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# The Oil Drum: Canada - Discussion of Energy and Canada's Future

In this house, we obey the laws of thermodynamics!

Tue, 30 Dec 2008 15:11:07 +0000

Thermodynamics When you use energy, the rules are very well defined.  The first and second laws of thermodynamics have been well understood for well over a century, and the third for just over a century, but the subject is still viewed by most as being pretty arcane.  This is a pity, both because these laws are of such importance, and because almost everyone has a fair understanding of the first and second laws, even if they think they don't.  Understanding the implications of the laws is another matter. [break] There are many facetious versions of the laws.  The set I like best goes: (zeroth law) You must play the game. (first law) You can't win. (second law) You can only break even on a very cold day. (third law) It doesn't get that cold. These are surprisingly accurate. The actual laws are, it should be remembered, experimental in origin.  The world has been found to work this way. Zeroth Law The zeroth law actually states that if two systems A and B are in equilibrium with each other, and systems B and C are also in equlibrium with each other, then systems A and C are also in equilibrium with each other.  Another way of putting it is that situations like Escher's "Waterfall" don't occur in real life. You must play the game. First Law The first law is the law of conservation of energy.  It includes the equivalence of heat and work, but is more general than that, in that there are many forms of energy that are interconvertible, but with the total for an isolated system remaining constant over time.  One point that is often misunderstood is the role of the equation E = mc2.  This is usually taken to refer to a conversion of matter into energy, but the reality is simpler.  Energy has mass, and the equation tells you how much.  No matter what conversions take place in a isolated system, its total energy (and hence mass) remains constant. You can't win. Second Law The second law is the one that results from the observation that hot things lose heat to colder ones.  It's a one-way process.  Mechanical work can be turned into heat.  Heat can be turned into mechanical work, but there are limitations.  The implications of this are far-reaching, and a surprising amount can be deduced (and defined) from just this and a thought experiment. If we have two reservoirs of heat (both conveniently infinite in capacity) at different temperatures, then devices can be constructed that take heat from the hotter reservoir, turn some of it into mechanical work and reject the rest to the colder reservoir.  The rejection of part of the heat has been found to be unavoidable, but the amount of rejected heat becomes less as the temperature of the heat source is raised.  Without at this stage defining what we mean by the numerical value of a temperature, let us suppose that the maximum possible efficiency of conversion is a definite function of the two temperatures.  Engine efficiencies are usually defined as [work out/heat in], but in this case, I'll look at [heat out/heat in] or [1 - efficiency].  If the temperatures of the two reservoirs are T1 and T2 and the heat taken from the hotter is q1, and the heat released to the colder is q2, then we will say that: q2/q1 = F(T2,T1)       F is some as yet unknown function (an algebraic expression) of the two temperatures. Maximum efficiency implies reversibility of the process.  An example of this is that heat transfer from the hotter reservoir to the engine must be achieved without any temperature difference between the reservoir and the part of the engine that absorbs the heat.  If there were any difference, the heat engine would operate at a lower efficiency (smaller temperature difference between hot and cold), and it would not be possible to run the process backwards (heat won't flow "uphill").  There can't be any friction either.  The engine with maximum efficiency is thus reversib[...]

The Round-Up: October 24, 2008

Fri, 24 Oct 2008 14:41:44 +0000

Petro-Can may scrap Fort Hills upgrader to cut costs

...Petro-Canada's partner, UTS Energy, estimated deferring the upgrader would cut costs of Fort Hills by about half, to the \$13-billion to \$15-billion range.
"Due to several factors including costs, current commodity, equity and credit market conditions, the partners are considering deferral of any decision to construct the upgrader," UTS said in a statement.
Petro-Canada, the country's third-largest oil company, said in September that costs at Fort Hills, located roughly 90 kilometres north of Fort McMurray, Ab., had ballooned between 50% and 60% to more than \$23-billion through the last year....

CALGARY -- Suncor Energy Inc. -- which axed capital spending plans by more than a third Thursday, delaying completion of its third oil sands upgrader -- could also hold back future expansion plans at its Firebag in-situ operations if the credit crisis and slumping oil prices stick around...
Suncor on Thursday cut its spending plans to \$6-billion in 2009, down from its previous forecast of \$9-billion to \$10-billion. About \$3.6-billion, or about 60%, of its 2009 spending will go into its planned \$20.6-billion Voyageur expansion project, which includes its new upgrader. The upgrader will be delayed to sometime in 2012, pushed back from late 2011.

Quick Sand: Credit Crunch and Falling Oil Hit Oil-Sands Projects

It’s unclear whether the pullback owes more to the financial crisis or to falling oil prices, which make exotic oil fields such as tar sands less economically-appealing. Either way, it shows how oil-gathering efforts that were said to make sense a year ago no longer seem so economic...

