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

More on the creation of artificial scarcity

The Foundation for Taxpayer and Consumer Rights (FTCR) have exposed internal oil company memos that clearly show how the industry intentionally set about reducing US domestic refining capacity in order to drive up gas prices and their profits.

http://snipurl.com/hjbl
 
Businessweek said:
This increasing recoverability, and not dramatic new discoveries of oil, explains why Russia's proven reserves keep shooting up.
Click to expand...

It may well be, that much of the latest field exploration phase has been completed and that the next phase, of bringing discovered inventories on stream and maximizing their potential, is now gathering momentum. I have pointed out elsewhere in this thread, that the oil industry does not explore unnecessarily for additional reserves of petroleum once its stock inventories have reached an optimum size, as this would then lead to a misallocation of industry resources and thereby a fall in profitability. In any event, the Russian oil industry is fully cognizant of the real nature of planets Earth's petroleum system and so knows better than anyone else that oil and gas is actually abundant and accessible to them.

Leading oil commentator Daniel Yergin, president of the Boston Massachusetts-based Cambridge Energy Research Associates (CERA), as previously cited, says: “... there will be a large, unprecedented build-up of oil supply in the next few years" and that "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.
 
UK to firm up market by freeing oil reserves
THE United Kingdom is to release 73,000 barrels of oil reserves a day for the next month to help the global market cope with the after-effects of the devastating Hurricane Katrina, it was announced yesterday.

The move is part of a decision by the Paris-based International Energy Agency (IEA) to make emergency plans to release two million barrels of oil reserves. The UK's contribution amounts to about 3 per cent of this country's total reserves.


This is the first time reserves have been released since the Gulf war more than a decade ago. Tony Blair, the Prime Minister, was told about the decision yesterday.

Energy minister Malcolm Wicks said it was important to have a global response to the disaster. He said: "We have all been saddened by the tragedy still unfolding in the United States. This co-ordinated response will free up extra supplies to help the market deal more effectively with the disruption caused by Katrina.

"This is a global oil market and so a multilateral response is the right way forward."

He added that the aid would not have an effect on the British consumer. "There is absolutely no reason to think that UK industry cannot continue to meet our needs. Stocks over and above normal demand are held specifically to enable us to respond to disruptions of this kind."

Hurricane Katrina damaged or displaced an estimated 58 Gulf of Mexico oil platforms and drilling rigs, according to the American Petroleum Institute.

The US has lost production of about 42 million gallons of petrol a day, equal to 10 per cent of its normal consumption.
Click to expand...
http://news.scotsman.com/topics.cfm?tid=1327&id=1883852005
 
Sorry for this aside, but can anyone tell me when oil prices are likely to go down by a goodly amount? In just over two years petrol prices here in thailand have now more than doubled. I'm getting fed up with it!
 
fela fan said:
Sorry for this aside, but can anyone tell me when oil prices are likely to go down by a goodly amount? In just over two years petrol prices here in thailand have now more than doubled. I'm getting fed up with it!
Click to expand...
That's the thing, fela. If the thesis of this thread holds true, the answer is never.
 
Good Intentions said:
That's the thing, fela. If the thesis of this thread holds true, the answer is never.
Click to expand...

Ah, well if you're right GI then the thesis is wrong, coz i'm sure they will go down, i just wish it would hurry up!
 
I think we won't know when the thesis of this thread holds true until after it's happened. Initially, the effects predicted would be hard to distinguish from a shortage caused by lack of refining capability and prices can rise and fall for all sorts of reasons that are nothing to do with the amount of oil available.
 
bigfish said:
It may well be, that much of the latest field exploration phase has been completed and that the next phase, of bringing discovered inventories on stream and maximizing their potential, is now gathering momentum. I have pointed out elsewhere in this thread, that the oil industry does not explore unnecessarily for additional reserves of petroleum once its stock inventories have reached an optimum size, as this would then lead to a misallocation of industry resources and thereby a fall in profitability. In any event, the Russian oil industry is fully cognizant of the real nature of planets Earth's petroleum system and so knows better than anyone else that oil and gas is actually abundant and accessible to them. <snip>
Click to expand...
Well if it turns out like that, I'll be surprised but I don't claim it's impossible. Meanwhile, it seems like a low probability in the absence of proof that abiotic oil has made a difference somewhere. So I'll carry on focussing on the high probability case.
 
