101 comments on The Disconnect Between Oil Reserves and Production
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Interesting Matt Mushalik is ending up with numbers similar to mine using a completely different approach.
I think this makes a good companion article to the current one
http://www.theoildrum.com/node/3301
But my approach.
http://www.hubbertpeak.com/hubbert/nehring.pdf
Given that most of the large discoveries are in the past when he published this paper and he is the only person known to have predicted peak correctly.
He has a world URR of 1250 GB with peak in 1995 given the trends in consumption at the time of writing.
His paper gives 1700-2000 GB using a study by Nehring as the basis. I urge people to read this paper since he did account for a lot of the sources we are using now.
In anycase starting with this the next step it to justify higher reserve estimates since then considering that most of the large discoveries are in the past.
My conclusion is that if we do actually have these additional reserves then probably the production rate from them will be low. The oil sands is the poster child for this situation but it holds for fields with 90% water cuts also.
On that note I also included this paper as a critical resource which puts global water cut at 80%
http://www.touchbriefings.com/pdf/2590/Ferro.pdf
Hubberts own estimate was 1250GB
http://www.aspo-ireland.org/index.cfm?page=speakerArticles&rbId=9
So given that we have produce over 1000GB by now I believe its actually 1100GB or so by now.
I estimated we are down to the last 150GB of "fast" oil that can be produced at a high rate.
Surprisingly close to the 190 GB Matt is reporting for 45% of our production.
And I have the same conclusion once this is gone production will drop by about 50%.
Given this approach and my approach its pretty clear that we may have only 150-190GB of the "good stuff" left that can be produced at a high rate. The actual amount remaining after that discussed a lot on the oil drum. I'm of the opinion a lot of it is paper barrels and whats not probably wont be produced at a rate close to days. Its at least 50% lower.
Next of course one big factor that caused us to delay peak from the 1995-2000 range has been increased ability to extract. This however just increased real depletion rates and results in a faster decline.
My conclusion is even though we may have just recently passed peak we may have actually used up most of the oil that can be produced at high flow rates on the front side.
So post peak will see a swift decline over less than a decade to production levels much lower than today if its even produced considering the political implications and the effect of such a swift decline on a oil based economy.
So thanks for the paper. Two quite different approaches seem to lead precedence to the scenario of a possible swift decline in production rates post peak.
Memmel,
I've recently seen a comment by someone (can't find it now) that the world peak in light sweet oil was in 1998.
I would love to see this backed up by evidence. Any idea's?
I'm pretty sure many disagree with your assessment. However to those I would like to say that Russia at the moment is producing full throttle, 9. something mbd, while at the same seems to be depleted for something in the range of 85%.
From peakoil.com, courtesy of the ever vigilant Steam_Cannon. We've had a number of threads on LSC peak there:
It's Official! Light Sweet Crude MAXED OUT: OPEC
Have non-Opec, and global light sweet crude oil both peaked?
Lloyd’s List – Past Peak for Light Sweet Crude
Great! Thanks. You are one cool dude, man.
Am I correct in the assumption that once light sweet peakes and declines, EROEI goes down?
The dude continues to abide.
Glad you like the chart. Says it all. The peak in LSC is a keystone of my rather infrequent peak oil rap - tying that in with the constant reports of refinery shutdowns we hear about. Would like to see an article charting the history of those, too.
Staniford contributed a small piece on LSC peak here, too, when he was still a guest contributor.
Ahem. The quote is "The Dude abides." This misquoting aggression against one of my favorite movies will not stand, man. (:
Thanks, Gary.
EROEI goes down, just because of the rising water cut and adding new smaller wells in higher to reach locations. Things that would add to the processing after production (higher sulphur, lower gravity) would reduce EROEI further.
The mix of oil types is moving to the ones that trade at a discount to the light, sweet types. Thus, the funds oil companies are receiving from the sale of oil will tend to lag indexes of a particular type of light, sweet oil (say WTI or Brent). The amount spent on processing goes up, so the cost to the consumer doesn't get much benefit of the price spread to lower grades.
Relative to average price of crude, the price of consumer pays probably goes up, because of lower EROEI.
Thats the other part of the problem. We seem to have figured out how to keep production rates high even though overall depletion may be well past 50%. Symmetric HL models give the peak at around 60% URR if you remove the symmetric constraint peak at 70-80% of URR is not unreasonable. Note that per field depletion rates as high as 20% or even higher is no uncommon only new finds and the magic of reserve growth keeps the overall depletion rate low. So regions like the GOM that had been bringing on new smaller fields until the last ten years or so would see the depletion rate climb from say 8% to 20% very quickly once the basin is fully developed.
So if I'm right about whats going on we will see production in the GOM start to drop off fairly quickly this already seems to be happening. Same of course with the North Sea.
Since the reserves in the ME are in general not backed by new discoveries then they should follow the same trend although at a later date.
So believe it or not the key is US and North Sea production if I'm right we will see a acceleration in the production decline rate for these regions as the underlying depletion rate grows to the field depletion rate because of lack of new fields.
As long as you could bring on new fields or use technology like horizontal drilling water/gas injection to revive older fields the overall production decline rate follows HL. However once you have saturated the basin the decline rate deviates from HL simply because the underlying depletion rate has increased over time and HL assumes a constant depletion rate.
As far as Russia goes a lot of the fields are watered out and production rate is controlled by the water handling rate. These fields follow a different depletion model. More in line with HL. I don't know the break down in production in Russia between old fields produced at the maximum of water handling and new fields produced at maximum depletion. I think they have also saturated some basins. In general I expect Russia should remain fairly close to HL but I don't know enough about its basins and how they are produced. However the recent increase in reserves and the fact they are still decline shows that the expect increased production from technology and are not getting it.
So the fact that Russia is now deploying new methods and is unable to increase production lends credence to the assertion several people have made that technology mainly increases depletion rates.
http://www.eni.it/wogr_2007/oil_production_quality-world-18.htm
memmel,
Thanks for all of those links. I think all of them are very worthwhile reading.
The water issue is clearly a problem. Besides the Ferro paper you link, as anyone tried to summarize the material available on it?
Not to my knowledge the water cut issues in the US are well known and documented frequently.
Other than that surprisingly considering its effect on production rates its pretty much ignored by the peak oil community.