Dialoguing with Dr. Peter Jackson of CERA: Is the Future of Oil Resources Secure?
Posted by Luis de Sousa on March 3, 2007 - 12:00pm in The Oil Drum: Europe
[ED by PG] Hit reddit/digg and send this to the other linkfarms fresh today, let's get Luis some more eyes for this re-post.
As a sequel to CERA’s report Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources, Dr. Peter Jackson was given a guest editorial in this month’s edition of the Journal of Petroleum Technology, entitled Peak Oil Theory Could Distort Energy Policy and Debate. This article ends with this sentence:
We invite others to join in a considered dialogue that now seems too easily lost in the rancor.Compelled by these words some reflections follow regarding Dr. Jackson’s arguments and understanding of the Hubbert’s Peak.
The Title
To start, it is important to note the strangeness of the article’s title; it calls Peak Oil a theory and implies it distorts the debate. Peak Oil is often labeled as a theory, usually by those not so acquainted with the study of resource depletion. A peak in time is a mathematical result of growing consumption of a finite resource; in the case of oil the peak phenomenon is already observable in more than 50 producing countries. As an oil expert Dr. Jackson surely knows this, so why call it a theory?
As for the second part of the title, it is hard to consider why the Hubbert Peak should distort the debate or energy policy. Shouldn’t an open and enlightening debate consider all hypotheses? Moreover, if a peak in oil production is an observable phenomenon, why not consider as such? Take for instance the United Kingdom, can the stakeholders make the right decisions on energy policy without considering the peak in internal production in 1999?
Resources or Reserves?
After an introductory account of his points Dr. Jackson dives into his arguments, immediately producing an important affirmation:
Our analysis finds that the remaining global oil resource base is actually 3.7 trillion bbl—three times as large as the 1.2 trillion bbl estimated by peak oil theory proponents.Strange words, considering researchers using the Hubbert method usually do not work with ‘resources’, for the method produces a number for ultimate recoverable reserves. But in that case, considering the known result of Prof. Deffeyes of 1000 Gb for remaining recoverable reserves [1], and using a world mean recovery rate of 27%, the implied remaining resource is 3700 Gb, the same number Dr. Jackson puts forward.
Further down Dr. Jackson continues:
[…] world oil production will not peak before 2030 […]How can world oil production peak after 2030 with a remaining resource of 3700 Gb? For that to happen the worldwide recovery rate would have to go well over 50%, something highly unlikely to happen when more than half of the world’s oil fields produce less than 20 kb/d [3], and are located on ever remote regions. Such a scenario could eventually actually make the case for a fall in world mean recovery rate, not the opposite.
Before considering further arguments it is important to note that such discrepancies in Dr. Jackson’s discourse seem to be caused by a mistake in conflating resources with reserves (and probably the opposite). Some clarification by Dr. Jackson on these first paragraphs of his article would be of help.
Hubbert’s forecast
In Fig. 2 there’s a graph representing the US Lower-48 production and Dr. Hubbert’s forecast. Something is wrong with this graph, which gives the idea that Dr. Hubbert’s forecast is somewhat astray from actual production. Using the graph depicted by Dr. Hubbert himself in his famous 1956 paper and the historical data published by the EIA the result is somewhat different:
M. King Hubbert’s projections found in his 1956 article Nuclear Energy and the Fossil Fuels and subsequent production published by the EIA.
Production didn’t completely follow the curve forecast by Dr. Hubbert, but it has kept evolving close to it, sometimes below, other times above it. Differences in excess of 60%, like pointed in Dr. Jackson’s article, are absent. Of note it is also a fact that using this data up to 2005, Hubbert’s method continues to forecast a figure for ultimate recoverable reserves of 200 Gb.
Above ground factors
Following Dr. Jackson admits to a peak lead by above ground factors:
An apparent peak in world oil production could appear if above-ground issues such as war, political change, or intractability in decision making by governments limit upstream investment and activity.What is left unsaid is that these constraints arise from the fact that oil production has peaked in the countries where consumption is higher (e.g. North America, Europe). In the XXI century oil production is no longer controlled by private owned companies from large consumer countries, but mostly by state owned companies in the countries where production surpluses still exist (e.g. OPEC).
[The] model formulated by the late M. King Hubbert fails to recognize that recoverable-reserves estimates evolve with time and are subject to significant change.Indeed, recoverable reserves change with time. Backdated proven plus probable conventional oil reserves have been declining since the early 1980s [2].
But this focus on reserve numbers misses the main issue: oil production. A large figure for reserves or resources does not necessarily imply a higher production rate; take for instance oil shale or oil sands.
Hubbert’s method
But Dr. Jackson explains his concerns about reserves:
Hubbert’s method requires accurate knowledge of the ultimate recoverable reserves of an area.This is the key sentence of this article, Dr. Jackson shows he doesn’t know or doesn’t understand what the Hubbert method is. Also known as Hubbert Linearization, this method uses past production data as its sole input, the ultimate recoverable reserves is the result.
Reserve Growth
The focus on reserves continues:
The U.S. Geological Survey, notably, points out that reserves growth accounted for 86% of total additions to reserves in the United States since 1950 and 86% of the additions to reserves in the North Sea since 1985.These reserves additions are a well known artifact of under-reporting practices used by private owned oil companies in order to avoid taxes. This is highlighted by the fact that the reported reserves to production ratio (R/P) for the United States has been around 10 years since the 1920s [4].
This argument is itself supportive of the Hubbert method, for both the United States and the United Kingdom are countries where the Hubbert curve models production remarkably well [5].
The fact that the method appears to work in some areas and not others suggests it is of limited use and even fundamentally flawed.There are in fact some countries or producing areas where the Hubbert method cannot be directly applied. Such is the case when more than one discovery cycle unfolds, which eventually produces an asymmetric production curve. The political factors referenced before can also constrain production (e.g. Iran, Russia). There’s no reason to think that the Hubbert method is flawed in the face of this.
Technology
[The Hubbert method has] the underlying premise that technology is static […]Dr. Jackson makes the case that the Hubbert method does not take into account the technological developments that improve oil recovery. Considering again the cases of the United States and the North Sea, these were areas entirely unconstrained where better technology was readily applied for years (decades). Still they peaked; still they followed the Hubbert curve.
Those who believe a peak is imminent tend to consider only proven remaining reserves of conventional oil, which they currently estimate at approximately 1.2 trillion bbl.Further lack of knowledge on the Hubbert method emanates from Dr. Jackson’s words. Beyond insisting that foreknowledge of existing reserves is a precondition to apply the Hubbert curve, a number of 1200 Gb is mistakenly associated with its results. As stated before, currently the Hubbert method points towards ultimate recoverable reserves of 1000 Gb (a number also given by other mathematical forecasting techniques) which is inline with current known proven plus probable reserves of around 800 Gb. This number of 1200 Gb is not associated with any known forecasting method for conventional oil.
Unconventional Oil
Dr. Jackson then addresses unconventional oil:
Those who believe a peak is imminent […] plays down the importance of unconventional reserves in the Canadian oil sands, the Orinoco tar belt, oil shale, and GTL projects.So far the arguments have been made around conventional oil, for which the Hubbert method provides an important forecasting tool, as discussed above. Non-conventional oil has to be modeled separately, for it represents a new cycle in production. It too can be the subject of a Hubbert-like analysis, in which case it will yield results not very far from those presented by Dr. Jackson.
Unconventional oil is not a factor of disagreement between early and late peakers. However, there are several factors that prevent unconventional oil from having great impact on the overall production of liquid energy sources: lower recoverable reserves, lower production rates, lower net energy yields, etc. As seen in Fig. 1 provided by Dr. Jackson, it is the peak in conventional oil production that marks the end of liquids fuels production growth. If that peak comes sooner, say in the next 5 years like the mathematic models forecast, the lesser the impact unconventional oil will have.
Data
CERA draws both on its own databases and those of its parent company IHS, which has the world’s most complete proprietary databases on oil production and resources.This information is quite relevant, for IHS’s is also the database used by Dr. Jean Laherrère, one of the prime researchers of the Hubbert curve. It’s with this same data that Dr. Laherrère arrives at a figure of 1000 Gb for remaining recoverable reserves for conventional oil, using several mathematical tools, like the Hubbert curve. Why is Dr. Jackson’s CERA arriving at different results? With what forecasting tools?
Hubbert-posited post-peak reservoir decline-curve assumptions are rebutted by observation that the geometry of typical oilfield production profiles is often distinctly asymmetrical and does not generally show a precipitous mirror-image decline in production after an apparent peakAgain Dr. Jackson shows some lack of understanding of the Hubbert method, which is not supposed to model individual field production. Also, there are no assumptions made on individual field production profiles when it is used. This is one of the strengths of the Hubbert methodology, it can be used with any underlying individual field profile. Again the United Kingdom is a good example, where individual fields tend to have highly asymmetrical profiles, with fast growth and slow decline, but the Hubbert curve can be used to effectively model the region as a whole.
The peak argument is not presented in the context of a credible systematic evaluation of available data;Apllying the Hubbert method to the public databases of BP, EIA or even IHS results in a short term peak. Does Dr. Jackson imply that these databases are not credible?
Methodology
At base, their methodology is to apply decline curves against currently proven reserves and declare that the game, and the argument, is over.With this sentence Dr. Jackson demonstrates even further his lack of understanding of what the Hubbert method is. This particular description has no relation whatsoever with the curve fitting techniques applied successfully to oil production by the late Dr. M. King Hubbert.
Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges with delivering liquid fuels to meet the needs of growing economies.No one will disagree, but it is of at least the same importance to not allow optimism to replace careful analysis.
Final Comments
A short term peak in world wide conventional oil production is a result of several different mathematic techniques: the Hubbert method [1], Creaming Curve [2], Loglet analysis [6], the Generalized Bass Model [7], to name a few, using different datasets (e.g., EIA, BP, IHS, Wood Mackenzie). All these models point towards a figure for remaining recoverable reserves of 1000 Gb and a production peak for conventional oil in the next 5 to 6 years; Dr. Jean Laherrère and Prof. Kenneth Deffeyes are two of the excel figures in this area. Using accounting techniques, country by country [8] or project by project [9], other researchers arrive at similar conclusions.
Dr. Jackson simply presents a number of 3700 Gb, without further detailing the mathematical or accounting techniques used to forecast a peak in world conventional oil production beyond 2030.
As a follow up to this dialogue, Dr. Jackson is invited to learn and apply the Hubbert method to one of the available world historic production datasets.
Luís de Sousa,
The Oil Drum:Europe
References
[1] Kenneth S. Deffeyes (2005). Beyond Oil: The View from Hubbert's Peak ; Hill & Wang. Further information here.
[2] Jean Laherrère (2006) Fossil fuels: what future? Global Dialogue on Energy Security, The Dialogue International Policy Institute, China Institute of International Studies, Beijing.
[3] Matthew Simmons (2002) The World's Giant Oilfields, White Paper.
[4] Roger Bentley (2006) Global Oil and Gas Depletion - A Letter to the Energy Modelling Community; International Association for Energy Economics Newsletter, Second Quarter, pag. 6.
[5] Jean Laherrère (2000). The Hubbert Curve : Its Strengths and Weaknesses; Oil & Gas Journal.
[6] Perrin S. Meyer, Jason W. Yung and Jesse H. Ausubel (1999), Logistic Growth and Substitution: The Mathematics of the Loglet Lab Software Package. Technological Forecasting and Social Change 61(3):247-271. Further information here.
[7] GUSEO, R. et al. (2006). World Oil Depletion Models: Price Effects Compared with Strategic or Technological Interventions; Technological Forecasting and Social Change, (in press). Further information here.
[8] Colin Campbell (2007), ASPO Newsletter n.73.
[9] Chris Skrebowski (2006), Peak Oil the Emerging Reality; V International Conference on Oil and Gas Depletion, Pisa, Italy.
Dialoguing with Dr. Peter Jackson of CERA: Is the Future of Oil Resources Secure?
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Dialoguing with Dr. Peter Jackson of CERA: Is the Future of Oil Resources Secure?
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177 comments
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One spelling error "still the Hubbert curve can be used to model the region as a hole." should be "whole" I suppose.
[however hole makes kind of a funny meaning - "its only a hole left" hehehe].
This is as good an answer to Jackson as the one at EB http://www.energybulletin.net/26270.html
In the end the ones that scream loudest (and has the greatest wattage of media outlets) dictates what society believes. This is known and used. Only after a paradigm shift people see, and say "was it like that?".
