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Responses to the NY Times article on peak oil

On March 5, the New York Times broke their near silence on peak oil by publishing an article by energy correspondent Jad Mouawad, entitled Oil Innovations Pump New Life Into Old Wells. (Also posted at EB and Mobjectivist.)

We've collected here a number of responses to the article from members of the peak oil community, and have reprinted them here.

For readers who don't want to go into the technical details, Jeffrey J. Brown, an independent petroleum geologist gives a quick summary of our response:

Can we find more oil? Yes.
Can we increase the recovery factor? Yes.
Can we increase our nonconventional oil production? Yes.
Will it make a material difference? In my opinion, No.

-BA


Bart Anderson, Energy Bulletin co-editor

A very disappointing piece from a normally top-notch NY Times energy reporter. In this article, he basically transcribes the industry talking points, without digging into the reality of the story. He mentions only one peak oil forecaster by name, and apparently has not looked deeply into what peak oilers have said.

The article demonstrates how reporters can lose their independent judgment when they identify too closely with sources of information. As a former reporter, I can understand how easy it is to be swayed by industry experts with a polished line. If one is writing on deadline, who are you going to trust? A PhD at the helm of 3-D oilfield modeling station presents a very reassuring image. Unfortunately, going by superficial impressions often lead one in the wrong direction. One would have hoped for better from the New York Times and Jad Mouawad. How can you report on peak oil without reading what the peak oil camp says?

For background, see the articles that EB has archived on the CERA report. There's a big story there, just waiting to be written about. It's a scandal that the three most prestigious newspapers in the U.S.A. (the NY Times, Washington Post and LA Times) have not done in-depth reporting on peak oil. In contrast, the Cleveland Plain Dealer and the Chicago Tribune have run excellent series.

In the video that accompanies the article, Mr. Mouawad does admit the reality of peak oil:

...oil companies believe they can extend the life of even the oldest fields and delay the time when oil production will inevitably decline.

The double-think of the oil industry is captured by this jaw-dropping quote from a Chevron engineer:

Yes, there are finite resources in the ground, but you never get to that point.


"Substrate" on a forum at The Oil Drum

It gets even worse than just omission. That whole article seems to be shooting itself in the foot.

One poster below noted that one of the fields they trot out, Kern River, appears now to be in steep decline despite their magical technology. [It's true, the graphic available with the NYT article, shows Kern River in steep decline. -BA]

The other graph there is one of oil prices, showing that as the price goes up, more oil becomes economically available. But wait - isn't that part of the point? I'm sure lots of oil would be economically available at $1,000/barrel but that surely doesn't help anyone.

But then what are these economically available oil resources that show up at higher prices? Hard to reach, and low EROEI sources including oil sands, and shale. Also, somehow...ethanol makes the list, which last I checked was not oil.

...and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil.

So, having to go to the ends of the Earth to find oil should somehow comfort us that oil's not getting harder to find and extract.

Except for the extreme bias in the writing, the article does a dandy job of explaining why peak oil is pretty close if not here.


EB contributor Greg Jeffers

How is it that any credible news provider still sees CERA as a viable, independent source? If CERA was a hedge fund manager, their fund would have gone belly up long ago, considering how badly their predictive record has been. I cannot find a single accurate prognostication on the price or production volume on either world oil or North American Natural Gas since 2000 in the literature.

Still, the Main Stream Media feels obligated to present "both sides" of the story. [Actually Jad Mouawad's article only presents one side of the issue - the oil companies's side. -BA] Some should remind the MSM that under no circumstance does 2 + 2 = 4.5 - even if one "expert" says the sum is 4 and another "expert" claims it to be 5.

As Huxley famously said - "Facts to do not cease to exist because they are ignored."

On the other hand, one must truly admire CERA's public relations agency.


Douglas Low, editor of the newsletter for the Oil Depletion Analysis Center (ODAC):

This is a ‘top story’ in today’s New York Times, web edition, and seems to be aimed entirely at shooting down Peak Oil. The usual tricks: avoids any discussion whatsoever of the multitude of problems that concerns Peak Oilers; the video refers to Peak Oilers as saying that oil is about to run out (i.e. we do not know what we are talking about); a suitable quote from Daniel Yergin – the same one as usual; the article even refers to the USGS 2000 report, which I understand has lost all credibility (not of course that it really had any in the first place); and Nansen Saleri of Saudi Aramco suggesting that Saudi oil ‘resources’ might be 1 trillion barrels – the suggestion being that new technology might extract much/most of this 1 trillion barrels. The article also has a video, which is equally anti-Peak Oil...

The article then goes on to describe how this wonderful technology gets the oil out, without discussing how much energy it uses, where this energy comes from, and what are the future implications of using so much energy, what are the limits, EROEI ? Presumably this technology requires a lot of energy (it is using steam - gas, electricity ?) and therefore cannot be used just anywhere? What about potential shortages of electricity / natural gas ? Never let the facts get in the way of a good story...


