[0mar]

I think the question of OPEC reserves is still open. While the jump in Saudi reserves (for example) may appear implausible, we don't have any solid proof one way or the other. Both Campbell and Lynch are operating on faith on that point because no hard numbers are available.

Yep. The Saudis have stated they have about 700 billion barrels of oil in place. The number they report is simply a fraction of that being recovered and it is quite feasible with better technology to fetch more out.

What scares me is the lack of reserves diminishing for the last 20 years in SA. Given that they could pump 260 bboe in 1984 (7?) they haven't touched that number one bit since that time.

[mididoctors]

I think the question of OPEC reserves is still open. While the jump in Saudi reserves (for example) may appear implausible, we don't have any solid proof one way or the other. Both Campbell and Lynch are operating on faith on that point because no hard numbers are available.

my problem with lynch is the assumption that the oil is there because we can't get the data!

ie because we have looked every where else with a higher degree of transparency the oil we need must be where we are not allowed to look..

despite never having any evidence this extra discovery should exist in the first place.. it is a very odd mentality if you step back.

does a lack of data support campbell or lynch?

in the absence of any data what should the conclusion of any estimate be? I would have thought.. "until we know better here is the bell curve"

it may well be wrong but what are you going to do.. assume it will expand forever despite having a shrinking area this new eldorado could be in?

However his point about the intense development of the lower 48 not being mirrored elsewhere thus inferring we may have more slack than some doomer's predict is a good point and should be addressed..

i think it is flawed or at least nay be a flawed point.

a lot of posts on this thread are really lynch is wrong because he is a tosser...

which may or may not be true but doesn't cut it with me

Boris
London

[nero]

what do you think of the observation that well numbers outside the US density wise are no where near as high, thus representing a far from depleted stripper well phase the US is in now?

I think Geology_guy is correct. I would also add that the density of production wells has decreased since the early days. Do you remember the oil field fire in the film Giant where the well rigs are literally side by side? The early days of the oil industry were like that. With improved science, technology and regulation that sort of intensive exploitation was stopped. Now with horizontal wells and MRC wells the need for lots of production wells is reduced even further.

Another factor why I suspect some places will never be as intensively exploited as the United States is that the political instability, corruption and economic backwardness of the country prohibits the profitable exploitation of small fields. For instance in Nigeria, Shell has a hard time making a profit with it's onshore wells and is now concentrating exploration in the offshore sector. If Nigeria was Texas or Alberta, there would be loads of smaller independents rushing in to exploit the small plays that weren't worth Shell's time.

Anyways as others have pointed out the megaprojects really define our oil supply. The 53 largest oil fields provide 50% of our oil supply. All these stripper wells and small fields don't amount to much, its the availability of significant prospects that define the rate of exploratory success. In that respect Lynch is on to something, politics is important. Politics may open up new areas for exploration but it may also close existing areas to exploration. For example Venezuela, Russia and Bolivia are becoming harder places for private oil companies to operate in. There is a global trend towards the renationalization of oil resources, and this might spell real trouble for America and the West.

[nero]

I think the question of OPEC reserves is still open. While the jump in Saudi reserves (for example) may appear implausible, we don't have any solid proof one way or the other. Both Campbell and Lynch are operating on faith on that point because no hard numbers are available.

Agreed. We really need some good numbers from the middle east. It might take some arm twisting, but I think there have been some very good ideas proposed on how to twist their arms. I particularly like the idea of requiring public companies to audit their foreign oil suppliers to ensure there is no undue risk of a key supplier defaulting on their contracts.

[kabu]

does a lack of data support campbell or lynch?

in the absence of any data what should the conclusion of any estimate be? I would have thought.. "until we know better here is the bell curve"

it may well be wrong but what are you going to do.. assume it will expand forever despite having a shrinking area this new eldorado could be in?

I agree. The onus ought to be on the lynchers to come up with something verifiable if they wish to prevent any political systems from accommodating the possibility of a more imminent-than-commonly-believed peak oil.

In the absence of data it's more about faith than estimations, and I've got a lot more faith in the improbability of our ability to time this transition, than I do in any corporate individual's assurances that there's still plenty of time left.

