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

[888]

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...

Market prices are supposed to reflect the value of items. This is the new Divine Right of kings. In reality they're just the outcome of random processes.

 

[Backatcha Bandit]

"...traders' psychologies... modulo coke intake... random processes."

Thanks, Guys.

-

<Sound of footsteps receding, a door opens and closes, a pause... then a muffled 'Bang!'>

 

[clv101]

This whole idea of blaming refining capacity bottlenecks for high crude prices just doesn't make sense to me. Does it to anyone else?

Yes it does make sense. We are currently awash with crude oil, unfortunately crude is little use to anyone, it must be refined. Now we need to understand that not all crude is the same. It can be light, heavy, low or high sulphur. Historically most production has been light sweet (low sulphur) crude, this is the easiest and quickest to extract and more importantly refine so that's what the refineries are geared up to deal with and what has been extracted from the ground.

Now as everyone should know we are approaching global peak oil extraction rates, before this happens though we are going to peak in the good stuff, the light sweet oil. This has already happened, sometime between 2000 and 2004. The proportion of light sweet crude has fallen to be replaced by heavy sour crude. This shift in proportions has not (yet) been matched with a shift in refining capacity resulting in a shortage of light sweet crude and the price being bid up.

When people talk about the price of all they are always talking about light sweet oil.

 

[Bernie Gunther]

<snip> Now as everyone should know we are approaching global peak oil extraction rates, before this happens though we are going to peak in the good stuff, the light sweet oil. This has already happened, sometime between 2000 and 2004. The proportion of light sweet crude has fallen to be replaced by heavy sour crude. This shift in proportions has not (yet) been matched with a shift in refining capacity resulting in a shortage of light sweet crude and the price being bid up.<snip>

Ah Ok. Makes sense.

 

[fela fan]

I reckon you lot will make this thread outlast oil...

 

[Bernie Gunther]

Well, we've recently had a couple of very well informed new visitors to this thread. I for one am finding it interesting to hear what they have to say.

 

[fela fan]

Well, we've recently had a couple of very well informed new visitors to this thread. I for one am finding it interesting to hear what they have to say.

Ah, i weren't taking the piss man! Just cackling at my own joke. Doubtless the topic warrants such longevity.

One thought occcurs to me. If we needed earth and mud to fire our engines, i'd say that we'd have pretty much an inexhaustible supply of fuel.

Oil is required on the other hand, and that is found (mostly?) in the oceans. And oceans cover much more than half the surface of the world.

So couldn't we just expand that and say that there must be shedloads of oil left? I know this is totally unscientific, but often to me when there are two opposing sides to an argument, the debate carries on coz no-one can provide facts and proof to back their position.

To me it often comes down to simply what we believe can be the case.

 

[Bernie Gunther]

Well, in this case the evidence is pretty comprehensive. There *is* shitloads of oil left, but within some limits, we can make an estimate of how much. We can also tell very clearly when production has peaked for some region (e.g. US, UK North Sea oil/gas etc) or some particular type of oil (e.g. light sweet crude in the example above) Once production has peaked, you get less oil out of the ground for the effort you put in and production gets less and less.

The issue is that global demand is rising fast and that unlike the demand for pineapples say, that demand doesn't shrink much at all if you increase the price by some large multiple when there is less to go around relative to demand.

The reason for this is that over the course of the 20th century we redesigned our way of life around abundant cheap energy. By using oil in vast quantities, we were able to substantially reduce the labour cost of food production, leaving the average western worker with a big surplus over and above survival. We then invented ways for them to spend that money, e.g. on a car and consumer goods (again highly oil dependent commodities) and we re-arranged most of our settlement patterns so that they only make sense if you have a car and a supermarket to drive it to.

Meanwhile we encouraged most of the developing world, especially the bit you live in, to adopt the same industrial farming practices so they'd be able to leave village life and go work in factories to make more consumer goods. This means that much of the developing world, especially Asia, is very quickly trying to catch up with the unsustainable arragenments we have in the west.

All of that stuff goes to shit when you jack the price of oil up by some large multiple over a long period because it's scare relative to demand. This is a fairly worrying prospect and I can completely understand the desire to believe something else that's nicer.

 

[bigfish]

Raining hydrocarbons in the Gulf

One thought occcurs to me. If we needed earth and mud to fire our engines, i'd say that we'd have pretty much an inexhaustible supply of fuel.