How can we efficiently reach out to more people, and raise questions, and debate the current business-as-usual?
(as most of us here believe BAU wont benefit the most of the population, in your country or in the world).
I find it also real curious that he say "the peak oil debate can influence energy policy in a bad way", how can an open debate make things worse. Worse for who, Mr Jackson? For the people on the street or for your customers?
If we cancelled "our" peak oil debate, would the world energy situtation instantly become better? Better for who?
Cheers
At least we peakoilers are being noticed, that's probably the best evidence that we are showing a real problem to exist.
I guess I missed the w key…
Unlike the ASPO-USA folks I don’t question directly CERA’s work, anyway I don’t have access to it. They just come up with this number: 3.7 Tb, and don’t even make quite clear if they’re talking of resources or reserves.
CERA doesn’t seem to use mathematical tools to build their forecasts, but they have different results even from accounting based assessments. It's not exactly a matter of credibility and more of transparency.
Type the line below into google:
worldwide liquids site:www.api.org
The top search link might be of interest.
Two questions arise:
1) If you completely miss forecasting a peak in a province where you have good data (the North Sea), then why should you have an credibility on a global basis?
2) If your Non-OPEC forecast after 2 years overestimates the amount of oil actually produced by roughly 10%, doesn't that suggest that you are actually simply adding new projects and not really accounting for the 5% decline/depletion of the base as suggested by Skrebowski?
Look: CERA made in 2005 a forecast for SA total liquids to be 13.05 Milion Barels per day...
Now...that is not what they are producing now, is it?
OPEC Liquids Productive Capacity (Annual Average) (continued)
(million barrels per day)
2007
Crude and Total
Crude Condensate Condensate NGLs Liquid Capacity
Algeria 1.62 0.53 2.15 0.40 2.55
Indonesia 0.88 0.13 1.01 0.14 1.15
Iran 4.39 0.25 4.64 0.20 4.84
Iraq 2.89 0.03 2.92 0.04 2.96
Kuwait* 2.75 0.05 2.80 0.17 2.97
Libya 2.04 0.09 2.13 0.09 2.22
Nigeria 2.60 0.45 3.05 0.22 3.27
Qatar 0.92 0.30 1.22 0.25 1.47
Saudi Arabia* 11.15 0.70 11.85 1.20 13.05
UAE** 2.81 0.35 3.16 0.33 3.49
Venezuela*** 2.78 0.09 2.87 0.23 3.10
Total OPEC 34.83 2.96 37.79 3.27 41.05
OPEC 10 31.94 2.93 34.87 3.23 38.10
Hahahahaaahaahahahhaaarrggh!!
just 2 years ago they forecasted total world liquids to be in 2007: 93.76 million barels per day.
Houston, we seem to be a bit off schedule here!!
Liquids Capacity Outlooks
(million barrels per day)
2004 2005 2006 2007 2008 2010 2004 2005 2006 2007 2008 2010
Non-OPEC
US 7.62 7.55 7.44 7.37 7.31 7.15 7.62 7.55 7.44 7.37 7.31 6.95
Non-US 29.23 30.01 31.04 31.94 32.39 33.23 29.23 30.01 31.03 31.83 31.65 31.82
Subtotal 36.85 37.56 38.48 39.31 39.70 40.38 36.85 37.56 38.47 39.20 38.96 38.77
Eurasia 11.22 11.81 12.40 13.06 13.70 15.21 11.22 11.81 12.40 13.06 13.39 14.76
Eastern Europe 0.19 0.20 0.21 0.22 0.23 0.24 0.19 0.20 0.21 0.22 0.23 0.24
Subtotal 11.41 12.01 12.61 13.28 13.93 15.45 11.41 12.01 12.61 13.28 13.62 15.00
Total Non-OPEC 48.26 49.57 51.09 52.59 53.63 55.83 48.26 49.57 51.08 52.48 52.58 53.77
OPEC
Gulf Countries 24.23 25.13 25.74 26.62 27.54 28.84 24.23 25.13 25.56 26.26 26.66 27.63
Gulf NGLs 1.80 1.93 2.00 2.26 2.40 2.67 1.80 1.93 2.00 2.26 2.40 2.67
Other OPEC 10.78 11.22 11.77 12.29 12.92 14.17 10.78 11.32 11.71 12.00 12.22 12.55
Total OPEC 36.81 38.28 39.51 41.17 42.86 45.68 36.81 38.38 39.27 40.52 41.28 42.85
Total World 85.07 87.85 90.60 93.76 96.49 101.51
Do note that CERA seem to forecast 'productive capacity' not production.
That said, there is virtually zero chance of 100 mbpd productive capacity or production in 2010 whatever calendar one uses; the forecast is clearly, and shown by the last 2 years data to be, a crock of rotting dingos' kidneys if predictive capability is an important criterion.
Interpolating... 2007 production will do well to average 86 mbpd whereas CERA forecast 93.76. Let's be generous and knock off the unused capacity (takes 2004 down to 83 which was about production, and 2007 to 92). So, 2004 to 2007 grew 3 mbpd, CERA forecast 8.7 mbpd; for 2007 to 2010 they forecast 6.75 increase, prorating by 3 / 8.7 = 2.33, which implies about 88.3 mbpd production in 2010.
Now that sounds reasonable. See, you just have to be on the CERA wavelength, understand how to read their forecasts and the truth is clear ;)
Many thanks Kyle for the link, I will save and print it using the most permanent ink printer technology I can find and store it well, I'm sure it will make an amusing bedtime story for someone's kids someday.
Capacity is relevant if there is an abundance of oil down there.
Look to Norway who peaked back in 2001 – now down some 25% from peak. As far as I know they have not decommissioned any platforms yet (or maybe a couple small ones) – BUT my overall assessment is that Norway still maintain the same pumping capacity as when they peaked – but sadly THERE ARE SIMPLY NOT ANY INCREASING BLACK SUBSTANCES DOWN IN THEM WELLS –anymore.
And as some smart people say –
…don’t listen to what they SAY – LOOK at what they do !
More on capacity(CERA) vs reality -
As a comparing example there is an overall speed limit in Norway set to 80 km/h (REALITY) – so why the heck do they sell cars in this country showing 260 km/h on the speedometer?
And the car will eventually keep its promise on this 260km/h (this number is what CERA would focus) – but the local police and the national roads will not allow for such speeds (REALITY AGAIN) ….
double post (clicked twice)
At 8.5 mbpd crude + condensate, the Saudis are probably producing about 9.9 mbpd Total Liquids (based on 2005 ratio).
Of course, CERA is talking about "productive capacity," so any reduction in production is just a process of increasing their reserve productive capacity. One little problem is that the Saudis have now admitted that their 2005 crude + condensate production rate of 9.55 mbpd was pretty much their maximum producing rate.
Well, they seem to be as off with liquids prediction as they have been with predicting Natural Gas production in the USA. Who would pay any dime to look at this report? It is just bogus.
Roger From The Netherlands
Thanks Kyle!
yeah right - hi haaa
'CERA doesn’t seem to use mathematical tools to build their forecasts....' Nope you got thet right
'CERA uses the same tool as parents use at Christmas when they lie in a gentle manner about St Claus ' - GIVE the contributors of CERA another year - and the see through 'their bluff' or rigthout deceptions...
We cannot convince, nor should that be our goal. We can, however, inform, provide answers to serious questions, provide links to relevant data, and help other to come to their own conclusions. Helping others to think for themselves and come to their own conclusions will ensure they do not replace one set of "experts" for another(us). The outcome of peak oil is inevitable. No amount of propaganda will stave it off. The governments of the world are not unaware. On the contrary, their actions off the public agenda demonstrates all too well that awareness. What those in power ARE trying to do is stave off the economic repercussions as long as possible while they solidify their own personal post-oil positions.(i.e. the purchase of 98,000 acres in Paraguay by George Bush and the use of US Military to displace the local residents in the name of "The War on Terror"). Those we can help are the critical thinkers who are currently being subjected to disinformation or are unaware of the approaching crisis. In the end, no matter what we do, most will die as it will be impossible to feed them all. If we can forwarn and help some to survive, we will have done our job. Don't waste your time on the stupid, they will be the first to go anyway.
This is getting very close to the essence of Dr. Jackson's goal:
It's time to start screaming louder, so that CERA's audience keeps listening to him and doesn't "pay attention to the man behind the curtain".
I would even go further. The fact that the article is responding to peak oil analysis gives more publicity to peak oil itself. In a strange way, his comments are the best publicity Peak Oil could get!
Excellent article Luis, very clearly spelled out that there is little science in the work of CERA.
Thanks.
It’s really striking that someone like Dr. Jackson does not know what the Hubbert method is or how it works. And still draws conclusions about it…
First, very good article, interestng and informative.
I am amazed at the vigor with which both CERA and the "peak aware/ASPO" types go at each others throats, given that the best I can tell, the difference between them is timing (now or 2030...not that great a difference in years really) and the nature of the downslope ("undulating plateau" or "peak and cliff")
I liked the take of one of CERA's commentators a few months back, (I can't remember where I saw it) who said, "I don't think we are at peak, but I am still shopping for a fuel efficient car... :-) They know we are in for some tough times, whether they are caused by above ground factors (logistical peak)
or as the ASPO claims, geological peak, but they must put as positive a face on things as possible given their client list (they did this on the natural gas issue, by proclaiming North American peak as "the internationalization of the natural gas market" (!) Astounding ability to put lipstick on a pig, that one!
I do have to take some exception with your remark in the short post
"It’s really striking that someone like Dr. Jackson does not know what the Hubbert method is or how it works. And still draws conclusions about it…"
I have spent the last year and one half trying to read everyone I can find who would have knowledge of the Hubbert method (Campbell, Deffeyes, Simmons, Laharrere, Westexas, Stuart Staniford and khebab on TOD amount the most well known in this community, but I have over 100 documents and sites on the issue on my hard drive), and I have convinced myself that there is virtually no agreement on how the "Hubbert method" works even among the "peak aware" community.
I must say, and I do this with no rancor, that to many, the constant shifting back and forth between "it's about being halfway through Qt" and "reserves mean nothing, it's about flow" undercuts the credibility of the method as it is currently being used. The public will not be concerned as it will seem academic to them, but to a person with some education in mathematics and versed in this discussion, it will be very disconcerting. If Dr. Jackson does not know what the Hubbert method is or how it works, he joins a large group in all camps, and has nothing to be ashamed of on this issue.
We are still back to the same point: There are 100 plus good reasons to work to reduce crude oil consumption, regardless of the exact date of peak, and time is our enemy unless we begin now. Why does CERA fear that "peak oil" will distort the discussion, when it is most likely to urge reduced oil consumption, unless they see ever increasing conventional crude oil consumption as a good thing? (I would love to hear them try to justify that one!)
Roger Conner Jr
Remember, we are only one cubic mile from freedom
I am amazed at the vigor with which both CERA and the "peak aware/ASPO" types go at each others throats, given that the best I can tell, the difference between them is timing
Some of us more doom and gloom types get frustrated that others can't or won't see the danger that peak oil poses to our children and ourselves. I am about petered out with the will to convince others of the importance or the nearness of the problem. Frankly, I hope that when dieoff starts, their bloated corpses don't foul the local streams. Nothing worse than having to step around a cornicopian's corpse when you are gathering water to filter in your British Imperial. I hope all the CERA staff have Hummers.
Any more it seems like a race to which will kill us first: Peak Oil, Global Warming, or Nuclear (nucular for the learning impaired) War.
Hello BaSE, yes, it is impossible to convince anyone of anything, I am afraid. It is like trying to change the behavior of a cat. We have had Teddy, our cat, for 12 years. Outside of getting older and slower, he hasn't changed one thing that we would like him to change. People, being creatures, have the same built-in change problems that my cat does. They really can't change much. We don't recognize this, as we are the creatures in this case. Just like my cat Teddy thinks everything he is doing is just fine, as he is working according to cat world logic.
So where does this lead us? Nature has set up a test for us. The test is simple: can we get along? Can we limit our numbers, wants and desires to fit into the world we must live in? The prior human species, Neanderthal, failed and went extinct. I imagine Nature recorded that event something like: Neanderthal went extinct - not smart enough - on to my next test species. Can we pass Nature's test? It does not look too good for us.
Roger,
Thanks for your comments. This post isn’t supposed to go at anyone’s throat; I just reflect on Dr. Jackson’s claims and conclude that he doesn’t know what the Hubbert method is. I have all respect for him and this post is not, and should not be perceived, as a personal attack.
