Hello Jean, Luis, Tony [Ace], et al,

Thxs again for the much-admired data-freak work!

When one ponders Ace's historical GoM hurricane & future forecast:

1. The hurricane induced downward glitches are remarkable for their size, depth, frequency, and duration, which cumulatively add to the overall -3.5%/yr decline rate by their sheer destructiveness and the necessity for early shutdown and evacuation of offshore workers.

2. Even if the latest and greatest tech & safety measures are incorporated into future deepwater rigs, FSPOs, pipelines, etc--nobody wants to be a hero and try to work through a CAT 1-5. Thus, the infrastructure might ride out the huge waves and winds just fine, but it will still be idle during these storms [which adds to the total cost of GoM oil & natgas extraction].

3. The weak link seems to be the Power Grid in the onshore GoM as the hi-tension power towers and other electrical equipment get blown down or disabled with great regularity when the hurricane comes ashore. So having the offshore rigs safe doesn't help much until the Grid is sufficiently restored to electrojuice the on-shore refineries and other critical equipment.

4. Compare 1,2,3 above with offshore MidEast [ME] or even Brazil. What a the chances of a hurricane [cyclone] threading the Strait of Hormuz, then continuing on up through the ME offshore infrastructure? IMO, practically nothing. The Ins. Cos. and bean-counters must consider the ME very weather-safe as compared to the GoM, and probably charge the GoM companies much more.

This 1,2,3,4 probably forces the GoM operators to get the FFs out quick compared to a more leisurely ME extraction, if the ME so desired.

IF Florida & Cuba eventually open up to drilling, since the prevailing winds and pressure systems tend to make many hurricanes 'hook right' in the GoM: the future production downward 'glitches' may become even more frequent as more offshore equipment gets dispersed across the entire GoM. As a prior weblink had noted in another thread: let's hope no major crude leak happens in Florida or Cuba whereby the Gulf Stream carries the crude to both E & W FL beaches.

In conclusion: I was glad to see Ace's 'little' forecasted 2009 hurricane glitch [although mostly hidden by the white box with 2007 Dean text]. But I was hoping his forecasted smooth decline line would have a bunch of hypothetical hurricane glitches out to 2030 as this seems highly probable.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Ace
I noticed your decline rate is 3.5% Could you explain why you chose that rate?

I know everyone from large agencies (IEA) to individuals here at TOD choose different rates for different reasons.

thanks

I think I read somewhere that ALL deepwater was only 60 Gb oil?

In 2001, Jean Laherrere discussed deepwater (>300 m) production and assumed two scenarios for oil ultimates of 80 Gb and 100 Gb. About 50 Gb had already been found up to year 2000.
http://www.greatchange.org/ov-laherrere,sep_28_01.pdf

There was also this discussion about deepwater oil in a semi annual report from FPA Capital Fund in 2007.
http://www.fpafunds.com/downloads/capital/September%2030,%202007.pdf
It was stated that deepwater (>400 m) proved and probably (similar to ultimate) was 78 Gb according to data from Bank of America. In addition, it was also stated that deepwater production is expected to double from 4 mbd in 2006 to over 8 mbd by 2011 according to estimates from Bank of America and Wood Mackenzie.

In his April 2007 newsletter, Colin Campbell discussed deepwater (>500 m) with an estimated oil ultimate of 80 Gb including some 65 Gb already found up to end 2006.
http://www.energiekrise.de/e/aspo_news/aspo/newsletter076.pdf

Campbell's chart from April 2007 predicted deepwater production reaching 12.4 mbd in 2011. However, Campbell has revised this peak down to 8.6 mbd in October 2008. My estimate is that an extended 7.0 mbd peak plateau is probable as many deepwater projects have been delayed due to low oil prices and the credit crisis.

Brazil is a significant deepwater producer but appears to be having problems increasing production as all offshore production (crude and NGL) seems to have stabilised at about 1.8 mbd. The chart below shows that Brazil's production has reached a plateau for March through May 2009.
http://www2.petrobras.com.br/ri/ing/DestaquesOperacionais/ExploracaoProd...

