What is easy oil? When did it end? What difference has it made? Is it easier to produce oil in 5000 feet of water in the Gulf of Mexico than it was in 1908 Persia?

All they are saying is, feel sympathy for us. Not that peak oil is near.
Mike Lynch

The US has seen recoveries, for example in the early 1980s when it diverged substantially from the Hubbert curve until 1986, when the oil price collapsed (what a coincidence!)
But the point is that the world has been able to offset the US decline, because there's lots of oil still out there, which is what counts.
Mike Lynch

I've heard we have hit a peak of refining (not drilling) capacity, wouldn't this have the same effect as peak oil on world economy's as demand exceeds supply?

Also, even if peak oil (geological) peak seems unlikely, couldn't Iran and Venezuala and some other key countries severely mess up the world economy with economic peaks? There is other oil out there, but getting operations to drill it online takes a considerable amount of time.

Basically what I'm asking is does it even matter if a geological peak is the problem? According to doomers worldwide economies will collapse nearly instantaneously once we hit peak oil (3% per year decline), so couldn't an oil disruption of a major pipeline or field cause all world economies to come crashing down all at once? The doomer view is that once we hit any supply disruption we can never recover - because the supply disruption will paralyze economies worldwide preventing anyone from fixing whatever the problem is (for example: a refinery gets hit by a major terrorist attack requiring 6 months of repairs to get back online, world economies collapse from the drop in supply and the human race dies off within 2 months).

spike/mike, I really appreciate you participating in this debate. I was wondering, are there any other credible energy optimists you'd recommend the people on this board read? Or any news services to follow? I'd like a more balanced reading diet if possible.

It's hard to give a balanced pro & con overview of this debate when you're pratically the only analyst not attributing their optimism wholly to Saudi Arabia or unsubstantiated truisms about technology and substitution. That doesn't really stand up to "oil discovery peaked in the 60's, we find one barrel of oil for every 4 we use, 80% of our oil comes from fields found 1973 or earlier, and tripling Campbell's URR won't even buy us 3 decades." But as you said, few analysts are sufficiently interested in the topic. I've got you, a CERA report I can't can't read, demand projections masking as future scenarios, and government reports I have lists of profound criticisms against.

For the sake of intellectual honesty, I want to be able to produce a stronger "no imminent peak" argument, even if I'm concerned enough to feel PO risk management should become an election-level issue. Any suggestions?

Refining capacity is tight, but nothing prevents us from building more. The industry was long severely glutted, so cut back on building.

And yes, you are precisely right, there is a very real danger of political disruptions to supply; see my article in the Nov/Dec 1987 Technology Review, "The Next Oil Crisis" where I argue that when surplus capacity declines, we will be more vulnerable to small disruptions.

This is important because in the case of temporary problems, you need surge capacity. In the case of a permanent supply decline, you would need replacement energies.
Mike Lynch

Yeah, it's irritating that many don't take this issue seriously enough to respond. You might read Peter Odell, he has a book out recently. M. A. Adelman is the dean of US petroleum economists, now retired, but his 1993 book contains published papers that explain mineral depletion theory in detail. Dave Knapp is now with Energy Intelligence Group, so his work is not readily available. DOE, IEA and OPEC are all pretty optimistic about supply.

Geologists like Michael Halbouty, William Fisher, and Marlon Downey are all much more prominent than Campbell or Laherrere, and have scoffed at the notion of near-term peak oil. John Edwards wrote an AAPG article in which he used 2.4 trillion as URR and the Hubbert curve to predict a near-term peak, then updated that with his own estimate of 4.6 trillion (if memory serves, and I think that included unconventional). Peter McCabe and David Deming have published articles debunking peak oil from a geologists perspective.

I'll try to come up with citations later.
Mike Lynch

The only 3.5 trillion guess I can find is the 5% USGS estimate.

Does the "low hanging fruit" theory affect your perception at all?

Can anemic new discoveries over the past few decades really be explained in total, by low barrel prices during this time?

How significant an impact do you think paper-barrels have on this calculation?

Do you pin more hope on secondary recovery technology advances, or new finds for expanding URR?

