Articles tagged with "depletion"
The latest OPEC Monthly Oil Market Report (MOMR) foresees that demand for OPEC crude oil will decline over the next year by about 300 kbd. This is largely in anticipation of additional production from elsewhere:
Non-OPEC supply is forecast to increase by 0.7 mb/d in 2012, supported by the anticipated growth from North America, Latin America, and FSU. In 2013, non-OPEC oil supply is expected to grow by 0.9 mb/d. The US, Canada, Brazil, Kazakhstan, and Colombia are expected to be the main contributors to supply growth, while Norway, Mexico, and the UK are seen experiencing the largest declines. OPEC NGLs and non-conventional oils are seen averaging 5.9 mb/d in 2013, indicating an increase of 0.2 mb/d over this year.
Overall, OPEC sees demand staying below 90 mbd over the remainder of this year, with total growth in demand lying at 1.01 mbd.
Much has happened since the late Matt Simmons and Nansen Saleri got together back in February 2004 to debate scenarios for future oil production in Washington. While Matt had developed his research that led into the publication of “Twilight in the Desert”, this was the meeting where Aramco pushed back to explain that there would not be a global problem for at least fifty years. As this series of posts on Saudi Arabia comes to a conclusion and moves on to other countries, it is perhaps of some value to look back on the presentation by Mahmoud Abdul Baqi and Hansen Saleri to remember what was said. Back in those days, oil demand was expected to steadily rise with increasing rates to reach 100 mbd in 2015.
Saudi Aramco has stated that it designs the well layouts and extraction patterns from its oil fields so that they effectively decline at a rate of 2% per year.* If one divides 100 by 2 it yields 50. If one subtracts 50 from 2012, one gets the year 1962. Even for those with poor math skills, these are not difficult operations, and they lead to the conclusion that those fields which came into production in the early 1960’s and earlier are now reaching the end of their productive lives. They are not there yet, since production took time to ramp up, and some fields have been rested over the years when production was cut back, or even mothballed. But this gives you some perspective on the overall scope of the situation, without the need for complex mathematical modeling.
(*The IEA apparently believes that the figure is closer to 3.5%) (H/t Matt) Saudi Arabia states that, without using advanced recovery techniques and “maintain potential” drilling sites – often not in the same field as that being depleted – the rate would be 8%.(h/t Darwinian ).
Posted by David Murphy on January 14, 2011 - 10:55am
Tags: bets, david murphy, depletion, john tierney, julian simon, matthew simmons, original, paul ehrlich, scarcity [list all tags]
For decades, economists (Cornucopians or optimists) have been at odds with natural scientists (Malthusians or pessimists) when it comes to the scarcity of natural resources. The economist’s argument, summarized here by Julian Simon, is as follows:
More people, and increased income, cause resources to become more scarce in the short run. Heightened scarcity causes prices to rise. The higher prices present opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had not arisen. That is, prices eventually become lower than before the increased scarcity occurred. (Simon 1996)
The viewpoint of natural scientists seems to be a bit simpler; the more scarce something is the higher the price, leading to increasing prices as resources deplete over time. These opposing views have led to some famous wagers in the past. The most famous occurred in 1980 between economist Julian Simon and natural scientist Paul Ehrlich. The wager was whether the price of five metals would increase in ten years time. Simon won the bet. Another bet was made more recently. In 2005, John Tierney of the New York Times wagered with Matt Simmons over the price of oil. Simmons bet $5,000 that the price of oil would be $200 per barrel in 2010. Tierney won the bet.
As a result, Tierney has publicly applauded himself and the economists’ view in a recent article in the New York Times. He states: “Maybe something unexpected will change these happy trends, but for now I’d say that Julian Simon’s advice remains as good as ever. You can always make news with doomsday predictions, but you can usually make money betting against them.”
But what is the real message (if any) to be gleaned from these bets? Is it that economists are always right and natural scientists always wrong? Is it that prices decline for commodities over time?
I argue that there is very little (if anything) to be learned from these bets, and I explain why below the fold.
I wrote a post a few days ago about my visit to Chevron's Kern River Heavy Oil facility.
