The Oil Drum

Folks, thanks for your great efforts in this thread. There's a lot of cool stuff down there! Now, if we just knew where Dean was going...so, continue linking to maps (esp. of Cantarell/Jack/Yucatan, but Texas and LA too), oil maps, NG maps, LNG stations, refinery maps, pipeline maps, shipping lanes, rig maps, news stories, weather, track predictions, strategic resources, and all that other stuff in this comment thread. Then I'll go through and start aggregating those for what looks more and more like it will be a very busy week next week. Ideas or assistance are always welcome. (New post on Dean as of 20:50 EDT 8/19 up top.)

Prof G has just made reference to the new article in Nature, concerning the possibility of Peak Oil, and hiding under the title “That’s oil, folks . . .” It begins with a comment on the Boston Meeting on Peak Oil and Gas last October, but largely is a review, by their Chief of Correspondents of some of the issues, with the major proponents of the opposing sides being Matt Simmons and Peter Jackson Of Cambridge Energy Research Associates (CERA).

While, I suspect that there is little real benefit is re-rehearsing all the arguments that we could put forward, since they have been brought up in a number of responses to the publications of CERA over the past few months, particularly those by Dave and Euan, though they merely exemplify a number, yet I feel a response is called for since, inter alia, the President of Aramco just said:

Over the last several years, no less than thirty books have been devoted to the “peak oil” theory, the imminent exhaustion of oil, and the world’s inability to grow future petroleum supplies. The peak oil proponents routinely used the rise in oil prices over the last several years as evidence for their arguments about scarcity, but with the recent pullback in prices and the moderating call on oil from Saudi Aramco and other major producers, many now acknowledge there is actually an oversupply of petroleum in the market. In fact, what seems to be in short supply these days are vocal peak oil theorists!

Well, the rising production of the growingly-expensive alternate fuel, ethanol, would suggest, at least to some, that this is more than a theory, and the growing inability of some of the poorer nations to provide adequate power to their people would underline that suggestion. The demand destruction that lowers demand and thereby stretches supply is already occurring.

A news imbalance exists in the reporting of supply-side developments affecting peak oil claims. Apparently, there is nothing but good news lately—actually, this is being reported as the absence of bad news. This trend has driven down oil prices since early August. Is the trend real? Today, Barrie McKenna reminds us in Those quick to deride peak oil theory also don't know Jack about the bigger picture.

A chronic pitfall for economists is that the daily deluge of data often obscures more meaningful long-term trends...

It's that old adage of not seeing the forest for the trees...

With oil now in the low $60 range, many economists are rethinking their assumptions of last year...

The problem in all this is that the peak oil theory isn't about $78-a-barrel oil. And the price of abundance isn't necessarily $63.

Let's look briefly at the forest, not the trees. There's plenty of bad news.

While I was gone Dave kindly replied to Dr Drollas' comments to my post regarding Depletion and the CGES. Since today was the day that Chevron announced the Jack prospect test result, it might be considered that this speaks more to his argument than mine. The well showed that from about 40% of the pay zone they were flowing 6,000 bd, and a second well to further define and appraise the field will be drilled next year.

Further within the considerable comment that has been provided on a number of stations was the comment that this is the "final frontier" for oil exploration. Actually it probably isn't. There are still some places further North that have not yet been fully explored, but it is getting very close to the limit of where we can afford to economically look. We are, by the geological definition of where oil is likely to be found, starting to run out of places to look for these large fields.