If we actually can find another trillion or 2 barrels out there somewhere, then I assume your peakoil date would be beyond the 2030 USGS estimate? When?

isn't high recovery a disaster in waiting as the perception of abundance at the consumer level is seen by increasing production rather than depletion of oil in place?

hence investment cycles are timed on liner projections which must crash... oil must be discovered first... you agree... yes? in-essence a very asymmetric oil production curve will form in relation to oil in place

in other words you may be correct in analysis yet your message may be poorly understood or be misinterpreted?


Boris
london

Here's my list of recent estimates:
1998 Fisher 3800
2000 USGS 3000
2001 Exxon 2700
2001 Edwards 4656
2002 Campbell 1950
2002 IHS Energy 3000
2003 Shell 3250
2003 Linden 3600
2004 Odell 6000

I think Odell includes some non-conventional oil, if I can find his book I'll update this.

The low hanging fruit theory doesn't impress me, as fruit regrows and we can buy ladders.
Seriously, at any given time, there's low hanging fruit, but as time passes, improvements move the fruit down or us up. This is true for energy conservation as well as for oil supply.
Low discoveries of the past few decades (which have replaced production) are primarily explained by the near-cessation of exploration in N. Africa and the Middle East.
What do you mean by paper barrels?
I think the peak is well beyond 2025, but it partly depends on what you consider conventional/nonconventional. Reports that someone is building a coal-to-liquids plant makes me think "liquids" production could be even further extended.
A combination of advanced recovery techniques raising recovery factors, plus new technology making uneconomic fields viable, plus infrastructure improvements lowering costs in high cost areas now, will add to URR.
Mike Lynch

I understand your concerns, but think they are misplaced. Better exploitation of the resource would lead to a faster crash if the resource was very limited (like fish populations). In the case of oil, I would argue that we're not hitting the limits, so this is not a problem.
In theoretical terms, if the resource was being stressed, costs would be rising. We don't see that.
In practical terms, you might get higher depletion in existing fields, meaning more drilling is required, but since the drilling is more effective, there is an offset.
Mike Lynch

IHS Energy shows liquids discoveries at about half consumption over the last decade or so with the crossover point about 1986 (in their presentations), ASPO puts them at more like one quarter though their figures for recent years are a little suspect IMO. Does your statement include an estimate of future reserves growth in these discoveries?

I mean the so called paper barrels added by many oil majors during the 80's without new finds.

I guess what I mean is there is concern that many of these reports are "puffery", especially from OPEC. (like Shell's admission of improperly classified reserves.)



Agreed.

But is there then no validity to the idea that we find the easiest stuff first?

I understand that this point shifts relative to our understanding of it, but surely the largest, most accessible fields are likely to be discovered first yes?



Is it not also true that secondary recovery is responsible for replacing much of the depleted amounts?

In addition, it would appear that production growth has been less prodigious than in decades past, so that we have lost significant margin in the commodity. thoughts?



Advanced recovery will add to URR, but don't infrastructure improvements just mean less costly oil, rather than adding to URR? (Or... How significant a factor is cost to estimating URR?)



How big a factor do you think unconventional actually is?

How do you think government subsidies & tax incentives affect the production costs for unconventional oil?

Thanks to JulianJ's god-like patience with me, I still have Odell's book. I will search it for the information you seek.

You can find Info over Odell here

http://www.clingendael.nl/ciep/events/20030521/

He gave a lecture there with the data from his book.

Basicly he thinks that conventional oil will peak in 2030 with an URR of 3 trillion

then in 2030 unconventional really starts to kick in and we get round another 3 trillion URR from that.

so 6 trillion what Mr. Lynch said is about right.

I find Odell not really interesting though, he does not explain were those oils will come from and gives no inside look into his so called "model". Besides that he does not make himself credible by going into abiotic oil and making the strange estimate of unconventional (how can you make a current day estimation that unconventionals will be able to produce somwhere around 120 mb/d in 2080/2090 ??????

So if say... 2 refineries explode with severe damage, wouldn't the ensuing economic recessions actually DELAY peak oil even further into the future?