On abotic oil...
bigfish said:
Because it demolishes the ludicrous idea that petroleum is constrained by a finite amount of biomass laid down in sedimentary basins millions of years ago and establishes the idea that it evolves by way of a continuous process happening at the Earths mantle... a process that is constrained only by the amount of carboniferous material laid down by meteorites crashing into the Earth over eons of time in its evolutionary formation. In effect petroleum is an infinite resource, because it permeates the universe.
Click to expand...

In my opinion the abiotic oil theory is absolute bunkum and has no impact on the imminent peaking of global oil extraction. See this points:

The fact remains that the abiotic theory of petroleum genesis has zero credibility for economically interesting accumulations. 99.9999% of the world's liquid hydrocarbons are produced by maturation of organic matter derived from organisms. To deny this means you have to come up with good explanations for the following observations.

1) The almost universal association of petroleum with sedimentary rocks.

2) The close link between petroleum reservoirs and source rocks as shown by biomarkers (the source rocks contain the same organic markers as the petroleum, essentially chemically fingerprinting the two).

3) The consistent variation of biomarkers in petroleum in accordance with the history of life on earth (biomarkers indicative of land plants are found only in Devonian and younger rocks, that formed by marine plankton only in Neoproterozoic and younger rocks, the oldest oils containing only biomarkers of bacteria).

3) The close link between the biomarkers in source rock and depositional environment (source rocks containing biomarkers of land plants are found only in terrestrial and shallow marine sediments, those indicating marine conditions only in marine sediments, those from hypersaline lakes containing only bacterial biomarkers).

4) Progressive destruction of oil when heated to over 100 degrees (precluding formation and/or migration at high temperatures as implied by the abiogenic postulate).

5) The generation of petroleum from kerogen on heating in the laboratory (complete with biomarkers), as suggested by the biogenic theory.

6) The strong enrichment in C12 of petroleum indicative of biological fractionation (no inorganic process can cause anything like the fractionation of light carbon that is seen in petroleum).

7) The location of petroleum reservoirs down the hydraulic gradient from the source rocks in many cases (those which are not are in areas where there is clear evidence of post migration tectonism).

8 ) The almost complete absence of significant petroleum occurrences in igneous and metamorphic rocks (the rare exceptions discussed below).

The evidence usually cited in favour of abiogenic petroleum can all be better explained by the biogenic hypothesis e.g.:

9) Rare traces of cooked pyrobitumens in igneous rocks (better explained by reaction with organic rich country rocks, with which the pyrobitumens can usually be tied).

10) Rare traces of cooked pyrobitumens in metamorphic rocks (better explained by metamorphism of residual hydrocarbons in the protolith).

11) The very rare occurrence of small hydrocarbon accumulations in igneous or metamorphic rocks (in every case these are adjacent to organic rich sedimentary rocks to which the hydrocarbons can be tied via biomarkers).

12) The presence of undoubted mantle derived gases (such as He and some CO2) in some natural gas (there is no reason why gas accumulations must be all from one source, given that some petroleum fields are of mixed provenance it is inevitable that some mantle gas contamination of biogenic hydrocarbons will occur under some circumstances).

13) The presence of traces of hydrocarbons in deep wells in crystalline rock (these can be formed by a range of processes, including metamorphic synthesis by the fischer-tropsch reaction, or from residual organic matter as in 10).

14) Traces of hydrocarbon gases in magma volatiles (in most cases magmas ascend through sedimentary succession, any organic matter present will be thermally cracked and some will be incorporated into the volatile phase, some fischer-tropsch synthesis can also occur).

15) Traces of hydrocarbon gases at mid ocean ridges (such traces are not surprising given that the upper mantle has been contaminated with biogenic organic matter through several billion years of subduction, the answer to 14 may be applicable also).

The geological evidence is utterly against the abiogenic postulate.
link
Click to expand...

I used the term imminent earlier, I say this because we know that:

Major individual countries have already peaked (America, Norway, Venezuela, UK, Indonesia etc.).
Individual companies have peaked (Chevron, Exxon, Shell, Total) (link).
Individual grades of oil have peaked (Light sweet crude) (link).

The only thing left to peak is total all oil extraction rates for which the experts predict 2007/8.
 
clv101 said:
On abotic oil...


In my opinion the abiotic oil theory is absolute bunkum and has no impact on the imminent peaking of global oil extraction. See this points:



I used the term imminent earlier, I say this because we know that:

Major individual countries have already peaked (America, Norway, Venezuela, UK, Indonesia etc.).
Individual companies have peaked (Chevron, Exxon, Shell, Total) (link).
Individual grades of oil have peaked (Light sweet crude) (link).

The only thing left to peak is total all oil extraction rates for which the experts predict 2007/8.
Click to expand...

