The Oil Drum | DrumBeat: April 17, 2008

215 comments on DrumBeat: April 17, 2008

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westexas on April 17, 2008 - 9:34am

The Financial Times, according to the WSJ, has a story that blames the recent decline in Russian oil production on a lack of access by foreign oil companies. Russia needs to emulate the “success” that we have seen in Texas and the North Sea, where these two regions–developed by private companies, using the best available technology, with virtually no restrictions on drilling–have seen respective decline rates of -4%/year and -4.5%/year respectively.

What drives the peak phenomenon in all of these producing regions is that we tend to find and then deplete the big fields first, and the smaller fields that we find post-peak can’t offset the declines from the big fields. Historically, in post peak regions we can make money finding smaller fields, but we can't match the peak production rate.

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BrianT on April 17, 2008 - 9:36am

They said the same thing about Nigeria yesterday.

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Leanan on April 17, 2008 - 9:40am

The story is posted above. It's "Preparing for the age of peak oil."

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jokuhl on April 17, 2008 - 11:00am

WT:
I had an oil conversation with a guy at an R2D2 builders get-together last weekend who was convinced that the reason US and Texas production was down was that it was cheaper to get the imported stuff, and that they were just waiting to pump again. Besides which, he heard that there was a food-safe genetic mod on corn that would prompt the non-food portions of the plant to self-digest into the fuels or towards them at any rate. (I didn't ask at What rate, however) I simply said re: the US oil, that I didn't buy it, that we were running on fumes and couldn't pump any more if we wanted to, and that at $110, (Last weekend, the good old days) anyone with a well would be happy to be selling that oil.

Like many people I talk to, he is a smart guy who has gotten a broad mix of good and bad info. (I'm sure I'm no exception) But that reminds me.. is Economides always this funny? Yikes, today's story reminds me of Churchill's 'Protecting the truth with a Bodyguard of Lies.' .. Peak Oil for him is still decades away, while Biofuels are already off the table, Renewables are inadequate (and for BAU, I completely agree), and somehow ANWR would bring us back to the heady days of $90 oil? That was August/September, I guess.. Where is the rest coming from? Did he hear about Russia or Mexico yet?

Thanks for listening.. what's your take on Economides?

Bob

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westexas on April 17, 2008 - 12:02pm

Regarding the guy you had a conversation with (a "Yerginite"), he is a prime candidate to buy some energy dependent stuff from Peak Oilers.

Regarding Ecnomides, he is an odd duck. He has been predicting $100 oil for a while, but he asserts that Peak Oil is a long time away, and oddly enough, he also agrees with Electrification of Transportation, but again it won't be needed for decades.

I debated him in October, at Texas A&M, over the timing of Peak Oil. The most memorable exchange, which I have previously described, was over Saudi Arabia.

I showed the Texas/Saudi slide and noted that Saudi production was down in 2006 and 2007. He responded with an EIA slide showing Saudi production up. I replied that I didn't know where the slide came from, but production was down. He said it was up. I offered to bet him $1000 that it was down. When I pinned him down on the details of the bet, he admitted that he was talking about "Productive Capacity" (PC). I described PC to the audience in the following way, I said that I had the capacity to date Julia Roberts, but was it a realistic possibility that we would be dating next week? (All hypothetical, my Alpha Female spouse is much prettier.)

Economides replied that he had dated Julia Roberts (general laughter followed).

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BadgerB on April 17, 2008 - 12:32pm

Sounds to me like he's living in the early 80's. In Oklahoma in the early - mid 1980's we did cap hundreds if not thousands of wells that were producing less than 5 barrels and in some cases more a day. Because they were just not profitable whether beacuse of cheap foreign oil or other causes. Now all of them have been reopened and anything that can produce is producing, this is not new has been going on since the mid 90's. They have even started production with new extraction techniques in what were long dead fields. Texas has done the same and I'm betting it's the same in any region in the USA that produces oil or gas.

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davebygolly on April 17, 2008 - 3:07pm

Junkies never believe there's a supply problem -- they always believe that you are just refusing to let them have what they need. If the junkie has a gun, he'll insist on entering your house to look for it.

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jokuhl on April 17, 2008 - 3:24pm

That was my thought reading the Gordon Brown story yesterday.. http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
"If some of the people who have them don’t want to sell (even if one asks nicely, as Gordon Brown tried yesterday) supply will be limited and prices will go up."

'Gimme, gimme, gimme, I need, I need, I need!'
Bob, in 'What about Bob?'

Bob

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