Urban75 Home About Offline BrixtonBuzz Contact

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

Okay, I have read through the transcript of the speech and it is clear the 1.2 trillion figure the Saudi Minister gives is a world reserve estimate and not a Saudi reserve estimate. However, the Minister makes it quite clear that Saudi Arabia's proven reserves have almost tripled from 88 billion barrels in 1970 to 261 billion barrels today, despite 35 years of intervening production. He also points out that the United States Geological Survey estimates that another 1.3 trillion barrels of oil and natural gas liquids will become available in the future. The US Geological Survey also estimates that the world was endowed with 3,021 trillion barrels before production began. And that was just conventional light crude. The Russians apparently think that the USGS numbers are too pessimistic, they put the total at 11,000 trillion barrels. It seem everywhere we look we end up finding more and more oil.

In fact it is worth quoting the figures in the context the Minister put them to get a better idea of the Saudi position on "Peak Oil":

With regard to recent claims that the world is rapidly running out of oil, I would like to point out that this is not the first time we have heard warnings of impending scarcity. In fact, dire Malthusian predictions about oil and other natural resources have been voiced now and again for at least the last 100 years. The most commonly heard argument is that mankind faces the imminent exhaustion of the world's natural resources, including petroleum, due to growing population and the profligate lifestyles of wealthy nations.

How did past predictions of doom and gloom fare? Not very well. During this period when we were supposed to be running out of oil, world oil reserves continued to grow, from about 550 billion barrels in 1970 to more than 1.2 trillion barrels today. What is all the more remarkable is that this increase occurred despite the fact that the world consumed over 800 billion barrels during this period.

In the case of Saudi Arabia, our proved reserves were estimated to be about 88 billion barrels in 1970. Today, we conservatively estimate them at 261 billion barrels, despite the intervening 35 years of production...

Some skeptics express disbelief at the nearly three-fold increase in our reserves number over the past 30 years. There is nothing magical about these numbers. Our years of experience gained from producing our fields, along with advances in technology have provided us with invaluable new knowledge about our petroleum resources. This knowledge has helped us to better appreciate their size and enhanced our ability to recover these resources. I would like to emphasize that all of our reserve estimates are extremely conservative and you can rest assured that our booked reserves are very real.

But what about the future, you may ask. We take the issue of oil production peaking seriously and are constantly monitoring and assessing the latest data and trends. I am happy to report to you that our analysis gives us reason to be optimistic about the future. Current world proven reserves are estimated at 1.2 trillion barrels. The United States Geological Survey estimates that another 1.3 trillion barrels of oil and natural gas liquids will become available in the future. This will come from undiscovered resources and more accurate assessments of reserves located in existing fields. The additional oil raises the conventional liquid reserves and resources to over 2.5 trillion barrels.

But that's not all. There are vast amounts of unconventional heavy oil and bitumen. The in-place volume of these two resources is estimated at about 3.7 trillion barrels; 570 billion barrels of these resources are expected to be recoverable. Based on the current global oil consumption rate, these conventional and unconventional oil resources would last for more than 100 years.
 
Backatcha Bandit said:
Physics (the law of thermodynamics) vs. Economics? Physics wins. Every time.

I agree... so how is it you put so much faith in an archaic hypothesis from the 18th century that petroleum somehow evolves from biological material and therefore, is limited in abundance, when this hypothesis is "in violation of the second law of thermodynamics"?


http://www.gasresources.net/energy_resources.htm

The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not a vague, qualitative hypothesis, but stands as a rigorous analytic theory within the mainstream of the modern physical sciences.* In this respect, the modern theory differs fundamentally not only from the previous hypothesis of a biological origin of petroleum but also from all traditional geological hypotheses.* Since the nineteenth century, knowledgeable physicists, chemists, thermodynamicists, and chemical engineers have regarded with grave reservations (if not outright disdain) the suggestion that highly reduced hydrocarbon molecules of high free enthalpy (the constituents of crude oil) might somehow evolve spontaneously from highly oxidized biogenic molecules of low free enthalpy.* Beginning in 1964, Soviet scientists carried out extensive theoretical statistical thermodynamic analysis which established explicitly that the hypothesis of evolution of hydrocarbon molecules (except methane) from biogenic ones in the temperature and pressure regime of the Earth’s near-surface crust was glaringly in violation of the second law of thermodynamics.* They also determined that the evolution of reduced hydrocarbon molecules requires pressures of magnitudes encountered at depths equal to such of the mantle of the Earth.* During the second phase of its development, the modern theory of petroleum was entirely recast from a qualitative argument based upon a synthesis of many qualitative facts into a quantitative argument based upon the analytical arguments of quantum statistical mechanics and thermodynamic stability theory.(Chekaliuk 1967; Boiko 1968; Chekaliuk 1971; Chekaliuk and Kenney 1991; Kenney 1995)* With the transformation of the modern theory from a synthetic geology theory arguing by persuasion into an analytical physical theory arguing by compulsion, petroleum geology entered the mainstream of modern science.