Jeffrey J. Brown aka "westexas" is an independent petroleum geologist in the Dallas area. He is long-time a contributor at The Oil Drum and Energy Bulletin

I think that the New York Times article ("Oil Innovations Pump New Life Into Old Wells") is another example of the "Iron Triangle" striking back (see explanation at the end).

I suspect that the recent flood of attacks on Peak Oil have a lot to do with the recent release of the EIA data showing a continued decline for all of 2006 in world and Saudi crude oil production, as predicted by our mathematical Hubbert Linearization (HL) models.

The article mentioned some examples of nonconventional production and secondary/tertiary recovery techniques in the Lower 48. But they somehow failed to mention that Lower 48 production has fallen more than 50% since peaking in 1970, despite all of our technological advances.

It also somehow escaped their attention that the North Sea has shown a steady decline since peaking in 1999--so much for our improved technology.

And somehow, the NYT failed to realize that both of these regions peaked, 29 years apart, in close proximity to the 50% of Qt mark (when half of their estimated recoverable reserves had been produced), based on their HL plots.

And it somehow escaped the attention of the NYT that either 13 out of 14 or 14 out of 14 of all super giant oil fields that are, or were, producing one mbpd or more are now in decline.

The function of oil companies in post peak regions, like the world, in my opinion, is to slow the rate of decline of crude oil production.

Can we find more oil? Yes.
Can we increase the recovery factor? Yes.
Can we increase our nonconventional oil production? Yes.
Will it make a material difference? In my opinion, No.

Definition of the “Iron Triangle”:

I think that we are seeing an "Iron Triangle" of sorts defending the status quo concept of ever expanding energy supplies: (1) most housing, auto, financing and related companies; (2) Most Mainstream Media (MSM) companies that are selling advertising to Group #1 and (3) some major oil companies, major oil exporters and energy analysts that are working for the major oil companies and exporters.

The housing/auto/finance group wants to keep selling and financing large homes and SUV's.

The MSM wants to keep selling advertising to the housing/auto group.

In my opinion, some major oil companies are afraid of punitive taxation, and some exporters are afraid of military takeovers. This group of oil companies, exporters and their analysts provide the intellectual ammunition for the other two groups, i.e., promising trillions and trillions of barrels of conventional and nonconventional oil reserves.

-Jeffrey J. Brown


Jeff Moss, EB contributor

There is no mention in the article that Kern River and Duri are heavy oil fields (although originally possessing light crude endowments), which respond well to steam floods. Steam floods are useless for conventional oil fields –light crude-

which comprise the vast majority of fields. There is also no mention that steam flooding in the San Joaquin basin – Kern River, Midway-Sunset, Elk Hills, Beldridge etc) began in the 1970s – 30 years ago. This is hardly new technology.

And, incidentally, Indonesia is in terminal decline and is a net oil importer, despite Duri. As for Chevron, if they are such wizards at recovering previously unrecoverable oil, why has their oil production (taking into account the Texaco acquisition) declined every year for the past five years?

Regarding Exxon and the Means field, I am familiar with the big Permian Basin fields, and have never heard of this field and cannot find any information on it on the web. Does “doubling production” mean –no pun intended- going from 1,000 to 2,000 barrels a day? I am personally familiar with the giant Wasson field of West Texas which has been under CO2 flood since the early 70s. Again, CO2 floods are hardly new technology. The current production from Wasson and the other West Texas giants under CO2 flood is a tiny fraction of what they produced in their primes. (Colin Campbell called this the “tadpole tail effect).

The “small band of retired petroleum geologists” is a lot bigger than the small band of economists – Yergin and Michael Lynch –who run highly profitable “consulting’ firms that cater to the integrated oils and oil-producing countries. Yergin and Lynch are lacking in technical and scientific expertise as regards the petroleum industry, but no one seems to call them on this.


Letter to the New York Times by EB reader Bill Goedecke

The article ‘Oil Innovations Pump New Life Into Old Wells’ (March 5th) generalizes about the size of oil reserves based on a few examples. The article lacks any coherent analysis of what the discussion actually is about in regards to oil field (and hence, oil reserves) decline. The criticism about the lack of transparency over oil reserve calculations is not mentioned although it is alluded to (‘…the Saudi estimates are impossible to verify…’). Important information, such as the fact that Kuwait’s massive Burgan field and Mexico’s biggest oil field, Cantarell, are both now in decline, is not mentioned. Even though there may be cause for optimism, this needs to be presented in terms of the larger picture in a coherent analysis if the author’s intent is to present a serious argument that reserves are actually sufficient in the face of increased world-wide use.

Bill Goedecke

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