Chris Nelder's Notes from ASPO-USA

Chris put together a (ridiculously detailed...47 pages! yeesh! :) ) set of notes from ASPO-USA if you are interested. They can be found over at his website at this link.

Is there a Cliff Note's version?

Yes, here it is: "We are really, really screwed."

Actually I thought HeadingOut's summaries on TOD were good for that.

Energy consultant, writer, blogger

I've decided that there are two types of people--those who now realize that we are almost certainly facing an accelerating decline in net oil exports and those who will realize it.

It's really, really hard to sugar coat the fact that the top five net exporters are almost certainly more than 50% depleted, with rapidly rising domestic consumption.

BTW, a couple of corrections on our presentation.

In any case, the 9%/year consumption number refers to Rembrandt's estimate for the Saudi increase in consumption in the first half of 2007 (not Russia).

In regard to Saudi Arabia & the Economist Magazine. They stated that the Saudis could produce at their current rate (11 mbpd, total liquids, in 2005) for 70 years, without finding another drop of oil. We just plugged in the 2005 to 2006 rate of increase in Saudi liquids consumption, +5.7%/year (EIA), which would result in Saudi Arabia hitting zero net exports in 2036, a long term (25 year) net export decline rate of about -10%/year. Note that the net export decline rate starts out slowly and accelerates with time.

And the average American today uses as much oil as 400 Swiss used at the end of the Second World War (Alan's stat).

Regarding Russia:
RenCap again cuts Russian oil output forecast
Thu Oct 18, 2007

MOSCOW, Oct 18 (Reuters) - Renaissance Capital brokerage said on Thursday it had cut its Russian oil output forecast for 2007 for a second time this year and saw minimal growth in 2008.

The brokerage, which had in the past issued aggressive forecasts for Russian oil production, said growth would amount to 2.5 percent this year, down from the previously forecast 3.2 percent and the initial 3.7 percent. . .

. . Excluding the Exxon Mobil's Sakhalin-1, daily crude output in Russia, the world's second biggest crude exporter after Saudi Arabia, has been down year-on-year since May, it said. . .

Thanks for the corrections, Jeffrey; they have been incorporated.
Energy consultant, writer, blogger

BTW, in the "what if" category, at the +5.7%/year rate of increase in consumption, Saudi Arabia would be consuming 108 mbpd in 2075--an example of meeting one absurd projection with another absurd projection.

But what the exercise does illustrate is how blind the world is--or at least was--to rising consumption in exporting countries.

It's a pretty good bet that just the top five net exporters alone are going to consume an additional 500,000 bpd of liquids in 2007 versus 2006.

Thank you Chris! This is very good!!!!


Your notes are just great, thanks for creating and posting them; they are among the best meeting notes I've ever seen.

Just in case ASPO wonders, I'm still going to get the DVDs when/if they're available :-)


Glad you all found value in them! I did them for my own purposes, but I'm pleased to be able to help spread the knowledge. I guess the last 20 years of typing came in handy after all...
Energy consultant, writer, blogger


I will be working on getting the DVDs edited shortly and expect to start shipping about Dec. 15 if I can. They are $85.00 for the 10 DVDs including S&H.

You can order them here:

They are on the proceedings which is linked on the main ASPO-USA website.


Thanks, Rick,

Someone was asking - and I'm also curious: Are there any "audio only" versions of the proceedings? (Is it difficult to make them from the video version? Just wondering, as I was thinking that to have audio available for indy/public radio pick up might be good.)

Indeed! Thank you _so much_. You have no idea how useful these are, for those of us who couldn't come and attend.

Yes, here it is: "We are really, really screwed."

Meanwhile, the sheeple are watching NFL this Sunday afternoon while the cold hard facts of peak oil are slowly creeping up.

At least they're sitting at home. oil columnist Chris Edmonds is touring the Mideast now and has some interesting things to say. He is writing a series of articles as he goes from country to county: Oman Qatar, Dubai, etc. KUDOS TO IAN AND STUART RE ITEM #2 on his list!! Sorry for the caps and exclamations but they deserve all the kudos I can give. Here's the link for his Bahrain diary (sorry this is a pay site); as a subscriber I found each entry to be fascinating.