The Hubbert method can be defined as the exercise of adjusting an Hubbert curve to historical production data. On prof. Deffeyes’ book you’ll find how to do it with the P/Q vs Q plot, a technique adapted to oil by Hubbert. To my knowledge it was in this book that the term “Huubert method” was coined; here at TOD we know it by Hubbert Linearization, or simply HL.
If you still have doubts check the prof. Deffeyes’ book that I reference.
The simplest method called Hubbert Linearization, is quite straight forward and gives approximately the same result as Khebab's much more sophisticated loglet analysis.
It's based on the simple differential equation:
dQ/dt = kQ(t)*(1-Q(t))
Where Q(t) is the fraction of the total resource that has been consumed.
k is a constant of proportionality
t is the time since the resource was first exploited
The justification of the equation is based on the following concepts. When the Q is small the amount that can be produced is proportional to the amount that is already produced. This encapsulates the growth in technology and knowledge of how the resource can be extracted and the exponential increase in demand through economic growth. Practically this translates to ever larger accumulations of intellectual and physical capital that can be employed to extract the resource. As Q increases, eventually the physical limits of the resource availability prevent further increases in the rate of extraction. This means that the cheapest reserves of the resource are depleted, forcing the use of more expensive and dilute concentrations. In the case of fossil fuels, this dilution represents pockets of reserves in ever decreasing size.
If we let C(t) = total amount produced to time t,
then C(t) = T * Q(t)
where T = Total recoverable reserves. Then P(t) = production rate at time t. So
P(t) = T * dQ(t)/dt
Then:
P(t)/C(t) = k(1 - C(t)/T)
So the HL method, is to simply plot the ratio of the Production rate to the total cumulative production.
If the method has any validity, it follows a decreasing straight line.
If you extrapolate the line to 0, the value of C at which the line crosses zero is the total recoverable reserves, T.
The gradiant of the line gives you k, which you can substitute back into the original differential equation and calculate the production rate at any point in time.
The result is very robust and you can do it yourself with data freely available on internet. You'll find you get a peak between 2008 and 2015 for the world depending on what data you include in your fit.
Look at some of khebab's posts for nice graphs and fits to the data from various countries.
It really is very straight forward and quite reproducible. I've done it. I get the same result as everyone else. A peak before 2015.
Again my opinion: Jackson starts the normal machine of trying to discredit the "peak oil movement". Pretty much teh same tactics as used against climate change or anti-smoking. The title says a lot. I have the feeling he wants "us" to sound like the bad guys, ruining the party. So that we become the uniteresting "fringe". The best response seem to be to restate facts repetetively via grass-root channels (like this).
He means that peak-oilers dont consider the "enormous potential of probable reserves" and produciton from "Canadian oil sands, the Orinoco tar belt, oil shale, and GTL projects". Well, then, give a proposal for productions per year from these sources for the next decade Mr Jackson... I think the whole oil industry (including himself) gives that , what, max. 5 mbpd increased production ten years from now? Could it be substantially more? This is the exactly the peak oil question/argument, right?:
Will that increase be enough to offset the declines in conventional oil, which can already be followed with the EIA figures?
For the Hubberts curve, CERA seem to have taken an average or so from the two curves from Hubbert in figure 2? Your graph looks better/more honest/less dicrediting. Moreover, a guy (hubbert) that predicted the production in the US for the year 2000 (even with 50% error) in 1956 (!!) should perhaps not be disregarded with a handwave? A pretty good job, I'd say. Can you predict production 50 years from now ?
I find also that his expressions for what he wants to achieve are weakly described, in the last section "signposts". Jackson wants to influence the policy-makers he says, but he doesnt say how. Why is that?
Moreover he says "it is not possible to calculate reliably the date of the peak except in general terms nor is this the key issue". So Whats then the problem? Why does Jackosn bother to write this whole piece? Because Mr Jackson prefers business as usual, without annoying warnings (peak oil) that something might be wrong with the current energy supply system? Possibly?
Hi Luis,
I really like this article - so much about it. I like that you start off with the title, for example. Then, you go through everything in a nice, logical manner. I hope this piece can find a wide audience.
A couple of preliminary comments:
1) If it might be helpful, there are a few minor edits I'd make, and I'd be happy to do this and send it to you.
Also, there are places I might add in a touch more explanation - so that someone unfamiliar with the oil situation in general could read it easily.
(Then I will send it to all my relatives!)
For example, (which, again, is to just put a touch of "frosting" on the already-perfect cake) -
"For that to happen the worldwide recovery rate would have to go well over 50%, something highly unlikely to happen when more than half of the world’s oil fields produce less than 20 kb/d [3], located on ever remote regions."
Here, if you added perhaps just one sentence, (perhaps two) which would be the phrase "20kb/d" into some kind of context. In other words: for example:
"The recovery rate today is "X", under the conditions of "Y" kb/d. There is no field in the world that produces above "Y"(bpd).
"Z" percentage of the fields producing - (you know the figures off the top of you're head, I don't) (above 1mbpd?) - are in decline. To expect an overall recovery rate of 50% is extremely unlikely. Why? Because, as of today, more than half of the world's oil fields produce less than 20 kbd. To increase the recovery rate to 50% would require...." (fill in the blanks).
My attempt to clarify here may have made it worse. Just my point is to perhaps add a little more explanation. (For the educated, but not "peak literate" lay person.)
2) I also like the content of some of segeltamp's comments above.
Is it possible, segel, that you could work these up and perhaps Luis might incorporate some of them into his piece?
For example,
"it is not possible to calculate reliably the date of the peak except in general terms nor is this the key issue". So Whats then the problem? Why does Jackosn bother to write this whole piece?"
I like the idea of commenting on this particular sentence of Jackson's. What *is* the key issue for Dr. Jackson? What is the key issue for 1) oil producers/exporters? 2) oil importers 3) the world?
Hi Aniya,
Thank you for your comments. In fact this piece was written as a speech directly to Dr. Jackson, hence the suppressing of some details. Although I see that with a bit more work it might become an educational article, which is also important.
I’ll be glad to get your suggestions or from anyone else.
I really like the suggestions Aniya is making, and Luís's openness to them. Collaborative work on TOD essays could make them much more accessible to a large audience.
I love the thinking and commitment that TOD essays represent, but I often find myself wishing that an editor or technical writer could have worked their magic on them. Quality writing requires editors and multiple drafts.
Perhaps posting an essay at TOD could be considered the first cycle of an editing process? A first draft to be polished for optimum effectiveness?
Bart / EB
TOD sometimes feels like real-time peer review. It's great fun, and the articles always improve.
that, dear friends, is *exactly* the idea. refining points, finding messages...
The Lower 48 and North Sea cases directly contradict CERA's arguments concerning conventional production.
Regarding crude + condensate:
The Lower 48 peaked, in 1970, between 50% and 52% of Qt, and it has declined at about 2% per year since 1970.
The North Sea peaked, in 1999, between 48% and 52% of Qt, and it has declined at close to 5% per year since 1999.
Both regions were developed by private companies, with no material restrictions on drilling and production, other than prudent reservoir maintenance.
As I have pointed out, the post-peak Lower 48 cumulative production was almost exactly what the HL model predicted, using only data through 1970 to generate the predicted production profile (Khebab's plot), even though we have tried improved recovery techniques, 3D seismic, horizontal drilling, etc.
What about improved technology since 1970?
Well, the North Sea peaked 29 years after the Lower 48, at the same stage of depletion as the Lower 48. Same result.
Edit:
This is Khebab's Lower 48 HL model: http://static.flickr.com/43/108482206_8769d44c1c_o.png
Khebab used only the data points in green (using HL) to generate the red curve. Note the close fit between the post-peak data points and the predicted curve. The post-peak cumulative Lower 48 production, through 2004, was 99% of what the HL model predicted it would be.
(The same exercise for Russia showed that actual post-50% of Qt cumulative production, through 2004, was 95% of what the HL model predicted it would be.)
Edit #2:
The cumulative shortfall in world crude + condensate production, between what we would have produced at the 5/05 rate and what we actually produced through 11/06 is on the order of 320 million barrels (EIA). On Deffeyes' plot, the world was at 50% of Qt in late 2005.
Why should we expect the world to show a production profile different from the Lower 48 and the North Sea--even as world crude oil production has started declining?
Could you comment on one of Freddy's last posts graphing the overly pessimistic projections of ASPO and Campbell in the past 15 years?
Hi sf, that’s an interesting question.
First of all there’s no official ASPO projection; several different ASPO members produced in the past very different forecasts. Campbell, Laherrère, Bakhtiari, our friend Rembrandt, etc. They all work in different was and achieve different results; since last year all these forecasts have converging to the 2010 – 2012 timeframe as the peak date.
The overview you get in the second page of every ASPO newsletter is Colin Campbell’s work, a country by country assessment focused on reserves. Colin Campbell has been repeatedly bashed by his changes to the date of the forecasted peak, the last one in 2005 when he moved it from 2007 to 2010. Of course no one remembered that previous to that, in 2003, Colin Campbell’s forecast was 2010.
The way that Colin Campbell and Rembrandt work (what I called the accounting methods) is somewhat prone to this kind of changes, for it needs a thorough knowledge of projects in progress and projected in the future. These projects to be change with time, and it is hard to know exactly what projects and fields will come on stream say 10 years from now. But in the short term these methods are quite informative.
Another major difficulty in projecting a peak is the current exploration cycle in deep offshore, which, say 2 or 3 years ago was still hard to grasp. Those who couldn’t model it correctly back then, had to update their models lately. Now the offshore cycle is much clearer, the discovery cycle cooled off and everyone is getting a peak at about the same. Everyone but CERA.
Do you know what campbell assumes for mature fields' decline rate?
ALso, do you know if Chris has plans to update his bottom up analysis, either to modify his assumed decline rate or to update the start/ peak date for planned new production?
Hi jkissing,
Colin Campbell usually uses 2/3% for onshore fields and 7% for offshore fields. These numbers usually change from country to country and to know them in more detail you should search the Newsletter.
As for Chris (and Rembrandt also) that kind of analysis is in constant update for two reasons: a) the schedule for projects start is changes perpetually and new projects are announced and b) the decline rate tends to change from year to year. I think we’ll get a new update during this coming spring.
Hi Jeffrey,
re: "Why should we expect the world to show a production profile different from the Lower 48 and the North Sea--even as world crude oil production has started declining?
Key question, well-stated. I wonder if this might also be incorporated into Luis's article. (Or, another one.)
Jeff,
In fact none of those cases is exactly similar to what the world will be: on the US you have a single cycle, on the UK you have two. For the whole world you can roughly find three production cycles (check Laherrère’s latest papers) and you still had the Iraq-Iran war bumping the curve in 1980. This will likely result in a peak a bit later than the midpoint of depletion.
But, discovery for the whole world has been following a single cycle. So modeling production with a single curve like you suggest still is a very good indication of the underlying trend.
Luis,
BTW, very good work.
Note that in regard to the North Sea, I was using the EIA North Sea C+C data base (Norway, Uk, etc.).
My point is that these two vastly different regions (Lower 48 and North Sea) peaked 29 years apart at the same stage of depletion, based on the HL method--and all that oil companies have been able to do in both regions is to slow the rate of post-peak decline, which directly contradicts CERA's position.
Note that Mexico is now definitely declining/crashing at the same stage of depletion as the Lower 48 and North Sea.
And, based on very recent data, the recent China discussion and the Daqing decline, it appears very probable that China is declining at the same stage of depletion as the Lower 48, North Sea and Mexico.
Which brings us to the ongoing decline in world crude + condensate production, relative to the (so far) 5/05 peak.
So far at least, world crude + condensate production is declining at the same stage of depletion as the Lower 48, North Sea, Mexico and (Probably) China.
westexas, do the data points in your khebab graph represent present EIA corrected data or the statistics as available in 1971? RR had stated that his preliminary HL study did not project this kind of accuracy as the peak was approached. If its to be a predictive model (as presented), one must use the data available approaching the peak and not that which is drawn from three decades in the future I would presume.
In 1974, the USGS was advising the new Secretary of Energy that peak was still far into the future. Mr Hubbert came to Washington to set them straight that peak was long passed. With the graphs green data points as presented showing a 1971 high it seems extraordinary that Mr Hubbert would have told a 1974 congressional hearing that the peak was in 1965.
Re: Lower 48 Data
Hubbert would have had the same data that we now have for Lower 48 production.
