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

[Falcon]

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.

Thoughtful and interesting post, elbows.

As a point of clarity, Iraq has 147 billion booked reserves. That's about three four* years of world supply.

It is also the result of a recent 24% upward revision. There were no seismic surveys or exploration program that would justify this revision, or improvement in the security fiasco. There was the political need to attract investment, at a time when it suits everyone for there to be plenty and no-one is applying SEC rules. In other words - paper barrels. Just like the 300 billion OPEC added in the 1980's.

I agree it is the last remaining hope. But that's a statement about the quality of the other hopes, not about the quality of Iraq.

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.

What is 'peak'? By definition - that point when it has never been so good. It would be unwise to scan the environment for superficial indications of problems at that point in our trajectory of maximum injection of low entropy energy into our living arrangement. The slow change in day length at midsummer gives no indication it will shortly be dark by 4pm - you need to know about the orbit of the earth around the sun to anticipate that.

Essential to remember: we are on plateau. The signal/noise ratio right now is very poor. Small excursions could be mistaken as growth even if our institution's fears hadn't disabled our cognitive faculties.

That's all they are, and all they will be: small excursions. But the underlying trend - depletion - is asserting itself and will accelerate year on year on year. We watch the trend, not the noise around the trend.

And we know the trend. It has been set by a pattern of discovery which peaked 40 years ago, declined aggressively, and is now yielding a production trend which is insensitive to even gross errors in our assumption about remaining resource. Everything else is obfuscation.

*edited: it's 4 years

 

[elbows]

Thoughtful and interesting post, elbows.

As a point of clarity, Iraq has 147 billion booked reserves. That's about three years of world supply.

Nobody is claiming that the world will rest on Iraqs sholders alone. I'll merge my next train of thought on this with the next point...

What is 'peak'? By definition - that point when it has never been so good. It would be unwise to scan the environment for superficial indications of problems at that point in our trajectory of maximum injection of energy into our living arrangement. The slow change in day length at midsummer gives no indication it will shortly be dark by 4pm.

Essential to remember: we are on plateau. So small excursions translate into apparent gains. The signal/noise ratio right now is very poor.

That's all they are, and all they will be: small excursions. But the underlying trend - depletion - is asserting itself and will accelerate year on year on year. We watch the trend, not the noise around the trend.

I am happy to zoom in and out on features of interest, the brief trends and the longer term ones, the inevitable later chapters and the unsteady interim ones. There are clearly an array of different perceptions that people have about oil and this offers features that some can hide behind, use to utterly misunderstand the system, or mix one sort of timescale up with another.

Its a frigging mess, and what has not happened during the lifetime of this thread is a situation which has brought everyone onto exactly the same page. I have every sympathy with many of the underlying concepts you've been trying to highlight for years, but I also suspect there are some counterproductive dimensions which have enabled some to write off the entire story rather than understand all of its twists, differing timescales, and the way different factors are rubbing against eachother in the short and medium term.

Just one of the many ways that a rather schizophrenic impression of the oil scene is generated is in the way we look at the large producing countries with such an emphasis on growth potential rather than existing hefty supply. Just look at how little attention Russia receives in the minds of people when they think about oil, and yet how essential its maintaining production has been to the story of the last ten years. Look at free spirit going on about recent exploration, and contrast it with the apparent reality that most of Russia oil production maintenance and growth over this period has stemmed from Soviet-era discoveries. The opportunities for perceptions to go awry are many, with just a wiggle of the focus stick. This also shows up as the phenomenon of it resembling something of a minor triumph to hear you mention the plateau!

 

[elbows]

And as just one further example, let me take another aspect of the oversimplified peak oil story that some may have given some thought to last decade, and may be wondering why it hasnt exactly turned out that way so far. I've already given the oversimplified giants story, so this time I will look at off-shore decline fears.

So the oversimplified story was look at how much the North Sea production rate is declining, and then apply it to somewhere else, eg Mexico.

Well, the North Sea has more than lived up to the hideous expectations, producing some stunning graphs.

UK:



Norway:



But what happened in Mexico? Still much to early to wipe sweat from brow, and the export picture is obviously not identical to the total production one, but not hard to see why the last 10 years have not stuck to the simplest story imaginable.

