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

[david dissadent]

Ghawar now with 43% water cut?

http://www.glgroup.com/News/Hallibu...t-of-largely-depleted-Ghawar-field-44671.html

Ain Dar (and other parts of the field) began producing salt water in the late 1970s and by 2005, the cut was 42%. All of Ain Dar was wet since 1984. Once water became a major problem, many existing vertical wells were converted to short lateral horizontals running along the top 10 feet of the Arab D zone, the main pay.

Well just the top bit. But still that top bit was once the most prolific bits of sedementry rock in petrolium history. Reading through this article by Lynch (an uber cornocopian) it is interesting to see what lengths they are going to keep Ghawars production up. Nothing really new in this article to people who have read Simmons Twilight in the Desert but its a nice summary of the amount of work needed to keep the worlds largest oil field in production.

For those less familiar with all this, Ghawar is the keystone of global oil production. One of only a handfull of fields that have produced more than 1 million barrels a day, it produces about 6% of the worlds daily oil production. Also the sedementry layer that is the resevoir rock (the Arab D layer) if famous for its permiability, the flow rates were awesome.

The great fear is that Ghawar will go into a decline as steep as Canterall did in Mexico (until recently the worlds third biggest daily producer). Canterall has hit 17% pa decline.

 

[david dissadent]

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency

 

[Kaka Tim]

http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency

I feeling miserable enough already without reading that

How long till the stock markets twig?

 

[goebfwai]

I don't think there will be much impact on the stock market. It is so awash with QE money and has reached dizzying heights despite the global economic crash. The UK stock market is so heavily dominated and controlled by institutional investors, if they collectively take a decision not to sell, it isn't going to fall much. War breaking out with Iran and the straits of Hormuz (oil route) being blocked - that would definitely cause a stock market crash.

I wonder however if the peak oil news is why info about the solution - the new UK nuclear energy building programme - was rushed out in advance over the weekend? It sends a message to the market that at least Britain will be able to continue keeping the lights burning at a reasonable cost. In fact it could herald a return to a production based economy in the UK. Countries that remain more dependent on fossil fuels, will have higher energy costs, as crude oil prices inevitably shoot up, and thus higher manufacturing costs. Cheap nuclear energy would give Britain a major competitive advantage. And of course, higher crude oil prices will mean the age of cheap imports from China via sea freight will decline, despite the slave labour/slave wages culture that exists there.

Then again, it hasn't really been headline news, been underplayed a bit, probably because news that you'll have a new bright and shiny nuclear reactor on your doorstep (ten of them scattered around England) isn't likely to be popular with a lot of people, voters, property owners, environmentalists etc. That said, they have done such a good job reminding people how much danger the climate faces from fossil fuel usage/new coal etc, maybe there will be less opposition than you might think.

 

[david dissadent]

I feeling miserable enough already without reading that

How long till the stock markets twig?

There is nothing there that has not been being said by the like of Cambell and so on ad infinitum since 96. If you read the comments section on places like the oil drum to geologists and resevoir engineers will say that the USGS numbers for US and world oil production have been known to be grossly overstated for decades. This is just confirmation of what this thread has been saying for years and what a blind man could work out from the OPEC resevoir jumps in the 80s.


This is interesting.
http://www.worldenergyoutlook.org/docs/weo2008/chapter10.pdf

Its the IEAs field by field breakdown. Ive not had a chance to read it and its gonna be a long techy doc so itll take me my time to get through. But it will be interesting to see what they are saying.

Wow just checking the news accumulators and peak oil is having a big day.... lots to read over the next day or two, Fathi Britol is being interveiwed over at the FT, anyone fancy popping over and having a skim?


Ahhh the Gruan article has been updated with a graph.

Hmmm they are looking for a big contribution from natural gas liquids, no mention if its leas condisate, CNG or LNG. They also dont say if that includes the energy content to compress the gas if it is CNG\ LNG.

 

[david dissadent]

IEA warns non-Opec oil supply will peak next year

http://blogs.ft.com/energy-source/2009/11/10/iea-warns-non-opec-oil-supply-will-peak-next-year/


(should have pulled a sickie today!)

Non-Opec oil production will peak next year, the International Energy Agency says in its World Energy Outlook.

The IEA also says that post-peak gas fields are declining at a rate of 7.5 per cent, but there appears to be enough recoverable gas reserves to satisfy world demand until at least 2030.

The IEA has been criticised for underplaying the risk of an imminent oil supply. A story in The Guardian today quotes two whistleblowers who claim the agency privately believes oil production will never reach 100m barrels per day, despite its forecasts that world oil demand will reach 105m b/d by 2030.

