Peak Oil (a myth?)

Is the idea of 'Peak Oil' a myth laid out by the Oil companys so they can justify a price rise? I used to believe the tale that the worlds oil reserves are fast running out and that if we don't find alternate source of energy we pretty well buggered!
But after reading this I am starting to wonder. I'm going to look into the Russian research a bit more. I suggest you read newsletters 52 on.

[Edited on 29-3-2004 by Britman]

[Edited on 30-3-2004 by Britman]

Originally posted by Britman
Is the idea of 'Peak Oil' a myth laid out by the Oil companys so they can justify a price rise? I used to believe the tale that the worlds oil reserves are fast running out and that if we don't find alternate source of energy we pretty well buggered!
But after reading this I am starting to wonder. I'm going to look into the Russian research a bit more. I suggest you read newsletters 52 on.

[Edited on 29-3-2004 by Britman]

Well, that's interesting.
I thought everyone knew the answer, but I guess the news hasn't percolated far enough yet.
Most of my clients are O & G majors, and they are not too concerned about running out any time soon.

A better third-party perspective can be seen at
�LE CHATELIER OR BUST? WHY DOOMSDAY SCENARIOS ARE ALWAYS WRONG

When I got in the business of poking around remote parts of the planet,
�there was this idea that the limit was impending.
It soon became apparent that we have only scratched the surface.
There are vast reserves waiting to be tapped.
One of my colleagues' clients suppressed a major LNG discovery in order to negotiate better ROI.
This happens all the time in the industry.

This kind of fear-mongering is fostered by the 'Enron' types -
�- folk who don't actually do anything more than trade rumours in order to drive options pricing.

There now, does that help you sleep better ?
...X...

nice one. I'll read that later. I bet kids in school are still being told that oil comes from dead dinos and plants!

Wow. It's the consumers that keep getting screwed. I know there's a chain of islands in the south pacific, that has an untapped oil reserve, I believe there are several countries claiming it as their land, including the United States. It's sad when you think about alternatives to fuel, that are far more efficient and environment friendly, but the oil companies pretty much rule the world. I can someone not be furious about this?

Are we running out of oil? It really depends on who you talk to. Actually, the real question is how long will we have cheap oil? We won't know for sure until after the peak. Thus the term peak oil.

The only thing that you can do is look at facts such as, the U.S. imports 60% of its oil. If oil production wasn't in decline, then maybe demand is increasing. Why do we import so much of our oil? Either way, you have an increase in prices.

Shell cut their reserve estimates by over 20% this year. Proof that some overestimate the amount of reserves that the world has.

AS of 03/29/04 we are not in an oil decline. However, the peak will happen some time in the next 20 years barring extreme new oil extraction techniques.

This could happen tomorrow, it could be 20 years from now, it could be 30 if a new cheap method of extraction is developed, but it will happen.

The current oil prices have nothing to do with peak oil. They are due to OPEC cutting back supply.

The same will eventualy happen for all natural resource that are non-renewable. (For example you can regrow trees, you can't regrow iron) THe first resource this will happen to is oil.

The peak isn't about there being no oil, its about there being CHEAP oil. And oil is still cheap. As i said, prices are due to OPEC, not the peak....yet.

Peak Oil is not a myth but its a reality in front of us. And the reality is close and getting closer fast. It is predicted that around 2010 the oil production will peak and after the peak will come the decline. But as the demand will be still high then the prices will rock sky high and economy will be shaken. People will be unhappy with their government and will revolt becuase of doubling prices. It is right now talked about high gas price, but think about when the prices will double because it will be more expensive to get the rest of the oil from the ground because it will be deeper and in geographicly unwelcoming areas.
Discovery reached a peak in the 1960s despite all the technology we hear so much about and a worldwide search for the best prospects. Discovery Rate: we now find one barrel of conventional oil for every four we consume

The world�s oil-based economic and social systems are nearing the end of the road. There is little chance that either can survive even modest declines in oil production, and no chance that they can exist in a world where energy supplies are decreasing at an accelerating rate. There is only so much oil in the world. We have found ninety percent of the world�s oil, and used half of what we have found. Adding to the looming geopolitical crisis, half of what oil remains lies under the parched sands of three Middle Eastern countries. �Well before 2010 the world will be vulnerable to 1970s-style oil shocks.�



This shows the effect of proper backdating. The discovery trend shown in yellow is falling not rising.



Prudhoe Bay field. It is the largest field in N. America.
� The Operator internally estimated its reserves at 12.5 Gb in 1977, but reported 9 Gb.
� Various enhanced recovery methods were started in 1982
� Decline commenced in 1988. Enhanced recovery did arrest decline for one year, but then the decline was steeper.
� The field will barely make the original estimate. Nothing was added



� This shows the growing gap between discovery and consumption as we move from surplus to deficit
� The yellow curve shows exploration drilling.
� Note that the level of activity barely affects the discovery trend. It destroys the flat earth heresy that discovery is driven by market forces



Discovery, shown in green, peaked in 1930 at the edge of the chart. Production peaked 40 years later



It is the same pattern in the North Sea, but advances in technology reduced the time lag to 27 years. We are getting better at depleting our resources.



� This shows the depletion of the Middle East.
� Actual production has been far below what was possible
� Note how rapidly production will have to rise to meet demand even with that being curbed by rising price. It is optimistic to believe that such an increase can be achieved in time.



This is the world as a whole.
� The green bars show discovery, highlighting a few exceptional spikes in the Middle East.
� The oil shocks of the 1970s cut demand so that the actual peak came later and lower than would otherwise have been the case
� It means that the decline is less steep than it would otherwise have been
� It reminds us that if we produce less today, there is more left for tomorrow.
� It is a lesson we need to relearn as a matter of urgency.

As you can see that everything shows that oil production will hit the bottom at around 2050. But that is not when oil based economies will be shaken. Oil based economies will be shaken much before that. So all together if the world deosnt find something to be put instead of natural gases and oil then it will be in deep trouble.




This shows the distribution of oil
Note how North America has consumed most of its oil
Note how the Middle East has most of what is left



This shows a production profile imposed by these known and easily understood resource constraints.
It is not prophecy. It is reality

Two-phased Crisis
We face therefore a two-phased crisis, the first of which has already arrived, as predicted
� A price shock comes when Middle East share reaches a critical threshold, and even it cannot raise production fast enough to meet demand. Non-Middle East production falls. That is happening now.
� The second phase comes around 2010 with the onset of chronic long-term shortage, as the Middle East can no longer meet even current demand, never mind growth. By then, it will be asked to supply 50% of the world's oil, which will be beyond is ability



A good read about peak oil and what it did in its history.
www.gulland.ca...

Links:
peakoil.org...
www.hubbertpeak.com...


Conclusion:
I wish this answer your question that peak oil is not a myth but it is the future of man kind.
What has to be done now it a couple of things.
1.You can raise taxes on high gas eating cars.
2.Explore technology on something that can replace oil, natural gas, etc.
3.Start producing cars that eat less oil(hybrid)
4.Come to terms that oil peak has hit and start thinking about the future instead of telling people that everything is good.

Out,
Russian