 

[elbows]

And just to repeat myself so that its absolutely clear, I am explaining why expectations based on a faulty, simplified quick peak & decline, literal bell curve version of reality didnt come to be during the original timespan last decade that some were fretting about. And why it isnt sufficient to simply add a few years onto that timescale, although once certain giants go wrong it mostly will be. Im not trying to debunk peak oil, just a crap version of it that was fixed in a timeframe that already passed, or one that featured little in the way of plateau.

To tell the story properly I'd probably have to use more like 20 graphs than three, but I dont want to do that. Instead I will try to tell various short stories using a few at a time.

 

[Falcon]

Its a frigging mess, and what has not happened during the lifetime of this thread is a situation which has brought everyone onto exactly the same page. I have every sympathy with many of the underlying concepts you've been trying to highlight for years, but I also suspect there are some counterproductive dimensions which have enabled some to write off the entire story rather than understand all of its twists, differing timescales, and the way different factors are rubbing against eachother in the short and medium term.

I think there is a terrible lack of basic energy literacy, and that ignorance (I speak in non-pejorative terms - there are many subjects of which I am ignorant) is not anyone's fault. Our relationship with energy has pretty much been like the fish's relationship with water - supported, surrounded, totally dependent and totally oblivious. The collision between reality and our ignorance of it is brutal. I don't blame the Free Spirits when they imagine their extraordinarily energy intensive devices appear ready made from under gooseberry bushes. A lot of stuff has appeared as if my magic in our lives thanks to a century of invisible, low entropy fossil fuel. Their toys are just another product of that magic.

As a subject, energy is not hard, but it's not intuitive either, our obliviousness means it's certainly not a subject that rewards guessing, but the majority prefer to guess. So our ignorant are pretty obdurate.

Energy's abundance has given us an impression of our own capability which is warranted in almost every case except, by definition, energy deficiency, which breeds complacency.

And we are terrified of both the changes we'd need to make if energy depletion was true, and of what will happen to us if we don't make those changes. So we are strongly predisposed to evidence that appears to confirm it is not true, and strongly ill disposed toward evidence that appears to confirm it is - in short, far from rational.

So it's little wonder that ignorant, complacent, frightened, irrational folks have trouble getting on the same page.

Given all that, I don't happen to believe that remaining ignorant is a terribly good strategy. Some will write it off. More (I hope) will not. The improving balance will move us to a place where we can plan rationally. Actually, I'm amazed and gratified at how far we have come in the lifetime of this thread.

 

[Crispy]

It is one of my favorite, if not my most favorite, threads on the boards. The wealth of knowledge is fantastic.

 

[rover07]

Fossil fuel has been very important for society's development.

But now it's limited supply and enviromental drawbacks mean it's time to move on and find better power sources.

Solar and nuclear.

How much oil is left in the ground is irrelevant. There is plenty to make the transition and that's what matters.

 

[Dr Jon]

Yeah.
It's OK, Sooty will sort it!

 

[elbows]

It is one of my favorite, if not my most favorite, threads on the boards. The wealth of knowledge is fantastic.

At the thread is ten years old this summer (although I havent been part of it for quite that long) I've decided to re-skim it for a laugh. So far I've made it to page 40, sometime in 2006. There are many observations I could make and some fun to be had with some optimistic production forecasts, but for now I will stick to stuff relevant to my recent posts.

It seems I was right to recently mention that specific fears at certain moments included Russian production in the period up to 2010, including wondering whether they would even manage to hit another peak in production that was comparable with their last one. Well with hindsight we can now see what happened there:

 

[Falcon]

To tell the story properly I'd probably have to use more like 20 graphs than three, but I dont want to do that. Instead I will try to tell various short stories using a few at a time.

I don't mean to spoil the story, but before you invest too much effort, worth being aware of the Central Limit Theorem in statistics - the mean of a sufficiently large number of independent random variables, each with finite mean and variance, will be approximately normally distributed.

In short, no matter how un-bell shaped any individual distribution is, the aggregate - i.e. the distribution of the global petroleum system comprising the portfolio of discrete production units - will be bell shaped. Not perfectly, and assumes the absence of correlative factors which is not universally true, but a strongly normalising tendency.

