mwah!
I'm still not getting your drift there.Raisin D'etre said:mwah!
Houston-based investment banker Matt Simmons, who argued in his recent book, Twilight In The Desert, that Saudi Arabia’s oil fields are at or near their peak, is one of the world’s gloomier commentators. Simmons’s fear is that the world is approaching its peak oil supply at a time of rapidly rising demand and that Saudi Arabia – which accounts for 13% of current global production but 25% of global reserves – has systematically over-stated its reserves for years.
Leading oil commentator Daniel Yergin, president of the Boston Massachusetts-based Cambridge Energy Research Associates (CERA) is more positive. He argues additional supplies will come to the rescue from 2007. He says : “Prices around $60 a barrel, driven by high demand, are fuelling the fear of imminent shortage – that the world is going to begin running out of oil in five or 10 years. This, it is argued, will be amplified by the substantial and growing demand from two giants: China and India.
“Our new, field-by-field analysis of production capacity leads to a strikingly different conclusion: there will be a large, unprecedented build-up of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil could grow by 16 million barrels a day – from 85 million barrels per day to 101 million barrels a day – a 20% increase. ”
Yergin predicts additional supplies will come from Canada, Kazakhstan, Brazil, Azerbaijan, Angola and Russia. Among Opec countries, he detects significant growth potential in Saudi Arabia, Nigeria, Algeria and Libya.
He insists his organisation’s forecasts are not speculative. “Many of the projects that embody this new capacity are already under development and were approved in the 2001-03 period, based on price expectations much lower than current prices.”
He adds: “This is not the first time the world has ‘run out of oil’. Cycles of shortage and surplus characterise the entire history of the oil industry. A fear of shortage after world war one was one of the main drivers for cobbling together the three easternmost provinces of the defunct Ottoman Empire to create Iraq.
“In more recent times, the ‘permanent oil shortage’ of the 1970s gave way to the glut and price collapse of the 1980s. A common pattern in the shortage periods is to underestimate the impact of technology. Once again, technology is key.”
Yergin believes the share made up of “unconventional oil” – which includes the product of Canadian oil sands, ultra-deep-water developments, and natural gas liquids – is set to rise from 10% of total global capacity in 1990 to 30% by 2010.
Sandy Nairn, founding partner of investment management house Edinburgh Partners, is no less optimistic. He believes that given the long-term realities of supply and demand, the current oil price should, in fact, be no higher than the mid 30s – [around $35 per barrel].
He explains: “Most of the current oil price is actually down to bottlenecks of supply. The trouble is we don’t know how long those bottlenecks are going to last. The finding and extraction costs have gone up – but nowhere near enough to justify the current price.”
Citing figures from the BP Statistical Review of World Energy, Nairn says: “In 1984, the world had 35 years’ of proven reserves at the then existing production rate, and between then and now we have used up 70% of those reserves. But we currently have 42 years’ of proven reserves at today’s production rates. So we have extracted more oil than we expected to, yet the level of known reserves has gone up, not down.”
McLaughlin says: “The amount of oil we consume and produce is a function of price and technology. That’s the fundamental economics of this. As the price rises, the use of substitute fuels, such as biomass, coal and nuclear, starts to become more attractive again.”
Conservation will also kick in, with gas guzzlers disappearing from the roads and even SUVs becoming more fuel efficient. Voluntary reductions in consumption will also kick in. As a result, the oil price tends to slide back down again.
McLauglin adds: “With the price at $50-$60, oil firms have the incentive to invest in new technology, for example, to extract oil from the deep sea bed.
“Every year the supply curve moves up and to the right. The world’s oil is never going to run out. The stone age did not end because we ran out of stone, but because technology moved on. We haven’t run out of stone, wood or coal.”
This is very good and I've been looking for something like it for a while. Thanks.zceb90 said:I've just joined this forum <snip>
3) There's a comprehensive report prepared for US DOE in Feb'05 by Robert L Hirsch entitled 'Peaking of World Oil Production: Impacts, Mitigation, & Risk Management', Hirsch Mitigation Report. There's 91 pages here but it's a really good read.<snip>
andWorld oil demand is expected to grow 50 percent by 2025.
