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168 comments on Duncan Clarke Responds to David Strahan
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168 comments on Duncan Clarke Responds to David Strahan
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Most major Private Oil Companies (POC's) are making two basic arguments: (1) Technology will save us and (2) POC's can do a much better job of exploring for and producing oil than the National Oil Companies (NOC's).
It's interesting to see how the POC's did in two regions that were developed by POC's, with virtually no restrictions on drilling: Texas and the North Sea.
Texas peaked in 1972. The North Sea peaked in 1999. In both cases, the initial production declines corresponded to generally rising oil prices.
Texas has shown a long term decline rate of about 4% per year, the North Sea about 4.5% per year (crude + condensate). And this is with the best available technology.
Saudi Arabia is now declining at about the same stage of depletion that Texas started declining (around 55% or so depleted, based on HL), and the world is now declining at about the same stage that the North Sea started declining (around 50% depleted, based on HL).
And like Texas and the North Sea, the initial Saudi and world declines are occurring against a backdrop of generally rising oil prices.
And yet, many major oil companies still assert that they can provide virtually limitless oil. You know, a polite person would call this misleading. A less polite person would call it fraudulent.
From the Most Recent U.S. Weekly Petroleum Data Report
5,158 domestic United States oil production 8/2006 (EIA)
5,154 domestic United States oil production 8/2007 (EIA)
2,245 domestic United States NGL's 8/2006 (EIA)
2,463 domestic United States NGL's 8/2007 (EIA)
The United States produced more total liquids this year than last. What is the decline rate?
At 7.7 million barrels/day total liquids the United States is not far behind Saudi Arabia or Russia.
The main problem is that this precious liquid is in danger of production decline, not that it is in an actual decline in the United States.
Eventually the world supply will drop. Live and let live. Not waste a drop.
Try averaging the decline rate from 1972 to the present. That might give you a better picture.
Rainsong, we are importing 14.25 million barrels a day, or 5.2 billion barrels a year at an average price of about $60 a barrel this year.This is a real national security problem and economic drain on our economy. Even President Bush says so, because we are importing 68% of the oil we use, and its just silly to say otherwise.
Bob Ebersole
rainsong, you are looking at only the last two years. You're missing the long-term trend. I refer you to this graph:
http://www.theoildrum.com/uploads/44/cera_figure_1.jpg
Since the early 70s there have been a few good years, but the long-term trend in America has been 2% [edit] yearly decline.
America now produces 50% what it did at peak. To get back up to the peak, we'd need to find a lot of fresh Saudi Arabias on American soil. As a practical matter this isn't ever going to happen.
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_7.pdf
1972 (C+C):
Lower 48: 9.4 mbpd
Total US: 9.6 mbpd
2006 (C+C):
Lower 48: 4.5 mbpd (down 53%)
Total US: 5.1 mbpd (down 47%)
Lower 48 production showed a recent rebound primarily because of the ongoing recovery from hurricane damage to production and transportation infrastructure. Also, Total Liquids somewhat distorts the US production situation, because of the increasing contribution from refinery gains.
In any case, since 1972, the Lower 48 has shown a long term decline rate of 2.2% per year, the total US, 1.9% per year.
Based on the HL plot, the US is about 85% depleted (conventional C+C).
In order for our crude oil imports to just stay flat, we have to reduce our crude oil consumption at the same volumetric rate (bpd) that our domestic crude oil production declines.
Rainsong,
It would also be reasonable to see what kind of effort and cost was required to get this 2.5mb out of the ground as compared with 1948 or so, when we first swung through this level of production, or even what it costs compared to last year. Are we pumping a lot more water/gas to maintain pressure? Are our maintenance costs for countless smaller wells becoming a much stronger fraction of the production expense? The flow is certainly the critical number that gets all the attention, but the state we are in is also illustrated by how hard we have to scrabble now to keep from slipping down the slippery wall of this pit.
Bob