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

[bigfish]

Oil shortage a myth, says industry insider

By Steve Connor, Science Editor
Monday, 9 June 2008

There is more than twice as much oil in the ground as major producers say, according to a former industry adviser who claims there is widespread misunderstanding of the way proven reserves are calculated.

Although it is widely assumed that the world has reached a point where oil production has peaked and proven reserves have sunk to roughly half of original amounts, this idea is based on flawed thinking, said Richard Pike, a former oil industry man who is now chief executive of the Royal Society of Chemistry.

Current estimates suggest there are 1,200 billion barrels of proven global reserves, but the industry's internal figures suggest this amounts to less than half of what actually exists.

The misconception has helped boost oil prices to an all-time high, sending jitters through the market and prompting calls for oil-producing nations to increase supply to push down costs.

Flying into Japan for a summit two days after prices reached a record $139 a barrel, energy ministers from the G8 countries yesterday discussed an action plan to ease the crisis.

Explaining why the published estimates of proven global reserves are less than half the true amount, Dr Pike said there was anecdotal evidence that big oil producers were glad to go along with under-reporting of proven reserves to help maintain oil's high price. "Part of the oil industry is perfectly familiar with the way oil reserves are underestimated, but the decision makers in both the companies and the countries are not exposed to the reasons why proven oil reserves are bigger than they are said to be," he said.

Dr Pike's assessment does not include unexplored oilfields, those yet to be discovered or those deemed too uneconomic to exploit.

The environmental implications of his analysis, based on more than 30 years inside the industry, will alarm environmentalists who have exploited the concept of peak oil to press the urgency of the need to find greener alternatives.

"The bad news is that by underestimating proven oil reserves we have been lulled into a false sense of security in terms of environmental issues, because it suggests we will have to find alternatives to fossil fuels in a few decades," said Dr Pike. "We should not be surprised if oil dominates well into the twenty-second century. It highlights a major error in energy and environmental planning – we are dramatically underestimating the challenge facing us," he said.

http://www.independent.co.uk/enviro...tage-a-myth-says-industry-insider-842778.html

 

[Crispy]

Interesting. I'd like to read his analysis, but the indy doesn't link to it or even name the report. I'd be interested to read what he has to say on flow rates.

 

[rioted]

the decision makers in both the companies and the countries are not exposed to the reasons why proven oil reserves are bigger than they are said to be

Can you decipher this please? Does it mean you know more than the bosses of the oil companies?

 

[bigfish]

Yeah but some of that speculation is probably speculating about the oil running out, something that should probably have been part of the price for a very very long time if the world was saner...

But, as the BBC Scotland program makes perfectly clear, North Sea oil is not about to run out anytime soon. Current estimates are that almost as much oil remains as has already been extracted, while huge swathes of the continental shelf are yet to be explored.

 

[Crispy]

But, as the BBC Scotland program makes perfectly clear, North Sea oil is not going to run out anytime soon. Current estimates are that almost as much oil remains as has already been extracted.

As should be expected for production areas about their peak of production. Which was 7 years ago, and ~1.8mbp higher than today. It will last a long time, but production will continue to fall.

 

[Kaka Tim]

But, as the BBC Scotland program makes perfectly clear, North Sea oil is not about to run out anytime soon. Current estimates are that almost as much oil remains as has already been extracted, while huge swathes of the continental shelf are yet to be explored.

But production of all the easily and cheaply available stuff is accounted for - they're may well be lots left - but its a lot more difficult to extract.

Yes - global oil produciton is higher than ever, but demand is higher still. Thats the point of peak oil - its not about 'oil running out' - its oil production being unable to keep up with ever increasing demand. Hence $150 a barrel and rising.
Which effectively means that 200 years of economic growth is about to hit the buffers. With no vailble cheap energy alternative the only way is down.

 

[bigfish]

As should be expected for production areas about their peak of production. Which was 7 years ago, and ~1.8mbp higher than today. It will last a long time, but production will continue to fall.

Nonsense! Neither you nor anyone else has any idea of how much oil remains to be discovered in those parts of the North Sea and continental shelf yet to be explored. However, enormous recent continental shelf discoveries made elsewhere in the world indicate prospects are very good indeed.

 

[Crispy]

None of those 'enourmous' discoveries have been conclusively confirmed or their production rates projected with confidence.

I suppose that the global decline in discoveries since the mid 60's is somehow going to magically reverse and shoot up to 3-4x its current rate, is that correct?

I'm so sure of myself on this one that I'd put money on it. I've got £50 here that says North Sea Oil production will never rise above 6.5mbpd, using a yearly average as the measuring stick. Would you take such a bet? £50 is yours if, at any time while both of us are still active on this board or another, North Sea Oil produces (6.5 x 365) 2372.5 million barrels in one year.

 

[fela fan]

I might be a bit late on the recent posts...

