforeseen q ue this trip. both the value q uan to the time of the work. Reality: renovation of a house. in Getting around 60km / h. if they are not many and not as relevant. Anyone q ue has already faced this experience. Model to determine the time and cost of this reform. jury tips and governments) s spread around the world and with varied interests and often conflicting. I say initial because we consider unforeseen as nothing less q ue variables present in reality. Even managing to identify the variables.Knowledge of the law or laws (equations) q ue govern the evolution of the variables from the initial conditions so we can determine their values aq uer q ual time in the future. .What we need is to build a model: . the time of arrival is calculated with a precision more than acceptable. The maximum q ue then we can achieve is a description of a possible scenario for certain reality. seriously obtained from the analysis of the best data available through a consistent reasoning.

At £ 1997 the Brazilian GDP grows u 24. ozone layer. In this same period the energy consumption increased 22. Before we make clear the fundamental question of this work: .Because with oil at $ 12 .BRAZIL: A NUMERICAL ANALYSIS SUMMARY Well.82% from 161.00're not watching the problems of the late 70s? We have three possible situations: ..00 / 140. global climate change. Perí odo considered 1997/2006.Energy. . .59%. in real terms. we take Brazil as an example and consider the conclusions valid globally. enough of philosophical concepts and let the numbers and its conclusion es. Two issues are important in this evaluation: . . greater instability and therefore more difficult to predict.Is at the same level. below the prices prevailing during the period of two shocks. In 1 case the answer to our question is immediate.. The higher the complexity of a system that can be defined by its number of variables. environment and species extinction. 043 million.779 million TEP TEP (tons of oil equivalent) indicating that the country was more efficient in this period.Is above. as well as other issues in fashion as stock exchanges.The increase or decrease in the efficiency of energy use. Based on what has already been said about the 4th time in the history of oil. To simplify the model. In the 3rd case the answer will depend on some speculation. we can say with reasonable certainty that the price level to trigger a new crisis (3rd shock) to be superior to the two previous shocks. having spent 1.. falls in the category of very complex realities and therefore difficult to model.029 million to 197.Actual price variations and . say q ue of this and more of the future? .2008 is the price.42% less energy per unit of GDP . If not even the past is often known correctly. . greenhouse effect. from 939 147 million for 1170. For the 2nd case we need to elaborate a bit more to understand why.

stoves.918 to 85. For this part of the work was considered the period 2000/2007.2007: 1.481 million 80.Oil: 40.82%. the decrease per unit of GDP is at 5. Let us now examine the ratio net oil imports (including derivatives) with GDP.88% of GDP) .) more efficient equipment .18% of GDP) IMPORT OF LIQUID PETRO LEO ED ERIVADOS FOB INCLUDING NATURAL GAS . Adding to the previous installment of the mere naked Natural Ga s.2000: 644984 .Sugar cane bagasse: 12.107 (0.Electricity: 16. .153 million TEP TEP which means an increase of only 4. from 99.24% .Energy Consumers (refrigerators.704 (0.Wood: 8.2955 million IMPORT OF LIQUID PETRO OIL AND DERIVATIVES FOB EXCLUDING GAS NATURAL .520 (0. 88% in their use per unit of GDP. GDP .2000: 5. All figures below in millions of $ currents.53% . In either case the conclusion is only one: Brazil in the period 1997-2006 has become more efficient in energy use.In between oil consumption and energy left to 76.96% . Mere naked This shows a significant increase in the efficiency of using oil as energy with a decrease of 15 .324 (0.155 million TOE.80%.2000: 5..2007: 4.More efficient industrial processes .2007: 2.32% of GDP) Again we prove the improvement of eficiê NCIA en ergética the Brazilian economy could be explained by different factors such as: .30% ..86% of GDP) .Increased participation of "non-smoking industries" (industries and services linked to IT and telephony) in the economy In 2006 the following are the plots for the total Brazilian energy consumption: .More efficient automotive engines .

A FIRST CONCLUSION Here we come to two very interesting and significant numbers.63% (large growth yet irrelevant) CURRENT PRICES OF THE BARREL OF OIL PAID BY BRAZIL . the barrel should be: . is coal and nuclear energy.8 0% .34% .00 being perhaps the s $ 200.2007: 75.00 the new level of the new oil shock.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).47 .Other renewables (Biodiesel and E ólica?): 94.30 . I believe it is very intuitive claim that serious problems occur in the society well before the $ 3 50.Oil: 4.$ 200.$ 350.41% .Natural Gas: 197. which is real can substitute for oil? My bet based on available data and history.11% !!! .20% . Q ue for the net oil import in 2007 reached the same percentage of 2000 GDP.Sugar cane bagasse: 45.18% .34% For the period 1997/2006 the following were the percentage growth of different energy sources: .38% .Electricity: 32.82% It is interesting to observe aq uebra Item Other energies: . . but also in politics and psychological reactions of society.A SECOND CONCLUSION Given current technologies.. 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.Natural Gas: 7. .Ethanol: .2000: 30.Other energy: 29.Other renewables: 2.00 without considering the natural gas .6.Total: 22.

40% in 2005. the threshold is reached without characterizing a 3rd shock otherwise we may attend a worse situation. until even as an environmentalist James Lovelock surrendered to this form of energy as opposed in recent decades by environmentalists and pacifists.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. the impacts of oil on the economy were much larger.In the history of mankind coal reigned much longer than oil (198 years versus 60 years). nuclear waste contamination. that lived in the late 70's / early 80's. And because the coal? 1 . apparently .10% of total energy consumption in the world in 1973 rising to 16. . However second only to the Natural Gas and Coal Plant that. The question that really matters is whether we will be prepared when the time comes which translates in a very simple question: . the "alternative energy" represented 15. in environmental terms. long and deep.If the world has developed a serious and consistent way other forms of energy. All suffer the consequences of a new shock that would be larger for poor countries without oil. In 1977 the development of a similar field in the North Sea over $ 500 million.. Interesting to note that according to statistics from British Petroleum. 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. . and this time much longer.000 barrels per day in typical conditions of the Middle East was $ 20 million. Ok. 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. No doubt a huge disadvantage. 3 . Plenty of room for all major developments in regard to coal including items related to the environment ie there. further increasing inequalities and fueling greater tensions between countries / blocks leading the world to inevitable wars and ideological confrontations fueling the escalation of terrorism.180. Just as a reference.abundant Reservations 2 . And Nuclear Power? Explosions reactors. coal lies in the range 2950-5700 kcal / kg while the oil falls to 10. has far more problems than the Mineral Coal.On a scale of Lower Calorific..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. in 1970 the development of a field of 60.

mauesj@gmail.National Petroleum Agency . Money and Power . Daniel. .Yergin. but a new era of global availability of energy at affordable prices and acceptable environmental costs.Central Bank of Brazil .International Energy Agency .Central Bank . The Prize: The Epic Quest for Oil.Several Web sites. of which 60 years almost absolute hegemony.ANP .BP .1990 . Jurandyr Arone Maués .It is the universal communications that will bring peace and development to the world.Ministry of Mines and Energy .IEA .National Energy Balance .British Petroleum . 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.com 09 / August / 2008 SOURCES: .