To meet that demand, ever-larger volumes of oil will have to be produced. Since oil production from individual reservoirs grows to a peak and then declines, new reservoirs must be continually discovered and brought into production to compensate for the depletion of older reservoirs.
If large quantities of new oil are not discovered and brought into production somewhere in the world, then world oil production will no longer satisfy demand. That point is called the peaking of world conventional oil production. When world oil production peaks, there will still be large reserves remaining.
Peaking means that the rate of world oil production cannot increase; it also means that production will thereafter decrease with time.
Because oil prices have been relatively high for the past decade, oil companies have conducted extensive exploration over that period, but their results have been disappointing. If recent trends hold, there is little reason to expect that exploration success will dramatically improve in the future. This situation is evident in Figure II-1, which shows the difference between annual world oil reserves additions minus annual consumption.
The image is one of a world moving from a long period in which reserves additions were much greater than consumption, to an era in which annual additions are falling increasingly short of annual consumption. This is but one of a number of trends that suggest the world is fast approaching the inevitable peaking of conventional world oil production.
You left a bit of that out bigfish.bigfish said:
But what about the longer term? Robert Kaplan, professor at Boston University’s Centre for Energy and Environmental Studies, says he expects that the production peak – after which producing oil will become much more expensive (but before which the price is unlikely to rise much above $60 per barrel) – to occur in 2015-25.
Contributing to a blog on WSJ.com, Kaplan predicts the transition to alternative energy sources will be painful. “The 20th century could be called the petroleum age,” he writes. “Inexpensive oil means goods can be imported and exported at little extra cost, people can live far from work and a small fraction of the workforce can feed those that produce the goods and services we associate with modernity. All this may change after the global peak in oil production. As such, the peak isn’t just an economic problem, it’s one of the biggest social and political challenges for this century.”
Bernie Gunther said:You left a bit of that out bigfish.
Damn. You're too clever for me bigfishbigfish said:Yes, that was my Pavlov's Dog experiment. Thanks for confirming the expected result by homing in on it.
Given that the lead time for mitigation and/or adaptation is quite long in many important cases, e.g. building all the expensive infrastructure required to make enough liquid fuels for transportation to carry on as normal, then the rate of decline becomes a serious matter of concern.zceb90 said:<snip> New oilfield technology does indeed raise overall recovery rates somewhat but, much more important, it alters the production profile from Hubbert's curve in that production rises much steeper on the left hand side of the curve (suits 'big oil' and Gov'ts - they retrieve payout / taxation revenue that much sooner). In some cases the onset of decline is postponed until nearer 60% than 50% of EUR has been produced. Now comes the payback - much steeper decline curves than has been seen in the past i.e. N Sea at 10% pa which is hugely different to the 1.5% - 3% pa seen in oilfields developed in 1st half of 20th century using traditional technology. If decline rates anywhere near approaching those of N Sea are seen in Saudi or Russia the oil consuming world will indeed have a big problem.
Chris
bigfish said:http://www.sundayherald.com/51252
“Our new, field-by-field analysis of production capacity leads to a strikingly different conclusion: there will be a large, unprecedented build-up of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil could grow by 16 million barrels a day – from 85 million barrels per day to 101 million barrels a day – a 20% increase. ”
Yergin predicts additional supplies will come from Canada, Kazakhstan, Brazil, Azerbaijan, Angola and Russia. Among Opec countries, he detects significant growth potential in Saudi Arabia, Nigeria, Algeria and Libya.
He insists his organisation’s forecasts are not speculative. “Many of the projects that embody this new capacity are already under development and were approved in the 2001-03 period, based on price expectations much lower than current prices.”
