Peak oil debate losing relevance?

[Pops]

The interesting part of this story is the line that new shale oil/gas in Argentina is profitable at $30/bbl. Looks like big time profits to me.

The debate over whether the world's reserves of hydrocarbons have now peaked and are in decline has lost relevance over recent years as new technology allows oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol Antonio Brufau said Tuesday.

Brufau said progress made in exploring and developing ultra-deepwater areas, unconventional oil and gas sources and the move into remote areas such as the Arctic, have been key to growing global reserves of oil and gas.

"The speed at which technology changes and its consequences have taken us largely by surprise. The peak oil debate, for example, has lost a great deal of its relevance in the past three years," Brufau told the World Petroleum Congress in Doha.

"The possibility that usable resources under commercially viable terms will run out is no longer a concern in the short or medium term," he said.

New technology has given access to "massive amounts" of new resources, Brufau said, adding Repsol is continue to explore in deepwater offshore Brazil, West Africa and Cuba.

Last month, Repsol said it has continued to more than replace its proven oil and gas reserves outside Argentina this year and will accelerate output from 2015 onwards as it converts contingent resources into proven reserves.

Brufau pointed to developments in the US shale gas industry and highlighted Repsol's own plans to develop a huge shale oil and gas area in Argentina.

Repsol has said it estimates the cost of fully developing its Vaca Muerta shale oil and gas discovery in Argentina at some $20 billion. The discovery covers nearly 1 billion equivalent barrels of recoverable shale oil at the Loma La Lata field.

Brufau said Repsol's shale reserves in Argentina are currently profitable to develop at $30/barrel finding, development and operating cost.

http://www.platts.com/RSSFeedDetailedNe ... as/8666877

[Fishman]

At this moment WTI at 100.56, Brent at 109.71. Despite Europe's growth of less than 1%. The flaw in the article

New technology has given access to "massive amounts" of new resources

. New resources yes, massive amounts, compared to the world demand, not even close. We'll see lots of articles like this, apply the same standards that always should be used, EROEI, production vs demand. The article quote 1 billion barrels of production, less than 15 day of world demand. Sounds like the proverbial smoke up one's behind

[dorlomin]

Repsol has said it estimates the cost of fully developing its Vaca Muerta shale oil and gas discovery in Argentina at some $20 billion.

"We have shedloads of fossil fuels. Um going to need some money. Anyone want to join invest in a guarenteed cash bonanza?"

[dissident]

Vaca Muerta shale oil and gas

What an appropriate name: dead cow. Nothing to liven anything up with this discovery.

[PrestonSturges]

$30 bbl? Delivered by the Tooth Fairy?

[Schadenfreude]

U.S. on Pace to Become Net Fuel Exporter Despite High Gasoline Prices at Home

For anyone bummed out about the United States' dependence on foreign oil, try this forecast on for size: The U.S. is on track to be a net exporter of petroleum products this year for the first time in 62 years -- and yet, domestic gas prices remain at or close to record highs for this time of year.

Data released last week by the U.S. Energy Information Administration shows that the U.S. sent abroad 753.4 million barrels of gasoline, diesel and other oil-based fuels in the first nine months of 2011, while taking in only 689.4 million barrels.

The reason? To put it simply, Americans are relying on less, while emerging markets are demanding more.

[Schadenfreude]

Fracking Shale Pummels Peak Oil Against the Ropes w/ Punishing Body Blows

Not so long ago, it was possible to talk about peak oil with a straight face at cocktail parties. But lately, rapid developments in petroleum production technology has knocked peak oil from the speaking circuit to the circular jerkular echo choir set.

Of all developments most concerning to peak oil devotees, is the possibility that China (and India) may be able to supply most of their own energy and fuel from domestic sources. Discoveries of large shale petroleum resources, plus the discovery of "another Saudi Arabia" off China's shores, suggest that China's petroleum future may be secure for a few decades. If you add China's rapid build-up of nuclear power plants, China may not need to buy so much oil from OPEC after all.

The debate over whether the world's reserves of hydrocarbons have now peaked and are in decline has lost relevance over recent years as new technology allows oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol Antonio Brufau said Tuesday.

