Water and Oil - another trip to Aramco's plumbing
Posted by Heading Out on February 13, 2007 - 11:34pm
Hmm! Maybe the next book review I’ll do will be “The Boy’s King Arthur.” Well actually, given the controversy about him (he was a Celt and they ultimately lost – after he died - so he has been relegated to mythical status. The winners write the history books), perhaps that might not be such a good idea. I recently looked at an NRC survey showing the classes of disciplines at a University and while history had more than 8 subdivisions as I remember, there was no mention of energy per se, or most of the energy production disciplines – so just imagine the columns of controversy I might generate. But it also speaks, by itself, to how important certain issues are ranked in the corridors of the mighty.
So let’s get back to the status of the world of oil. And while, as one of the recent conferees noted, the public thinks that, since prices having dropped back “we survived the energy crisis,” sadly the world picture is really getting worse. Sometimes, when I have looked at what we have projected, I have consoled myself with the thought to myself along the lines of “well these are the lower estimates, it really isn’t going to be that bad.” Unfortunately the numbers that are now starting to pop up hold no such comfort, and are beginning to confirm what our contributors have been predicting for a while.
As Prof G posted the other day, Matt Simmons thinks that we will peak this year, because the spare capacity to replace the collapsing fields of Mexico and the North Sea is just not there. Both Khebab and Euan have explained the issues with Mexico, and the Financial Times story in Drumbeat gives the UK situation. Much hangs on whether Saudi Arabia is going to be able to help match the declines that are now becoming apparent. Unfortunately there are a couple of possible flies in this particular ointment.
The first of these is that while Paul Roberts mentioned last week that the spare production available between current demand and actual supply is around 2 million barrels, a nasty suspicion still sits in my mind thinking that Saudi Arabia is counting the Manifa field as part of that capacity. After all the KSA stated goal for their capacity for production increase matches that 2 mbd number. However, once discovered production from the field was suspended because, as numerous posts have noted, the chemistry of that oil will require a special refinery , and after trying to sell the crude on the world market, Aramco have given in, and are now building their own refineries to deal with it. As a result the oil from the field, projected at around 900,000 bd, will not come on line until 2011 , which is going to be a tad late. Concurrently the volume of that flow is just about at the level at which, in the past, Aramco officials have said that the KSA fields are declining in production each year, so that when it arrives it may do no more than hold the levels of the then current production, rather than increment it.
Along which line, Leanan had a story the other day relating to the new water pumping station that has just been brought on line. What is worthy of note is where all the water is going. (See I did warn you). And for those who have not followed this for very long, let me very quickly explain something again.
The oil field that we talk about as Ghawar , the world’s largest, in often considered, not as a single field, but rather as different parts. Some of the most productive regions have been the Ain Dar/Shedgum portions, which are to the north end of the main field. These are the regions that have been producing at around 30% water cut, and are some of the oldest of the producing regions of the Kingdom, with a current water injection rate of 2 mbd It is thus interesting to see look at the new water pumping stations that are being installed. The new construction for the Qurayyah Seawater Treatment Plant to be used to supply seawater for the Khurais expansion that has been put in and will provide the fields with 4.5 million barrels of water, to help in pressure maintenance and production. The overall water capacity of the plant has, however, grown to 14 mbd . Of this flow some 2.5 million will now go to the Ain Dar/Shedgum fields. Wonder what that will do to the water cut ? Which is, if I remember, how Paul Roberts started The End of Oil . That title seems a bit closer these days.
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When I was in college, energy and energy efficiency was covered in some of our physics classes - sort of along with thermodynamics.
I suppose part of it is that the professor that we had back then was really interested in these questions himself. Although in an unrelated note, I just saw that same professor's obituary this week, which I suppose reminded me of the things that we covered in class.
Hello Heading Out,
I enjoyed this post. Well-written and ominous.
The winners write the histories, but what happens when there are no longer any winners?
When the books on Homo sapiens are closed and history has come to its final end and all that humankind has ever accomplished is forgotten forever ... what then?
When Homo sapiens are extinct and there are only fossils and a thin layer of pollution left in the fossil record to testify of our existence, what would a future species of intelligent life say about the primate species that appeared for such a brief moment and departed so swiftly?
All of these things which seem so real are coming to an end. Humans -- Americans in particular, but all humans -- are living in an invisible ocean of delusions and grandiose lies. It is a tragedy of the highest order, a tragedy which only a Divine mind can really comprehend and appreciate. I wonder what God is thinking? When God looks down upon heaven and observes the Earth with its 6.5 billion humans I imagine that He cries.
Here today, gone tomorrow. Such is the fate of all species. Such is the fate of the Homo sapiens.
But the sun will rise again tomorrow. That much is guaranteed. Thank God for the sun.
David Mathews
http://www.geocities.com/dmathew1
The Olympian Gods didn't cry; rather, they laughed, slapped their bellies and ridiculed the folly of Man. Perhaps that's why the idea of Isis/Gaia had/is so appealing. The Warring Father Gods overturned in favor of Nurturing Mother Goddesses.
"Nurturing Mother Goddess" ...don't let Mom image fool you. She can also beat the living crap out of you if you misbehave.
It is highly unlikely that Homo Sapiens will go extinct from the collapse of this
failed experiment we call civilization. Civilization will go extinct, of course,
and the vast majority of the enormous population will disappear with it, but
it is almost certain that humans themselves will survive, and probably curse
their ancestors who put them through such a miserable thing as the slow, violent, brutal, painful decline of civilization and left a poisoned world as their final
legacy. But humanity will survive. Homo is only a couple million years old, and Homo Sapiens is only a couple hundred thousand years old. We already figured out how to
live on this earth just fine, and right up until some thousands of years ago (in some places more, in some places less) we lived a very good, very sustainable, very healthy life.
It is a common misconception of the civilized world to think that civilization IS humanity and vice-versa, that there is no other alternative. Those 'primitive savages', though, could have taught us a lot that we will have to learn again for
ourselves, as many of us as survive the next couple decades.
High gang, I have been, and will continue to be out of pocket for several days. Taking a vacation and only every few days check the Oil Drum on a borrowed computer. But I must agree with Rudolph and all the others who say that it is highly unlikely that Homo sapiens will go extinct in the next few thousand years.
Think about it, we occupy every habital liveable place on earth. Even a catastrophe that wiped 999,999 out of every one million people on earth would still leave 6,500 people on earth.
Extinction happens when there are not enough breeding pairs of a species left to reproduce. No matter how bad the consequences of peak oil, or even the total end of fossil fuels will likely cause that to happen.
But if anyone truly believes that human extinction is indeed about to happen then it would behoove them to explain the exact mechanism of this catastrophe. After all, there are people living in the Amazon jungle as well as in New Guenie that are surviving quite well completely isolated from the rest of civilization.
But they should do this on the open thread, not on a thread that is dedicated to another subject like Saudi Arabia.
Ron Patterson
Ron, If such an event were to occur, don't you think that it would leave the 6500 people rather scattered around the earth? Is it not only helpful to have breeding pairs if they are physically together?