But i'd just like to know if any reasons have been put forward as to the huge rise in oil over the last two years or so.

A very recent trip i had to the UK showed me that everyone was complaining about the price rises, people and media, but no-one was even beginning to explain why.

It seems to me that, as ever, it is for political reasons. Might it be something to do with the politicians that make up a lot of the US elite being oilmen? And they're making what they can before they lose power end of the year?

I recall rises before, and then the fall. Just like the western economies.

It seems all a bit fixed to me.

It's not as surreal as it sounds. In the US, they love a war economy, as a main method of transferring taxpayers' money into the elites' hands.

I think the way they deal with the price of oil is the same way they use war to get rich.

I would hazard a guess that as the year comes to a close so will oil prices come tumbling down.

Nothing to do with the bullshit supply and demand equation.

 

[fela fan]

None of those 'enourmous' discoveries have been conclusively confirmed or their production rates projected with confidence.

I suppose that the global decline in discoveries since the mid 60's is somehow going to magically reverse and shoot up to 3-4x its current rate, is that correct?

I'm so sure of myself on this one that I'd put money on it. I've got £50 here that says North Sea Oil production will never rise above 6.5mbpd, using a yearly average as the measuring stick. Would you take such a bet? £50 is yours if, at any time while both of us are still active on this board or another, North Sea Oil produces (6.5 x 365) 2372.5 million barrels in one year.

But how can a barrel at about 40 dollars going up to 140 dollars be explained away by reserves and supply and demand?

It looks very dodgy to me. Especially as we've been down this road before, although not quite to this extreme.

I notice also that any possible reasons given are located in the main oil producers' manipulating the market. I think it's all US driven.

 

[fela fan]

Meanwhile gasoline continues to retail for 2p/litre in Venezuela and 6p/litre in KSA, hardly an incentive for consumers in those key oil exporting nations to use energy more frugally. The impact of the 'Export Land Model' will hit much earlier and harder than originally predicted.

Well now, fucking look!

If such hugely cheap oil is available in these two countries, why has the prices gone so bloody mad elsewhere??

I think it's politically driven economies.

 

[Crispy]

The big rise last time was caused by an artificial cut in supply as OPEC restricted exports. This time round, all signs point to hard systematic limits to supply. It's hard to get a real answer, as the big producers do not keep an open book on discoveries, inventories and spare capacity.

Bear in mind that the last oil shock was over quickly, when OPEC resumed exports. If OPEC manages to pull several millions of barrles per day extra production out of their sleeves over the coming years, then prices will come down.

There is undoubtably an element of speculation in the current oil prices, but remember that it is not the western oil companies who have control of this game, it is the nationalised oil companies of OPEC.

Petrol is crazy cheap in KSA and venezuala because those governments subsidise the prices to make it affordable to the poor.

 

[fela fan]

Petrol is crazy cheap in KSA and venezuala because those governments subsidise the prices to make it affordable to the poor.

I didn't know there were any poor in saudi.

 

[fela fan]

There is undoubtably an element of speculation in the current oil prices, but remember that it is not the western oil companies who have control of this game, it is the nationalised oil companies of OPEC.

Are you sure about this?

I thought one of the major political planks of american foreign policy over the last few years was to seriously increase their ability to manipulate energy prices. That's the reason for invasions into afghanistan and iraq.

There are very deep political links between saudi and the US, as evidenced by their ignoring the proven links between the two countries over the 911 events.

And then there was the saddam hussein's declared intentions to have their oil bourse dealt with in euros, not dollars...

... same goes for iran...

 

[Crispy]

I didn't know there were any poor in saudi.

millions of them. they have the classic oil curse. those who own the oil are rich and corrupt. there is very little employment that isn't in oil, and there is 25% unemployment.

The USA may try to manipulate oil prices, and as the largest consumer it has some clout, but with China et. al. increasing demand, they're not the only people the ME listens to.

 

[max_freakout]

oil is rapidly on its way out, and people are too terrified to admit it


about bloody time i say

 

[Crispy]

it's not going to be pretty making the switch, mind.

 

[max_freakout]

it's not going to be pretty making the switch, mind.

of course not, it will be as pretty as a heroin addict coming off heroin, but on a global scale


the politics of oil, is the politics of heroin addiction


expect lots and lots of smelly vomit


in the end we will return to nature


EDIT: switch to what btw? There's no 'metahadone' type substitute for oil afaik

 

[fela fan]

oil is rapidly on its way out, and people are too terrified to admit it


about bloody time i say

But how can you say this? On what basis can we say that oil is running out? It's the result of a process, so theoretically supply should always be there.

The only question is how fast our demand might exceed the process of oil becoming oil, so to speak. I know this thread has dealt with this question, but i've rarely seen it dealt with in mainstream media.

Long before oil might run out due to excessive demand due to the increase in both human populatoin and human demand, we humans will have found an alternative. So again, i say these prices are completely manipulated by and on behalf of the elites who benefit.

