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Page added on April 6, 2019

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Remember Peak Oil? It’s back!

Remember Peak Oil? It’s back! thumbnail
Saudi oil well
© Back in 1950, everyone thought the oil would last forever. / Hulton Archive/Getty images

It seems that the biggest Saudi field is losing its punch.

Years ago we used to talk a lot about peak oil, the prediction made by M. King Hubbert that the easy oil was going to run out, that it was going to get harder and harder to find the stuff, and it was going to get more and more expensive to get out of the ground. Hubbert wrote in 1948: “How soon the decline may set in is not possible to say, Nevertheless the higher the peak to which the production curve rises, the sooner and sharper will be the decline.”

hubbert peak
According to the predictions made back in 2005, right about now the Saudis are running out and we are smack in the middle of confusion, heading for chaos. Of course we are not, we are flooded with fossil fuels, thanks to the fracking boom.But according to Eric Reguly, writing in the Globe and Mail, there is trouble ahead, because that prediction about Saudi oil may not be that far off. He writes that the giant Ghawar field used to produce ten percent of the world’s oil, five million barrels a day.

In fact, Ghawar is not as resilient as we were led to believe. We just found out that its output has fallen substantially since Aramco previously came clean on its reserves and production. If Ghawar is losing momentum fast, peak oil – remember that theory? – might be closer than we had thought. And Ghawar is just one of dozens of enormous conventional-oil reservoirs scattered around the planet that are in various stages of decline.

Those include the North Sea, Alaska’s Prudhoe Bay, and Reguly reminds us that Mexico’s Cantarell reservoir used to supply 2.1 million barrels a day and is now down to 135,000.

The US Permian shale basin now supplies 4.1 million barrels a day, but fracked wells run out pretty quickly, and the fracking companies are all losing money. Better sell that pickup truck; it may well cost a lot more to fill it. As Reguly concludes, the Ghawar field is indeed in trouble,”and if it does collapse, peak oil will come a bit sooner.”

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37 Comments on "Remember Peak Oil? It’s back!"

  1. Cloggie on Sat, 6th Apr 2019 10:02 am 

    Peak oil supply, perhaps, peak fossil supply, not in a thousand years.

  2. Davy on Sat, 6th Apr 2019 10:21 am 

    Peak oil supply of affordable oil and from regions not suffering failed state dynamics is happening. All oil producing regions are potential failed states in this day and age from political to economic reasons. Peak Oil Dynamics was coined by our board expert on oil, Rockman several years back. Peak Oil dynamics is alive and well per his definition of systematic PO issues along with traditional geologic issues. The original peaker narrative was proven wrong but to be fair to earlier peakers, back then the concept was evolving from the original Hubbert theory. Most of the current smart peaker people now realize there is still very much an oil problem just not what was once preached by doomer peakers 5-15 years ago.

  3. Robert Inget on Sat, 6th Apr 2019 10:27 am 

    Oil wells have been ‘fracked’ for over 150 years.
    Sure enough, they ALL eventually go dry.
    Oh, when drilling rigs have to moved, it’s expensive. Placing several wells on a single pad
    is an economy move made possible by star pattern HORIZONTAL drilling.

    WHEN Ghawar poops out, we will know months maybe years in advance. For now that massive field is on life support. A ten K CO/2 pipeline
    will keep the crude flowing for years at a steady,
    diminishing pace. Don’t sell that pick-up.
    Instead, get it crushed, or converted to electric. Switch to renewables and natural gas generated electricity.

    Predictions:
    I see Australia as a poster child for North America’s future. Take a few minutes and glimpse OUR future. https://en.wikipedia.org/wiki/Drought_in_Australia

  4. Robert Inget on Sat, 6th Apr 2019 11:05 am 

    Davy, like most casual observers, confuse shale
    AKA ‘tight oil’ or ‘condensate’ with ‘mature’ crude.

    Natural-gas condensate, also called natural gas liquids, is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. Some gas species within the raw natural gas will condense to a liquid state if the temperature is reduced to below the hydrocarbon dew point temperature at a set pressure.

    https://en.wikipedia.org/wiki/Condensate

    Crude oil comes in ‘flavors’, like ice cream.
    Depending on how long it’s been ‘cooking’ crude can be as light as diesel or as thick and gooey as bitumen.

    Since most of the earth is covered with water
    doubtless, like billions of planets in the know universe there must be entire gangs of ponies
    out there. Simply too expensive to mine.

    The good news? Peakish oil timing is lining up with a newer, sustainable economy.

