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228 comments on In Defense of the Hubbert Linearization Method

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ace on June 26, 2007 - 3:31am Permalink | Subthread | Parent | Comments top

I also don't want to believe that decline rate. There is a lot of production coming on, but it's not enough. Recently, Aramco is only scheduling one more expansion of Shaybah so that Shaybah will reach plateau production of 0.75 MB/D instead of 1 MB/D. Aramco's Al Khafji project of 0.30 MB/D, in the Neutral Zone, is no longer on their project schedule. Aramco only has 0.5 MB/D from AFK coming on line late this year, 0.1 MB/D from Nuayyim late 2008 and 0.25 MB/D from Shaybah expansion also late 2008. It's just not enough new production to offset declines.

Many of Russia's projects have been delayed to come on line late next year. (It's tough to do work in the long cold Russian winter). Mexico/North Sea are showing very high decline rates.

People like Robelius show an optimistic peak oil date later in 2018 but this assumes that Ghawar has 150 Gb URR. Robelius does show worst case peak oil, including NGLs happening in 2008. Also note that the C&C excludes other liquids such as NGLs (8 MB/D) and ethanol/XTL. Bakhtiari/Deffeyes/Skrebowski/Campbell/Simmons/Savinar/Heinberg probably wouldn't disagree with the decline rate.

Here is the chart that the 2007-2012 bottom up forecast was based.


click to enlarge

If you believe that OPEC's reserves are overestimated by at least 400 billion barrels, the world's total URR is about 1,840 billion barrels and that the world has produced just over 1,000 billion barrels C&C to the end of 2006, then the world has produced over 54% of its total URR of C&C. This means that C&C will decline.

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Sam Foucher on June 26, 2007 - 10:21am Permalink | Subthread | Parent | Comments top

Are you taking into account the Canadian tar sands (already included in the EIA C+C data)?

The production is set to increase by 0.5 mbpd in 2007, check this post:

http://www.theoildrum.com/story/2006/10/20/142436/03

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ace on June 26, 2007 - 10:34pm Permalink | Subthread | Parent | Comments top

Hi Khebab,

Yes, I have taken into account Canadian tar sands, but I think that most forecasts are too optimistic.

Last year, I was optimistic about tar sands production but then I read your comprehensive story a few months ago when I was checking my forecast for tar sands. I also listened to David Hughes http://globalpublicmedia.com//interviews/823 who thought that tar sands production was limited to 2.5 mbd. The Hughes interview was done in 2006, prior to the possible cancellation of the MacKenzie Valley pipeline. His tar sands limit of 2.5 mbd may need to be revised downwards.

The Canadian Association of Petroleum Producers (CAPP) just released their June 2007 forecast http://www.capp.ca/raw.asp?x=1&e=PDF&dt=NTV&dn=123361

Table 7.2, page 32 of CAPP’s forecast (moderate growth case) shows the following tar sands production numbers, mbd (actuals to 2006)

2004, 0.99
2005, 0.99
2006, 1.13
2007, 1.28
2008, 1.49
2009, 1.69
2010, 1.84
2011, 2.03
2012, 2.27

My annual average tar sands forecast numbers, included in the charts above, are lower.

2007, 1.27
2008, 1.36
2009, 1.45
2010, 1.55
2011, 1.65
2012, 1.70

These numbers show an annual growth rate of 7% until 2012, when a ceiling of 1.70 mbd is assumed, which is similar to your logistic curve and the CAPP 2005 (constrained case) from your chart below.

I cannot justify using a higher growth rate than 7%/yr for tar sands production because tar sands uses huge amounts of natural gas, water, infrastructure and produces lots of carbon dioxide/other pollutants. Environmental constraints may also become stronger. Woodland Cree First Nation is challenging Shells Oil Sands expansion from 12,500 bopd to 100,000 bopd.
http://www.marketwire.com/2.0/release.do?id=745361
Tar sands could also be starting to produce acid rain which is derived from sulphur and nitrogen oxides.
http://pubs.acs.org/subscribe/journals/esthag-w/2006/aug/science/jp_acid...

It also appears that a huge source of natural gas is at risk, the $US16b MacKenzie Valley pipeline. However, the Canadian taxpayers might subsidise this pipeline so that tar sands oil can be exported to the US.
http://blog.foreignpolicy.com/node/5110
The $US25b Alaska natural gas pipeline may also be at risk.
http://www.canada.com/nationalpost/financialpost/story.html?id=397fb965-...
Delays in either or both of these pipelines could force gas prices up considerably, making tar sands oil more expensive to produce which could adversely impact the economic viability of new projects.

Even with increasing tar sands production, according to EIA production data, Canada’s total C&C production decreased slightly from the last quarter of 2006, 2.643 mbd to the first quarter of 2007 at 2.636 mbd. This probably means that Canada’s conventional C&C production is declining at 7%/yr to offset the tar sands increase of 7%/yr.

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228 comments on In Defense of the Hubbert Linearization Method

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