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Quiz 5 Geo Study Guide.docx

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Geography 2143A/B
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Oil  Oil Springs, Ontario the first commercial oil well in North America What A Barrel Makes  Distillate Fuel Oil makes 10.5 Barrles compared to 19.4 from Gasoline o Residual Fuel Oil-1.7 Barrels Finsihed products from a refinery  Most goes to gasoline 42%, then Diesel ¼, Lubes/Coke/Other 11%, Jet fuel 9% o Lowest is waxes and Asphalt 3% Types of Crude Oil  Pg. 136 and 137 for difference in crudes, very important Chart of Crude Oil prices since...  High 2011 prices after Pennsylvania boom (1961-69), Iranian revolution (80s), Invasion of Iraq and Atab Springs (2000s) WTI- texas light sweet or light sweet Crude Oil, type of crude oil that is used as a benchmark in oil pricing  The underlying commodity of NY mercantile Exchange’s oil futures contracts o Based in Cushing, Oklahoma Brent- is the biggest of the major classifications of crude oil  Is used to price 2/3 of the worlds internationally traded crude oil and is based in London, UK o This oil streams include, Brent, Oseberg and Ekoflisk that make up 47.6%, where as Forties represent 52.4% o Whatever is the cheapest of the 4 sets the benchmark, and that is traditionally Forties  Much of it’s demand is from S. Korea, putting pressure on price of Brent Oil prices per barrel at which fuels sources become economically  Pg. 141-143  Many big oil discoveries from Brazil to Sierra Leone, but may only be enough to ward off a small supply crunch o Look at charts pg. 144  IEA (International Energy Agency) says the world economy will witness $2000 bn shift in wealth and power from oil consuming countries to members of OPEC because o Oil prices rising to $200 a barrel by 2030  $66 in 08, 100+ between 08-15, o Global demand peaking at 116 million barrel a day in 07, to 106 in 08 estimate  65 (80s)->77 (2000)-> 85 in 2006 o Pg. 146? Don’t know what it means Increasing Prices Reduces Consumption  OECD oil demand declining and crossing with prices in the Q3 07’  Pg. 148 might mean nothing  Took 125 years to use 1 trillion barrels of oil, while second trillion will be consumed in next 30 years Signs of Stress  Pg.150 Top 10 Producers 2007  Saudi Arabio and Russia both hold top for 12.6% of world share, but Saudi need has declined th o They are followed by USA who holds 8%, Canada ranks at 7 with roughly 4.1%  Their consumptions hold for 2.6%, but there reserves has increased in 07 from 06  US production growth will come from tight oils by 2020, where as its other sources will stay the same o US production maybe up 1 million by 2016 to 6.6 million barrels a day o Canada is similar in the oil sands, where as Brazil will just grow o From 12.2 million barrels in 2000 to 19.6 in 2020 China  Biggest energy user and second largest-consumer of oil after US o Their state-owned oil companies have become a major force in global merges and acquisitions in last 5 years, also trying to do US thing by pinning down on their energy security o Petro China the most growth, from 2.9million barrels a day in 2006 to 2.4 in 2010  Sinopec and Cnooc grew in small margins  Their consumption of 10 million barrels a day is twice amount of production of 4 million in 2012- 11-19 Major Oil Trade movements in 2011  Pg. 155, all or most of Canada’s is toward USA,  The western hemisphere provides a substantial share of oil o Saudi Arabia, Nigeria, Venezuala and Mexico likely at the top pg.157 for reference  pg.158 shows China’s oil imports, most of the importing coming from the Middle East and Africa 2007-09 Oil Reserves  Proven reserves- proven developed and proven undeveloped and has a 90% certainty of being produced  Probable reserves- 50% certainty of being produced  Possible reserves- 10% certainty of being produced in the foreseeable future Map of Proved oil reserves at end of 2011  ½ in Middle East, and 1/5 in S. and Cent America, North America 13% followed by Europe and Africa, and a small percentage in Asia pacific o Total of 1652.6 thousand million barrels, 1.6 trillion North American now closed for exploration and production  34 billion barrels of oil on the west coast and another 34 in the east o Eastern Guelph has another 28 billion o Another