The Aboriginal people in Australia are our nation's past... I can't help thinking that they'll be our future as well, and will have the last laugh.
There are probably enough of them still retaining some of the traditional culture and skills to be able to flower again.
So let me get this straight.....the inability to cope with the decline (which we have known was coming for at least a half century, and the really smart ones knew was coming starting after the first day of pumpling) of one cubic mile of liquid fuel is going to lead to the extinction of the human race, and leave nothing but a thin trace of pollution and fossils and wailing to the Olympian Gods....
O.K., just so I know I have everything in perspective, wouldn't want to be accused of exaggeration of any kind, right? :-)
gee, and we were worried that folks wouldn't take this issue seriously....
RC
Remember, we are only one cubic mile from freedom.
It's a bit more nuanced than that. There is actually a choice.
Option 1:
Option 2:
Obviously, the first option is not a serious alternative...
Hello mikey,
Option 1 v. Option 2 is flawed in several serious manners. You seem to approach this issue from a nationalistic standpoint while I am looking at the entire Earth (which is already filled with billions of impoverished non-drivers who are barely surviving these "good times" of increasing oil production).
From the standpoint of the United States, undoubtedly America could survive if Americans were willing to live with less. I would prefer that Americans consume less:
But do you know what would happen to the American economy if massive numbers of Americans actually followed the advice of Option 1?
I imagine that the American economy would collapse because there are millions of jobs which are made possible by America's present (increasing) level of consumption. The value of stocks would decline tremendously, too, once everyone realized that America had entered an era of perpetually diminishing consumption.
Regarding Option 2: Extinction is not an immediate threat. Extinction is our species' ultimate fate.
David Mathews
http://www.geocities.com/dmathew1
The consumption of two cubic miles of oil, the pollution that such consumption shall generate, the overpopulation which the oil made possible, the tools of technological warfare which oil also made feasible: These shall all work together to drive humankind to extinction.
Homo sapiens are not an eternal species. Extinction is real, inevitable, inescapable, and coming quickly. Does it make any difference whether extinction comes in ten thousand or one hundred thousand years? Not from a geological standpoint.
Humankind has thoroughly demonstrated an inability to cope with the increase of energy (see the 20th century). I imagine that humankind will cope with the decline of energy in a much worse manner.
For those who expect a smooth downslope: I doubt that the oil exporters will continue to export oil once Peak Oil reaches the general public's consciousness. The Muslims will probably not allow America's SUV drivers to burn away every last drop of their natural resource wealth. Those aircraft carriers in the Persian Gulf are not merely a threat to Iran.
Civilization is winding down. Humankind's era of dominance over the Earth is coming to an end. Humankind's era of existence is also coming to an end. But all of these things shall occur more than twenty-five years in the future.
David Mathews
http://www.geocities.com/dmathew1
Hmmmm!
Perhaps Saudi Arabia's stated excess capacity really means future new capacity instead of current excess capacity.
Estimate of Saudi's new projects by end of 2009:
Hawiyah NGL 0.4 mb/d
Khursaniyah NGL 0.3 mb/d
AFK 0.5 mb/d
Nuayyim 0.1 mb/d
Shaybah phase 1 0.3 mb/d
Khurais 1.2 mb/d
Adding these volumes gives 2.8 mb/d of excess capacity crude, lease condensate and natural gas plant liquids.
If excess capacity does mean future capacity then given current field decline rates, Saudi Arabia production of crude oil & lease condensate is highly unlikely to exceed 9 mb/d ever again.
Maybe we can go lower. SA says the market is ok, so no need for new cuts. Meanwhile, they are producing, according to them, 8.5Mb/d, or their cuts are twice what they agreed to do. If, therefore, 8.5Mb/d is the best they will be able to do until the vanadium refineries come on line in 2011, and given further at least 50k decline/month or 600k/yoy, then we will never see 8.5Mb/d again. Going just a little further, after 07 the limit would have to be 8Mb/d, and so forth.
If the world's fields are declining 5%/y, or 4Mb/d/y, then we need another SA every other year...
Your analysis is not bad, and the shopping list of projects grows, people are putting their money where their mouth is:
http://www.pipelinedubai.com/focus/2006/cf0106.html
Note that of the projects mentioned, AFK is essentially an ethane/NGL development, and there are nice glittery gifts in the form of GTL and LNG projects, meaning that natural gas is getting it's fair share, or more, and the growth of the petrochemical industry in the Persian Gulf creates some interesting new market arrangements (will we be buying our fertilizer from the Persian Gulf to grow our ethanol "freedom fuel"? (irony of ironies :-)
Only Khurais promises over 1.2 mb/d, and all eyes are, or should be on this field. It is big enough in potential that it could truly alter the marketplace, but, if it turns out to be a bust, then Simmons really gets the hat trick, as North Sea decline, Mexican/Cantarell decline, Venezuelan "difficulties" (for lack of a better word) begin to really cut into our supplier base, and then Khurais turns out to be a bust, you have to ask how many other places can make up that kind of shortfall.
The last wildcard has to be Persian Gulf/Saudi offshore. I have heard no one willing to venture a guess about how much is possible there. The Saudi's suddenly seem interested in offshore rigs, leading a good chess player to try to posit the next move:
(a) Is Saudi production suffering onshore, and thus, offshore is needed in a way it has never been?
(b)or, do our Arabian friends intend to go for an "oil fortress" Saudi style, and soon have offshore, Khurais, the natural gas and finished petrochemical trade all in their holster, so they can strike the market when and as they chose with astonishing power?
Yeah, I know, your laughing. Don't laugh too loud. We have made that mistake before.
Remember, we are only one cubic mile from freedom.
RC
THere is nothing about khurais that promises 1.2Mb/d... actually, the field itself promises maybe 1/10 of that. It is the saudis that promise that incredible number, adding 'trust me'.
SA is indeed interested in off shore rigs, already poaching several looking for ng in our gulf to look for oil in theirs. Indeed, they are interested in absolutely every bit of oil infrastructure known to man - huge water pumps to relocate the persian gulf underground; on shore rigs, now up 3x and moving rapidly towards 10x; off shore rigs; in a word, we've heard of everything except tankers.
SA, mexico and venezuela are quite similar in result - production in all countries is way down - but SA, at least, is trying to do something about it. Venezuela is more like mexico, both starving their fields of internal investment and external capital/expertise. IMO all three will continue declining. Of the three, only venezuela has the potential to bring production back to former highs, but imo will not under chavez, usefully saving oil for somebody's future, not that chavez cares.
Can you explain a bit about khurais. I don't know much about the field except for the vanadium.
The fact that KSA is expending so much effort to develop a field with basically unsellable oil speak volumes in itself. Just about any combination of other choices if they existed make more sense. Unless of course production has peaked.
It is manifa that has the vanadium, this is probably what sa meant when they said they had no buyers for their oil last spring. Khurais produced at one time something over 100k/d, then trickled down and was abandoned. They have great hopes with, I think, a water flood, but 1.2Mb/d seems wildly optimistic... imo more likely they might get back to their former peak for a while.