[mididoctors]

I think Geology_guy is correct. I would also add that the density of production wells has decreased since the early days. Do you remember the oil field fire in the film Giant where the well rigs are literally side by side? The early days of the oil industry were like that. With improved science, technology and regulation that sort of intensive exploitation was stopped. Now with horizontal wells and MRC wells the need for lots of production wells is reduced even further.

pdf from EIA

[url=http://www.eia.doe.gov/pub/oil_gas/petrosystem/us_table.html[]html table of well distribution[/url]

I think this historical precedent theory is only half true the rate of new small development wells is still high

Another factor why I suspect some places will never be as intensively exploited as the United States is that the political instability, corruption and economic backwardness of the country prohibits the profitable exploitation of small fields. For instance in Nigeria, Shell has a hard time making a profit with it's onshore wells and is now concentrating exploration in the offshore sector. If Nigeria was Texas or Alberta, there would be loads of smaller independents rushing in to exploit the small plays that weren't worth Shell's time.

yes this sounds likely

Anyways as others have pointed out the megaprojects really define our oil supply. The 53 largest oil fields provide 50% of our oil supply. All these stripper wells and small fields don't amount to much, its the availability of significant prospects that define the rate of exploratory success. In that respect Lynch is on to something, politics is important. Politics may open up new areas for exploration but it may also close existing areas to exploration. For example Venezuela, Russia and Bolivia are becoming harder places for private oil companies to operate in. There is a global trend towards the renationalization of oil resources, and this might spell real trouble for America and the West.

right this is where i agree with you the advent of a high stripper well mix is a sign of depletion. and where my original comment on the news page stem from.

Boris
london

[DefiledEngine]

I do think this is a valid critisism of some PO doomers. However many people who worry about peak oil do not fit into this mold. They may be worried about peak oil but they do not predict a catastrophe. Simmons, Campbell and Aleklett for example are not malthusian doomers. Lynch is implying here that anyone who worries about peak oil is a crazy survivalist nutcase. It's a cheap rhetorical trick to start an opinion piece devoid of facts.

Not to mention that economic shamen like Lynch may be just as deserving of such critisism, just on the other side of the spectrum.

Furthermore, I though Simmons had talked about several catastrophe scenarios as strong probabilities (mentioning stuff in line with the Olduvai Theory).

Would you claim that Jay Hanson and such people are crazy survivalist nutcases?

In general I agree with Lynch on this point. Sometimes I find Campbell to be too pessimistic in his country forecasts. On the other hand Lynch here ignores the fact that the reaction of countries to local depletion is quite predictable, and when averaged over a large number of countries will again produce a bell curve.

Is that average bell curve a proven indisputable fact? Sometimes there's just too many "will"s and "shall"s in Peak Oil debates, which I believe pushes it away from a scientific discussion, especially by people who don't have all the inside information.

[nero]

Would you claim that Jay Hanson and such people are crazy survivalist nutcases?

I didn't mean to imply that I think of anyone as a "crazy survivalist nutcase", just that that was how they would be perceived and yes I think that some people think Jay Hanson is a "nutcase". I try to keep an open mind and not close it to anybody's ideas by labeling them a "nutcase".

Is that average bell curve a proven indisputable fact? Sometimes there's just too many "will"s and "shall"s in Peak Oil debates, which I believe pushes it away from a scientific discussion, especially by people who don't have all the inside information.

I agree sometimes people are a bit too sure of themselves on this site. I tend to put alot of "I think" and "IMO" into my posts and then edit some of them out because they make the paragraph too clumsy.

I'm not aware that the symetrical bell curve for oil production is proven in any way. It is I believe used because engineering experience points to it being a common form for a depleting resource's historical production. It is the net result of alot of individual economic, scientific, and political decisions. If an individual political decision has a large effect in relation to the size of the total resource then it will make a noticable perturbation. However when the production of many countries are added together any single country's political decision is unlikely to have a large enough effect to be noticable in the profile of the historic data.

[WebHubbleTelescope]

I'm not aware that the symetrical bell curve for oil production is proven in any way. It is I believe used because engineering experience points to it being a common form for a depleting resource's historical production. It is the net result of alot of individual economic, scientific, and political decisions. If an individual political decision has a large effect in relation to the size of the total resource then it will make a noticable perturbation. However when the production of many countries are added together any single country's political decision is unlikely to have a large enough effect to be noticable in the profile of the historic data.

Lynch gets a lot of mileage out of criticizing the bell curve. In only one way is he right -- the mathematical abstraction of the bell curve (the Gaussian or Normal distribution) cannot model experimental curves absolutely corrrectly. The bell curve is symmetrical about some mean, which means the tails have to go negative; but what does a negative time imply? So Lynch says "Gotcha!"

The biggest mistake that Peak Oil modelers make is not using asymmetric formulations such as the Gamma distributions. This would keep nutcases like Lynch from nitpicking on the mathematical details that get broadbrushed. What Lynch does is the equivalent of some dweeby Star Trek fan criticizing some arcane bit of non-logical trivia that appears in an episode, and then doing a victory dance celebrating his infinitesimal intellectual acchievements.

[nero]

WebHubbleTelescope, There isn't any scientific foundation to the Hubbert curve as far as I know. Why should the gamma distribution be better than the gaussian curve? Simply to avoid nit-pickers? I think that would be playing into their hands. There is no hope in making a model that can accurately predict the production profile and we should say up front that the hubbert curve is just a rough estimate, nothing more. It isn't based on geology or physics. Heck, it isn't even scientific at all and we shouldn't try to dress it up to be something it's not. That's just asking for the nit-pickers to come and tear you apart.

