What Matters: November 2004
Pixel Power: Computing Higher Productivity for Oil
Alex Lightman '83
Photo: ©istockphoto.com.
Though Hurricane Ivan gets the blame for the lowest oil output in 54 years, the real problem is that the smartest engineers, lawyers, and policymakers in this country have not applied their intelligence to the hydrocarbon industry. The seeds of this neglect have now become a whirlwind that can blow down the US economy. What matters most is to apply the best practices of information technology to the hydrocarbon industry, and to create a smarter backlash against the sort of thinking that prevented the building of any refineries, liquefied natural gas (LNG) ports, or nuclear power plants for three decades.
Boston's own John Kerry erroneously stated that the US could eliminate the need for Middle Eastern oil within ten years. Given that there are over 800 million internal combustion engines roaring around the world, and thousands of jet aircraft which require fuel that can burn at 9,000 degrees Fahrenheit, and that over 650 billion of the remaining 1 trillion barrels of proven reserves of oil reside within a hundred miles of either side of the Persian Gulf, it is mathematically impossible for the US to do without Middle Eastern oil. Besides, all oil and gas goes into a global market, priced in dollars, so tracing origin is neither practical nor possible.
What is possible, though, is for intelligent people to ask if the million-fold increase over the last decade in graphics-related computing power can be made available to all geologists, geophysicists, and reservoir engineers. This computing power could be put to use to quite literally double the productivity of current oil fields from 20-35% recovery to 60-70% recovery. This would bring lower prices, higher profits, and a longer runway to build economies of scale for renewable energy sources like wind, solar, hydro, and biomass.
When I attended MIT I worked during IAP and summer breaks as a roughneck (someone who gets splattered with steaming mud as he screws together miles of pipes) and as a drilling engineer. I asked my professors in Civil Engineering if I could learn anything that would help the oil industry. I was told that there was no interesting research to be done, and therefore MIT would not waste time with it.
In fact, the history of the oil industry is one of very slow improvements that, measured against the increased recovery of all oil, were each worth hundreds of billions of dollars in extra profit, both to companies and to countries.
Contrary to what the professors told me at MIT, the biggest productivity improvements in petroleum exploration and exploitation were still to come. The improvements all used the sort of thinking that MIT's Architecture Machine Group, which became the Media Lab, used to burst upon the world scene: out of the box thinking on visualization, as well as "big box" thinking in the form of wall-sized displays, and the ability to "put that there" by using gestures with interdisciplinary teams. By not thinking out of the box about oil and gas (because there were no petroleum engineering grad students, professors, or programs), no students around the Media Lab thought to apply "pixel power, the revolution in computer graphics" to oil and gas. I use those words in quotes because this was the title of my first published article, the cover story for The Futurist magazine, June 1985, indicating to me that MIT's visualization breakthroughs had made me a visionary about the possibilities of computer graphics. But, with 20/20 hindsight, I never saw the connections between what I learned in classes and UROPs with what I did as a drilling engineer.
As the oil industry added viewing dimensions, we gained the ability to drill fewer wells to drain the reservoir, and to drill them at angles so that we didn't have to spoil the view from the beach (a scenic blight that killed offshore production in California among other places). BP's chairman, Lord Brown, has said that the first visualization center built for BP saved the company $9 million in the first week. BP also said that a team using another visualization center saved BP $500 million by changing the routing of its Baku to Ceyhan pipeline after viewing it with an interdisciplinary team of experts. BP now has almost thirty of these visualization centers, and some are booked out months in advance, 70 hours a week. These centers are crucial in order to connect every well to real time data and to maximize total yield, as well as allowing teams to function in a "wizard environment" of abundant, comprehensible data.
The US has exacerbated the problem of wasting oil by not implementing these improvements decades earlier. (The oil and gas industry, like the construction industry, has historically under invested in R & D, particularly when compared to the IT and pharmaceutical industries). The US energy industry is also mortally wounded by NIMBY, the Not In My Back Yard syndrome. California, for instance, is famous for driving cars, but the last refinery built in California was over 70 years ago. The last refinery built in the US was 30 years ago. Not building refineries for more than a generation (when population increases by one to three million people per year) is economically destructive. We complain about gasoline prices but our refineries are old, inefficient, and patched together. We set ourselves up for rolling blackouts by building natural gas-fueled power plants, and then refusing 100% of permit requests to build LNG (Liquefied Natural Gas) facilities. We set ourselves up for near total dependence on Middle Eastern oil by refusing to break ground on a new nuclear power plant since the mid-70s, even as the French, with 58 nuclear plants, scoff at US energy hypocrisy, and get grudging US approval to grab billions in the new multinational fusion plant by having the best pool of expertise on earth to move to fusion.
The real facts, especially in comparison to Saudi Arabia, are shocking. There are only 22 billion barrels of proven oil reserves in the US, and over 260 billion in Saudi Arabia. Of the 880,000 producing wells in the entire world, 520,000 of them are in the US, and, of these, 502,000 use mechanical pumps as oppose to free flowing wells. The US drilled over 36,000 new wells last year, yet on average, wells in the US produce a measly 100 barrels a day. The US oil industry is going back in time, and will have reduced output every year from this point onwards, whether Arctic National Wildlife Refuge in Alaska is opened up or not. Saudi Arabia reports that it has 260 billion barrels of reserves, but it has only about 3,000 wells, and only drilled about 300 new wells in the last year, while claiming that it would have drilled more...if it could find spare parts for six more oil rigs! The idea that Saudi Arabia is "producing flat out" is a PR triumph for the Saudis. I believe that if Saudi Arabia had drilled even 10% of the wells drilled in the US, its proven reserves would be vastly higher. To put it another way, if Saudi Arabia had as many producing oil wells relative to its reserves as the US, then Saudi Arabia would have about six million wells rather than three thousand, and oil prices would be in the dollars per barrel rather than dollars per gallon. But to have this, we'd need to have thousands of oil companies in Saudi Arabia competing, rather than one big one, ironically created by US oil company SOCAL.
The US is like a rebellious teenager with respect to energy, and needs to grow up. The US should pass legislation to allow eminent domain to build refineries, LNG plants, and nuclear power plants, as well as federally purchase (to create economies of scale) wind turbines and solar cells (which should both be on every structure in America that is remotely feasible), as well as switch all government vehicles to electric cars, powering them during the off peaks when the turbines rotate anyway and thus at almost no marginal cost in energy.
Oil is the basis for a world that supports over six billion people. If and when oil gets too expensive, billions of people could die. The world, especially the US, is burning up the ultimate retirement savings account: billions of years of dead plants and animals. And by the middle of the 21st century we need to figure out how to effectively harness both the photon and the atom for clean energy.
An ever-smarter energy industry, and research prioritization at MIT and every other top engineering and science university, is what matters most. Unless you want the US to have to have to fight a Falluja every fortnight to assure that you can drive your car alone for the foreseeable future, you need to vote for smarter energy with all the passion you voted for on Nov. 2. The future can be bright, or dark, depending on our energy policies. Getting the best technology out to every company, starting with visualization centers everywhere is where we must begin.
About the Author
Alex Lightman '83 (Course I-A) is the CEO of MIT-spin off Charmed.com and the author of Brave New Unwired World: The Digital Big Bang and the Infinite Internet, the first book on 4G wireless broadband. He also chairs IPv6 events.
What Matters is a guest opinion column written by a different MIT alumnus or alumna. The views expressed are entirely those of the author and do not necessarily represent the views of the Alumni Association or MIT. Interested in writing a column? Email whatmatters@mit.edu.