Above is pretty well in line with the price for 2005 that Michael Lynch predicted last year....and we're around double that right now. The age old issue is again putting in an appearance - 'economists are always a whole lot better at finding oil than geologists'. So much so, in fact, that geologists sometime express the view that they wish the economists would send them the UTM coordinates of the 'prospects' they have identified....would save a bunch of seismic interpretation. Colin Campbell explained a historic example to us at the Depletion-Scotland (Edinburgh) workshop in April'05 - back in 1960 he was prospecting for oil in the interior of Columbia but the financial officers in the company insisted they prospect on the coast instead where infrastructure was in place and transportation costs were much lower. Colin tried to explain that 'there was geologically very unlikely to be any oil there' but the 'bean counters' carried the day and it was to be 25 years before someone had the courage to fund exploration in the interior and thus make a discovery. LOL.bigfish said:http://www.sundayherald.com/51252
Sandy Nairn, founding partner of investment management house Edinburgh Partners, is no less optimistic. He believes that given the long-term realities of supply and demand, the current oil price should, in fact, be no higher than the mid 30s – [around $35 per barrel].
Dr Hirsch is an ex VP of ARCO, here is outline CV I've tracked down for him: Dr Robert L Hirsch .bigfish said:<snip>
Well, another “official” report and surely a good read, but so what. I would expect to find at the bottom of it the usual disclaimer stating that the DOE does not necessarily endorse the views reperesented in this report… And who is Robert L. Hirsch? I've never heard of him until now.
zceb90 said:Dr Hirsch is an ex VP of ARCO, here is outline CV I've tracked down for him: Dr Robert L Hirsch .
Bernie Gunther said:... Abiotic oil, as anything more than a lab curiosity, seems to me a bit of a fairy story for people who don't want to take the issue seriously and deal with it.
So, let me be quite clear about this. You cleverly laid a trap, by leaving out the one paragraph of the article that contradicted what you were trying to claim.bigfish said:Yes, that was my Pavlov's Dog experiment. Thanks for confirming the expected result by homing in on it.
Let's not loose sight of where Dr Hirsch used to work as VP i.e. Arco. On February 10, 1999 Arco chairman, Mike R. Bowlin, addressed an industry meeting with the words 'the world is entering "the last days of the Age of Oil," and the energy industry must respond wisely or face the consequences' Arco CEO Speech, Feb 10, 1999 . As for Arco's actions, within a year they had 'merged' with (sold out to?) BP (then BP-Amoco). On this basis even if one is uncomfortable with the background of a few individuals once multi-billion dollar corps. with access to some of the best oilfield experts start to 'vote with their feet' I for one try to take notice.bigfish said:ARCO, Exxon.. Hirsch is straight out of the Rockefeller domain, just like Campbell and Leherrere and most likely Simmons the billionaire energy banker too.
No thanks!
I thought the report was very useful. I don't agree with his priorities in mitigation, because he's coming from a mainstream US point of view, but he's thought clearly and intelligently about that mitigation, about what is feasible and what isn't, which is in itself valuable.zceb90 said:<snip> If I recall correctly Hirsch's report deals primarily with options for mitigation of the worst impacts of PO rather than dwell over much on the date of the peak itself (which, as we've said, depends on many variables including much 'suspect' data on reserves). To this end I and many others feel that Hirsch and his team have done a good job. Very few experts still believe in 'no peak' and once we have accepted that peaking is inevitable and given the lead time of 2 decades + for major infrastructure changes that the declines are likely to require it would seem most prudent to start planning for such changes now rather than wait for the declines to hit. On this basis I'm confident that Hirsch has produced a valuable report.
Again I'm guided by the actions of the oil companies themselves. One of the UK N Sea 'elephants', Forties, virtually made BP in the N Sea and yet they sold it to Apache about 3 years ago. At that time Forties had produced some 2.5 Gbbls but output, which peaked in 1978 at 500k bopd, was already down to 45k bopd i.e. a decline of some 91% in just 24 years. BP also disposed of the nearby Montrose and Arbroath fields acquired in 1999 via the Amoco 'mega-merger'.Bernie Gunther said:With the exception of a few economists who place their faith in markets to make new fields appear as if by magic, most qualified opinion puts world conventional oil peak somewhere between in the next couple of years and say 2025 or so.