Oil is required on the other hand, and that is found (mostly?) in the oceans. And oceans cover much more than half the surface of the world.

So couldn't we just expand that and say that there must be shedloads of oil left? I know this is totally unscientific, but often to me when there are two opposing sides to an argument, the debate carries on coz no-one can provide facts and proof to back their position.

To me it often comes down to simply what we believe can be the case.

Your thesis is not as unscientifically detached as you seem to imagine fela. In fact, what you imagine come pretty close to modern scientific understanding, in my opinion.

Here's an interesting piece that reflects to a certain extent your theory that petroleum may well be abundant in the oceans, though it's expressed in more technical terms:

Geotimes: Raining hydrocarbons in the Gulf

This canvas image of the study area shows the top of salt surface (salt domes are spikes) in the Gas Research Institute study area and four areas of detailed study (stratigraphic layers). The oil fields seen here are Tiger Shoals, South Marsh Island 9 (SMI 9), the South Eugene Island Block 330 area (SEI 330), and Green Canyon 184 area (Jolliet reservoirs). In this area, 125 kilometers by 200 kilometers, Larry Cathles of Cornell University and his team estimate hydrocarbon reserves larger than those of the North Sea. Image by Larry Cathles. ​

Cathles and his team estimate that in a study area of about 9,600 square miles off the coast of Louisiana, source rocks a dozen kilometers down have generated as much as 184 billion tons of oil and gas — about 1,000 billion barrels of oil and gas equivalent. "That's 30 percent more than we humans have consumed over the entire petroleum era," Cathles says. "And that's just this one little postage stamp area; if this is going on worldwide, then there's a lot of hydrocarbons venting out."

According to a 2000 assessment from the Minerals Management Service (MMS), the mean undiscovered, conventionally recoverable resources in the Gulf of Mexico offshore continental shelf are 71 billion barrels of oil equivalent. But, says Richie Baud of MMS, not all those resources are economically recoverable and they cannot be directly compared to Cathles' numbers, because "our assessment only includes those hydrocarbon resources that are conventionally recoverable whereas their study includes unconventionally recoverable resources." Future MMS assessments, Baud says, may include unconventionally recoverable resources, such as gas hydrates.

Of that huge resource of naturally generated hydrocarbons, Cathles says, more than 70 percent have made their way upward through the vast network of streams and ponds, venting into the ocean, at a rate of about 0.1 ton per year. The escaped hydrocarbons then become food for bacteria, helping to fuel the oceanic food web. Another 10 percent of the Gulf's total hydrocarbons are hidden in the subsurface, representing about 60 billion barrels of oil and 374 trillion cubic feet of gas that could be extracted. The remaining hydrocarbons, about 20 percent, stay trapped in the source strata.

Driving the venting process is the replacement of deep, carbonate-sourced Jurassic hydrocarbons by shale-sourced, Eocene hydrocarbons. Determining the ratio between the younger and older hydrocarbons, based on their chemical signatures, is key to understanding the migration paths of the oil and gas and the potential volume waiting to be tapped. "If the Eocene source matures and its chemical signature is going to be seen near the surface, it's got to displace all that earlier generated hydrocarbon — that's the secret of getting a handle on this number," Cathles says.

See also this Wall Street Journal article: Odd Reservoir Off Louisiana Prods Oil Experts to Seek a Deeper Meaning

All of which has led some scientists to a radical theory: Eugene Island is rapidly refilling itself, perhaps from some continuous source miles below the Earth's surface. That, they say, raises the tantalizing possibility that oil may not be the limited resource it is assumed to be.

"It kind of blew me away," says Jean Whelan, a geochemist and senior researcher from the Woods Hole Oceanographic Institution in Massachusetts. Connected to Woods Hole since 1973, Dr. Whelan says she considered herself a traditional thinker until she encountered the phenomenon in the Gulf of Mexico. Now, she says, "I believe there is a huge system of oil just migrating" deep underground.

Conventional wisdom says the world's supply of oil is finite, and that it was deposited in horizontal reservoirs near the surface in a process that took millions of years. Since the economies of entire countries ride on the fundamental notion that oil reserves are exhaustible, any contrary evidence "would change the way people see the game, turn the world view upside down," says Daniel Yergin, a petroleum futurist and industry consultant in Cambridge, Mass. "Oil and renewable resource are not words that often appear in the same sentence."