Just to add, the prestigious Proceedings of the National Academy of Sciences in the United States published last September a rather interesting study by a distinguished group of academics:


http://www.pnas.org/cgi/content/abstract/0405930101v1?view=abstract

"We present in situ observations of hydrocarbon formation via carbonate reduction at upper mantle pressures and temperatures. Methane was formed from FeO, CaCO3-calcite, and water at pressures between 5 and 11 GPa and temperatures ranging from 500°C to 1,500°C. The results are shown to be consistent with multiphase thermodynamic calculations based on the statistical mechanics of soft particle mixtures. The study demonstrates the existence of abiogenic pathways for the formation of hydrocarbons in the Earth's interior and suggests that the hydrocarbon budget of the bulk Earth may be larger than conventionally assumed."

PDF http://www.pnas.org/cgi/reprint/0405930101v1
 
You appear to put an awful lot of faith in a US Federal Agency that only yesterday got caught 'fabricating documentation' of their work at the Yucca Mountain Nuclear Waste dump.

The Energy Department said Wednesday that a U.S. Geological Survey worker had "indicated that he had fabricated documentation of his work" in e-mails written between May 1998 to 2000...

Nevada Nuclear Projects Agency chief Bob Loux [said] "Absolutely it's a major setback. I think it will preclude them from submitting a license application in the near term," Loux said. "This combined with all of the other major issues it seems to indicate to me there is a level of incompetence and mismanagement that might not be repairable and could lead to the demise of the project."
:eek:

There's a link in post #12 to Campbell's reply to a 2002 USGS report which are both worth reading.

Ali Al-Naimi and Abdallah Jum'ah are not the only voices to be heard from the Saudi Arabia... Dr. Sadad Al-Husseini (who retired from Saudi Aramco on March 1 2004, as executive vice president and a member of its board of directors, after 32 years with the company) had this to say:
Sadad Al-Husseini said:
I think in total the [International Energy Agency] outlook is much too high for production and it’s unrealistic for the world to be expecting such high numbers from all of the producers, including Saudi Arabia. They’re not only overestimating the Middle East, but they overestimate non-Opec, they overestimate Russia, they overestimate the whole global resource base. And I think this is a rather dangerous situation for the US government policy to be based on.

Channel 4 26/1/04

http://www.btinternet.com/~nlpwessex/Documents/SaudiOilAdmission.htm

WRT "the Saudi position on Peak Oil'" - Who's going to give it to us straight? The 'Greenspan of Oil' or the petrogeologist who just quit?

-

bigfish said:
so how is it you put so much faith in an archaic hypothesis from the 18th century that petroleum somehow evolves from biological material and therefore, is limited in abundance

It's not anything of the sort that suggests to me that it 'is limited in abundance', it's the hard data on production.

This is why I'm begging you for "some convincing figures to reassure me that the effects of abiotic production (if it is indeed true) are anything other than utterly negligable".

I don't particularly care if oil is created by pixies - what matters is the looming brick wall where supply is unable to keep up with growing demand.

You keep repeating that there is no supply constraint (or that the constraint is artificial) yet the data appears to contradict you:

Oil Discovery (3 year average - past and projected) 1930-2050:
d1oildiscavproj.gif


US production:
Image1.gif


UK production:
Image9.gif


Norway:
Image8.gif

Unless you are saying that this data is all lies?
 
And just incase you are tempted to phone up the Norwegians and tell them they're drilling in the wrong places, thanks to their 'archaic hypothesis from the 18th century'...

Cumulative Discovery versus Cumulative Wildcats for Norway:

Image10.gif
 
BB: It seems odd that you don't want to address the rather serious question of whether or not Lomonosov's archaic 18th century hypothesis that petroleum somehow evolves from biological detritus is in glaring violation of the second law of thermodynamics, bearing in mind that you have already made it clear that when it comes to physics v economics, "the law of thermodynamics wins. Every time". That is, every time except this time it would seem. Now that Lomonosov's hypothesis is shown to be an obsolete relic, you appear to be making an exception to your earlier rule when you say that you don't particularly care if oil is created by pixies!

You can post up as many charts and graphs as you like BB, but none of them can alter the fact that your preferred "fossil fuel" theory is in glaring violation of the second law of thermodynamics. Therefore, by the laws of physics, the hypothesis that petroleum is a "fossil fuel" is demonstrably false. From this, one can only conclude that petroleum does not inhabit static finite reservoirs as the "Peak oil" lobby insist. On the contrary, by these same laws, it means that petroleum must have deep sources of generation, that certain giant oil fields replete from below and that the petroleum budget of the planet, therefore, is NOT LIMITED by the amount of biological detritus laid down in sediments millions of years ago. Indeed, "simple calculations of potential hydrocarbon contents in sediments shows that organic materials are too few to supply the volumes of petroleum involved."


You keep repeating that there is no supply constraint (or that the constraint is artificial) yet the data appears to contradict you.