An absolutely critical point to keep in mind is that if we were discussing the world peak at the same time, relative to the 50% of Qt mark, that Hubbert predicted the time frame for the Lower 48 peak, we would be having this discussion in 1991.
We have vastly more production data for the world--and therefore a more accurate HL plot--than Hubbert had in 1956 for the Lower 48.
Resectfully westexas, your *1991* reference is non sensical. Khebab did not stop at year 1956 data points to construct the red curve. He seems to have used EIA 2006 revised data from 1937 to 1971 to predict the decline curve.
This only serves that purpose - the decline profile.
Your comments speak to the predictability of peak. Again, I ask why would Mr Hubbert have tried to convince the Committee Hearing that the peak was in 1965 if he had data showing 1965 production was exceeded by khebab's six data points? For your hypothesis to have validity using the Lower 48 example that you have chosen, khebab must use the same inaccurate data that Mr Hubbert used in his 1974 prsentation.
It was your link last month to the Howard Baumann overlays of the Lower 48 Hubbert curve that underlined for me the fact that Mr Hubbert had some really pungent statistics when he was contructing that final curve. As a mobile lurker that is often upload challenged I cannot reproduce your 1974 link.
Why are we not as inaccurate in 2007 in our forecasts of world peak as was Mr Hubbert in 1974 when he gave testimony to the Senate in post peak USA?
I noticed that you have been a member for three days.
h t t p : / / e n . w i k i p e d i a . o r g
Hro?gar, Hrothgar, Hróarr, Hroar, Roar, Roas or Ro was a legendary Danish king, living in the early 6th century[1].
Ha Ha.
Those bloody dark age Geat(s)* turn up everywhere...
*Pronounced 'Yeyat'(s), but 'Geats' of modern parlance is more appropriate...
Oh, I do so hope he is back :-)
Our own little woermsbane...
Three words come to mind "LastViking." You. Got. Served.
Not subtle, is he, WT?
I notice that I am not able to follow his "rebuttal." This is a clue, unless one wishes to assume I'm an idiot, which is up to one to assume for oneself.
"If you've gotta use language like that about a thing, it's 90-proof bull and I ain't buying any." (Big Daddy)
In regard to your question, I assume that you are talking about the following testimony. You will note that Hubbert stated that the peak was in 1970. In 1974, he estimated Qt at 170 Gb. Khebab's plot, using all of the data through 2004, put Qt at about 200 Gb.
One point. I may be mistaken, but I don't think that Hubbert described the HL method until 1982. In other words, we don't know for sure that Hubbert was using the HL method in 1974.
Hubbert's original estimate, in 1956, for the Lower 48 peak was for between 1965 (Qt of 150 Gb) and 1971 (Qt of 200 Gb). Note that a one-third increase in URR only delayed the peak by five years.
(Does this whole exchange sound familiar to anyone besides me?)
http://www.energybulletin.net/3845.html
Published on 6 Jun 1974 by Technocracy.org. Archived on 3 Jan 1970.
Hubbert on the Nature of Growth
by M. King Hubbert
What an awesome article! I am very impressed by Mr. Hubberts insight.
Note that the 1974 testimony was 18 years after Dr. Hubbert's famous speech, in 1956, in which he predicted that the Lower 48 would peak between 1966 and 1971 (note I made a mistake and said 1965 above).
In 1956, he also estimated that the world would peak no later than 2006.
"...Similarly, a child born within the last 5 years will see the world consume most of its oil during his lifetime..."
He's talking to me and my demographic right there..before I could even walk. Thats an eye-opener to me.
Thank you for the link westexas. It clears up much. The Baumann graph that you linked to last month is included in the testimony as Figure #11. Your last graph was much clearer than this one.
I was wrong that Mr Hubbert stated in the Hearing that the peak was in 1965. The text is a virtual word-for-word reprint of his 1971 Scientific American article. Only three lines are changed. The original text gave the year-range which centers on 1966. Mr Hubbert's base graph from 1971 is included showing a similar 1966 peak. Mr Howard's overlay of the pruduction data shows the 1970 peak. Mr Hubbert *definitely* says peak passed in 1970.
I must concede that Mr Hubbert was not in a fog in 1974 as I stated up-thread. However your inclusion of this text and graph confirm my recollection that in 1971 he formulated and confirmed by text (halfway between 1932 & 1999) and by graph that his research supposed a 1966 peak when publishing in 1971. In my humble opinion Mr Hubbert was admitting in the 1974 testimony that he was wrong by five years in 1971.
This is the only fact I am attempting to illuminate. The formulas that he used are provided by him and we can conclude that it's *predictability* factor is duly prejudiced. Had khebab used the same 1937 to 1970 figures that Mr Hubbert had available to him, khebab would likely have had similar conclusions unless he is already using the original data and claiming that newer Verhulst formulas are superior.
Using 2006 EIA data to look (by HL) at the Lower 48 may confirm peak year of 1971 and confirm the decline curve but its a retrospective view. Unless you and khebab can use the pre peak data figures as they were *before revision* and show us a better curve then Mr Hubbert came up with, than we must conclude khebabs formula is no better then his and the predictability range is equally no better. Is this a fair deduction?
The best production data in the world are for the Lower 48. I can't imagine that there were any material revisions to 1970 and earlier production data. And Hubbert testified in 1974 that the Lower 48 peaked in 1970, so the data at that time showed rising production up to 1970, when it peaked and then declining production.
In any case, using the Lower 48 production data through 1955, Hubbert--in 1956--put the Lower 48 peak between 1966 and 1971, based on a Qt of 150 Gb and 200 Gb respectively. The 200 Gb appears to be accurate, consistent with a 1970/1971 peak in close proximity to the 50% of Qt mark.
In other words the data set was accurate enough, in 1956, to predict that if Qt were 200 Gb, the peak would be no later than 1971. And you have zero evidence that there have been any material revisions to the Lower 48 production data.
Which brings us back to the same point. The post-1970 cumulative production was 99% of what the HL model predicted it would be, using only data through 1970 to generate the model. If you wish to attack the accuracy of this statement, provide us with evidence of material revisions to the Lower 48 production data.
Freddy... what's in a name?
Is last more heroic than penultimate?
What is there about this site that you find irrisistable?
Freddy... what's in a name?
Is last more heroic than penultimate?
What is there about this site that you find irrisistable?
I guess we can give it a few days and then take a poll--Hothgor or Freddy?
Jeff,
The above(from Last Vikings first post) was by far your best response. You might want to copy/paste the whole thing somewhere for future use (just in case - might save you some typing).
;-)
D
It was pretty uncanny that Hubbert in 1956, in effect, said that if Lower 48 URR was 200 Gb, then the peak would be no later than 1971.
Using data through 2004, Khebab put the Lower 48 Qt (the HL estimate of URR) at 196 Gb. And the Lower 48 peaked in 1970.
Again, relative to the Lower 48 peak, we would be in the 1971/1972 time frame, and as predicted by Deffeyes, world crude oil production is now in decline.
As I said yesterday, IMO it's later than most us think.
Sounds like Hothgor to me.
Welcome back Hothgor.
I can't understand the point you are making here. Are you telling us that in 1971 Hubbert said peak was 1966? That he couldn't just look at the production data for 1967, 1968, 1969 or 1970 and see that they were higher?
And when you say "in 1971 he formulated and confirmed by text (halfway between 1932 & 1999) and by graph that his research supposed a 1966 peak when publishing in 1971." What text are you refering to?
Going back to the http://www.energybulletin.net/3845.html all I can find is this:
You must be looking at different graphs than me, cause I can't see this "confirmed by graph". Mainly because I can't read those graphs at all.
And I sure hope "confirmed by text" means you are referring to something other than the above blockquote. But it was the closest thing I could find to your description.
In short could you please clarify how and where Hubbert makes a claim of a 1966 peak in 1970?
Hang on, I'm all confused here.
WT's energy buletin article says
It was archived in 1970, but he gave his testimony in 1974?
But Hothgor says
I'm confused.
What 1971 SciAm aricle is Hothgor refering to? (the one where he supposedly makes a 1966 peak prediction)
And this energybulletin article is his 1974 testimony of a 1970 article he published in SciAm in 1971?
I'm just trying to confirm Hothy's claim of a 1966 peak.
Okay I found this article from SciAm in 1971. http://www.hubbertpeak.com/hubbert/energypower/
I can only conclude its what Hothgor is referring to.
On page 35 Hubbert refers to the lower 48 thusly:
Additionally there are no graphs relating to this, so I still don't see what graphs Hothgor was referring to above.
It seems to me that Hubbert did not predict a 1966 peak in 1971 in this article.
"The time span required to produce the middle 80 percent of the ultimate cumulative production is approximately the 65-year period from 1934 to 1999" != Peak in 1966
Your attacks on HL and Hubbert are spurious at best.
I take it all back, I was wrong!
Its not Hothgor, its Freddy!
Take a look at his second post here on TOD (the day after his banning)
http://www.theoildrum.com/node/2288#comment-161699
He posts a link back to his site (trendlines) about a dig against TOD.
Funny thing is, its burried deep in the site where a casual reader wouldn't find it.
Even better, its a broken link! the internal link "#PeakTOD" is busted just as the same as the link on the webpage. (you have to scroll down to see it).
Only Freddy would have known that comment was there, only Freddy would have used that same broken link twice.
Besides, LastViking is using the same bogus info about hubbert that Freddy posted on his site.
Man, I really need to get to work.
Awesome!!! THat was really FUNNY!
Yeah I checked it correct the link goes to TREndlines = freddy.
freddy has always been more intellectual, the arguments appear to mean something... hothgar is more 'me too'. CA and LV have always seemed to be F.
I thought that the lower 48, or at least Texas had some artificial restrictions put on production for most of the way up to the peak. Wasn't the Texas Railroad Commission the agency that regulated the production (OPEC was modeled after it I believe).
My premise is that Texas is to the Lower 48 as Saudi Arabia is to the world:
http://www.energybulletin.net/16459.html
At this point one no longer needs Deffeyes, Campbell, Simmons and the others to strongly suspect peak is here or near. One pick up sufficient clues from the MSM, reports of decline in Iran, Russia, Kuwait etc. One reads Exxon-Mobil ads boasting about how much they are spending to find oil. One sees the propaganda about Jack 2 and anything else that comes along. This stuff doesn't make headlines, but it's there. Once one is alert to the issue, it's there in the little nooks and crannies of the MSM. Drumbeat has shown that.
The problem is, once one is alert to the issue, a lot of things fall into place, but not the way which most people wish. The invasion of Iraq, for example, is fairly easy to explain using a peak oil perspective, but it then shows how the reality of how hollow the beliefs most Americans accept are.
Peak oil is about reality - generally, most Americans feel reality is what you see on TV.
Hi Expat,
a lot of things fall into place once one "believes". But if you don't believe, Peak Oil is all one big conspiracy theory from the ATAC/anti-globalization/anti-free market/global warming/over-population/anti-US imperialism faction. This is the response I get from my deeply Republican family, for instance.
Cheers nach Kaiserslautern(?)
Dom
mmmmm-hmmm.
My theory is that ideas have lives of their own and grow or diminish according to their natures irrespective of the promotion efforts of adherents or the disparagement of detractors. The ultimate effect of peak oil ideas will have everything to do with these ideas' correlation with reality and little to do with dextrous pr campaigns in any direction. It helps me when I'm letting myself get overwhelmed with some kind of pressure to win "believers".
Well, I have more of a problem discussing PO with people who seem otherwise pretty open - at least in the "conservative" American circles. For that reason I have come up with a sort of theory:
People don't really like to think (me neither).
Ok, I admit, that's nothing new.
Instead, people like to categorize. "Peak Oil" belongs in the above-mentioned categories because it is a Doomer subject. Thinkers who aren't necessarily doomers, on the other hand, have very different analyses of the groups/subjects above.
We see that tendency with the posters on this sight as well. PO is quite often mentioned right alongside Global Warming. And Overpopulation. GW interests me a lot, but not cause I'm a doomer, which I have tended to be with PO. Overpopulation, on the otherhand, is a varried subject that has a lot to do with 1st and 3rd World - us and them. It is also a subject that that tends to take care of itself..
Peak Oil will/is happening. I find it very enlightening as a tool to help understand what's going on in the world (see Expat: "a lot of things fall in place").
