tag:blogger.com,1999:blog-8861605.post1930847191969624270..comments2024-03-24T11:01:27.668-04:00Comments on Resource Insights: The great condensate con: Is the oil glut just about oil?Kurt Cobbhttp://www.blogger.com/profile/05330759091950742285noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8861605.post-30166156285967127602016-01-17T20:49:39.133-05:002016-01-17T20:49:39.133-05:00Condensate is basically natural gasoline, and it i...Condensate is basically natural gasoline, and it is a byproduct of natural gas production. However, the issue of relative quality, between crude and condensate, is a little bit of a red herring. <br /><br />The CC's (Cornucopian Crowd) argue that there is no sign of any kind of peak in sight. I would argue that this assertion is manifestly false when it comes to actual crude oil production (45 API and lower crude oil). In my opinion, the available data strongly suggest that we have been on an "Undulating Plateau" in actual global crude oil production since 2005, while global natural gas production and associated liquids, condensate & natural gas liquids, have so far continued to increase. <br /><br />Again, what the EIA calls "Crude oil" is actually Crude + Condensate (C+C), and based on EIA data 22% of Lower 48 C+C production in 2015 exceeded 45 API gravity and about 40% of US Lower 48 C+C production exceeded the maximum API limit for WTI crude (42 API Gravity). <br /><br />westexashttps://www.blogger.com/profile/13648669299354997219noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-71421664232269459922016-01-17T20:37:47.239-05:002016-01-17T20:37:47.239-05:00Alice,
First, I find myself hitting your site reg...Alice,<br /><br />First, I find myself hitting your site regularly since so many people refer to your work. So, thanks for the great work you are doing.<br /><br />As for condensates and NGLs, terminology in this case is the enemy of clarity. For a good treatment of this problem <a href="http://resourceinsights.blogspot.com/2012/07/how-changing-definition-of-oil-has.html" rel="nofollow">How the changing definition of oil has deceived both policymakers and the public</a>. NGLs generally refer to both natural gas plant liquids and lease condensate which originate from two different sources, i.e. gas wells vs. oil wells. And, yes, part of the storage issue is the storage of lease condensate since it is often, as indicated, mixed with crude oil. Natural gas plant liquids come from natural gas processing plants and so are not typically stored in combination with crude oil (though in gasoline refining, butane is usually mixed in with gasoline).<br /><br />Yes, propane and butane, are used for transportation fuels. But their supply is limited by the amount of natural gas demand. No one withdraws natural gas from wells solely for the propane or butane it contains. There are practical limits to how many propane-powered vehicles we can have.<br /><br />Now, if we didn't make certain chemicals from natural gas plant liquids, we would be making them from oil, and so in an indirect way this keeps more oil in the liquid fuels market rather than the petrochemical market. But I think the substitution effect here is exaggerated by those saying we should consider all liquids as part of the oil supply. As I said in the piece, the marketplace certainly makes distinctions between these products.<br /><br />I think you are right about truck freight being crucial to our current way of living. I remember an exchange with an Italian reader who explained that while European passenger rail is far superior to that of the United States, one reason for this is often not understood. Much of the freight in the United States moves by rail at some point and so our tracks are filled with freight trains that delay passenger travel. In Europe 80 percent of the freight moves by truck. The rails are not so burdened with freight and so passenger trains move with fewer delays and at higher speeds.<br /><br />But in both places truck freight remains crucial. Best of luck with your new book.Kurt Cobbhttps://www.blogger.com/profile/05330759091950742285noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-87653868546401025402016-01-17T20:02:21.903-05:002016-01-17T20:02:21.903-05:00Kurt, are you saying that the apparent oil glut is...Kurt, are you saying that the apparent oil glut is mostly NGL's and not oil? Also, are NGL's what make it appear that oil storage is full? I never could understand why NGL's are included in oil production in the EIA stats, since only 13% of NGL's can be blended with gasoline (the pentane). The rest is ethane, butane, propane, and isobutane -- mainly useful for petrochemicals, plastics, and heating (propane).<br /><br />By the way, I've just written a book for Charlie Hall's Springer Energy Briefs series called "When Trucks stop running: Energy and the Future of Transportation" where I look at all the possible ways trucks, rail, and ships could keep moving as oil declines, including NGL's, CNG, LNG, coal-to-liquids, biofuels, hydrogen, electrification, etc. More info at http://www.springer.com/us/book/9783319263731 <br />or <br />http://energyskeptic.com/2016/when-trucks-stop-running-so-does-civilization/<br /><br />I think all the endless electric car nonsense is effective at distracting people from the heavy-duty transportation that really matters. Virtually everything in our homes, everything in our stores, got there on a truck. Prior to that, 90 percent of those items were transported on a ship and/or a train, which all run on finite oil. If trucks, trains, and ships stopped running, our global economy and way of life would stop too. <br /> energyskeptichttps://www.blogger.com/profile/16746681628705632150noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-7380289531407533552016-01-17T12:42:31.586-05:002016-01-17T12:42:31.586-05:00My guess is that the surplus of condensate and ble...My guess is that the surplus of condensate and blended "dumbell crudes" has been stacking up in storage tanks, especially in the US, cutting the amount of working storage available to purchasers. Lack of storage increases the sensitivity of the market price to supply/demand imbalance magnitude. If a purchaser of oil has plenty of cheap storage, they might purchase oil they can't use today at a slight discount and save it for future use. If they have no storage they won't buy it at all, no matter how low the price.Joehttps://www.blogger.com/profile/01251330546889158364noreply@blogger.com