That there is no supply constraint may appear to be contradicted your data BB, but it certainly isn't contradicted by the data provided by Professor's Odell and Lynch, cited earlier in the thread by me and largely ignored, or indeed by the data provided by Ali Al-Naimi the Saudi Oil Minister.


Do you have any data regarding the replenishment rates/ratios resulting from abiotic production?

All petroleum is abiotic in origin. In which case, the data provided by Ali Al-Naimi, the Saudi Oil Minister, showing that Saudi Arabia's proven reserves have almost tripled from 88 billion barrels in 1970 to 261 billion barrels today, despite 35 years of intervening production, can perhaps give us some idea of replenishment ratios.

I would like to remind the forum, once again, that in the former Soviet Union, Lomonosov's hypothesis was jettisoned long ago in favour of the modern Russian-Ukrainian theory of deep, abiotic petroleum origins. This theory has established over the last 50 years, in both the laboratory and the field, that petroleum is a primordial material erupted from great depth to the Earth's surface - as with the giant tar sand deposits found in Canada and Venezuela; the huge near surface reservoir deposits found in the Middle East; and with the deeper lying oil plays that are routinely being discovered at varying depths of up to 7,000 meters, as found in the North Sea (3,000mtr), Vietnam (5,000mtr) and the FSU (7,000mtr).

In the case of the Former Soviet Union, it was formerly considered petroleum-poor in the first half of the 20th century, now, today, through the development of the modern inorganic theory and its practical application in the field, the FSU has not only managed to achieve energy self-sufficiency, it has also transformed itself into one of the largest petroleum producing and exporting nation in the world.
 
bigfish said:
BB: It seems odd that you don't want to address the rather serious question of whether or not Lomonosov's archaic 18th century hypothesis that petroleum somehow evolves from biological detritus is in glaring violation of the second law of thermodynamics, bearing in mind that you have already made it clear that when it comes to physics v economics, "the law of thermodynamics wins. Every time"

I assume that the violation of the second law you talk about would be something along the lines of:

Stalin and Abiotic Oil Essay said:
Beginning in 1964, Soviet scientists carried out extensive theoretical statistical thermodynamic analysis which established explicitly that the hypothesis of evolution of hydrocarbon molecules (except methane) from biogenic ones in the temperature and pressure regime of the Earth's near-surface crust was glaringly in violation of the second law of thermodynamics.

And yet as quoted in this fantastic essay that offers a very well-written and citation-backed debuking of abiotic oil:

laboratory experiments have shown repeatedly that petroleum is in fact produced from organic matter under the conditions to which it is assumed to have been subjected over geological time.

I really reccomend that any believers in abiotic oil take a look at that piece. It is written by a peak oil advocate, but as he says at the end of the essay:

There is no way to conclusively prove that no petroleum is of abiotic origin. Science is an ongoing search for truth, and theories are continually being altered or scrapped as new evidence appears...
...Now, I like scientific mavericks; I tend to cheer for the underdog. Peak oil is itself a maverick position...
...I have not personally inspected the oil wells in Saudi Arabia or even those in Texas. But nearly every credible report that I have seen—whether from the industry or from an independent scientist—describes essentially the same reality: discoveries are declining, and have been since the 1960s. Spare production capacity is practically gone. Not even the Russian fields cited by the abiotic theorists as evidence for their views are immune: in June the head of Russia’s Federal Energy Agency said that production for 2005 is likely to remain flat or even drop

I would like to hear how you can explain the supply/time graphs posted above by BBandit. Surely if oil is replenished, supply levels shouldn't drop off? I would like to see data that would plot a graph showing production rising back up after a (statistically significant) drop. Otherwise, peak oil is still a concern.
 
Bakatcha - There's not doubt that individual countries that have been extensively and intensively surveyed and drilled follow something approaching a Hubble Peak, but that only applies to a handfull of nations, including the ones your graphs portray. There's plenty of places that haven't been drilled or surveyed in anything like those volumes.
 
Crispy: Richard Heinberg's essay debunks nothing, though I will grant you it really is quite fantastic.

Fantasy No 1.

Richard Heinberg: Geologists trace the source of the carbon in hydrocarbons through analysis of its isotopic balance. Natural carbon is nearly all isotope 12, with 1.11 percent being isotope 13. Organic material, however, usually contains less C-13, because photosynthesis in plants preferentially selects C-12 over C-13. Oil and natural gas typically show a C-12 to C-13 ratio similar to that of the biological materials from which they are assumed to have originated. The C-12 to C-13 ratio is a generally observed property of petroleum and is predicted by the biotic theory; it is not merely an occasional aberration. (13)


J. F. Kenney et al: During the 1950’s, increasingly numerous measurements of the carbon isotope ratios of hydrocarbon gases were taken, particularly of methane; and too often assertions were made that such ratios could unambiguously determine the origin of the hydrocarbons.* The validity of such assertions were tested, independently by Colombo, Gazzarini, and Gonfiantini in Italy and by Galimov in Russia.* Both sets of workers established that the carbon isotope ratios cannot be used reliably to determine the origin of the carbon compound tested.

