Peak Oil (was "petroleum geologist explains US war policy")

[free spirit]

I didnt want to quote the entire interview but obviously I've missed some interesting stuff out of the above.

I note that Falcon has liked this post, but it seems a little at odds with his recent statements that we're already in decline at a decline rate of 10% a year.

OR: Afterwards, in my view, we will have to face a decline of the production of all forms of liquid fuels somewhere between 2015 to 2020. This decline will not necessarily be rapid, however, but it will be a decline, that much seems clear.

I can't see that there's much I'd dispute in that article, though I'd be a bit surprised if we actually saw a decline before the end of the decade, I would probably expect it before 2025 so I'm thinking in the same ballpark.

I also like the way he sticks to his subject, and describes the potential consequences of it as 'the first tensions arising'.

Tbh my specialists subjects in this field are renewables & energy efficiency / demand destruction. I'd rather not get too involved in arguments about oil production, but I sometimes feel forced into it by some of the outrageous and unsupported claims that get made on the subject.

In demand destruction terms though, I'm pretty comfortable that efficiency gains possible from deployment of current technology particularly in the US car fleet, a gradual unwinding of the economic globalisation process, and a general move towards more public transport, bike, walking and working from home in the developed world, along with non-car orientated development in the developing world is capable of enabling the global economy to cope with a relatively gradual reduction in oil supply.

As an example, the US car fleet consumes around 8 billion barrels a day. Its current fuel efficiency standards for new cars are around half those of EU and Japan now, and the average fuel efficiency of their fleet is probably less than a 3rd of current EU and Japanese fuel efficiency standards. So by increasing US fuel efficiency standards for their new fleet even just to current EU and Japanese standards, the US has the potential to cut probably around 1-2 billion barrels a day by the end of the decade, and another 1-2 billion barrels a day by 2025-30 as the last of the gas guzzlers leave the fleet, all without any actual need to reduce vehicle miles travelled... though I'm sure that will also happen.

It needs the right policies in place to make the change happen, but with those policies in place then the global economy should be capable of surviving and even thriving in a post peak oil world, is really my main point in all of these discussions.

 

[free spirit]

So we are clear. You were challenged to show:

1. Evidence that we are on track to discovering the equivalent of 150% of current Saudi resource
2. Evidence that such addition is new resource, not mobilised previous discovery
3. Evidence that such new resource can sustain the same production rate as the depleted resource did

1 - this assumes the 10% decline rate you give from a 2008 report that I doubt is accurate now, and the former IEA modeller in that oil drum article who presumably worked on those figures originally doesn't seem to be using them now.

2 - why? If it's being brought into production as a result of higher prices then it's still new production, similarly if it's production gains resulting from the higher price making eg gas reinjection economic.

3 - I'm not saying that we're never going to reach a point of peak oil and oil decline, I'm specifically saying that we are not there yet in response to your assertion that we are, so I don't need to demonstrate long term sustainable outputs to justify my position.

You were further challenged to acknowledge that, even if you could, you'd have demonstrated only a 14 year peak extension - far less that than the time necessary to build out your projects. And you were challenged to acknowledge that the additional hydrocarbon would fry the planet.

According to your model, but then there's always the chance that the assumptions behind that model aren't actually correct, which would seem to be the case if the model only works by excluding production gains, and new production that's enabled by higher prices.

Price is only one economic factor. Lifting cost is the other. Oil price and lifting costs have both doubled.

Obviously the point is that higher prices facilitate the delivery of oil at higher lifting costs. Presumably you're not arguing that that same oil at the same lifting costs could have been delivered at the lower oil price that existed in the 90s?

I referred you to IEA sources asserting that net investment is falling.

yes, a 2006 document based on 2005 data, ie before the vast majority of the expansion in exploration and development activity I was referring to had taken place, and before the majority of the oil price rise had happened.

There have been no technical improvements in recent decades that compare with the introduction of satellite remote sensing, downhole sensing using miniaturised computers, supercomputer based seismic processing, and geophysical and geochemical advances in the 1970's.

That's as maybe, but when the oil companies have only carried out proper seismic surveys on around 5% of the seabed*, it'd be fairly logical to assume that an increase in the number of seismic survey vessels and their contracts to carry out surveys would lead to the remainder of the seabed being surveyed faster than if this work had carried on at the same rates as in 2003-4.

*source = my seismic surveyor mate

He also reckoned that the depths being surveyed to are related to the length of the cables being towed behind the vessels, and that the newer vessels are towing much longer cables as it's now considered economic to extract oil from deeper than it was 10 years ago. But then what would he know about the subject eh.

 

[elbows]

I note that Falcon has liked this post, but it seems a little at odds with his recent statements that we're already in decline at a decline rate of 10% a year.

I'm a bit tired now so wont respond to all the other stuff you've said. But on that point I'm usually under the impression he is talking about some sort of averaged decline rate of the fields that are already declining, or some form of depletion of older fields that were the previous production base, and is not actually saying that total conventional production is already declining by 10% a year. Thats not the sort of claim that anyone could make prematurely without the numbers clearly failing to add up in a big way before long. But I dont rule out the possibility that these lines may have been deliberately blurred sometimes to try to stretch a point.

 

[Falcon]

That quote does leave me wondering if Falcon is aware of the function of a heat pump.

