I'd draw a distinction between "motives" and "ulterior motives" intended to decieve or mislead. Both types of motives occur.

As a quick segmentation analysis, we could group commentators on oil issues roughly into political groups, corporate groups, and intellectual groups. The categories are not mutually exclusive. Other groupings do, of couse, make sense.

Political bodies include the IEA, EIA, USGS, and OPEC. They often have to support a homogenized point of view that is politically expedient. Many inside the groups may not really believe what they say. Consider the outrageously high USGS estimates, but the fact that they also publicize Les Magoon's peak oil viewpoint. I feel a lot of these groups are either disingenuous or have clear ulterior motives.

Corporate groups are the oil companies and other associated producers and users. A very few choose to speak openly (Chevron's "Will you join us" campaign). Some speak in code (Exxon Mobil's graph showing non-OPEC supply flat within the decade). Most don't speak, for good reason. Saying that your industry has no long-term future in its current form is bad for stock prices, and could even lead to lawsuits. I think these corporates will tell the truth when they believe it's good for business, and be discreet and quiet when they think the truth causes more trouble than it is worth. I don't think there is much outright lying here, perhaps because of liability issues as much as anything else.

Intellectual groups are those people studying the issue from a more outside perspective. I suspect most of these people are sincere and motivated by the truth as they see it. There are diverse opinions in this group: I'd put the Lynch & Yergin cornucopian / economic camp in this groups; as well as Hubbertarians/ depletionists like Deffeyes, Campbell, Simmons; environment policy people like Heinberg; social critics like Kunstler; and the more extreme post-industrial and dieoff groups. Some have clear agendas, such as pushing environmental or climate change policies, or debunking peak oil. But that doesn't mean they are lying--it's how they see the truth.

Dave said in an earlier post that peak oil is not a matter of belief, but I disagree with that. I am a fervent peak oil believer, but I can't (yet) prove my belief to a smart skeptic. The data is simply too bad, too incomplete, too full of holes. Ultimately, we don't know people's motives, but we can judge their words and actions. I'd assume sincerity, even from those I vehemently disagree with, unless we have clear evidence to the contrary.

I offer this and subsequent events as evidence that the worldwide military-industrial complex considers oil as crucial to their marketing strategy.  If oil is becoming scarce I fully expect that it will lead to a windfall for them.

We in the Peak Oil camp like to point out that our spokespeople are more believable than governments or corporate spokespeople because our champions have no vested interests in the outcome.  They are retired, they are outside the system, etc.

I beg to differ.  At a very basic level, we have a need or desire to be proven right.  We tend to become attached to an argument and world view, and an unconscious need to be proven right can become a powerful motivator, especially for those who define themselves as intellectuals, as ones who have tasted of the tree of knowledge, and who can discern not only what is true from what is false, but what the future holds, and how the rest of humanity must conform to their divine revelation or perish.  This motivation can skew our interpretation of reality, causing us to filter incoming data that interferes with our world view.  I humbly suggest that this motivation runs deep and has a long history.

Along with this subconscious need is a tendency for groups to begin to reinforce each others opinions, as noted here:
http://www.energybulletin.net/10113.html, where the author mentions the study on firemen adopting similar viewpoints in their close knit firehouse societies, viewpoints seen by any outsider as silly.  So this is not so much a motivation but a group behaviour.  In public policy debates, this group think tendency leads us to polarized, inflexible group positions, and an inability to thoughtfully consider other viewpoints.  

When I read the Time point-counterpoint essay, I was struck by the degree to which this is already a polarized issue in which each camp trots out the same verbiage and arguments, replete with key emotional trigger words which quickly identify one's faith allegiance and remove the need for any further thought.

I am glad though that we can agree here to leave religion out of it and resolve everything through our pristine scientific objectivity.

why do you think decline rates are way too optimistic in my report?

I think it would be interesting to discuss the plausibility of the idea that we've already peaked.

IMHO it may not be as simple an issue as asking when, geologically speaking, we as a society reach the point where our oil extraction rate at the rig-site is at maximum.

It may be more complex than that.

Maybe we should look at the whole oil-utilization infrastructure?

The Peak Wood study offers an interesting parallel:
http://anthropik.com/2005/10/peak-wood/

It wasn't so much that there was no more wood, or that production of wood had maximized in the dense forests...

It was more that the increasingly longer trips out to the deep offshore woodsheds (OK, to the wooded hinderlands) to get the wood was becoming a growing pain for the collapsing society (Cypress, Rome, etc.)

It was more so that supporting the armies to protect the woodsmen who went out to the hinderlands to get the wood was becoming an economic strain ...

It was more so that the uncertainty of every next venture to get the next batch of wood was growing ...