Colombo, Gazzarini, and Gonfiantini demonstrated conclusively, by a simple experiment the results of which admitted no ambiguity, that the carbon isotope ratios of methane change continuously along its transport path, becoming progressively lighter with distance traveled.* Colombo et al. took a sample of natural gas and passed it through a column of crushed rock, chosen to resemble as closely as possible the terrestrial environment.27* Their results were definitive:* The greater the distance of rock through which the sample of methane passes, the lighter becomes its carbon isotope ratio.

The reason for the result observed by Colombo et al. is straightforward:* there is a slight preference for the heavier isotope of carbon to react chemically with the rock through which the gas passes.* Therefore, the greater the transit distance through the rock, the lighter becomes the carbon isotope ratio, as the heavier is preferentially removed by chemical reaction along the transport path.* This result is not surprising;* contrarily, such is entirely consistent with the fundamental requirements of quantum mechanics and kinetic theory.

Pertinent to the matter of any claim that a light carbon isotope ratio might be indicative of a biological origin, the results demonstrated by Colombo et al. establish that such a claim is insupportable.* Methane which might have originated from carbon material from the remains of a carbonaceous meteorite in the mantle of the Earth, and possessing initially a heavy carbon isotope ratio, could easily have that ratio diminished, along the path of its transit into the crust of the Earth, to a value comparable to common biological material.
...
The reason for the result observed by Galimov is also straightforward:* In the water of the reservoir, there live microbes of the common, methane-metabolizing type.* There is a slight preference for the lighter isotope of carbon to enter the microbe cell and to be metabolized.* The longer the methane remains in the reservoir, the more of it is consumed by the methane-metabolizing microbes, with the molecules possessing lighter isotope being consumed more.* Therefore, the longer its residency time in the reservoir, the heavier becomes the carbon isotope ratio, as the lighter is preferentially removed by methane-metabolizing microbes.* This result is entirely consistent with the fundamental requirements of kinetic theory.

Furthermore, the carbon isotope ratios in hydrocarbon systems are also strongly influenced by the temperature of reaction.* For hydrocarbons produced by the Fischer-Tropsch process, the ?13C varies from -65% at 127*C to -20% at 177*C.29, 30* No material parameter, the measurement of which varies by almost 70% with a variation of temperature of only approximately 10%, can be used as a reliable determinant of any property of that material.

The ?13C carbon isotope ratio cannot be considered to determine reliably the origin of a sample of methane, - or any other compound.

Fantasy No 2.

Richard Heinberg: In addition, oil typically contains biomarkers—porphyrins, isoprenoids, pristane, phytane, cholestane, terpines, and clorins—which are related to biochemicals such as chlorophyll and hemoglobin. The chemical fingerprint of oil assumed to have been formed from, for example, algae is different from that of oil formed from plankton. Thus geochemists can (and routinely do) use biomarkers to trace oil samples to specific source rocks.

J.F. Kenney et al: The types of porphyrins, isoprenoids, terpines, and clorins found in natural petroleum have been observed in material extracted from the interiors of no fewer than fifty-four meteorites.. 9, 12, 13

The observations of such molecules in meteorites thoroughly discredited the claims that their presence in natural petroleum might somehow constitute evidence of a biological connection.* Because especially strenuous (and especially erroneous) claims are often made particularly about the porphyrins observed in natural petroleum, those molecules will be discussed in modest detail.

Porphyrins comprise a class of molecules designated cyclic ionopheres, a special class of polydentate ligands for metals.* Porphyrins are heavy, approximately planar, chelating molecules, found in both biotic and abiotic systems.* Several porphyrin molecules are of special biological significance:* vitamin B12;* chlorophyll, the porphyrin which is the agent of the photosynthesis process in plants;* and the heme molecule, the porphyrin component of the protein hemoglobin which is responsible for the transport of oxygen in mammalian blood.* As an example of the high molecular weight of porphyrins, hemoglobin has the empirical chemical formula, [C738H1166O208N203S2Fe]4.* Neither vitamin B12, nor chlorophyll, nor heme (nor hemoglobin), nor any biotic porphyrin has ever been observed as a component of natural petroleum.

The porphyrin molecules found in natural petroleum possess different side-groups than do those of chlorophyll or heme.* The central chelated metal element in chlorophyll is always magnesium; in heme, it is iron.* In porphyrin molecules found in natural petroleum, the central chelated metal element is typically vanadium or nickel.

As stated, porphyrin molecules evolve both biologically and abiologically.* During the 1960’s and 1970’s, porphyrin molecules, which are the same as those found in terrestrial natural petroleum, were observed in the hydrocarbon fluids extracted from the interiors of carbonaceous meteorites.