Which in his analogy is pretty much what renewables are doing in terms of taking an amount of up front high grade energy then using this to spend several decades transforming low grade energy into significantly greater quantities of high grade electricity than were used in their initial construction and operation.

I think I have misjudge you, Free Spirit. I first I thought you simply didn't understand the criticality of properly accounting for system boundaries in energy life cycle analysis (your persistent fallacy about the contribution of renewable sources to the energy supply that ignores the colossal energy consumption of the global industrial manufacturing system that is necessary to their manufacture, maintenance and operation).

Now I realise you don't even grasp basic thermodynamics.

It's called a "heat pump". It pumps heat. Heat has a particular meaning in thermodynamics.

The global industrial manufacturing system, and industrial economies, don't run on heat.

I thought your dad was some kind of scientist - didn't he teach you basic physics?

 

[Falcon]

1 - this assumes the 10% decline rate you give from a 2008 report that I doubt is accurate now, and the former IEA modeller in that oil drum article who presumably worked on those figures originally doesn't seem to be using them now.

You doubt incorrectly. Did you ever bother to read the reference I supplied you to the IEA 2008 explaining the structural reason why it's 10%? It's because we get 60% of our production from just a handful of ancient fields. It is their performance which sets the depletion rate of the system.

2 - why? If it's being brought into production as a result of higher prices then it's still new production, similarly if it's production gains resulting from the higher price making eg gas reinjection economic.

Area under the curve. Accelerated production is more production now at the expense of less production later. But production later is already falling. So accelerated production intensifies subsequent depletion. I supplied you with some sensitivity graphs - modest short term gains at the expense of fatal intensification of depletion. Incremental production (resource addition) gives more production now while preserving post peak depletion rate. You need incremental production over 50+ years to fund your little projects. The distinction between incremental and accelerated production is critical to you, but since you don't understand your own argument, let alone mine, that distinction will be lost on you.

3 - I'm not saying that we're never going to reach a point of peak oil and oil decline, I'm specifically saying that we are not there yet in response to your assertion that we are, so I don't need to demonstrate long term sustainable outputs to justify my position.

Fluff and waffle. We have 1 trillion barrels of remaining resource today, from which 80 million barrels a day of production can be mobilised. If we had 2 million barrels of remaining resource tomorrow, but could only mobilise 40 million barrels a day, production would have peaked even though reserves had doubled. (Analogy: your mad aunt left you a million pounds, but instructed her lawyers to release it to you as an income of £100/month. You are indistinguishable from a welfare recipient).

You are using resource interchangeably with production, again because you don't know what you are talking about. The tar sands of the Orinoco delta in your example are not comparable on a unit production basis with currently expiring reserves.

You need to demonstrate three things, and account for two more (oh, Free Spirit, your climate change denial silence grows with every passing post). You haven't managed one yet.

That's as maybe, but when the oil companies have only carried out proper seismic surveys on around 5% of the seabed*, it'd be fairly logical to assume that an increase in the number of seismic survey vessels and their contracts to carry out surveys would lead to the remainder of the seabed being surveyed faster than if this work had carried on at the same rates as in 2003-4.

"The remainder of the sea bed"? Could you share a little more about your notion of how oil is searched for? We've surveyed 5% of the world's jungles for kangaroos - be sure your explanation doesn't lead to some hilariously unanticipated conclusions for you to explain.

 

[Falcon]

But on that point I'm usually under the impression he is talking about some sort of averaged decline rate of the fields that are already declining, or some form of depletion of older fields that were the previous production base, and is not actually saying that total conventional production is already declining by 10% a year.

Correct. It's a transcript of a conversation and Rech mispoke - he meant "Recovery Factor is increasing", which is a true statement - the recovery factor of today's puddles is higher than the recovery factor of yesterday's giants, not least because the economics today are so marginal that we can only develop high recovery factor puddles.

But the dominant parameters are collapsing accumulation size, and rising depletion rate. The IEA is a government sponsored institution that is required to provide policy advice to governments on Peak Oil. Peak oil poses an existential threat to the continuity of government. The IEA hires good guys, and is flashing the red warning light like fury. Its analysis in 2003(?) decomposing future reserves into a bucket which included "unconventional unidentified" (i.e. "don't exist") was a masterpiece of smuggling bad news past thick neoconservative and other resource optimist censors. But they are under extraordinary political pressure to sustain the illusion that all is well, and have got caught. When a dog walks on its back legs you marvel that it is walking, you don't criticise the way it walks. Their admission is a major insight into the tension at government level over this, which is why I 'liked' the statement and understand the softening obliged by political pressure.

The uninvested depletion rate of the global petroleum system - the rate at which production would fall if investment stopped today - is 10% per annum. It's all fields in aggregate, not just the already declining ones. It's set by the depletion rate of the small population of large ancient fields dominating production. Depletion rate is a strong inverse function of accumulation size. Discovered accumulation size is a strong declining trend. So, coupled with ancient field exhaustion, depletion rate is a strong rising trend.

The maths are brutal.

10% per annum (the rate it is passing through on the way to higher depletion rates) is (70/10 =) 7 year half life. So in the next 7 years, investment must replace (80*50% =) 40 million barrels of *production* (see my "mad aunt" analogy above to understand the difference between replacing production and just replacing resource - Free Spirit's denialist misdirection du jour). In 14 years (two half lives), investment must replace (80*50% + 40*50% =) 60 million barrels of *production*.

