The Oil Drum | JHK: "A Hard Place"

266 comments on JHK: "A Hard Place"

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westexas on October 2, 2006 - 6:32pm

Jim asked me why I commented that world crude + condensate production is down by about 800,000 bpd (12/05 to 7/06), if we exclude Iraq. (He wanted to know why I was excluding Iraq.)

My response:

Two reasons.
It's the only major oil exporter occupied by the US military (makes me wonder about the reported production numbers), and more importantly, it is at the top of my list for most unstable producing regions worldwide.
Having said that, it is my understanding that Iraq has the best remaining reserve potential in the world, which has a lot to do with why the US military is occupying the country. But can you imagine trying to get Western drilling rigs and service companies to work in the area given current circumstances? This also makes you wonder how sustainable the current production is.

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PhilRelig on October 2, 2006 - 7:31pm

It has always struck me that Iraq receives far too little attention in Peak Oil discussions, given its reserve potential. Has Colin Campbell ever done one of his in-depth country surveys on Iraq in his newsletters? Are there any other reasonably sober-minded assessments of the geological situation in Iraq floating around out there?

Just think how different things might be if the US had not decided to make Iraq the enemy in 1990 and sequester their oil from the market. The Iraqis would be producing 6+ MBD using a state-of-the-art oil infrastructure, the world would be at 87-88 MBD, there would have been no run-up in prices such as we have seen the past few years, and the world might even still have some spare capacity left at this stage.

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ET on October 3, 2006 - 1:15am

The hubbertpeak site has this interesting piece by Laherrere.

http://www.hubbertpeak.com/IQ/iraqLaherrere.pdf

Another one with lots of nice maps is at

http://www.searchanddiscovery.net/documents/gong03/index.htm

Just off the top of my google...

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Leanan on October 3, 2006 - 10:06am

Iraq has been covered in the ASPO newsletter.

But what I find most interesting are the rumors that Iraq doesn't have nearly as much oil as we thought. This was also reported at ASPO.

Supposedly, the U.S. conducted a survey of Iraq's oil reserves after the war. It is classified. It was supposed to be made public in 2004, but here we are, nearing the end of 2006, and it's still classified.

But the "whisper number" that has leaked is only 47 BBL. Not the 112 BBL claimed.

Why so low? Partly, for the same reason Kuwait's reserves are in question. When OPEC decided to base quotas on reserves, everyone juiced up their numbers. Partly, because the oil fields have been severely damaged by the way they were produced during the ten years of sanctions.

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westexas on October 3, 2006 - 12:47pm

A Google New Search turned up a blog posting claiming that Iraq's September production is back down to 1.8 mbpd, from the EIA's 2.2 mbpd number for July.

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GreenEngineer on October 3, 2006 - 6:19pm

Thus preventing the penetration of the peak oil concept into the public mind, ensuring continuing low fuel prices, and causing renewable energy technologies to continue to languish as they did through the 80's and 90's. Right up until we hit geological peak, and find ourselves entirely up a creek.

Maybe the Republicans are alot smarter and more forward-thinking than I've been giving them credit for... Naw. :)

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GreyZone on October 4, 2006 - 1:39pm

Your thinking assumes that 88mbpd would be sufficient right now to keep prices at $20 per barrel. We don't know that. Prices rose because demand was higher than supply. How much higher? Chinese demand has yoyoed for the last several years in response to prices. So has India and those are two huge economies that would be even bigger and consuming more if some of that demand had not been supressed by higher prices. Further, poorer nations would have stayed in the market continuing to use oil. So what would the total demand have been? Nobody can accurately tell so to suggest that 88, 90, or even 100 mbpd would result in stable low prices is purely a guessing game. Yes, the larger your guess the more likely it could be right but there is no way to prove that.

And frankly, I suspect that if prices had remained flat while production grew further, we'd have just ended up with exactly the same scenario we saw from July 2004 til now, only a few years later. Eventually we hit a production plateau and prices rise to constrain demand.

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Samsara on October 2, 2006 - 8:25pm

"It's the only major oil exporter occupied by the US military (makes me wonder about the reported production numbers), "

I have thought of this more than once. What if production could be/was pumped up 500,000 or down and nobody knew.

Would it be possible to do that? Have their production be kinda like an "Oil Slushfund" so to speak.

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trost on October 3, 2006 - 3:14pm

The administration already has an oil slush fund. It's called "the Strategic Petroleum Reserve." There is reason to believe it's being used that way, too....

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