RC, The Persian Gulf is not a wildcard. Every square inch of it has been throughly explored and no new Saudi fields have turned up there since the 60s. The Kuwait, Iran, UAE, Oman, Qatar and all other sectors of the Gulf have been throughly explored as well. Rememver the Persian Gulf is very shallow. Jackup rigs can explore every inch of it, no deepwater are needed. And it has already been done.
Safaniya, one of Saudi's oldest giant fields, is entirely offshore. Saudi is drilling more onshore as well as offshore in a near panic to try to offset the rapid decline of their old giant fields. Saudi is only trying to shore up declining production. I don't think they have any grand conspiracy planned, survival is their only concern.
Ron Patterson
Hi Heading Out,
Thanks for the update.
re: "...the columns of controversy I might generate."
I was just looking over (and reflecting upon) your CC, post-conference post, and I wrote some questions for you there (if you have time to look at them).
The essential thing I got from what you were expressing (and there may have been much I didn't get), is that you feel an urgency - the problem is immediate. And you're concerned that others possibly do not feel this same urgency, and further, that we (or someone, or many of us) may waste time in intellectual exercise that doesn't really address the problem. (Did I understand this much?)
So, my Qs are:
1) What do you suggest?
2) Can TOD facilitate this, do you think?
3) If so, how?
Hi Aniya:
There is something you can do. As Westexas has written many times at TOD, Economize, Localize, Produce (ELP).
I've been trying to formulate a strategy that is similar, and it goes something like this: (1) Secure yourself and your family, (2) Secure your job or business, (3) Secure your community, (4) Secure your country...(5) Save the world. Or in language from 20 or so years ago, think globally, act locally.
The primary point is that you need to start with yourself and work on reducing your reliance on (still) cheap fossil energy. Leadership has to come from the ground up on this one. Your leaders at the National level are being pulled in too many directions, and they may not even be able to get it right.
Transforming isn't easy, and it will take you a while. I've been at it for a year now, and while I've done many things, sometimes I wonder if I've done anything substantial, for I'm still not to the point where I could survive long without oil and its products. Once you start, you will begin to see what works and what doesn't, and you can advise your relatives and friends appropriately, and then you can also begin working at the community level.
Thanks, Goinggreen,
re: "...and then you can also begin working at the community level."
One of my "communities" is the "TOD" community.
What I got from "Heading Out"s exercise/post on GCC was his feeling of urgency and need for action on the level of national and international policy.
My Q is: Is this something TOD can facilitate? If so, how?
I am speaking specifically about "Peak Oil" and am more than happy to restrict discussion to "peak":
We've had some discussion here of policy actions in the past, however, I'd like to see more. Just as one response. Heading Out may have others. You may have others.
For example, some methodical exploration of pros and cons regarding some of the following: gasoline rationing, carbon caps, gasoline tax, tax on oil imports, oil co.s voluntarily giving up subsidies, 55 mph speed limit, subsidies for "renewables", no more roads, no subsidies for anything...etc. (I'm sure I've left some out.)
Heading out was concerned about using up valuable "oxygen" when we need action. Okay, here we are.
Right now I am waiting to see if USSB is going to release a video of Dr Hansen's talk, since I'd like to find out what he actually said, rather than a second hand report, no matter how venerable.
There have been these cycles in the past, where apparently there have been fairly dramatic collapses of the ice fields, with major impacts and Dr Hansen appears to think that we might be heading for another one. And while I agree that we can't totally rely on the past to foretell the future, we have to be able to learn from it.
Thus what I would like to see is more study on these transition periods - how fast were they, what can we cross-correlate as the changes that occurred around the world took place, can we anticipate from them what might happen and do some planning. (And I should admit that I am an experimentalist and thus more comfortable with hard data than with theoretical predictions).
However, in regard to TOD, here we are more specifically focused on the coming energy crisis, particularly as it relates to oil and gas supplies. Of the two crises I still think (but not quite as confidently) that this is the more immediate and the one with the more short-term impact. I recently looked back at some of the problems that arose, very rapidly back in the '70s, and so, while I will continue to occasionally put up the odd technical post, trying to explain what, for example, the Dansgaard-Oeschger cycle is, how it was found and what has happened in the past (trying to stay perhaps a little less controversial in the process) since I suspect that most of our readers had never heard of it before last weekend, and they need some background information to grasp what folk are talking about. (In the same way as I wrote, for example, about using nuclear bombs to stimulate oil shale).
But for this site this should be a relatively rare posting since our goal is to follow energy. As I was told, there are other web sites that discuss climate change, from more than one point of view. We have acquired the reputation for being a place to go to talk about energy supplies, and I would like us to continue in that role.
While this thread isn't the place to elaborate, let me say a word or two. The study of past events over the last six ice ages is limited by the resolution within the ice cores and other proxies. But the science issues are being resolved dut to current interest.
As far as why Stuart, Hansen and other "alarmists" on the Greenland issue are not getting "air time", it isn't because of any stupid arbitrary IPCC AR4 deadline. The substantive study of Greenland, Russian meltflows and Antarctic melting is a concern. But the direct evidence is in the sea level data.
If proponents of catastrophic ice melting were correct the satellite data would illustrate this for us immediately. And while there was a brief up-tick in early 2005, it has vanished. In fact, the ten year trend has dropped from 2.9mm/yr twenty four months ago to 2.8mm/yr in the most recent graphs that i have posted.
There was a flurry of reports that the ocean had escalated to 4mm or even 6mm rates. And they were likely true. But this noise has been lost in subsequent readings. We must trust that the scientists are doing some wathchful waiting and will let all of us know if we should return to "panic mode".
"If proponents of catastrophic ice melting were correct the satellite data would illustrate this for us immediately".
Sigh. How many strawmen do you have up there Freddy?
I don't know of anyone proposing that catastophic ice melting is happening to an extent that it is causing massive sea level rise now. That would be obviously inconsistent with the evidence as you say. Rather, the concern is that a) sea level rises in the past have been very rapid (~4m/century in Meltwater pulse 1A), and it seems both from that and direct recent evidence in Greenland and Antarctica that ice sheets really melt by meltwater induced breakup and basal lubrication, rather than via gradual melting of the surface over millenia, as used to be thought by climate modelers (and which were the assumptions built into the TAR sea level rise projections). What this means for the 21st century is something that there is no consensus on. But it clearly raises at least the possibility that, as temperatures continue to rise, sea level rise might start to go at the meters/century scale at some point in coming decades, rather than the current 20cm-30cm/century. I have no idea whether that will happen or not, but I don't see that it can be ruled out with confidence, given the lack of fit of present ice sheet models to present events. The 4AR explicitly doesn't take a position on this question (understandably, since there is no consensus). All ice dynamic effects have been removed from the sea level projections (which leaves them pretty much meaningless as far as I can see).
(Also I'm mildly uncomfortable being in the same sentence as Hansen as above, since he is a first rate climatologist, whereas I am outside my own field in climatology just trying to understand the issues because they appear to pose significant risks to my kids).
My understanding is that this new evidence only surfaced in 2006 and that the IPCC 4AR had already closed to submissions due to the editorial need to review, edit and prepare for publication. There was no attempt to supress this data as was suggessted upthread.