That is before any attempt is made to maintain production *growth*. Investment that has historically been allocated to production growth must now switch increasingly to production maintenance, at the same time that the cost of production maintenance is doubling. Growth (which operates on multi-decade project cycles) requires additional (debt financed) investment. The global financial system is now debt constrained and hasn't even begun to finance Free Spirit's projects at scale. There is a puff of US shale oil production at the moment - financed by various Ponzi schemes hatched by Wall Street as money laundering schemes for recycling the colossal quantity of synthetic TARP debt that is being created.

That's why this conversation spent a while in the financial implosion thread - petroleum geology, and the fate of a financial system that is the emergent property of an economy founded on petroleum geology - are two sides of the same coin.

Worth saying again. In 14 years, investment must replace 60 million barrels of *production* - 75% of current capacity - using a finance system that implodes if energy doesn't grow and is sustaining plateau production levels with synthetic debt. That requires the immediate discovery and mobilisation of the equivalent of 150% of what is taken to be Saudi's current reserves. The combustion of 20% of existing reserves consumes the last of our emission budget - this is the hypothesis that those reserves might be increased by another one third.

That is the argument Free Spirit is unwisely pursuing with his charts of rig rates and seismic vessel activity.

 

[elbows]

Well you wont find me agreeing very much with Free Spirits recent stuff about oil, although to be fair he does admit this isnt really his area. Nor will you find me wishing to repeat too often the sorts of arguments you and I have had in the last year or so. It may still happen occasionally since and I dont think we will end up in 100% agreement about the numbers, all of the time, but the rough magnitude is often about the same.

Anyway given this strand of the conversation, I think I will briefly remind myself of the depletion rate picture that has been acknowledged in the last 5ish years. This is where I am starting, and if memory serves me correctly this is roughly as far as the mainstream got in terms of acknowledging the scale of the issue:

​

The IEA’s World Energy Outlook 2008 included, for the first time, a study of the depletion rates of the world’s top 800 oil fields. It found rates of 6.7% for past-peak fields, increasing to 8.6% by 2030 (the end date of the report’s “reference scenario”). Averaged across all fields, the rate is 5.1%.
Against such high decline rates-up from a generally accepted 4.5% estimate only a few years ago–the agency calculates that the world would need to add a whopping 64 million barrels per day (mbpd) of new capacity between 2007 and 2030 in order to meet an anticipated demand growing at 1.6% per year. That’s like adding six new Saudi Arabias.

The IEA concluded that the world will have a hard time reaching 100 mbpd within the next two decades. Their projected supply curves are now sharply reduced, while their global demand projections continue to show about a 1.5% annual rate of growth.

The report concluded with this stark warning:

For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed, but not necessarily in the way we would like to see…While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over…It is within the power of all governments, of producing and consuming countries alike, acting alone or together, to steer the world towards a cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now.

http://aspousa.org/peak-oil-reference/peak-oil-data/oil-depletion/

 

[elbows]

I can't see that there's much I'd dispute in that article, though I'd be a bit surprised if we actually saw a decline before the end of the decade, I would probably expect it before 2025 so I'm thinking in the same ballpark.

But what are these expectations based on?

Personally Im not sure I have a date that would surprise me more or less than any other. It would not have surprised me if production had started to decline 6 years ago, it would not surprise me if it started to decline in 2 years, or 5, or 7. If it hasnt started to notably decline by then, I suspect I will have to start scratching my head.

I can certainly see why the original worst-case decline possibilities I heard about approx a decade ago didnt pan out that way. People like Simmons were hyping up the prospects for imminent, rapid decline of the Saudi giants. Throw in the mature field state of other large suppliers like Russia, and suggest they were about to start declining at quite a pace rather than managing to maintain production for some years, and it was possible to construct a picture of peak then immediate decline, with a lack of plateau. That it didnt pan out that way in the last 6 years doesnt really give much comfort as to the realities of the next 6 years though.

Anyway back when I was first looking at the data I used to find it helpful to look at each countries production separately, and I shall probably repeat that exercise again this month and see if anything interesting emerges.

 

[Frumious B.]

Seems that North Carolina's newly appointed Secretary of the Department of Environment and Natural Resources, Mr John Skvarla, believes in abiotic oil. Lots of the Christian Right do - they know that there are no such things as fossil fuels. Or fossils. Because the earth is only 6,000 years old. That's what the Bible says. The things we think are fossils are just jokes played on us by that well-known japester, God. If you ask me, yet another reason to invade America and massacre the Christian Right. Some of these people are educated, intelligent, corporate high-fliers. I met one who told me all about abiotic oil when she noticed me looking quizzically at her Ford Excursion, the largest SUV ever built. It weighs 3.5 tons, or two Transit vans.

