5 replies to this topic

[Cirrus]

If you follow what's behind the energy markets this is a must read. I am in the camp that Saudi production will never agian reach 9.5 mbpd. IF this is true we are at peak oil or have recently passed it. If there's anyone who even occasionally reads about the energy markets I would read this. There's plenty of outstanding charts and explanations--especially the first few.

Link

[hiker]

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[colion]

If you follow what's behind the energy markets this is a must read. I am in the camp that Saudi production will never agian reach 9.5 mbpd. IF this is true we are at peak oil or have recently passed it. If there's anyone who even occasionally reads about the energy markets I would read this. There's plenty of outstanding charts and explanations--especially the first few.

Link

API estimates 100B bbl plus gas off the between Arctic and off the east and west coasts. I read similar projections for the Middle East coast. Are people factoring such reserves into their scenarios?

[Cirrus]

colion, Peak oil is a somewhat complex and misunderstood subject. It took me a few years of following the sector to learn about how the industry works. There's even a slight 'conspiratorial element' there. The bottom line IMO is that IF Saudi Arabia has peaked, the world has peaked. Peak oil doesn't mean we are running out. It just means that the world has reached max production capacity. There's so much to the depletion side of the equation that not many pay attention, too. You also have to guard your own opinions and psychology about the sector (bull vs bear) from the perma bulls and perma bears--there are PLENTY of both. Peak oil is like running on a treadmill and you're not allowed to get off. IMO opinion the world has gone from a slow, comfortable walk to a brisk walk the past 5 years. We are about to begin a slow jog. There will be a point in the decade to come where we will be unable to match the accelerating pace of the treadmill. I expect plenty of other energy solutions to come on line, though. FWIW I just follow the OSX, XOI and several individual energy equity charts to see what's up--especially monthly and weekly charts. To me these LT charts look very bullish and match the fundamentals I'm seeing.

[PorkLoin]

I think the Saudi fields are generally in decline. Last I saw was just less than 8.5 million barrels per day production. With the price of oil going down the last half of last year and into the January 2007 bottom, I wouldn't think they'd be going 100%. Maybe pretty close but why go crazy when oil's going down in price? If they are pumping the max, then it's all the more bullish. Why would they do that -- are they afraid of oil spiking up higher than it did, resulting in demand destruction? The oildrum link mentioned that in the north Ghawar field not many new wells are going in, and that it wouldn't be any better if they were. I bet the Saudis are starting to really hammer on some lesser, more marginal fields. Still complicated as I see it, since those fields would in general deplete slower than the high-permiability ones that were understandably more fully-developed first. If the production from them gets jacked-up, it ought to help stem the overall decline for some years. Those are some knowlegeable people at the oildrum site. Just my BS here -- I think the Saudis and some other countries have fudged the figures on reserve numbers, overestimating/overstating them. I see the Saudi royal family as fighting a delaying action with a populace that's largely increasingly dissatisfied with them. It's very believable to me that they're "delaying" the truth of any significant field depletion numbers as well, but they play it close to the vest and much is just speculation. Mexico's Cantarell field is certainly declining in production and forecasted to continue going down. For a while, anyway, it was the 2nd-largest producing field in the world, behind Ghawar. It's sure interesting -- I don't know whether we're really at the "peak" yet or not -- as far as I know world oil production is still increasing. Not very fast though, and going into the decades ahead I think there isn't much chance if any that supply will keep up with forecasted demand. I'd say that higher prices will in the end bring demand down to supply. Doug

[colion]

Peak oil doesn't mean we are running out. It just means that the world has reached max production capacity.

Yes, that's my understanding which is why I raised the question. With the size of the untapped areas, maximum production will depend on how we decide to develop the fields and so peak oil becomes a moving target (as it has been so far).



One runs into the same problem when discussing depletion of fields due to confusion regarding "resource" (amount of physical stuff) and "reserve" (amount of stuff that can be economically extracted). Presently, most figures indicate about 1T bbl of reserves (recoverable "now") and 3T bbl of resources (recoverable at the right price, political situation, technology, etc.). This is why fields with estimated reserves of X bbl 30 years ago have already produced, for example, 3X bbl. Economics also control how rapidly exploration and development occur - raise the price and the amount of money available for such ventures increases.



The Earth is a finite volume so there is not unlimited quantities available. However, I don't think anyone knows how to factor in the economics, effect of new technologies, political factors, etc. and come up with anything but a fuzzy estimate of when peak oil will (or has) arrive. Best, imo, to simply accept that it will arrive and ramp up R&D for other technologies (e.g., improved nuclear, fusion, etc.). Maybe we should start to build big tankers that can bring back CH4 from the "oceans" on Saturn's moon