Right now oil is about $65 a barrel. My understanding is there are alot of ways to get oil that we don’t use right now like thermal depolymerization, getting it in siberia, getting it in Canada, etc because they are not cost effective. How much does oil have to get before these alternative methods of getting it become marketable?
I was talking to a labmate today about it and he said he saw an article about a man who claimed he could make oil out of (I think) wood chips and ethanol, but not for less than $85/barrel.
I suspect that it’s not an all or nothing answer. As the price goes up, more people will try different things, sometimes at least.
More folks will try out alternative fuels, if only for small vehicles or whatever. If enough people try out alternative fuels, more places will spring up to sell them, and if more infrastructure gets installed, the price of the alternative fuels may come down some.
It’s a dynamic thing, not easily given a straight answer. I suspect.
The only real answer is that your starting assumptions are flawed. It’s perfectly economical to produce nuclear power right now, or hydroelectic power, or coal power, or wood power. Those things have been economical for decades. And I don’t know who told you that getting oil in Canada wasn’t cost effective, but Canada has been producing oil cost effectively for decades. And no, that’s not nitpicking. You genuinely are making a massive invalid assumption, even if that assumption is made by most people.
You really need to appreciate that we don’t; just use oil now because it is more cost effective. We use oil in large part because it’s convenient. Oil is fairly energy dense which means it doesn’t require massive holding facilities like coal does. Being a liquid it is easy to transport and easy to sell. Trying to sell coal by the pound to motorists would be a pain while lugging coal into your house for heating is also inconvenient. An electric car these days will do probably 90% of what a petrol car will do for 99% of people, but it is still more convenient to own a petrol car than to own an electric and hire a petrol car 10% of the time. And that is only a small sample of what makes oil a fuel of convenience, not just of economics. And being a fuel of convenience is what makes it impossible to answer the question. People aren’t rational creatures. We are more than willing to pay more for essentially (or exactly) the same product if it is convenient, and it’s impossible to quantify what convenience is worth. (BTW, under convenience I include issues of status, aestheics, ethics and so forth that are also big selling points for oil. Essentially anything that can’t be quantified.)
A person will happily pay 150% more for fast food than for exactly the same meal prepared at home. A person will pay infinitely more to have someone wash their windows than it would cost to do it themselves. So how can we answer the question “How much does McDonalds need to cost before alternative sources are cost efficient?” or “How much does Bob’s window cleaning need to cost before alternative sources are cost efficient?”. It seems clear that we can never answer those questions because people don’t use those services solely or even primarily for economic reasons. And so it is for oil to a large extent.
In many ways convenience will be reflected in market forces, since smaller handling depots, less frequent deliveries and so forth will drive the price down, but at the same time many convenience issues will never be directly reflected in the market. If a person wants a big, fast, sleek car for Freudian reasons then they will have one, even if it is more expensive while for all practical purposes an electric car is identical. If a person wants to avoid ‘spoiling’ their house with the addition of a coal cellar then they will pay for that by using oil heating no matter what the economics.
And so it goes. The subjective convenience factor plays a large but unquantifiable role in the demand for oil. It is by no means driven solely by economics. And because of that liquid crude oil is used today even when alternatives are perfectly viable economically and even practically. So while it may be economical to produce gasoline out of woodchips for $85/barrel that doesn’t in any way indicate that it will be cost efficient or marketable to produce gasoline from woodchips once oil hits that price. If nobody is willing to buy it then it will never be cost effective to produce it.
That $85.00 number is generally used as the price of crude oil. As far as I know crude oil in itself is unusable.
FWIW I have a couple of piles of wood chips that the county crews left behind when clearing trees from roadway right of ways that I’ll give you. They will surely fill 5 or 6 oil drums.
It’s all part of the same equation. Imagine we could get nuclear power for free, we could then produce oil directly from the gases in the atmosphere if we wished. In essence any alterative to oil is an alternative source of oil at some point, itls just a case of whether it’s convenient.
Which was rather my point. It’s not as simple as asking when alternative soucres of oil become economically viable, it’s about when they become convenient. Even if we discovered limitless deposits of easily obtained uranium tommorrow and could produce atmopheric gasoline for 20c a barell that wouldn’t necessarily mean that it would be cost effective to do so. Or alternatively even if liquid crude gasoline costs $300 a barrell it may still not be cost effective to use any alternatives.
Well, thermal depolymerization seems to break even at 80 dollars a barrel. Making oil from oil shale is cheaper than that, but as a lot of companies got burned in the '80s, there is a lot of hesistation to invest in oil shale technology.