The observations of petroleum-type porphyrins in the hydrocarbon fluids extracted from the interiors of carbonaceous meteorites destroyed, a fortiori, the claims that such molecules constitute “evidence” for a connection of petroleum with biological matter.* Additionally, after the observations of porphyrins in carbonaceous meteorites, those petroleum-type porphyrins were synthesized abiologically in the laboratory under chemical and thermodynamic conditions specially set to mimic the abiotic conditions in meteorites.8, 14

The “porphyrin evidence” claims were destroyed by the investigations of carbonaceous meteorites approximately thirty years ago, and are well known throughout the community of scientists working in the field of petroleum.* Every compound designated as a “biomarker,” and not otherwise identified as a contaminant, has been either observed in the fluids extracted from the interiors of meteorites, or synthesized in laboratories under conditions comparable to the crust of the Earth, - or both.

Such scientific facts, and the general knowledge of same, not withstanding, every textbook published in the English language purportedly dealing with the subject of petroleum geology, including the ones cited above, continues to repeat the old discredited claims that the presence of (abiotic) porphyrins in natural petroleum provide evidence for its origin from biological matter.15-17* Such assertions, thirty years after having been demonstrated scientifically insupportable, must be acknowledged to be intellectual fraud, pure and simple.
For a comprehensive debunking of some of Heinberg's 'scientific' claims see: Dismissal of the Claims of a Biological Connection for Natural Petroleum.
 
Crispy said:
And yet as quoted in this fantastic essay that offers a very well-written and citation-backed debuking of abiotic oil:

Interesting article, Crispy. Cheers. :)

Richard Heinberg said:
Thus even if the abiotic theory does eventually prove to be partially or wholly scientifically valid (and that is a rather big “if”), it might have little or no practical consequence in terms of oil depletion and the imminent global oil production peak. That is the situation in a nutshell, as I understand it, and it is probably as much information as most readers will need or want on this subject.

At the risk of providing readers with any more information than 'they need or want', I'll repeat the quote from Ugo Bardi I posted back in #657:

In order to discuss this point, the first task is to be clear about what we are discussing. There are, really, two versions of the abiotic oil theory, the "weak" and the "strong":

- The "weak" abiotic oil theory: oil is abiotically formed, but at rates not higher than those that petroleum geologists assume for oil formation according to the conventional theory. (This version has little or no political consequences).

- The "strong" abiotic theory: oil is formed at a speed sufficient to replace the oil reservoirs as we deplete them, that is, at a rate something like 10,000 times faster than known in petroleum geology. (This one has strong political implications).

I'm guessing bigfish supports the 'strong' theory, but as no data to support such a theory has been presented, I don't think further discussion will prove particularly fruitful. :(

Also, Bernie Gunther's excellent posts #631, #632 and #633 (page 16) cover resposes to 'abiotic theory' and Odell in particular.

-

bigfish said:
You can post up as many charts and graphs as you like BB
Why, thankyou. :)

That there is no supply constraint may appear to be contradicted your data BB, but it certainly isn't contradicted by the data provided by Professor's Odell and Lynch...

The World according to Odell:

odell_fig2.jpg


Which planet is Odell on?

Odell said:
The potential supply schedule forecast for oil - for long the price leader in the fossil fuel market - suggests little or no pressure of demand on supply for at least the next 20 years. For this period there is thus no reason why oil prices in real terms should rise much and no reason why any significant volumes of reserves of oil, gas or coal which involve higher costs should be produced. The interquartile average annual price range of $16.85 to $19.50 per barrel for internationally traded crude oil over the past 15 years seems to indicate the most likely price of oil for the medium-term future. Technological developments have already brought production costs down in many areas of production (Econ Centre for Economic Analysis, 1997), and this process can be expected to continue.

Sometime in the 2010s, however, upward price pressure on the oil market seems likely as the attempt to maintain growth in the production of conventional oil leads to a requirement for higher investment costs. An increase of 10-20 per cent in unit exploration or development costs will then be confirmed by the required new and heavy investments in the first substantial exploitation of non-conventional oil. Such cost increases will be passed through into the general level of prices. The equilibrating price of $17-20/bbl of oil in the meantime thus seems likely to be converted by 2020 to $ 19-24/bbl (in 1999 dollars). At this modestly higher real price level, the requirement for the highest cost oil producer to sell into the market and earn sufficient profits will be satisfied.

...er... not this one, apparently. :D

Odell and Lynch are Economists, bigfish.

...And Odell can't even get that right!

-

Another lecture well worth watching if you have the time:

'Arithmetic, Population & Energy' by Albert Bartlett. (RM stream)

Text, tables and graphs available here.
 
That post on Economists makes one or two reasonable points, but it's dressed up in a lot of rubbish, and misses the main point, which isn't that economists believe that energy sinks can be productive, but that technological progress increases the energy efficiency with which fuels can be extracted from the ground, and hence also makes them more economically efficient. This is true by the way, it does, the question is can it continue to do so. That's a much more interesting question, and you don't have to go erecting straw men to ask it.
 
Fair comment, slaar. It's a bit of a caricature, designed to get the point across regarding thinking of 'energy' in 'economic' terms.

In terms of 'energy sinks being productive', if we allow ourselves to think in purely economic terms, it would make perfect sense to burn 2 barrels of $55 pb today oil to realise 1 barrel of $120 pb oil tomorrow.