Until this new evidence surfaced it was the consensus position that both Greenland and Antartica would remain stable and might possibly experience an increase in mass. This stability is now in doubt.
It is likely additional work will be performed to determine the impacts of meltwater breakup and increased basal lubrication and that these further studies will be incorporated in subsequent IPCC reports.
You can date the issue at least as early as Zwally et al in June 2002. The abstract says:
and the conclusion states:
But I don't think there's any clarity on the quantitative implications for future mass balance.
In simple terms for laypeople, the controversy results from the realization in recent years that melting activity at the shorelines in the antarctic and greenland and subsequent breakup of shelves has now allowed the glaciers behind them to flow freely into the oceans. In effect, the dam is gone.
Thus instead of only guaging meltwater, models must now account for these new annual rivers of ice dropping off the shorelines. Net. More ice bergs.
The sea levels aren't rising 'cuz this new phenom is chilling the coastlines and the cold water is sinking to very low ocean depths and contracting.
Sometime it will resurface and expand. But at present there is more contraction going on than a contribution to sea level rise.
A further discovery has been that the "fuller" ocean floor beds are "stretching". The ocean floor is actually bulging into the magma. This theory is based on the very fears Stuart has. When one measures all the sea level rise forcings, the ocean sea level readings are not reflecting what should have occured. And hence the new geo theory which has actually been shown as a negative forcing in new forcing tables since y2K (incl IPCC TAR 2001) as is the Antarctic "chilling" contraction.
Fortunately we don't have to wait for IPCC 2011 AR5 to see what's going on. These Reports are mainly compendiums of the current science all put into perspective. Just as we could see the abstracts and underlying research reports for AR4 long before the Release two weeks ago, the research continues and will be available via the MSM and specialized sites like RealClimate etc.
Lest anyone be confused by Freddy's enormous creativity today, I note that the understanding of current contributions to sea level rise is summarized in the recent IPCC Summary for Policymakers, specifically Table SPM-1 on page 7. The individual contributions come from Greenland, Antarctica, all the smaller ice caps and glaciers, and thermal expansion of the oceans. Those contributions add up, within the error bars, to the observed total.
Stuart, the AR4 table should be legit but it certainly is not inclusive of all the forcings that i have seen in either recent peer reviewed research or even IPCC TAR 2001: http://www.grida.no/climate/ipcc_tar/wg1/425.htm where the negative forcing of Antarctica and geo storage of 0.45mm/yr are table illustrated.
I am at a loss to explain the change at this time, other than to say that perhaps the AR4 authors since found errors in their previous studies that have not made it to abstracts as yet (unlikely).
The graph at this link http://www.grida.no/climate/ipcc_tar/wg1/417.htm does remind me that scientists thought we were at a crossroads wrt pos/neg forcings.
The hundreds of pages of backgrounders to TAR were quite illuminating. If the fourth and final report to AR4 includes that same detail, we may find the narrative to shed some enlightenment on this discussion. Sorry.
Just as i had certain glee in some of the ugly stats being softened in AR4, i should realize that on balance some of my pet theories will be trashed as well...
Hi Heading Out,
Thanks for responding. I just posted a couple more replies (to you and Dave, as well) back on the original page. (I don't seem to be able to go back and forth without losing my comments page, or I'd highlight them.) In any case...
Just as a point of clarification, when you write:
"My concern is that all the debate over which is right can soak up the oxygen at a time when it is really almost irrelevant as to what is causing it, because whatever it is will not be significantly changed in the next 50 years."
From this I got a sense of your feeling of urgency regarding "peak oil", and "GCC" as well.
Yes, I agree. The situation is extremely urgent in respect to both serious problems.
When I wrote my questions, I am speaking specfically about "peak oil".
I agree we see a need for immediate action in the real world. Jeffrey's "ELP" on all levels, as it were - including on the level of national and international policy. (Example: 55 mph speed limit).
So, to reiterate: My Qs are: Re: "Peak Oil" (action urgently needed in the real world):
What do you suggest?
Can TOD facilitate this (action steps urgently needed in the real world"?
If so, how?
Hi (again) Heading Out,
"We have acquired the reputation for being a place to go to talk about energy supplies, and I would like us to continue in that role."
I was talking about "energy supplies" (AKA "peak oil", etc.) when I referred to "the problem". Just to clarify. I just posted here and on the previous page, don't mean to repeat...just wanted to get my Qs on the table. You mentioned "action" (my translation of "do some planning"), so that's what I'm asking about...Can TOD facilitate this? If so, how?
Sorry, somehow I got fixated on the idea that you were talking about the GW problem - my apologies. One of the things that we do at regular intervals is to check on the popularity of the "peak oil " phrase as an indication of public perception - currently it is almost non-existant on the web.
PG has done an excellent job over time in what I suppose is called "blogwhoring", but is really an effective way of getting our message out to the larger community, by attracting the attention of more popular blogs, and Jerome, for eg, has pieces in Kos.
To an extent we are a child of the storm, when things are quiet we are the crisis that was past - yesterday's worry. It is only in times of crisis that we get all the attention, the radio shows, the chances to be on TV. And we are in a bit of a quiet phase right now.
But, thanks to the folks that write in, and the contributors that we have, we are building a data base and set of information ( I am trying to collate it at The Book ) so that when we say, for example, that the Kingdom of Saudi Arabia can only develop (and this time I won't look it up, so this is just ballpark using rounded numbers) 960,000 bd of new production this year it is because it is using 40 drilling rigs that drill 6 wells a year each and each well averages 4,000 bd, and we can document those numbers.
This sort of information takes a while to put together, and we are still in that mode, and we debate many issues. The benefit of this I can perhaps illustrate by example, and I won't name the individual, but he knows who. Just this week we had an e-mail from a teacher in Thailand who has put together a portfolio on Energy that includes some of the material from posts here. It is an excellent teaching aid that he uses serindipidously to carry the message to the broader community.
By providing this information in a way that can be used by others - as well as ourselves, for example relatively soon I have to make three presentations on the current situation - we can hopefully give information that the users can have some confidence in.
Sadly, without public pain their awareness is not likely to be great. The great current fad of ethanol has some powerful backers, and though credulity is starting to wear a bit on some of its claims, it is currently grabbing much of the oxygen on the debate. It has benefits in the Midwest and has helped the revenue stream of farmers and the investors in the plants to date. Thus, while the debate is still on issues that the public don't feel pain about they won't get interested.
I think we are still growing as a community, but like other organizations, unless we continue to offer new "stuff", our audience will, in time, dwindle, until, that is the next crisis arrives. Pre-crisis we are still Cassandra.
Hi "Heading Out",
Thanks for your response. I just went over to your "The Book", and posted a rather lengthy comment. I appreciate the opportunity (and hope "y'all" will have a chance to read it.) This really is a tremendous service you're doing. I'm glad you pointed it out, as I'd missed it.
And it's great you've seen people use it already.
So, would "the book" log be the place to leave specific suggestions in the future?
re:
"Thus, while the debate is still on issues that the public don't feel pain about they won't get interested."
