Peak oil theorists don’t know Jack

Patrick Brethour, Globe & Mail (with files from Bloomberg and Reuters)
An oil well drilled deep beneath the floor of the Gulf of Mexico might lead to the biggest find in years. It might also prove that not all the biggest petroleum discoveries are in the past.
CALGARY — The elephants aren’t extinct yet.

Chevron Corp. and its partners say they have tapped into an area that may contain as much as 15 billion barrels of oil in the ultradeep waters of the Gulf of Mexico — the kind of massive reservoir of crude that the industry dubs an elephant discovery.

The days of such discoveries were supposedly gone, with oil supplies peaking as the world simply ran out of big oil-producing fields, according to pessimistic forecasters. Instead, high technology and sky-high oil prices have combined to transform dud prospects into billions of barrels of crude.

“The industry is still very capable of coming up with new ways of producing oil,” says Michael Lynch, a prominent opponent of the notion of peak oil — that global supplies of crude are set for a marked decline.
(6 Sept 2006)

Extra! Oil Discovery Saves Civilization!

Jeff Vail,

Extra! Oil Discovery Saves Civilization!

For 35 days.

In 2013.

Except for decline in other fields.


The huge news today is that Chevron, Norway’s Statoil, and Devon Energy have jointly discovered our collective salvation in the “Jack 2” deepwater oil platform in the Gulf of Mexico. CNN, Fox, and ABC have all been carrying this as the top story all day.

MSNBC and CBS have relegated it below the much more significant story of the Crocodile Hunter Steve Irwin’s death–where it belongs.

Before we discuss conspiracy theories of why this news is coming out now, let’s first look at the facts in the absence of cable-news hype. This larger field, of which Jack 2 is just a small part, may someday yield between 3 and 15 billion barrels of recoverable crude. It won’t even start to produce oil until 2013, if everything goes according to schedule. Then, it (the entire tertiary GOM zone) may eventually produce 400,000 barrels per day. That’s about how much Mexico’s Cantarell field declined in production this year. And how much it will decline next year. And the year after. Ultimately, 3 billion barrels of oil will fuel the world–at current consumption levels–for about 35 days.

Did I forget to mention? Chevron first confirmed Jack 2’s viability in 2004. They’ve known all along the expected size of the field’s reserves, and this figure has long been part of Peak Oil calculations. In fact, the 6000 barrel per day flow rate of the test well was finalized and published in May of this year. There is absolutely no new information about this event to surface in the past three months. So why all the hype now?
(5 Sept 2006)

Massive Oil Find In Gulf of Mexico Brings Gloom to ‘Peak Oil’ Pranksters

Raymond J. Learsy, Huffington Post
I hate to say “I told you so,” but the news of a big new oil discovery by Chevron and two partners in the Gulf of Mexico confirms what I’ve been saying for years: Oil is not scarce. Big Oil’s price manipulators only want us to think it is. (See my May 24, 2006, blog: “Oil Is Not Scarce — The Oil Industry Continues to Play Us For Fools.”)
(8 Sept 2006)
Learsy has been a vocal critic of peak oil theories from a liberal Democratic standpoint, apparently seeing peak oil as a shadow puppet for oil interests. -BA

Plenty of Oil-Just Drill Deeper

Mark Morrison, PUB
The discovery of reserves in the Gulf of Mexico means supply isn’t topping out
You can tune out all the scare talk about Peak Oil for a while—probably a long while. Peak Oil is the theory, on the verge of becoming conventional wisdom, that the world’s petroleum supply is topping out and will not be able to meet global demand soaring along with the economies of China and India. But a successful test in a mammoth field deep beneath the Gulf of Mexico, announced on Sept. 5 by Chevron (CVX), Devon Energy (DVN), and Norway’s Statoil (STO), should help put that scary scenario on hold for decades.
(7 Sept 2006)

Discovery Paves the Way to an Oil Peak

Jim Cramer,
An oil discovery worth noting — hallelujah! From the beginning of this historic run in oil, I have said that you will not get a peak until we discover more oil and oil companies can flood the market with oil that’s in safe, non-political areas.

Like the Gulf of Mexico.

And we finally got some, this Gulf discovery by Chevron, Devon and Statoil, deep under the waters covering the Jack field.

What’s important about this find — beside the fact that I have been buying Devon aggressively for Action Alerts PLUS! — is that I believe this will be the first of many finds that would have seemed uneconomic three or four years ago.
(5 Sept 2006)
Contributor AN comments: “A classic economist/trader approach.”

Byron King cheers Gulf oil discovery, but says ‘no impact whatsoever’ on peak oil
Marc Strassman, Etopiamedia
Byron King “congratulates and commends” Chevron on their ultra-deep ultra-high tech oil discovery in the Gulf of Mexico, says it will have “no impact whatsoever” on the general question of peak oil.

A twenty-minute audio interview with peak oil expert and commentator Byron King (an attorney and formerly a geologist)
(6 Sept 2006)