This is an entirely different but reinforcing phenomenon to the logistic curve system type. The logistic curve sets up the bell-ish (!) shape in a specific production unit, the central limit theorem normalises the aggregate system of discrete units. It's very strong.

 

[elbows]

However upon revisiting the old posts, it seems I need to zoom in more on the Mexico story I mentioned some posts ago. It seems the fears were rather specifically focussed on the Cantarell field, and so I should look at that field as well as the overall decline which has been somewhat offset by other fields coming online.

I'm having a bit of trouble finding a graph that takes Cantarell right up to last year, so I will augment the graph with a story from last April:

More recently:

http://www.bloomberg.com/news/2012-...ction-falls-as-cantarell-hits-record-low.html

Cantarell’s output fell 14 percent from April 2011 to 400,000 barrels a day, the lowest since at least 1990, when the Energy Ministry started to publish Pemex’s production.
Cantarell’s production has slid 74 percent since 2006 to 449,000 barrels a day last year, dragging down the country’s daily output. Pemex has sought to stop declining output at Cantarell, the world’s third-largest field when it was discovered in 1976, by injecting natural gas and using other recovery methods.

So having gone on about giants not declining yet, and comparing North Sea declines to Mexicos overall production, I'm sure you can see why I've now felt the need to zoom in on this particular field so as not to misrepresent whats happened.That field has declined in just the horrible way we've seen in the north sea.

 

[elbows]

I don't mean to spoil the story, but before you invest too much effort, worth being aware of the Central Limit Theorem in statistics - the mean of a sufficiently large number of independent random variables, each with finite mean and variance, will be approximately normally distributed.

In short, no matter how un-bell shaped any individual distribution is, the aggregate - i.e. the distribution of the global petroleum system comprising the portfolio of discrete production units - will be bell shaped. Not perfectly, and assumes the absence of correlative factors which is not universally true, but a strongly normalising tendency.

Thats not my mission or focus with these posts though. I'm zooming in to revisit some of the specifics that came up on this thread in the past, revisiting various stories now that we have the benefit of hindsight. I dont expect to find anything which will alter the overall picture or peoples impressions of it.

 

[littlebabyjesus]

At the thread is ten years old this summer (although I havent been part of it for quite that long) I've decided to re-skim it for a laugh. So far I've made it to page 40, sometime in 2006. There are many observations I could make and some fun to be had with some optimistic production forecasts, but for now I will stick to stuff relevant to my recent posts.

It seems I was right to recently mention that specific fears at certain moments included Russian production in the period up to 2010, including wondering whether they would even manage to hit another peak in production that was comparable with their last one. Well with hindsight we can now see what happened there:

View attachment 27366

That illustrates a point about oil production following demand. Production grew strongly throughout the worldwide boom in demand in the early 2000s, fell back a little with the credit crunch and is now rising again.

Of course, you can't just take Russia's figures in isolation, but the graph shows changes that are expected if the major driver is demand rather than reserves. This is perhaps my biggest disagreement with Falcon when looking at energy supplies, economic growth and the way that they dovetail. Of course they dovetail - but which is driving which is the big question. There are bound to be two-way interactions - the discovery of a big oil supply boosting growth, for instance, being an example of supply driving activity. But activity driving supply is probably the major consideration, even now as supplies in many areas begin to run out. The need for energy has driven the search for fuel and generation of energy.

 

[elbows]

That illustrates a point about oil production following demand. Production grew strongly throughout the worldwide boom in demand in the early 2000s, fell back a little with the credit crunch and is now rising again.

Although total demand for oil obviously influences how much everyone tries to produce, I think it would be a mistake to attribute the shape of the Russian graph to demand in such a straightforward way. For a start if demand & price were defining the shape then it would have remained on a steeper trajectory over the last decade.

 

[Falcon]

This is perhaps my biggest disagreement with Falcon when looking at energy supplies, economic growth and the way that they dovetail. Of course they dovetail - but which is driving which is the big question. There are bound to be two-way interactions - the discovery of a big oil supply boosting growth, for instance, being an example of supply driving activity. But activity driving supply is probably the major consideration, even now as supplies in many areas begin to run out. The need for energy has driven the search for fuel and generation of energy.