I know how you feel; I'm often in the Cassandra-mode myself. At the same time, I'd really like to introduce the idea of using generalizations for a purpose, for example. Okay, let's take the argument that goes like this:
1) so "the public" won't act
2) unless they "feel pain".
3) Then, is there a way we can deal with this?
4) Examples, perhaps a discussion with "the public" about this very point?
In other words, these types of generalizations may serve to block our initiatives, as individuals and as a community,(the TOD community), rather than open opportunities. I'd like the latter - I'm guessing you would, as well.
So, not to be contrary, still...OTOH, I also see a tremendous amount of interest (and some change) in my little corner of the world here. I see both - lack of interest before "pain", growing interest, despair on the part of the "youth" looking for a cause for hope, and everything in-between.
Re: "I think we are still growing as a community, but like other organizations, unless we continue to offer new "stuff", our audience will, in time, dwindle, until, that is the next crisis arrives. Pre-crisis we are still Cassandra."
I'm not sure what you mean here. I'd welcome more explanation.
Anyway, thanks for the info.
The time frame before everyone can see the problem is one of our topics and it is very hard to really judge that interval. The situation is very much one where "a butterfly sneezes" and there can be a problem. I suppose one could say that, outside of depletion, these include weather, politics and mechanical breakdown sneezing powders. Betting on any single one of them may be problematic, but collectively there are bound to be some problems that arise that will again get the public's attention. It remains, in very large measure, blissfully ignorant, however of the finality of a peak oil crisis. And for a problem to arise - I would say we have less than six months before something will come along (not the peak oil point, but something that brings oil back onto the front pages).
And so that is why I feel that we need to collect the information, so that when someone says (as did I think the Fox movie) the Russians will save us by sending two tankers - we can say, they don't have them to spare. We can look ahead and say that we are going to be in the same fix as the UK in regard to natural gas supplies - assuming that they are available, and then discovering that the price may be more than we want to pay. The situation between China and Russia is starting to appear to be a bit like that, and there are possible problems between Japan and China.
In regard to my last comment, it was hard for me to vocalize, what I ws trying to say was that this is a dynamic situation, we have to therefore keep the information refreshed as it changes, since the readership does follow the situation and when I have missed something they are not shy of telling me I am wrong (or others) as you may have noticed. But that is what we want, this informed dialogue.
HO: I just found "The Book" as a result of your reference upthread. Do not know how I missed it prior to this. It may be of benefit to put a link to it in the right hand pane so that visitors (especially new visitors) can see the degree of work that has gone into TOD.
Really looking forward to that King Arthur book review!! Cheers!
It is very much a "work in progress" and we will give it more ink when I get further along.
I did (today) put a longer answer beside your comment and questions here
HO,
Just a point that makes it all worse. The water injection into Ain Dar and Shedgum is a lot more than 2 mbd. Ghawar was being injected with 4 mbd in 1979 and around 1994 Ghawar, Abquaiq and Berri were requiring 12 million per day between them with 8 mbd going to Ghawar. Page 90 Twilight in the Desert.
The Ain Dar and Shedgum area with Uthmaniyah have always produced the majority of Ghawar's oil production and were at around 7 mbd water injection in 2000 but in a post by Ron Patterson many months ago he pointed out that this had been upped by a further 2.5 mbd to 9.5 mbd when US Filter won the contract to put in 20 125,000 bpd water filters in May last year.
I believe that they are now puming in excess of 20 mbd overall in all fields, hardly the sign of a great future. I have also read where the water cut in Ghawar could be as high as 55% These pumps are rated at 20,000 hp per 1/2 million barrels of water to pump at 2,000 psi. Is it any wonder they are reducing production.
If you are right that 20Mb/d is going in, and 8.5Mb/d is coming out, then the avg of all fields is at 57.5%, no doubt some much higher. And, I think I read that they are planning a major water pumping expansion, so maybe they will be up to 67% pretty soon. As WT says, sound like texas.
I'm really interested in two data points, the EIA report for 8.8 mbpd in Saudi (C+C) production for November, and the Saudi report of 8.5 mbpd in February.
What is interesting is that both the 8.8 and the 8.5 numbers are consistent with an 8% annual net decline rate, since September, 2005. Odd that their "voluntary" cuts are consistently the 8% per year range. . .
BTW, just a reminder that the Saudis recently admitted that their average 9.55 mbpd production rate for 2005 was virtually at 100% of capacity.
So, Texas went to virtually a 100% of capacity in 1972 (except for East Texas and one field in West Texas), and Saudi Arabia went to virtually 100% of capacity in 2005.
In 2006, Saudi Arabia was at the same stage of depletion (based on Khebab's HL models) at which Texas started declining in 1973.
And this Saudi decline, like the Texas decline, corresponded to higher oil prices and significant increases in drilling activity. The average monthly Brent spot price, in the 20 months after 5/05, was about two-thirds higher than the average monthly Brent spot price in the 20 months prior to 5/05.
We've seen it before: Higher Oil Prices + Increased Drilling = Lower Crude Oil Production
It is unfortunate that my discussions on global inventorties have been over your head, WT. The brief flirtation with 86.1-mbd flow rates in July caused contract prices to plummet from their record high of $69 to $45/barrel. With JIT supply stretched, the past three weeks has seen that price increase to $52.
Do u honestly believe the Saudi's should be increasing production today from their long stated (2004) equilibrium rate of 8.6-mbd? Your ad nauseum repeat posts are nonsense. Q2 Demand call is 84-mbd. There is no doubt in my mind that a return to Aramco production of 9.5-mbd at any time over the next two quarters would push the price below forty bucks. Your comments are absurd and reflect only some deviant voodoo musings.
harsh but on target.
Freddy,
Four Facts:
(1) Based on EIA C+C data, the cumulative deficit through January, between what the world would have produced if we had simply maintained the 5/05 crude oil production rate and what we actually produced is on the order of 320 million barrels.
(2) The average monthly Brent spot crude oil price in the 20 months after 5/05 is about two-thirds higher than the average monthly Brent spot crude oil price in the 20 months prior to 5/05.
(3) Deffeyes accurately predicted the decline in world crude oil production.
(4) Using Khebab's data, I accurately predicted the decline in Saudi crude oil production.
You can if you wish continue to shovel out vindictive personal attacks by the truck load, but until we see sustained increases in world and Saudi crude oil production (above the 2005 peaks), why do you continue to launch attacks on people who have made--so far--accurate predictions?
Hello WT/Jeffrey,
We've seen it before: Higher Oil Prices + Increased Drilling = Lower Crude Oil Production.
Just as a favor to the anonymous reader (eg. new persons, among whom I may have friends and acquaintances): You are being ironic, here, is this right?
No, I think he's being serious Aniya. My interpretation of what WT is saying is that one would expect higher prices to lead to increased drilling to lead to higher crude production. If instead we see lower production, then that could be an indication that region has peaked.
Personally, I think it's still far too early to tell whether SA has peaked. There are other possible explanations for their production cuts (debated at nauseum on these very boards) that probably won't be entirely ruled out for quite some time.
