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

Anyone notice this?

_41439340_wholesale_gas_prices_416.gif

BBC said:
UK gas prices soar on new warning

UK wholesale gas prices have risen 23% to 230p a therm after supply troubles forced National Grid to ask industrial users to limit their usage.

On Monday prices had quadrupled after a fire shut the UK's main storage facility and the recent cold snap made domestic usage soar.

If the situation gets worse, industrial users could see supplies cut off.

"This is as close as the UK has got to a national gas emergency," said the Energy Intensive User Group.

"Supplies would effectively be rationed to industry to keep supplies maintained to households," warned the group's director Jeremy Nicholson.

"The spiralling costs of energy are increasingly eating into companies' ability to compete, and with prices this high, some heavily energy-dependent firms could be forced to shut down or shut down production," said CBI director-general Sir Digby Jones.

He was reiterating a warning the CBI gave last November, which was dismissed at the time by ministers as scaremongering.
Click to expand...
http://news.bbc.co.uk/1/hi/business/4804504.stm
 
Yeah, but European prices are a third of that. It's more to do with our wonderful "liberated" markets than anything else.
 
UK Gas Supplies

Backatcha Bandit said:
Anyone notice this?

http://news.bbc.co.uk/1/hi/business/4804504.stm
Click to expand...
Thanks for the link which provides production stats from UK gas fields, very useful. The daily supply situation can be viewed here: National Grid

The peaking of UK N Sea gas production in 2000 followed by steep declines (unexpected to many) has effectively 'caught the UK gas infrastructure out'. Those relying upon markets to provide timely signals of impending supply squeezes are finding themselves overtaken by events; the short termism which tends to dominate markets and much political thinking in no way provides the necessary lengthy lead time to plan and construct new energy infrastructure. Importing of gas provides particular difficulties as, unlike oil, it's much harder and more expensive to transport across-continents.

The current supply situation is made worse by the temporary loss of the Rough gas storage due to an offshore fire; repairs are scheduled to restore this facility in May 2006. Relative to countries such as Germany and France even when the Rough facility is available UK's gas storage capacity is still very small, a legacy from the decades when N Sea provided total UK needs and the industry saw little need for large scale storage facilities. Given ongoing N Sea production declines, which have been as high as 9% pa, I'd expect the supply situation next winter to be even tighter.

From winter 2007/08 the supply position will improve, at least temporarily, with the completion of the pipeline to Ormen Lange from whence it's planned to import some 400 BCM over 20 years i.e. 20% of UK's current annual consumption of 100 BCM. The problem, however, is that gas reservoirs behave very differently to oil reservoirs as the gas flows much more readily through the rock formation and thus plateau rates can be more or less maintained until some 80% of recoverable reserves have been produced. The downside is that gas production then 'falls off a cliff' which is exactly what we are now experiencing with the ageing southern gas fields. Assuming declines continue at or around 9% pa, Ormen Lange will only buy around 2-1/2 years' grace hence current push to construct LNG facilities at Milford Haven and Canvey Island.

A number of energy experts, most recently on a BBC Radio 4 interview this week, have indicated that UK will be 50% reliant on gas imports as early as 2010 and the storage issue will need to be urgently addressed given that future imports will need to be sourced from far less stable places (70% of global gas reserves lie in Iran, Qatar and Russia). Not least I'd be interested to hear comments as to how UK will fund the future trade imbalances caused by such large scale imports - I'd estimate the value of Ormen Lange imports alone as at least 100 billion Euros over a 20 year period.
 
zceb90 said:
Thanks for the link which provides production stats from UK gas fields, very useful.
Click to expand...
I must confess it found it's way into my bookmarks from one of clv101's excellent articles. ;)

zceb90 said:
Those relying upon markets to provide timely signals of impending supply squeezes are finding themselves overtaken by events;
Click to expand...
Naturally, what with 'economics' being subsidiary to 'energy'. At the risk of repeating myself, I would no more trust an economist's views regarding energy issues than take my car to a hairdresser for repair. :)
 
Only rabidly free trade and neoclassical economists would argue there aren't costs to be borne when a long-term energy source depletes as rapidly as the North Sea field is now. However, principles of substitution are still important; when OPEC forced prices through the roof in the 1970s energy efficiency and use of alternatives soared in the subsequent years. We got over that, we'll get over this. But it will be painful.
 
sparticus said:
Exxon http://www.exxonmobil.com/Corporate/Files/Corporate/OpEd_peakoil.pdf

Anyone care to speculate why Exxon take this position and go public now?
Click to expand...

