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Declining Production in Venezuela

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Declining Production in Venezuela

Unread postby StarvingLion » Wed 17 Aug 2016, 02:20:48

as we never consumed so much oil as today


Here we go again. If it isn't the pseudoscience of "barrel counting" then its the meaningless reference to "oil".

The definition of "oil" has changed dramatically to include all kinds of weird vapors, tar-like gunk, and just about any other concoction that can be shoved through a pipeline and made to burn.

How can we be consuming more "oil" when Peak Oil occurred 10 years ago?

The dupes will never learn.
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Re: Declining Production in Venezuela

Unread postby AdamB » Wed 17 Aug 2016, 06:57:23

StarvingLion wrote:
as we never consumed so much oil as today


Here we go again. If it isn't the pseudoscience of "barrel counting" then its the meaningless reference to "oil".


Or the meaningless reference to "worthless money" by those without the courage of their convictions, who can only pontificate and then tuck tail and run from the first demonstration of why they are wrong.

If you know nothing about money, and its worthlessness or not, and refuse to have the courage of your convictions, why should someone listen to a word you say, if even YOU know you are just making it up as you go along?

StarvingLion wrote:The definition of "oil" has changed dramatically to include all kinds of weird vapors, tar-like gunk, and just about any other concoction that can be shoved through a pipeline and made to burn.


Maybe in a fanciful world where money is worthless the definition of oil has changed, but not to the folks who do this for a living and knew exactly what it was a hundred years ago, know now, and will give you as much of it as you want for some worthless money. But then, they live in the real world, and have the courage of their convictions.

StarvingLion wrote:How can we be consuming more "oil" when Peak Oil occurred 10 years ago?


Easy. Peak oil was about peak oil, not running out. And as it turns out, in all liklihood you don't use a DROP of oil, but rather the products manufactured from it, like gasoline, diesel and jet fuel. And those can be manufactured from natural gas, goal, oily dirt, lease condensate, natural gas liquids or HGLs.

And this assumes we hit peak oil a decade ago, when that in fact is just the result of cherry picking favorite oil weights and colors or extraction methods, the methods used by peak oilers past to not have to admit they fell for bell shaped curves rather than the sine wave of oil production.

StarvingLion wrote:The dupes will never learn.


Agreed. You never will, and worse yet, you don't even believe a word you say on these topics.
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Re: Declining Production in Venezuela

Unread postby AdamB » Wed 17 Aug 2016, 07:11:21

tita wrote:
AdamB wrote:Venezuela is a no brainer in terms of sine wave production, the only question is will peak demand occur first, as the energy experts are discussing, in which case there may never be a price signal that causes the 3rd peak in Venezuelan production.

"Peak demand" is a whole subject which is not specific to venezuelan production.


True. And Venezuela matters because it is the crown jewel of un-utilized oil resource on this planet. As peak demand begins to focus industry attention on the inframarginal barrel, that will never be Venezuela until all other sources are nearly exhausted. Which means that its peak in production could be far off in the future, and based on the size of its resource, far higher than anything it has ever seen before.

tita wrote:And it is highly speculative, as we never consumed so much oil as today, and there is no hint of a lower consumption in the 3 years to come.


Amy Jaffe certainly sees signs of lower consumption in the future, and explains why. Examine oil consumption in the developed world, and you can find the same clues. Just because she is a certified expert doesn't mean we can't spend some time to examine the same evidence.

As just one example, how about your personal consumption? My family is marching into the new transport paradigm, and 8 years after the horrors of peak oil in 2008 were unleashed (according to TOD anyway) none of the 3 working members or 1 student member of my household use liquid fuels to commute to work or school. Such is how peak demand works...we do other things, some telecommting full time, and the others walking or using an EV.

My fuel bill was once like $200/month. No more. Now my electric bill is higher, to the tune of $15/month.

tita wrote:Venezuelan oil production currently follows the same path as US oil production...