Hi Ener,
Well, I hope Jeffrey has time to respond. I took it like, yes, we'd expect to see higher, but instead we see lower, hence, we haven't "seen it all before" - in fact, it's new...the "it" being lower production under these conditions. Hence, I took it as irony. (Then, again, I'm asking. Honestly, I am.)
Actually, perhaps he means "Lower 48" or "Texas" as having seen this equation before. Okay. Still, seems like one of the steps contains irony (doesn't it?). (Whah.)
Nope.
Texas and the Lower 48 showed sharp increases in rig counts in the Seventies, as oil prices went up by about 1,000% from trough to peak, and production fell at a long term rate of 4% per year for Texas and 2% per year for the Lower 48.
In Texas specifically, every available rig was put to work in the Seventies, and the number of producing wells increased by 14% from 1972 to 1982, but production fell by about 30%.
I don't have a figure for North Sea rig counts, but I assume that it was up since 1999. We have sustained increases in oil prices since 1999, when the North Sea peaked, and crude + condensate production is in a long term decline of about 5% per year.
Thus: Higher Oil Prices + Increased Drilling = Lower Crude Oil Production (past the 50% of Qt mark).
We are presently seeing all three of these factors at work in Saudi Arabia, which started declining at the same stage of depletion at which Texas started declining.
Hi WT/Jeffrey,
Thanks for responding. In my first reading, I took that one sentence to mean "within KSA", which would mean we hadn't seen it until recently.
(So, we hadn't seen it before - within KSA. I assume this is correct. Perhaps you know more of the history in detail, though.)
Reading it to mean you're referring to TX and Lower 48, then it made sense. I appreciate you taking the time to validate, though. The "(past the 50% of Qt mark)" also helps clarify.
OK, you probably got 57.5% by assuming that 20MMb/d WI was replacing 20MMb/d liquids production t surface conditios, so 11.5 MMb/d water gives watercut = 11.5/20 = 57.5%.
Not exactly.
That 8.5MMstb/d (stock tank barrels/day) of oil occupies about 11MMrb (million reservoir barrels) at reservoir conditions - see my explanations of formation volume factor ad nauseam every time there's a discussion of waterflood. That assumes a FVF of 1.3, which is about right for Ghawar. Further assuming 100% voidage replacement ratio (a good starting assumption) and no free gas production, and remembering that water doesn't expand much, that gives us 20 - 11 = 9 MMb/d water production.
So the real watercut is 9/(8.5+9) = 51% - a bit lower than your own calculation.
The biggest guess in the above calculation is the 100% VRR. It's unlikely ever to exceed 100%. If it is lower then the watercut will be higher. eg if the VRR is 80% then reservoir-conditions production is actually 25MMrb/d so water production is 25 - 11 = 14 MMb/d and watercut is 14/(8.5+14) = 62%.
Another assumption is that all that 20MMb/d injection capacity is currently being used. They could be preinstalling against future need, or just putting in rotating machine foundations and blinded-off flanges so they can install the expensive bits later.
You're welcome!
PUD
Future need could be right... but, probably not ten years out.
50% could be right... but, this is an average for all fields, so some may be much higher. Probably the oldest fields are higher, the younger ones a bit less.
The biggest fields, just like most places, are the oldest.
There is no need to guess about this. The same Obaid presentation that Patterson could not comprehend reveals the overall water cut for SA. It's 29% (32% at Ghawar). They have been frank on cuts since 2004.
Simmons misunderstood much of the revelations. Or chose to. He said they were pooched. Within seven weeks SA increased sustained production 2.5-mbd. It has been easy for SA to show the world that Simmons is a blowhard and on several occasions. This is why it has become personal for him...
It seems his to me that the only reason Simmons wants transparency on SA reserves is 'cuz he's scared sh*tless to recommend funding of several expansion projects. If he says "go" to those Boards of Directors and Aramco shows up over the next five years with surplus capacity, these non SA projects face thin or zero margins. They can't compete with $5/barrel oil from Aramco. Billions of dollars in E&P are at stake by Aramco's competition.
Today Matthew Simmons doesn't know whether to sh*t/puke or go blind. U can see the desperation in his interviews. As an Investment Banker, he wants to say yes to many borderline project.
SA has been his nemesis for years and remains so...
The optimism in MSM is really overwhelming. I recently had a letter published in the Financial Times that pointed out a rather dramatic mistake by one of their best American columnists. Mr Caldwell is a senior editor at the Weekly Standard and a contributing writer for the New York Times magazine.
I would guess that out of every 10 people who read the original article only one read my rebuttal. Wasted effort I guess.
Hi Alfred,
Congratulations on having your letter published, and thanks.
If you'd like some just-for-future rereference "feedback", I'd perhaps have chosen a slightly different word than "optimistic", as that connotates future, rather than present, conditions. (Just my take on it.) Also, if you look over on Drumbeat, Jeffrey says: "Based on the HL model, the US is about 85% depleted." (Perhaps take up the topic with him?)
In any case, it's very well-written and covers the main points. Let's hope it's not wasted. Do you think there's any more effective way to get these points across? Would they accept a guest opinion piece?
Hi Aniya,
Thank you for your input. I do think that they may accept a guest piece under some exceptional circumstances. For example, they accepted the following article by Jerome Guillet recently. I had to include it all as it is behind a paywall:
Hi Alfred,
Thanks for the acknowledgment and also for including the entire article. (It may be questionable wrt copyright, but it was very helpful to me!)
You know... the point Jerome makes here, namely "...Energy market deregulation is incompatible with the fight against global warming – markets like to finance gas plants – and with security of supply when exporters will not play by our rules."...
...speaks precisely to the point I attempted to raise with Heading Out, in response to his comments about regulation and centralization being negative. And many people seemed to echo his opinion.
I'd very much like to take this up in some appropriate way, where we can discuss it in detail. (Also, I seem not to be able to go back and find things without losing my page, so I'm going to go ahead and post this, then hopefully find the exact conversation.)
Hi again, Alfred,
Well, perhaps I've managed to get the link - http://www.theoildrum.com/node/2266#comments. We'll see. If you have time, I'd be interested in your take on this thread. (Or, even Jerome's for that matter.)
Hello HO,
Not a petro-engineer, but I thought this might be of some use for those TODers that could make sense of this long list of projects in KSA [approx. 100+]:
http://www.ge.com.sa/news.php?news_id=40&PHPSESSID=7f60b464f6fe060ebeda9...
---------------------------------------------------------
Projects currently being tracked in Saudi Arabia
February 01, 2007
Project Name
4 x IPP Projects at Juaymah, Ras Tanura, Uthmaniyah and Shedgum
Al-Khafji Joint Operations OFFSHORE Projects (KJO) - Including Dorra and Lulu Fields
Al-Khafji Joint Operations ONSHORE Projects (KJO)
APPC - Jubail Propane Dehydration (PDH) and Polypropylene (PP) Plant
Aramco - Abqaiq DR-1 Pump Station to Abqaiq GOSP-5
Aramco - Abqaiq Pumping Stations Project (Replacement of Pump Stations 4 & 5)
Aramco - Abqaiq to Yanbu (AY-1L) Oil Line Conversion - EWG-1
Aramco - AFK Oil Field Development - Ethane & NGL Recovery, GOSP, Pipelines (Abu Hadiyah, Fadhli & Khursaniyah)
Aramco - Ain Dar Water Injection Pumps Station (WIPS-1)
Aramco - Bulk Plant
Aramco - Bulk Plants Construction and Expansion Project.