Again, that is why it is so important to be clear about whether price is mobilising previously discovered supply, or causing new supply to be discovered. Remember, oil supply is a two stage process: first it gets discovered and becomes resource. Then it gets made accessible (by, for example, constructing an oil platform on it) and it becomes reserve. Until forty years ago, price did both. Now it only does the latter (in material terms).

Living off pre-existing resource is to living off newly discovered resource what living off your savings is to living off your income. The latter is sustainable. You can estimate the durability of the former quite accurately.

The confusing thing is that living off pre-discovered resource and living off newly discovered resource is indistinguishable from the perspective of the dovetailing you observe - until the pre-discovered resource expires.

It suits resource optimists to be unclear, and to portray as resource discovery what is in fact only mobilisation of already discovered resource.

 

[littlebabyjesus]

A

It suits resource optimists to be unclear, and to portray as resource discovery what is in fact only mobilisation of already discovered resource.

I accept this point. And I accept the points you've made about the major discoveries and when they were made. I don't deny that energy crises of various kinds already loom large.

 

[elbows]

Another little detail that came up in the first third of the thread was light,sweet crude production peaking. One of the ways that this probably continues to manifest itself today is in the difference that has emerged between the Brent and WTI prices. But there is a third aspect to this story. I dont have an article to hand that explores it properly right now so I'll just briefly touch on it using an FT article from December that is brief and mostly focussed on advising investors to be careful of differences:

http://www.ft.com/cms/s/0/6d3fbd5c-483a-11e2-a1c0-00144feab49a.html#axzz2HbUXTpc3

​

Last week was an example of the problem. Brent traded at about $110 a barrel – probably a good price for investors in oil equities. The cost of Saudi oil was at roughly par – another good sign for the likes of ExxonMobil, Royal Dutch Shell, Chevron, BP and Total.​

​

​

But at the same time, WTI was at just $85 a barrel – no so good for producers any longer. Even worse, the price of a key Canadian crude, called Western Canada Select, representing the output from the oil sands of the Alberta province was at a bargain level of $45 a barrel.​

​

​

 

[free spirit]

I really dont think thats the mistake peak oil made at all

ah, I did say the worst peak oil predictions for a reason.

I do not think assumptions about Venezuela are a safe bet

Me either, I'm just saying that it shouldn't be ignored or treated as if it doesn't even exist as potential additional production to be coming on stream - see Falcon's recent dismissals of it for the reasons I mention this.

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.

yes sorry, that should have been 2 million barrels a day - hazard of posting late. I took that number as the total of the actual contracts that were signed last year according the this article, so they ought to bear at least some relation to what's considered possible for the next few years. Brazil's another story with steady growth up to now which ought to continue for a good while yet, but Venezuela for me has 2 big sources of growth potential in terms of solving the under investment and loss of expertise of the last 10 years from its conventional sources, plus the orinoco belts potential additional output - it's far from a certainty due to the politics, but it's surely got the greater potential.

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.

Libya may not be that significant, but it did drop by a million barrels a day in 2011 as a result of the civil war, and Africa as a whole dropped by around 1.4 million barrels a day, so around 2% of global output, which is enough to show up in the figures eg when DrJon (I think) pointed to a slight decline in global output this year in the other thread.

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.

yep, as long as the country doesn't tear itself apart, it's probably got the biggest potential for increases.

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.

That's pretty much how I see it as well.

I think sometimes Falcon manages to paint my position as being a bit different to what it actually is, where I'm just trying to oppose some of the specific claims he's making and his scenarios of impending doom.

 

[Falcon]

yes sorry, that should have been 2 million barrels a day - hazard of posting late. I took that number as the total of the actual contracts that were signed last year according the this article, so they ought to bear at least some relation to what's considered possible for the next few years.

From your reference:

This number constitutes a major upward revision – two years ago the same publication listed the country's reserves at 99.4 billion barrels. The update results from the inclusion of massive reserves of extra-heavy oil in Venezuela's Orinoco belt.

"Extra-heavy oil" is not "oil". It is bitumen mixed with sand. So you dig it out, and put it in large separators with colossal quantities of water (if you have it). You heat that up with colossal quantities of gas (if you have it) and skim the bitumen off the top.

Then you apply more colossal quantities of energy to strip hydrogen from the bitumen to lighten it.