You mean the two sine wave cycle path? Based on how we now know resources are developed, the US and Venezuela stand to have yet more peaks, Venezuela with the development of the extra-heavy, and the US with the development of other resources, such as oil shales or hydrates, or yet another supply response to price as the other sites in the Bakken and Eagle Ford are drilled. The Eagle Ford has the disadvantage of being small in areal extent, but not the Bakken.

tita wrote:Going down due to a lack of investments. The big difference being the state control dependence for one side and the public companies dependence for the other side.


A supply response to price is not the same as lack of investment. Oil and gas companies "invest" in wells, certainly, but anyone who has ever run a boot strapped drilling operation doesn't think of it the same way as those who need to borrow externally to drill.
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Re: Declining Production in Venezuela

Unread postby ROCKMAN » Wed 17 Aug 2016, 09:43:56

Post nationalization Vz oil production had zero chance of looking remotely similar to US production dynamics during the same time period. I'll skip the obvious reasons and give one real example. About 20 years ago the Vz cut a deal with a small US company (Benton O&G??) To enhance production from an existing conventional oil field doing less then 500 bopd. Production methods had been very primitive...like 1940's. With better surface facilities and hz drilling they quickly brought tyhe fgield up to 40,000 bopd. And then the company completely halted additional efforts and for good reason: the concession with the Vz govt required 100% of the revenue beyond 40,000 bopd to go to the govt. And did the Vz govt pick up the slack and continue with the enhancement effort? No...just sat back, let production decline as the collected the royalties. Had those leases belonged to private mineral owners as in the US who knows how much production of that light sweet crude would have been increased.

Thus the general nature of the Vz govt controlled industrty: suck up all the revenue with almost no reinvestment.
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Re: Declining Production in Venezuela

Unread postby StarvingLion » Wed 17 Aug 2016, 13:10:41

worthless money


If you can...

A. borrow $20 trillion and not pay it back
B. and if you can quantitatively ease trillions of dollars/pounds/euros into existence
C. and if banks can dip into their customers' bank accounts and just take money

Then your currency is JUNK

Wait it even gets better...

You can lose billions on the stock market and then just get it returned to you by money printing. This is pure power of being the ones who issue the money. Most investments now are just patronage, because they're not not going to get return on investments.

Enjoy your JUNK CURRENCY.
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Re: Declining Production in Venezuela

Unread postby PeakOiler » Wed 17 Aug 2016, 16:49:55

OMG!

There are about 64 more countries that are "past peak". That's a lot of new threads!

:|

Declining Production in...
Poland
Austria
Germany
Bulgaria
USA
Bahrain
Israel/Palestine
Romania
Iran
Trinidad & Tobago
Kyrgystan
UK
Syria
Georgia
Spain
Myanmar
Oman
Czech Republic
Russia
Cameroon
Ghana
South Africa
Slovakia
Tajikistan
Greece
Tunisia
Denmark
Gabon
Ukraine
Hungary
Chile
Norway
India
France
Benin
Croatia
Bangladesh
Italy
Senegal
Netherlands
Bosnia
China
New Zealand
Turkey
Taiwan
Serbia
Yemen
Argentina
Japan
Kinshasa
Congo
Morocco
Australia
Barbados
Egypt
Jordan
Peru
Guatemala
Uzbekistan
Papua New Guinea
Belarus
Albania
Mexico
Surinam
Colombia
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Re: Declining Production in Venezuela

Unread postby ROCKMAN » Wed 17 Aug 2016, 20:07:18

Peaky - And what many don't realize about those peaking countries: they aren't "old producers". They are actually the newe kids on block. LOL. Here's some details:

http://www.tsp-data-portal.org/Energy-P ... tspQvChart

From that chart notice that global oil production didn't begin to take off until around 1960. Some like to say the world's " oil age" began in the late 1800's. It didn't. Prior to 1960 not only was THE world's oil exporter the USA but we were the only significant oil producer on the planet. By 1890 PA was the Mecca of oil production. IOW it took about 80 years for the premiere oil producer, the USA, to peak. And then almost regained that height of production recently. Now jump to all those other late commers, including Saudi Arabia, that didn't begin their individual "oil ages" until post 1960...about 7 decades after the USA oil age was born. And now most have reached their PO in much less then 80 years in most cases. And not one has had a production resurgence as the USA did as a result of very high oil prices. The KSA and Russia may be the two top oil producers on the planet but the USA is #3 and has been doing it significantly for TWICE AS LONG as #1 and #2.

