Homework Assignment: Rates of Decline of the Largest Fields
Posted by Prof. Goose on August 11, 2006 - 11:41am
Greyzone and others worked a while back to assemble as much data as they could about the largest producing oil fields, their peak year, and whether or not they were in decline, and if so, the decline rate.
I thought I'd repost this as a discussion point, but also to accomplish two other goals: 1) can we expand this to the top 50 fields easily? is that a worthwhile exercise? and 2) is there any more data out there that can fill in the blanks (note that most of the missing data is from SA) that are present?
Here's a link to the data, and here's a link to the original thread that started this all.
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Don't know if it would be a wasted exercise knowing this being you cannot necessarily depend on a true bell curve with modern production techniques.
ASPO will be announcing an increase in their production outlook later this month. It will include an announced increase in their URR as well as it has been slightly low when reconciled with their production outlook volumes over the next century.
The merging of the models continues. ASPO is now forecasting 90-mbd in 2010. This equates to about 95-mbd on the EIA/IEA scale when processing gains are factored in. The URR will be restated at 2.5-Tb.
It is interesting that most of the major models are coming converging at a point right about the year 2020 or so. If you average the models you mention (ASPO, EIA,IEA and CERA) and then count in the forecast of our Iranian friend Dr Ali Samsam Bakhtiari is predicting the emergency begins essentially now, but even he is now saying peak is still about 5 years away. If you take his position only slight long, it gets close to the models above.
Not to be forgotten are Jean Laharre, (all liquids post 2020), and of the French chief of explration for Total, M de Margerie who does not give a year, but simply declares the 2030 drean if 120 million barrels a day as impossible, "never" to use his words.
But M de Margerie throws the monkey wrench in the works, by confusing together the concept of geological peak and logistical peak. His quote:
"The IEA was mistaken in using recovery factors that failed to consider the timing of new resources coming on stream. M De Margerie said. The world was confusing the issue of reserves with the scale of the problem in producing those reserves. He said: "The oil reserves are there, that is the good news, but what we can bring on today to meet demand is limited by factors other than what scientists see in a lab or think-tanks."
Note that last sentence, because it is much more important than it looks....the words "The oil reserves are there, that is the good news...", is about as far from the existential definition of true "peak oil" as you can get.
What M. De Margerie is talking about is much closer to what the long posts supposedly by "energy digger" later down this string, a depiction of a world oil and gas industry that has been gutted by the cheap energy prices of the 1980's and 1990's, now without reliable technicians and employees, rife with graft and corruption, and with aging and decrepid equipment, and still, witht the world facing energy crisis, even catastrophe, no ability to gain needed investment.
Again, that is not a definition of "Peak Oil". It is a depiction of a cyclical industry depression. It would also explain the price increases in oil and gas without peak oil, in that we are now having to try to play catch up to try to get the industry back up to standard, to avert economic disruptions.
It seems that everyone is starting to come to a broad set of major "understandings", that can be loosely said this way:
a. The URR numbers are almost totally unreliable, and have to adjusted repeatedly, thus making the dating of geological peak oil or natural gas all but impossible. Demand changes, and market management in the energy industry, combined with mismanagement of investment in the industry, make the picture of real production capabiliity of oil and gas completely unknowable.
b. There now seems to be enough production capacitity visible in the system to provide oil and gas to 2020, all liqiuds slightly longer, without serious market disruption caused by geological shortage. If there is demand destruction of a serious impact, that number of course would be pushed further into the future. Crude oil, gas and condensates can be considered for all practical purposes interchangable through LNG, LPG and gas to liquids technology. However, logistical, geopolitical, financial, and market structure disruptions of very serious nature are very possible at any time, of almost any magnitude, and completely without warning.
c. Massive, very massive, investment in the energy industry of the world is long overdue. The emergency right now is people, money, politics and heavy machinery and not geology worldwide. It is a different emergency than geological peak, but an emergency nonetheless. But, it creates a completely different set of scenarios confronting the industry, the investor, the customer and the nation, that will respond different to approach than geological peak oil. This is of extreme fascination, aod poses some fantastic opportunities. It is of the most ludicrious fantasy to expect this scenario to produce a "back to the Earth" simplicity any time during our lifetime.
d. The above scenario does not preclude, or in any way compete against true geological peak of conventional light crude oil, which evidence indicates may be getting near, or could already be past. On the other hand given the URR numbers, the corrupted investment and market control, we cannot know, and may not be able to know for many years after it occurs. Geological conventional peak oil is essentially a moot point.
Conclusion: We are now in a race, one of the most heated ones we will ever undertake as a culture, between the forces of depletion and the corruption and decay of a crucial industry, and the energy structure that will replace it. (Hirsch calls it, rather stiff upper lip fashion "mitigation", I call it the "new design age", but it is the same thing, massive restructuring and efficiency increases and energy diversity) . We will need the most technical, artistic, inventive and creative population in our history, and an educated core of young people that surpasses our prior great generations. Evidence is building that we are running further behind than ever, and this will be our major failing, perhaps the back breaking one. There is no indication that physics or science are the limiting factors.