But I digress. Here's the worrisome news about Mr Skarvla, from www.indyweek.com/triangulator/archives/2013/01/07/john-skvarla-new-secy-of-denr-snake-oil-salesman

John Skvarla, the newly anointed Secretary of the Department of Environment and Natural Resources, has publicly stated that under his watch, regulations—and the relaxation thereof—will be grounded in science and fact.
In an illuminating interview with WRAL’s Laura Leslie, Skvarla failed the scientific sniff test. (The portions referenced below begin around 11:21.)
First, Skvarla insinuated that oil and gas are infinite, renewable resources. When Leslie noted that these fossil fuels are not renewable, he replied, “Some people would disagree with you. The Russians, for example, have always drilled oil as if it’s a renewable resource … There is a lot of different scientific opinion on that.”
Not really.
The abiotic theory of oil, as it’s known, holds that oil is naturally produced deep underground rather than is converted from decomposed and organic material, such as plants and prehistoric forests. Abioticians (We made up that word—why not, if you can make up science?) use this theory to support the idea that we need not wean ourselves off fossil fuels because they’ll never run out.
Creationists have latched on to the theory as way to prove the Earth is only 6,000 years old.
Now Skvarla is right in that the Russians proposed this theory in the 19th century, but it has gained no legitimate, scientific consensus. That didn’t stop astronomer Thomas Gold, who revived the theory in a 1998 book.
In 2005, abiotics was explored again in Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil by Jerome Corsi and Craig R. Smith, neither of whom is a scientist.
(Corsi has a doctorate in political science from Harvard. Smith is chairman of Swiss America Trading Corporation, an investment firm specializing in U.S. gold and silver coins.)
INDY Week called Dr. John Rogers, UNC professor emeritus of geology, about abiotics. He says the idea that oil and gas are renewable resources is incorrect. “Abiotic oil is another idea that conservatives have latched onto as a way of denying that there is any limitation that the Earth places on the way we live,” Rogers says.
“The idea that there is carbon deep in the Earth is true,” he adds. “The problem is that there is very little in the deep crust in comparison to the oil that has been found and produced by decomposition.”
Rogers, who is writing a book, Rational Environmentalism, taught at UNC from 1975—1997. He says the anti-science movement has strengthened in recent years because of greed.
“If you accept the idea that the Earth puts limits on itself, you have to understand science. We can’t simply manipulate our way to wealth,” he says. “And the modern feeling is that all we have to do is adjust taxes and laws and we will be become rich.”
While we’re comparing credentials—Rogers being a geologist and Corsi being a political scientist—it should be noted that Corsi also pens columns for the conservative website WorldNetDaily, which often trafficks in conspiracy theories and misinformation. WND published the Black Gold book.
Corsi’s previous work includes two books attacking Democrats, including The Obama Nation. A bestseller, it was widely criticized for serious inaccuracies, including that Obama could claim to be a Kenyan citizen and that he was once a practicing Muslim.
Factcheck.org, which is based at the Annenberg Public Policy Center of the University of Pennsylvania, judged it to be “what a hack journalist might call a ‘paste-up job,’ gluing together snippets from ehre and there without much regard for their truthfulness or accuracy. … A comprehensive review of all the false claims in Corsi's book would itself be a book,” Joe Miller wrote on the Factcheck.org website.
These are the minds from which abiotics sprang—and our new Secretary of the Environment and Natural Resources is parading around a scientifically bereft theory.
But wait, there’s more.
Although he chose his words carefully, Skvarla spoke in the same terms as the far-right climate-change doubters, similar to coastal conservatives who advocated for what became known as the sea-level rise proposal last year.
"I think climate change is a science and I think science is constantly in need of scrutiny," Skvarla said. "There is a great divergence of opinion on the science of climate. More dialogue is needed.
“We must engage the very best minds with diverse opinions to make conclusions on policy that will be driven by fact but simply to say that climate change is settled … science is fluid.”
Fact: There is no scientifically valid debate about climate change. Period.
But the facts didn’t deter Skvarla, who as a point of interest, has spoken at several Tea Party events and is an expert on Wake Up America, which espouses the tea party platform. When Leslie pointed out that 97 percent of qualified scientists agree on the science of climate change, Skvarla said, “I think that’s [the proportion of scientists] misleading. I have studied this every day for 10 years and there is a great divergence of opinion on this. I’m not ready to say which is right or wrong.”
Really? Every day for 10 years? And he’s still not ready to come down on the side of science?

 

[elbows]

So thats what happened to BigFish, the classic abiotic oil poster that powered this thread through many a long year back in the day

 

[Falcon]

Nor will you find me wishing to repeat too often the sorts of arguments you and I have had in the last year or so. It may still happen occasionally since and I dont think we will end up in 100% agreement about the numbers, all of the time, but the rough magnitude is often about the same.

Elbows - your arguments are interesting and advanced with integrity - the basis of enjoyable debate. The fact that we disagree on some issues is neither here nor there.

