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182 comments on CERA Response Thread I
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182 comments on CERA Response Thread I
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I tried to summarize the points of agreement and disagreement between CERA and the "peakists" (CERA's term). I was surprised by the amount of agreement. I was further surprised by their openness to debate:
I'm eager to hear what the experts at The Oil Drum have to say.
One suggestion - this looks like an opening. It would be good to have a response that is gracious and mature.
Bart
energybulletin.net
Where did you get that quote ("We respect the urgency and seriousness ...")? I could not find it in the press release on the CERA web site or in the abstract of the report. Do you have the $1000 version of the report?
PG,
A minor point - not quite sure why you changed the link from CERA to Energy Bulletin (rather than just adding the EB link). With all due respect to EB, CERA is the primary source here, and in my opinion it is always preferable to cite primary sources if possible.
Anyway, the thing that sticks out is just how different Khebab's post and CERA's report are, i.e. 20+ year difference in peak/plateau. It would be interesting to see an analysis of why this is so. It most likely comes down to different analytic methodologies, different assumptions, and different definitions of "oil" (Daniel Yergin is fond of saying that the definition of oil is constantly expanding). For example, CERA's work seems to be bottom-up, while much of the work done here (Stuart, Khebab) is top-down. (Khebab did a good job disaggregating a lot of the data in yesterday's post.)
It may be difficult to critique CERA's work because of their use of their proprietary IHS database (IHS is CERA's parent company). For example, what are they assuming for the average rate of decline of existing fields in production? And are they assuming any kind of project slippage for new projects? Nevertheless, an analytical comparison of the "peakist" theory to the CERA report would be highly worthwhile. Bart's comments at EB make for a good outline.
I agree with you about linking to the original source whenever possible. -Bart
Later they say "CERA draws both on its own data bases and those of its parent company IHS, which has the world's most complete [b]proprietary[/b] data bases on oil production and resources."
Bart further notes that "the short report cited by this press release is not publicly available (the 16-page PDF is sold for $1000."
As regards OPEC members, the information in the database is what OPEC tell them. If Saudi Aramco drill a well and say they found 400 million barrels, then they stick 400 million barrels in the database (plus a bit more because anything in Saudi Arabia must be good). Apparently the Saudi's have eighty undeveloped fields. The database says so, so it must be true.
cheers
Phil
from Aberdeen to Melbourne, Oz.
They do eventually give Hubert credit for calling the peak within a year or two of actual - which is a <small> positive - while at the same time trashing him some that his production numbers were wrong. If I made such a grand prediction in the early 1950's I think that is pretty damn good, it is good, damn good. Huberts call should be a much bigger positive than it was, they act like they are forced to cough it up. Nothing follows a perfect curve they should know that as well. All the factors that they mention can and do have an effect on production and ultimate recovery. I was young at the time but I'm sure there were factors that affected oil production in the period between 1950 and 1972, political, geological, technological, etc. etc. this is not a brand new world they just came up with. Hubert did a damn fine job and took alot of shit for it. That shit continues....
Point 2)
(I can't toggle back and forth without losing my text here, so..accuracy is not what it could be)
They mention technology as making URR greater - and, AND giving a more gradual downslope on the hubert curve. I suspect that technology added, or continues to add to the upslope(?)/plataeu as well. I think logically you can use the effect of technology on bothsides. To say it acts to reduce the down slope with out giving credit as to why we have had so much oil to use for so long seems disingenuinous at best.
Point 3)- The CEO of Shell oil was here in Portland, OR and was interviewed in the paper. The era of cheap oil is over and he stressed conservation. I think this is more than a mouth full no matter what CERA says. Shell is not a new kid on the block.
Point 4) What about that damn 'Hirsch Report' - forgotten??? How can we have both CERA and the HIRSCH REPORT at the same time. (seriously - WTF?)
I'm suspect of this group. I think we need to follow the $ (thiers). Given the seriousness of PO I think these guys need to have a good look in the mirror in the morning...never mind there are plenty of people without a conscience.
Sound familiar to the likes of Dr. Campbell?
