PEMEX March Production Numbers - All Liquids Down 83KBD From February, Off 335KBD YOY

[hatrack]

http://www.pemex.com/files/dcpe/petro/eprohidro_ing.pdf

[GliderGuider]

1. Down over 10% over the year

If other major oil provinces follow this depletion profile, the slide down from Hubbert's Peak is going to be "exhilarating".

[hatrack]

2. Does "black diamond ski slope" work as an analogy?

Or would "oily slick black diamond ski slope" be more appropriate?

[phantom power]

3. bungee jumping, where the bungee breaks at the end.

[kristopher]

4. "If other major oil provinces follow this depletion profile"

"If other major oil provinces follow this depletion profile..."

Extrapolating globally from a single non-representative sample isn't valid.

I can prove anything with 'if'.

[amandabeech]

5. I've followed this for a while,

but off the top of my head, I think that 10% a year is not typical for major producers right now. I think that the 4-8% range would be right for everyone but Oman, which used those nasty bottle-brush wells and messed up their fields badly. The Russians may be a little less.

The ASPO site has pretty good data. However, I have to get back to work!

[GliderGuider]

7. But, but...

Those bottlebrush wells are part of "tertiary recovery technology" that's supposed to save the world. Yeah, they brushed out Yibal but good.

[amandabeech]

10. I think that they're a joke.

Everyone's now on notice with those ridiculous things.

I hope that the Mexicans don't get desperate and try this.

The Russians should stay away, too.

[GliderGuider]

6. North Sea (UK and Norway), Alaska, Texas, Oman, Daqing, Burgan...

There are plenty of major oil provinces or large fields in decline around the world.

One of the papers that's worth reading is the PhD thesis of Frederik Robelius, from Uppsala. It's entitled Giant Oil Fields – The Highway to Oil, and is available from this page, where you can see some pullout graphics from the paper. The official opponent for the the defense of the paper was Dr. Robert Hirsch, who headed a landmark study of Peak Oil for the DOE in 2005.

This isn't just a bunch of know-nothing Chicken Littles squawking in the night.

[kristopher]

8. What I've seen so far is a web-ring of speculation posing as proper analysis

If you want to characterize that as know nothing chicken littles, just remember that those are your words, not mine. Perhaps you'd like to explain why basic economic theory is rejected? All I've heard are sneers at "neo-classical" economics; as if that actually explained anything. The behavior of a system replacing a diminishing finite resource in the face of a viable alternative is what you are occupied with trying to predict, and that is a fairly straightforward exercise in natural resource economics. The most damning aspect of your web-ring's academic products is that there is no use of that tool at your web-ring level. You take other work that does use it, like Hirsch, and then arbitrarily change a bunch of assumptions; the results of which you then hold up as being as valid, even though the assumptions haven't been through the same process of validation as those in the original studies. You simply can't do that and not expect strong criticism.
For example, if you look at a chart showing over time the amount of reserves in comparison to the rate of consumption how do you know what degree that chart is reflective of the economic constraints on the definition of oil reserves versus the degree of geological constraints on the definition of oil reserves. Both are part of the equations behind the estimations, right? So if you use such a chart with data compiled in 2003 from estimates made in 1999, do you address the change in the trend line that is produced by new economic conditions?

Or if you look at a decline in production statistics over time, how do you know how much of that decline is targeted to improving the overall economic efficiency of petroleum extraction and distribution, and how much is a matter of capability?

A technological understanding of the how the potential for renewables could serve the transportation sector and as baseload power didn't begin to emerge until around 1995, and it is only in the past 5 years or so that the theories have started to be confirmed by experience in the field. In that same period of time, we have much more accurately surveyed the extent of renewable resources - an effort that is just now sifting into and shaping the planning and analysis of top tier people in the field. Does your thinking reflect the impact of the new technologies and understanding of resources? Or are you operating on outdated assumptions that you are looking at depletion of a finite resource that has no substitute?

Challenging assumptions in someone's academic work isn't personal, it is just the right way to find the best information and deepest understanding of a given topic.


"...Reserves estimates are revised periodically as an oil field is developed and new information provides a basis for refinement. Reserves estimation is a matter of gauging how much extractable oil resides in deep, obscure, complex rock formations, using inherently limited information. Reserves estimation is a bit like a blindfolded person trying to judge what the whole elephant looks like from touching it in just a few places. It is a far cry from counting cars in a parking lot, where all the cars are in full view.

Specialists who estimate reserves use an array of technical methodologies and a great deal of judgment. Thus, different estimators might calculate different reserves from the same data. Sometimes self-interest influences reserves estimates, e.g., an oil field owner may provide a high estimate in order to attract outside investment, influence customers, or further a political agenda.

Reserves and production should not be confused. Reserves estimates are but one factor used in estimating future oil production from a given oil field. Other factors include production history, local geology, available technology, oil prices, etc. An oil field can have large estimated reserves, but if a well-managed field has past maximum production, the remaining reserves can only be produced at a diminishing rate. Sometimes decline can be slowed, but a return to peak production is impossible. This fundamental is not often appreciated by those unfamiliar with oil production.


