Declining oil reserves

Off Topic
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Ok…

Granted that we probably won’t solve the future of energy here on this forum.

Furthermore I consider most of the points you raise valid, mitigating influences in the decline and effects of oil depletion.

And I can?t publish all the material relevant to this discussion here of course. I encourage everyone to google this topic and see for themselves, and view the argument.

Couple of points though.

?As far as fusion, to tell you the truth, all energy on earth comes from fusion. But I believe that what you mean is that we are not getting any energy from fusion right now, equaling 0%. Well we have a new restaurant being built near where I live. Guess what. They supply 0% of all dining here right now, so maybe they should quit building the restaurant.?

Not at all? but then again, not every restaurant built serves good food. Or even opens?

Not knocking fusion, since it obviously exists throughout the universe, but if our test reactor comes online in 2035, then 2050 for full scale production, we need an interim carrier.

?But it is my contention that there is a lot more oil out there then anyone wants to admit. And with about a decade of a price drop, and about a decade of relatively flat prices, nobody had any financial incentive to find more oil.?

The charts you reference are production graphs? notice the trend? This is not some price-based exploration dip. Did you know we have discovered less new oil every year since the 60?s? That?s right? discovery peaked. Since production historically peaks around 40 years after discovery, adjusted for the 70?s-80?s oil consumption reductions, that means that peak production of discovered oil reserves should be? right around now.

Economists have long based their predictions on pure supply and demand theory. And they have been correct, because there has always been more easy energy available to finance it. If you know of some counter-trend to show that global oil reserves will reverse the trend of diminishing returns, we are listening.

As for exotic energy sources? of course we should dance in the streets if something emerges to rival oil as an energy and manufacturing resource. But remember, we are discussing the consumption of oil, finally catching up to our production capabilities. The ?cliff? peak theorists speak of lies between cheap oil and moderate to expensive sources of oil? not oil versus fuels of the future.

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Boston Barrister:

By a Fed commissioner?

Try some articles by retired and now disinterested industry insiders.

There is 3 part series on CBS Market Watch by a former Big Oil big shot. Basically, he echoes all the stuff a crazy person like me has been shouting from the rooftops.

See also:

FinancialSense.com (Energy Section)
HubbertPeak.com

Matt

P.S. One of my predictions has proven false. Guess I should be more careful in the future. O my site and in my Feb 25th radio interview on Coast to Coast, I said you would see 3.00 gas this summer. Turns out it is already here. (at least in Cali - check gaspricewatch.com)

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AaronD: Oops, I meant to say we weren’t getting energy from fusion reactors. That makes a little more sense.

And I don’t see why the oil companies would want to search for more oil when prices have been dropping for decades.

And the “counter trend” is just like any other commodity, quoting an expert I read years ago. That the biggest reason a commodity is in short supply is because that is the way the producers want it. They cannot have the price too high, or too low. If the price increases then they will go get more. If the price is low, why produce more oil, or go looking for more? It will only lower the price more.

This is also one of the reasons that no refinery has been built in over 20 years. It doesn’t matter if we find a quadrillion (a one followed by fifteen zeros) barrels of oil and pump it out in a week. The refineries cannot handle it.

Matt: Keep on shouting. We have to discuss something.

But again your “Big Oil big shot” really wants you to believe that there is a shortage. They have been trying to keep oil prices from dropping for a long time. It is to their financial benefit to have people believe that oil is scarce.

And eventually they will make synthetic oil on a lab. Oh wait, they did. Want to save oil? Run a synthetic in your car. Although you will have to change it every 25,000 miles.

Will this replace all oil uses? No. But it doesn’t need to.

Remember, I cut my electricity use by 10% just by switching to compact florescent light bulbs. Now I have to admit that if I lived in a larger house, the percent improvement would have been smaller. But it shows that it is currently possible to reduce the use of energy.

Yes there will be inflation. Yes there is not an infinite supply of oil. But don’t forget that the state and federal tax on gas in California was 50.4 cents a gallon in 2002. (This is the date I found, and didn’t feel like searching more. Hey, more energy savings.) It might be higher now.

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“Since production historically peaks around 40 years after discovery, adjusted for the 70?s-80?s oil consumption reductions, that means that peak production of discovered oil reserves should be? right around now.”