 

[Falcon]

Anyway given this strand of the conversation, I think I will briefly remind myself of the depletion rate picture that has been acknowledged in the last 5ish years. This is where I am starting, and if memory serves me correctly this is roughly as far as the mainstream got in terms of acknowledging the scale of the issue:

Observed decline rates are an important indicator of the performance of oilfields across regions and over time, but, by themselves, they do not reveal underlying trends in field production behaviour. This is because observed rates are heavily influenced by on-going and periodic investment in fields already in production, aimed at maintaining well pressure and flow rates, and improving recovery of oil reserves.
…
It is necessary to estimate the underlying, or natural decline rate — the rate at which production at a field would decline in the absence of any investment — in order to ascertain how much capital needs to be deployed to sustain production or limit observed decline to a particular rate. To arrive at the natural decline rate, therefore, one needs to strip out the effect of new investment beyond the initial capital spending involved in bringing the field into production.
…
The production-weighted average annual natural decline rate for the world as a whole is estimated at 9.0% — some 2.3 percentage points higher than the observed decline rate for post-peak fields.
…
[A] clear rising trend does emerge from our analysis: the worldwide average natural decline rate (year-on-year) rose from 8.7% in 2003 to 9.7% in 2007 (the average rate is 9% for the period 2003-2007 as a whole). This result is in line with expectations, as over that period, a growing share of crude oil production came from younger, smaller and offshore fields, which have inherently higher decline rates. Smaller and offshore fields typically exhibit higher observed decline rates, because of the more limited potential for infill drilling, as mentioned in the previous section. But natural decline rates would also be expected to be higher too, as these fields tend to be developed in such a way as to maximise and bring forward peak production in order to improve cash-flow and amortise the large up-front investment as quickly as possible. Development programmes for larger fields typically are less likely to be driven by purely financial considerations and are more likely to be effected by a policy of maximising ultimate recovery rates.

- World Energy Outlook 2008 pp244-248 - IEA

 

[free spirit]

I think I have misjudge you, Free Spirit. I first I thought you simply didn't understand the criticality of properly accounting for system boundaries in energy life cycle analysis (your persistent fallacy about the contribution of renewable sources to the energy supply that ignores the colossal energy consumption of the global industrial manufacturing system that is necessary to their manufacture, maintenance and operation).

Now I realise you don't even grasp basic thermodynamics.

It's called a "heat pump". It pumps heat. Heat has a particular meaning in thermodynamics.

The global industrial manufacturing system, and industrial economies, don't run on heat.

I thought your dad was some kind of scientist - didn't he teach you basic physics?

hold on, this is exactly what you wrote that I responded to

is indistinguishable, thermodynamically speaking, from the hope of turning a bath of tepid water into ice cubes and hot water.

This is exactly what a heat pump does, so stick a barrier across around the 3/4 mark of the bath, and you could use a heat pump to extract heat from the large side of the bath and use it to heat the water on the other side of the bath, resulting in a bath full of tepid water turning into a bath part full of ice and part full of hot water.

Don't blame me for that fact you're using shit analogies.

 

[MikeMcc]

hold on, this is exactly what you wrote that I responded to

This is exactly what a heat pump does, so stick a barrier down the middle of the bath, and you could use a heat pump to extract heat from one side of the bath and use it to heat the water on the other side of the bath, resulting in a bath full of tepid water turning into a bath part full of ice and part full of hot water.

Don't blame me for that fact you're using shit analogies.

Only by doing work to do so.

 

[free spirit]

The uninvested depletion rate of the global petroleum system - the rate at which production would fall if investment stopped today - is 10% per annum. It's all fields in aggregate, not just the already declining ones. It's set by the depletion rate of the small population of large ancient fields dominating production. Depletion rate is a strong inverse function of accumulation size. Discovered accumulation size is a strong declining trend. So, coupled with ancient field exhaustion, depletion rate is a strong rising trend.

So we are clear. You were challenged to show:

1. Evidence that we are on track to discovering the equivalent of 150% of current Saudi resource
2. Evidence that such addition is new resource, not mobilised previous discovery
3. Evidence that such new resource can sustain the same production rate as the depleted resource did

these 2 posts combined neatly outline my problem with Falcon's figures.

The 10% depletion rate he quotes as he says, is for existing fields if no further investment were to be made in boosting their production levels.

He then argues that we need to replace this loss of production entirely with output from newly discovered fields only, whereas in reality we need to replace those losses with a combination of new discoveries, previously unmobilised resources (eg those that are only economic to produce at higher oil prices), and production improvements from additional investment in existing fields.

This is why his statements don't match with the actual reality of how much actual oil is being produced, and the fact that oil output has actually been rising in recent years instead of falling.

Theorising is all well and good, but it must be tested against real world data and then refined on that basis rather than simply being regurgitated for years in the face of the real world data that demonstrates that the theory isn't telling the whole story.

 

[free spirit]

Only by doing work to do so.

yes, but the majority of the heat is moved rather than produced from the electrical input.

I'm not saying that it happens spontaneously, I'm just saying that with the correct inputs then the laws of thermodynamics do then allow for the scenario that Falcon seems to think is impossible.

Same situation with renewables, where with the right inputs the low grade energy can be transformed into high grade electricity (albeit with wind turbines, solar panels etc not heat pumps)

 

[free spirit]

But what are these expectations based on?

Personally Im not sure I have a date that would surprise me more or less than any other. It would not have surprised me if production had started to decline 6 years ago, it would not surprise me if it started to decline in 2 years, or 5, or 7. If it hasnt started to notably decline by then, I suspect I will have to start scratching my head.

I can certainly see why the original worst-case decline possibilities I heard about approx a decade ago didnt pan out that way. People like Simmons were hyping up the prospects for imminent, rapid decline of the Saudi giants. Throw in the mature field state of other large suppliers like Russia, and suggest they were about to start declining at quite a pace rather than managing to maintain production for some years, and it was possible to construct a picture of peak then immediate decline, with a lack of plateau. That it didnt pan out that way in the last 6 years doesnt really give much comfort as to the realities of the next 6 years though.