The WEO repeats the 105m b/d forecast this year, but breaks its outlook into two scenarios: a ‘reference scenario’, in which energy use continues along its current path, and a ‘450 scenario’, in which governments make a concerted effort to limit atmospheric CO2 concentrations to 450ppm.

Under the no-change reference scenario, the IEA sees global oil rising 1 per cent per year, reaching 105m b/d in 2030. This is 1m b/d less than the agency’s forecast last year. OECD demand, in this scenario, will also fall.

Under the 450 scenario, non-hydro renewables rise from 2.5 per cent of the power mix in 2007 to 8.6 per cent in 2030.

 

[Kaka Tim]

I don't think there will be much impact on the stock market. It is so awash with QE money and has reached dizzying heights despite the global economic crash. The UK stock market is so heavily dominated and controlled by institutional investors, if they collectively take a decision not to sell, it isn't going to fall much. War breaking out with Iran and the straits of Hormuz (oil route) being blocked - that would definitely cause a stock market crash.

I wonder however if the peak oil news is why info about the solution - the new UK nuclear energy building programme - was rushed out in advance over the weekend? It sends a message to the market that at least Britain will be able to continue keeping the lights burning at a reasonable cost. In fact it could herald a return to a production based economy in the UK. Countries that remain more dependent on fossil fuels, will have higher energy costs, as crude oil prices inevitably shoot up, and thus higher manufacturing costs. Cheap nuclear energy would give Britain a major competitive advantage. And of course, higher crude oil prices will mean the age of cheap imports from China via sea freight will decline, despite the slave labour/slave wages culture that exists there.

Then again, it hasn't really been headline news, been underplayed a bit, probably because news that you'll have a new bright and shiny nuclear reactor on your doorstep (ten of them scattered around England) isn't likely to be popular with a lot of people, voters, property owners, environmentalists etc. That said, they have done such a good job reminding people how much danger the climate faces from fossil fuel usage/new coal etc, maybe there will be less opposition than you might think.

I think its more a case of the many people in the markets know or suspect whats going on but as long as they are confident that they can sell stuff on at a highter price they will keep playing. Its a bit like stock market bubbles -many people will know that a comodity is overvalued but believe they can find a 'greater fool' to sell it on to - so the price keeps going up until it suddenly pops.

AS to nuclear energy, the plants will take many years to build and will do littel more than replace existing nuclear plants which need to be decomissioned. Also nuclear power is very expensive. If we ahve already peaked the UK will be as pretty much fucked as anyhwere else in the developed world.

 

[Kaka Tim]

There is nothing there that has not been being said by the like of Cambell and so on ad infinitum since 96. If you read the comments section on places like the oil drum to geologists and resevoir engineers will say that the USGS numbers for US and world oil production have been known to be grossly overstated for decades. This is just confirmation of what this thread has been saying for years and what a blind man could work out from the OPEC resevoir jumps in the 80s.

Yeah I know. But I've been trying to ignore it and hoping we were all wrong.

 

[david dissadent]

AS to nuclear energy, the plants will take many years to build and will do littel more than replace existing nuclear plants which need to be decomissioned. Also nuclear power is very expensive. If we ahve already peaked the UK will be as pretty much fucked as anyhwere else in the developed world.

Government announced 10 over the weekend, including two greenfields sites. But given the Finnish example its going to be pretty damned expensive and late. *wonders if David Flemming is right about uranium available?*

One more link

http://www.renewableenergyfocus.com...-ingredient-in-future-energy-supply-says-iea/

Renewables say investment has dropped by about 20% this year, but global energy consumption dropped 1.5%....

Plus a little about why people should invest in renewables.

 

[david dissadent]

This is interesting.
http://www.worldenergyoutlook.org/docs/weo2008/chapter10.pdf

Check out the graph on page 227, its a stonker.

Edit also checkout Fig 10.3 on page 232, the production profile for the smaller offshore fields is pretty steep, especialy given that much of the new oil is coming from smaller offshore fields.

 

[goebfwai]

Whatever happens, they will need to look more at energy efficiency. This guy has some good ideas here:

http://www.timesonline.co.uk/tol/news/environment/article6361432.ece

 

[Dr Jon]

AS to nuclear energy, the plants will take many years to build and will do littel more than replace existing nuclear plants which need to be decomissioned. Also nuclear power is very expensive. If we ahve already peaked the UK will be as pretty much fucked as anyhwere else in the developed world.