(Hothgor's constant attacks using misleading information, e.g., his bizarre assertion for weeks that US gas production didn't peak in 1973, made it quite easy for me to say adios to TOD. I am also very busy developing several oil fields, with two rigs dedicated solely to my projects right now, but the CERA story is irresistible.)
I believe Yergin made the statement that this is the fifth time that the world has run out of oil, after four previous "crises." Interstingly enough, there are four large discrete producing regions that have shown lower production after crossing the 50% of Qt mark using the Hubbert Linearization (HL) method--the Lower 48; Russia; North Sea and Mexico.
Khebab has mathematically modeled (using only production data through the 50% mark) the post-50% of Qt production for the Lower 48 and Russia. For the Lower 48, the cumulative production through 2004 was 99% of what the HL model predicted it would be. For Russia, the cumulative production through 2004 was 95% of what the HL model predicted it would be.
The North Sea peaked in 1999, after crossing the 50% of Qt mark (crude + condensate). Mexico just peaked this year, after crossing the 50% of Qt mark.
The world is just past the 50% of Qt mark for crude + condensate, and right at the 50% of Qt mark for crude + condensate + NGL's. Both measures of "oil" are showing lower production relative to late 2005. In other words, the world is showing the same type of production response that four large producing regions have shown, at about the same stage of depletion.
Then there are the big four super giant oil fields that are, or were, producing one mbpd or more--Ghawar; Cantarall; Burgan and Daqing. Assuming that Ghawar is in decline--a reasonable assumption IMO--all four of these super giants are either in decline or crashing. The only possible super giant on the horizon is the Kashagan Field that, at best, won't start producing until 2010, and won't reach peak production until 2020, when it is expected to peak at just a little more than one mbpd.
IMO, the CERA story is part of the concerted effort by the "Iron Triangle" to persuade Americans that we are not anywhere near Peak Oil and that Americans should continue buying and financing large homes and autos. IMO, large majors like ExxonMobil are afraid of punitive taxation, if they admit to the reality of Peak Oil. I suspect that the recent election had a lot to do with the CERA story. ExxonMobil is going to assert that they need every dollar of cash flow to bring on the trillions of barrels of oil reserves--so that Americans can continue driving their SUV's to their large suburban mortgages.
Published on 19 Apr 2006 by Energy Bulletin.
What the mainstream media are not telling you about the run up in oil prices
by Jeffrey J. Brown
We hope it's only a one day retirement, Jeffrey. Best wishes to you.
Erwin
And that point should be hammered home again and again. If a person is going to be a pundit, then their track record should certainly be carefully scrutinized. If their past predictions are no good, why exactly would I pay any heed to their current predictions?
I do want to see the specifics of why their reserve number is so large. How do they calculate it? Upon what is it based? Are they throwing a trillion barrels of tar sands in there?
Published on 13 Jul 2006 by Energy Bulletin. Archived on 13 Jul 2006.
Daniel Yergin Day, July 13, 2006
by Jeffrey J. Brown
;)
D
Hmmmm
....I noticed that CERA certainly spent alot of time thrashing on huberts curve....
...maybe you are in thier crosshairs because of you constantly refer to hubert also...
...I think they do not like you. You are a bad person...
:)
D
After the Peak Oil debate on PBS, where I took on ExxonMobil and Michael Lynch, I had an interesting exchange with the ExxonMobil guy on the way out. I gave him my card with the EB website and with instructions for finding my articles. He handed it back to me saying, "We have read all of your articles." I left feeling not entirely comfortable with that comment.
Of course, that was topped by a comment from a guy at a Dallas area Rotary Club meeting, where I gave a talk on Peak Oil. On the way out, he took me aside and said that while he agreed with me about ELP, he was surprised that I had not been assassinated yet (I think he was halfway serious).
I did not know this. Do you have a link. I very much want to see.
You should be flattered
Creepy
Now if millions of young people (including nubile young women) were signing up for ELP, then yeah assasination might be a real concern.
That's the thing about the Iron Triangle. It has such overwhelmingly powerful propaganda controls that ultimately people like us are really no threat. Particularly on an issue where even people of the intellectual-dissident class don't wants to believe this. IE, you can have somebody who is totally "against the system" who would never believe corporate propaganda on all sorts of issues but who will accept it in regards to PO. The alternative (accepting it) is simply too terrifying even for people who are aware of how corrupt the system is.