Then you apply more energy to remove the sulphur, and figure out where to dump it and millions of tonnes of mutagenic toxic slurry waste and entrained heavy metals. The Venezuelans aren't terribly particular about this, which is a shame for the peasants but at least you get your projects built and they might die of malnutrition after their food gets turned into biofuel anyway. You've vented to atmosphere all the CO2 and methane emissions from the process, naturally, but climate change denial comes in very handy at this point.

The resulting product is syncrude - synthetic crude. Depending on how rough the syncrude is, you might have to cut it with expensive, carcinogenic solvent to ensure it flows at ambient temperature.

You can put it through a refinery for processing, but only after you've modified the refinery, and you can't make all the products that you can make with conventional light sweet oil. So the refineries will pay you much less for it, which is a shame because you needed the money to cover the huge extraction and processing cost. So your "reserves are a function of price" schtick isn't working quite as well as you hoped.

As you might imagine, this is not a process that scales gracefully. You run out of gas, or water, or somewhere to put the (highly toxic) slurry. The process requires a significant fraction of its own output.

In short, major upward revisions of reserves and major upward rates of production are entirely different. I hope I've made the point by now.

Another peach is oil shale, which is claimed to offer trillions of barrels of reserve. It is notable for being neither oil, nor shale. But I'll leave that for Free Spirit to research.

 

[Crispy]

(not to be confused with shale oil)

 

[free spirit]

From your reference:

"Extra-heavy oil" is not "oil". It is bitumen mixed with sand. So you dig it out, and put it in large separators with colossal quantities of water (if you have it). You heat that up with colossal quantities of gas (if you have it) and skim the bitumen off the top.

I've not said I like it, or think it's a good idea, I've just pointed out that it is happening and I don't see what's to be gained from pretending that it isn't.

 

[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.

I've not said I like it, or think it's a good idea, I've just pointed out that it is happening and I don't see what's to be gained from pretending that it isn't.

Disingenuous. My claim is simply that Orinoco tar sand is not comparable with Saudi light sweet crude, yet you and other resource optimists fail to make the necessary distinction when you present graphs of reserves increases in service of your argument that peak can be deferred.

 

[free spirit]

Disingenuous. My claim is simply that Orinoco tar sand is not comparable with Saudi light sweet crude, yet you and other resource optimists fail to make the necessary distinction when you present graphs of reserves increases in service of your argument that peak can be deferred.

My first post on this subject is quoted below, where I fairly clearly made the point that the exact distinction you've just accused me of not making.

now, granted around 200 out of the 270 billion barrels of increased reserves from 2007-11 comes from Venezuelan heavy oil / tar sands additions, and Venezuela's a bit of an odd case as it's not been investing heavily enough in its industry to even keep production levels up, but even without that it means that reserve levels have increased by 70 billion barrels in the last 5 years, which is a bit at odds with the picture painted by Falcon's outdated graphs.

 

[Falcon]

My first post on this subject is quoted below, where I fairly clearly made the point that the exact distinction you've just accused me of not making.

What - exactly - is at odds? Would you say you've grasped the point that if reserves go up and discovery does not (he situation we are in), then we are in an even worse position in a decade because of intensified depletion? Could you be clear whether you have grasped this?

And never mind your nonsense about outdated graphs. Your task is to show that we are on track to discovering *multiples* of Saudi reserves, not *fractions*. I can assure you, if we were it would not have been hard to find the data - every resource optimist on the planet would have been shouting about it. Instead all they can rustle up is fraccing Ponzi schemes.

 

[free spirit]

And never mind your nonsense about outdated graphs.

Funny you should mention that, as I've finally found some figures for the discovery rate in 2007-2008 at least, which demonstrate my point about extrapolating from 2004 data.

I've crudely added it to one of the graphs you were using.



Data sourced from here, though I'm not sure where the primary source of the data is.


Now, personally I'd not be confident about being able to extrapolate any sort of long term exponential decline rate from that data, or even that the rate was actually still in decline.

Either way, that looks to me like a bigger discovery rate than the rate given on the original graph as being needed to push back the peak by 8 years, which means that the combination of your own graph, plus the revised data is looks like supporting my rough judgement about the likely timing of any peak and decline.