Brufau said progress made in exploring and developing ultra-deepwater areas, unconventional oil and gas sources and the move into remote areas such as the Arctic, have been key to growing global reserves of oil and gas.

"The speed at which technology changes and its consequences have taken us largely by surprise. The peak oil debate, for example, has lost a great deal of its relevance in the past three years," Brufau told the World Petroleum Congress in Doha.

"The possibility that usable resources under commercially viable terms will run out is no longer a concern in the short or medium term," he said.

[radon]

Interesting to know how these 30$ per bbl add up. They need to invest $20b to "develop" 1b bbl of recoverable reserves, taking it to $20 per bbl. So the remaining $10 per bbl is all that they have for operations, delivery, environmental etc. It is realistic at all with that kind of oil fields?

Brufau said Repsol's shale reserves in Argentina are currently profitable to develop at $30/barrel finding, development and operating cost.

Does this mean that the shale reserves do cost $30/bbl, or that they are profitable in Argentina at $30/bbl, i.e. become unprofitable at say $35/bbl for whatever reason?

[Kristen]

Arent there serious consequences to using shale gas? What about the amount of water needed? Even if there is an over abundance, kicking the can farther down the road is hardly solving the problem

[OilFinder2]

Ooo, this is rich! Argentina has been one of the poster children of the peak oil arguments. For example, check out page 35 of this document!
http://mazamascience.com/Presentations/ ... umbers.pdf

[OilFinder2]

Here's another one:
http://www.peakoil.org.au/hubbert-curves.htm

[OilFinder2]

And last - but certainly not least! - from the "authority" on peak oil itself, Argentina appears on this 2009 list of "countries that are past peak."
http://www.theoildrum.com/node/5576

[OilFinder2]

^
And a bit off-topic, check out footnote #2 at the bottom of that list:

But in some of these cases, it will be difficult to pass an old peak because decades of depletion have occurred since that peak. Iraq peaked in 1979, making it all the more difficult to pass that now.

[dorlomin]

Ooo, this is rich! Argentina has been one of the poster children

United States 11297 7337 -35% 1970
Venezuela 3754 2566 -32% 1970
Libya 3357 1846 -45% 1970
Other Middle East 79 33 -58% 1970
Kuwait 3339 2784 -17% 1972
Iran 6060 4325 -29% 1974
Indonesia 1685 1004 -41% 1977
Romania 313 99 -68% 1977
Trinidad & Tobago 230 149 -35% 1978
Iraq 3489 2423 -31% 1979
Brunei 261 175 -33% 1979
Tunisia 118 89 -25% 1980
Peru 196 120 -39% 1982
Cameroon 181 84 -54% 1985
Other Europe & Eurasia 762 427 -44% 1986
Russian Federation 11484 9886 -14% 1987*
Egypt 941 722 -23% 1993
Other Asia Pacific 276 237 -14% 1993
India 774 766 -1% 1995*
Syria 596 398 -33% 1995
Gabon 365 235 -36% 1996
Argentina 890 682 -23% 1998
Colombia 838 618 -26% 1999
United Kingdom 2909 1544 -47% 1999
Rep. of Congo (Brazzaville) 266 249 -6% 1999*
Uzbekistan 191 111 -42% 1999
Australia 809 556 -31% 2000
Norway 3418 2455 -28% 2001
Oman 961 728 -24% 2001
Yemen 457 305 -33% 2002
Other S. & Cent. America 153 138 -10% 2003*
Mexico 3824 3157 -17% 2004
Malaysia 793 754 -5% 2004*
Vietnam 427 317 -26% 2004
Denmark 390 287 -26% 2004
Other Africa 75 54 -28% 2004*
Nigeria 2580 2170 -16% 2005*
Chad 173 127 -27% 2005*
Italy 127 108 -15% 2005*
Ecuador 545 514 -6% 2006*

Poster children?

Ive heard a lot about the US, Mexico, UK, Norway, Kuwait but Argentina....

There is cherry picking then there is finding a needle in the haystack of post peak countries and announcing your haystack is now in fact a luxuary castle in the sky.

[dorlomin]

Gee....I wonder how something like that could ever happen?

Hi Shorty, hiya pal.

[MD]

It's only lost relevance in that it's been over for some time.

