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Peak Oil: Laherrère responds to Yergin (English translation)

Jean Laherrère, co-founder of the Association for the Study of Peak Oil is a retired expert from the French oil company Total. He picks apart the latest analysis from the champion of optimists, the American Daniel Yergin.

[Excerpts. Complete article in English and en français at Auzanneau's Oil Man blog.]

Daniel Yergin is back. The author of The Prize, an oft-cited history of oil which glorified the industry, last week has published an editorial in The Wall Street Journal, in advance of the release of his latest work, The Quest.

Daniel Yergin is the vice-president of IHS, a powerful economic intelligence agency considered to be very close to the major American oil companies. The arguments this first-rank analyst develops in the Wall Street Journal is a long-awaited counterattack on the proliferation of alarming forecasts for the future of global oil production.

Daniel Yergin admits that success in satisfying future demand for petroleum constitutes a “challenge”. But he says he has severe doubts about the credibility of the members of ASPO, the Association for the Study of Peak Oil, who claim that this battle has already been lost, due to lack of sufficient oil reserves that remain to be exploited.

In his portrayal of the current situation, the vice-president of IHS omits a key fact: conventional oil production (the classical liquid oil which comprises 80% of the current crude oil supply) reached its absolute peak in 2006. The date of 2006 was predicted back in 1998 by Colin Campbell and Jean Laherrère, two petroleum geologists who founded ASPO.

And so I have asked Jean Laherrère, former chief of exploration technology at Total, to react to the key statements contained in the optimistic analysis provied by Daniel Yergin.

Daniel Yergin/Jean Laherrère

 

Daniel Yergin: “Just in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added.”

Jean Laherrère: Daniel Yergin cites official, political estimates published in the Oil & Gas Journal and by BP. According to these figures, global reserves were at 1253 billion barrels (Gb) in 2007 and at 1333 Gb in 2009, after the addition of 72 Gb of extra-heavy Orinoco oil discovered in Venezuela... in the late 1930s. What is, let us say, astounding about this, is that Mr. Yergin ignores the confidential figures from his own agency, IHS.

These figures, here they are. Note that they do not incude the extra-heavy oil

 

Découvertes (Gb)

Production (Gb)

2007

10

26,0

2008

13

26,3

2009

12,4

25,8

Total

35,4

78,1

The reality is that for each barrel produced less than 0.5 barrels have been discovered, and not 1.6! Oil continues to be consumed faster than it is discovered. This situation has lasted for a quarter of a century now.

Daniel Yergin: "One example [of revolutionary technology] is the "digital oil field," which uses sensors throughout the field to improve the data and communication between the field and a company's technology centers. If widely adopted, it could help to recover an enormous amount of additional oil worldwide—by one estimate, an extra 125 billion barrels, almost equivalent to the current estimate reserves of Iraq."

Jean Laherrère: It is at present quite fashionable to talk of the “digital oil field” to impress investors. But to this day I have not come across any mature field that has significantly increased its reserves by the use of this technology. To pretend to be able to grow reserves by 125 Gb thanks to this technology amounts to nothing more than wishful thinking, and does not stand up to any serious study.

[End of excerpt]

Editorial Notes: See the complete article in English and in French at the Oil Man blog (Le Monde). Bloggers and journalists, please cite that URL and give proper attribution. Matthieu Auzanneau is an independent journalists and needs recognition and support to continue with his work. Many thanks to Natasha for the English translation. Thanks to Dmitry Orlov for making the translation possible. -BA

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