The Oil Drum: Europe

I guess that's why Saudi and world crude oil production are both down from 2005.

So again, what's your recommendation? That we all buy Hummers and McMansions and party on, based on the assumption of an infinite rate of increase in the consumption of a finite energy resource base?

Actually the production in the majority of cases has been maximized. You can verify this for yourself by comparing original URR estimates to the 507 giant/supergiant fields in the world (1% of all fields total) which produce 60% of all oil in the world. There is no need to even look at the smaller fields to see that the dominant factor is the giant/supergiant fields and that most of them have been maximized in production.

So as Euan has noted elsewhere, the URR is going to be low but not by as much as you try to insinuate.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

PartyGuy,

The changing political climate advances in technology and economics of the Texas Oil and Gas Industry over the last 105 years has had much lot to do with Texas development as political decisions have had with the development in the Kingdom of Saudi Arabia. Much of it is field size distribution.

In the KSA 70% of the production came from the Ghawar complex, while Texas's largest field, East Texas had about 7% of the total Texas production. Ghwar has always been managed for maximum production by the major oil companies and their successor Aramco, and its discovery was after petroleum engineering had discovered basic principles of reservoir management like well spacing and chokeing back wells so they didn't cause reservoir damage. The first years of the East Texas field drilling and production was totally uncontrolled so huge amounts of economic waste occurred. The well density is 1 well for every 6 acres and oil prices fell to 10 cents a barrel in 1932.

The governor, Ross Sterling was a former president of the Humble Company (which became ExxonMobil eventually) and ended up sending in the Texas Rangers and the National Guard to shut in wells and enforce new state rules to limit production and raise prices. In essence the State of Texas acted like the OPEC cartel to limit production so that the producers made more money and the State collected more severance taxes for the same volume of oil.There's a great history of all this in a book called "The Last Boom" by Michael Halbouty and James Clark. For a shorter summary I'd also reccommend the "oil and gas industry" article in the Handbook of Texas Online.

The end result of the wild price gyrations was that many oilfields discovered before the East Texas field were abandoned too early, especially ones with heavy and sour oil. And, after the Texas peak Nixon put price controls on "old oil", or fields discovered before the tripling of prices after the first Arab embargo. All fields except the very best were sold by the big oil companies and they moved to offshore and foreign production because of the price distortions. Virtually no wells were worked because it took three times as much oil to reach pay-out as it did on new reservoirs. The 1990's crash in oil prices finished off most of the smaller independents, yet few people have much of an idea about the old, shallow fields and that's where the best chance of commercial production exists in the United States.I'm currently working on a couple of these prospects on old fields near Houston, but they exist all over the United States for tertiary development.

I think the conclusion I've come to is that Hubbert would be right in a universe withoutgeopolitical considerations or great technologica changes. The curves are elegant, and the thinking irrefutable. But, thats not our universe, so Stuart Staniford may be closer to the truth with his bottom up analysis.
Just think, if we all live another 94 years the answer wil be clear and obvious! Bob Ebersole