We're mining oil like crazy now, and will continue to do so, which was unthinkable just 10 years ago when most attempts were economically buried in the flood of cheap supplies still available.

Saudi Arabia has declined to add new production of their own, stating competitive alternatives as their reason, which is remarkable when looking back just a few years.

Oil prices are "steady" at four times times previous "steady" values, despite the fact that the world's cheapest oil is still flowing at remarkable rates --making up the bulk of production, yet declining steadily in quantity--.

What's to debate? Hubbert was right, and Hubbert was wrong. He saw the global picture as only sweet supplies and abandoned reserves, a model that when observed in one group fields amongst "endless" world supplies made perfect sense.

The global model is entirely different, once each layer of reserves becomes economical due to the depletion of less expensive resource, people will turn to it in droves, as we've seen and are seeing.

Don't forget to watch the ratio of cheap to expensive oil-production over time. That's where the real problem lies, at the moment, one where the more relevant discussions are centered around economy and ecology, not geology.

The answers to the geological questions have been mostly answered, except for the fine points that drive the endless squabbling you see here.

So yeah, Peak Oil has become irrelevant.

[seahorse3]

The world maybe finding a lot of NG but it won't be replacing oil anytime soon for vehicles. As as Bern argued PO is a liquid fuels crisis. Many of these MSM articles citing all these new gas finds don't realize or overlook the fact that virtually no one is using NG to fuel cars/trucks/planes. The number of NG vehicles on the road today is insignificant. So far there is little or no movement to transition to NG vehicles. CLNE is one such US company but again it's insignificant at this time- caveat I'm long CLNE.

[Pops]

No wonder the optimists in the crowd love to post PR stories.

First, let's review; if there are +/- 2.2T barrels of gettable oil and we've already got 1Tb, it follows there are still a trillion somewhere. It's peak oil, folks, not no oil.

Second if there is a billion barrels of something flammable in Argentina and globally we use 85 million a day... what is that? 12 days worth? Again, I think it's a little early to say we're saved.

What is important is the price. This is PR, the guy is pumping his stock, Repsol does lots of business in Libya and they haven't had a good year there. But still, if his PR is even close to true it really brings the overall situation into focus, the floor for oil isn't based on high extraction costs like some of us have been guessing, it's simply too little supply to meet demand.


Look at the drilling boom in the '70s, there was a huge increase and within a couple of years the price of oil came way down, not so this time. The reason is fracking isn't like old fashioned oil where you drill a hole then stand back and watch it produces for years under it's own pressure. The fast decline in production from each well (up to 85% the first year) means more holes need to be made, quicker, just to keep up with declining production from the last one.

Also one of the reasons that there is so much drilling going on right now in the US is the 3 & 5 year leases bought for, say, $100 are expiring and if they aren't drilled on before expiration the lease will be renegotiated, the going price is $1,500 today so there is a big incentive to get those leases "proved".

They are making big money with lots of incentive to make more but still the price of oil is historically high. So, with oil higher than it's been since 1860 where are all the rigs?




The bottom line is this doesn't making PO irrelevant, it does just the opposite. Is there a grand conspiracy and a bunch of entities are sitting on a lot of oil to keep the price of even fracked oil at 4x break even? Look at the futures, oil is trading between $95 and $100 all the way out so the consensus is Fracking isn't the blessing bestowed by the Energy Fairy some would lead you to believe.

What is irefutable is there just isn't anywhere to drill for easy, cheap, quick oil - otherwise someone would be doing it and making a killing. Since demand keeps rising but supply can't keep up, the price rises instead.

Sounds like a great argument for peak oil too me.

[Schadenfreude]

Arent there serious consequences to using shale gas? What about the amount of water needed? Even if there is an over abundance, kicking the can farther down the road is hardly solving the problem

The oil industry has been kicking the can down the road for the past 100 years. That's the history of petroleum chicken-littleism.

Sure, oil will become scarcer and more expensive. But it has become clear that there won't be any oil emergency for decades. and that leaves plenty of time for adaptation, innovation, and discovery of alternate sources of energy.

These sure aren't the days of Jay Hanson and dieoff.org any more. Back then, all the doomerish forecasters like Heinberg and all the rest were forecasting severe energy crunches by 2011.

[Cloud9]

I would not gloat about the time frame.