Welcome to the cult.
 
The other day I started a somewhat related thread over on UKP.

Just thought I'd leave a pointer to it here.

Sustainability vs standard of living ... ?

edited to add: I've often wondered if behind bigfish's need to claim peak oil (and perhaps also climate change etc?) is a big oil company conspiracy, is a genuine concern about the impact of measures aimed at sustainability on material progress. I think this might also be something to do with the broader left's apparent diffidence towards sustainability issues.

I think this sort of thing would be a concern and a legitimate one to pursue, so I thought it might be a good idea to start a UK politics thread about it.
 
Can't find the report - BBC I think - but I read earlier LA had had another power cut with lots of businesses affected as a result.
 
Oil Demand + Exponential Growth

I wrote this post in response to a debate on the planned fuel tax protests, thought I would share it with this forum:

Let's assume that the peaking of oil production will be postponed so that it's something for future generations to worry about. Btw peak oil is certain to occur but for now let's put it on the 'back burner'.

Demand for oil between 2004 and 2005 has increased by 3.7%. Why is this? Well people in OECD nations, especially the US, have been on a steady trend towards buying vehicles with greater engine efficiency but these efficiency gains have been offset by extra power, weight or add-ons (such as air conditioning, automatic transmission etc). All these things are nice for drivers and passengers to have but they all require extra fuel. One only has to look at many roads today and you can see powerful saloons, sports models and SUV's - all use far more fuel than (say) a VW Polo. At the same time average annual distances have increased steadily, again using more fuel.

Now let's look at China where it's own auto industry is adding 530,000 units to their roads every month (and that excludes vehicles imported into China). All require between 60 and 70 bbls oil equivalent to manufacture and then will require fuel over their lifespan.

Now 3.7% growth does not sound much but let's take a look at some arithmetic to see what it really means. The first key point is that the 3.7% pa is not linear but is exponential. In other words it's 3.7% on an amount which is itself increasing each year. I'll not go into the laws of natural logarithms but simply state here that if we divide the growth rate into the constant of 70 the result is the number of years for the amount we started with to double.

The result is actually 18.91 years but we'll call that 19 years for simplicity. Therefore at just 3.7% pa growth rate oil demand doubles in just 19 years. (You can easily check this using a hand calculator, start with '1' and multiply by 1.037 a total of 19 times.

Now let's consider what happens when 3.7% growth in oil demand persists for a typical human lifetime i.e. 80 years. Believe it or not consumption would increase no less than 18.5 times! With world oil demand currently running at 84 million bbls/day (bopd) that would mean we would need to find an additional 1470 million bopd (or 1.47 billion bopd). What does that mean in terms of oil provinces? Well it means we simply need to find another 507 oil provinces the size of the UK North Sea (at peak) or another 147 Saudi Arabia's (and neither allow for ongoing depletion in mature oilfields).

Now most people faced with the above numbers would say 'that's impossible'...and I'd totally agree with them. Even if the reserves were out there no one would want to live in a world where so much was being consumed. The question now arises - 'when do we stop the 3.7% exponential growth?' Do we stop it now, in 5 years time, in 10 years time or when the current generation have all died?

The point I'm getting at here is, peak oil or no peak oil, current trends are totally and utterly unsustainable. So how do we stop demand growing - do we go to China and US and try to persuade folks there to drive less? Do we impose worldwide rationing and if so would all Governments agree to do so? Or do we simply let the market price of oil impose the rationing for us?

I don't have the answers but I do know that we cannot continue present trends. One of the main reasons why US is currently consuming so much gasoline is that it's been so cheap there for decades. US has 5% of the world's population but consumes 25% of the world's oil and 46% of the world's gasoline. China apart, US consumption patterns is one of the main reason why fuel prices have risen so much recently.

Do we really want to encourage UK to embark on a US type consumption 'party' by substantially reducing fuel taxation?

Chris
 
Offshore Europe 2005 Conference Item - Delaying the Peak

I attended OE 2005 conference and exhibition on a couple of separate days last week. At the conference session I attended one of the agenda items was 'Delaying the Peak' - I took some extensive notes at the time and posted them on another forum. As they are quite long I don't propose to post them again here (unless forum moderator asks me to) so here is link to my conference notes: OE 2005 - Delaying the Peak - Notes

Chris
 
Backatcha Bandit said:
Gordon Brown said this morning:

"..this is, at root, a problem of demand outstripping supply.."
Click to expand...

That'll be demand for refined petroleum products outstripping refining capacity, no?