This morning, I received an e-mail from Jean Laherrère of ASPO-France with some graphs of historical production and forecasts that he had prepared for Kern River. The e-mail gave permission to post these graphs, if I "found them of value". I thought a separate short post on the subject might be worthwhile, since most readers are no longer looking back at late comments on my original post.
When I compare Laherrère's forecast with what I learned in my visit, it seems to me that the production forecasts developed using linearization are not tied in well with what is actually economic. Unless one makes careful adjustment for economics, it seems to me that this approach could significantly over-state the amount of oil that will ultimately be produced.
In recent years, natural gas consumption in the United Kingdom has grown rapidly. At the same time, there has been an abrupt change in UK natural gas supplies, brought about by depletion and decline. In the first part of this two part series, I look at historical developments in EU and UK natural gas consumption, production and imports and the challenges posed by declining production.
In the second part of the series, I use a simulation approach to test the likely adequacy of natural gas supplies during the upcoming heating season. In these simulations, I use data from the UK Department of Business, Enterprise, and Regulatory Reform (BERR), UK National Grid, as well as information about recent UK Continental Shelf (UKCS) and Norwegian Continental Shelf (NCS) develpments. Based on what I refer to as the reference scenario, it seems likely that the UK will increasingly have to rely on Liquefied Natural Gas (LNG) imports to secure adequate supplies.
This is a guest post by James Ward. James has a background in science and engineering and is ASPO-Adelaide coordinator for ASPO-Australia. This post appeared previously on Energy Bulletin.
By fitting a bell curve to historical phosphate production data, the best fit is obtained by assuming an ultimate recoverable resource of approximately 9 billion tonnes (of which about 6.3 billion tonnes have already been mined). This yields a peak in around 1990. Of course, the USGS claims an ultimate recoverable resource of some 24.3 billion tonnes (i.e. 18 billion remaining); however using this value yields a bell curve that is an inferior match to the historical data. A hypothesis is thus presented whereby phosphorus is considered in two broad forms: “easy” which is able to be mined quickly, but already peaked in 1990, and “hard” which has large remaining reserves and is yet to peak, but cannot be mined as quickly. (In reality there are probably many different forms ranging from very easy to very hard.) Just as with oil, estimates that lump all types of reserve in together will yield a theoretical peak that is high and distant, however the true system may involve periods of decline after exhausting easy-to-get reserves before other supplies come online to replace them. Ultimately we must develop a recyclable phosphorus supply if humans are to continue living on this planet.
Once, black caviar from the Caspian Sea was ubiquitous in Russia in its typical blue cans. Now, it has disappeared. "Peak Caviar" has taken place around 1980 in Russia
|This is an updated post on the energy return on energy invested on Canadian natural gas by Jon Freise. Jon's initial draft of this analysis, and related comments, can be found here.|
An intermittent but longstanding theme here on theoildrum is that dollars do not sufficiently inform us of the long term details of energy depletion, and that the inexorable race between technology and depletion can be better understood using biophysical methods. Essentially this post suggests that it is requiring more and more energy to procure the same amount of natural gas in Canada, and this trend will likely continue into the future. This update makes the initial analysis too pessimistic on the rate of EROI NG decline but also too conservative on the absolute level of energy return. It is going to be a very interesting few years as Canada declines, Barnett peaks, and Haynesville and other unconventional plays ramp up. The treadmill spins on.
This is a post by Richard Heinberg, Senior Fellow of The Post Carbon Institute and author of Peak Everything, The Party's Over: Oil, War and the Fate of Industrial Societies, Powerdown: Options and Actions for a Post-Carbon World, and The Oil Depletion Protocol. A special thanks to Global Public Media for facilitating publication of Heinberg's work; GPM is a wonderful resource and plays an important role in peak oil activism. This article is a draft chapter from a forthcoming book, currently titled Coal’s Future/Earth’s Fate.
With oil and natural gas prices rising and coal prices still relatively low, the return of the US to a greater reliance on coal might seem inevitable. However, several recent reports suggest that coal reserves, which have shrunk dramatically during the past century, may still be overstated. Coal prices are likely to rise precipitously during the next two decades due to transport bottlenecks and higher transport costs, falling production trends in many current producing regions, and the lack of suitable new coalfields. This information should give pause to any agency planning new coal power plants today.