-

slaar said:
There's plenty of places that haven't been drilled or surveyed in anything like those volumes.
Which is probably why I wouldn't look in those places for evidence for or against 'strong' abiotic replenishment... ;)

-

Union of Russia’s Oil and Gas Producers Says Oil Exports in Danger

The president of the Russian Union of Oil and Gas Producers said on Wednesday, March 16, that the country’s oil exports are in danger unless a program of geological exploration of new oil deposits is introduced. Gennady Shmal, quoted by RIA Novosti said that unless the government and public opinion stop thinking about the oil and gas industry as some “magic wand that works and works and works and doesn’t ask to eat”, soon Russia will lose its oil export capacities.

The problem with the oil industry is that existing deposits will either be depleted shortly or are simply not being tapped by oil companies.
 
Don't get me wrong, I'm not for one second saying I support abiotic theories of oil, I've seen nothing to convince me they have any merit. I do think the Hubble's Peak issue is overblown in many peak-oil theories.

I'm also interested by the last quote on your latest post, calling for more exploration, which is exactly what you'd expect when prices are rising and supply being the short side. I'd expect the rate of discovery of oil deposits to rise in the medium term.

In terms of your logic on the economics of $55pb vs $120pb oil, yes, that is true, in theory. In practive however the futures market's aren't pricing oil anywhere near that level, and in fact futures tend to be cheaper than current spot prices since this supply constraint is seen as not lasting. If peak oil were reached then that could lead to the kind of perverse outcomes you suggest, but I don't see that as being too likely in the immediate future.
 
Am doing some work on Saudi economics and came across this:

http://www.mepc.org/public_asp/forums_chcs/37.asp

Haven't got time to read it at the mo, but thought you might like it.

BTW, BBandit I did check that link on "economists" - here's not the place to go into it in detail, but that piece is terrible. It's like saying we shouldn't study politics because right-wing politicians have been mistaken in the past. The version of economics (basically, the Chicago School) discussed in the piece has been dominant over the last decade (but now appears to be on the wane), but this version/school/set of ideas does not equate to the sum totality of economics.

And, while I'm on one, the statement on the link that physics is more "true" than economics raises more questions than it answers.

Anyway, back to Saudi ... as you were.
 
Err has anybody noticed a rather large shift in mainstream media reporting of oil issues, and some acknowledgement of production peak issues?

New York Times Op Ed:
http://www.energybulletin.net/4883.html

Rolling Stone "The Long Emergency":
http://www.energybulletin.net/4856.html

Newsweek:
http://www.energybulletin.net/4896.html

The explanations and rhetoric used in general news stories explaining the current high price of oil seems to have changed in recent months too, its markedly different to last years emphasis on it all being terrorists fault, though the "blame China" angle is still in full play.

International Energy Agency March 05 conference on Managing Oil Demand In Transport has some very interesting presentations, I saw the phrase "peak oil" sneaking in there quite a bit.

http://www.iea.org/textbase/work/2005/oil_demand/FinalAgenPresentations.htm

Ho hum, in the 3ish years Ive been following the Peak Oil stuff Id say its becoming more and more accepted, moving rapidly from being considered "a conspiracy theory" to an issue that the mainstream press takes seriously. I personally dont buy the idea that governments are only just waking up to the reality, I think its been at the heart of policy since the 70s.
 
Cheers for the links, all.

Freke's Middle East Policy Council conference: Securing U.S. Energy in a Changing World is also available as streaming video, well worth watching - especially Frank A. Verrastro (Director, Energy Program, Center for International and Strategic Studies) going over the background data (his charts, graphs and graphics are each linked in the body of the transcript).

There is a hell of a lot in that conference, but here a couple of fairly random choice quotes:

Verrastro said:
One of my largest concerns with some of the administration policy is they're relying an awful lot on hydrogen, carbon sequestration and clean jet. And if you pick up the napkin, there's nothing behind that yet.

So maybe 15 years out with a lot of work and a lot of money and a lot of research we can get there, but we need to be smarter and look at practical applications - what we can do in the near term to make that transition. You know, Al talked about the Stone Age not ending because we out of rocks. I think that's true. Technology and consumer preferences may drive a lot of this. It's just a matter of the timeframe that we bring these technologies on, and it takes a lot of lead time and a lot of money.

Placke said:
The industry was more optimistic about hydrogen-fueled automobiles 10 years ago than it is today. I think they've realized increasingly that there are just too many inherent problems in handling it, in distributing it, in treating it is a fuel on a mass consumer basis. Therefore I think it's relatively unlikely that that will be the solution but nobody can say with certainty.

Freeman said:
I will prove that I'm not a politician by giving you a straight answer to your question of what ought to be done; namely we ought to tax the hell out of oil and gas and gasoline and apply the taxes to the infrastructure and other problems you identify while simultaneously reducing demand and dependence on foreign energy by raising prices. With those few words I plan to defect to Australia since I obviously have no future in this country.

-

Also worth a gander:

International Energy Agency, 28 February 2005: Saving Oil in a Hurry: Measures for Rapid Demand Restraint in Transport (pdf!)