As most of Brazil's 2009 projects have already started, Brazil's crude and condensate production will probably be below 2 mbd for 2009 on an annualised basis.
http://en.wikipedia.org/wiki/Oil_megaprojects_(2009)

The IEA shows a small amount of growth for Brazil crude oil later in the year.
http://omrpublic.iea.org/omrarchive/14may09sup.pdf

In 2010, Brazil's crude and condensate production might be about 2.2 mbd as there is over 0.4 mbd capacity additions of which about 0.2 mbd will be needed to offset declining production from existing fields.
http://en.wikipedia.org/wiki/Oil_megaprojects_(2010)

Good point memmel. Even folks in the oil patch that aren't involved in the GOM tend to be surprised when they see the decline of the shelf plays and how the Deep Water has contributed so much to the appearance of some stability in OCS production. The decline in shelf would have been even steeper had it not been for the rise in relatively small operators. Not like the "mom & pop" operators onshore but small compared to the big established independents or majors. Since 1990 or so many new small GOM operators have come into existence solely to fill the gap left by big guys who found the shelf play a quickly diminishing return. Given the general decline of exploration opportunities both onshore and in the GOM the only course for growth by these startups was the acquisition and redevelopment of offshore properties. And we did work them to death. Often projects were approved not because of the potential for a satisfactory rate of return but to just push the stock up. The biz plan was simple: drill and establish new reserves (real or imaginary) or die.

The only remaining potential (not counting the off limit areas) on the GOM shelf is very deep (20,000’+) NG. Folks have been trying to find such a trend for at least the last 10 years with very little progress seen. Even NG has its limit on how hot it can survive.

The real shock for the public will be the rapid decline in the GOM in the next 10 years or so. The rapid expansion of Deep Water rates has hidden the shelf decline. But you know how much quicker those rates decline compared to the old shallow water fields. I doubt DW operating expenses will allow the industry to beat out the last little bit of reserves as has been done onshore and on the shelf. The rapid decline rates will hit the high fixed operating expense wall very hard. As you know I am a proponent of expanding OCS drilling operations as long it’s done soundly. But I also believe that such an expansion may only act as another short term buffer for the national decline rate. But even if that works it won’t do much good if it’s taken as a sign that we can continue BAU.

Hello Memmel, WHT, Sam, and other TOD math gurus:

I avidly read your postings about the shock model, dispersive discovery, and other tech-arcana, but I don't often comment on the postings of you gents as I don't have the math & statistical 'chops' required. So what follows may be entirely useless, OR it might help move the discussion forward. :)

I was musing on the theory of how EOR tends to move the Peak: up in volume plus earlier in time, as per your discussion a few days ago in Rembrandt's monthly update thread. Memmel seems to logically argue that we are headed into a severe 'shark fin decline' as exemplified by his agreement with the heavy bottom red line in the earlier graph:

http://www.theoildrum.com/node/5489/511573

Ok, here goes, and I hope I can explain this in adequate detail to jumpstart synaptic wildfires in your math-minds:

When an deepwater undersea quake first happens [think '04 Boxing Day], the resulting Peak dynamics of the later land-falling tsunami [tidal wave] are totally fixed at that point in time by the Laws of Physics [Let's say an avg 10 ft tall wave breaking on land sometime later]. The long wavelength of the incoming wave is harmless in deepwater, only when the wavelength starts to contract in shallow water is it dangerous as it start to rise up in height as it comes ashore.

This is tantamount to discovering a new oilfield or all the present oilfields in summation over time, but keeping the applied extraction tech 'Exactly the Same Level' until the field or all fields are finally abandoned. So linear extrapolation of oilfield production seems logical.

Obviously, we now know that tech-extraction advances are applied to oil & natgas fields ASAP when the tech becomes available and economically viable--thus the 'simplified' Tsunami Model becomes invalid regarding Peakoil. Is there a better, non-linear model?

