Shell's New Oil Well Shows Fossil Fuel Crowd Not Standing Still

By Michael Kanellos

Shell (RDS.A) has drilled an oil well in the Gulf of Mexico that’s 1.77 miles deep and it will follow up with an even deeper one.

The oil giant announced it has drilled a well in the Silvertip field of the Perdido development that extends 9,356 feet below the surface and will later drill a 9,627-foot well in the same area. That handily beats the old record, which stood at 6,950 feet.

In all, the Perdido development will have 35 wells and pump 130,000 barrels a day around the turn of the decade.

So what’s that have to do with greentech? It’s just a reminder that the fossil fuel crowd isn’t standing still. Instead, oil producers are exploiting technology and engineering to extend their traditional businesses. As a result, ethanol and biodiesel manufacturers will remain locked in tight competition to keep production prices down. It’s going to be interesting. Ethanol was a growing industry in the 1970s until gas prices undercut it in the ’80s. Peak oil is inevitable, but the battle will probably go on for quite some time.

Comments

[Road Runner:]

Here we go again, confusing "peak oil" and "cheap oil". It doesn't matter whether we are past peak oil or not. What matters is that we are definitely past "cheap oil". The oil that these wells produce will not be cheap. It would have made a much better post if you gave us an idea of what will be the cost of this oil.

As soon as we get the world economy jump-started, oil will be back over $70/barrel (the price many oil analysts say is the current world-wide cost of production) and heading to $100/barrel (when demand is fully back).

2008 Dec 03 10:27 AM