potential 20bn in Alaska o 2 bn in the rockies Oil Consumption per Capita  Highest in Canada and some Middle Eastern Country, followed by the States and northern Europe Net imports of Oil as % of Total Consumption 2010  Vulnerability of an economy to oil price changes varies by country o Spain, Japan, France, Germany, Italy are all nearly in 100% in that order o China has increased by still around 55%, where as US has decreased about 5% to 45%  Britain huge increase to from 17% to 30%ish Top 10 Consumers th th  1. USA ¼ of the world consumption 2. China 9%, 3. Japan 6%, Canada in 7 and 10 is Saudi Arabia which odd cause they have largest production and proven reserves o After top 3 the rest are around 3-2%  In contrast to US whos dependence on energy imports are decing, China is rising o Already takes 38% more oil from Middle East than US  In 2000, it was US, EU, China in terms of imports 12 billion on top  In 2010, China is still half EU AND NA in imports  But by 2035, they will be top, with US at bottom Oil Reserves and their Remaining years at the end of 2010  Saudi Arabia has the most oil reserves but it is expected to drain in 72 years, opposed to Venezuela 234 years who are in second o US,Canada, Brazilland China were near the bottom then, all projecting less then 20 years o Saudi Arabia is explain because they output 3.24 million barrels day as of 2011 compared to the rest who’re all under .3 World Consumption be Sector  Residential vs Commercial o Residential calls for 100 billion BTUS by 2040, and commercial only 40  Transportation o Personal will still continue to be around 20 million barrels between 2010 and 2040  Change will come from a larger share coming from Non-OECD o Commercial will grow almost 40% to 48 million barrels, with Non-Oecd also facilitating most of that growth  Industrial demand by sector o Manufacturing will continue to take the largest portion and grow as well as will chemicals  Energy and other industries will stay the same International Oil Company Access is declining  Pg. 167-169 look at it cause I don’t want to right now New Seven Sisters  Probably oil company giants? o Gazprom Russia, CNPC/PetroChina China, NIOC Iran, PDVSA Venezuela, Petrobras Brazil, Petronas Malaysia, Saudi Aramco Saudi Arabia OPEC  Part of a concentrated in select group of countries  Organization of Petroleum Exporting Countries OPEC o 12 members largely positioning in Middle East and Africa  Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela  They control 81.33% of worlds crude oil reserves in 2010, other 20% in Non OPEC countries o Of this 80% Saudi Arabia and Venezuela are the biggest  Followed by Iran, Iraq, Kuwait and the UAE Russia  Russia is the one big producer that is not part of OPEC o Their companies have very low operating costs compared to other producers  They had a decline in production in the 90s but have steadily grown to 10 000 000 barrels a day o Their gas and oil have political effects across all it’s neighbouring eastern countries, because theyre pipelines extend to all of them  Provided the largest amount of gas to Europe in 2007, (UK, Germany, Italy, France, Netherlands) o Seconded by Norway and Third by Algeria CURRENT Oil Production by Country  Saudi Arabia, Russia, USthin order all right above 10 000 o China, Iran then 6 is Canada around the 4300-3600 New Oil is increasingly expensive  Trend in 2000 was a huge supply thus less price, but even as we have steadily found more supply the price keeps rising African Oil  The petroleum potential of Africa, a key contributer of oil barrel thirsty markets, isbeginning to look dimmer, because of their credit crunch and host of endemic challenges o The control of its oil lands is divided among three players  International Oil companies make up for most with about 3 billlion licensed area  Others such as Asian NOCs and Middle Eastern/Asian private make up for 1 and a bit  Where as African only make up for half a billion o Much of the oil is difficult and expensive to access  Deep-water, Shelf, Onshore, Ultra Deepwater in order, in million barrels per day Mexican Oil  With oil prices falling and it output fading, Mexico must overhaul is oil laws and allow private companies for room o Steady 3 million barrel per day output until 08 when it falls under South American Oil  The new rsevres promise