Sunday, November 09, 2008

Alternative methods of oil production

Another recent search phrase is "what other methods do we get oil".  I'll take this to be an inquiry into methods of oil production other than via drilling into underground resevoirs and pumping the oil therein out.

There are about four alternative sources for petroleum (or petroleum-like substances that are usable as fuel): the extraction from oil sands and shales, the conversion of either natural gas or coal into a petroleum-like substance, and the conversion of organic waste matter into petroleum by depolymerization, and direct biofuel production.

The first method is not widely used simply because it is still cheaper to obtain oil by drilling.  There are huge reserves of petroleum locked up in oil-bearing mineral deposits (oil sands and shales) far more than believed to exist in underground resevoirs, which simply haven't been exploited because of the high costs of recovery.  As drillable reserves exhaust, eventually the price of oil will rise to the point that exploiting these reserves will presumably become cost-effective. 

Converting natural gas or coal reserves into liquid fuel has been exploited at times, usually by nations who had been cut off from the world petroleum market by war (Nazi Germany) or economic sanctions (South Africa).  As a result, the possible processes are reasonably well-developed, but not widely used because they are not terribly efficient.  Natural gas conversion may also enable more effective exploitation of gas fields that are too remote to be effectively exploited currently due to the difficulty of transporting the natural gas.

Depolymerization has the theoretical possibility of converting nearly any organic waste (from petroleum coke to ordinary garbage) into petroleum or at least a petroleum-like liquid hydrocarbon fuel, using heat and pressure.  As with the other methods above, these approaches require a lot of energy, and also tend to be rather polluting.  Unlike the other methods above, depolymerization does not draw down the earth's limited oil feedstocks, but instead draws on various waste streams (which would otherwise be landfilled or incinerated), a substantial fraction of which represent the consumption of renewables.

The final method is by direct production of biofuels such as ethanol, methanol, and various vegetable oils, which may then be modified into so-called biodiesel.  This also represents a renewable source; however, the fuel use of agricultural production competes with the use of the same for food, which could drive up the price of food and may increase the risk of food shortages.  The earth's total capacity to produce crops is limited, and many of the methods that have been used in the past to increase that capacity are energy-intensive; as a result some (in fact most, presently) biofuel production methods actually consume more energy than they produce.

None of these methods is generally cost-effective relative to drilling, although the differential costs are getting narrower as the price of drilled crude increases and the costs of production of the alternative drops as technology improves.  All of the alternatives are in limited use due to local conditions that favor them (usually legal in nature), but none is widespread.  In practice, the existence of these alternatives means that we'll continue to have "petroleum" for a long time—but not necessarily at a price we'll be all that comfortable with.