I just remember the feeling I got when a friend years ago mentioned the 98 Scientific American article and the idea that we would be producing less oil every year...very uncomfortable. I could almost detect a "denial" response within my own mind--"this can't possibly be true." To contemplate the beginning of the end of oil for the first time is deeply unsettling--that's why its so hard to talk to people about it, IMO.
That is good!
For those people I let them read Dick Cheney's stement from 10 years ago about how much oil will need to be found and replaced. After all we know that he is central to the conspiracy theory from the ATAC/anti-globalization/anti-free market/global warming/over-population/anti-US imperialism faction.
Get's em every time.
You copied and pasted that, now, didn't you!-)
You got a link?
There is a certain irony about the reaction of some Republicans to peak oil. Peaksters recognize the concept of supply and demand, and don't blame the oil companies entirely for every price rise. Peaksters are very disturbed about the political power held by oil companies, but generally support the business of oil exploration and distribution. Congressman Bartlett, one of the leaders of the peak oil caucus, is a conservative Republican.
Odd to me that peaksters would blame oil companies even a little bit for any price rise. They are, after all, in the business of producing and selling as much oil as possible. OPEC, on the other hand, does occasionally restrain production directly specifically to raise prices. Nations that nationalize their oil resource indirectly raise prices; because the lack of bonuses etc they do not go balls out to produce every barrel possible, and, eg pemex, hire many relatives with little training/expreience, thereby producing less than oil companies would had they access to the resources.
Of course, toders are presumably pleased with opec reducing production/raising prices, and, perhaps, displeased with oil companies producing as much as they do and thereby lowering prices, on account of both po and gw.
The history of the oil industry is full of examples of oil companies manipulating prices for higher profits - Standard Oil, which is just about reformed these days, is a classic business case.
This idea that oil companies, or Saudi Arabia, want to flood the market may stem from the 1980s - where oil seems to have become the weapon that broke the back of Reagan's evil empire, but even more importantly, allowed America to go back to living in its dream.
I think the alarm clock's snooze function isn't working anymore - read about Britain's current energy stats to get a taste of reality.
You know, if you work that analogy out further, you might have the perfect response to Yergins - whose book btw I really loved.
Since we have already run out of oil x-number of times bzw. (:-)and have been running out of oil for the last 40 years, as Yergins rightly claims, we have been hitting the snooze button time and again.
...This time it ain't working!
Wow.
I've seen some similar sentiments by the anti-globalization/anti-us imperialism faction who claim that Peak Oil is also a scam from oil companies to justify their outrageous windfall profits.
So when the waste impacts the rotating ventilation shaft, I'll guess
One group will viciously blame Big Oil Companies Who are Crying About Being Kicked Out of Venezuela, and the other group will blame the Swarthy Sand People for stealing "our" oil and feel good about bombing them.
Why does empirical objective science always lose?
You know, I wouldn't think that Hubbert's method would be that difficult to grasp. It seems to me more likely that Dr. Jackson just doesn't WANT to think about the situation that way, or that he for whatever reasons doesn't want too many other people to think about the situation like Hubbert. His arguments against just don't make much sense otherwise.
Reynolds,
Even if you’re right, I do not assume evil intentions from Dr. Jackson. He’s a respectful science man, from what I read he’s just wrong.
THe concept is pretty simple, really, and any 'science man' should have little difficulty with it. I see him as deliberately obtuse because his position demands it, and he simply wants to maintain the position, and the money/clout that goes with it.
Hi. Thats my feeling too. I believe he is (unconsciously?) intentionally misleading the debate. I believe the big machine of propaganda is starting to roll (the peakoilers know nothing, they are deabting, they are wrong, look here several times missed the correct date (climate ice age in the 70ties), even the fundamentals are wrong, they have no good data as the industry,...).
Lets instead spend our time on challenging the main idea - is there a peak production, an oil squeeze, coming up? (instead of entering a defensive debate that will waste our energy).
Lets instead keep stating facts, through grassroot organisations (as we'll not yet (never) win in the big media). And we'll gain momentum.
I have never understood how they claim to have debunked peak oil 'theory' then go on to talk about a peak at some later date.
Virtually every peak oil debunk I have read falls back to the "resource base" as evidence that a near-term peak can't happen. They completely miss the point. The point of peak oil is simple....it's deliverability, plain and simple. Tar sands? They are, at best, expected to grow from 1 mmb/d today to perhaps 3.5 mmb/d in 2020. So what? 2.5 mmb/d in 15 years? Saudi increased production by over 3 mmb/d between 1991 and 1993, at a fraction of the $300 billion it will take (not to mention the natural gas) to raise tar sands production by that amount. If it's not there on time, seamlessly, compensating for the decline in convention crude (which hardly anyone disputes), then the problem is the same, no matter the resource base.
It reminds me of an awfully embarrassing presentation that EIA gave at an oil conference in Malaysia two years ago. They added in tar sands and bitumen reserves to the USGS estimate of remaining conventional crude and ran it out--using the same R/P=10 decline rate post peak they have used elsewhere--to assert that oil would peak in 2067. And the guy still has his job.
Forget logic - those with a deeply vested interest just want more time to skim the cream, regardless of what that means for everyone else.
As for talking about the resource base - hey, it worked in the early 1980s with a B movie actor/commercial spokesman in charge of the U.S., so why not try it again? USGS figures, OPEC's magical reserves, lots of ridicule of those talking about resource constraints - it worked for a good 20 years last time.
Of course, at some point, fantasy meets reality - but in Hollywood dominated America, that just means a happy ending is merely a script rewrite away.
I think the underlying message they want to convey is this:
Don't bother investing the huge amount of money to lower, permanently and structurally, oil demand. We want our windfall.
When Peak Deliverable Oil hits---which will be clearly observable a few years after the fact---the center of the debate will then be around "increasing incentives", "lowering restrictions", yadda yadda yadda, asserting there are some kind of easily lifted external barriers between us and gushers of prosperity (especially gushing for them).
If Peak Deliverable Oil were see as an irreversible geological phenomenon of Peak Oil Period then the effort will be devoted elsewhere. Environmental restrictions will not be eliminated since it will be seen as a limited benefit with great cost (more activity == more environmental damage, and yet with less and less oil flowing).
Unfortunately, given the examples of the global warming debate, it seems destined to bitter political schism. One side will eschew mainstream empirical disinterested scientific analysis, and the other will not.
HI spraxis,
re: "...it's deliverability, plain and simple."
An excellent point.
re: "If it's not there on time, seamlessly, compensating for the decline in convention crude (which hardly anyone disputes), then the problem is the same, no matter the resource base."
Well, on one hand, I like this a whole lot, because you are saying it's a decline in production coming on line that creates a problem. (Yes?)
And I like your emphasis that it's the *reality* of the existence of (and timing of) any substitute that matters. (You can't light a match to a hypothetical source.)
Still, the resource base - and the amount of the base that's recoverable (so to speak), also matters, because it is part of the answer to the question: "Is the decline we see now (or upcoming) temporary or permanent?"
A shortage that is perceived as temporary (and, even, *is* temporary, though, of course, this can only be confirmed in hindsight) - is much less of a problem, even if that shortage is somewhat severe. (Or what do you think?)
A problem perceived as short term and temporary is much (much) easier to deal with, in general. (Would you agree?) (A problem perceived as short term does not cascade into things like hoarding, for example. Just to try to pick a somewhat generic example.)
I suppose another example might be - one deals with a wait for parts much differently than the prospect of no new part, ever.
So, I'd say: both are problems, just not the exact *same* problem.
Perhaps another way to say it would be...if the source coming online can *never* ramp up to fill the gap - then, that's a problem (of a different sort).
I'm going on about this because it seems to be exactly where CERA can take the thinking of someone whose waiting with baited breath to see if everything will be "all right" (or not)...and derail the line of logic. We (generic "we") *want* things to be "all right". (Somehow.)
So, it seems our analysis and "message" needs to encompass this.
Something like: "Yes, it would be great if peak was later..at least, great 1) If we start today to do many things very differently, including immediately, radically conserve 2) use every ounce of available oil to construct renewables. (etc), and thus also 3) Avoid continuing to up the concentrations of GHGs.
Unfortunately, using the best tools at our disposal, we see a distant peak is not the case. Peak is sooner, rather than later. Facing reality together can only help us. We call on CERA to use their expertise and time to work together on what we must do. Now." (I'd try to be more specific, but it's late.) (Does this make sense?)
The comparision of KSA increasing by 3mmbd in 2 years vs. tar sands production increasing by 2.5mmbd in 13 years is very powerful, and, I agree, pretty much captures the flaw in the 'resource base' arguement....Im going to use that next time someone says...'hey, what'a bout those 100 Terra-billion barels up north??'
an average decline figure used is 4% - 3mmbd is about 4% of the current world production, so in other words the fabled tar sands will be able to offset one years worth of decline over the next 13 years
(although, assuming other logistic issues are not a problem even though they probably would be, they could keep up this production rate for a very long time)
so thats 1/13 of the production we need to come online over the next 13 years just to sustain our current production - biofuels is another 2 or so, and finally efficiency gains could produce about another 4 or 5 years worth of decline protection (25% increase in efficiency), giving us an (back of the envelope) estimate of 8 years decline that can be covered out of the next 13 years, leaving us with only a 20% shortfall assuming no demand increases.
i may be out by a few percent here and there but the basic idea is that we have problems over the next 10 years, starting in 2 or 3 years time (low level demand destruction and efficiency gains can cover the first 10% relatively easily).
IMO, their basic premise is that a future technological silver bullet will somehow transform low oil sands/shale flow rates into conventional ones.
Hello Luis,
Excellent rebuttal keypost! Since CERA thinks converting reserves to ramp production is so easily done--I would like them to present a reverse or inverse statistical HL-type model that irrefutably illustrates this phenomena. I think they will find it much harder than they think. The world is getting increasingly dubious of just hand-waving proprietary databases and the chanting of magical incantations.
We Peakniks on the other hand, are finding greater validation over time as the production decline database builds from depletion, ERoEI declines, costs spiral up faster than $/barrel, maintenance is deferred, shutdowns and unfortunate accidents rise, more EOR methods prove temporary, new fields are increasingly delayed, and political blowbacks increase. Need I mention that we are punching ever more holes into ever smaller fields that are getting ever more difficult to find in the first place?
I think it is getting increasingly likely that CERA will continue to backpedal toward us than we will pedal forward to their 2030 Peak.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob,
Re: "The world is getting increasingly dubious of just hand-waving proprietary databases and the chanting of magical incantations."
It's hard to say, really. The magnitude of the change in personal and/or group assumptions dealing with "peak" requires can be huge. I'd say clear explanations like the one Luis just gave, coupled with clear and simple (doable) actions to take would be our message.
In fact, without the action component, my take on it is the analysis is just too hard to deal with...(and how could a business respond to "ELP"? Perhaps Jeffrey knows. I don't, just off hand. Fold up and start farming? I'd be interested to hear how Gail envisions this, say, for her colleagues. It seems a focus on a national "ELP" might be a consensus first step. Along the lines of Simmons recommendations, perhaps?)
Which is all to say, perhaps we could think about addressing head-on the emotional aspect and extreme difficulty of what we face. Hence, the need for clear thinking and a dose of...courage (?)
This may not be a role of TOD, but I agree with Aniya. The biggest obstacle to general acceptance of peak oil realities is the perception that there is no hope at the end of this tunnel. If there truly is not, then why address it? If the world's about to end, why bother fathoming the mechanisms or taking any action? This is why I do believe that bringing hope THAT IS IN LINE WITH REALITY into the picture is essential. I would hate for the perception of peak oilers to be of a bunch of soulless statisticians glorying in their exclusive grasp on the coming destruction--or even of moralistic hand wringers crying out that the only hope is an impossible social revolution--especially since these portrayals could for the most part hardly be further from the truth. A vision of the future that is inspiring IS essential to healthy human brain function--even to healthy reasoning. In some ways, humanity's predicament in relation to oil is a result of an overly cramped, mechanized, soulless and cynical rationalism-of-the-moment. Purging and correcting this is essential to the future. This is directed at no one, just an observation I'm putting out there like a balloon. Don't want to flood TOD with my non-technical commentary...just a dash for flavor.
another good one. well said!
D
oops
You just put your finger on my main motivation for writing "Sustainability". If I could only offer a chance for one in ten to survive to spend life behind a mule (definitely a doomer perspective), there would be no reason for the public to quit enjoying the status quo any sooner than they had to. But if I could find a way to offer the same lifestyle with immense advantages, including a pardon from the approaching sentence of drastic climate change, the public would find it much more attractive — even worth fighting for.