See also: Peak Uranium

 

[david dissadent]

http://www.iea.org/speech/2009/Tanaka/WEO2009_Press_Conference.pdf

 

[elbows]

Fascinating stuff, another step towards the mainstream. I guess its been around this time of year for the last 4 or 5 years that the curtain has been slowly lifting on the pek realities as far as the mainstream goes, and depending on how the economy fares it may not be too many years longer before it features widely in the mainstream narrative of humanities future. Right now whilst the detail gets better, it still only appears on the radar sporadically.

 

[Kaka Tim]

Fascinating stuff, another step towards the mainstream. I guess its been around this time of year for the last 4 or 5 years that the curtain has been slowly lifting on the pek realities as far as the mainstream goes, and depending on how the economy fares it may not be too many years longer before it features widely in the mainstream narrative of humanities future. Right now whilst the detail gets better, it still only appears on the radar sporadically.

I've noticed polticians and commentators talking about 'the era of cheap oil being over' but theres a real (deliberate?) disingenuousness about what that actually means. The impression given is that we'll have to pay a bit more for petrol and electricity - When its as big and grave a crises as climate change, consigns growth based economic policies to the dustbin of history and is likely to hit us a lot sooner.

 

[elbows]

Well they've got their reasons, ranging from silly optimism to the market not being able to handle the truth, fear of panic, the premature death of the god of growth, and making it hard to obscure the realities of oil wars.

 

[david dissadent]

http://news.bbc.co.uk/1/hi/business/8353840.stm

Fatih Birol "The era of cheap oil is over". Welcome too 2003 then Fatih.

There also seems to be a mixing of Copenhagen with resource depletion, that somehow climate change and peak oil are linked. There has been a long running criticism of AGW that it is just a front to cover for changes necessary to prep for peak oil, Ive never bought it and still dont but this seems to be where the IEA is steering the current discussion.

 

[elbows]

There also seems to be a mixing of Copenhagen with resource depletion, that somehow climate change and peak oil are linked. There has been a long running criticism of AGW that it is just a front to cover for changes necessary to prep for peak oil, Ive never bought it and still dont but this seems to be where the IEA is steering the current discussion.

Well they are linked in that many of the problems and solutions are the same, with some exceptions such as coal. I have sometimes talked as though I think climate change is cover for peak oil, which is not exactly my position. I dont disbelieve climate change, I simply think there are some reasons why some would rather dress things up in those terms. This IEA stuff is a fairly good example. Time will tell I guess.

 

[Kaka Tim]

http://news.bbc.co.uk/1/hi/business/8353840.stm

Fatih Birol "The era of cheap oil is over". Welcome too 2003 then Fatih.

.

God that report is total

Again Utterly disengenuous. No mention of what hitting the energy buffer actaully means and even seems to suggest that if/when 'we all switch the renewables in 2020' energy will be cheaper. This complacent nonsense really makes me angry. Its not a case of 'oh bugger - it costs more and more to fill up my car' its 'oh shit - theres no food/heating/lighting etc'.

 

[Kaka Tim]

ooops - double post.

 

[elbows]

I cant listen to the BBC on this subject in recent years, although funnily enough there was an episode of the money programme around about 2002 that was about peak oil.

Mind you I was lucky enough to tune into Newsnight earlier this year when they were describing Russias gas pipelines as tentacles, god it was cringeworthy.

 

[Kaka Tim]

I cant listen to the BBC on this subject in recent years, although funnily enough there was an episode of the money programme around about 2002 that was about peak oil.

Mind you I was lucky enough to tune into Newsnight earlier this year when they were describing Russias gas pipelines as tentacles, god it was cringeworthy.

Yes - I saw that too. IIRC it pretty much echoed the frist post in this thread. I'm suprised no politicians - like ex-ministers - have broken cover on Peak Oil yet. Its the ultimate elephant in the room.

 

[free spirit]

75 million barrels a day oil production more likely estimate for 2030 than IEA's 105 million barrel a day prediction says Kjell Aleklett, professor of physics at Uppsala and co-author of a new report "The Peak of the Oil Age"[Guardian]

 

[kyser_soze]

OK, does anyone have any background on the guys who are saying we're past it etc? Who their links are? For example, what's Prof Aleklett's interest in this?

There seems to be an awful lot of confirmation bias going on there, with no source checking etc, simply 'X bod says something I agree with about peak oil so I won't question it'

Not saying they aren't right, they probably are...

 

[Dr Jon]

I just spotted this article, which suggests that there isn't such an acute shortage of oil as people imagine, because prices are also being manipulated by our old friends, the Money-Juggling Parasites:

Goldman Sachs (GS), Morgan Stanley (MS), BP (BP), Total (TOT), Shell (RDS.A), Deutsche Bank (DB) and Societe Generale (SCGLY.PK) founded the Intercontinental Exchange (ICE) in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.
...
You can chart the damage done by Goldman Sachs and their gang of thieves by looking at commodity pricing pre and post ICE. Before ICE, commodities followed a more or less normal growth path that matched global GDP and was always limited in price appreciation by the fact that, ultimately, someone had to take delivery of a physical commodity at a set price.