Anyway back when I was first looking at the data I used to find it helpful to look at each countries production separately, and I shall probably repeat that exercise again this month and see if anything interesting emerges.

I think you're touching on the issues that underpin my understanding of the situation, namely that the worst peak oil predictions assume that all the output reductions or limitations from fields around the world are and have been physical, and that the theoretical decline curves can just be neatly applied to all of them as a result.

The real world is far messier, with politics and economics having a hell of a lot to do with the situation as well.

To give an example of the disconnect - Venezuela has signed production deals totalling 2 billion barrels a day with several oil companies from the Orinoco belt field that Falcon doesn't seem to think we should be allowed to count at all for some reason. I know these deposits aren't exactly the same as US shale oil deposits, but the US has demonstrated that it's quite possible to mobilise this sort of land based production potential relatively quickly in significant volumes with sufficient political will and economic investment. I also suspect that Venezuela has the potential to significantly increase its production from other more conventional sites if it increases its levels of investment, as those declines are apparently mostly down to the politics and lack of investment rather than physical limits.

There are several other significant areas of the world where production in recent years / decades has been limited largely by political factors such as Iraq, Iran, Nigeria, Yemen etc. Iraq's the big one there that I'd expect to have potential to raise production significantly presuming the security situation continues to improve and investment levels increase, then there's Libya and the other areas affected by the uprisings.

And the impact of the increased Exploration and Development spending of the last few years ought to feed through for the rest of the decade as well, and the ongoing impact of high prices on increased recovery rates.

so it's not any one concrete factor, but a combination of several different factors that seem to me to have the potential to keep production from falling for another 10 years or so, unless maybe the production gains now do actually result in a faster decline rate in those fields once they hit decline, as some of Falcon's graphs suggest could be the case.

Not that I'm exactly ecstatic with the idea of using shale oil etc, which we'd probably not have had to do if the US had followed the route of the EU through the last 20 years of car production instead of producing another full generation of gas guzzling monsters. I'm merely pointing out the reality of the situation.

 

[free spirit]

You need incremental production over 50+ years to fund your little projects.

not really. The proportion of the energy input into the renewables sector that comes from oil is relatively low, mainly for transport, and operation of mining plant, and the amount of oil needed in total is going to be a relatively small percentage of overall global oil consumption.

Renewables use electricity as their main energy source for their manufacture, the vast majority of which is not produced from oil.

 

[free spirit]

You need to demonstrate three things

no, I really don't.

I just need to demonstrate that your hoops are false contructs, which they are.

 

[free spirit]

Area under the curve. Accelerated production is more production now at the expense of less production later. But production later is already falling. So accelerated production intensifies subsequent depletion. I supplied you with some sensitivity graphs - modest short term gains at the expense of fatal intensification of depletion. Incremental production (resource addition) gives more production now while preserving post peak depletion rate. You need incremental production over 50+ years to fund your little projects. The distinction between incremental and accelerated production is critical to you, but since you don't understand your own argument, let alone mine, that distinction will be lost on you.

I can see that this argument works if all you're doing to accelerate production is to pump harder, but that's not actually what were really talking about is it.

What I'm talking about is the higher oil price resulting in it being economic to deploy enhanced recovery technologies that can both boost the rate of production (or in most cases reduce the decline rate) and significantly extend the actual total recovery factor for those fields - ie the total amount of oil that can actually be extracted from a field.

eg

It's daft to argue that decline rates can only be made up from totally new discoveries, and exclude all the potential that also comes from actually reducing the decline rates via investment which is what you're doing when you bandy around that 10% decline rate figure then use it to calculate how much totally new resource needs to be discovered to replace it by itself.

OK, so this is just pushing the issue back a few years, but making out that this isn't happening at all isn't a particularly honest portrayal of the actual situation on the ground now.

 

[free spirit]

Fluff and waffle. We have 1 trillion barrels of remaining resource today, from which 80 million barrels a day of production can be mobilised. If we had 2 million barrels of remaining resource tomorrow, but could only mobilise 40 million barrels a day, production would have peaked even though reserves had doubled.

BP reckons there's now 1.6 trillion barrels of reserves, and a lot of the reason this figure is going up is because it's not a fixed figure, it's the figure for the reserves that are economically recoverable at the time the estimate is being made, and the higher oil prices have made a higher percentage of those reserves economically recoverable.

Notes: Proved reserves of oil – Generally taken to be those quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions.

I can't argue with the logic that if we could only produce 40 million barrels a day then it wouldn't matter how many reserves we had as to how much we could produce... but that's not actually how the situation's working out.

The reality of the situation is that both production and economically recoverable reserves have continued to increase significantly in recent years well past the point when you'd confidently pronounced that production had peaked. High oil prices have stimulated huge levels of additional investment to boost production both from reserves that were previously uneconomic to exploit and from enhanced recovery methods on increasing percentages of the older fields, resulting in increasing production levels and increasing economically recoverable reserve levels.