Here are his conclusions based on a week of Mideast travel.
1. Of the top 38 oil fields in the Arabian Gulf, 41% of the reserves are depleted. While there were originally 605 billion barrels, today there are only 360 billion barrels left, many of which will be difficult to recover.
2. The world's largest oil field, the Saudi Ghawar field is over 55% gone with recovery of the remaining 45% significantly challenged and much more expensive.
3. Kuwait's Burgan field, the second-largest field in the world, is in steep decline. While Kuwait says it can boost production to 2 million barrels per day, anything above 1.7 million bpd appears unlikely.
4. While Iran says production should reach nearly 5 million bpd between 2010 and 2015, credible estimates suggest production of 3.8 million bpd today is likely close to peak production. Projects suggest production by 2015 will likely be lower than current levels.
5. Global oil reserves are likely overstated by at least 300 billon barrels.
6. All major oil fields in the Arabian Gulf have been discovered. While incremental discoveries are possible, future new production will likely come from small fields that are less productive, incrementally more costly and potentially more prone to rapid depletion.
7. The one area of potential hope is the Red Sea which has not been explored and developed. However, drilling is more expensive and technically challenging than the Persian Gulf and onshore Arabian Peninsula.

Regarding the Red Sea, Edmonds states that a shortage of trained E&P personnel will constrain its development. Elsewhere in the series he states that oil companies have been very cautious with their exploration budgets, whereas in the early 80s they burnt themselves by borrowing too much money to finance exploration that in turn led to the mid-80s oil market collapse. This time, says Edmonds, it is different. With restrained exploration activity in place so far, he sees continued oil price appreciation, even entitling one of his diaries, "The Certainty of $100 oil." Also, re item #6, Edmonds says that much of the so-called "new" Mideast projects that come on stream are in fact workovers; he also concurs with posters on this site that much new Saudi supply is sour crude. Nice to have the great work done here confirmed by a prominent industry insider/ journalist like Edmonds on the qround -- and sobering as well.

Edmonds is sharp and one of the best oil analysts on the Street, IMO. His guest appearances on The Real Story with Aaron Task are excellent too. (Full disclosure: Aaron's a friend of mine and I've had a few cameos on his show as well, but Edmonds is far more an expert than I am.) Thanks much for sharing this info, Sunlight!
Energy consultant, writer, blogger

Apology to Euan, somehow I wrote "Ian" above, my bad.

Sunlight - you are forgiven, I'd be intrigued to know a bit more about the article though.

Chris - when I saw you typing the whole time during the conference I assumed you were playing some internet game. Your notes are amazing and display true dedication. The fact remans however, that you really suited that mask. Looking forward to the next time if there is a next time.


Euan: It's true, I've never looked so good as when I had a mask covering my entire face. Thanks for noticing. (Would appreciate a reply to my pvt emails too -!)

Not sure I received any Chris - and just tried to send you one at idiotwind - and that bounced.

Try again - I at least got you name in my address book now.

Re-sent from two different addresses...

Energy consultant, writer, blogger

Given the vast number of uncertainties involved in trying to guess at recoverable reserves from outside these major exporting countries (and given the problems that even companies like Shell have had in accurately estimating their own reserves), my working theory is that the HL based estimates should be considered our most reliable estimate of URR for a region, until proven otherwise, because we can use the two numbers we have the most confidence in, annual production and cumulative production to date, to generate a mathematical estimate of URR.

Looking at the macro picture, Deffeyes predicted (using HL) a world crude + condensate (C+C) peak between 2004 and 2008, mostly likely 2005. The cumulative shortfall between what we would have produced at the May, 2005 rate and what we have actually produced to date is on the order of 660 mb, while oil prices have been at record high levels.

(If anyone wants to point it out again, Deffeyes' observation that we may have peaked in 2000 was an observation, not a prediction. He never backed away from what his model showed).

Edmonds says that much of the so-called "new" Mideast projects that come on stream are in fact workovers

For some reason when I read this I read the word as "comb-over". Sort of like taking an aging oilfield, trying to make it look young again, and not fooling anyone in the process.

P.S. I finally got around to posting my photos from the Refinery Row tour, which you can see here. The tour included stops at the NASA Johnson Space Center (where the last Saturn V rocket is on display) and a memorial park where the Battleship Texas now lives as a museum. Photos 5126487091316622850 through 5126487658252306306 are for a pano that isn't stitched together yet.

They're not great photos--it was a dark day, and the bus never stopped for the refineries, so those shots were all taken from a moving bus through tinted windows--but then again, I thought the "Mt. Doom" look was apropriate and effective.


