3.13 More economics of oil
Like the oil in oil sands, heavy oil is thick and viscous and difficult to extract – usually because heat and pressure have cooked the organic matter a little too much.
Heavy oils are found in normal oil reservoirs but won’t flow to the surface on their own, and so they need a similar energy and water input as oil sands do to extract and process. There are very large reserves of heavy oils, of which most of those known reserves are found in Venezuela. If high oil prices return and stabilise, it is likely that these very dirty, energy intensive oils will become economically viable to extract on a large scale.
Deep-water and polar oils
These two are different because the formation and storage characteristics of both deep-water and polar oil are identical to conventional oil, but their current location makes them difficult, expensive and more dangerous to extract, which puts them in the ‘unconventional’ grouping traditionally.
Most marine oil fields exist in fairly shallow waters – shallow seas like the North Sea and Persian Gulf where anchoring and recovering oil from the sea floor is aided by the shallow water. Oil reserves are also present in deep water too – but at depths greater than about 150 m it becomes technically much more difficult. Anchoring oil platforms is more of a challenge, as is access to drill heads for maintenance. The pressures at these sorts of depths also pose challenges for oil extraction.
High oil prices made deep water oil exploration and production viable, and large production areas in the Gulf of Mexico have begun at depths > 150 m. However, the Deepwater Horizon accident in 2010, which demonstrated just how difficult it can be to control oil wells in deep water (this well was very deep, at 1600 m), may affect how widespread deep water oil extraction becomes.
Polar oil fields have similar challenges – the water depth isn’t necessarily that great (especially in the Arctic), but the added difficulties with extraction where icebergs and large storms can be encountered, the distance from large ports and the increased fragility of polar ecosystems mean oil extraction in polar regions is particularly expensive and controversial. At the time of writing (2016), large scale oil extraction in polar regions hasn’t really begun – but if high oil prices return and summer sea ice continues to dwindle, the Arctic could be the next major oil extraction frontier.
Life without oil?
Oil is a fossil resource; it takes much longer to form (millions of years) than it takes for us to extract it. So are we going to run out? The large reserves of unconventional oil mean that it is unlikely we will actually run out of oil, it will just become progressively more expensive and difficult to extract. There is more than 500 billion barrels of technically recoverable heavy oil in the Venezuelan Orinoco alone. If we were to continue to extract as much oil as we can (and climate change, more on which next week, makes that unlikely), there would likely come a point where the oil remaining in geological reserves is too expensive to extract.
So will we run out of oil? Probably not, but there will come a point when the remaining oil reserves are too expensive, economically or environmentally, to extract. When that point will come, nobody currently knows.