About the blog: What Things Are Made Of

AMERICA'S GLOBAL DEPENDENCY FOR NEARLY EVERYTHING


The United States relies on imports for dozens of commodities in everyday use. Often enough, that reliance is 100%. In this book I aim to provide awareness of the hidden geology and mineralogy behind common things, and to develop an appreciation for the global resource distribution that underpins our society. While concerns about oil import reliance are in the news every day, our needs for other minerals are comparable and are typically unknown even to technologically aware Americans.





Friday, May 20, 2011

Everyone has an agenda

Everyone has an agenda. I do too, and because of my background as an oil explorationist it would be reasonable to think I might come down on the side of drilling, mining, and exploiting. Those things are important to modern life – but as a geologist, I also love the earth. I would call myself an environmentally sensitive resource explorer, even though some would say that’s an oxymoron.

In the introduction to What Things Are Made Of, I say the book is not intended to be a polemic against the mining industry – nor does it ignore the environmental consequences of mining. The point is that mined materials ARE used in incredible ways, and the book is a showcase for the necessity of mineral resources and the world's interdependence on their irregular distribution.

The National Mining Association promotes and lobbies for the mining industry. But they also have a great section, Minerals Make Life, whose message is essentially the same as mine: that everything takes minerals, that modern life would be impossible – not just inconvenient, but flat-out impossible – without them.

Sunday, May 8, 2011

What eyes are made of

As a geologist, I don’t get too much into biology (except for dead things – fossils). But given my early career analyzing kidney stones, I’ve been fascinated by biomineralization. So I was interested to learn of the first discovery of aragonite eyes.

Aragonite is the orthorhombic form of calcium carbonate, more familiar as calcite, the hexagonal (rhombohedral) type. Both are CaCO3 but their crystal structures are quite different. There is a rare less stable third form, vaterite, that crystallizes in the hexagonal dihexagonal dipyramidal crystal class and is sometimes found in gallstones. But back to eyes.


The research linked above found that some chiton lenses consist of aragonite crystals. Acanthopleura granulate, the fuzzy chiton of the West Indies, is a primitive mollusk, nonetheless pretty successful in evolutionary terms: the chiton group got its start in Devonian time about 400,000,000 years ago. The West Indies version lives in intertidal zones – so maybe it should be no surprise that aragonite crystallography allows the chiton to focus light equally well through both water and air.

Modern animal lenses are biochemical compounds—proteins—that have evolved transparency. But early in earth’s history, other critters, including trilobites, developed single crystals of calcite as optical lenses. This evolutionary development might have been an important factor in the Cambrian Explosion, the time about 530 million years ago when all the major phyla developed in a geologically very short time. In the Blink of an Eye, by Andrew Parker, explores this idea in depth.

In the industrial world, aragonite sometimes finds uses in glass and cement making, but calcite, far more common, is generally used. Aragonite and calcite both make beautiful collectible mineral specimens.

Chiton photo by Kirt L. Onthank, via Wikipedia under Creative Commons Attribution-Share Alike 3.0 Unported license.

Sunday, May 1, 2011

Why “Drill Baby Drill” doesn’t matter

Here’s why drilling in the US (or almost anywhere else) today won’t make any difference to the price of gasoline this year, next year, or even the year after that – no matter what politicians may say.

It takes a long, long time to find oil fields. It takes a long, long time to develop them. It takes a long, long time to finally get some oil out. The most recent large example I’ve seen is the Hebron field, offshore Newfoundland. Discovered in 1981, ExxonMobil and others are about to develop it. They expect “first oil” in 2017.

Hebron contains an estimated 700 million barrels. The estimated cost to set up the field for production is $C 8.3 billion (US$8.75 billion), and the estimated cost of operations over the life of the field is an additional $C 5.8 billion (US$6.11 billion). I have not found an estimate for finding costs specific to this field, so I’ll start with the estimated US offshore cost (average for 2006-2009) of US$53 per barrel. That would put finding at 53x700 million = $37 billion. That amortizes all exploration expenses including failures, to make an average total cost for actual oil found. But offshore Newfoundland has a relatively low finding cost – and Exxon is a pretty efficient company, so the actual finding cost for Hebron is probably closer to US$7 per barrel, or around $5 billion. So there’s something like just under US $20 billion in costs.

Production rate will be something like 150,000 barrels a day. At $100 a barrel, that’s a whopping $15,000,000 every day. And about 1300 days – under 4 years – to repay the investment. Of course, things like corporate taxes, transportation to market, and so on come out of that, as well as dividends to shareholders. And obviously it could not happen without the huge up-front expenditures. And the patience and money to wait 36 years from discovery to first oil.

36 years is an unusual length, even for offshore oil fields. But 10-15 years is not.

At 150,000 barrels a day, the 700,000,000 barrels would take about 4700 days or 13 years to produce. But it won’t be at 150,000 barrels a day for the entire time – it will ramp up to that point, probably be managed to sustain a production plateau, and then decline. For comparison, Prudhoe Bay, North America’s largest oil field, reached a peak production level of about 1.6 million barrels a day in 1979. It’s still producing, but about 200,000 barrels a day and declining. ExxonMobil estimates Hebron’s productive (economic) life at 46 years, beginning in 2017.

The main point of this exercise is to illustrate that any major oil field discovered today will not impact the price of oil until it is actually produced – in 10, 15, or 36 years from now. When you consider the future, consider that almost all existing oil wells are declining in their production rates, like those in Prudhoe Bay. 525,000 oil wells in the US average about 10 barrels per day per well, and the estimated rate of decline in US production ranges from 3% to 7% per year. If it is 5%, 5% of 10 barrels is half a barrel a year – so in 10 years, on average, the 525,000 wells in the US today will have lost 5 barrels per day per well, so they’d be at 5 barrels a day rather than 10. We’ll have lost 2.5 million barrels a day. You’d need almost 17 Hebron fields to make up that loss.

The Hebron field is an extreme example, but the concepts apply to any large oil discovery in the United States – and large oil discoveries in the United States are very few and far between, and getting scarcer. Drilling or discovery today will have no impact on the price of gasoline for years to come.