It was more so that supporting the roadways along which the wood was brought back home was becoming an economic strain ...

If you look at the American situtation:
Maintaining our roadways (pipelines, refineries) is becoming a strain in view of changing climate and changing military security,

Maintaining and supporting our armies is becoming a problem as we go out to get that oil (from Iraq, Iran, etc.)

The ROI (Return on Investment) for each venture is becoming more uncertain. Iraq is not paying back like we thought it would (by "we", I mean Cheney & company of course) ...

So it is becoming economically unviable to boldly go out and get more oil in those outer quadrants where no Columbus has gone before ...

You see?

So it's not just about when peaking occurs at a local rig site.

Localized extraction peaking may have been the prime factor for domestic oil in Hubbert's time.

It is no longer the prime limiting factor for foreign oil in our times.

There is a lot more consensus on projections of non-opec peaking around 2010-2015, than there is on world peaking - mainly due to the middle-east being an information-free zone. That's what makes Huseini's view so interesting IMHO.

One such "non-opec" study (Wells, R.A O&GJ Feb 21) appeared in O&GJ recently. He projects non-OPEC peak around 2007-2011. On this basis he shows what OPEC will need to produce to fill the gap for IEA's low, medium and high demand forecasts:

As you wrote above Husseini says at best the ME producers will at best be able to increase from around 20mbd to 25mbd be 2014 and then plateau to 2025. This leaves the remainder  of OPEC to come up ~60-90mbd by 2025 which seems pretty unlikely.

Here is the corresponding non-OPEC forecast from the same O&GJ article.

Sweet light crude has probably peaked already some time ago. Most new fields are "non-conventional", mostly deepwater. This is oil but behaves a little bit differently in the depletion sense.

And we don't really know what is production level today or even what it was last year: somewhere between 80 - 82 mbpd. 2  or 3 mbpd difference means an 2.5% error margin at least. This is as much as the average production increase in a year. It is quite right to suspect that the peak is already here because we can't know. But remember: oil seemed to peak already in 2000, so we don't know if this it now or not.

But is it important to know the exact date of the peak? It can be known only afterwards when the downwards trend is visible i.e. a couple years or more after the actual peak.  The economic and political repercussions might appear before that, but it will be hard to tell that these were caused by the peak. We should not expect any sudden petrocollapse but a period of uncertainty and strong price volatility.

Those who don't "believe" in the Peak Oil will be as sceptical after that. They just say that the supply problems are temporary and caused by the likely recession and lack of investment. And probably those who expected a dramatic collapse and sky high oil prices will be ridiculed. And probaly I will be wrong with my "grey" scenario...
 

I'm not decided on the abiotic theory, but one thing is clear: Refineries have been shut down to increase margins. Oilcast, for example points to Sen. Wyden Report (pdf) on these concerted closures.

I've read similar stories about other very profitable refineries being closed to increase margins on those still open.

Siljan proved there was no oil at the location drilled.

(sorry, getting in the black humour part of the picture already)

Let's hope that critical thinking spreads and leads to ridicule of anyone who dares put forth such easily-refuted nonsense ever again.

We'd have to dig much deeper to get this oil. I think this fact means that we'll run into a supply disruption what ever is the truth behind abiotic oil.

Exploration and extraction technologies are not optimized for this kind of extreme either. Still, I think fifty years would be enough time to advance our understanding of the deep geosphere. If there is fifty years of civilisation, that is.

