Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
ASPO Newsletter #69 September 2006 (PDF)
Colin Campbell, ASPO
Contents:
- War
- Regional Assessment – EURASIA
- ASPO Database
- ASPO-6 International Conference
- Thoughts on the future mission of ASPO
- Climate Change
- Review of an oil supply forecast by CERA
- The Retreat from Marketing
- Review of ASPO-5: The Fifth International Conference on Oil and Gas Depletion
- Peak Oil and the Oil Industry
- The Oil Depletion Protocol – Adopt it Today!
(12 September 2006)
Jack-2 and the Lower Tertiary of the Deepwater Gulf of Mexico
Dave Cohen, The Oil Drum
With the successful test drilling of Jack-2 in the ultra deepwater Gulf of Mexico, there has been a media blitz proclaiming the good news. The “peak oil” theory is under attack. .. Let’s take a closer look at the prospectivity, geology, economics, technology, reservoirs, hydrocarbons and logistics of the Lower Tertiary play in the Gulf of Mexico (henceforth the LTGOM).
It is important for everyone to understand that the large EUR numbers quoted do not apply to any one field but rather represent the entire Lower Tertiary region. ..
Unanswered logistical concerns include securing rigs, transporting produced oil to market and what to do with associated natural gas. ..
(11 Sept 2006)
Article covers much more on the many constraints on oil production from the LTGOM, and deflates some panglossian prose from Business Week for good measure.-LJ
Peak oil theories wrong, ExxonMobil executive says
AAP, The Age
The world has an abundant supply of oil, and high petrol prices are just the reality of a globally-traded commodity, ExxonMobil Australia chairman Mark Nolan says.
Mr Nolan used his speech to the Asia Pacific oil and gas conference in Adelaide on Monday to debunk the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.
Such predictions, he said, had been around since the 1920s, particularly at times of high oil prices.
“The fact is that the world has an abundance of oil and there is little question, scientifically, that abundant energy resources exist,” Mr Nolan said.
“According to the US Geological Survey, the earth currently has more than three trillion barrels of conventional, recoverable oil resources.
“So far we have produced one trillion.”…
Mr Nolan’s comments were endorsed by the president of the Society of Petroleum Engineers, Eve Sprunt, who said the proponents of peak oil theory often confused oil reserves with available resources.
(11 Sept 2006)
Of course, peak oil theorists do not necessarily state that ‘oil supplies have peaked’, rather that oil production will at some time peak. Even the U.S. Geological Survey are really peak oil theorists. The reverse point, that oil production will grow indefinitely is indefensible.
The Australian Senate enquiry into Australia’s future oil supply and alternative transport fuels noted that:
Peak oil proponents have criticised official estimates of future oil supply with detailed and plausible arguments. The Committee is not aware of any official agency publications which attempt to rebut the peak oil arguments point by point in similar detail. …
Their concerns [include] the following observations or propositions:
…The USGS 2000 estimate of potential new discoveries, to be realised, would require a drastic turnaround of the historic decline in the rate of discovery. Discoveries in the study period to date have been far short of the suggested rate. ‘This is doubly damning because the larger fields are found first.’
For more on this issue see The Countdown for the Peak of Oil Production has Begun – but what are the Views of the Most Important International Energy Agencies.
With regards to the point about confusing reserves with resources – depending on speculative resource estimates can be very misleading, as the USGS study demonstrates. Colin Campbell and ASPO have long expressed concern about inconsistent reporting techniques for various forms of reserves. As a more easily agreed upon definition they have prefered instead “to avoid the term Reserves altogether, and speak of best estimates of future production from known fields to 2075.”
Further, it might be argued the optimists confuse the significance of reserves and resources with flows. Chris Skrebowski made the point [PDF] in Pisa at ASPO 5 that:
- The world needs oil production flows
- Consumers need delivery flows
- Reserves are only useful as flows
- Peak oil is when flows can’t meet the required demand
- This will cause an ‘Economic Tsunami’
- Worry about flows not reserves
-AF
Predicting the peak
Eric Mathiesen, Norwegian Petroleum Directorate
Most observers agree that production of conventional crude has reached or will soon reach its tipping point, but this does not mean that the world is out of oil.