If abiotic oil is to prevent the occurrence of that peak, it would need to be making a difference by now. It isn't.
It is making no evident difference to production. It is making no impact anywhere but in a few curious lab results (... and apparently also as a matter of faith in what seems to be some sort of ongoing shit-fight between two rival factions of online 911 conspiracy theorists. Which is getting tiresome whenever those standards of evidence and debate spill onto this thread.)
The US lower 48 is in a fairly advanced stage of depletion already and the North Sea is not far behind. If this deus ex-machina was going to make any difference, I think that we'd have noticed by now.
Unless of course *they* are keeping all that secret oil to themselves ....
Thanks for the comment; I'll admit that I'm not new to this subject even though I'm new to the board!Bernie Gunther said:Quite so. Unfortunately a system has evolved hellbent on maximising that rate of exploitation (and consequently decline) whatever the human cost.
Wicked first post by the way
Oil at record $68 as demand soars
Oil prices have hit a record $68 a barrel after the US reported a fall in gasoline stocks, while China said its crude imports had risen sharply.
(Sums done for us here).One of the main consequences of these production trends was the rebalancing in a relative short period of time of the crude types produced by non-OPEC, as measured by API and sulphur content. In 2000, non-OPEC crude output was 66 mb/d and the split of non-OPEC crude production by light (>35 API), medium (26 to 35 API), and heavy (<26 API) was approximately 41%, 44%, and 15%, respectively. However, in 2004 with production at 70 mb/d, the split was 34%, 49%, and 18%, respectively. In terms of sulphur content, 47% of crude production in 2000 was sour (sulphur >0.5%) whilst in 2004 it was 51%. These changes can be explained by the fact that the net increase in non-OPEC crude production was 73% medium and 26% heavy in API terms, and was predominately sour, while at the same time there was a net loss in light, primarily sweet crudes (see Graph 1)...
cont.
source (I'd recommend this source for further information on organic geochemistry, I used it extensively here)White thereby concluded, as already done by T.S. Hunt, that the formation of petroleum and natural gas reservoirs and coalification were two aspects of the same mechanism of progressive transformation of organic matter in the sediments during their burial. He also stated that the intensity of this transformation could be calibrated with a simple parameter, the carbon content of the coals found in the sedimentary series.
Katrina damage raises oil prices
The clean up after Katrina may take months and cost billions of dollars
Oil prices remained high on Wednesday as initial reports showed Hurricane Katrina had caused extensive damage to facilities in the Gulf of Mexico.
As the US Coast Guard said seven rigs were adrift and eight refineries had closed down, US light crude hit $70.48 a barrel in early Far East trade.
On Tuesday US light crude touched a fresh record high of $70.85, before falling back to close at $69.81.
Gas production has also been hit in the US, sharply increasing its prices too.
Damage assessments
Anglo-Dutch oil giant Shell was one of many firms to see damage to its Gulf of Mexico facilities.
The scary thing is that the hurricane season is not over yet...so I don't see prices coming down
Aerial photos have shown significant damage to the top of its giant Mars platform.
The rig usually produces 220,000 barrels of crude and 220 million cubic feet of natural gas per day.
"The markets are jumpy amid all the uncertainty and confusion, with much offshore production still shut in," said oil analyst Tom Wallin of Energyintel.
"Initial damage assessments from companies are mixed, but the rumours on the second day are that the damage could be heavy and extensive, supply curtailments could be long."
Bernie Gunther said:... A key breakthrough occurred when Treibs, A. (1934) published "Chlorophyll und Häminderivate in bituminösen Gesteinen, Erdölen, Erdwachsen und Asphalten. " Ann. Chem. 510, 42-62 in which he demonstrated that porphyrins, organic compounds found in oil formations, have a very strong resemblance to chlorophyll, being derived by chopping off the phytl side-chain and retaining the tetrapyrolic molecule. This work has been extended today into a fairly sophisticated understanding of organic biomarkers in oil deposits.
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.