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64 comments on The IHS Energy View of Peak Oil

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timdrive on December 20, 2005 - 1:29am Permalink | Subthread | Comments top
> Sum the ultimate "proven+probable"technically
> recoverable liquid and gas resources of
> each field and undeveloped discovery, by year

As an energy analyst and consultant I would like to
point out that this above is the real culprit why
IHS and CERA conclude peak is "not imminent". They
add the proven (P-95) and probable (P-50) to come
up with URR which they later use in their analysis.
What they do not tell you is that the probability
for them to be correct is 50%. If they only use the
P-95 (95% chance the URR to be what they believe)
then the peak date will be around 2007, give or take.
Everything else like transport and refinery limitations
take back seat to the fact that their principal
assumptions are correct with 50% probability.

Cheers,

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Stuart Staniford on December 21, 2005 - 2:51am Permalink | Subthread | Parent | Comments top
This isn't right.  If the geologists and petroleum engineers are unbiassed estimators of the P-50 reserves of an individual field, then when you add lots of fields together, the reserves should be right with only a small error (due to the central limit theorem).  Specifically, the relative error will scale like 1/sqrt(N), where N is the number of fields being aggregated.
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shez on December 21, 2005 - 3:32am Permalink | Subthread | Parent | Comments top
Didn't the USGS use a similar approach for new discoveries. I had no argument with the critiques of their reserves growth estimates but when it came to their estimates for new discoveries I couldn't see any problem with their methodology (using Monte Carlo simulations based on probability distributions). The only problem was the degree to which the resulting discover projections were at odds with the historic decline in disoveries (eg to meet their estimates would require a complete turnaround in this trend). This suggests that their probability curves may have been a tad optimistic!

Maybe it is this "unbiassed estimate" of the probabilities we are lacking in both cases.

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dp1 on December 21, 2005 - 1:49pm Permalink | Subthread | Parent | Comments top
The thing is, those reserve errors are not going to be independent from field to field; errors in estimating the size of a field are much more likely to be a result of methodology problems, misestimating current/future technology, etc, than just statistical error.  

So adding all of the individual field estimates together will not necessary reduce error dramatically, even if the field-by-field estimates are unbiased.

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southpaw on December 25, 2005 - 1:59pm Permalink | Subthread | Parent | Comments top
Even IF the probable reserve calculations have a higher level of accuracy than current conventional wisdom, one cannot escape the fact that a sizeable number of oil fields are on the brink of decline and even terminal decline. Once peak of an individual oil field has come, extraction during the second phase becomes increasingly expensive.

Combine this factor with ever increasing world demand and the result is predictable.  Arguing whether accurate estimates of probable reserves peg the brunt of the shock in 2 years or in 10 years is a matter of pedantry - as much of a waste of time as arguing over the ideal placement of furniture while the house is burning down.

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64 comments on The IHS Energy View of Peak Oil

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