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206 comments on DrumBeat: May 20, 2006

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dissident on May 20, 2006 - 2:13pm Permalink | Subthread | Parent | Comments top
Following the pattern of the US this decline will not be all that catastrophic, in contrast to under-sea provinces such as the North Sea.  If Russia's output falls by 2.5 million barrels per day by 2010 that is not bad for Russia.  But pumping hundreds of billions of dollars into oil exploration and development on some forced program to please the west is bad for Russia.

Russia's current oil consumption is about 2.5 million barrels per day.  A decline in production is actually good for the country since it will prevent it from copying the US car culture deathtrap.

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westexas on May 20, 2006 - 2:32pm Permalink | Subthread | Parent | Comments top
"But pumping hundreds of billions of dollars into oil exploration and development on some forced program to please the west is bad for Russia."

No argument from me.  I think that it is ultimately bad for the West too.  

However, we have seen three major regions peak and decline:  

Texas/Lower 48/Total US in the Seventies;

Russia in the Eighties;

North Sea in the Nineties.  

Based on the HL method, all peaked between about 49% and 58% of Qt.   None have shown production higher than what they showed in the vicinity of 50% of Qt.  Based on the HL method, Russia's rebound in production is just making up for what was not produced after the collapse of the Soviet Union.  

The kicker?  Based on currently producing basins (I admit that frontier basins in Russia are huge unknowns, for better or worse), the HL model indicates the US has more recoverable reserves than Russia.   This implies an extremely sharp decline.  How sharp can declines be?  Look at what the internal reports are suggesting for Cantarell (up to 40% per year).  

I continue to find it very interesting that Marathon sold their Russian production.

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RussianCrude on May 20, 2006 - 3:06pm Permalink | Subthread | Parent | Comments top
It's ok, the Russians have a plan B

http://www.mosnews.com/news/2006/05/18/heliummoon.shtml

No need to worry.

(sarcasm)

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dissident on May 20, 2006 - 8:55pm Permalink | Subthread | Parent | Comments top
I agree with the HL method but I doubt that Russia's oil production will collapse by 15%-20% per year from now on.  There is also a big difference between the history of oil exploitation in Russia compared to the US.  The US has had many entrepreneurs getting at ever scrap of oil while in Russia it has been a few big enterprises before and after the fall of communism.

Marathon Oil could have been harassed out of Russia.  Treatment of foreign investors in the natural resource sector in that country has been attrocious.

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Essex Land Rover Man on May 21, 2006 - 12:23am Permalink | Subthread | Parent | Comments top
Marathon Oil could have been harassed out of Russia.  Treatment of foreign investors in the natural resource sector in that country has been attrocious.

But deliberate and planned?

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totoneila on May 20, 2006 - 3:05pm Permalink | Subthread | Parent | Comments top
Hello Dissident,

I am assuming you are in Russia, please correct me if I am wrong.  I sincerely hope that Russia does have the wisdom to avoid the car culture deathtrap, but please inform us if this is, in fact, official Russian policy.  As I understand it now: motor vehicle sales are booming:

http://english.pravda.ru/main/18/89/357/16308_cars.html

Do the Russian media and the general public discuss Peakoil ramifications, or are most in ignorance and denial like here in the US?

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

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smekhovo on May 20, 2006 - 3:14pm Permalink | Subthread | Parent | Comments top
So far, very few Russians have heard of the global PO case, and even fewer are worried.
Because up to now, it's been party time.
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totoneila on May 20, 2006 - 4:44pm Permalink | Subthread | Parent | Comments top
Hello Smekhovo,

Can you give us an assessment of the average Russian's response to Putin's proposed new birth benefits: are the people excited to pump out the newborns, or would they rather have fewer children?  Thxs.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

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smekhovo on May 21, 2006 - 1:42am Permalink | Subthread | Parent | Comments top
People are certainly talking about it on the street.
I think there will be some short-term increase in the fertility rate, but - if the experience of all the other countries that have tried similar measures is any guide - not nearly enough.
And the other part of the demographic problem - the appallingly low male life expectancy - goes unaddressed.
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RussFag on May 20, 2006 - 6:52pm Permalink | Subthread | Parent | Comments top
A week ago there was an informal discussion about Peak Oil concept in the Russian Ministry of Energy. The consensus was that the World Peak will be somewhere in the middle of the next decade.
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Charles Mackay on May 20, 2006 - 9:44pm Permalink | Subthread | Parent | Comments top
I'm no expert on Russia, but I've read everything I could get my hands on concering their new oil plans.

It seems that the concept of PO and depletion has indeed come up in Russia.  It was not clear at what level of production they were talking about - but the Russian energy minstry specifically stated they believe Mideast oil will last about 13 more years at roughly the same rate before it depletes, but Russia's supplies will last roughly 28 years.  

What was supposed to happen after 13 or 28 years was not made clear.  Russia was just preparing for the day when its financial windfall would run out by shifting its surpluses into Euros, gold, and even specific worldwide investments.

 

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dissident on May 20, 2006 - 9:07pm Permalink | Subthread | Parent | Comments top
I moved out of Russia 30 years ago.  

Unfortunately Russian policy is still dominated by monetarist dogma imposed by Yeltsin.  So the car culture is growing out of control and streets in Moscow and elsewhere are becoming clogged with traffic.  For a country were public transit was very, very good (e.g. you could hop on a train to go camping in the backwoods) this is idiotic.  So a swift kick upside the head for this trend would be very beneficial.

A significant fall in oil production has numerous benefits. It will force the economic development away from dependence on fossil fuel extraction and sale abroad, which is seriously distorting the economy.  It will force the development to make use of existing rail and public transit infrastructure and prevent all of these assets from being scrapped in the name of "progress".

As other posters have said already, awareness of peak oil is lacking since the same BS was spewed during Soviet times about vast oil resources.  East and west people have been brainwashed by endless repitition of the technology will overcome nature mantra.

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206 comments on DrumBeat: May 20, 2006

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