http://www.iht.com/articles/2005/10/27/business/rigs.php

 A global shortage of tools for the oil industry

By Jad Mouawad The New York Times

THURSDAY, OCTOBER 27, 2005

NEW YORK Kim Bennetts, an executive at a Texas-based natural gas company, traveled over 7,000 miles this year to the heartland of China to look for the right rig to drill four wells in the Piceance Basin, a booming exploration area in western Colorado.
 That is how far he needed to go to get the basic tools of the trade. The shortfall in drilling rigs has become so acute that some executives blame it for slowing down new exploration projects.
 "Sure, there's been some hue and cry," said Bennetts, the vice president for exploration and production at Presco. When the skeleton crew arrived, along with the rig, a local newspaper compared them to Chinese railroad laborers in the Rockies in the 19th century.
 "But the Chinese are not displacing any Americans in terms of either technology or jobs, not when nearly every American rig and crew is spoken for," he said.
 The oil and natural gas industry is awash in cash. Collectively, major oil companies are on track to earn more than $100 billion in profit this year. But even with all that money, energy executives cannot simply snap their fingers and bring on more supplies to meet strong demand. The bottleneck in drilling crews and rigs is only one piece in the giant jigsaw puzzle of infrastructure needed to produce energy.
 Each piece that is needed to find, drill, pump, carry, refine and ship hydrocarbons has been stretched by years of underinvestment. Today, just about everything between the wellhead and the gas pump is in short supply.
 Even before hurricanes sent energy supplies into a tailspin this year, the oil industry had been hard pressed to find drilling rigs and crews, petroleum engineers and geologists, contractors and suppliers, tankers, pipelines, storage tanks, refineries and import terminals.
 "The supply side is stretched from an industry perspective," David O'Reilly, Chevron's chief executive officer, recently said. "It's a little reminiscent of the squeeze we had 25 years ago."
 Today's shortages can for the most part be traced to the boom-and-bust cycle that has shaped the industry. Even with record prices now, industry executives still are haunted by the collapses of 1998 and 1986, when oil prices tumbled to $10 a barrel in a matter of weeks.
 These oil crashes sent many smaller companies into bankruptcy and left a profound impression in the minds of today's managers. In response, they went on a massive diet, cutting costs, reducing research budgets, freezing investments, and ultimately seeking savings that led to the mega-mergers of the late 1990s. The trouble is that by the time oil prices recovered, a more nimble industry was struggling to keep up with high growth. By that time, the industry in the United States had a much smaller work force, the result of years of consolidation and big layoffs.
 Meanwhile, the number of oil companies has shrunk sharply. For example, BP is what was created after various mergers of at least 10 separate companies since the 1950s, including British Petroleum, Amoco, Atlantic, Richfield, and Sinclair. Today's top 10 oil companies were formed by mergers of over 45 separate entities.
 "The industry has gone through such a contraction that getting it to expand again is proving difficult," said Paul Horsnell, an analyst with Barclays Capital in London. "These companies are not equal to the sum of their parts. "
 One problem common to most companies is finding new engineers and geologists to fill the shoes of an aging work force that is mostly expected to retire over the next decade.
 In the United States, half of workers in the oil and gas industry are between the ages of 50 and 60 and will retire over the coming decade; only 15 percent are in their early 20s to mid-30s; the average age in the industry is 48.
 "The industry is going to have a lot of challenges replacing all the graying people leaving in the next few years," said Mark Rubin, the executive director of the Society of Petroleum Engineers. The average age for oil engineers is 51.
 

Students have been scared away from petroleum engineering and geology studies by the oil industry's brutal layoffs and negative image, analysts said.

After reaching a peak of 11,000 in 1983, the number of students enrolled in petroleum engineering in the United States has dropped to 1,700, while the number of universities offering these programs halved to 17 over the same period, according to figures compiled by Lloyd Heinze, a professor at Texas Tech. Enrollment hit a low of 1,300 students in 1997.

According to the American Petroleum Institute, oil companies will need to hire more than 5,000 engineers and 1,300 geoscientists to meet their needs. Getting them will be challenging.

"The availability of talent across the globe is shrinking," said Navjot Singh, the global marketing manager for recruitment at Royal Dutch Shell, whose company said this year that it plans to recruit 1,000 petroleum engineers.

According to a recent study by Wood Mackenzie, an oil consultancy based in Edinburgh, oil companies have been finding much less oil in recent years than they are pumping out. Their reserve replacement level, which peaked in 2000, has slumped over the past three years as the world's top oil companies found only half the oil they produced, according to the study.

"The reserves exist," said Andrew Latham, vice president for upstream consulting at Wood Mackenzie, "but it's almost inconceivable that we will get full reserve replacement. There are simply not enough rigs available, not enough geologists."

One reason, he said, is that oil companies have simply not been investing enough in exploration. These budgets, he said, have shrunk by a third since 1998.

One thing that's not in short supply is cash. With oil prices averaging $41 a barrel in 2004 and $56 this year, oil companies have been enjoying record profits. But much of these gains have been going back to shareholders, either in terms of record high dividends or as share buybacks.

This year, the six largest oil companies are expected to buy back shares worth $40 billion, a 60 percent jump from last year, according to John S. Herold, a research firm. They will also pay out some $31 billion in dividends.

Only 34 percent of their cash flow, or $54 billion, will be invested in their so-called upstream businesses - drilling wells, building pipelines, and bringing new supplies to the market.

"The concern now is that there will be a backlash against big oil companies who do not seem to be doing enough to bring new supplies and push oil prices down," said Arthur Smith, Herold's chief executive. "The industry basically downsized itself into trouble."

"Eventually, the industry will come to the realization that it will need to go into a crash course of investments," he said.