(Adam's piece on it for AJ).
 
Oil for dollars, and dollars for US deficit

http://www.atimes.com/atimes/Asian_Economy/GD09Dk01.html

In effect, the US and its Gulf Arab allies just pulled off the biggest central-bank heist in the history of the world. The price of oil just went up 60% or more, which really cuts down to size that $3.4 trillion of net foreign holdings of US financial assets. As a loyal American, one would like to cheer one's government's deft move to pick the pockets of our trading and financing partners. Moreover, the US gets the Arabs to fund a large share of our deficit, subsidize our interest rates, and help keep our taxes low for another year. Surely I can afford to buy another gas-guzzling sport-ute, get a rifle, and wave a flag.

The United States is extracting tribute on oil from the world. If the world wants Middle Eastern oil, it can pay for it through the Saudi branch of the US Treasury. Why do the heads of Saudi Arabia, Kuwait, Abu Dhabi, Bahrain, Qatar, etc, hold dollars? Because they want to keep the money and the power. The ruling family of Saudi Arabia controls 25% of the world oil reserves and is completely dependent on oil revenues for its survival. Tens of thousands of Saudi princes live off lavish royal stipends. Think of Arabia as a family firm. If the dollar goes down in value, the Saudi royal family still gets to keep hundreds of billions of dollars. But, if they don't buy dollars, why would the US keep them in power? It would simply not be in our interests to do so. Remember when Saddam Hussein talked about pricing Iraq's oil in euros? "Shock and awe" quietly followed.

This program of oil for dollars and dollars for the US Treasury deficit is the simple tribute that we, as the superpower, can expect. The United States is well paid for keeping the world's supply of black gold safe and available to all. Unlike the Vietnam era - when the US was trying to finance guns and butter - getting others to pay now for our guns allows us to milk the oil out of the sand and turn it into butter.

The next question will be how the Asians respond to a 60% hike in the price of oil. Please stay tuned.
 
Caught this lurking at the bottom of the newsmap...

Bank says Saudi's top field in decline
The Bank of Montreal's analyst Don Coxe, working from their Chicago office, is the first mainstream number-cruncher to say that Gharwar's days are fated.

Coxe uses the phrase 'Hubbert's Peak' to describe the situation. This refers to the seminal geologist M King Hubbert, who predicted the unavoidable decline of oilfields back in the 1950s.

"The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia," says Coxe, referring to data compiled by the International Energy Association's (IEA) August 2004 monthly report.
 
Conference told oil reserves may be healthy

http://www.abc.net.au/news/newsitems/200504/s1344429.htm

The Australian Petroleum and Production Exploration Association conference in Perth has been told that the world's oil reserves might not be as low as analysts are predicting.

The United States Geological survey conducted in 2000 predicts that only 30 per cent of global oil supplies have been used.

The report also says that there are 2,029 billion barrels of oil in reserves around the globe and that is not including undiscovered oil in frontier areas.
 
Investing in spare oil capacity: OPEC

http://www.smh.com.au/news/Business...s/2005/04/10/1113071844320.html?oneclick=true
"We have speeded up the expansion program and currently have about two million barrels a day spare capacity and planning to bring that to three million in spare capacity by the end of the year to meet additional demand," Dr Shahib-Eldin said.

"We're trying to erase the fear factor that is driving oil prices to $US50 and $US60 a barrel."

He said consumers were afraid that demand will continue to be strong and that supplies will plateau.

"We believe OPEC will continue to make investments (in capacity) and will have the right amount of production capacity and some to spare," he said.

He said OPEC is working with "new consumer" countries such as China and India to invest in refineries in those countries so they are capable of refining crude oil.
 
Saudi Arabia may increase oil reserves by 200 billion barrels: minister

Ooh, look, the Saudi's have managed to find another 200 billion barrels of oil to add to their reserves...

http://in.rediff.com/money/2005/apr/07oil.htm

Saudi Arabia, which has the world's largest oil reserves, has said that it may increase its stock by around 200 billion barrels and was also mulling investment in building refineries in India among other countries.

"There is a possibility that the Kingdom will increase its reserves by around 200 billion barrels, either through new finds or by increasing what it produces from existing fields," Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi was quoted as saying by the Saudi press agency.

"These huge reserves enable the Kingdom to remain a major oil producer for between 70 and 100 years, even if it raises its production capacity to 15 million barrels per day, which may well happen during the next 15 years," he said.
 
bigfish said:
Ooh, look, the Saudi's have managed to find another 200 million barrels of oil to add to their reserves...

So what? They have so much of it, i doubt they ever bothered to find it all.
 
Hmmm. Interesting assumption that author is making there Slash ...
World population collapse is just around the corner - let's say 2050. This coupling of population decline with increased efficiency will compensate for increases in energy use.
I'm quite sure a sufficient population collapse would do the trick (2-3 billion would probably amount to a genuinely sustainable global population), but what's hidden behind the word 'collapse'?

