Posted by Big Gav in peak oil
John Kingston at "The Barrel" has a post on the growing production of natural gas liquids - The exploding supply of NGLs: can this stuff be called oil?.
If The Oil Drum were still around, the contributors would certainly be talking about a new ESAI study.
The Boston-based consultancy put out a press release today, touting a new report it has produced that says by 2023, NGL production will account for more than one-quarter of the world’s liquids output.
To which the peak oil believers might say: exactly.
One argument often made by the peak oil school is that the rise in liquids output around the world does not eliminate any suggestion that oil production has peaked, because so much of what is coming out of the ground isn’t really oil. Instead, much of it is NGLs, which are far less versatile in what can be produced from them. Specifically, they have virtually no value in making distillates, the oil product most in demand in rising economies.
an increasing supply of natural gas from areas as diverse as the Middle East and Australia is pumping out a lot of NGLs along with that rise, and that’s adding to the percentage of NGLs in the total world liquids pool. You can see it in the price: NWE propane now runs about 60% of the price of Brent, and in 2008, it averaged close to 70%.
The question for the global market is whether innovation can take some way of making what could be a growing surplus of ultra-light petroleum products like NGLs or condensate and figure out a way to help them satisfy other petroleum demand. The rising supplies of these types of ultra-light petroleum feedstocks is great news for the petrochemical industry, particularly in the US, but it does take something off the ebullience of those proclaiming the end of peak oil. All barrels most certainly are not alike.