The Oil Drum | DrumBeat: July 18, 2006

174 comments on DrumBeat: July 18, 2006

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Jack Greene on July 18, 2006 - 8:55am

westexas,

Another talking head last night on Bloomberg said 18 months of constricted supply and at that point more oil and better transportation of it will come on line.

Clearly no consensus on this point.

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westexas on July 18, 2006 - 9:14am

"Clearly no consensus on this point"

Last year, the Texas State Geologist said that Texas may not be able to match its 1972 peak production, but with the use of improved technology, Texas can significantly increase its oil production.

So, I guess that one could argue that there is no "clear consensus" on the Texas oil production decline.

Texas oil production is now down close to 75% from its 1972 peak, and Texas has never shown a year over year increase in production over the past 33 years--despite a frantic drilling program after its initial decline.

Texas, the Lower 48, Total US, Russia and the North Sea have all peaked in the vicinity of 50% of Qt. None of these regions--as in zero, nada, null set--have shown production higher than its peak in the vicinity of 50% of Qt.

The latest EIA data show that world oil production and oil production from the top four net oil exporters are all down since December.

It's a virtual certainty that the world's four largest producing oil fields are all declining.

What part of this is not clear?

To argue in favor of rising oil production, you have to ignore the following: (1) It has never happened in the regions cited and (2) currently world oil production is falling.

So, you can argue in favor of rising oil production, but it is contradicted by historical models and by recent data.

To top it all off, the Energy Secretary says we can't meed demand. Do you think that this is just a coincidence as we cross the 50% of Qt mark, and start showing a decline?

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westexas on July 18, 2006 - 9:34am

"To argue in favor of rising oil production, you have to ignore the following: (1) It has never happened in the regions cited and (2) currently world oil production is falling."

Should read:

"To argue in favor of rising oil production (beyond the peak level in the vicinity of 50% of Qt), you have to ignore the following: (1) It has never happened in the regions cited and (2) currently world oil production is falling."

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westexas on July 18, 2006 - 10:17am

Russian Oil Production, courtesy of Khebab

1977 9.95
1978 10.49
1979 10.88
1980 11.17
1981 11.37
1982 11.48
1983 11.42
1984 11.17
1985 11.00
1986 11.18
1987 11.48
1988 11.56
1989 11.23
1990 10.44
1991 9.32
1993 6.73

If you round up to 11 mbpd, the above data table shows 11 years with production of about 11 mbpd--five years on both sides of 1984.

Khebab's HL plot shows 1984 to be the 50% of Qt mark.

Khebab took only the production data through 1984 to generate a predicted production profile throuth 2004. The actual Russian post-1984 cumulative production was 95% of what the HL model predicted--again based only on production data through 1984.

The same exercise for the Lower 48 showed that post-1970 production was 99% of what the HL model predicted.

(I'm practicing for the Peak Oil debate tonight--interesting timing given Bodman's remarks.)

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Jack Greene on July 18, 2006 - 6:01pm

westexas,

You make some good points. I am certainly no expert in this field, but I do my homework and have taken the Danish outlook on this that named 2020, granted a few years back, as the true peak point.

We certainly do not argue that it will occur, and relatively soon.

This off Charles Schwab site (and yes, I note the doublespeak in this statement):

Kuwait To Clarify Its Oil Reserves Within Days -Min -2-

1:42 PM EDT July 18, 2006

Sheikh Ali also threw his weight behind the long-delayed $8.5 billion development of its northern-most oilfields, Project Kuwait, which has attracted consortia led by BP PLC (BP), Chevron Corp. (CVX), and ExxonMobil Corp. (XOM).
Kuwait wants to double oil production to about 900,000 barrels a day from four northern fields. This target is a key plank in Kuwait's quest to boost its total production capacity from 2.7 million barrels a day currently to 4 million barrels a day by 2020.
But lawmakers are concerned how increased tax revenues - which currently make-up about two-fifths of the overall economy - from future production will be used.
Sheikh Ali said in the statement: "I'm confident that this strategy was only approved for the interest of Kuwait, and there is nothing" proposed in the plan that undermines Kuwait.
He said upgrading capacity in the north "does not mean an exhaustion of these fields, but develops the efficiency of the fields."
Separately, the minister said oil producers weren't influencing current oil prices.
The Organization of Petroleum Exporting Countries, he added "will not save any effort to use its available mechanisms to achieve" a balance in the oil market.

-By Adam Smallman, Dow Jones Newswires; +44 (0) 20 7842 9343; adam.smallman@dowjones.com

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geewiz on July 18, 2006 - 10:00pm

how is it that the MAX amount extracted in year 88 is not the earmark for the start of a decline, since no other years can produce as much?

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westexas on July 19, 2006 - 5:28am

1988 would be the precise peak, but the differences between the years is so small that I think a valid way to look at Russia is to pick the peak as the midpoint of the 11 mbpd years.

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Starship Trooper on July 18, 2006 - 11:51am

Hey, it worked for smoking and the tobacco companies, it worked for energy companies and global warming. Why not here in peak oil country?

Remember the old adage about how something can't become clear whenever a persons livelihood depends upon it not ever becoming clear.

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174 comments on DrumBeat: July 18, 2006

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