Why do they feel the need to write that stuff? The USGS 3.3GB figure? That's only with 50% probability. Their P95 was closer to 2GB meaning after using 1GB so far, peak is around about now.

See this on Exxon from The Oil Drum

And this graph:
exxon_production.gif

Recent Total Exxon Liquids Production (dark green) with 2001 projection (purple).

If there's so much oil why has Exxon missed it's own production forecasts and maintained steady extraction whilst the rest of the world has increased, thus losing market share?

This advert will go down in history like the Economist front cover from a few years ago talking about $10 oil.

Even if we're 'lucky' and the 3.3GB figure is true - we've got less than 30 years so shouldn't Exxon be warning us already?

Never believe anything until it's been officially denied!
 
Thought this might be of interest:
http://today.reuters.com/news/newsa...OC_0_US-ENERGY-PENTAGON-EFFICIENCY.xml&rpc=22

"The U.S. military consumed 144.8 million barrels of fuel in 2004, spending $6.7 billion, according to the Defense Energy Support Center (DESC).

Last year, it consumed only 128.3 million barrels, but spent $8.8 billion, as the average price per barrel rose by almost 50 percent to more than $68.

For 2006, DESC estimates the military will need 130.6 million barrels and pay more than $10 billion for it, at a price of more than $77 per barrel."
 
Looking back to the UK gas crisis again...
slaar said:
Yeah, but European prices are a third of that. It's more to do with our wonderful "liberated" markets than anything else.
Click to expand...
Just noticed this story, which I'd think indicates that there may be a little more, erm, 'healthy competition' in the European gas market:

Russia signs gas deal with China

Russia and China have signed an agreement to pipe large quantities of gas from fields in Siberia to China.

Officials said the pipelines, which could begin supply within five years, would deliver up to 80bn cubic metres of gas annually.

The agreement came as part of a raft of economic deals signed between the two sides during the visit to Beijing of Russian President Vladimir Putin.
Click to expand...

_41466498_leaders_ap203.jpg

http://news.bbc.co.uk/2/hi/asia-pacific/4828244.stm
 
80bcm is a large amount of gas (UK total consumption is the largest in Europe at 100bcm) that won't be coming to Europe - however it looks to be coming from Eastern Russia so it may well never have been practical for that specific gas to come to Europe anyway. This deal will certainly reduce the flow to Europe from it's potential maximum - just due to Gazprom having limited resources, some of which will be deployed developing gas not for Europe.
 
Looking For Fossil Fuel Arguments

Does anyone have a summary of all the key arguments in favour of the fossil fuel explanation for oil? I am new to this thread and want to get up to speed.

Thanks
 
I've just been catching up on Greg Palast's stuff - came across this from a couple of weeks ago:

Bush Didn't Bungle Iraq, You Fools
THE MISSION WAS INDEED ACCOMPLISHED

Monday, March 20, 2006
by Greg Palast

Get off it. All the carping, belly-aching and complaining about George Bush's incompetence in Iraq, from both the Left and now the Right, is just dead wrong.

On the third anniversary of the tanks rolling over Iraq's border, most of the 59 million Homer Simpsons who voted for Bush are beginning to doubt if his mission was accomplished.

But don't kid yourself -- Bush and his co-conspirator, Dick Cheney, accomplished exactly what they set out to do. In case you've forgotten what their real mission was, let me remind you of White House spokesman Ari Fleisher's original announcement, three years ago, launching of what he called,

"Operation

Iraqi

Liberation."

O.I.L. How droll of them, how cute. Then, Karl Rove made the giggling boys in the White House change it to "OIF" -- Operation Iraqi Freedom. But the 101st Airborne wasn't sent to Basra to get its hands on Iraq's OIF.

<snip>

And what did the USA want Iraq to do with Iraq's oil? The answer will surprise many of you: and it is uglier, more twisted, devilish and devious than anything imagined by the most conspiracy-addicted blogger. The answer can be found in a 323-page plan for Iraq's oil secretly drafted by the State Department. Our team got a hold of a copy; how, doesn't matter. The key thing is what's inside this thick Bush diktat: a directive to Iraqis to maintain a state oil company that will "enhance its relationship with OPEC."

Enhance its relationship with OPEC??? How strange: the government of the United States ordering Iraq to support the very OPEC oil cartel which is strangling our nation with outrageously high prices for crude.