Energy consultant, writer, blogger

Some small errata from my Presentation.

It’s possible to operate a modern democracy without oil. Consider the Swiss: in 1948 after the WWII oil embargo: they used less oil in a year than the US does in a day. They walk, they have electric rail running on hydro power.

In 1945, the Swiss used 1/400th as much as the USA today, In 1948, they used 8x more, 1/50th as much as the USA today. (The USA could join OPEC if we used 1/50th as much oil as we now do).

The Swiss also bicycle.

Under an electrified rail scenario, -62% oil use in USA, -50% GHG emissions AND +50% GDP in 30 years.

The Swiss have done the equivalent of the US spending $100 trillion on expanding their already excellent rail system…major political support Only $1 trillion ($1.1 trillion with current exchange rates) not $100 trillion.

You missed my line "We Americans need to become as fast and as efficient as French bureaucrats".

The US in 1897-1916 built streetcars in 500 cities and towns, when our population was only 100 million, using only coal, mules and sweat. We did it before, and we can do it again !

Q & A

Drake: Today’s major railways aren’t that interested or incentivized to pursue electrification. There are really only two major players in most of the US…not enough competition

Most of the USA is served by two (or one) Class I railroads. UP & BNSF west of the Mississippi River, NS & CSX east of the MS River.

Geaux Saints !, halftime is over (yes I watch),


Thanks very much Alan! I knew most of those spots in the notes were rough & I particularly wished I had captured the line about the French bureaucrats. Thanks! My notes have been duly updated.

BTW - I'd be interested in a treatise from you some time--since you're The Man on electrified rail & all--on how the US might go about the necessary seizures of land by eminent domain, as the French did. (Please don't get me wrong--I think riding the TGV across France is THE most pleasureable form of travel I have ever experienced, and I'd be willing to stomach nearly any sort of necessary property seizure in the U.S. to have something similar.) What sort of legal basis or precedent do we have? Has anybody assessed the potential impact--cost, property, square miles, anything??

And for intracity rail, it would be very helpful to have some kind of metric to tell us, say, how many miles of track equal how many bpd saved...anything along that line.

We're going to need hard data on this stuff to sell it to the policymakers...


Energy consultant, writer, blogger

The USA does not have the resources or time for a passenger only TGV like system (not till I am VERY old).

The Bush Admin asked for "congestion relief projects". Got 19 freeway projects and one from CSX RR. I would use the CSX template for, perhaps, 11,000 miles around the USA.

Washington DC to Richmond, 4 tracks, 2 pax @110 mph, 2 heavy freight @ 70 mph, all grade separated.

Richmond to Miami, 3 tracks (all 30' apart so maintenance only shuts down one track at a time). 2 heavy freight, 1 110 mph passenger and high priority, low & medium density freight, all grade separated.

1,200 miles, $12 to $20 billion.

Use existing 100' ROWs (at least south of Richmond) with about 1 yard added where reasonable. Extra ROW to straighten out sharp curves, new bridge crossings, etc.

All in all minimal takings of land. And affordable. But 176 kph (110 mph)# is NOT TGV speeds ! But it "gets you there" for many trips in reasonable time.

Best Hopes for realistic plans,


# With stops, average speed is about 86 mph.

Washington DC Metro, 106 miles of subway & grade separated at-grade is a 90,000 barrel/day oil field that never depletes but only grows a bit each year :-)

And it can jump to 130,000 or so b/day in an emergency :-)


Love it, that's all very useful. Thanks Alan!

I know you're no spring chicken--and neither am I--but I wouldn't bet that some high speed cross-country rail is out of the question in the next 10 years or so. If the pain is great enough, as some of us believe it will begin to be within the next few years, that good ol' U.S. capitalistic can-do attitude might just seize the initiative and start doing long as the pathway is clear. I think the American learning curve can be much shorter than anticipated, given the correct information.

Energy consultant, writer, blogger

I worked with Ed Tennyson to look at all Urban Rail lines that "made sense" at $30/barrel oil. We rejected 4 and supported 15 projects. First year ridership (no TOD effects) would add 50% to DC Metro ridership. More as TOD effects came on-line.

So, 135,000 b/day is VERY doable in DC even at low oil prices.


P.S. I received and incorporated some changes today from Dr. Kyriacos Zygourakis.