Then there is also the fuel that is locked in ice to consider:

The next frontier of energy exploration is beginning to open up as Canadian researchers take a leading role in a worldwide effort to tap into natural gas hydrates, a virgin resource that is twice as large as all other known deposits of oil and gas. Hydrates form when methane gas combines with water in cold conditions, under intense pressure.

U.S. Federal Reserve Board chairman Alan Greenspan ignited interest in this fire-trapped-in-ice resource last month in a speech to the petrochemical industry.

"In the more distant future, perhaps a generation or more, lies the potential to develop productive capacity from natural gas hydrates," he said, pointing out that the United States alone has 200 quadrillion -- or 200 million billion -- cubic feet of hydrates, by itself 33 times larger than the current worldwide reserves of natural gas.

"Peak"?

What "Peak"?

 

[elbows]

Well Im certainly prepared to consider that theres plenty we dont understand about oil yet, and that in some places there may be unusual activity. Are there any updates on that 1999 story about the gulf? I hope they have learnt more about it, its intreguing.

All the same, the kinds of nightmares that would occur with peak oil, will not be avoided even if some of this stuff is actually true.

What matters is results. Clearly we need millions more barrels per day of oil production in order for the current economic system to function properly.

They can find oil in regions previously cut off by ice, they could find a special hole that leaks oil continuosly from the mysterious depths of the planet, hell they could find a special breed of cat that secretes oil, and that still doesnt mean we'd be saved. We need more than just discoveries. We need to not only replace those fields which are definately declining, but to keep up with ever strengtheneing demand. We need actual production results and we need them sort of now.

I think its now too late to avoid at least some sort of economic crisis. Even if it isnt peak oil and just a temporary glitch, the supply/demand numbers have gone wrong, the cusion is too small. As someone else mentioned, the refining is now an issue because its mostly Saudi who can increase supply and all they seem to have to offer in that regard is heavy sour stuff. Is our declining North sea light sweet stuff?

So the question is not whether there is an energy crisis, it is whether this is a short-term crisis or the beginning of the long main peak oil crisis. At best if the optimists are correct, we will have a rocky ride for the next few years whilst measures such as increasing refining capacity & redoubling exploration efforts, and putting more effort into studying other theories, are put in place to fix the short crisis.

As Im not an optimist and see the above measures as likely only to help manage the crisis for a while rather than end it, I expect to see demand reduction as inevitable because its the only solution that will make the numbers add up. Once the numbers translate into reality on the ground in terms of supply, this will become obvious to more and more people.

 

[slaar]

Can't remember Lovins being mentioned here yet, so thought I'd throw him into the mix:

http://www.rmi.org/

He's very much from the engineering perspective, showing what enormous waste we create and how easy (and profitable for private enterprise) it actually is to get rid of it. Interesting guy, certainly no panacea but an example of some of the savings that could fairly easily be made given tightening resource constraints.

 

[Bernie Gunther]

Lovins is the natural capitalism guy right? Proper accounting of resources etc? One thing that puzzles me about that stuff, although I haven't read much. How does he do away with the "grow or die" aspect of capitalism?

All that M-C-M' stuff?

 

[Ae589]

Bigfish, from your article:

"their study includes unconventionally recoverable resources"

They estimate there is oil there that is economically unviable to retrieve. It doesn't really help us, does it?

Peak oil is about oil getting more scarce, and more expensive to use. I think your post sums that up.

 

[slaar]

Bigfish, from your article:

"their study includes unconventionally recoverable resources"

They estimate there is oil there that is economically unviable to retrieve. It doesn't really help us, does it?

Peak oil is about oil getting more scarce, and more expensive to use. I think your post sums that up.

That misses the entire point of economists (those eternally optimistic creatures) that technology constantly improves to get more and more oil out of the ground. Up to this point, they appear to have been vindicated.

 

[Ae589]

Up to this point, they appear to have been vindicated.

Have they been vindicated, or is OPECs price-fixing hiding the additional expense?

 

[slaar]

Have they been vindicated, or is OPECs price-fixing hiding the additional expense?

Indeed, that's where it gets messy. Only time will tell, frankly I don't think half the oil industry knows, let alone those of us, like me, outside the industry looking in with interest.

 

[clv101]

That misses the entire point of economists (those eternally optimistic creatures) that technology constantly improves to get more and more oil out of the ground. Up to this point, they appear to have been vindicated.