 

[free spirit]

Further tugs on the thread:


Encouraging, sure, but do you have (yes I'm being lazy ) data for actual discoveries? All your graph shows is frenzied searching. We need to know what they found.

I just thought I'd bump this as I've now found some data to support my point.

Does anyone on this thread actually know which organisation actually collates the data on the annual discovery rates, and where it can be found? I have found some graphs that had the data up to 2007, but they were using a rolling 3 year average figures, which partially hides the rise that the other data says starts in 2007. Google isn't finding this data for me.

 

[Falcon]

Does anyone on this thread actually know which organisation actually collates the data on the annual discovery rates, and where it can be found?

No-one "collates" it - conversely, a large number of institutions and well funded organisations misrepresent it, and an even larger number including the popular media propagate it, since it is in almost everyone's short term interest to believe the replacement rate is is >=100%. The two principle misdirections are (1) the misrepresentation of reserve as discovery and (2) the failure to backdate reserve to create meaningless extrapolation trajectories.

Many institutions maintain private databases which attempt to maintain an accurate picture of resource. These require engineering judgement and are proprietary and commercially sensitive. BP's internal database, for example, looks nothing like the statistics published in "BP Statistical Review of World Energy" - the latter is an exercise in maintaining the illusion that the fossil fuel extraction business model is still viable, the former is the tool by which investment capital is actually allocated (or, rather, returned to shareholders). The company would be insolvent if its private database was made public, as would the pension funds contingent on future revenue expectations.

The most credible effort to date was Colin Campbell's work. The database was purchased by IHS CERA and is now confidential.

 

[free spirit]

That'd explain my inability to find the data then, and probably why that graph is still being used now in non-updated form.

In the absence of an actual database to link to then, I'll submit the limited data in that book as evidence to support my position that the increased expenditure on exploration since the oil price rises has led to a significant rise in the discovery rate, well above the decline rate extrapolation in those graphs, and that the extrapolations in those graphs are therefore wrong and misleading.

TBH whoever produced those graphs had no business running the extrapolation curve along the bottom of the recent peaks and troughs anyway, as anyone with any understanding of data and graphs would view it as being more realistic to at least use the mid points of those peaks and troughs as a reasonably attempt at approximating the actual average discovery rate. If you wanted to extrapolate the likely situation in times of high oil prices, and therefore high exploration rates, then IMO the line should probably be extrapolated from the peaks (or somewhere close to them), not the troughs.

This essentially has been my point about those graphs all along, I don't see the extrapolations as being valid for the actual situation, and this then must logically cause the predicted timings of any peak and declines to also be out. Maybe it only pushes them out by a few years, but then that's all I'm really claiming anyway is that it's not actually happening right now, but may well be in 10 years time or so.

 

[ferrelhadley]

I'll submit the limited data in that book as evidence to support my position that the increased expenditure on exploration since the oil price rises has led to a significant rise in the discovery rate,

It also means that a great deal more oil can be booked as a recoverable reserve on existing fields. This normally gets shifted back to the date of the fields discovery so much additional oil is added to the big finds in the 50s and 60s. This is known as 'reserve growth'.

 

[free spirit]

It also means that a great deal more oil can be booked as a recoverable reserve on existing fields. This normally gets shifted back to the date of the fields discovery so much additional oil is added to the big finds in the 50s and 60s. This is known as 'reserve growth'.

I'm aware of the phenomenum, and tbh I reckon both sides in this debate are as guilty as each other of using this sort of ambiguity to manipulate the data to produce graphs that neatly support their point of view.

Personally I think it's valid to consider the reserves growth figures in terms of the dates of the discovery of the improved recovery techniques that will allow the additional oil to be extracted from those reserves in the way that the BP review does it, though at the same time it's necessary to also realise that this is what's going on, and that this is reflective of a combination of new discoveries + reserves growth - consumption. The graphs produced the other way though do also have some validity and relevance when answering certain questions, or to illustrate the point about the impact of reserves growth on the BP figures.

Unfortunately it looks like us mere mortals aren't allowed access to the basic annual discovery rate data which does handicap the entire discussion quite a bit, as in the absence of this data we're left to attempt to interpret the BP and similar data to attempt to make sense of the situation.