Large parts of the planet remain little explored, for instance, and hopes are high that major oil and gas discoveries could be made in the Arctic and in new deepwater areas.
The USA also has a lot of energy locked up in oil shales, while Canada and Venezuela have extensive deposits of petroleumrich oil sands. Producing such resources is technically feasible, but is expensive, energy-intensive and environmentally challenging.
Norwegian oil production is already past its peak, declining by an average of four per cent annually from 3.1 million barrels per day in 2000. Production has averaged 2.4 million barrels so far this year.
Borne out
Dr Hubbert’s theory is borne out for Norwegian oil output on the basis of existing reserves – in other words, the amount of crude sanctioned for production.
But that figure is supplemented by resources available from improved recovery projects, the development of proven fields and discoveries yet to be made.
All these factors could help to demolish Dr Hubbert’s ideas, and would also mean that production can peak before half the crude has been recovered.
That probably also applies on a global basis. In addition to booked reserves, the resource base can accordingly be expanded by improved recovery and proving new resources.
So the rules which apply in Norway – the importance of proving new resources while improving the recovery factor on existing fields – also apply to the rest of the world.
This is underlined by the Norwegian government’s recently adopted target of adding five billion barrels of oil equivalent to the country’s petroleum reserve base by 2015.
(11 Sept 2006)
Contributor Sohbet Karbuz writes:
The article was first published in Norwegian Continental Shelf (no. 2-200), a journal of the Norwegian Petroleum Directorate.
The article unfortunately does not fit in the quality of the journal, and is a good example of peak oil illiteracy. It explains and interprets Hubbert’s peak, reserves and resources without understanding them well enough.
A strange, and not very clear article. I guess the point is supposed to be that the theoretical Hubbert Curve is too symetrical, whereas in reality, advanced recovery techniques may slow the decline, extend the tail of the curve out further. That very well may prove true, but if so that would not so much be a demolition of Hubbert’s theory as a refinement. Note that the official EIA projections predict a peak and then catastrophic drop off of oil production long past the half way point of recoverable oil. So in relation to these projections, the author might just as well said that the truth may prove something like Hubbert predicted, only more so.
Jeffrey Brown comments:
The US Lower 48 and the North Sea could not be more different, but both regions peaked (crude + condensate) at the same point, based on the Hubbert Linearization (HL) method, when both regions were about 50% depleted. Since peaking in 1999, North Sea production is down about 30% (through June, 2006).
According to Matt Simmons, the top major oil companies working the North Sea in the Nineties were predicting that the North Sea would not peak until 2010. These are the same guys telling us not to worry about a worldwide peak now.
-AF
Stormy world of energy has a clear forecaster
David Kaplan, Houston Chronicle
Houston was rocking and rolling in 1980, with oil at $40 a barrel and some people in the industry predicting it would soar to $100. One of the few dissenting voices, Henry Groppe Jr., forecasted that by 1985 oil would fall to $15. “This guy’s a nut,” Houston energy analyst Matt Simmons recalled an oil executive telling him then. “He ought to be locked up in a straitjacket.” After oil plunged to $14 in 1986, Groppe was “treated like a prophet with a crystal ball,” Simmons recalled.
Groppe sees oil hovering in a range of no less than $55 to $65 a barrel for the next 10 years and likely much more because unforeseeable political unrest and weather will drive prices up. ..
To avoid a global crisis, Groppe thinks that Americans should use the next 10 years, a time in which production output is expected to peak, to transition into new energy-usage habits.
“We must rely more on nuclear power and alternative energy supplies and use all energy more efficiently,” he said. He is no fan of ethanol, which he calls “pure farm-bloc subsidy.” The energy spent on producing it is greater than the output, he said, “not to mention depletion of the topsoil.”
(10 Sept 2006)