There have been, and continue to be, two different oil production dynamics functioning in the world: the USA and all the other countries collectively. It might make more sense to view the future from those two different perspectives. Of course that will still be rather simplistic considering the import/export and consumption dynamics.
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Re: Declining Production in Venezuela

Unread postby AdamB » Fri 19 Aug 2016, 14:15:19

StarvingLion wrote:Enjoy your JUNK CURRENCY.


I took little green pieces of paper in to buy a car. Did they take my junk currency or not? Because if they didn't, I will grant you best and never post again. And if they took junk currency and gave me a useful automobile with a life expectancy of perhaps 200K miles and a decade of usefulness, then the little pieces of green paper I asked them to take in exchange for it was not junk.

Either you believe what you say, or you do not. So can I trade my previously worthless, according to you, and now junk, according to you, little pieces of paper for a manufactured product of steel and glass that will provide good transport for a decade or not?

Do you believe a SINGLE word you say? Or do you just make stuff up? While you seem to enjoy blathering on in your own alternate reality, if you don't believe a word you say, why should anyone else?
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Re: Declining Production in Venezuela

Unread postby AdamB » Fri 19 Aug 2016, 14:18:20

PeakOiler wrote:OMG!

There are about 64 more countries that are "past peak". That's a lot of new threads!

:|

Declining Production in...


Production decline today, is not a guarantee of past peak. As the US so recently, and ably, demonstrated. The bell shaped curve has been completely discredited at this point, and we need to discuss how many countries currently experiencing production decline can be reversed, and even the world as a whole, and how many more paradigms of resource development can create how many more peaks.
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Re: Declining Production in Venezuela

Unread postby ROCKMAN » Fri 19 Aug 2016, 16:38:31

"The bell shaped curve has been completely discredited at this point..." Not really IMHO. What has been discredited was the consept the US oil production is composed of a single (and symmetrical) bell-shaped curved. Hubbert's curve and its future projection are still valid. But additional b-s-c (representing trends not included in his model) have been superimposed upon his model. B-s-c such was that of both the shallow and Deep Water GOM trends and more recently the shale trends.

The potential problem I see with any new b-s-c derveloping is that we haven't seen much indication of any developed during the period of record high oil prices as we did in the US. IOW if we didn't see big production increases from NEW international plays when oil was $85+/bbl for years what should we expect as long as the price remains at half that level? Of course prices might increase significantly in the future but until that time depletion, like rust, never sleeps.
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Re: Declining Production in Venezuela

Unread postby AdamB » Sat 20 Aug 2016, 11:17:44

ROCKMAN wrote:"The bell shaped curve has been completely discredited at this point..." Not really IMHO. What has been discredited was the consept the US oil production is composed of a single (and symmetrical) bell-shaped curved.


Agreed. And Saudi Arabia. And Russia. And Venezuela. And Canada. And OPEC at large. And have I passed 90% of the known produced, reserves, and resources of oil yet?

So we can talk about the 10% of oil that maybe the bell shaped curve works on...but seems a bit irrelevant, discussing the tail that isn't wagging the dog, rather than the dog itself.

Rockman wrote: Hubbert's curve and its future projection are still valid.


Not in the US. Or Saudi Arabia. Or Russia. Or Venezuela. Or Canada. Or OPEC. Hell, or Prudhoe Bay. Or the Spraberry. Or Ohio. Or Texas. Or North Dakota. Or Montana. Or California.

But in all those places that don't produce oil, it might still work I suppose.

Rockman wrote:The potential problem I see with any new b-s-c derveloping is that we haven't seen much indication of any developed during the period of record high oil prices as we did in the US. IOW if we didn't see big production increases from NEW international plays when oil was $85+/bbl for years what should we expect as long as the price remains at half that level? Of course prices might increase significantly in the future but until that time depletion, like rust, never sleeps.