Using myself as an example: Let's say hypothetically speaking Blackwater calls me and says, "Matt we'd like to pick your brain for a couple hours about current events. We'll pay you a consulting fee of $25,000." Would I accpet it? Sure would. Would I then be less inclined to post those nasty videos about Blackwater contractors that I've posted to LATOC? Almost certainly.
Now other PO pundits might be able to say they would turn down such an offer from entities in the petroleum-banking-military-industrial complex. That's all well and good. They'll just find whatever your weakness is and exploit that. For me, it is the desire to get money to buy land, go off-grid, etc. For somebody else who is already secure financially they might want a cushy consulting job or more notoriety or funding for their site, organization, conference, whatever . . .
As an example, let's say some bigtime defense contractor approaches PO pundit #1 and says, "hey we'd like to help finance or publicize your PO conference . . ." The person or organizaiton would likely accept the money under the rationale it is for the greater good as it will allow the conference to succeed. But you are then MUCH less likely to put defense contractor's feed to the fire when the need arises.
Even if the defense contractor was not offering money, the potential political connections and power such a relationship might bring to the PO pundit would be more than most could resist. There would be some seemingly logical rationalization (excuse) generated by the brain to justify the relationship. That's just the way the brain is wired.
Point is, TPTB have much more subtle and effective ways of influencing the PO debate should they choose to employ them. The stuff you listed usually gets employed AFTER these "nicer" methods have failed.
TPTB know it is generally much more effective to send Jenna Bush packing tequila to your door then it is to send Dick Cheney packing heat, if you get my drift.
I am impressed with your insidious ideas of undermining PO awareness. The government or industry would do well to hire you to lead the campaign. After you make your money I recommend your moving to Maine.
Land is dirt cheap here compared to California
Population is only up about 30% from 1900
We have more organic farmers per capita than any state in the country
70% of households own guns and will shoot to protect themselves
A friend who visited was surprised when I drove up to a farm stand, picked out my produce and dropped the money in a slot - People still trust each other.
Make sure you buy a wood lot with your land. It gets cold here. But at least you won't freeze to death.
Last year, like this one, we also had 20 inches of extra rain. We recently had 3 days where the wind blew almost continuously between 30 and 40 mph. No one here I talked with including an 80+ year old farmer has ever seen this before. If this is a foretaste of global warming there is no good place to live. We will all be doomed. It is all relative and relative to other places I have lived including NYC, Santa Barbara, western VA, upstate NY, and suburban NJ I prefer it here. I have a neighbor who can live off the land and is willing to share his skills with others. You only need one person like this to learn. I suspect you already can.
The SUV's and waste are everywhere in this country. We have become a society were hopes and dreams have been channeled into what we can buy and consume.
Have you checked out MOFGA (Maine Organic Farmers and Gardners Association)?
My organic garden also did not fare so well. But I grow everything in raised beds which allow for better drainage so everything did grow even with all the rain.
I too would be dead by February if I had to live off my own produce. Too many soft years living in the City. But a young couple able to do the work might have a fighting chance. More than in the suburbs for sure.
SA & the oilco's are well aware that sustained plus-70 oil would bring about Recessionary economies after twenty-four months. That is not in their interest. Peaks and valleys are passe in the minds of decision makers and stake holders.
I did get Michael Lynch (who was on the phone from Tokyo) to agree that discrete regions, like Texas and the Lower 48, have peaked, but he in effect asserted that overall production would virtually never peak. I have several times referenced the comments that Chris Ross made, that Middle Eastern producers would be cutting back on their production in order to prolong the life of their fields. Dennis McCuistion said that Chris was recommended by Saudi Aramco.
http://www.frtv.org/programs.html
1519 | Peak Oil - Are We There Yet (Part One)
September 17th, 2006
Just listened. Thx for the link. Seems quite a snub that they don't list you as a panelist on the website.
Thanks for kind words. It did feel a bit lonely in the crossfire between ExxonMobil and Michael Lynch. The ground rules were that we could not interrupt each other. We made hand signals when we wanted to make a point. I didn't get a chance to rebut Lynch's claim that the HL method had "failed dozens of times." I did think that it was odd that Lynch used the example of a country in terminal decline, the UK, to rebut a Peak Oil argument.