Specifically, the system ordered up by the Bush cabal would keep a lid on Iraq's oil production -- limiting Iraq's oil pumping to the tight quota set by Saudi Arabia and the OPEC cartel.

There you have it. Yes, Bush went in for the oil -- not to get more of Iraq's oil, but to prevent Iraq producing too much of it.

..more..
Click to expand...
http://www.gregpalast.com/printerfriendly.cfm?artid=483

Come back Bigfish, all is forgiven! (well, maybe some of it, anyway). ;)
 
Very interesting article in this mornings Guardian (in light of above Palast artice):

Chávez seeks to peg oil at $50 a barrel

· Price could see Venezuela producing for 200 years
· Country's reserves may exceed Saudi Arabia's
Mark Milner
Monday April 3, 2006

Guardian
Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.

A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.

"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."

The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.

According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.

A $50-a-barrel lock-in would open the way for Venezuela, already the world's fifth-largest oil exporter, to demand a huge increase in its official oil reserves - allowing it to demand a big increase in its production allowance within Opec.

Venezuela's oil minister Raphael Ramirez told Newsnight in a separate interview that his country plans to ask Opec to formally recognise the uprating of its reserves to 312bn barrels (compared to Saudi Arabia's 262bn) when Mr Chávez hosts a gathering of Opec delegates in Caracas next month.

Venezuela's ambitious strategy to boost its standing in the global pecking order of oil producers by increasing the extent of its officially recognised reserves is likely to face opposition. Some countries will oppose the idea of a fixed price for the global oil market at well below existing levels. Others are unlikely to be happy with any diminution of their influence over world oil prices in favour of Venezuela.

Caracas's hopes for an increase in its standing would be a far cry from the days when Mr Chávez came to power after years of quota-busting during which Venezuela helped to keep oil prices down. "Seven years ago Venezuela was a US oil colony," said Mr Chávez.

..more..
Click to expand...
http://business.guardian.co.uk/print/0,,329448816-108725,00.html

E2A: Just notice thread on this story in 'Middle East' forum: http://www.urban75.net/vbulletin/showthread.php?t=157089

(*...mutter... that'll teach me not to check the wrong forum... mutter..*)
 
U.S. - Oil Strategy And Oil Abundance

A paper by John Hopkins’ researcher Roger J. Stern[5] argues that U.S. policy in the Middle East is totally misguided if it is based on fears that the region could cut off America’s energy supplies. Stern’s data point to an abundance of untapped oil reserves. He states:

“We hypothesize that threats do arise in the oil market, not from the oil weapon, but from the cartel’s management of abundance… If oil were scarce, the cost to recover it should rise over time. The opposite has occurred.”

Among other things, he notes that:

“...only 17 of 80 Iraqi fields are in production…. Iraq may possess ‘reservoirs that have been completely overlooked’... [while] much of Iraq has not been explored at all. Similarly, of 80 Saudi reservoirs, only 23 are in production.”

While arguing against the idea that petroleum exhaustion and the use of scarce oil as weapon in the hands of the oil-producing States are the factors behind America’s stance on the Middle East, Stern proposes that it is the wealth transfer to the OPEC States which may pose a threat to security because it may be used to finance international terrorism. Although we do not agree with the latter argument (as we make clear in our commentary on Iran above), we think Stern has made a contribution to our understanding of some of the issues behind the present world situation by unearthing and analyzing facts about oil abundance and its history.
Click to expand...

Round-up on petroleum

Oil market power and United States national security
 
http://business.timesonline.co.uk/article/0,,13130-2124287,00.html

THE world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational.

The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, M de Margerie said in an interview with The Times. Forecasters, such as the International Energy Agency (IEA), have failed to consider the speed at which new resources can be brought into production, he believes.
...

The IEA predicted in its World Energy Outlook that global demand for crude oil would reach 121 million barrels per day by 2030, of which more than half would be supplied by Opec. The agency predicted that more than $3 trillion (£1.72 trillion) of investment in wells, pipelines and refineries would be needed to raise output to such levels.

However, Total’s exploration chief reckons the output rise is impossible, given available resources and geopolitical constraints on gaining access to reserves in Opec countries.
...