Prior to hurricane Katrina, US refining was running at around 96 percent of total capacity. In Europe capacity is said to be running at up to 95 percent. Nothing runs for any length of time when it's maxing out at 95/96 percent.

Even if more crude oil is exported to the US and Europe, the fact remains it will not alleviate the problem of under supply at the petrol pumps, because refined petroleum is ultimately limited by the capacity to refine it. It really is that simple.

So who owns the refineries?

Why the Slippery Sisters, of course... who else?

Factor in the planned blockade of UK motorways and refineries by messrs rent-a-mob and you've got a political recipe for a developing state of panic, fueled by synthetic FEAR, resulting from manufactured artificial scarcity.

The three internal memos from Mobil, Chevron and Texaco, linked below, illustrate how the Slippery Sisters have set about reducing (US) refining capacity in a concerted effort to increase their profits.

http://www.consumerwatchdog.org/energy/fs/


Knight Ridder: Running full throttle, U.S. refineries still can't meet demand for gas

But, anyway, don't let any of these rather uncomfortable facts get in the way of your "peak oil" cult fantasies, whatever you do.
 
zceb90 said:
<snip> Let's assume that the peaking of oil production will be postponed so that it's something for future generations to worry about. Btw peak oil is certain to occur but for now let's put it on the 'back burner'.

Demand for oil between 2004 and 2005 has increased by 3.7%. <snip>

The point I'm getting at here is, peak oil or no peak oil, current trends are totally and utterly unsustainable. So how do we stop demand growing - do we go to China and US and try to persuade folks there to drive less? Do we impose worldwide rationing and if so would all Governments agree to do so? Or do we simply let the market price of oil impose the rationing for us? <snip>
Click to expand...
While "letting markets solve it" seems the likely response of our governments, I think that probably means people starving, freezing etc.

I don't think you can have capitalism and not have 'exponential' growth ...

... but this is straying onto the territory of the other thread over in UKP.
 
bigfish said:
Welcome to the cult.
Click to expand...

Alternatively to making unsupported accusations of cult membership you could of course have tried to refute the poster's points.

Perhaps you're unable to?
 
ViolentPanda said:
Alternatively to making unsupported accusations of cult membership you could of course have tried to refute the poster's points.

Perhaps you're unable to?
Click to expand...
Refuting it would be beside the point in this case. I'm pretty sure none of us are seriously arguing that the present fuel shortage is the arrival of peak oil. It might be, but we won't know that until later. Most probably it's not.
 
Bernie Gunther said:
While "letting markets solve it" seems the likely response of our governments, I think that probably means people starving, freezing etc.

I don't think you can have capitalism and not have 'exponential' growth ...

... but this is straying onto the territory of the other thread over in UKP.
Click to expand...

Who says the growth has to be at the expense of non-renewable resources? Can there not be growth in a closed system, whereby improving technology lets us make better use of the things our predecesors threw away? (that's a crude way of putting it though :)) - Or, create wealth from the creation of ideas or information?

Devil's advocate of course - I pretty much agree with you.
 
I am interested in what possible circumstances there culd be that would cause bigfish to change his mind.

I mean, if you go with the theory that oil is in abundance and that any supply constraints are artificial, what would make you change your mind?

If signs of peak oil appear, cant you just dismiss them as industry-manipulation for the sake of profit?

I guess this is something we are going to have to get used to. Whilst in the past, peak oil has been dismissed because it hasnt happened yet, after it does happen it looks like theres going to be plenty of alternative theories about what is going on.

Personally as I am not monitoring the globes oil resporces personally, by turning up and investigaing each reserve, I will have to use some logic or other to rule theories in or out.

For example, what if things keep getting worse and there are all sorts of economic disasters, decline in standards of living, possible wars, and prolonged genuine shortages of supply?, Will the theory that its being done for profit still hold true if there is so much damage caused as a result?

Are governments likely to accept massive declines in national income? I mean Im in the UK and the North sea output is going down every year, am I supposed to believe that the government would tollerate such a thing? Governments and big business may well stitch things up to suit themselves when its mutually beneficial, but when one party starts to lose out I wouldnt expect to see such arrangements continue.

If Russias output starts to decline will the Abiotic stuff lose any credibility in your mind?

Personally the Abiotic stuff is the cult theory to me, stink of flat earther mentality. And the stakes are higher with your theory. If the Peak Oil theorists are wrong, so what? If you are wrong and the world based its planning on infinite oil theories, then it starts to run out, big problem! In this way, no matter which theory is actually right, peak oil represents sensible concern and responsibility for potential problems ahead, abiotic stuff represents reckless negligence.
 