No they haven't, when it comes to oil extraction it's a myth that 'technology' improves ultimate recovery. What technology has enabled is faster recovery of the same (or even sometimes smaller) quantity of oil. Technology allows the rate of extraction it rapidly increase to very high rates, quickly however the rate of extraction falls rapidly leaving the total amount of recovered oil about the same as it would have been using '50s technology.

 

[elbows]

Again, even if we give the benefit of the doubt to the idea that technology will enable more of the oil to be extracted, will it be enough to counteract the affects of increased demand and depletion?

As I cannot personally vaidate the science, Im just left wondering about it from another perspective. If these technological saviours were going to be enough to make a big difference, why hasnt the US been able to utilise them to increase its own domestic oil exxtraction rates? Everything discovered and invented has not been enough to return the USA to production levels seen at the start of the 70's.

At best it can slow the speed of decline, at worst it has helped accelerate the decline. Again I believe the North Sea is probably a good example, the speed of the decline in output seems to have caught them offguard, and is likely due to extraction methods used to drive the ultimate peak output higher. All these technologies could have been used to soften the nightmare of global output decline, but instead its been used to keep production as high as possible, to keeep trying to meet demand, but when it can no longer keep up the production decline will be more dramatic.

 

[Bernie Gunther]

No they haven't, when it comes to oil extraction it's a myth that 'technology' improves ultimate recovery. What technology has enabled is faster recovery of the same (or even sometimes smaller) quantity of oil. Technology allows the rate of extraction it rapidly increase to very high rates, quickly however the rate of extraction falls rapidly leaving the total amount of recovered oil about the same as it would have been using '50s technology.

Which in itself is ominous, because it implies that the current attempts to increase production in line with demand, in order to avoid immediate political problems, are likely to cause a more rapid drop-off to occur in the future.

edited to add: I see elbows had the same thought ...

 

[fela fan]

Bigfish, from your article:

"their study includes unconventionally recoverable resources"

They estimate there is oil there that is economically unviable to retrieve. It doesn't really help us, does it?

Peak oil is about oil getting more scarce, and more expensive to use. I think your post sums that up.

I know this has been replied to, but i'd like to address this post, together with what seems to be a widely-held belief, indeed probably a taken: that demand for oil will continue to rise, which is stated certainly as if there can be no other alternative.

To me, if technology improves (probably not open to argument, only how fast and in what direction), then it can extract oil that is currently deemed uneconomical to extract, thereby delaying 'peak oil' (if there is such a thing); while at the same time it can decrease our demand and need for oil.

I've recently become aware of a technology i'd only heard of in name before. But having been told a lot more about it, i wish to learn much much more and have in fact meant to start a thread on it. But since it sounds to me like it's very pertinent to this thread, let me ask posters what they know about nano-techology and how it might apply to both extraction of oil and lessening our demand for it.

[apologies if it's come up on this thread, it's now way too long for me to read through it all!]

 

[slaar]

No they haven't, when it comes to oil extraction it's a myth that 'technology' improves ultimate recovery. What technology has enabled is faster recovery of the same (or even sometimes smaller) quantity of oil. Technology allows the rate of extraction it rapidly increase to very high rates, quickly however the rate of extraction falls rapidly leaving the total amount of recovered oil about the same as it would have been using '50s technology.

That's one part of it, but clearly not the only one. Just as one example, there are previously uneconomic sources of oil (i.e. at the bottom of the Gulf of Mexico) that with modern drilling and rig technology have become extractable, in huge quantities. The same goes for exploration tecniques.

 

[slaar]

Again, even if we give the benefit of the doubt to the idea that technology will enable more of the oil to be extracted, will it be enough to counteract the affects of increased demand and depletion?

As I cannot personally vaidate the science, Im just left wondering about it from another perspective. If these technological saviours were going to be enough to make a big difference, why hasnt the US been able to utilise them to increase its own domestic oil exxtraction rates? Everything discovered and invented has not been enough to return the USA to production levels seen at the start of the 70's.

At best it can slow the speed of decline, at worst it has helped accelerate the decline. Again I believe the North Sea is probably a good example, the speed of the decline in output seems to have caught them offguard, and is likely due to extraction methods used to drive the ultimate peak output higher. All these technologies could have been used to soften the nightmare of global output decline, but instead its been used to keep production as high as possible, to keeep trying to meet demand, but when it can no longer keep up the production decline will be more dramatic.

The Hubbard's Peak phenomenon is based on US experience, because so much of the country has been drilled and explored. The same is not true in much of the rest of the world.