...Peaking means that the rate of world oil production cannot increase; it does not mean that production will suddenly stop, because there will still be large reserves remaining." - Dr. Robert Hirsch

[GliderGuider]

9. What's the old saying about horses and water?

It makes no difference to me if you can't accept peak oil theory. You're in good company, with the likes of Daniel Yergin and Michael Lynch, both of whom happen to be economists. Good luck.

[kristopher]

11. Why do you always avoid answering valid criticisms?

I have no "problem" accepting "peak oil theory". That's a strawman. What I have a problem with is bad analysis.

[GliderGuider]

12. Because a) I don't think they're valid, and b) I've got better things to do.

I think your "criticisms" are nothing but a pompous, obfuscatory smokescreen, especially when applied to an internet conversation.

[kristopher]

13. That sounds suspiciously like ad hominem

What is it I'm supposedly providing a smokescreen for? You're making this personal, and as I already stated, it isn't.

If you can't mount an intellectual defense of the emotion laden arguments you espouse so strongly, then why should anyone take you seriously? I understand how uncomfortable it can be, but if you are correct and the only people you convince are those who already think as you do, then what have you accomplished? Are you seriously claiming that aside from the handful of people who are subscribing to this rapid collapse scenario everyone else either doesn't want to know, is too corrupt to care or is too thick to comprehend it?

If you actually have something to offer, (and anyone who sees the effort you've put into this knows that you believe you do) then step up to the plate and explain why the use of economics is, in and of itself, anything except anti-intellectualism.

Please, explain how totally failing to take into account significant known variables (like marketing and consolidation plans) enhances or validates the theories you are proposing.

[GliderGuider]

14. A couple of thoughts on this

First off, I'm not here for pedagogic purposes. I've pointed to some legitimate and significant papers on Peak Oil -- one PhD thesis, one paper sponsored by the DOE, one careful analysis by the EWG (regardless what you think of their sponsors or assumptions, it's a significant work on the topic that represents mainstream thinking within the Peak Oil community). I have no urge to run Peak Oil seminars, or even debate the minutiae. If the topic is interesting to you there is plenty of material out there. If the topic is not interesting to you, or you think it's fundamentally muddle-headed, there is nothing I can say that will change your mind.

That said, I will briefly address two issues you raise: the role of marketing and the role of substitution.

First though, I want to call your attention to the phrasing of the final sentence of your post:
Please, explain how totally failing to take into account significant known variables (like marketing and consolidation plans) enhances or validates the theories you are proposing.
Do you see how phrasing like that might make me assume you will reject a priori any argument I might make? Might that make me less willing to engage in debate?

Now, about marketing. The international oil market is huge. According to the BP Statistical Review of World Energy 2007 there are 55 oil-producing countries or regions in the world. Many of those will will have national marketing plans, but few of those plans are transparent. Most producers appear to be pumping at capacity, some are being constrained by force majeure, some may be keeping the oil in the ground as a matter of policy. If some countries are hoarding their oil, though, they're not putting it in those terms. The biggest question mark right now is KSA. They are sending massively mixed messages regarding their production capability and intentions. That has left most of the skeptical watchers very suspicious about their true situation, especially since an intense technical analysis on The Oil Drum hinted strongly that Ghawar may have peaked.

Lack of transparency in reserve data, especially among middle east NOCs, has made third-party analysis difficult. This is one reason whey Peak Oil analysis relies on production data, which is more readily available. IMO marketing policies make little difference to the global production situation, given the size and fragmentation of the oil market. It may be constraining aggregate production by a few percent, but not enough to make any long term difference to the peak.

Regarding the IOCs, every one of them appears to be struggling to get access to new supplies, largely as a result of the increasing nationalist sentiments of the nations whose territories contain the oil. The IOCs are on the verge of becoming irrelevant to the global oil picture, and their marketing plans do not include any constraints on their own production -- in fact it would be a breach of fiduciary duty for them to attempt such a thing.

Regarding substitution, I utterly reject the notion that there are substitutes for oil that can be scaled up in time. I see a supply/demand gap that already exists and will be growing -- initially by maybe 2% a year on a global average, ramping up within 5 years to 5% per year and continuing to grow beyond that. When you add the probable effects of the net oil export crisis, as described by Jeffrey Brown's "Export Land Model", it is clear to me that it is entirely possible for the oil supplies of industrialized importing nations to decline at very high rates, and I expect that to start in 5 to 10 years. Between the amount of raw energy that will be lost, and the fact that all potential substitutes have different characteristics and utility, the required replacement of infrastructure and the acquisition of the required energy seems utterly infeasible. This will be especially true in the USA, and to an only slightly lesser extent in Europe.

These are my own conclusions, based on my readings over the last three years. You may read different material, bring to the table a different set of assumptions and biases, and come to different conclusions. I have no problem with that, but I feel no responsibility to "bring you around" to my point of view.

And here's why I think your debating style on this topic is a smokescreen. The way you ask for things (as in the example I gave at the outset), plus the things you either ignore (like the Robelius paper?) or insist on (e.g. substitution economics MUST and WILL play a salvation role), give me the impression that you're not genuinely interested in finding out any truth about PO that might challenge your predetermined rejection of its negative consequences that are all too obvious to me and many, many others.