The IEA was mistaken in using recovery factors that failed to consider the timing of new resources coming on stream. M De Margerie said. The world was confusing the issue of reserves with the scale of the problem in producing those reserves. He said: “The oil reserves are there, that is the good news, but what we can bring on today to meet demand is limited by factors other than what scientists see in a lab or think-tanks.”
Click to expand...
 
de Margerie is quite right to say the reserves are there but we'll never reach 120mbpd. It's clear there's at least a trillion barrels of oil left, over 30 years at the current rate of extraction - I agree with BP.

Having said that it is also clear we are pretty much at peak oil now in within a few years the oil extraction rate will be lower than it is today.

Peak oil is due to the logistical problem of trying to extract oil at faster and faster rates from a diminishing reserve. Once upon a time 5 guys in a truck could erect a derrick, drill a few hundred feet and have 50,000 barrels per day spurting into the air. These days it takes billions of dollars to produce oil.
 
clv101 said:
de Margerie is quite right to say the reserves are there but we'll never reach 120mbpd. It's clear there's at least a trillion barrels of oil left, over 30 years at the current rate of extraction - I agree with BP.

Having said that it is also clear we are pretty much at peak oil now in within a few years the oil extraction rate will be lower than it is today.

Peak oil is due to the logistical problem of trying to extract oil at faster and faster rates from a diminishing reserve. Once upon a time 5 guys in a truck could erect a derrick, drill a few hundred feet and have 50,000 barrels per day spurting into the air. These days it takes billions of dollars to produce oil.
Click to expand...
Expanding a bit on clv's comments we now face several problems in increasing or even maintaining overall production:
1) Decline rates in mature oilfields are high and accelerating.
2) New discoveries are typically far smaller than earlier giant fields.
3) Energy economics are deteriorating (ERoEI is much closer to unity than in earlier decades)
4) The industry is 'out of capacity' - heavy / sour refinery capacity, quality drilling rigs and above all skilled people (average age last year of skilled oilfield personel was reported as 49).
5) Demand is increasing at the same time as average new well productivity is falling thus more wells have to be drilled each year to both offset declines in existing wells and to meet increased demand.

Point 5) above refers to a 'treadmill' situation whereby more and more wells have to be drilled each year simply to 'stand still'. An excellent example is US attempts to maintain gas production by drilling ever more wells - a loosing battle as the size of gas reservoirs being brought online is just a fraction of the earlier gas reservoirs and the new wells decline real fast.

This paper, published today, provides a very good summary of the situation: An Economist Response. To those who maintain that 'new technology will save the day' it should be noted that new technology was used virtually from day 1 in the North Sea. Its use proved to be invaluable in quickly ramping up production as the development wells were drilled. The legacy however is that we are now seeing monster decline rates.

Another thought provoking paper here as to what happens when output declines in the world's largest oil exporting nations just as their population (and thus energy demand) is increasing. The author is 'right on the money' to look at this issue given that Saudi Arabia has one of the fastest growing populations in the world with some 50% of the population reported as being under 21. All these extra people will require copious amounts of energy especially as the area is extremely short of water and energy intensive desalination plants are used extensively. What the mainstream media are not telling you about the run up in oil prices

In his presentation at the April 2005 'Peak Oil UK' conference in Edinburgh, Chris Skrebowski stated that 'the best indicator of the advent of peak oil was the oil price itself'. The recent sustained rally has taken the price of WTI through the $75 level. There are far too many variables (and lack of good data in the public domain from several key oil producers) to accurately forecast the peak - we will only really see it 'in the rear view mirror' i.e. several years after the event. My own view, however, is that output will be struggling to grow from this point in line with demand hence the run-up in the price since 1999. The author of this excellent paper offers similar views here: Why peak oil is probably about now

Chris
 
This is interesting.
LONDON, Jan 20 (Reuters) - OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW).

"PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday.
Click to expand...
source
 
Sasaferrato said:
We need oil. Providing the world price is being paid, I do not see the problem in ensuring that it continues to flow.

The day will come however, when it is all gone, before this happens we need to concentrate on viable alternatives. My preference is nuclear fusion in the long term, fission in the short.
Click to expand...

Yeah nice one, replace one dirty finite energy source with a dirty, poisonous, radioactive, finite energy source. :rolleyes:

Some people think Tesla invented free energy in the early 1900`s. Who knows. All I know is that to depend upon a bunch of criminals to sell you the lifeblood of your economy (energy), is a bloody stupid idea.

Invest in renewable, maybe we should cut some defense or security service budgets by a few billion.
What would you rather have, an upgrade to our already potent nuclear threat or massive drops in energy bills, pollution and a stripping of power from a rich elite. :confused:
 
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