 

[free spirit]

Growth (which operates on multi-decade project cycles) requires additional (debt financed) investment. The global financial system is now debt constrained and hasn't even begun to finance Free Spirit's projects at scale

hold up, why are you suggesting this all needs debt financing when the oil multinationals have been making monumental profits for the last decade, to the point where they've been buying back billions of dollars of their shares each year?

 

[Falcon]

I'm not saying that it happens spontaneously, I'm just saying that with the correct inputs then the laws of thermodynamics do then allow for the scenario that Falcon seems to think is impossible.

The proportion of the energy input into the renewables sector that comes from oil is relatively low

Bless. You assume there is a "renewables sector" that has boundaries (as the product of the global industrial manufacturing system in an industrial economy, there isn't). Even if it did, you don't know where the boundaries are to establish proportions. And you don't know any consumption within those boundaries. But you feel confident stating "the thing that would have to be true for your argument to hold water" as a fact. You apparently don't have a lot of regard for the intelligence of your fellow debaters.

 

[Falcon]

The 10% depletion rate he quotes as he says, is for existing fields if no further investment were to be made in boosting their production levels.

Wrong.

He then argues that we need to replace this loss of production entirely with output from newly discovered fields only

Wrong.

This is why his statements don't match with the actual reality of how much actual oil is being produced, and the fact that oil output has actually been rising in recent years instead of falling.

Your usual straw man shenanigans. Try again.

 

[Falcon]

I can't argue with the logic that if we could only produce 40 million barrels a day then it wouldn't matter how many reserves we had as to how much we could produce... but that's not actually how the situation's working out.

That is precisely how the situation is working out. The reserves comprising the previously discovered resource consist of accumulations, the extraction of which involve a process similar to shoving a scaffold pole in the sand and watching colossal quantities of sweet light crude (the stuff we use) spew out.

Then - Trying to keep oil in the ground - Conventional hydrocarbon

The reserves comprising newly discovered resource consist of accumulations that variously involve strip mining and overburden removal operations, operations in 4000 meter water depths, arctic operations, the production of sour, heavy fluids that mandate additional energy intensive refining and processing, and the diversion of colossal quantities of its product back into its own manufacturing process.

Now - Trying to get oil out of the ground - Tar Sand operations

The hydrocarbon in both pictures appear in BP Statistical Review of World Energy claims for reserves, along with the fluids derived from liquidising poor people's lunches. Their claim, and now yours, that they are equivalent is like putting turds next to mars bars and claiming the supply of tasty, nutritious lunch snacks is going up.

If you don't understand foundational concepts about our energy supply (as you clearly don't) how can we possibly attach any value to your conclusions on how much energy is used in the manufacture of your projects?

 

[Falcon]

High oil prices have stimulated huge levels of additional investment to boost production both from reserves that were previously uneconomic to exploit and from enhanced recovery methods on increasing percentages of the older fields, resulting in increasing production levels and increasing economically recoverable reserve levels.

I presume you just don't understand the difference between reserves acceleration and reserves addition, and the implications. I can't think of a way of explaining it in any simpler terms to you, so will leave you to it.

 

[free spirit]

The uninvested depletion rate of the global petroleum system - the rate at which production would fall if investment stopped today - is 10% per annum.

The 10% depletion rate he quotes as he says, is for existing fields if no further investment were to be made in boosting their production levels.

Wrong.

1. Evidence that we are on track to discovering the equivalent of 150% of current Saudi resource
2. Evidence that such addition is new resource, not mobilised previous discovery
3. Evidence that such new resource can sustain the same production rate as the depleted resource did

He then argues that we need to replace this loss of production entirely with output from newly discovered fields only, whereas in reality we need to replace those losses with a combination of new discoveries, previously unmobilised resources (eg those that are only economic to produce at higher oil prices), and production improvements from additional investment in existing fields.

Wrong.

How are my statements about your position wrong? You've laid out the 2 strands of that argument clearly in black and white.

Unless I'm misunderstanding and you're agreeing that your entire position is wrong.

 

[Falcon]

How are my statements about your position wrong? You've laid out the 2 strands of that argument clearly in black and white.

Unless I'm misunderstanding and you're agreeing that your entire position is wrong.

The statement that we need to replace production from new fields is yours, not mine. My statement is that that fraction of total demand which is consistent with the Hubbert extrapolation is supplied from continued mobilisation of the foreseeable resource base. That fraction of total demand which is in excess of the Hubbert extrapolation is supplied from the extension of the foreseeable resource base (if possible). The attempt to supply that fraction of total demand which is in excess of Hubbert extrapolation from the foreseeable resource base (the outcome your data illustrates) results in post-peak intensification of depletion. I make the straightforward point that if your projects can't be delivered under conditions of Hubbert decline, they certainly can't be under intensified decline.

You are misunderstanding, and it's not my position. I'm articulating the position of Petroleum Engineering about which, correct me if I'm wrong, you confess you know nothing.

 

[elbows]

I think you're touching on the issues that underpin my understanding of the situation, namely that the worst peak oil predictions assume that all the output reductions or limitations from fields around the world are and have been physical, and that the theoretical decline curves can just be neatly applied to all of them as a result.

The real world is far messier, with politics and economics having a hell of a lot to do with the situation as well.