[avo]

WebHubbleTelescope, There isn't any scientific foundation to the Hubbert curve as far as I know.

Take a look at Deffeyes' new book, Beyond Oil. He plots oil production per year divided by total extracted vs total extracted. The Hubbert "logistic" curve predicts that this should be a linear plot. After initial fluctuations, it is! There is no fundamental reason for this, but it's visually obvious. This, in my opinion (as a PhD physicist) is good empirical science. And it picks out the logistic (derivative of the hyperbolic tangent) as the "right" curve to use.

Avo

Here's a 1998 article by Lynch, containing his predictions for future oil production, contrasted with those of Campbell:

http://sepwww.stanford.edu/sep/jon/worl ... ldoil.html

Take a look especially at figure 18:

http://sepwww.stanford.edu/sep/jon/worl ... gure18.gif

He has world production at around 85 mb/d in 2005, which is just about right! He predicts a general rising trend to 110 mb/d in 2020.

Since his past predictions have been right, and Campbell's have been wrong, why are we so sure he's wrong??

Avo

{moved post by MQ}

[JohnDenver]

Since his past predictions have been right, and Campbell's have been wrong, why are we so sure he's wrong??

Excellent point, avo. Lynch vs. Campbell reminds me a great deal of Simon vs. Ehrlich.

Many of the criticisms of Lynch also apply to Simon -- i.e. Simon's basic argument was a seemingly irrational faith in technology and humanity, he didn't produce numbers, he didn't tell you exactly how things would work out well etc. Nevertheless, Simon was always right! I believe we should take that fact very seriously. A person like Simon or Lynch may have seemingly weak arguments, but if those arguments keep producing the correct predictions, again and again, they may not be as weak as they seem.

[Edit: To be clearer, I think quality of argument is not that useful. What is important is whether the argument yields the correct result. We can't tell whether Lynch is full of it simply by looking at his methods. We have to wait until the future comes, and see who is right. You could do a Ph.D. thesis on why Campbell's "quantitative" methods are superior to Lynch's economics arguments, but it's all just hot air if Campbell's method gives the wrong result.]

[nero]

Take a look at Deffeyes' new book, Beyond Oil. He plots oil production per year divided by total extracted vs total extracted. The Hubbert "logistic" curve predicts that this should be a linear plot. After initial fluctuations, it is! There is no fundamental reason for this, but it's visually obvious. This, in my opinion (as a PhD physicist) is good empirical science. And it picks out the logistic (derivative of the hyperbolic tangent) as the "right" curve to use.

I'm aware of this work. Basically it's at the level where we've identified that the planets sometimes circle the Sun in what look like elliptical paths but have not come up with a theory of gravity. Sometimes the production profiles follow a logistics curve sometimes it doesn't, I'm not aware of any theoretical justification for why it should. Perhaps there is an economic model where an ideal resource is exploited in a logistics curve manner. (If someone would like to share this information I would be delighted) however that kind of graph will produce what looks like a straight line (after some initial fluctuations) from alot of different production curves. I grow suspicious of this kind of analysis when Laherrere can use it to extrapolate an UR value for Saudi Arabia from what is essentially constant production in the 1990s.

[JohnDenver]

Sometimes the production profiles follow a logistics curve sometimes it doesn't, I'm not aware of any theoretical justification for why it should.

Smiley gives a simple, but interesting model which produces a bell-shaped curve:
Hubbert's peak derived

It's not clear, however, whether the produced curve is actually the Hubbert curve (derivative of the logistic curve).

It may be that the Hubbert curve can be derived, given certain assumptions about economic behavior and political stability etc., but those assumptions don't hold in the real world, and that's Lynch's point.

[JohnDenver]

In the end I find Lynch only ever backs up his arguments with faith and derision. Faith that economics can handle any problem and derision of anyone who cautions otherwise.

He also backs up his arguments with the accuracy of his past results. Does that count for nothing?

Look at the graph avo posted:


Lynch was the most optimistic, and closest to the truth.

I can also understand Lynch's derision. It's a lot like Simon's derision of Ehrlich. It's a response to the fact that, even though you consistently make the correct forecast, you get very little credit for it. It's a flamboyant way of calling attention to the primary strength of your approach: it's track record of accuracy. If you're too polite, and don't use derision, you face a whole room of people mesmerized by Campbell's (Ehrlich's) number barrage, thinking "well, if he's got all those numbers, he must be right."

[mididoctors]

Lynch gets a lot of mileage out of criticizing the bell curve. In only one way is he right -- the mathematical abstraction of the bell curve (the Gaussian or Normal distribution) cannot model experimental curves absolutely corrrectly. The bell curve is symmetrical about some mean, which means the tails have to go negative; but what does a negative time imply? So Lynch says "Gotcha!"