I have to hand it to you Jeff you did a commendable job of standing your ground. That is very, very tough.
The problem will be that they will need to produce more to make thier assertions accurate. I doubt anyone will hold thier feet to the fire if (when) they don't.
The number of drilled wells is more than a little eye-opening. 500k + in the US. I would assume to keep up our declining output this is what is required.
Where did they find this Lynch guy. 12 trillion barrels? LOL gas should be a buck.
Unfortunatly the whole thing makes me think we are hopeless - greed will overrule conscience and responsibility in the people that pull the levers.
Great job! I wish you all the best.
D
Has CERA (or a similar mainstream organization, like one of the major oil companies) ever made a similar comparison for the other 3 areas, like the North Sea, where you argue that the HL method fits nicely?
Now they're planning to keep maintaining it, rather than let it die in orbit in the next couple of years...
Loathsome.
...decline...
As about CO2 increase from liquefaction, I'm not yet sure how this global warming thing will turn out (http://www.junkscience.com), and sequestration could be gradually introduced (and hopefully advanced to be economically feasible).
"In a review of world energy resources, M. King Hubbert (1973) estimated that the coal resources of the United States and of the world will be depleted within 300 to 400 years. More recently, the Energy Information Administration (1995) estimated that the United States has enough coal to last 250 years."
The above reserves estimate assumed (both by Hubbert and the EIA) that coal would continue to represent approximately 20% of our nation's total energy use throughout that 250-300 year period. Clearly, if you change that to, say, 90% of our energy base, then the duration that the reserves will last becomes a small fraction of that 250-300 years, more like 60-70 years. And if usage grows by just 2% per year then it doubles in 35 years, meaning that with continued growth, coal reserves as the primary source of US national energy would drop to under 40 years.
You must understand that coal is not a solution. At the very best, it is simply a bridge from here to a sustainable future. At the very worst, coal is an ecological nightmare, from the damage due to mining (I grew up in coal country), to the environmental runoff from mining, to the burning of coal producing particulates, greenhouse gases and other pollutants. Despite the fact that we have technology right now to heavily scrub coal burning pollutants and that we have tech to sequester CO2, none of the new coal plants built in the last 2 years in Texas have used those technologies.
Anyone (I will not name names of the ignorant) who asserts we have "thousands" of years of coal, is clearly unfamiliar with the professional data about coal. Amusingly, and in an unusual turnabout, note that Hubbert estimated higher coal reserves than the EIA for our coal endowment.
http://www.energybulletin.net/16459.html
Published on 24 May 2006 by GraphOilogy. Archived on 25 May 2006.
Texas and US Lower 48 oil production as a model for Saudi Arabia and the world
by Jeffrey J. Brown & "Khebab"
It's a reciprocal altruism "smoke out." Ie, they're tyring to smoke out the PO crowd. Rather than getting on with real change, they'll have the elite PO crowd of the world endlessly debating whether they're is X or Y amount of unconventional oil rather than getting on with stuff like WT's "ELP" program.
I linked this on LATOC but, to be quite frank, I really don't see it as worthy of my attention beyond a single link. Giving it more than that is, imho, playing into their game.
They are trying to take ownership of the debate, not take part in it. The numbers will speak for themselves, and their projections are already clearly wrong, e.g. wrt North Sea production. When production continues to decline, CERA will continue to promise increased production and lower prices, but really they are the band on the Titanic.
Bart,
With all due respect, you are being suckered into a corporate pundit's mind game.
So we are to be labled as "peakists" and they, what are they? The CERA-bellumists?
There is no way their uber-punditry rises to a level of mature and "rational" discourse.
Do you need Tom Cruise to yell it in yo' ear?
Show me the CERA database!
Show me the CERA database!
- The goal is not to win an argument; the goal is move towards a rational energy policy.
- Oil companies are going to be important players in any energy policy.
- The people you count as your opponents today may be the people you want to be your friends tomorrow.
- People usually forget the specifics of what they've argued about... but they never forget being abused or humiliated.