I am in great debt to the people who aimed me at some bits of information, because they made the exercise possible.
"But if I could find a way to offer the same lifestyle with immense advantages, including a pardon from the approaching sentence of drastic climate change, the public would find it much more attractive — even worth fighting for."
If you could do this you would be the Ronald MacDonald Houdini-Genie. I do not think a hopeful future must entail the elimination of pain as much as Americans are stuck in this rut. Got a link to this dream of a plan you got?
Sure. Click on my name, then click on "Stories by...", then click on the one entry.
Or click here.
I apologize for being flippant. That's an amazing amount of info and statistics you've pulled together. It still seems very dangerously optimistic to me...everything seems to ride on our current industrial/technological base projecting unchanged into the future. But even a relatively imminent peak and decline in oil production will quickly and drastically alter that industrial base. The massive changes you discuss would certainly take some time! More than we have I'm afraid. I'm not convinced, I think we'll have to look for hope elsewhere, but nice article...
No apology required. It's a big claim, and nobody should accept such a claim without support. (You can imagine my "Wow!" moment when all the numbers came together and the implications hit me; then it was a month and a half to write it all up.)
On the other hand, it's not as optimistic as you think:
Time is the factor, but if things get bad enough maybe somebody will confiscate all the Yukons and Navigators and Hummers to have them melted down in electric mini-mills to make support pylons for new wind turbines and rail for electrified transport systems.
In the mean time, I am all hot to pre-order a VentureOne.
Or pre-order the Toyota.....http://tinyurl.com/23xenu
or if you can't wait .....http://tinyurl.com/3apzzu
Only two problems with that:
Well let's see, there was post a few days ago about the prospects for Nuclear Power. Plenty of energy, very little CO2.
Given the choice between working behind a mule and a factor 5 more Nuclear Power plants I think most people would choose Nuclear.
But that's just me.
reminds me of a certain well known financial type who stated (in a court deposition in the early '80's) that reserves for the whitney canyon field in sw wyoming were 5.6 tcf. the well known financial type based his figure on a press release, but he must not have read the fine print because the 5.6 tcf refered to gas in place. whitney canyon has produced just over 2 tcf, so far (and contunues to produce).
This discussion about the precise timing of the Peak is somewhat akin to "rearranging the deckchairs". I personally do not care about the Peak, if one is ever identified. Oil production (C+C) has not increased since late 2004. It is showing no signs of increasing anytime soon and the downsides seem to press closer and closer and seem to get worse and worse.
As far as I can see what is happening is that we are on the "undulating plaeau". Prices are high. WTI closed above $60 yesterday and as a result poorer people and countries are quietly dropping out of the oil age. This process is called "demand destruction" by economists. That's a fancy term, but it still means babies are dying in hospitals that cannot afford to power their incubators when the grid goes down.
The wealthy world will sail on, oblivious to the increasing pain as prices trend up in a series of volatile steps and demand is destroyed. There will be gas in the gas stations for a long time yet in the US and long after the undulating plateau has tilted fairly firmly downward we will still be arguing with CERA who will still be saying that Peak will occur after 2030.
What might wake everyone up is a rapidly rising sea level as one or more of the major ice sheets collapses (http://www.nasa.gov/centers/goddard/news/topstory/2006/greenland_slide.html). Who knows what will happen and how governments will respond. Needless to say nothing is going to happen to save us from global warming either. Maybe we are at Peak Dumbness!
PEAK STUPIDITY! I love it! The wisdom curve must be an inverse of the world's HL plot, though lagging behind about 5-10 years. People will be getting much the wiser before too long!
I don’t know about Peak Stupidity, But Peak innovation may well be passed:
From Bryan Appleyard’s website:
Article in the Sunday Times, October 2005.
The greatest getting and spending spree in the history of the world is about to end...
The greatest getting and spending spree in the history of the world is about to end. The 200-year boom that gave citizens of the industrialised world levels of wealth, health and longevity beyond anything previously known to humanity is threatened on every side. Oil, the fuel that powers our world, is running out; the climate is changing at a potentially catastrophic rate; wars over increasingly scarce resources are brewing; finally, most strange and shocking of all, we don’t seem to be having enough ideas about how to fix any of these things.
It’s been said before, of course, people are always saying the world will end and it never does. Maybe it won’t this time either. But, frankly, it’s not looking good. Almost daily new evidence is emerging that progress can no longer be taken for granted, that a new Dark Ages may be lying in wait for ourselves and our children….
…it goes on:
Jonathan Huebner is an amiable, very polite and very correct physicist who works at the Pentagon’s Naval Air Warfare Center in China Lake, California. He took the job in 1985 when he was 26. An older scientist told him how lucky he was. In the course of his career, he could expect to see huge scientific and technological advances. But, by 1990, Huebner had begun to suspect the old man was wrong.
“The number of advances wasn’t increasing exponentially, I hadn’t seen as many as I had expected, not in any particular area, just generally.”
Puzzled, he decided to take on some research of his own. He began to study the rate of significant innovations as catalogued in a standard work entitled The History of Science and Technology. After some elaborate mathematics, he came to a conclusion that startled him, inspired rank disbelief in others and raised serious questions about our continued ability to sustain progress.
What he found was that the rate of innovation peaked in 1873 and has been declining ever since. In fact, our current rate of innovation – which Huebner puts at seven important technological developments per billion people per year – is about the same as it was in 1600. By 2024, it will have slumped to the same level as it was in the Dark Ages, the period between the end of the Roman Empire and the start of the Middle Ages.
Full article here:
http://www.bryanappleyard.com/article.php?page=2&article_id=5
Mudlogger;
If necessity is the mother of invention, then I'm guessing there will be a spike in innovation coming along soon enough. It may not be new antidepressant formulas (unless you count the antidepressant effect of heavy-exercise-induced dopamines), or new designs for nosehair trimmers or particle accelerators, but there are wheels to reinvent and mousetraps to embetter. I can hardly be surprised that the overfed, decadent and doped-down form that much of the western lifestyle has successfully championed has resulted in a lethargy of new discoveries. I don't know that it necessarily promises a dark-age, or at least as we have had it painted for us by Monty Python ('How do you know he's King?' 'Cuz' he ain't got shit all over 'im!')
Not just to open a 'can of Wikidemia' on your butt, but there are a wide range of thoughts on what the 'Dark Ages' really were.. http://en.wikipedia.org/wiki/Dark_Ages
"It is generally accepted that the concept was created by Petrarch in the 1330s. Writing of those who had come before him, he said that "amidst the errors there shone forth men of genius, no less keen were their eyes, although they were surrounded by darkness and dense gloom"[1]. Christian writers had traditional metaphors of "light versus darkness" to describe "good versus evil." Petrarch was the first to co-opt the metaphor and give it secular meaning by reversing its application. Classical Antiquity, so long considered the "dark age" for its lack of Christianity, was now seen by Petrarch as the age of "light" because of its cultural achievements, while Petrarch's time, lacking such cultural achievements, was now seen as the age of darkness."
...
"Petrarch's original metaphor of "light versus dark" had been expanded in time, implicitly at least. Even if the early humanists after him no longer saw themselves living in a "dark" age, their times were still not "light" enough for 18th century writers who saw themselves as living in the real "age of Enlightenment," while the period covered by their own condemnation had extended and was focused also on what we now call Early Modern times. Additionally Petrarch's metaphor of "darkness," which he used mainly to deplore what he saw as a lack of secular achievements, was now sharpened to take on a more explicitly anti-religious meaning in light of the draconian tactics of the Catholic clergy."
Sitting under Gray Skies,
Bob Fiske
There is a genre of sayings that I lke to refer to as truthie-lies.
They sound like they should be true, but deep underneath they are actually implanted falsehoods.
Consider phrases like "sticks and stones will break my bones".
This business with necessity and motherhood and invention is yet another truthie-lie.
The 'truthie-lie' that swims in my head these days is 'Fighting fire with fire'.. although I don't really know if it is originally meant as advice or a precaution to avoid such counterproductive behavior. Our leadership has taken it to heart, though..
I agree that the adage is worth challenging, but as cute and convenient as it seems, I have invented new combinations, solutions and methods all my life when I needed a tool that I could envision, but could not or would not buy. Another way to look at it would be my definition for 'intelligence', which is the counterpart to that old pearl that 'Insanity is trying the same solution again and again, but expecting different results'. Flipped on its head, it becomes 'Intelligence is the ability to understand when an approach is not working, and imagine, devise and test another direction.' I think the shoe fits.. to further my tirade of cuteness..
Bob
Nose hair trimmers: Now that man should have been given the Nobel Prize.
I doubt anyone living in what we call the dark ages actually referred to them as such at the time. The term is a historical construct.
My take on a 'dark age' is less the manichean concepts of light and dark, In a religious sense but more a stalling of and ultimate loss of knowledge. Followed by a prevailing innability to build on that stored knowledge. Civis stalls and fails, Rustic prevails. Living perhaps in a wattle and daub and thatch and timber dwellings amidst the broken roof tiles and tile shards of a formerly centrally heated villa.
Sure, the European concept of the Dark Age is actually quite parochial. Islamic Spain Flourished as did Persia and China.
But if it happens I will surely miss the nose hair trimmers...
Perhaps a useful (and humorous) graphic would involve the following...
a) When did sailors decide the earth was round... or that earth orbited around the sun...
b) Mark off the centuries until the Catholic church (or the approriate Authority) recognized the facts.
I wish there were something like a Peak Stupidity curve. That would mean there is hope for human kind on the down slope.
Alas, stupidity is one of the rare phenomenon of nature that actually can follow an exponential curve all the way up to the bitter end.
Einstein stated that only two things are infinite; the universe and stupidity and he wasn't sure about the universe.
As for that peak in innovation in 1873 that was a per capita peak. The explosion of innovation since then has more to do with there being more innovators. Part of the problem may be that corporations can lay claim to inventions by employees, even those made on the employees's own time and money. Better to take as much time and pay as possible from your employer before saying an idea is ready for market.
All we need is a few changes in the rules of the game.
Today’s gold-oil ratio comes to about 11.4 barrels per ounce. The 36-year average is about 17.5 bbl/oz, with last year coming in at 9.22 bbl/oz. Aside from a recent fall back, the ratio has been rising steadily this year, hitting a multi-year high of 12.5bbl/oz in mid-January.
Last week, Dennis Gartman, editor of the Gartman Letter, reiterated his belief that gold remains “cheap” relative to crude. He expects the ratio to move ultimately toward 20 barrels to one gold ounce. At current prices, this would put gold at about $1200/oz.
“As we've said countless numbers of times over the past two years or more, were we the counsellors to an Arab oil ministry we would have been arguing strongly in favour of selling crude oil as aggressively as possible while pricing it in gold,” he said.
“Of course no one has taken us up on that strong recommendation, but we are content to be long of gold and short of crude as the trade works rather relentlessly in our favour,” he concluded.
I use to think there was a relationship between the prices of commodities, but no longer believe it. During the 1960's and '70's a bushel of corn would buy 3 gallons of gas. This gradually declined to 2 gallons and then one gallon. By the summer of 2005 a bushel of corn would only buy a half gallon of gas. Even with the "big" increase in the price of corn to $4.00, a bushel still won't buy even 2 gallons of gas. IMO there is no fixed relationship between prices of commodities. This is especilly true if the commodities are fundamentally different. Corn is renewable, oil depletes and nearly all the gold that was ever produced still exists. To expect a relatively constant price ratio between such fundamentally different commodities is IMO unreasonable.
SIGNS AND CLUES
We should stop usig the term "peak" as it raises useless emotion and debate. the fact that is unarguable is that oil is getting more expensive to produce. this is a sign of a "peak" or rather a decline in supply of a natural resource (from economics 101)
Good article today in the National Post (Canada) about the break even point and ROI analysis for some of the large global projects the majors are undertaking. it said the majors are walking away from projects due to insufficient return on investment at current price.
again econ 101, when the price goes up sufficiently, the ROI improves, and these projects become profitable
are we running out of oil? no. we are running out of cheap oil. there is lots of oil at a sufficiently higher price
As to the comment that there is lots of oil at a sufficently higher price, may I remind the readership that half of that 'lots of oil' may be consumed in getting the other half out, and as we increase the flow rate, the return gets smaller as a percentage.
Money doesn't change geology or physics one whit. It does have a rather large effect upon people's consumption habits. The tantalizing prospect of massive amounts of thick oily googe stobbornly resisting our entreaties to 'flow, dammit' may be the coming scene.