OIL SANDS-PART 3: Biggest Customer Has Second Thoughts

Together, skyrocketing construction costs, falling crude prices, increasingly vocal opposition from some native groups, and a little known section of the 2007 U.S. Energy Independence and Security Act all threaten growth projections in northern Alberta.

"If I was an investor, I wouldn't want to take the risk of putting money into the tar sands right now," said Liz Barratt-Brown, a senior attorney at the Natural Resources Defence Council, an NGO leading U.S. lobbying efforts against Canada's heavy oil industry.

Les sables bitumineux (special report in French)

Il y a présentement 17 projets d'expansion de raffineries dans la région des Grands Lacs, dont 16 en territoire américain. Les chercheurs de l'Université de Toronto signalent que les promoteurs des raffineries sont attirés par les Grands Lacs car ils pourraient faire usage des grandes quantités d'eau disponibles dans la région.

Le rapport scientifique, qui doit être dévoilé ce mercredi, précise que la valeur des projets d'expansion des raffineries d'ici 2015 pourrait atteidre 31 milliards \$ US afin qu'elles soient en mesure de traiter les sables albertains. Mis ensemble, ces projets risquent d'anéantir les gains de lutte à la pollution réalisés dans cette région depuis les années 70, selon les auteurs.

Compressed Air Energy Storage - How viable is it?

Sun, 27 Jul 2008 14:00:19 +0000

Energy Storage - Compressed Air One of the most critical aspects of the implementation of renewable electricity is the ability to store electricity.  If a good solution existed right now, our situation would be a good deal easier.  On the face of it, compressed air seems a likely candidate: relatively easy to make, store and use - so what is the problem?  Why isn't it used routinely? More Thermodynamics than You Ever Wanted to Know? We usually speak of storing and using energy without being very precise about what we mean.  That ends forever if you take a few chemistry or engineering courses.  Thermodynamics rules everything. [break] Let's start with the usual definition of work - using a force to push something a given distance (in the direction of the force).  The amount of work is the force multiplied by the distance, and has units of energy.  If we lift a 1 kg mass by 1 metre in the earth's gravitational field on the surface of the earth, then the work done on it is the force required: 1kg x 9.8 m/s2 (9.8 Newtons), times 1 metre, or 9.8 Joules.  Since a Watt is 1 Joule per second, then in principle (no friction), this lift could be carried out in 9.8 seconds by a 1 Watt electric motor.  At the end of the process, the weight has acquired 9.8 Joules of gravitational potential energy. We just constructed an energy storage device.  The weight we lifted could now be allowed to descend, giving its potential energy back to an electrical generator and making electricity in the process.  This is in fact the basis of possibly the most effective existing way of storing electricity.  Water is pumped from a low reservoir to a high one at times when there is a surplus of electricity, and then allowed to flow back when there is a shortage.  For useful amounts of energy storage using reservoirs that are not too large, one generally requires reservoir height differences of a hundred metres or more, which limits this to suitable terrain. So what about compressed air?  Surely a cylinder of compressed air contains energy that could be used to drive something? This is where it all becomes a little strange.  The energy content of compressed gas isn't very different from that of uncompressed gas at the same temperature.  For an ideal gas, the energy contents are identical.  How come we can get work from the compressed gas? The answer is that compressed gas has a lower entropy than the uncompressed gas, and that the amount of useful work you can get out of something when it changes depends both on the change in energy content and the change in entropy.  We usually focus so much on the energy side of things that we ignore the entropy side. If the compressed gas has no more energy than the uncompressed gas, where did the energy used to compress it go?  The answer can be found in the old bicycle pump experiment.  When you compress a gas it becomes hot.  In fact all the work put into an ideal gas to compress it is turned into heat.  If that heat is thrown away, the same amount of energy as was in that work is thrown away with it. To look at a definite example, if we take 1 cubic metre of air at 1 atmosphere pressure and 20C and compress it to 10 atmospheres pressure, its temperature will increase very considerably - to 293C.  If we want to store this compressed air at 10 atmospheres pressure and 20C, then more compression will be needed as we cool the gas, or its pressure will drop as its temperature does.  The total work done on the gas, and the total heat lost are both about 91.7 Watt-hours (Wh).  (This assumes that the air is an ideal diatomic gas.) This gas would now have a lower entropy than the same amount of uncompressed air.   The entropy change is 796 J/K (Joules per degree Kelvin).  Note the units are energy per degree.  This gives a hint of how the entropy change is related to the work that can in principle [...]