The biggest mistake that Peak Oil modelers make is not using asymmetric formulations such as the Gamma distributions. This would keep nutcases like Lynch from nitpicking on the mathematical details that get broadbrushed. What Lynch does is the equivalent of some dweeby Star Trek fan criticizing some arcane bit of non-logical trivia that appears in an episode, and then doing a victory dance celebrating his infinitesimal intellectual acchievements.

the thing about this bell curve is its inference is used by lynch!

nearly all his arguments are based on modifications from the perfect fit and why...

everybody does that. it is a starting point as depletion must be addressed by some real world factor

increased recovery

increased discovery (even in existing basin fields).

staggered production and bottlenecking (moving a floating production platform to a new field or political control).

and the such like

the thing is lynch is a peak oiler

Boris
London

[mididoctors]

Sometimes the production profiles follow a logistics curve sometimes it doesn't, I'm not aware of any theoretical justification for why it should.

Smiley gives a simple, but interesting model which produces a bell-shaped curve:
Hubbert's peak derived

It's not clear, however, whether the produced curve is actually the Hubbert curve (derivative of the logistic curve).

It may be that the Hubbert curve can be derived, given certain assumptions about economic behavior and political stability etc., but those assumptions don't hold in the real world, and that's Lynch's point.

the best macro fit is the US.. probably because of all the factors already outlined in this thread.

Lynchs point about the real world is invalid as reasons for distortions in a bell curve does not equal logically to a unbridled amount of in place oil to be discovered.. a curve in production or metric graph does not tell you that but it can tell you about the exploitation of know discovery.

the glut discovery point is weak as you are fighting a law of diminishing returns if you ever want to turn around a deficit.. the production gap.

we have a glut (arguable it looks a 50:50 proposition at best) therefore a new wave of discovery exists somewhere because to the economic conditions for discovery are poor?

thats a piss poor argument on so many levels least of which is why are we looking in expensive locations?

Campbells predictive credentials is poor for sure and it does him an injustice... but I suspect this time he may have over compensated in the other direction.

Boris
London

[mididoctors]

I can also understand Lynch's derision. It's a lot like Simon's derision of Ehrlich. It's a response to the fact that, even though you consistently make the correct forecast, you get very little credit for it. It's a flamboyant way of calling attention to the primary strength of your approach: it's track record of accuracy. If you're too polite, and don't use derision, you face a whole room of people mesmerized by Campbell's (Ehrlich's) number barrage, thinking "well, if he's got all those numbers, he must be right."

well they must be right... even lynch knows it its only a matter of when.

Lynchs extrapolation of production could be right for the decade but if the in place discovery trend stays there then you have a real crash.. its impossible not to..

my suspicion is that around "peak" you can expect not only a high degree of price volatility but also production and data volatility in general.

we could see a massive rise in production due to a concentration of effort on the in place oil... what does that mean?

if we stayed on track with Lynchs predictive path is that a good thing even if we achieved it? Lynch has no discovery data to back away from a discovery glut mitigation.. in a sense he asking us to make a real faith based leap way beyond campbells and admits it! think how dangerous it is if we are able to increase production by lynchs trend.

BTW I agree i am feed up with people just slagging someone off because they are a "insert stereotype" here.

Boris
london

[JohnDenver]

Lynch gets a lot of mileage out of criticizing the bell curve. In only one way is he right -- the mathematical abstraction of the bell curve (the Gaussian or Normal distribution) cannot model experimental curves absolutely corrrectly.

There's no reason to believe that probability distributions (Gaussian, Gamma etc.) have any relationship at all with the oil depletion curve (other than a superficial resemblance). I find Smiley's derivation plausible, and it makes no reference to probability at all. It's a question of drilling an ever increasing hole in a pressurized reservoir. It's not a random process.

Maybe if pup55 reads this, he would know more, but I don't think anybody is actually modeling resource peaks with the Gaussian curve.

[JohnDenver]

Lynchs point about the real world is invalid as reasons for distortions in a bell curve does not equal logically to a unbridled amount of in place oil to be discovered..

Good point, boris. Both Lynch and Campbell are shooting in the dark on oil in place (particularly in places like Saudi Arabia where the data is poor). They both deserve criticism for that. Neither of them has the certainty they are projecting, and it's disgraceful scientifically.

It's probably best for society to act on Campbell's prediction, whether it is right or wrong. In fact, I wish that Campbell would adopt that as his explicit position. I would respect him a lot more if he said: "We don't know the exact numbers. We can't and won't predict an exact date. However, we know that conserving petroleum is a win-win strategy which will be beneficial whether the peak comes soon or late." That would put a little rhetorical ju-jitsu on Lynch, deprive him of his primary debate tactic, and put the focus where it really should be.