Crispy said:
Who says the growth has to be at the expense of non-renewable resources? Can there not be growth in a closed system, whereby improving technology lets us make better use of the things our predecesors threw away? (that's a crude way of putting it though :)) - Or, create wealth from the creation of ideas or information?

Devil's advocate of course - I pretty much agree with you.
Click to expand...
I think a closed system can grow in complexity but by definition, if it's closed, the resources out of which it builds that complexity are the ones it started with.

At the start of the industrial revolution, the average worker spent a very high proportion of their income on food. Industrialising agriculture changed that over time, but industrial agriculture depends on using lots of fossil fuels. It's not only "technology" that radically reduced the labour costs involved in food production, technological innovation was involved, but what powers it are fossil fuels and the difference that this technology can make is limited by their availability (to say nothing of the damage industrial farming does in terms of degrading the ecosystem services on which agriculture depends)
 
bigfish said:
That'll be demand for refined petroleum products outstripping refining capacity, no?
Click to expand...
No.

What Brown said again (with subsequent sentence intact for the benefit of your good self):

"Because this is, at root, a problem of demand outstripping supply, OPEC must respond at its meeting on 19 September to rising demand by raising production,"

http://today.reuters.co.uk/news/new...H334775_RTRUKOC_0_UK-ENERGY-BRITAIN-BROWN.xml

That'll be demand for Crude Oil (That's demand from the refineries) outstripping our ability to get it out of the ground fast enough.

What would be the point of the 'Slippery Sisters' building more refining capacity if they knew damn well that there was insufficient crude feedstock to refine?

This whole idea of blaming refining capacity bottlenecks for high crude prices just doesn't make sense to me. Does it to anyone else? :confused:
 
bigfish (a few posts back) said:
Leading oil commentator Daniel Yergin, president of the Boston Massachusetts-based Cambridge Energy Research Associates (CERA), as previously cited, says: “... <snippity-snip... PLOP!>
Click to expand...

Who? :confused:

Ah!

Daniel Yergin is secretary of American Friends of Atlantic Partnership.*

He is chairman of Cambridge Energy Research Associates and Vice Chairman of the Global Decisions Group.

Dr. Yergin is a member of the Board of the United States Energy Association, a member of the National Petroleum Council and a director of the New American Foundation
He is also a member of the US Secretary of Energy's Advisory Board and chaired the US Department of Energy's Task Force on Strategic Energy Research and Development.

He is part of the Merrill Lynch Forum.

Daniel Yergin appears to be well connected to the multinational oil interests and foreign affairs groups.

http://www.sourcewatch.org/index.php?title=Daniel_Yergin
Click to expand...

Ooh! :eek:

*Let's take a quick glance at that one, a moment:

The Atlantic Partnership is an organisation to promote links between the United States and Europe.


Executive Committee

* Michael Howard QC MP - President and founding chairman

...

USA Trustees

* Richard Burt (Ambassador)
* Brent Scowcroft - former national security advisor, retired US General.


...


American Friends

* James Rubin - President
* Daniel Yergin - Secretary


Patrons

* John Major CH - United Kingdom
* Henry Kissinger - United States of America
* Lord Gilbert - United Kingdom
* Karsten Voigt - Coordination of German-American cooperation
* Antonio Martino - Italy [Italian Minister of Defence]
* Joseph R. Biden, Jr. - United States of America
* Alain Juppe - France [Former French Prime Minister]
* Eduardo Serra - Spain


Panellists

* Matthew d'Ancona Deputy Editor and commentator, The Sunday Telegraph
* Ed Heathcoat Amory Political columnist, the Daily Mail <snip>
Click to expand...
...plus Malcom Rifkind (former Tory Defence and Foriegn Secretary), General Colin L. Powell and one of Thatcher's old speech writers! What was that you were attacking Simmons for, again?

-

I'm starting to suspect that the CIA are manipulating the mind of bigfish and making him waste my time. :(

Time for a little 'fine tuning'. :)

-

If anyone (other than bigfish) thinks I should waste some bandwidth to address what Yergin is saying, rather than what he is, feel free to point me to anything he's written you agree with. ;)
 
Backatcha Bandit said:
This whole idea of blaming refining capacity bottlenecks for high crude prices just doesn't make sense to me. Does it to anyone else? :confused:
Click to expand...

Market prices aren't supposed to "make sense" - especially in a market heavily influenced by open-outcry trading.

They're supposed to reflect all possible information about the supply and demand for (in this case) a commodity.

In practice they're the sum of the traders' psychologies... modulo coke intake...
 
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