This paper seems to explain the theoretical concept as to why Hubbert was wrong, and is certainly far more inclusive than he ever was because economics are explicitly included, and economics are what dictate the how much, when, not bell shaped curves. It does not label the price at which it takes to speed up any given conversion of resource to reserves to production, but it is good that our tax dollars aren't funding half wits when it comes to these types of resource to reserves to production conversion rates.

I think we need to follow peakoilers example (or was it someone else?) who contacted the EIA and requested information, and was happy with the response, to see if we can get their resource experts types to answer a few questions for all us forum denizens.

Here is the paper demonstrating they know far more about this than one might suspect.

https://www.eia.gov/workingpapers/pdf/trr.pdf
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Re: Declining Production in Venezuela

Unread postby tita » Sat 20 Aug 2016, 13:39:07

AdamB wrote: and economics are what dictate the how much

Hum, economics dictate the repartition. The how much depends on the efforts made to provide the ressource and is dictated by physical constrains. Economics have impact on the efforts, but don't dicate the availability. Classic cornucopian mistake.
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Re: Declining Production in Venezuela

Unread postby pstarr » Sat 20 Aug 2016, 14:28:24

I like that tita: "economics dictate the repartition" But why "repartition", and not simply "partition". I don't understand?

But anyway, and on the other hand, one (at least one cornucopean lol) might argue economics do also seem to dictate oil production on the margins, in the micro-economic scale. So a wealthy country like the United States can afford to produce Eau d'Bakken whereas Poland and Argentina et al just don't have the infrastructure wealth and investment pool to call on. But that would be wrong.

Declining aggregate net-energy world-wide means the money, increased debt applied to Bakken is not available to the world's money supply. It disappeared down the bore hole. There is only a limited amount of available natural capital> free energy storage> available (industrial) work> debt> and money supply.
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Re: Declining Production in Venezuela

Unread postby AdamB » Sat 20 Aug 2016, 18:01:58

tita wrote:
AdamB wrote: and economics are what dictate the how much

Hum, economics dictate the repartition. The how much depends on the efforts made to provide the ressource and is dictated by physical constrains. Economics have impact on the efforts, but don't dicate the availability. Classic cornucopian mistake.


If I give you $0 for your oil, there is no availability. If I give you $2/bbl, there might be a little. So sure, economics matters. No worries, classic doomer mistake.
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Re: Declining Production in Venezuela

Unread postby AdamB » Sat 20 Aug 2016, 18:07:52

pstarr wrote:Declining aggregate net-energy world-wide means the money, increased debt applied to Bakken is not available to the world's money supply. It disappeared down the bore hole. There is only a limited amount of available natural capital> free energy storage> available (industrial) work> debt> and money supply.


Sounds like doomer dogma. Can you please reference why these mechanisms didn't stop the drilling of tens of thousands of these wells here in the US, but apparently capital develops feet of concrete the instant it moves on to Argentina, or China? I should mention, I believe both of those countries have drilled more than a 1000 shale wells to date...so perhaps there is more natural capital around than someone with skills developed at the Stoner Instructional Complex is professionally qualified to guess at?
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Re: Declining Production in Venezuela

Unread postby tita » Sun 21 Aug 2016, 05:39:57

AdamB wrote:If I give you $0 for your oil, there is no availability. If I give you $2/bbl, there might be a little. So sure, economics matters. No worries, classic doomer mistake.

ROFL. Did you really learned anything about basic economics? It's really simple: demand, supply and price. The price is set to balance the demand and the supply. Of course, a strong imbalance set the price high and stimulate the supply.

What you lack to understand, is that supply is different from availabilty, which is set upon physics constrains. There is full availabilty of air (which I need), and I don't have to give anything for it. On the other hand, a 500 carat diamond is so rare that whatever I offer, there won't be more than the quantity that exist on earth. Oil is between these two cases,

The availabilty of oil is constantly decreasing, as we are burning it. No matter how hard you try, economics can't create a supply of stuff that is not available. Peak oil debate turns around this availabilty.
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Re: Declining Production in Venezuela

Unread postby AdamB » Sun 21 Aug 2016, 15:00:11

tita wrote:
AdamB wrote:If I give you $0 for your oil, there is no availability. If I give you $2/bbl, there might be a little. So sure, economics matters. No worries, classic doomer mistake.