    Have you observed how the now common smartphone, high capacity batteries, cars, trucks and busses with no need for oil changes or antifreeze or tune-ups or emission controls have
    changed the way we live?

    Like climate change, we are already living in the future. Learn to enjoy. Adopt a rescue dog or cat.
    Soon, you will wonder which one of you were the rescued.

  5. Davy on Sat, 6th Apr 2019 11:45 am 

    Not my fault bobby for being so confused. I got me a lurning disability.

  6. Not Davy on Sat, 6th Apr 2019 12:01 pm 

    JuanP posted this Davy did not

    Davy on Sat, 6th Apr 2019 11:45 am

  7. Davy on Sat, 6th Apr 2019 12:03 pm 

    “Davy, like most casual observers, confuse shale AKA ‘tight oil’ or ‘condensate’ with ‘mature’ crude.”

    AH, bob, give me the reference for my confusion and explain yourself. Most of your comments are confused

  8. dissident on Sat, 6th Apr 2019 1:51 pm 

    Peak oil never went away. It was the media that suppressed it with propaganda about the cornucopia of tight oil and gas. Conventional crude peaked in 2005. The EIA and IEA having been faking it up by counting ethanol and tar sands synthetic crude as conventional.

    Tight oil plays like the Bakken are a flash in the pan. They are not some 1000 year guaranteed supply. Pay attention to the fracking related supply in the USA. It is already peaking.

  9. Not JuanP on Sat, 6th Apr 2019 2:15 pm 

    Davy posted this JuanP did not

    Not Davy on Sat, 6th Apr 2019 12:01 pm
    JuanP posted this Davy did not
    Davy on Sat, 6th Apr 2019 11:45 am

  10. Nostradamus on Sat, 6th Apr 2019 2:49 pm 

    Law of the Universe: What goes up must come down.
    OIl production must come down someday.
    It’s a no-brainer.

  11. Robert Inget on Sat, 6th Apr 2019 3:00 pm 

    https://www.reuters.com/article/us-oil-condensate/u-s-oil-industrys-billion-dollar-question-what-is-condensate-idUSKCN0HX0BU20141008

    What is the meaning of crude condensate?
    A crude condensate is a very light crude oil. Crude condensate occurs like any other crude oil it is so light it is almost like it has been already partially distilled and striped from its heavy parts. It can be challenging for certain refinery to use as such because the distillation curve is too much skewed toward the light ends. It can also be used as petrochemical splitter feedstock.

    It’s true I’m confused. (too)

    I knew at once, when Trump openly went to war on Venezuela’s heavy, oil was going to go thru $60 like a fart through Spandex.

    Most folks (including Dave) just don’t get it.
    Exxon’s Gulf refineries are tuned for Venezuelan
    crude. There is a substitute from a so far friendly nation, Canada. Oil Sands or tar sands if you will
    yields a heavy oil like that of VZ’s Orinoco Valley.

    Why ‘most folks’?
    1) Libya (where all the new fighting aroused oil traders) in light oil. NOT from bitumen.
    2) Saudi Arabia may be maxed out until new tech permits greater production.
    3) That XL pipeline from Mid US to those Gulf refineries yet to get final digging papers.
    IOW’s, SU, CNQ, USA, etc, SOL. No pipelines, no
    heavy crude needed to make vital diesel.

    The reason Keystone was always on ice was because we had a quick, reliable source in Venezuela.
    Suddenly… Trump signs a few permits with questionable validity. Even if digging started
    Monday, XL wouldn’t fill till March 2020.
    I recon problematic trains and trucks may be used.

    IOW’s this ‘shortage’ of heavy oil is NOT for a few days or months but years.
    Today.. Trump ordered all Venezuelan deliveries of oil to Cuba stopped. IOW’s since he didn’t stop Iranian oil?

    Do I need to remind anyone here? What Trump is doing will not go down well with Putin.
    Russia has military personal as well as oil workers
    stationed in VZ. Putin will do what he has to do.

    United States embargo against Cuba – Wikipedia
    https://en.wikipedia.org/wiki/United_States_embargo_against_Cuba
    United States embargo against Cuba. Despite the existence of the embargo, the United States is the fifth largest exporter to Cuba (6.6% of Cuba’s imports are from the US). Cuba must, however, pay cash for all imports, as credit is not allowed.

    Cuba was getting deeply discounted crude from VZ in exchange for Medical personal.
    If Cuba is denied 93% of its fuel, Cuba would do what any nation would do. (protect delivery tankers by military means)

    No one can predict how this situation resolves.
    ONLY one thing certain. $100+ oil gets printed
    by July 4th.