How about the 'Rogue Wave Theory' applied to the one-time occurring Hubbert Peakoil Tsunami Tidal Wave and EOR-extraction tech?

http://en.wikipedia.org/wiki/Rogue_wave_(oceanography)
----------------------
Rogue waves (also known as freak waves, monster waves, killer waves, and extreme waves) are relatively large and spontaneous ocean surface waves that are a threat even to large ships and ocean liners...
----------------------

Doesn't this link to the Drauper Wave look just like the classic, long timeline, but giant single-pulse Peakoil Spike? Compare the two links below:

http://philhart.com/images/peak%20oil/hydrocarbon_age.gif
http://en.wikipedia.org/wiki/File:Drauper_freak_wave.png

From the above Rogue_Wave Wiki:
---------------------------------
..Such waves were said to consist of an almost vertical wall of water preceded by a trough so deep that it was referred to as a "hole in the sea"..

..Nonlinear effects — It seems possible to have a rogue wave occur by natural, nonlinear processes from a random background of smaller waves.[6] In such a case, it is hypothesised, an unusual, unstable wave type may form which 'sucks' energy from other waves, growing to a near-vertical monster itself, before becoming too unstable and collapsing shortly after. One simple model for this is a wave equation known as the nonlinear Schrödinger equation (NLS), in which a normal and perfectly accountable (by the standard linear model) wave begins to 'soak' energy from the waves immediately fore and aft, reducing them to minor ripples compared to other waves...
------------------------------
So even the earliest tech advances [even way back to Drake's oilfield?] only helped to grow the Hubbert Spike and our present-day EOR mini-waves are also energetically 'soaked up' into this one-time for us humans Rogue Hubbert Spike.

http://en.wikipedia.org/wiki/Nonlinear_Schr%C3%B6dinger_equation
-------------------------
..For water waves, the nonlinear Schrödinger equation describes the evolution of the envelope of modulated wave groups. In a paper in 1968, Vladimir E. Zakharov describes the Hamiltonian structure of water waves. In the same paper Zakharov shows, that for slowly-modulated wave groups, the wave amplitude satisfies the nonlinear Schrödinger equation, approximately. The value of the nonlinearity parameter к depends on the relative water depth. For deep water, with the water depth large compared to the wave length of the water waves, к is negative and envelope solitons may occur...
---------------------------

http://en.wikipedia.org/wiki/Soliton
-----------------------
In mathematics and physics, a soliton is a self-reinforcing solitary wave (a wave packet or pulse) that maintains its shape while it travels at constant speed. Solitons are caused by a cancellation of nonlinear and dispersive effects in the medium. "Dispersive effects" refer to dispersion relations between the frequency and the speed of the waves.
----------------------
What we need are equations, not for a soliton, but for a 'Hubbertiton' [my invented name to honor M. King Hubbert] that constantly self-reinforces and GROWS it shape ever taller and steeper from applied EOR; as ever increasing backloaded EOR helps ramp the Peak plus moves it time-forward so it subsequently will decline fast.

Of course, at this time I am hopelessly lost in math application... but maybe the following speculative example might help you math-wizards visualize my thought process:

Again, picture the Boxer Tsunami occurring, setting off the initial wave with wavelength 10X. But now, as the original deepwater rogue-wave moves toward the beach: imagine a series of additional earthquakes happening as the wave passes overhead-- each additional [EOR]quake adds to the TOTAL Hubbertiton deepwater wavelength...10X + .01X [vertical wells] + .5X [waterdrive injection] + 1X [nitrogen injection] + 2X [millions of nodding horseheads] + 5X [MRC horizontals]... + 1X [fracing fluids] + .05 [Tarsands] + .01 other EOR,etc.

Then when the only Hubbert Peakoil rogue wave hits the beach==>it is now a towering Tsunami 10 times as high as the [original oilfields]Boxing Day tsunami; a 100ft Hubbert Spike that quickly declines like the Drauper Wave above or the 'Red Line' like in Memmel's linked graphic.

This is due, IMO, in direct opposition to what occurs in a soliton [the Cancellation Effect]. Because there is NO cancellation of nonlinear and dispersive effects in the oil extraction industry or medium--it is actually an 'Amplification Effect' in a Hubbertiton. "Dispersive effects" refer to dispersion relations between the frequency and the speed of the waves, but in this case freq. & speed of the EOR-waves SUM into the ROGUE total.

Hope you guys find this helpful. Please feel free to elaborate further or flame away in scientific refutation.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?