to turn Brazil into an important oil exporting nation o Also highlight the differences between Petrobas (publically traded but government controlled oil company of growing international status) and the declining fortunes of Pdvsa of Venezuela and Pemex of Mexico\ o Look at chart on pg 181 should be important BP and the Gulf of Mexico  Tiber, 200 miles lake of Lake Charles is a “giant”, a field with an estimate of 3 billion barrels of oil, but only a fraction may be extracted o Deepest ever drilled 9km underneath the seabed o Where as Guara the deep water discovery below brazil must only drill 2km, and several more km of rock and semiliquid salt  Both are expensive and technologically complex  Maybe look at chart pg.18  BP is biggest producer in the Gulf, pumping oil and gas of 400 000 barrels there day FPSO  Are a Floating Production, Storage and Offloading facility o There 22 in North Sea, 34 in Asia Australia and 13 in North and South America o Look at how they work? Pg. 184  Pg. 185? Canada Oil Production and Consumption  Production exceeds consumption by about a million barrels day, and is forecasted for more production and less consumption o Total Oil production hit 3.5 million barrels a day in 09, and petroleum consumption at 2 million in 09  Thus exports of about 1.2 million barrels a day  Most of these exports go to the US and US imports the most petroleum from us at 2.5 million in 08? o Vs Saudi who is next on the list at 1.5 US Oil production  Oil production has increased from 08ish but not at the standards of 2000, mostly due to hydraulic fracturing o Water mixed with chemical additives and horizontal drilling into shale rock  Fracking comes from Bakken, Niobrara(both near Canada border), Eagleford (near mexico), Barnnet and Monterey (western coast) o Bakken makes up for almost all of it o 1 million barrels a day from fracking by 2020, another 3 from other oil sources, .5 from Alaska and 2 from Mexico  As of 2010 most of US oil supply comes from onshore production 5.5 million barrels a day o 3 from other and 2 from Canada and Mena countries  China has moved ahead of the US and biggest buyer of Oil and gas from Saudi o So far this avoided social upheaval but is on the Mideast analysts lists  The oil tankers that travel across these seas lanes are owned by India and US which add to Beijin jitters o They are worried about their growing dependence on imported oil, which is projected even higher than US, at 60+% Canada Light and Heavy Oil and Oil Sands  Light is heavily concentrated in Alberta and Newfoundland o Heavy is highly is SK and AL is second  But Oil sands of Alberta far surpass everything  In the Pipeline pg 193-195 Cold Cash, Hard Going  Oil and gas companies are ramping up spending to develop new wells in the artic but progress is slow o Statoil has invested the most, 1 000 million into Snohvlt in Northeast Europe  Cono Philips has invested the next most 600 mil in Amauligak in NA  Lowest in BP in Sandpiper Island at 51 million o Most are situated in North America some in Europe o Large production is expected to start and peak until 2031-2035  After that it is supposed to die down Offshore  Altogether there are an estimated 17.8 billion barrels of oil offshore that are closed to drilling o 10 years worth of US production at Current Rates, 76 trillian feet of natural gas  However this is less that 4 years of current consumption levels  Drilling the deepest wells ever many situated in the Gulf of Mexico o Deepest is Blackbeard from McMoran Exploration at 32 550 feet o One situated in Texas another two in Oklohoma o exploration less than 1000 feet make up 455, where at 1500-5000 and 5000+ account for 27% each o compared to 92” 2005 has 8200, 300 more active leases, 27% in deep water at 54% and 27 more rigs  Situated in Gulf, Brazil, West Africa and China  In 1947 Kerr-McGee built first offshore oil well that was out of sight from land o Drilled 4.6 metres in seabed of Louisiana coast o Now Shell’s Perdido rig, stands as tall as the Eiffel tower and capable of drilling 2.9km  Deep water will increasingly become important and account for most of offshore drilling growth o Delivering 2 million barrels a day by 2015 Alberta Oil Sands  Tar sands occur in more than 70 countries, bulk is found in Canada o Athabasca, Wabasca, Cold Lake, Peace River (together