See:
The Global Oil Scam: 50 Times Bigger than Madoff

 

[Mab]

The people in Ecuador and Niger may say different. The US. reached peak oil in 1970 and the West will continue to invade and corporations will terrorize the environment and people. Technology will not save us but thinning our species might--a small one. I don't drive or have kiddys, but of course I love them). There just too many here.

 

[Mab]

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.

The people in Ecuador and Niger may say different. The US. reached peak oil in 1970 and the West will continue to invade and corporations will terrorize the environment and people. Technology will not save us but thinning our species might--a small one. I don't drive or have kiddys, but of course I love them). There just too many here.

 

[elbows]

I just spotted this article, which suggests that there isn't such an acute shortage of oil as people imagine, because prices are also being manipulated by our old friends, the Money-Juggling Parasites:



See:
The Global Oil Scam: 50 Times Bigger than Madoff

That article was annoying on several levels. Its a giant rant that may very well contain some truth about how things are manipulated, but it does not actually tell us anything about the oil supply-demand balance.

And who said there is an acute shortage of oil anyway? There isnt, we just started to lose the buffer between demand and supply in recent years. At some point this leads to a crunch, but if the rising price of oil causes economic poop which destroys some demand, its perfectly possible to have peak oil production without any apparent acute shortage. This has already happened once, although the reduction in demand does not look large enough to prevent the cycle from repeating again quite quickly, subject to other economic woe.

 

[elbows]

OK, does anyone have any background on the guys who are saying we're past it etc? Who their links are? For example, what's Prof Aleklett's interest in this?

There seems to be an awful lot of confirmation bias going on there, with no source checking etc, simply 'X bod says something I agree with about peak oil so I won't question it'

Not saying they aren't right, they probably are...

Im not familiar with Aleklett, I know that Simmons has an energy investment business so a variety of motivations are possible.

There may be some confirmation bias going around, but there is a fair amount of fact checking, you only have to look at the figures for amount of oil produced yearly for each year this decade. That still leaves some problems, namely there are some big gaps in terms of reliable data on oil production and many reserve figures are a joke. There is also an issue where just because the oil production figure seems to get stuck at a certain level and fall off, that doesnt prove its the final peak. Only time will tell for sure, although people can get some idea of how likely this stuff is by looking at the decline rates for existing oil fields, then looking at what new fields are available to come online, and see if this is enough to offset the decline from existing fields. Ive not exactly carried out scientific study of this to a high level myself, but the large variety of graphs Ive seen do suggest that filling the gap will be at best a huge challenge, and at worst the gap will grow quite rapidly and I can quite imagine this thread becoming obsolete within 5 years because the reality will become obvious.

 

[david dissadent]

Developed world oil demand has peaked.

New technologies, eco concerns and the reduction from the recession have all combined to cause a permenant peak in demand for the west.

But they still have big eyes on Chinese demand. How will they meet this?

http://www.energybulletin.net/node/51352

He said he hoped Iraq would become a major oil player, producing up to 10mbd in the next decade if the political situation remains relatively stable.

This talk of a ramp up in Iraqi oil has been doing the round for many months now.

But the Saudis weighed in

Khalid al Falih, Aramco's chairman and chief executive, hit out at 'misleading' rhetoric that the world was weaning itself off fossil fuels, saying this did not give producers confidence to keep investing in production.
The head of the world's biggest producer company was speaking at a World Economic Forum session on the global energy outlook in Davos. 'We don't believe in peak oil,' he told reporters later.

And in other news Phillip Morris declare cigarettes safe.

But other petrol bosses remained unconvinced. 'The problem of peak oil remains,' said Thierry Desmarest, chairman of French giant Total. Mr Desmarest said it would be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10% more than today's level.

I always figured we got another 2 million barrels of crude and condisate production by 2012 then the down slope looms into view. Could be wrong but thats going on things like Chris Skerbowskis mega projects program and the long long lead times on things like ultradeep water (Tupi in Brazil, Jack 2 in the GOM and so on.)

As for Iraq, those fields were opened all barrels blazing for years with no concern over gas pressure or maintaining the pourosity of the reseviour rock. Like the FSU it is likely those fields were really heavily damaged and while production can be raised they wont be seeing there individual peaks again. The big wild card in Iraqi Kurdistan and the excellent oil geology up there that has not been fully explored. Perhaps the last great cheap oil province, ironic as Kirkuk was one of the first.