Aramco - Hawiyah (& Juaymah) Gas Plant Expansion
Aramco - Hawiyah NGL Phase 2
Aramco - Hawiyah NGL Recovery Scheme (Phase 1) - Pipeline Packages 1 & 2
Aramco - Hawiyah Straddle Plant
Aramco - In-Kingdom Project Management Services
Aramco - Juaymah Gas Plant (JGP) - Wastewater Treatment Upgrade
Aramco - Juaymah to Jubail Ethane Pipeline
Aramco - Jubail 2 - Grassroots Refinery
Aramco - Karan Offshore Gas Field
Aramco - Khurais Downstream Gas Line ( Khurais Central Processing Facility to Shedgum)
Aramco - Khurais Full Field Field Development (Khurais Crude Increment Programme)
Aramco - Manifa Oil Field (OFFSHORE)
Aramco - Manifa Oil Field (ONSHORE)
Aramco - Manifa Pipeline Project
Aramco - Moneefa Oilfield Development
Aramco - Mubarraz Area Oil Production Optimisation
Aramco - Qatif to Ras Tanura Pipeline Upgrade (QRT-6 & QRT-8)
----------------------------------------------------------------
Lots more on the link. Not sure if indicative of any shattering news---- hopefully the TOD experts can tell.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Summarizing the comments above. I think the situation is as follows:
Please send updates.
Your summary was good 'til u got to the part about depletion. I assume your 800k figure is taken from the Security Official presentation (by Obaid) that Ron Patterson made six passes at and couldn't get right. For that matter neither did Obaid.
Both gentlemen confused field "depletion" with "decline". If u go back to the source document from our first discussions in November, we will see (for the seventh time) that certain aging fields are terminal and will be shuttered. The 800k rate is thence reduced to 500-kbd.
The target date for Munifa and associated refinery infrastructure is 2011 and the resultant MSC was 13.5-mbd less surplus capacity of 2.5-mbd for a net sustainable production rate of 11-mbd. Your figures are similar to these oft stated targets.
FYI, while August 2011 is the current date for this two phase completion of extraction/refinery infrastructure, this date has been constantly and aggressively been forward dated. When originally proposed in early 2004 at CSIS, we were looking at a 2016 target for only 12-mbd MSC!!!!
Saudi Arabia is #1 in oil reserves AND production but while Iran and Iraq are #2 and #3 in reserves, they are only #4 and #13 in production. Their infrastructure is mostly old and crumbling and that was so even before the current war.
The potential for significantly increased global oil production is right there and that is proven beyond any doubt by the war/geopolitics going on right now. For example, Iraq alone produced 3.5 mbpd in 1979 vs. 1.8-2 mbpd today.
It seems we are focusing PO analysis on KSA down to the 100.000 bpd level, but totally ignoring what could occur should #2 and #3 come on stream with the same level of technical expertise as the majors. Iran and Iraq are now producing a combined ~6 mbpd.
Anyone care to guess where this will go to IF Exxon, Chevron, Haliburton et.al. get their hands on those fields?
It depends on whether or not Iran switches to Euros instead of dollars.
In which case it may be Total et al, but the question still stands: has anyone at TOD done/seen an analysis of the potential of those two?
Iran peaked nine years ago (1998) at 3.8mbd, investment may only be able to slow depletion at this point. Even if the US Army stabilizes Iraq by 2008, it will take until 2012 to significantly increase production. Realistically we may not see significant oil flows from Iraq until 2015.
I'm sure Dick Cheney has realized this and will try a desperate move as he is boxed in a corner. I hope the Democrats have the courage to stand up to him and start a graceful climbdown and the subsequent powerdown. I'm sure there are some that want to go out in a blaze of glory but the average American would rather not be responsible for genocide.
WE've already got our hands on the iraqi fields... Based on this experience, if we get our hands on the iran fields, existing production will be halved.
On another vein, of all the large, existing producers that are state controlled, eg sa, russia, kuwait, mexico, venezuela, iran, iraq, and libya, only the first and last are making substantial new investments. All others are allowing infrastructure to decay, spending all revenues on locals and/or swiss accounts.
Since it seems that every field produces oil of a different analysis (obviously some more different than others), I assume that these oils command widely varying prices. When the news reports that "oil" has reached such and such a price, this usually means WTI for next month delivery; but how much of the world supply is WTI? and how is the other stuff priced? The WTI futures contracts (again an assumption) are mostly just paper unrelated to any physical delivery. Are actual contracts, sold by actual producers, individually priced?
The spot markets are the playgrounds of desperate buyers and speculators. It was stated at the last OPEC Conference that only 1% of their oils pass thru those gates. WTI is a similar useless yardstick.
U are correct that all fields have different sticker prices. Often they are quoted as discounts to mainstream fields as TOD regulars were enlightened to by Hothgar. We all remember the hostile attacks on Hothgar by Ron Patterson who challenged their existence.
My tracking of contract prices is also done by EIA. It has been my experience that both WTI and spot world prices range from 6% to 28% above AVG Contract pricing. The high margin periods have coincided with the two recent high speculation eras - the summers of 2005 & 2006. Both likely spurred unrealistic Demand Calls that were met with resulting high flooding of inventories.
The good thing about speculators is that eventually they must give up their positions or make arrangements at the yacht club for a super tanker visit. As eluded to by a TOD poster earlier today, this period of liquidation then floods the market with Supply and dampens the price. Unless shorting the market, Speculators in any commodity raise the Spot Price when buying but then soften it when they let go.
I took a course in Environmental History a few years back and in the exam I based one answer substantially on Peak Oil theory. Passed and with first-class marks! I come from Scotland..does Environmental History figure at all in the US and elsewhere?
Hi Philip, when I was an undergrad in agronomy a number of years ago (early 1980s), we were required to take a class in "Man & Environment." This sounds like the sort of class that you are referring to -- ecology + resources + man's impact. It was a great glass. We were introduced to many of the names that you still hear -- the Ehrlichs, Garret Hardin, Buckminster Fuller, the Lovins, Lester Brown, etc.
...It (IEA) warned that a production cut already programmed by OPEC, if applied, would bring its output down to 25.8 million bpd from this month, a level that could see demand for OPEC crude outstripping supply from OPEC countries by the second quarter.
It revised upwards its prediction for demand for OPEC oil in 2007 to 30.6 million bpd and warned that "additional OPEC-10 (the 10 members of the 12-member cartel bound by quotas) supply cuts could markedly tighten the market."
Saudi Arabia's oil minister said in comments published on Monday that OPEC might not have to cut output further at its meeting next month.