they cover 77000 km^2)  These Alberta oil sands produce about 1.5 million barrels a day, and together Alberta convetional about 2 million th  Make up for 2/3 of Canadian oil production who is placed 6 in world o The same production as Norway, Brazil, Nigeria and Iraq o Is also second fastest growth and 26.5, slightly above Brazil and Iraq is at 34% between 2005 and 2010 o Canada exporting 577 000 barrels a day of high crude to US  However the oil sands cost $50 a barrel with new facilities and $25 with existing o Thus lower prices from Saudi $10 and Venezualan $25-30 place Canadian companies such as Suncor and Western Sands at risk o Pg. 209 for $per barrel operation, same kind of third, Wabasca is cheaper than Cold Lake  When these extra heavy reserves are counted Canada is placed 3 , behind Venezuala and Saudi o However Saudi is all convetional at 264 billion barrels o Canada extra-heavy only consist of 174 billion  Alberta might expand pipelines to the Pacific (West Coast) to meet Asian demand (Kinder Moran) o Existing go from Edmonton to Vancouver, where as possible expansion goes to Kitimat in the North o Projected 3.5 mill with all sources in 2020, and slight decline afterwards  Actually, technically recoverable reserve is estimated at 280-300 billion, larger that Saudi at 240-260 o The total reserve that is not yet recoverable is estimated at 1700-2500 billions of barrels  Alberta’s bituminous crude needs specialised coking facilities, and significant refineries are in American Midwest o By 2014 it is said production from the sand will have filled coking capacity creating a bottleneck and hinder upstream spending o To answer TranCanada has proposed the $7 billion Keystone XL to send 510 000 barrels/day to Texas  However booming oil in North Dakota is displacing Canadian crude to American Midwest  Plans for two new pipeline TransCanada Mainline and Embridge Line 9 transport oil from west to east amid falling Canadian oil prices (from a peak of 120 a barrel in 2011 to around $100 in 2012) [US technically always a little lower] o The mainline is currently used for gas but can be retrofitted o Lowest discount on a barrel was 22.41 on Feb 9 2012  Company dominated by Suncor, Sunoco, Esso, Shell, Chevron, Texaco, Syocrude and Petro-Canada o Canadian Oil sands producing same amount of oil as OECD, FSU AND Others, but everything is still dominated by OPEC Alberta Increasing Export  Alberta energy export to US decline greatly in 2008 to 20009 o However Oil fell much less than gas, only at -34% rather than 50%  Except for coal which increased slightly Alberta’s wedge  Tar sands are forecast to make up almost 75% of Canada crude oil production by 2025, while other all decrease o A total of 4.5 million barrels per day, and 4 of that from tar sands  Shell say new developments are economically at $50 per barrel  The tar sands are worth $15.7 trillion at today’s price Eye on Emission  Canada must consider ways to curb the climb from oil sands in global-warming gases emitted o From 20 metric tons of CO2 in 2003 to 140-120 tons in 2019 Labour Intensity  A measure of how much labour it takes to produce a unit of output o Labour costs constitute a higher portion of overall costs for industries with higher labour intensity  The oil industry in 2007 had only 2 workers per $1 million of real output o Very low compared to goods-producing industry at 10 and all industry average of 14 workers  Top Companies o Imperial $25 000 million in revenue o Petro Canada 21 000 o Suncor 17 000 o Husky 15 000 o Canadian Natural Resources 11 000 Capital Intensity  A measure of how much capital stock (which takes the form of machinery, equipment and structures)- there is per employee in the industry o High capital intensity can be a barrier to entry and limit competition  High capital intensity usually means high higher levels of output per employee  Oil industry is 1.5 million capital stock $ per employee, where as Goods and All are only about 100 000 Alternative Fuels Pg. 218 not sure? Future Traffic Jams  Over the next few decades, one of the main determinants of increased oil demands will be higher car ownership in emerging economies o Total in India and China combined could go from 30m today to 750 million cars in 2040 (more than all
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