Thanks Bigfish -
The fundamental point of peak oil is not that oil is going to "run out", or "stop being found". It is that new oil is not going to be discovered and developed as quickly as existing reserves of oil deplete. "Not a drop" was a careless, jet-lag induced expression which I feel comfortable to retract and substitute with "Only a drop".
Some perspective: By your own admission, Shaybah is "the largest oilfield development of the past twenty years". Yet it is only capable of delivering 500,000 b/d. For example, that's less than half of this year's 1.4% growth in world demand. Next year, demand will grow another 1.4%. The following year, demand will grow another 1.4%. If demand is not met, the world economy will crash. Yet of the
16.6 mn b/d of capacity due to come onstream by 2010, the next largest development is only 300,000 b/d, while underlying production is anticipated to fall by 18 mn b/d through depletion.
Combined with all other developments, even without depletion, the discovery and development rate is not keeping pace with demand.
Meanwhile, the largest oil field in the world,
Ghawar, produces 4.5 mn b/d ... having declined from 5.7 mn b/d at its peak. The next largest - Cantarell in Mexico, produced nearly 2 mn b/d ... before it entered terminal decline last year. Total world stock is now declining at 5-8% per year (6% in Saudi, 7% in Iran).
So the challenge is to bring five Shaybahs onstream every year just to stand still, and then a couple more to meet growth and prevent the global economy stalling. The question is - is the Empty Quarter capable of making a material contribution to that challenge?
Your growing list of desperate explorers remains conspicuously free of evidence that anything is being found in sufficient volumnes. That is entirely to be expected - Oil Peak in the US, combined with high oil prices, generated an identical flurry of fruitless exploration activity. Some oil was discovered, of course, but in aggregate was (with the exception of the minor blips contributed by Alaska and GoM) sufficient only to hold the depletion rate to the theoretical logistics curve rate. Even if any significant volumes are discovered, it would take ten years to develop them and bring them to market in a mature area, and much longer in the Empty Quarter due to the distance from infrastructure and markets, meaning the area makes no contribution to mitigating the risk of Peak in the next 10 years.
In fact, your list is evidence, not of how attractive the Empty Quarter is, but of just how poor the next best alternatives are. "The largest oilfield development of the
past twenty years" - perhaps you are starting to grasp the magnitude of the challenge involved?
most of your own points appear to be more or less worthless
I can believe that - if you don't understand the subject, there is much that will appear worthless to you. For my part, I do understand your points fully, having championed them myself for much of my working life, and don't find your points worthless at all - they are (with the inexcusable exception of abyssal theory, for which I can offer you no olive branch) entirely plausible conclusions that can legitimately be drawn from an incomplete understanding of the subject and a skewed data set, and in which you are being led by the nose by powerful vested interests.
It's weird how all that fossilized squashed fish found its way down to 26,000 feet, don't you think?
As a professional geologist? No. Much of geology appears weird to those who have not studied it - if you want to participate in this debate, deal with it.
Professor Odell really is a world authority on hydrocarbon economy
Quite so. Unfortunately, even hydrocarbon economists concede that economic theory doesn't handle the extraction of finite resources very well. In particular, it can't differentiate between the properties of the abstract financial system, which can and must exist through a process of indefinite geometric expansion, and the properties of the underlying physical matter/energy system, which cannot. The resulting intellectual disconnect leads the likes of Odell into remarkable non-sequiturs, such as the notion of energy as a fungible, priced commodity (which, behind closed doors in our industry, are as notorious as they are embarrassing).
His mistaken analogy of manufacturing industry "working stock" representing extractive industry "reserves" is something of a classic. In manufacturing industries, "working stock" is constrained only by capital and, given an adequate supply of resource (which can generally be assumed to be effectively infinite) is indeed a function of demand. In extractive finite resource industries, reserves are constrained both by capital AND resource. Thus the statement
"proven reserves can only be defined as a function of the demand for oil" is simply untrue: it implies that resource is infinite. Proven reserves have been
indistinguishable from infinite-acting while there has been sufficient spare resource, which is to say for the entire pre-Peak period of the industry, which has misled Odell and others into assuming they
are infinite acting. Although you may not realise it, that is why the abyssal theory is so important to you: it is the only way to make a finite resource appear infinite-acting in economic theory.
they know that the reserves available to them on which to justify such long term investment must be equal to about 15 times the current annual level of consumption
Odell's "infinite-acting" assumption also failed fatally to account for how the the rate at which reserves can be converted into production deteriorates exponentially over time. As an economist rather than a geologist, Odell was unaware that the last units of resource to be exploited require orders of magnitude more investment than the first units of resource to maintain constant conversion rate, eventually exceeding capital and human constraints (unlike, say, in the sportwear apparel manufacturing industry). After the resource ceases to be infinite-acting (after around 50% has been consumed), there is no "optimum" level of proven reserves capable of ensuring a desired offtake rate. (The industry joke is that, for an encore, Odell presented a theorem that proved, from the optimum flight parameters enjoyed by a 747 immediately prior to flying into a mountain, the probability of collision was zero! A delicious morsel of delusional economics - thank you.)
Clearly, at 1.28 trillion barrels, the world is not lacking in sufficient proven oil reserves
Another example of the basic inability to distinguish between the volume of reserve, and the diminishing achievable rate of development of that volume in relation to demand.
What to do? I'd say: start investing as though Peak Oil were a reality and reconfigure U.S. military strategy to permit the simultaneous deployment of massive force into the last three petroleum basins. Which is to say - exactly
what is being done.
What we have, therefore, is a two-pronged strategy that effectively governs U.S. policy toward much of the world. One arm of this strategy is aimed at securing more oil from the rest of the world; the other is aimed at enhancing America’s capacity to intervene in exactly such locales. And while these two objectives have arisen from different sets of concerns, one energy-driven and the other security-driven, they have merged into a single, integrated design for American world dominance in the 21st Century. And it is this combination of strategies, more than anything else, that will govern America’s international behavior in the decades ahead.