Will these effects be enough to offset depletion? Nobody knows. They certainly will partially offset it though, rendering invalid the more extreme Peak Oil predictions. As for the race between technology and energy depletion that is the key subject of this thread, it's not clear what will happen, but what is certain is that rates of oil consumption will fall with economic growth if the price gets too high and spur innovation. Whether it will be "enough" I have absolutely no idea.

fela - AFAIK nano-technology is in the very early stages of development, but there's certainly lots of potential there.

 

[fela fan]

fela - AFAIK nano-technology is in the very early stages of development, but there's certainly lots of potential there.

I don't think that's what i was told (that it's in the early stages), but i'm seeing my mate tonight who told me about it all. It was fascinating at the time but we only spent an hour talking about it. From what he described at the time i recall clearly thinking how much less energy we'd need. But i can't remember why i thought that.

He seemed to think that nano-technology would drastically alter things. Like with all technology that would be both good and bad i guess...

They do have a habit of not releasing new technology until it will satisfy the market place... so who knows.

 

[clv101]

The Hubbard's Peak phenomenon is based on US experience, because so much of the country has been drilled and explored. The same is not true in much of the rest of the world.

Hubbert's theory is not just a US phenomenom, it applies too all oil provinces. The US is just usually mentioned since it's big (once the worlds largest producer) and it was a long time ago. Many other major provinces have already peaked including Norway, Venezuela, UK, Indonesia etc.

Will these effects be enough to offset depletion? Nobody knows. They certainly will partially offset it though, rendering invalid the more extreme Peak Oil predictions.

What are you saying? Are you suggesting a deviation of the last 45 years falling rate of discoveries? You're on your own if you are. No one is suggesting there are significant new discoveries to come. There are lots of new projects coming on line over the next few years (some 16million barrels per day of new production by 2010) and there needs to be to offset the major provinces already in decline. The most optimistic realistic assessments show net production increasing slightly or staying flat to the end of the decade and declining there after. There are very good arguments for net declines by 2007.

As for the race between technology and energy depletion that is the key subject of this thread,

I don't see technology as a substitute for energy supply, technology does not equal energy.

it's not clear what will happen, but what is certain is that rates of oil consumption will fall with economic growth if the price gets too high and spur innovation. Whether it will be "enough" I have absolutely no idea.

Enough? That's the problem, falling energy supplies results in reduced and then negative economic growth. All other peak oil predictions stem from that, the results of a long term permanent decline in global productivity.

 

[slaar]

I'm well aware that Hubbard's Peak applies to all areas of the globe that have been as extensively surveyed and explored as the US, but many areas have not.

Of course technology is not a substitute for energy. But it can make energy conversion more efficient, and come up with new forms of converting the infinite amount of energy out there into forms we can use. Technology to productively use the Canadian oil sands for example is getting closer all the time. The ability to harness nuclear fission was achieved only 60 years ago, the ability to efficiently convert solar energy is getting better and better.

May I make it clear that I do not think there is no problem with oil depletion issues, nor that it will have a significant impact on how we live. But people shouldn't underestimate the ability of humans to solve problems and create solutions when resource constraints bite. We've been doing it for some time, and Peak Oil theories consistently discount the possibility that it will continue.

This only applies to the more extreme variants before anyone calls me up, not the majority of the sensible things that have been said on this thread.

 

[zceb90]

New Oilfield Technology + Flowrates

Which in itself is ominous, because it implies that the current attempts to increase production in line with demand, in order to avoid immediate political problems, are likely to cause a more rapid drop-off to occur in the future.

edited to add: I see elbows had the same thought ...

Let's compare the giant NS oilfield, Forties, with the recent significant discovery, Buzzard. EUR for Forties is 2.7 Gbbls of which some 2.5 Gbbls had been produced by 2003. Peak flowrate for Forties was 500k bopd back in 1978 and was down to just 40k bopd by then. Apache who acquired field from BP in 2003 invested a further $100m and flowrate has revived to 65k bopd (but note it's still massively sub peak).

Looking at Buzzard, here are some details: Buzzard Development Plan . Note the peak rate of 80k bopd is in fact the operator's net share and grossing up their 43.2% interest gives peak rate for this field as 185k bopd which they plan to reach in 2007 i.e. within around 12 months of inception. EUR for Buzzard is 550m bbls.