- If the peak oil debate is going to go mainstream, good manners count. Time to tuck in our shirts and comb our hair!
Bartenergybulletin.net
I truly do understand where you are coming from and respect it. Indeed it is a noble notion to believe that one can engage in rational discourse with his (or her) fellow human beings so as to thereby bring them about gently to our "rational" point of view regarding our current state of affairs.
(Click on image to the right for a brief history of the same.)
My most "rational" herd mates would see that our rock is of finite volume and that its endowment of accumulated hydrocarbons is therefore finite and that by sheer force of rational logic it makes sense that our extraction trel="nofollow" hrefrom of crude oil and other fossilized hydrocarbons must follow a bell shaped production curve and that in the long run, Hubbert was absolutely right.
However, as I continued my individual study of this Peak Oil phenomenon, it was I who became enlightened. I discovered that the "intelligent" species I thought I belonged to is instead an irrational collection of psychotic apes who make critical decisons on the basis of emotions, sound bites and herd mentality.
Indeed as I opened up this month's issue of Scientific American (December 2006), there on page 34 was a short article about the experimental observations of some professor at the Stony Brook University (SUNY) demonstrating my worst fears, that indeed "Politics, like religion and war, is all about emotions and feelings ... The enlightenment model of dispassionate reason as the duty of citizenship [and as the basis for understanding the behaviors of a democratically voting public] is empirically bankrupt".
So when you write (with all good intentions) that:
I just shake my head and say, there goes another noble creature whose eyes have not yet been opened to the truth of our predicament.
I humbily apologize for informing you that the human mind is not the center of the intelligent, rational universe.
So, if you accept this premise, and believe we are at war, Robert's Rules for business conduct are thrown out the window.
In the case of the disbelievers here at TOD, it is about how the noble and "intelligent" human brain actually works.
Empirical data shows that rational debate is a fool's game.
We are skeptics of ethanol (at least corn source) again due to logical arguments.
By and large there is a strong prejudice on TOD against any arguments except logical. Thus we try (with limited success) to purge our marketplace of ideas of anything but logic based ideas and concepts.
Now the logic is based on certain presumptions, but these presumptions also are challenged here with some regularity (we are now debating if we use logical arguments !).
Like all complex human creations, TOD is not perfectly logical (step back needs to post Mr. Spock) nor efficient, but our relentless re-analysis does seem to reduce the non-logical fraction to a nearly unique low IMHO.
Take the best that one can find, and TOD is it !
Best Hopes (is hope logical ?),
Alan
When all CERA has to do is call a local media rag, sneeze into the phone, and get headline news, the odds are definitely against us being an effective tool for change.
All we are right now is a statistical archiving service. I'm asking what should be the next step here at TOD? How can we overcome some of the obstacles to getting the facts out there?
I think TOD can do some things in this direction, but then it changes the "nature" of what is TOD. Dave's CERA rebuttal post is integral to what TOD should become in my opinion; not just research site, but one that takes a stand on some things.
Dear Mr. Drake:
Thank you for the copies of your proposed plan. As you may know, we are soliciting a broad range of energy forecasts to betterinform the analyses being conducted by the current NPC Study on Global Oil and Gas. I am forwarding your information to the study's Demand Task Group for use in its
work.
Again, thank you for your contribution.
Sincerely,
John Guy
NPC Deputy Executive Director
------------
I keep knocking on doors, trying to get attention, sooner or later something will "pop".
Best Hopes,
Alan
I recently hosted a friend and his wife that spent 17 years to get the Expo Light Rail Line built. They broke ground on the first half a couple of months ago.
George Isaacs spent over 30 years to get the Hiawatha Line built in Minneapolis.
I am approaching ten years for the Desire Streetcar Line in New Orleans.
It is a marathon. The US will not start reacting soon enough to avoid serious dislocations. But my efforts may minimize the damage.
Best Hopes,
Alan
You're a grand role model.
OTOH, the disaster zone that I live in is VERY concrete and real as are the struggles and suffering of my friends and neighbors. We support each other as best we can, each contributing towards the common good in their own unique way.
The psychology impact of the marathon reconstruction of New Orleans, struggling to preserve our soul and culture, dwarfs the Paek Oil impact.