If we consider soil erosion, deforestation, high-probability climate change impacts and the destruction of ecosystem services in general (see e.g. http://www.millenniumassessment.org ) then we might very well see a 'collapse', although we can reasonably expect population to double to around 12 billion by mid-century before such a collapse ... (see e.g. this summary of some Cornell University research into population and resource issues)

We're talking about hundreds of millions of people starving, succumbing to disease and dying in resource wars (c.f. Rwanda for an example of the latter)

... but capitalism will continue to thrive, so those stupid Greens are alarmists.

Right ...
 
Slash said:
Owen McShane is the Director of a privately funded right wing, anti-Kyoto think-tank, who's prime purpose appears to be to oppose the NZ 'Resource Management Act' on behalf of it's (nameless) sponsors.

The (unnamed) sponsors apparently include "individuals, companies, incorporated societies, and landowner groups". (here).

As Mr. McShane suggests:
If the Trust is to be taken seriously by government agencies, the news media and the public at large, it needs to be able to demonstrate that it has the support of more than a dedicated few. Hence the Centre seeks your support. One of the most concrete ways of demonstrating your support for the Centre’s activity is to make a donation to the Trust. Members will have priority access to the services of the Trust and its expert panel.
Please do take a moment to check out who sits on this 'expert panel'... :D

In addition to the ones picked out by Bernie above, Mr. McShane makes a number of 'interesting assumptions'. I find myself deeply suspicious of the Mr. McShane's ability to differentiate between fact and fiction - as demonstrated by his stated belief (with regard to population) that "Once there were only two of us..."

Well, would you Adam-and-Eve it. :D Another Xtian nut-job?

The other main assumption, upon which his steaming pile of 'theory' rests, is betrayed when he suggests:
A shrewd guess is that a bunch of new technologies will allow us...
Is there a name for this pious 'faith in technology' exhibited by so many, yet based on nothing more than 'shrewd guesses' and blind faith born of human arrogance and inability to conceive any issue in terms other than the 'economic'?
There must be a term out there somewhere which I can use other than the ones that immediately spring to mind.

Slash, if you think I'm being a little harsh in my (admittedly ad-hominem) dismissal of McShane's opinions, please feel free to pick out any of his points to defend, as shredding the entire article wouldn't be much fun, as most of the points he attempts to make have been dealt with previously on this thread, or can be dismissed with some fairly simple mathematics. e.g. "Windmills on your roof will dissociate water into hydrogen for the fuel cell in your car".

Anyway, I emailed him a couple of links (
http://128.42.10.107/media/Smalley_OEF_20031101_300k.wmv / http://edison.ncssm.edu/programs/colloquia/bartlett.ram ) and asked him for comment, so hopefully he might get back to me. :)
 
Backatcha Bandit said:
<snip> Is there a name for this pious 'faith in technology' exhibited by so many, yet based on nothing more than 'shrewd guesses' and blind faith born of human arrogance and inability to conceive any issue in terms other than the 'economic'?
There must be a term out there somewhere which I can use other than the ones that immediately spring to mind.<snip>

Cornucopian ?
 
Bernie Gunther said:

Yes. Perfect. :)

...and not just because I like the 'Goat' connotations.

dictionary.com said:
cor·nu·co·pi·a Pronunciation Key (kôrn-kp-, -ny-)
n.

1. A goat's horn overflowing with fruit, flowers, and grain, signifying prosperity. Also called horn of plenty.
2. Greek Mythology. The horn of the goat that suckled Zeus, which broke off and became filled with fruit. In folklore, it became full of whatever its owner desired.
3. A cone-shaped ornament or receptacle.
4. An overflowing store; an abundance: a cornucopia of employment opportunities.
 
Bernie Gunther said:
Hmmm. Interesting assumption that author is making there Slash ...

It's not half as interesting as your assumption that petroleum is a "fossil fuel" Bernie.

Statistical thermodynamic analysis has established clearly that hydrocarbon molecules which comprise petroleum require very high pressures for their spontaneous formation, comparable to the pressures required for the same of diamond. In that sense, hydrocarbon molecules are the high-pressure polymorphs of the reduced carbon system as is diamond of elemental carbon. Any notion which might suggest that hydrocarbon molecules spontaneously evolve in the regimes of temperature and pressure characterized by the near-surface of the Earth, which are the regimes of methane creation and hydrocarbon destruction, does not even deserve consideration." Professor Emmanuil B. Chekaliuk, at All-Union Conference on Petroleum and Petroleum Geology, Moscow, 1968.
 
One of the interesting features of the cornucopian argument is a kind of selective vision. What I mean by that is that one can certainly point to technological solutions to these kinds of problems, but almost invariably these solutions bring with them their own problematic side effects. An excellent example of this might be the shortage of fuelwood and timber in England just prior to the industrial revolution. Yes, along came fossil fuel and industrial ironworking technologies just in time, but as we know all too well, they had their own associated problems.

One key feature of the cornucopian argument is to focus on the benefits of technology revolutions without noticing their (frequently) associated costs.
 
Back
Top Bottom