The IEA said: "Global oil product demand is raised by 111,000 barrels per day (bpd) in 2006 to 84.5 million bpd and by 273,000 bpd in 2007 to 86.0 million bpd following revisions to China."
But for the first time since 1985, oil demand in the 30 industrialised countries of the Organisation for Economic Cooperation and Development had shown a significant drop, the report said... [link]
From April 2005:
"A high oil price will damage markets, and he knows that," Bush said of Abdullah, the de facto leader of the desert kingdom...
Saudi Arabia has outlined a plan to increase production capacity to 12.5 million barrels a day by 2009... [link]
Is this Bushco's way of saying if the price goes too high that Americans will start seriously seeking alternatives? Somehow I don't think the 12.5 mb/d capacity will ever again be matched with a production rate of 12.5 mb/d.
SAN FRANCISCO (Dow Jones) -- Saudi Arabia, which already has aggressively shaved its oil output in a battle to shore up prices, will reduce production by another 158,000 barrels per day beginning Thursday and more cuts are on the way, according to a media report...
Saudi Arabia' s reduction is nearly double the total cuts it agreed to make under two output accords hammered out at OPEC at meetings in October and December, The Journal said. T he 10 OPEC members that committed to the cuts were producing about 27.5 million barrels a day in September, the Journal said, and if the agreed-upon cuts are fully implemented, output would drop to 25.8 million barrels a day in a global oil market of about 85 million barrels a day... [link]
It is my estimation that Saudi Arabia now has some spare capacity, but they do not mind the relaxed demand at this time because they can rest some of their fields and do some more exploration and development at the same time. The last gasp for Saudi Arabia before they lose the ability to deliver 10 mb/d ever again, even in a tight market, may still be a few years away, especially if they can comfortably cut production in slack times.
Thinking that sa can produce one more barrel than they are is wishful thinking that has no basis. They were 'resting their fields' when prices went to 78 and they stated that prices were far too high...
THeir spare capacity is oil loaded with so much vanadium that nobody can process it.
It can't possibly be wishful thinking, this is just an intellectual exercise for me. If it were up to me the U.S. would cut consumption. I honestly feel that they could, if they tried, produce a short-term gasp of production of something that passes for oil at 10 mb/d.
I have no doubt regarding your honest feelings. Can you provide any evidence that might boost my rather low level of optimism regarding future sa production?
If one accepts that there is no advantage in producing what cannot be sold, and the KSA can work out ahead of time how much they can sell that month (bearing in mind that the stuff in tankers can take weeks to get from Ras Tanura to wherever) then why should they aggressively pump oil that they know can only be sold if they are willing to accept a competition that could dramatically reduce prices. Remember that they have also an ability to learn a lesson from history.
I am not saying that this is the case, but if you look at the logic that drives the OPEC reports it reflects this sort of thinking.
sa production declined quite significantly as prices went from one record to another last summer. As you know, other countries eg angola/brazil had no difficulty finding tankers/buyers for their rising output. And, at the moment, their cuts yoy are twice the number they agreed with opec.
Should we assume, based on their remembrance of 1998, they doubled their cuts to help boost prices while other opec members - again - failed to honor their own agreements? And, if their 'capacity' is, say, 10Mb/d, and all they can sell is 8.5-9Mb/d, why are they hiring so many expensive rigs? Didn't somebody say that the simplest solution is usually the most likely one? Why not conclude, at least until shown otherwise, that sa production has peaked, is on the way down, and that to date 3x rigs is not sufficient to halt the decline, much less increase capacity?
Hoping for increased sa production is cleary faith-based. There is no evidence that they will ever be able to boost production above 9Mb/d again from their very old fields other than their pronouncements. Given that every other giant field on the planet as old as theirs is undeniably in rapid decline, why would anybody think that somehow theirs are immune to ageing?
Can you provide any evidence that might boost my rather low level of optimism regarding future sa production?
Actually, no I can't. SA is going to crash soon, and it will be spectacular. They are obviously already in serious decline. The combined utilization of advanced recovery techniques and unique geology has made it possible for them to keep up production rates right to the edge of the cliff. I merely play devils advocate from time to time because they keep changing the rules as to what qualifies as oil. That said, if they pushed as hard as they could in an all-out orgy of tar, heavy sulfur, condensate, and threw in some new twist, they could probably increase production for a short time. Their days are numbered as the swing producer to the world though. Actually, I am on your side of the pessimism curve, I just get cynical from time to time.
Hi Petropest,
re: "Their days are numbered as the swing producer to the world though."
And then what?
Then watch the rush to the arctic.
Hello Aniya,
And then what? I'm not sure you actually want an answer to that. Here goes anyway, just for funsies. Dollar crash, environmental havoc, CONgressmen still flying back and forth to D.C. while people starve. Large scale unemployment, marshall law, civil war, etc., etc., Or... everyone, even the wealthiest, agree to conserve and work together for a brighter future and the general good. I'll let you decide which is the more likely scenario.
Hi Petro,
Thanks, and re: "I'm not sure you actually want an answer to that."
You're right. I was feeling some frustration about trying to figure out what Heading Out was getting at when he was talking about "sucking oxygen" out. And if someone (anyone) wants less academic talk and more action - well, then, can we please commence with at least one positive action step? Q: How to organize that?
Anyway, my general point is (and thank you for paying some attention to what I said)...is that...the likelihood of the different scenarios may be (just possibly) somewhat (note qualifier) contingent on what each of us does and what, even, we can manage to generate here (TOD) toward the "conserve and work together for a brighter future and the general good".
I agree. The best thing that can happen in this country would be a change in the general attitude. Whereas now people are only impressed with bigger is better and the monster truck mentality, I foresee a time when conservation is "cool" and waste is "uncool". That is the biggest hurdle. When people start bragging about the mileage they get and how low their last electric bill was you'll know we're on the right track. Many on this board already do this, definitely a step in the right direction.
Have you ever seen the picture of the chimpanzee with his hand in a vase holding an apple? He refuses to let go of the apple and consequently can't remove his hand as his hand is too big. I think this is a perfect metaphor for this world. The love of shiny stuff and the belief that 'he with the most things when he dies wins'.
So does King Arthur pull the sword from the stone? Or does he continue going round and round failing to see his shadow? Just wondering!
Manifa doesn't look all that ugly to me.
I have some data from crude samples taken back in the early 80's (when this field was last in the queue for production).
API two samples (from different areas of the field) one at 30, one at 26 so 28 shown in this story is reasonable. Sulfur averages to 3.2%. Vanadium in the vac resid below 50. 650+ yield 54%.
It's ugly, but compared to Mexico's Maya 22 API, 3.4% sulfur, Vanadium in VR 688!!!!! and 650+ yield of 59% it's not that bad. Even Exxons Hondo (Santa Barb channel) is worse.
Maya is run all over the USGC in the big complex units. And the ugly, hi metals Calif crudes have homes in the LA and SF refineries.
Sure, this stuff isn't Berri, but it will sell. Perhaps Saudi hasn't liked the discount and would prefer to build their own coking units or resid hydrocrackers to capture the maximum value.
All I'm saying is don't pretend this stream doesn't count. The overall balance still looks ugly going forward.