  12. Davy on Sat, 6th Apr 2019 4:08 pm 

    Lol, bob makes another prediction. Bob, I hope it
    goes better than your last one. I will save this to my notes. JuanP will be excited to read that because he likes to mock me but I have him tagged. You are tagged too, bob. What about the faltering economy bob? That might make $100 oil a stretch.

  13. Davy on Sat, 6th Apr 2019 5:13 pm 

    Oops, sorry Robert. Now that I’ve calmed down and got my nasty widdle temper under control, I have something to add.

    Thank you so much for your opinion. I respectfully disagree with you, but that doesn’t mean that my opinion is any more valid then yours is. After all opinions are like assholes. Everybody has one.

    All the best to you my friend.

  14. Harquebus on Sat, 6th Apr 2019 5:16 pm 

    In my opinion, peak oil was circa 2005 and never went away. The effects of peak oil have masked by massively increasing debts. When the debt bubble collapses, all of the effects of peak oil will suddenly appear in full force.
    With no time to adapt, that’s when the fun will start.

  15. Not Davy on Sat, 6th Apr 2019 5:58 pm 

    JuanP posted this not Davy

    Davy on Sat, 6th Apr 2019 5:13 pm

  16. JuanP on Sat, 6th Apr 2019 6:20 pm 

    We know this can’t be a Davy post due to the inclusion of the words “respectfully disagree” and “thank you”.

    He has NEVER used words and phrases that are universally recognized for being polite and courteous of others.

    “Thank you so much for your opinion. I respectfully disagree with you, but that doesn’t mean that my opinion is any more valid then yours is. After all opinions are like assholes. Everybody has one.

    All the best to you my friend.”

  17. Davy on Sat, 6th Apr 2019 6:36 pm 

    “We know this can’t be a Davy post due to the inclusion of the words “respectfully disagree” and “thank you”.”

    No shit juanpee, it is your identity theft. LOL.

  18. Not JuanP on Sat, 6th Apr 2019 6:37 pm 

    Davy posted this not JuanP

    Not Davy on Sat, 6th Apr 2019 5:58 pm
    JuanP posted this not Davy
    Davy on Sat, 6th Apr 2019 5:13 pm

  19. Davy on Sat, 6th Apr 2019 6:39 pm 

    Welcome back Juan! We all missed you over the last several weeks, especially me. How was your trip?

    Let’s get this party started old friend!

  20. Not Davy on Sat, 6th Apr 2019 6:41 pm 

    JuanPee posting Not Davy

    Davy on Sat, 6th Apr 2019 6:39 pm

  21. Not JuanPee on Sat, 6th Apr 2019 6:42 pm 

    Davy posting not JuanPee

    Not Davy on Sat, 6th Apr 2019 6:41 pm
    JuanPee posting Not Davy
    Davy on Sat, 6th Apr 2019 6:39 pm

  22. Dredd on Sat, 6th Apr 2019 7:37 pm 

    A bottomless pit with oil in it?

    And the Earth is flat (Make Flatulence Great Again).

  23. Chrome Mags on Sun, 7th Apr 2019 12:47 am 

    “No one can predict how this situation resolves. ONLY one thing certain. $100+ oil gets printed by July 4th.”

    You’re forgetting reduced demand feedbacks from non-elite consumers that cannot afford oil by products if priced above their means. Too high a price and the economy contracts, supply rises and price drops back down.

  24. Chrome Mags on Sun, 7th Apr 2019 12:59 am 

    Let me toss out there my ‘Dovetail’ Theory, which suggests GW & PO are timed to dovetail. I don’t have any solid evidence, just the observation that both seem to be moving in concert towards a common time period of tipping points. One will tip the climate into a new much harsher one while the other will tip the economy down. When, is unknown.

  25. Davy on Sun, 7th Apr 2019 4:00 am 

    “Let me toss out there my ‘Dovetail’ Theory, which suggests GW & PO are timed to dovetail.”

    It is more than GW & PO dovetailing. The world is faced with multiple converging predicaments heading for a civilizational tipping point. It appears very little can be done as long as human behavior is diverging into more insanity and away from a wisdom of sobriety.

  26. Theedrich on Sun, 7th Apr 2019 4:11 am 

    Declining Ghawar explains SA going nuclear.  MENE, MENE, TEKEL, UPHARSIN!

  27. Cloggie on Sun, 7th Apr 2019 4:25 am 

    “Declining Ghawar explains SA going nuclear. MENE, MENE, TEKEL, UPHARSIN!”