Quite frankly, my Peak Oil efforts are my respite/break from the daily struggle in New Orleans. I could not do what I see others do, being fully immersed in the day-to-day recovery.
I do my bit for New Orleans and my bit for Peak Oil and use one to balanc ethe other. Then have a good meal with a glass of wine :-) and catch some music with friends and friendly strangers. No city gives so much back to those that love her :-))
A friend that moved here (a psychiatrist doing her residency here and clearly on the front lines) has said two things.
New Orleans is the first city that I have loved that has loved me back.
The longer someone lives in New Orleans, the less able they are to live anywhere else.
Les Bon Temps Rouler
Alan
I've been to New Orleans several times, years ago, and loved the culture, food, and music. Any culture that can make a jazz parade out of a funeral should be exalted by the rest of us.
Thanks for the shoulder tonight. And here I am, city intact. I will wake up tomorrow with a little more vigor.
Strengths of the PO movement: rational argument, technical background, idealism.
Weaknesses: small numbers, little money, a message that is not popular.
Corporations on the other hand are masters at public relations and (when necessary) ruthless action. They have money and paid talent. We are no match for them at that game.
The worst thing we could do is let the debate slip into away from facts and rationality. Those are our strong points.
The biggest strong point of the peak oil movement is that PO happens to be true, and CERA and the oil companies know it.
But let's not go overboard. Struggle and debate take place on multiple levels. Different strategies are effective in different situations. Propaganda, PR and scientific debate are all going on simultaneously.
My sense is that CERA and some of the oil companies are working on two different projects. On the one hand, they have a public relations campaign to advance their corporate interests. On the other hand, they need accurate analyses and forecasts to manage their enterprises. They are not fools.
Ironically, the speeches and reports from CERA and the oil companies are what made me realize that peak oil is real. If anyone could find flaws in the peak oil argument, it would be they. Looking at their speeches and reports, I realized: they agree with us about peak oil.
My stomach fell... This is really it, then.
Their disagreements are trivial. Peak oil in 2030 instead of 2006? Not that much difference, if you consider the number of optimistic assumptiions they make.
Bart / Energy Bulletin
Hi Bart,
I think we all agree on many of the "infallible fundamentals" (;-)).
(As a journalist you should appreciate the heavy alliteration in that flinging of the f's and l's.)
PO in 2030 (25 years away) as opposed to now (Dec. 2005?) is a huge thing because you are pushing out the "urgency" of the matter to a whole other generation away.
Boomers who are say 50-60 years old now can say to themselves, Hell I'll be 75-85 years old, close to kicking the bucket when and if the SHTF with PO, so why should I bother? Let the next generation worry about it. In truth we should have started (and kept going) on an Apollo-like project when Jimmy Carter made his sweater speech back in 1974(?). Here we are 30 years later and essentially nothing has been done on a massive scale to deal with the energy tsunami that is surely (as CERA agrees) going to strike our shores.
The basic message from CERA continues to be that PO is very far away and:
- New technologies will save us,
- The markets will save us,
- Things aren't as bad as the "peakists" would have you believe: there will definitely not be a sharp decline but instead we are going to toughen our ab's with these undulating plateau machines and rejuvenate our old and tired fields. (Don't snake oil salesmen say the same thing to aging Boomers about rejuvenating their failing bodies? Yeah right. 60 is the new 30.)
I take cold comfort in saying, gee, CERA "fundamentally" agrees with what we are saying at TOD.CERA is working on behalf of private interest groups that want to "stay the course".
Where have we seen that approach lately and how successful has it been for the lemmings (R.I.P.) who unquestionably believed in their stay-the-coarse leaders and kept marching straight for the edge?
We're not ready for Kum-ba-yah yet, but I think it is possible to make common cause with the oil industry on certain issues.
Agreement: on the general idea of the peak, on the importance of data and of realistic forecasts. Keep in mind that this is more agreement than with the Republicans, the Democrats, and probably most of the Greens.
Yes, the oil industry has its own agenda and it uses PR methods to forward it. But that is the way of the world. We shouldn't be shocked.
One doesn't have to agree on all points to enter an alliance.