No. Reserve data is useful, but only indicative. The fact that Saudi Arabia has hardly been drilled by has 200-350 "known oil" (past production and current reserves) tells you something about their resource potential.

Mike Lynch

I'm going to answer these piecemeal, time permitting.

1-2) I have seen a number of SPE papers, including a couple that Matt cited, and read widely on oil generally, including fairly summary work on Saudi Arabia. I've read a number of official Saudi reports, as well as earlier work (dating back to the 1970s) which sometimes disputed them. I haven't seen anything Matt has cited (or anyone else) that contradicts these various documents. If you would like a full accounting of them, I suggest you hire me or wait until my own book is out. (I hope to have a paper on Saudi oil out within the week, up on my own website; it will be documented.)
Be advised that Matt is not a student of world oil supply and has only recently come to the subject. For example, he expressed great shock about the 1979 USG study on Saudi oil, and at one point referred to it as suppressed or something. It was widely publicized at the time. There is a lot of other work (empirical and theoretical) that he, and other Malthusians, do not seem to be aware of.
Mike Lynch


[quote="seahorse2"]Spike/Mike,

Here's some questions for you:

(1) What hard data, actual source documents, have you personally analyzed regarding Saudi oil production, to include where you got the documents, who provided them to you, when they were provided to you, and where the documents are now, (include an itemization of all the source documents analyzed, specifying the title of the document, the source of the document, and the date of the document).

(2) Have you had access to any documents concerning Saudi oil production, capacity, reserves, decline rates, or field data that Mathew Simmons has not had? If so, list all the documents, their source, the dates reviewed, and provide a copy of all the information for review.

Spike,

I appreciate the time you are taking to answer questions. I appreciate the responses you have given regarding Simmons, bc, as you can tell, I in particular am not in a position to know or gauge someone's experience in the oil industry.

I will buy your book, that's for sure. In the meantime, with what time you do have, any time that you can spend answering questions on this forum is much appreciated. The questions will undoubteldy show my ignorance, but I hope you will understand and explain things in a way that I can understand.

More answers:
3) USGS says about 370 bb, I think it's probably much closer to 500 or even 700. I'll produce an estimate soon. I am relying on past discoveries and creaming curves.
4) The Energy Intelligence Group puts current Saudi capacity at 10.7 mb/d, which is probably right within a margin of error (most people would accept). Most of the capacity not being produced is of low quality oil, which would fetch a low price (relatively speaking) at present.
Mike Lynch

Ah, so the Saudi's have peaked on light sweet?

[To Spike]

Why have your estimates of future oil prices been so wildly off the mark in the past?

Why do you consistently maintain there is no problem with oil supply when geopolitical, economic and other events indicate otherwise?

Who is paying you?

Edited by [Unknown]




[Added by Chicken_Little]

Whatever...

Who cares any more. Listen to Mike Lynch's 'arguments' that everything is OK if you like.

Personally I was educated at Oxford so I have little respect for any academic who wasn't educated at an institution of similiar standing.

Institutions not of similiar standing would include 'MIT', wherever that is.

right....this is the place that used to give away masters degrees to everyone. Oxford is no better nor worse than most of the universities around the world that can afford to attract good educators and researchers. The only thing it has over other universities is a greater number of public school boy wankers with swollen heads.

spike/mike
I guess the ability to replicate a creaming curve that is at all accurate requires some dependance on the reserve numbers reported, does it not? That being the case I think it will be very difficult to come up with semi-reliable recoverable reserve numbers versus actual in-place ( I suspect using recoverable reserves throws way too much error into creaming curve analysis, especially when we are dealing with complex reservoirs and differing oil properties).
What might be a more interesting analysis is to plot reported discovery size versus year. I don't have a complete dataset but what I do have indicates some big gaps...suggesting missing data or perhaps they were merely concentrating on moving P3 to P2 and P2 to P1 and not drilling exploration wells? The other issue in creaming curve analysis for Saudi is that Ghawar is not a single reservoir but a series of reservoirs along the ancestral Ghawar arch...some are/were connected dynamically but my understanding is that many are in separate compartments. Accurate creaming curve analysis would require splitting all of these out and treating separatedly to my mind. I haven't seen that level of detailed reporting but perhaps it is out there somewhere.
This whole Saudi question is the most important factor in understanding when PO might happen. They are secretive about reserves....the expats haven't had access to that info for a long time and have been pretty much set to work exclusively on the gas fields. That strikes me as somewhat suspicous....and why have they spent the last ten years looking for gas around Ghawar and now have opened up the Rub Al Khali to foreign companies to explore exclusively for gas? An optimist would say they want the gas to power desalination, provide aircon etc. so that they can save the oil for the next generation...a pessimist would say that they realize unless they stop burning fuel in country for big projects they will have to limit exports and hence show their hand to the rest of OPEC. I don't know the answer....but if we could sort this one out with some confidence the rest of the puzzle pieces would likely fall in place relatively easily..

No, they just don't have extra capacity in light sweet crude at present. They are adding capacity (my paper will have a list of fields and, if I can find it, quality) at present.
Mike Lynch

Do you know anyone who has a good record of forecasting short-term oil prices over the past two years? Like many others, I underestimed oil demand growth last year and the degree to which big investors have bought oil futures in the past year.