ROFL. Did you really learned anything about basic economics?


I'll bet you that the PhD's that taught me economics are better than the ones who taught you.

tita wrote:The availabilty of oil is constantly decreasing, as we are burning it. No matter how hard you try, economics can't create a supply of stuff that is not available. Peak oil debate turns around this availabilty.


And now it sounds like you are trying to conflate availability and depletion. And you would have to define "available" very strictly, for your claim of what economics can't create a supply of, for your statement to work.

Once upon a time, there was no oil available offshore. Now there is. Economics and technology is why it happened. And my statement was quite perfect. If I give you $0/bbl, I can promise you that you will give me no oil. And if I give you some amount for your oil, be it $2/bbl or $100/bbl, you will probably let me have it. Of course, we don't see much oil nowadays for $2/bbl, but we once did, and the principle I expressed stands.

If no oil exists, then obviously there is no way you can give me any for $100. But we know that the world has used 1.3 trillion barrels perhaps, and according to the IEA we have another 7 trillion or so to go, so basic economics in how this commodity works will go on for quite some time yet.
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Re: Declining Production in Venezuela

Unread postby PeakOiler » Sun 21 Aug 2016, 16:21:14

CNN Article-The biggest threat to cheap oil

Venezuela's deepening chaos could soon create tremors in the global oil markets.

Already in an economic and humanitarian crisis, Venezuela's oil production -- the country's sole lifeline for revenue -- has hit a 13-year low.

As the situation worsens, Venezuela's oil output could plunge even lower. A new report by Columbia University's Center on Global Energy Policy calls Venezuela a "growing supply risk for oil markets in 2017."
Oil prices are currently around $45 a barrel, a dramatic drop from about $110 two years ago. The main reason for the low prices is that there's too much supply globally. However, the line between oversupply and a shortage in the oil market is thin, and Venezuela could tip the scale in the opposite direction.

Venezuela is the biggest "wildcard out there," said Matt Smith, director of commodity research at ClipperData. "The economy there is spiraling out of control. The fear is that oil production could be the next shoe to drop."


Now that's a black swan...

Bold and italics mine.
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Re: Declining Production in Venezuela

Unread postby AdamB » Sun 21 Aug 2016, 18:09:47

PeakOiler wrote:CNN Article-The biggest threat to cheap oil

Venezuela's deepening chaos could soon create tremors in the global oil markets.

Already in an economic and humanitarian crisis, Venezuela's oil production -- the country's sole lifeline for revenue -- has hit a 13-year low.

As the situation worsens, Venezuela's oil output could plunge even lower. A new report by Columbia University's Center on Global Energy Policy calls Venezuela a "growing supply risk for oil markets in 2017."
Oil prices are currently around $45 a barrel, a dramatic drop from about $110 two years ago. The main reason for the low prices is that there's too much supply globally. However, the line between oversupply and a shortage in the oil market is thin, and Venezuela could tip the scale in the opposite direction.

Venezuela is the biggest "wildcard out there," said Matt Smith, director of commodity research at ClipperData. "The economy there is spiraling out of control. The fear is that oil production could be the next shoe to drop."


Now that's a black swan...

Bold and italics mine.


Not for American independent oil producers it isn't. It is salvation.
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Re: Declining Production in Venezuela

Unread postby StarvingLion » Sun 21 Aug 2016, 21:55:48

Not for American independent oil producers it isn't. It is salvation.


Thats actually true. America has to grab VZ's oil because you can't expect those idiots in Europe to keep paying for American Shale Gas through their electricity bill while believing in the renewables fairy tale of reliable electricity and that skyrocketing electricity costs are saving the planet from co2 doom.

Americas Shale Oil: Not much there, mostly gas, very low ERoEI
VZ oil: More oil than America shale, higher ERoEI
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