Dividing respective EUR's by peak flowrates gives 5400 days for Forties and only 2973 days for Buzzard which points to reserves to production ratio for Forties being 1.82 times that of Buzzard. In other words they plan to 'pull on the reserves' at nearly twice the rate for this new field. I've not looked at reservoir specs in detail but the faster recovery of Buzzard's oil is likely to partly reflect that it's a much smaller field and thus recovery is via a single platform and more straightforward. Working on the basis that output will enter decline once half the EUR has been produced it will only take 1487 days at peak rate to reach this point. Even allowing for lower flowrates for a few months as additional wells are drilled and completed Buzzard will still reach above mid point in under 4-1/2 years i.e. decline would commence around the end of 2010 and will inevitably be steep.

The rush to 'ramp up production' also reflects the fact that much of the North Sea infrastructure is ageing and trunk facilities are suffering increased corrosion over time. More specifically oil from Buzzard will flow into the Forties pipeline and gas will flow into the Frigg pipeline. Both of these pipelines and related offshore facilities have been in place for several decades and thus now have a limited shelf life. Replacing such pipelines, offshore platforms etc would take some really serious investment and the current (and diminishing) level of new discoveries in the North Sea would be unlikely to justify such expense nor the provision of stand alone pipelines etc.

As we were told at the recent Offshore Europe 2005 Conference there is just a single 'window of opportunity' to discover and develop additional small N Sea deposits. Progressively over the next couple of decades the existing infrastructure will be removed as it reaches its design life and the giant fields discovered typically in the early 1970's which justfied such infrastructure will no longer produce oil or gas at economic rates. Partly anticipating comments such as '...these will become economic as the oil price rises' I would add that the energy economics will become unattractive as the energy expended in maintaining production from these oil fields rises to reach the energy contained in the oil or gas so produced. When this happens production ceases regardless of the oil or gas price.

 

[zceb90]

Deepwater Oil

That's one part of it, but clearly not the only one. Just as one example, there are previously uneconomic sources of oil (i.e. at the bottom of the Gulf of Mexico) that with modern drilling and rig technology have become extractable, in huge quantities. The same goes for exploration tecniques.

While true these newer sources of oil - deepwater, polar etc will have a very sharp production decline or 'cliff' once production has peaked. Operations in such places are extremely expensive and energy intensive; once serious declines set in the energy expended tends to rapidly approach the energy recovered thus there is then no point in prolonging matters. It's also worth bearing in mind that because capital and operating costs are so high the operators aim to produce flat out as soon as possible to recover their huge investments. The overall effect of these 2 factors is an earlier and much sharper peak.

 

[Bernie Gunther]

Presumably though, while the energy economics might make no sense, the obvious political factors might cause our government to actually even subsidise extraction, because we're so badly under-prepared to do otherwise.

 

[zceb90]

Hubbert's Curve

The Hubbard's Peak phenomenon is based on US experience, because so much of the country has been drilled and explored. The same is not true in much of the rest of the world.

Will these effects be enough to offset depletion? Nobody knows. They certainly will partially offset it though, rendering invalid the more extreme Peak Oil predictions. As for the race between technology and energy depletion that is the key subject of this thread, it's not clear what will happen, but what is certain is that rates of oil consumption will fall with economic growth if the price gets too high and spur innovation. Whether it will be "enough" I have absolutely no idea.

fela - AFAIK nano-technology is in the very early stages of development, but there's certainly lots of potential there.

The rest of the world will follow the same pattern of production as the US i.e. the same type of bell shaped curve. Curves for individual giant fields are readily available on the web (will post links on request). Examples are Forties (UK NS), Prudhoe Bay (Alaska, US) and Samotlor (Russia).

The downslope of Hubbert's curve for US lower 48 is in fact rather benign compared with many other oil producing regions. Output in US lower 48 has fallen by approximately 50% in 34 years whereas UK N Sea output is already down 40% in just 6 years. As a general rule oil provinces where a large part of the original development and production was performed using more traditional oilfield methods the declines post peak will be relatively gentle, maybe around 3% pa. Such areas include US lower 48, Middle East etc. By contrast oil provinces (usually in high cost areas) which have made extensive use of new oilfield technology virtually from inception will experience sharp declines post peak. An excellent example is N Sea where 10% decline has been experienced in UK sector and the Norwegian sector has recently reported steep declines in 21 oilfields.

 

[Bernie Gunther]

To what extent are these new production methods being employed to boost output in Saudi and other massive provinces that have (apparently) yet to peak?