I really dont think thats the mistake peak oil made at all, those are not the sort of factors that are usually allowed to corrupt its data and assumptions. If there are people who want to pretend that every single supply disruption is for physical reasons, they are not the peak oil analysts I've been following, they are doom-mongers who have just been using peak oil as one part of their prophecy, and are disingenuous about some of the data.

I will return to what mistakes might have been made in a later post.

To give an example of the disconnect - Venezuela has signed production deals totalling 2 billion barrels a day with several oil companies from the Orinoco belt field that Falcon doesn't seem to think we should be allowed to count at all for some reason. I know these deposits aren't exactly the same as US shale oil deposits, but the US has demonstrated that it's quite possible to mobilise this sort of land based production potential relatively quickly in significant volumes with sufficient political will and economic investment. I also suspect that Venezuela has the potential to significantly increase its production from other more conventional sites if it increases its levels of investment, as those declines are apparently mostly down to the politics and lack of investment rather than physical limits.

I do not think assumptions about Venezuela are a safe bet, there are safer candidates to dwell on for now. This is partly because the politics & economics, eg complaints about a lack of investment, cannot be properly tested to determine how much truth there is to them, as opposed to the other possibility that conventional oil production there is irretrievably past peak rates.I am under the impression that nothing too spectacular is expected from Venezuela, its large reserves dont translate into giddy expectations about future production rates, at least not for the sort of timeframe we are talking about. Perhaps its considered a dull but essential, vaguely steady production base for some longer time period, I'm a bit out of date and need to refresh my country-specific knowledge. But I asume you mean 2 million barrels per day, not 2 billion! I will test that number once I've done my research.

There are several other significant areas of the world where production in recent years / decades has been limited largely by political factors such as Iraq, Iran, Nigeria, Yemen etc. Iraq's the big one there that I'd expect to have potential to raise production significantly presuming the security situation continues to improve and investment levels increase, then there's Libya and the other areas affected by the uprisings.

The effects of the uprisings on production were generally written off as a temporary blip that doesnt feature in gloomy production prediction data, though it did affect the price of brent. Perhaps there is some further potential to be unlocked in Libya but I dont think its anything too notable. Effects on the demand side in these countries may end up being more notable, we shall see. Still not a big part of the picture unless something new and dramatic happens in the region.

The original reason for this thread, Iraq, certainly shows up as the remaining great hope for good old fashioned on-shore, cheap, easy oil production increases of notable magnitude, backed by reserves that will last a good while. I've been reading bits of the full IAE special report on Iraq from last year, and as long as they dont mess up when trying to jump the other hurdles not directly related to oil extraction, it will be a difference maker that enables the old ways to continue for some time to come.

When looking elsewhere for where the hope is in the near term, I think Brazilian deep water is a better candidate than Venezuela, but again I have some research to do before saying any more about that at this point.

so it's not any one concrete factor, but a combination of several different factors that seem to me to have the potential to keep production from falling for another 10 years or so, unless maybe the production gains now do actually result in a faster decline rate in those fields once they hit decline, as some of Falcon's graphs suggest could be the case.

Indeed, which is why I have in the last year or so not been willing to dismiss out of hand things like the unconventional production in the USA. Part of the premise of what peak oilers were going on about years ago has already been realised with the end of the cheap oil era, and obvious limitations to the pace of possible energy supply growth. The demand side is in play these days, and even under the 'everything is ok' scenarios offered by world energy bodies, we see stagnant demand forecasts for regions such as Europe. With the effects of these phenomenon filtering through, the Iraq project moving into the stage where its supposed to deliver, and an absence of the key giant fields falling off a cliff and showing us many other places repeating the hideous north sea decline rates of the last decade, I no longer find it impossible to imagine business 'nearly as usual' continuing for another decade or two. At some point this will no longer be the case, and we'll only need one of the major production declines to kick in to rather undo the gains that presently look like they might keep heads above water for some time, but since I find it impossible to predict exactly when any of these declines will actually begin, I cannot claim that doom is just round the next bend. What I can claim is that we are already in a different era, not a magic leap to the non-carbon endgame, but a stage where price is both a challenge, a solution to the giddiest of demand growth stupidity, an unlocker of the slightly less easy oil, and a driver of changes to energy intensity in our economies. Sadly its not entirely benign, it will still bring with it the sorts of horrors associated with peak oil, via numerous economic burdens including deadly cuts to subsidies.

 

[elbows]

And now an exercise is taking a massive oversimplification about just one aspect of oil production and peak oil theory, and using it to tell a simple story of why we havent been utterly screwed just yet:

We havent found any giants for a long time.
Most existing giants are already being exploited to approximately their full production capacity. The exception is Iraq.
The giants we rely on havent suffered notable production declines yet.

When some of the above features change, big shit happens that makes most of everything else we get into arguments about sort of irrelevant.Some fuckers with agendas were hyping the imminency of e.g. Saudi giants production collapsing very quickly. So far they have been wrong, no idea how long that will continue to be the case for. Quite possible some of them may have been doing this to explain/justify/sell the Iraq war, a mirror of what anti-war activists were doing in threads like this one back in the day but with slightly different motivations to say the least. Either way enough time has now past that the IEA can gush about Iraqs prospects without anyone blinking. I have some ideas about which aspect of history Blair is hoping to be judged slightly differently by one day 'cor blimey its lucky we got rid of Saddam when we did eh'.