If i'm right, then we shall see prices coming down rapidly by year's end.

Coinciding with the exit of the bush empire...

 

[Crispy]

The thing is, it looks like demand is already starting to outsrip supply. Production of conventional crude has been flat for the last 3-4 years. Alternatives have been able to pick up the slack so far, but if conventional crude goes into decline, it's likely that those alternatives will not be able to ramp up quickly enough to satisfy that demand. It is also likely that those alternatives have maximum output rates that cannot be exceeded. In this case, total supply of all oil-equivalents will decline.

There will still be plenty of oil in the ground, and we will be pumping 10's of millions of barrels per day for a long time yet, but at ever decreasing rates.

 

[max_freakout]

But how can you say this? On what basis can we say that oil is running out? It's the result of a process, so theoretically supply should always be there.

i didn't say it is running out, that is clearly not true

what i said was, it is 'on its way out', ie, 5 years from now, we wont be using it anymore

The only question is how fast our demand might exceed the process of oil becoming oil, so to speak. I know this thread has dealt with this question, but i've rarely seen it dealt with in mainstream media.

Long before oil might run out due to excessive demand due to the increase in both human populatoin and human demand, we humans will have found an alternative. So again, i say these prices are completely manipulated by and on behalf of the elites who benefit.

If i'm right, then we shall see prices coming down rapidly by year's end.

Coinciding with the exit of the bush empire...

rubbish, bullshit, denial, same old story

the elites are just the people who have the worst problems

even my own mum is somehow able to convince herself, as she fills up her petrol tank, that Saddam Hussein was a bad man who had to be removed from power

to understand what is happening to the world of oil politics, just observe the psychology of a heroin addict, there is no difference, except in scale

 

[Crispy]

i didn't say it is running out, that is clearly not true

what i said was, it is 'on its way out', ie, 5 years from now, we wont be using it anymore

No way will that happen. We would either have to research, develop and construct an alternative infrastructure within that time, or completely restructure modern society.

 

[max_freakout]

we will be pumping 10's of millions of barrels per day for a long time yet, but at ever decreasing rates.

i disagree with this, this is just classic denial of a heroin addict who starts realising, deep in his soul, that he has a terminal problem

 

[Crispy]

i disagree with this, this is just classic denial of a heroin addict who starts realising, deep in his soul, that he has a terminal problem

Denial? What am I denying? The addiction of modern society to oil is massive. What's going to force us off it all of a sudden when there are no viable alternatives? Oil is such an incredible material that it will remain valuable for a long time.

 

[max_freakout]

No way will that happen. We would either have to research, develop and construct an alternative infrastructure within that time, or completely restructure modern society.

what do you mean by 'would'?

when are we going to begin doing these things you suggest? tomorrow? Next year?

there are far too many people, and far too little consciousness

 

[max_freakout]

Denial? What am I denying?

that oil is rapidly on its way out

The addiction of modern society to oil is massive. What's going to force us off it all of a sudden when there are no viable alternatives?

economics

 

[Crispy]

We should have begun these changes 10 years ago. 5 years is not long enough to make those changes. Therefore, for your-year prediction to happen, modern society will have to collapse.

 

[max_freakout]

We should have begun these changes 10 years ago. 5 years is not long enough to make those changes. Therefore, for your-year prediction to happen, modern society will have to collapse.

'modern society' (whatever that means) is going to go cold turkey

 

[Crispy]

'modern society' (whatever that means) is going to go cold turkey

This is not good news.

 

[zceb90]

But how can you say this? On what basis can we say that oil is running out? It's the result of a process, so theoretically supply should always be there.

The only question is how fast our demand might exceed the process of oil becoming oil, so to speak. I know this thread has dealt with this question, but i've rarely seen it dealt with in mainstream media.

Lack of coverage on oil formation in the mainstream media is hardly surprising - the timescale is way beyond their horizon! Part of the process involves the natural creation of rift valleys as continents move apart; these valleys containing the remains of billions of micro-organisms are subsequently buried by sediment to the right depth for temperature to 'cook' the material into oil.

Oil was created during 2 principal periods, 150 and 90 million years ago. In similar timescales (which are totally irrelevant to anyone alive today) more could be created but ourselves and the subsequent few million generations will have to rely on what's already down there!

I once ran some calculations based on an estimated 1 trillion barrels of conventional oil remaining and 100 million years for further supplies to be created - US is consuming oil at around 4 million times its replacement rate and Europe around 2 million times. Based on estimated numbers of current oil consumers true sustainable consumption rate would be something like 1 litre per person per 750 years whereas US consumes 4134 litres per person per year!

The message is pretty clear here - oil will 'run out' but long before it does flowrates will cease to meet the demands of industrial society. Quadrupling the estimated remaining reserves to 4 trillion barrels only postpones the peak for 1 or 2 generations.