Life has been light, and sweet.
so the next thought is - how will supply and demand interact?
- when oil goes to 100, there will be demand destruction
- less demand should mean price should come down
- but price cannot come down becuase the majors will not produce at a lower price
- so supply stays tight
- and prices stay high
... I did not get beyond Econ 101 so this is as far as my tiny brain can push this line of reasoning...
Hi Poly,
Maybe demand destruction is just another of those truth-lies mentioned higher up.
For those who were buying fuel here in Australia in the 70's an amazing thing happened (which I daresay will happen again) when fuel was rationed and prices rose dramatically. Demand became acute - people queued for hours to get their ration's worth - sometimes using a fair slab of their quota just waiting in line, then running around the block to rejoin the queue.
And this was an artificial ration - not a resource depletion ration.
IMO People will give up cable and buy fewer DVDs before they'll give up fuel.
Demand will go up inversely to availability.
Ian
The poor already consume very little. They will begin starving before you see any significant demand destruction. The masses will starve and experience post-oil, while simultaneously, those that can still afford it will continue to burn every last barrel they can get their hands on. Thus, the need for the Haliburton camps and the "Area Denial"(crowd control) weapons. Particularly the Heat Ray and the Sound weapons. The military claims they were developed for use in Iraq, give me a break. It's obvious what they were developed for. Much more effective than water cannons.
Cid,
Would an aluminum-foil shield work against these?
Yes. Space blanket material (aluminized mylar) would probably help too. You could even put it inside your clothes. As a bonus, it would make it really hard to read any RFID tags on anything you had inside.
Yes and No. The Heat Ray can reflected. But, it is invisible. You can't readily see where it is coming from.(You will therefore also not know which way to run to get away from it) It they use two in concert, you will be bracketed and a shield will be useless. Those at the front of the crowd could be trapped by the mass of people behind them and get toasted. The days of massive protests are over. The scariest thing is that Haliburton is currently building Concentration Camps.
Two words: Testudo formation.
It would be just as easy to tell the direction of the weapon as it is to tell the direction of the sun with your eyes covered. Large flat reflecting formations might even be able to redirect the weapon against its users.
Thanks Luis!
I agree that the terminology employed is rather fuzzy (probably intentionally). Even the term "Productive capacity" used by CERA is an upper bound estimate on production levels assuming a perfect world, but what is the lower bound? Assuming a 2% annual production growth from 2006, we will reach a cumulative production of 1.85 Tb (C+NGL) in 2026 which is 50% of CERA 3.7 Tb.
hmm.. not sure about that, I believe the 1.0 Tb number comes from Deffeyes (Crude + condensate?) and Jackson is probably talking about Crude+NGL.
You could mention also the result of Hubbert approach on 56 countries (out of the 73 that are producing oil) that have peaked or about to peak. The Hubbert Linearization has accurately predicted a peak in 1999:
Another simple argument that can be add to your final comments proposed by Roland Watson:
Surface land area of USA: 9,631,420 sq km
Surface land area of World: 148,939,063 sq km minus Antarctica at 14,425,000 sq km = 134,514,063 sq km
The USA URR is taken from Colin Campbell's ASPO estimate of 195 billion barrels which can be found at this link.
So doing our division and multiplication gives a first approximation for world URR of 2.72 trillion barrels of oil. Remarkably this is very much in line with estimates calculated from more complex techniques and ironically finds itself half way between the estimates of the two divides of the Peak Oil controversy.
Khebab, Ace Chart. I always feel that the argument about the number of countries past peak v those yet to peak is one that is underplayed. Therefore, I have a few minor favours to ask:
1. Can you post the HL for the group of countries shown?
2. Do you have a table listing all countries - those past peak, those bumping on a plateau and those yet to peak?
3. Do you have a figure, same as above, and HL for those countries yet to peak, ie. the 17 countries not shown on your ace chart?
If you've already posted all this somewhere - appologies for my poor memory.
Thanks, Euan
I totally agree. We have to start from what we know with a good level of certainty (which countries has peaked), separate mature countries from immature countries as well as constrained production (moslty OPEC) and unconstrained ones (ex: USA). The remaining group (what I call the type II group in he post below) is the difficult group where most of the production growth is originating from. It's a kind of bottom-up Hubbert Analysis but on a country basis.
All the details are in this story:
Why We (Really) May Have Entered an Oil Production Plateau
Khebab, that was great story - one that should be posted again!
I don't want to start another "debate" here about Hubbert, but...
If you look at the HL, IMO this statemnt is not strictly true. The linear regression is drawn through the last 8 years - which takes us back to the peak year of 1999. Prior to then the HL was wagging around all over the place - and it is only post peak that the HL seems to be telling us that we are now past peak.
I didn't follow all the debate with H***g*r et al., but want to focus on another point here, related to one of *redd*'s latter themes - which was how badly wrong ASPO and Campbell et al have been in the past - which are very valid observations IMO.
So where am I heading here? I seem to recall that it has been decided that the confidence of HL increases with maturity - related here to the fact that decline in these 56 countries combined will now almost certainly just keep going down. In essence, what I'm trying to say is that just because peakers have been wrong in the past does not mean to say that they will always be wrong and the probablity of peakers being right increases with time, as the World's petroleum province's mature.
I hope this may make some sense to someone.
Perfect sense...there are many ways to spin the data. HL is a wonderful tool that appears to converge only after the fact.
Of course, because when HL is reverse-engineered, all that matters is the inverted parabolic cusp at the peak. Before the peak, too much noise will obscure or mislead the asymptote. Only after the peak does the noise have limited effect.
My mistake
, I should not have the used the word "predicted" which was not the original intent of this fit but to rather model the post-peak decline. IMO, any HL results should be shown with a confidence interval which can be easily obtained using bootstraping.
First, the 'dog leg up' that both WT and his opponents discuss is very visible here... the HL just before peak would have predicted a later peak and higher total.
Second, and related to the above, HL modelers may be conservative in looking at both world and SA data, particularly if peak is now... I wonder if we will see aspo reverting to 05/6/7?
Yes, but the linear trend here prior to the dog leg up (prior to 400 Gbs) declines to a much lower URR intercept around 800 Gbs.
I'm sure if you look into the details, the dog leg up here will be caused by countries that then were not past peak and could some how ramp production. Once they join the post-peak club that luxury is no langer available to them.
I'll bet if you did a least mean squares fit to the data from ~200GB onward (including or discluding the dog leg) you'd see a URR between 950 & 1030GB... Just a guess.
Thanks for the comments too.
I’m not sure about it either, but Dr. Jackson repeatedly refers to “conventional oil”, I don’t recall any article where that includes NGL. Anyway from the Loglet analysis we get 2.1 Gb for the URR.
Yes I like that graph a lot, I just kept with the North Sea and the US because those where the cases Dr. Jackson focused more. Also from that 56 country list some countries might have not yet crossed the peak, just a detail.
I really don’t like Roland Watson’s logic, although not completely useless. The United States was a very special oil province probably richer than the average geological province. And of course 2.7 Tb is nowhere to be found in the map of ultimate reserves forecasting.
Agreed. China has not peaked yet and Canada tar sands production should be excluded and dealt with separately.
I agree that it is a very rough calculation but the fact that we reach an URR estimate in the 2-3 Tb interval using a completely orthogonal approach is quite surprising to me. As you said, the US is the country that has been the most explored and drilled and using it as a reference will probably lead to an optimistic URR. As for the URR estimates distribution:
src: Lynch (pdf)
Interesting graph, I like that cloud around 2 Tb in the 1970s. I don’t know in detail those modern forecasts above 2 Tb, but they are hardly based on math or thorough data analysis. The discovery signal is almost dead, were will that oil come from?
http://www.ogfj.com/articles/article_display.cfm?Section=Sponsored&ARTIC...
Industry veterans sound-off on peak oil at CERA week
Mikaila Adams
Editor, The Financial Update
The Oil and Gas Financial Journal
Excerpts:
" He says "to make an assumption of peak oil is 'mission impossible," because it is essentially a philosophical discussion. He says it all boils down to critical assumptions. "
That, and UNcritical assumptions. I was waiting to hear what was said by the elephant in the room, but it doesn't sound like he got a chance to talk. OK, I guess I pulled that quote since it was practically saying "Guys, even if you believe it's happening, clearly no one in their right mind would ever state it out loud, right? Am I right?" It just had the ring of poker players who were already bluffing, before the next hand was even dealt..
Critical assumptions... That made me laugh, because as manager of Saudi reservoirs he's the one who knows the answer to the most critical of assumptions ... the state of Saudi productive capacity, i.e. have they peaked yet?
Sure as hell he won't be giving the answer to the chumps at CERA.
That's like the Pope and a few Cardinals debating the advantages of Catholicism. Where were the retired geologists and engineers?
Hello WT and/or Khebab,
[off-topic, but I wanted you to hopefully see this]
One of the basic themes of your ELM is that the first world is outbidding the Third World for FFs. At the CIA factbook, I found some files that lists oil consumption, oil production, and oil imports by country:
https://www.cia.gov/cia/publications/factbook/fields/2174.html
https://www.cia.gov/cia/publications/factbook/fields/2173.html
https://www.cia.gov/cia/publications/factbook/fields/2175.html
Unfortunately, I am not a computer guru, but I thought you or Khebab could track these numbers, then compare later as the CIA updates them to see how much Third World oil demand destruction is going on. Maybe you already have a better info links than these. Cheers!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
There's a pandemic in American culture of the False Dilemma argument, and Peter Jackson and Dan Yergin have both leaned on the tactic for years. Yergin for example opens up every radio interview with his hoary "they say we've been running out of oil for 40 years." These people are not interesting, not knowledgeable, not intelligent, and increasingly irrelevant. On the last point, I do think they've started to pick up the signs. The current CERA stance on Peak Oil is like a cry for help. CERA's polemic in the fall of 2006 was a career-ending move.
However, as an investor, I've come to actually give thanks to these clowns because they give alot of cover to the bearish case, and make it possible to accumulate oil for delivery in 2012 at very reasonable prices.
Again, Dan Yergin is not an expert on oil, and is totally out of his depth on many subjects. But I love that he is touted as an expert. I've written on this before, and linked to a very revealing video of Yergin, showing him to be quite the ignoramus.
CERA is the gift that keeps on giving.
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Watching Dan Yergin totally out of his depth in this linked video from 2003 gives great insight into Yergin's true abilities. It's a dinner table conversation between Yergin, Marc Faber, and Jimmy Rogers. Needless to say, I'm sure Yergin decided to never get in over his head like this again.
There's a very nice consistency that Yergin demonstrates here, that flows all through his public appearances in the years since--and in CERA reports: the man carefully avoids saying anything meaningful at all times, or, that is not easily derived from other mainstream sources.
Riverside Conversations: (there is very brief intro in German, but the entire conversation takes place in English).
http://www.vpro.nl/programma/tegenlicht/afleveringen/10443446/items/1076... mp;player=wmp&media=13717558&refernr=&hostname=www&portalid=programmasites&x=47& amp;y=12#
Gregor
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PS: I jus thought I'de mention that this new TOD site is terrible. Terribly slow, and terribly dysfunctional for finding previous comments, linking, and searching. Awful. I hope TOD's not paying much for the servers, cuz there is little given in return.
Gregor
Hi Gregor, could you give me a link to the page where the link to the video is? Can't seem to make the link work.
I'm VERY interested..
I apologize that that link is so difficult. It was very hard to find, and if you link to the page, rather than trying to link to the video itself, it doesn't work. If you just hit the link that I used, it will work. If it doesn't work, click on the tiny "Afslegn in Standard Player." I can actually get both the above to work in audio, but not video.
If that doesn't work, Google for "Riverside Conversations" watching for links with Yergin, Rogers, Faber. Google both web pages and video.
Here is the link to the page:
http://www.vpro.nl/programma/tegenlicht/afleveringen/17628147/
Also, remember, the intro is in a German Voice, but the whole dialogue is in English. Good luck.
Gregor
I think that I remember reading a transcript of the conversation, on Financial Sense. My recollection was that Yergin basically had zero to offer to the conversation.
You know, a really interesting, but unanswerable, question would be if CERA were taking the opposite position--that we are at or very close to peak production--would they still be heralded by the media as "The Experts" on energy matters?