I say there is no problem with oil supply (from a resource point of view) because it's rising rapidly. I have written extensively about political threats to supply (See Technology Review magazine, November/December 1987 I think it was) and how this impacts markets.

You went to Oxford and you don't know what MIT is? Hmmm.
Mike Lynch

A few more answers.
9) I think the US and UK are past peak, that is, won't surpass previous peaks. But that doesn't mean they are declining. One of the basic mistakes of Hubbert modelers is to think that once a country declines, it keeps declining. Look at countries like the UK, Russia, Venezuela and many others.

10) I believe it will peak at some point, of course. I don't know when, and recognize that any estimate is a wild guess, for all that people like Deffeyes claim to know. (Never confuse precision with accuracy, as Morry Adelman always said). It could be before 2020, especially if you exclude FSU.

11) I don't think a peak will occur due to resource constraint before 2050. After that, it's murky. URR is a dynamic variable. Oil in place, conventional is at least 8 trillion, unconventional about 12-25, depending on the estimate. The recoverable portion grows over time.

Geological maturity of most of the world (wells drilled, well productivity, etc.) is very low, especially compared to the US in 1970 (peak year).

I'll try to put together some sources later, but it will take me time.
Mike Lynch

[quote="seahorse2"]Spike/Mike,

Here's some questions for you:



(9) List all countries that you agree are in a state of permanent decline in oil production;

(10) Do you believe that non-OPEC conventional oil production will peak? If so, when do you believe it will peak and what is the source of this information.

(11) When do you believe total world oil production will peak (both conventional and non-conventional)? What is the source or basis of this opinion? Please give your estimated URR for world oil, and provide the basis for this estimate.



(quote]

Okay, in the interest of full disclosure, I'm not an Oxford Graduate. In fact, until about 2 years ago, I thought that was some type of cow. I barely graduated from Springdale High School, having spent many make up hours in summary school, just to get my GED, which I'm not sure is legit at that. That being said, I feel I have an inalienable right to ask about oil, as I am a car owner, an SUV owner, that pays more for gas this year, than when I was in 12th grade. In the end, I just want to know if I am paying more because of inflation, greedy oil companies, greedy Arabs, or oil depletion. If I'm paying more because of oil depletion, then I can't do anything about that. But if I'm paying more bc of some greedy bastard at the other end trying to take my milk money, then this hill billy from Arkansas wants some names and numbers, b/c somebody's going to get an ass whoopin.

Spike, I do appreciate your continuing to answer the questions I posed to you, even though they surely disclose my ignorance. Your answers are helpful, and I hope that you will continue to provide answers when you can.

I wish that Campbell would do us the favor of participating directly on this forum as you have and are doing. In other threads, I have continually questioned why ASPO, in the last 12 months, has "revised" their peak date for conventional oil. For example, this time last year, the date was 2005. At the beginning of 2005, it went to 2006. Just this month, it went back down to 2004. What the heck? I have read your many papers, can't say I understand it all, but generally get the gist. Your one critique that Campbell's numbers continue to change has been confirmed with this example of his estimated peak in conventional oil, revised now 3 times in the last year. This is significant to me, bc I've yet to hear an explanation how it is possible that the data he is relying on has changed three times in the last year. Until he decides to join in, I guess I'll be left in the dark.

All that to say, thank you for taking the time to indulge us here. If nothing else, maybe our questions and issues will help you draft a book which can answer questions shared by "commoners" like myself. It doesn't do any good for book sales and t.v. or addressing the issue if it doesn't make sense to the lowest common denominators from Springdale High School.

By the way, I would like an autographed copy of your book when it comes out.

Oh! Here you are.

OK. For reference: http://www.peakoil.com/fortopic2327.html

I'll shift through this thread right here, keep an eye on it and mull over how to post the best of it to the front page -- a la, here: http://www.peakoil.com/forum24.html


On behalf of the entire board, I appreciate your time and considered attention to our ruminations.

Hi, Spike:

Thanks for joining us.

Just had to ask a follow up question on this one:



About how much of this do you think is "recoverable oil from existing fields" versus "oil from new fields that have yet to be discovered?".

(For the benefit of the other readers who are not aware this is a really optimistic estimate compared to various others).

Second (minor point), if the Saudis only have about 500-700 gb of this, where is the rest of it?

I appreciate the 'supportive' comments from you guys about my participation. I don't mind if people think I'm wrong, or even an idiot, I'm pretty thick skinned. (Campbell comparing people who disagree with him to Neville Chamberlain at Munich, ignoring looming disaster, did upset me a bit.)
Elsewhere, I've been accused of dishonesty, usually by people confusing technical terms, or not reading what I wrote carefully, etc. That is about the only thing that really bothers me.

But I do want to emphasize: these are complex issues and there is a lot of uncertainty, not just because we don't always know what governments are going to do, but because a lot of the data is very poor. As my 1995 paper noted, the vast majority of oil supply forecasts and models have performed very poorly (including models that appeared to be well constructed). I try to make it clear when there is good data and some degree of certainty, but in posting to the web, I hardly go to the lengths that I do in an academic article.
Mike Lynch