Meanwhile, the crunch has pushed up prices, for example, with the day rate for renting a 1,000 horsepower drilling rig in the United States jumping to $15,000 from about $9,000 a year ago, according to Richard Mason, the Lubbock, Texas-based publisher of The Land Rig Newsletter.

For deepwater drillships, the jump has been even more substantial, jumping by more than a third to as much as $300,000 a day.

"The last time drilling was profitable like this was in 1981, making this a stars-are-aligned, once-in-a-generation moment," said Mason.

And looky here:

Petro-Canada's Q3 profit up by half to $614M: no 'demand destruction' yet

September sales at Petro-Canada's national chain of service stations were down from the previous year as hurricane-jolted prices surged above $1 a litre "and there was obviously some sticker shock," Ron Brenneman said Thursday during a conference call on third-quarter results, which showed Petro-Canada's profits up by half to $614 million.

"But interestingly enough, those sales have largely rebounded in the month of October, so at least in the short run there doesn't seem to be what you would call permanent demand destruction," Brenneman said.

"You have to anticipate that in time there will be some behavioural change and lifestyle change and driving decisions and car decisions that will ultimately impact demand. But we're not seeing it at this point in time."

http://www.canada.com/windsor/windsorstar/news/business/story.html?id=b35b75aa-cd52-4681-83f0-b1d5b5 59c690

Don't feel stupid, it is incredibly poorly explained in the article you link, I saw an earlier version of it a few days ago and had to read it about 3 times to make sense of it.

The daily chart suggests the oil price is probably nearing a 'bottom', is beginning to look oversold, but the price should not dip below about $58.58 (next month's contract, light sweet crude) or it will probably decline to $56.50. It should then bounce back to at least $64.01.

The weekly chart suggests the oil price may decline further but may hold above resistence at $60.13. It needs to rally to above $63.56 to resume its uptrend but is highly unlikely to fall below $50.43 a support level that has held since December 05, 2003.

The monthly chart says oil is still in a long term up trend and will remain so until it drops below $46.05.

Summarising: the oil price might dip down to $60, maybe $58.50, possibly even $56.50 in the short-ish term (next few weeks) but is then likely to bounce back to at least the $63.50 to $64.00 level.

Note that all such systems are fallible. What this one is suggesting seems in line with present market thoughts: oil is currently range bound $60-$64 might break down to resistence of $56 in short term then / or up to a $64-$70 range. If it falls through $56 then next major stop is just above $50.

Since the MMS are reporting 67% Gulf oil production still shut in (barely changed in the last couple of weeks - in fact marginally worse than 2 weeks ago - I just checked) :
http://www.mms.gov/ooc/press/2005/press1028.htm
http://www.mms.gov/ooc/press/2005/press1014.htm
my guess is it will soon be going up.
 

Dry natural gas reserves/production/consumption:

http://www.eia.doe.gov/emeu/international/gas.html

All 2003 data

Dry Gas Reserves TCF

US 189.04

CAN 56.57

MEX 14.86

260.47 TCF

Dry Gas Production TCF

US 19.04

CAN 6.45

MEX 1.49

26.98 + 0.51 TCF LNG Imports = 27.49 TCF

Dry Gas Consumption TCF

US 22.38

CAN 3.21

MEX 1.82

27.41 TCF

260.47 / 27.41 ~ 9.5 years

"During the third quarter of 2005, prices for finished goods advanced at a seasonally adjusted annual rate (SAAR) of 14.8 percent, after falling at a 0.5-percent SAAR during the second quarter of 2005. Excluding prices for foods and energy, the finished goods index increased at a 2.6-percent SAAR for the 3 months ended September 2005, after rising at a 1.0-percent SAAR for the 3 months ended June 2005. Among prices for rawand partially processed goods, the SAAR for intermediate goods accelerated from 0.8 percent to 18.1 percent from the second to the third quarter of 2005. The crude goods index moved up at a 109.7-percent SAAR during the third quarter, after declining at a 12.5-percent SAAR during the previous quarter."

Source: http://www.bls.gov/news.release/pdf/ppi.pdf

I think it is perfectly reasonable to omit food and energy prices, because it lowers inflation to less than one-fifth of what it would be if you included them.

The truth is that even $100 a barrel would be a mediocre price for the US economy. For a long time from now (at $75...100..150) we will be seeing happy reports like this and more and more US-economy-being-oil-independant talk. The effect of 100$/bbl would be demand being destructed (read social unrest, people starving and killing each other) in 3rd world countries which will of course be the first victum of PO. But this "cushion" provided by them will be very thin and when it evaporates after couple of years we will start recalling the 70-s again.

The price will not really matter - $200-$300 - we will get back to the true reality where not the numbers (and the paper behind them) matter but the physical world we've somehow forgotten about.