Oil Megaproject Update (July 2008)

Sun, 06 Jul 2008 01:23:22 +0000

Possible future supply capacity scenario for crude oil and NGL based on the Wikipedia Oil Megaproject database. The resource base post-2002 decline rate is a linearly increasing rate from 0% to 4.5% between 2003 and  2008 then constant at 4.5% afterward. The decline rate for each annual addition is 4.5% after first year. [break] Below is the evolution of  the new supply additions since the beginning of the project compiled by year of first oil: December 2007 January 2008 February 2008 March 2008 May 2008 June 2008 We can clearly see the initial 2008 and 2009 peaks wearing out with time due mainly to delays. Now the situation does not look so good: Possible new gross and net new supply additions compiled by year of first oil. Crude oil + NGL monthly production from the EIA. The resource base post-2002 decline is a linearly increasing rate from 0% to 4.5% between 2003 and  2008 then constant at 4,5% afterward. The decline rate for each annual addition is 4.5% after first year. Below is a possible scenario for future supply assuming a 4.5% decline rate. Possible future supply scenario for crude oil and NGL based on the Wikipedia Oil Megaproject database. The resource base post-2002 decline is a linearly increasing decline rate from 0% to 4.5% between 2003 and  2008 then constant at 4.5% afterward. The decline rate for each annual addition is 4.5% after first year. This scenario seems to agree with this recent statement from Ray Leonard: “By 2010, the production of the fuel that has driven the world’s economy will start to rapidly decline. This will conflict with the steadily increasing demand for oil. The collision of these two trends will lead to shortages and increased prices, providing a strong incentive to shift to alternative fuel resources…Due to unequal distribution through the world of oil and gas supply and consumption, [the upcoming] transition will result in significant shifts in global power and wealth.” Many thanks to Ace who has diligently updated the data and put more than 500 separate contributions. Finally, maintaining this database is a lot of work and it is crucial to track delays, project final approval, etc., so I'd like to repeat our appeal: the more folks in the TOD community head over to the Wikipage and help, the faster we'll know what's really going on here. Related stories: Update on Megaproject Megaproject Help us List Megaprojects [...]

Weekend Energy Listening: Wind Power with Paul Gipe

Sun, 08 Jun 2008 15:00:00 +0000

Predictions for Canada’s Natural Gas Production

Wed, 04 Jun 2008 14:00:45 +0000

Weekend Energy Listening: The H2 Economy vs the Electron Economy

Sat, 31 May 2008 14:45:11 +0000

The Round-Up: May 26, 2008

Mon, 26 May 2008 14:19:13 +0000

Oil shock: China and Mexico, not Exxon, stupid

Prices are soaring, in part, because oil is denominated in U.S. dollars and the dollar declines, thanks to Washington’s overspending on wars, trade, subsidies and government budgets. Investors have also abandoned credit markets, since the meltdown due to subprime scandals in August, and put their money into solid, real assets instead. But the biggest reason prices have been soaring is that investors are now understanding the future supply and demand reality.

CITIC Resources Holdings Limited announces the discovery of the Lower Nief and Manusela carbonate oil reservoirs at the Nief Utara A-1 drilling well located at Seram Island in Indonesia. Lower Nief oil reservoir is the first discovery in the region. The Original Oil in Place (OOIP) of the Nief Utara A-1 drilling well is over 60 million barrels. Thus, the current total Original Oil in Place exceeds 123.6 million barrels.

Oil rises towards US\$133 on Monday

Oil rose towards US\$133 a barrel on Monday, extending the previous session's gains on a supply outage at the Statfjord oilfield in the North Sea and a weak U.S. dollar.

Blaming rising construction costs and policy uncertainty, StatoilHydro ASA, Norway's state-owned oil giant, is delaying by two years the startup of its oilsands upgrader near Edmonton, joining at least three other oilsands developers that are facing or recently announced delays in their oilsands strategies.

If Alberta can't thrive with this record oil, nobody can

Douglas Porter, deputy chief economist with BMO Capital Markets Corp., is among the country's most-respected economists, producing extensive analysis and research on all facets of the economy, investment and markets. Several years ago Porter distinguished himself by discovering a flaw in Statistics Canada's Consumer Price Index, arguably the most respected measure of consumer inflation in the world.

Oil price to average \$115 this year: UBS

UBS AG knocked its oil forecasts higher Friday and it projected Canada's energy-heavy S&P/TSX Composite Index could climb all the way to 16,400 in the next 12 months.

The Switzerland-based parent of investment firm UBS Securities Canada Ltd. became the latest global financial player to revise oil projections in the wake of crude's surprising rally to record heights. Benchmark West Texas Intermediate will average \$115 US a barrel this year, \$120 US in 2009 and \$116 US in 2010, UBS said. It marks increases from UBS's previous projection of 32 per cent, 54 per cent and 53 per cent, respectively.

Weekend Energy Listening: Ethanol's Energy Balance with Tad Patzek

Sun, 25 May 2008 14:00:34 +0000