    More opportunities for the MAGA prez to do one of his famous “deals”.

    Thanks Don.

    https://www.cnbc.com/2019/03/27/us-approved-secret-nuclear-power-work-for-saudi-arabia-reuters.html

  28. Sissyfuss on Sun, 7th Apr 2019 8:26 am 

    Harq the herald angel sings the truth.

  29. Robert Inget on Sun, 7th Apr 2019 9:11 am 

    UN LEAVING Libya (to escape fighting)
    Look forward to action packed week as another
    14% of Europe’s crude at risk.

    https://www.csmonitor.com/World/Europe/2011/0223/Europe-rethinks-dependence-on-Libyan-oil

  30. Robert Inget on Sun, 7th Apr 2019 9:22 am 

    This link might be helpful if you are interested
    in Libya’s next chapter in our crude drama;

    https://www.theguardian.com/world/2019/apr/06/un-expresses-deep-concern-for-libya-as-haftar-closes-on-tripoli

  31. Robert Inget on Sun, 7th Apr 2019 9:39 am 

    Even in this ‘post truth world’ I don’t make this shit up. Watch this link this week;
    http://www.livecharts.co.uk/MarketCharts/brent.php

  32. Cloggie on Sun, 7th Apr 2019 9:45 am 

    US withdrawing soldiers from Libya, “for the time being”:

    http://www.spiegel.de/politik/ausland/libyen-usa-ziehen-soldaten-voruebergehend-ab-kaempfe-rund-um-tripolis-a-1261704.html

    Essentially this is a war between two secular wannabee rulers of entire Libya.

    Tripolitania:

    https://en.wikipedia.org/wiki/Fayez_al-Sarraj

    East:

    https://en.wikipedia.org/wiki/Khalifa_Haftar

  33. Robert Inget on Sun, 7th Apr 2019 10:44 am 

    Libya: definition: a North African nation cursed by oil.

    That’s UN ‘peace keeping’ troops. Not US.

    As for oil supply, unlike Venezuela, it will resume soon as fighting subsides. I’ll guess a few weeks after one side or the other prevail. The question now: Will Libya’s new show runners blackmail Europe over pricing or can US Non Profit shale fill the gap?

    (Europe’s gasoline consumption doesn’t stop/wait for Libyan Warlords to work off greed)

    Venezuela and Libya have more in common than OPEC. Both are a few day’s sail from their biggest
    customers. One potential and one actual civil war is not about religion. It’s flat out oil, no pretense
    as in Yemen or Syria or Sudan or Nigeria.

  34. Duncan Idaho on Sun, 7th Apr 2019 10:57 am 

    “Both are a few day’s sail from their biggest
    customers. ”

    But Libya has “the kind” oil, some of the best on the planet—-
    But Venezuela has the most—– and it is not getting any less valuable–
    Hint: The Maduro government is still in power

  35. Robert Inget on Sun, 7th Apr 2019 11:06 am 

    There’s gonna be sum real Trouble in River City.

    33https://www.bbc.com/news/world-middle-east-478400

    Israeli PM Benjamin Netanyahu said he will annex Jewish settlements in the occupied West Bank if he is re-elected.

    My question; What happens to Israel/ME is Bibi
    ISN’T reelected? Trump has shown, democracy
    can be overridden once one has a solid core of devoted, well armed, nothing else to lose, followers.

  36. Robert Inget on Sun, 7th Apr 2019 11:26 am 

    Duncan, Shale product, like Libyan light, is great for making gasoline. By Monday traders will have figured that one out.

    Canadian oil sands could replace Venezuela’s heavy, were enough pipelines in place. IMO one of the best investments to make today is not crude or even NG but Pipelines. Every time well meaning
    activists delay another pipeline, EXISTING pipe gains value.

    Now the Canadians will try choo choo trains, even trucks, getting heavy oil south where it’s required for HO, diesel and jet fuels.There-in lies that expected but unintended danger of spills.

    Short story; Higher crude oil for diesel will be with us for years,

    https://www.bing.com/videos/search?q=choo+choo+train&view=detail&mid=F7508D568C0AFA71338CF7508D568C0AFA71338C&FORM=VIRE

  37. Robert Inget on Sun, 7th Apr 2019 11:43 am 

    https://sputniknews.com/analysis/201904061073884708-saudi-aramco-americans-purchase/

    Saudi Aramco, the epitome of Middle Eastern success, started out as a US venture with a concession for oil rights in Saudi Arabia – until the Saudis made their American partners an offer they couldn’t refuse.

    see link for more;

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