BTW, following was my CERA/Jackson response:
http://www.energybulletin.net/22733.html
A Tale of Four Predictions – Hubbert, Deffeyes, Yergin & Jackson
Jeffrey J. Brown, ASPO-USA's Peak Oil Review
According to the EIA the world through August 2006 has produced roughly 100 million fewer barrels of crude + condensate than if we had simply maintained the December 2005 production level. This is consistent with the Hubbert/Deffeyes model. It is not consistent with the Yergin/Jackson model.
first published November 20, 2006
It is actually in Dutch - not German :-).
Francois
Actually the correct link is:
http://www.vpro.nl/programma/tegenlicht/afleveringen/21819209/items/1763...
Wow, Gregor, thanks for posting that. I am a physician by education with no experience at all in business. All I know about business and world politics comes from reading the news and following sites like TOD. Yet I could have made a better contribution to that conversation than Yergin did.
My two favorite parts.
1) One of the few assertions that Yergin actually made (he mostly just asked questions) was quickly shot down. When he tries to defend the US's position and popularity in the world and Faber responds with something like "I know some people in laos and vietnam who when carpet-bombed, did not appreciate the carpet bombing"
2)Yergin makes another comment on how critical the year 1993 was bc/ that was the year that China became a net importer. Yet he goes on to say that the world will be well supplied with oil and oil inflation should not be expected. If there is more than enough oil to go around for decades, what difference does it make it China is a net importer or exporter?
More Faber http://europe.theoildrum.com/node/2265
Luis - a nice article. I find this whole debate with CERA rather strange. Dr. Jackson is an exceedingly well qualified geologist and Daniel Yergin is author of the definitive book on the history of the oil industry. No one, including us, should ignore what they have to say. And yet when you start to check out the relaibility of their statements and data their (CERA's) position quite simply doesn't seem to hold water:
Could you perhaps start by putting some numbers on this to illustrate what you mean.
This is a fascinating coincidence.
In writing the strory The forecasting record of CERA and other commentators I had extensive email correspondence with Dr Jackson he was very friendly and helpful up to a point.
Figure 3. CERA1 and CERA2 compared. The approximate consumption line is discussed here.
CERA's forecast for the UK is wildly higher than reality. Even after revisng this down - it is still way too high. As a result, CERA's credibility just melts away IMO.
Dr Jackson's paper has a good title: "Peak Oil Theory Could Distort Energy Policy and Debate" - all I can say is that if the UK government followed CERA's modelling for UK oil production it would be a disaster for the UK economy.
But in the same time, if their are talking about Productive Capacities their forecast will be always higher than reality! A best case scenario is only useful if you are offering also a worst case scenario! That's a possible issue with bottom up approaches, there are possibly thousands of parameters and assumptions behind a production forecast especially using detailed database as CERA is using. One possible solution is to apply Monte-Carlo simulation (like the USGS) in order to derive confidence intervals.
Wholeheartedly agree, a proper bottom up MC simulation with field declines and project ramps simulated. The width of the resulting production bands would be quite illuminating..
Where is the most reasonable (i.e. free) DB located?
Yeh, I keep forgetting about the forked tongue of Productive Capacity. I understand the concept when applied to Saudi Arabia during the 1980s and most years since, where they have capacity to produce well above their actual production , i.e. voluntary witheld capacity. But the UK has always produced flat out. There always is some production shut in for unsceduled maintenance and accidents - and always will be.
And in reply to Flakmeister - I've suggested (half jokingly) to the TOD bossess that we should subscribe to the IHS data base - any philanthropists out there who want to help us out, then donating the IHS energy data base to TOD would be a most worthy act.
What's the price tag? Probably well beyond 250 people throwing in $100 each I would guess. I wonder if Simmons ever checks out TOD?
Were a philanthropist to buy the data, that would not give him the right to publish it here, even for free.
Hello Mudlogger,
That is probably true, but after the signing of confidentiality agreements: the TopTODers could probably publish all the analysis and conclusions they derived from this root database. Jean Laherre does it all the time.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Check Khebab’s previous comment, half of 3.7 Tb is 1.85 Tb.
I thought it so too, at first. But then, it might not be a coincidence at all, with the discovery cycle at the present stage you don’t have a big margin to “invent” oil.
It is good to know that. From the article I got the feeling that Dr. Jackson is a friendly person with whom we can peacefully change views.
Imagine an investor's results over the past few years had he bet the futures based on cera's oil and ng forecasts.
Money Talks, Credibility Walks. Someone earlier said "CERA the gift that keeps on giving.", allowing him to buy oil futures at decent prices. If you had billions, were in a position of power and knew what we know; would you not want to keep the game running as long as possible? Allow yourself to square your positions, make money on the downside, and build yourself a little fiefdom in Paraguay for after the fall? When the game ends, money turns into plastic chips. A feudal estate with pre-oppressed peasants would be far more useful. As well as technical staff capable of providing a comfortable existence for at least the rest of your lifetime and a small private army. Buying a Geologist or two, who, by the way are aware of what's coming and might want a post-oil fund for themselves, would be a small price to pay.
Hi anyone,
Still playing catch up and would like to know the answer to what is likely to have an obvious answer.
If the rate of increase and decrease of oil production follow the Hubert curve would there be another curve reflecting the useful or net energy produced. If there is where could I see it? Or read some comment about it?
Black Bald
A good question Black Bald. Although others may be researching the issue I only know prof. Charlie Hall’s. Get a glimpse at his presentation at ASPO-5.
From that and previous work it seems that EROEI goes down linearly with time. It might be an approximation, but then this is a very hard thing to assess.
IIRC, the EROEI line intercepted zero in around 2025...let's just say that the trend is not our friend.
Thanks Luis,
I was wondering if that question was on the par of "do the carved rafters go with the house" which I was once asked by an engineer who dealt in deep water log retrieval. He did flash red in the face almost as soon as he said it though.
Thanks again.
Black Bald
The Financial Times chips in on the discussion with an editorial today ...
"As soon as 2020, conventional production could reach a plateau, leaving unconventional reserves to take up the slack." ... posted in Drumbeat.
The peak oil "theory" refers generally to the conjecture of a near-term peak in world oil production — lets say, for the sake of argument, before 2015. Other estimates (like my own) see it occurring sooner than that. Any near-term estimates are a part of the peak oil "theory".
Just trying to make this language clear. No one doubts the eventual peak of oil production, not even CERA. It's only a matter of timing and it is the timing that makes all the difference.
-- Dave
And that timing is heavily based upon the "assumptions" you make in your analysis.
I beg to differ, Dave. I have seen Mike Lynch (and others) lay out a scenario where the switch to alternative fuels comes before the peak, therefore rendering the whole concept of Peak Oil moot, and leaving a lot of oil in the ground (the stone age didn't end.....etc.). Maybe it's picking nits, but this is IMO the real cornucopian argument.
ET, I'll bet you watch Fox science channel.
Now I beg to differ...sorry, because this can become splitting hairs, but....
I think Dave has a point in saying that CERA in particular accepts eventual peak, or at least "undulating plateau" which will only stairstep downward.
On Mike Lynch, he presents a problem for me, because he is classified "cornucopian" and by you ET as "real cornucopian", so I don't want to argue with accepted definitions accept to say there is a step or two up the cornucopian chain even beyond Lynch, that being (a) the abiotic oil crowd, who believes that oil replenishes in some way from deep earth, and (b) those who believe the URR of the conventional oil is so high that we would not be in danger of peak until post 2100 or so.
On Lynch's argument, he STILL believes in an eventual peak in conventional oil (when I don't know) otherwise, the need to switch to alternatives would not even be considered, except possibly for environmental and carbon release reasons, or because whatever replaces oil is so convenient and liberating, customers would leave oil as fuel source behind. (This is not to be dismissed as a real possibility)
Here is my problem: I have said often enough here and elsewhere that we are in a race. If peak does not disable the technical/scientific culture within the next 15 years it never will, and indeed, peak oil becomes not moot, but simply a logistical/financial issue and in no way a real threat to the survival of cultures or nations.
I moved my timing down from 10 years because the technical developments in real sustainable workable alternatives are recieving such poor financial/political/cultural support that they are developing far slower than they are needed, and then technology will allow. To me the greatest danger is a crisis of will and education.
So, why don't I consider myself a "cornucopian"? Because, I do think there is a clear danger of timing. This is why I propagandize that
(a) alternatives are doable IF we choose to do them. If we do not choose to do them, then of course, they are by definition not doable.
(b) The alternatives need to be commercialized and spread quickly and SOON. If we wait too long, and begin to allow the "four C's" (command, control, communication and coordination) lapse, it will make the development and delivery of alternatives exponentially more difficult.
(c) This is why the "doom and gloom" crowd can be so damaging; anything that slows us from moving to the most workable alternatives, and damages our will slows us by even months, could be a huge factor. It is imperative to understand that this is a time sensitive race, and we are wasting time NOW.
(d) Unlike Mike Lynch, who seems to think that moving to alternatives and efficiency/elegant engineering and design can be done seamlessly, and without great effort, I feel that it is going to be very difficult, given the time horizon we have left ourselves, and the almost catastrophic failure of technical/scientific/design education in America that has left us talant poor (and I am not talking about people with degrees, I am talking about creative, inventive designers, technicians, bankers, managers, artists and engineers).
Unlike the doomers, I do not for one moment feel it cannot be done, but it wil require an effort that makes the "cold war" effort of last century seem like small beans, and will have to be incorporated into every institution in America. So I do carry with me what Mike Lynch and the "real cornucopians" do not seem to, a real sense of urgency, even emergency, in changing immediately, and turning our (for lack of a better phrase) "biggest guns" onto the target of reduced oil and natural gas consumption....we should be hearing the turrets turn now....but what we hear is "analysis paralysis".
To paraphrase Dave, I think we all do know the eventual outcome if we fail to make our moves NOW. While we argue about a handful of years (peak now, peak 2010, peak 2030) we ignore that a handful of years in delay could decide the battle, and the fate of cultures and the fate of millions of lives.
Lynch is right: the alternatives really could get here before the peak and collapse. But they won't if we dismiss the need for massive mitigation NOW.
Of course, this can be called the "Hirsch Doctrine" for lack of a better name and still to me is a very correct one. Time is our enemy.
Roger Conner
Remember, we are only one cubic mile from freedom
and the almost catastrophic failure of technical/scientific/design education in America that has left us talant poor (and I am not talking about people with degrees, I am talking about creative, inventive designers, technicians, bankers, managers, artists and engineers).
This is one area which I disagree.
The problem isn't at all raw talent, especially in any scientific or engineering area. Those who say so have economic motivations to bash the US for the purpose of enhancing labor arbitrage and lowering wages of skilled workers.
All that is necessary is sustained incentives: well paying jobs for the long run to do what's needed for the long run.
If it's bankers and managers---the people who make the decisions to actually do and pay people---then yes there could be a creativity problem.
Plenty of oil WILL be left in the ground.
Is recovery rate ever 100%?
Question is what price will it be economically unrecoverable (a low price is good, since it means that alternatives are working), and how pleasant will the world be then.
In reading the drunken sailor essays of CERA/Jackson for some time - I have realized these folks have started to dig a few holes for them selves...OR ?!
Now, if those CERA-folks are right - someone else must be wrong...
So, have any of you peak-oilers bought the 1000$ report and actually looked into their claims – as of yet? I just wonder..
Any $1k that I can spare will end up as PV or the equivalent..
I'll let the historians decide where CERA fits into the package.. by then, their pricey evaluations will be free.
Who will get Iraq's oil?
It's more complicated than it used to be. During WWII, the Brits were unhappy about the proposed division of Middle-East oil after the victory. Lord Halifax, British ambassador to the USA wept. His tears ran through the usual channels and that very evening he had a meeting with President Roosevelt. Roosevelt ringed Saudi Arabia on a map and said "That's ours". He then ringed Iran and Iraq and said "That's yours'. Sorted. Source is a book "The Prize" by a rightwing, fool-mooner whom some of you might have heard of called called Daniel Yergin (Touchstone Press, Rockerfeller Centre NYC 1991)Which raises the question of why the Brits are leaving Iraq. Can't be rats leaving a sinking ship since they are going to Afghanistan. Are the Brits unhappy about their allocation of Iraqi oil?
Perhaps somebody already pointed out this New York Times article:
Yes, several times throughout this website, and totally discredited and proven to be outright lies. They know most people will not verify the statements that were made and just believe it. Especially if they have already heard about Peak Oil and are desperately searching for someone to tell them it's just a bad dream and to go back to sleep.
Thanks,
I think this reply by Byron Walter seems to hit the mark.