This statement is not even logical, How can you have a history of production of oil after discovery when there is only one “event” of discovering and producing oil. You can not state that something historically happens when we are still in the period being cited.

Now if we went to another planet, developed it and found oil there and began to produce it, you could then legitamately say that production peaks at x years after discovery. But then also a year ,might not be the same on another planet.

I could have possibly misread your post and maybe you meant that the production of one oil site peaks 40 years after it’s discovery, which would make a lot more sense. However I think the point was made that the oil companies or whoever are not looking real hard for new oil fields untill the prices rise a bit, this will give them a lot of investment capital and increase their profits.

If the prices do go up to 3 bucks a gallon, then suddenly the will find all this oil and look like heros to drop it back to 2.25 and in reality they will have gained about .75 a gallon in a shorter time.

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Quite right? The 40 year number comes from observing individual field behavior. Take a look at the linked material for more detail.

?The fundamental driver of the 20th Century’s economic prosperity has been an abundant supply of cheap oil. At first, it came largely from the United States as it opened up its extensive territories with dynamic capitalism and technological prowess. But U.S. discovery peaked around 1930, which inevitably led to a corresponding peak in production some forty years later.?

http://healthandenergy.com/peak_oil.htm

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Sure hope the new hybrid cars will live to better than gas guzzlers… That is, until real alternatives are made available.

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Interesting. This chart needs a legend.

I know that people are told to search for “peak oil”. But this brings out a biased view. This is because all the people talking about it are only the ones worried about it, or are trying to sell something. (Not always a bad thing of course.)

I have an idea. Search for things like heavy oil.

Did you know that there are estimates of 6 trillion barrels of reserve heavy oil available? Now add that to the numbers of light sweet crude, and you have a more substantial number then before. I have seen an estimate of 3 trillion, with less then a trillion used. That leaves a total of 8 trillion barrels.

http://www.heavyoil.com/

People living in Canada probably know about Syncrude. 13% of Canada’s petroleum needs are supplied by Syncrude’s heavy oil production. And their three major deposits are equal or greater then Matt’s estimates of world oil levels, being estimated to have 1.6 trillion to 2.5 trillion barrels of bitumen.

http://www.syncrude.com/who_we_are/01_06.html

One of the big problems with this peak oil stuff is that people are trying to predict the future. And that is a very hard thing to do. Nobody can predict technology, except the person creating it, and even they don’t always know.

We were still supposed to be working on mapping the human DNA in the genome project. (Contrary to popular belief, the genome project was not a plan to breed gnomes.) But then somebody came up with a way to massively replicate DNA on a previously unbelievable scale. They finished long before they ever expected to.

While I know that oil prices will fluctuate, I have no doubt that we will have enough to get us through this century.

If light sweet (yummy) crude starts to decline, increases in heavy oil will supplement it more. Efficiency will improve, and alternates will become more and more important. Even the oil industry expects crude to drop form the current 40% of energy produced by crude to 37%. I expect it to drop even more.

After 2020, renewable energy will become so efficient that it will start making more sense to put up the windmills and solar panels, slowing the use of oil.

By 2050 Methane hydrates will be in full use, and the first fusion plant should come online. Eventually every power plant built will be powered by either gas, or fusion. But slowly fusion will win out.

Oh yeah. I expect that by 2050 that at least 80% of non energy uses for oil will have an economically viable alternative, a portion of which will completely replace oil because the alternatives will be cheaper.

Ok, this is my prediction, and I could be off. But the events will eventually occur. Even a slow introduction will have a surprising benefit.

I mentioned earlier about Japan buying 3 natural gas turbines from GE to produce their energy needs. And that they are efficient enough to save 2 million dollars worth of natural gas a year. One of the reasons they bought those turbines is because of a massive methane hydrate find off their coast. Once viable, they will no longer have to import all of their energy.

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Dick Cheney seems to think that oil is destined for decline…

“For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a
day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million
barrels a day.”

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AaronD, it should be of no surprise that people like Cheney and Simmons are commenting on declining oil reserves… they’re backing Bush who’s pushing to get into that Alaskan nature preserve.