Sunday, July 12, 2015

Sippican's Law of Thermodynamics: Matter or its Energy Equivalent Can Neither Be Created nor Destroyed, With One Exception

That is the Prelude, the largest floating object ever constructed.

It produces liquified natural gas. It's bigger than 5 aircraft carriers, and it cost $12 billion to build it. They'll park it off the western coast of Australia, and it's estimated that it will stay there for 25 years. Math-ing is hard for me, but here goes: It says will produce the energy equivalent of 110,000 barrels of crude oil every day. If my memory serves, there are 42 gallons of oil in a barrel. That's the equivalent of 4.6 million gallons of fuel oil every day. There are a little over 135,000 BTUs in a gallon of fuel oil. That means they're producing 621 billion BTUs-worth of energy every day. That means in 25 years, they'll produce 5,666,625 billion BTUs of energy. A million multiplied by a million is a trillion, so if they take the occasional Christmas off, they'll still produce 5,000 trillion BTUs of energy. That's enough to heat my house for 56,666,000 years and three months, if you're wondering. I know I was.

The price of a barrel of crude is way down these days, but even if they got $50 a barrel equivalent pricing, that's $5.5 million of energy production every day. That means they'll earn $50,187,500,000 during that 25-year period. Remove all the zeroes and that number is 50 billion dollars. They probably figured that they'd get twice that, but fracking is sending energy costs way down. They'll still net around $40 billion.

During the same 25-year period, the United States Department of Energy will spend $750 billion, if their budget doesn't get increased from this year's amount, which is very, very unlikely.

The Department of Energy doesn't make any energy.


Anonymous said...

I did not do the math but note one potential error in what's reported here. Oilfields decline in productive capacity. Once fully developed they go 'downhill' constantly until they become no longer economic to operate. If your math does not take that into account your estimate of the longterm production (and value) is over-stated .... and of course, anyone's 'economics' have to factor in the time-value of money - 25 years is a long time. It's a huge investment. No doubt they'll make a nice return but don't think it's a 'windfall'.

SippicanCottage said...

It's a boat floating over a natural gas well. They'll cut the anchor rode and float it over the next natural gas field when that one peters out. The boat doesn't stop being the boat when the gas runs out. The people that spent 12 billion dollars on that boat say there's 25 years-worth of NG in that field. They put 12 billion where their mouth is.

I have known many petroleum engineers in my life. They're not weathermen. They aren't allowed to be wrong, and seldom are.

Sam L. said...

Oh! The HORROR of Greenpeace will know no bounds!