Again, and this is absolutely and essentially imperative to understand:
Due to the extreme amount of energy that will be in available in the world for the right price and with the right arrangements. Trillions upon trillions of BTU's of energy will be available even if no renewables/alternatives succeed, in the remaining crude oil, retainable methane, natural gas, and bio fuel easily digested.
Peak does NOT mean the world is running out of energy, that is a child's assumption.
With efficient solar and wind capture, that amount will of course soar. But it will not, despite the romanticism, be equally distributed. Some may live their life without fossil or renewable energy, just as man did for thousands of years. But many many million people will always know energy, for centuries to come, and all the things that modern energy bring.
There will be winners, and they will be very well off indeed. Sadly there will be losers. But "modern" technology and culture will go for many more centuries, and if it is done right, we will be dealing with these problems on other worlds centuries from now.
Roger Conner known to you as ThatsItImout
- The petroleum industry simply hasn't found large amounts of new oil in a long time. They are using technology that is considerably better than 40 years ago: 3D seismic, horizontal drilling, gas injection, deep water, and so forth. And they have invested heavily in those technologies. Add to that the nationalization of oil resources. Venezuela and Russia are following a different model than the "globalization" we've been promoting.
- Major, experienced players like Pickens and Simmons are saying the best years are behind us. Debating URR's and corrosion conspiracies won't change the relationship of oil demanded vs. oil produced.
- There is an ominous, emerging picture involving resource depletion across fisheries, rain forests, desertification and aquifers, to name but a few. This will accelerate the competition for scarce energy.
- The sinks are in trouble. GHG levels are not at defcon 3any longer: glaciers are melting, permafrost is melting, the methane clathrates are bubbling.
- The M.E. is in overshoot. Water and soils will not support those populations. 80% of Saudi Arabia's food is imported. Probably 95% of Palestine's is. The instability there will not be solved with "democracy". It is being resolved with war.
- We have no domestic energy strategy. The President, Congress, and our corporate leadership are supporting ethanol. Our game is to produce our way to prosperity with corn or biomass. This is ludicrous.
We have a lot more in common with the inhabitants of Easter Island than many here want to recognize. Even within this group, with a minority of exceptions, Cherenkov, Beggar, Cyclicious, Pedex... the vision is still grounded in the car...I agree with you that oil will not run out tomorrow. But the real issue is lead time. What substitutes do we have ready to come online within the next few years as it moves beyond $100 a barrel? None. We have none. We have no game plan for $100 oil. At $200 oil, we have coal.
Then we are cooked.
Diesel is much more important for farmers than for miners. Diesel is less than one half, less than one quarter, less than one eighth of the cost of iron ore, or steel, or pipe.
What's really going to hurt is when all those under employed people making ten bucks an hour are suddenly getting paid as much as you do. You're going to think it's the end of the world when the sixteen year olds start getting apartments and cars and it comes out of your slice of the pie. Even when the pie gets bigger, your slice will get smaller.
The pendulum swings, and then swings back. Welcome to 1973!
We have a lot of options on the table, and they are being fully explored now thanks to higher energy prices. The problem isn't that we don't have a plan and we're not doing anything, the problem is we're still not doing enough. The expansion of wind and solar power, combined with research into CTL, cleaner coal technology and, yes, even ethanol, give a lot of reason to be optimistic. Not that there won't be problems, but clearly we have options other than complete societal collapse, which is what's important.
I think a lot of the doomers here underestimate how quickly our society can change. Compare 1900 to 1950 to 2000 and look at how different things are. By 2050 things could be equally different, with trains everywhere and only a few, small electric cars.
Will,
You have some interesting and very valid points, one in particular and I will come back to that, because I think it is so critical.
Using your numbering system, which makes a thought or two on each of your points so convenient, to your point
- "The petroleum industry simply hasn't found large amounts of new oil in a long time." To some extent true, but I don't know how hard they have been looking in a long time. The searching methods you describe are relatively recent. Through the 1980's and 1990's, we have to take their word for how much they have been searching. With oil and gas at historic lows when inflation adjusted, and oil and gas flowing freely from the North Sea and Persian Gulf, why would they have spent vast amounts looking for it. Do not be too surprised by some big finds if the price stays about $70 a barrel for very long. On the "Venezuela and Russia" point, we will see. China once felt that way, as did Libya. Going it alone is tough, even if you have oil and a very small home population. Just ask Libya.
- Pickens and Simmons carry some weight given their long experience, and I think the phrase "the best years are behind us" on oil and gas may well be true. This bodes for tough times, but is not proof of impending peak by itself. But that is a strong argument to me.
- I will get back to....It is big, but in a different way...
- M.E. in overshoot. Yes, your are certainly correct on that one. your sentence "The instability there will not be solved with "democracy". It is being resolved with war." I would differ with that conclusion however....war doesn't seem to be resolving anything. These are desert environments not suited for supporting massive numbers of very consumptive people. Only extremely efficient and sustainable design will make it possible over the long haul, and population restrain. But, this does not directly impinge on oil production, and in fact, only encourages these people to produce and sell as much oil as they can to support their populations. The idea of the Arabs using the "embargo weapon" declines each day as they need the money more and more.
- Is a philosophical discussion. There are those who believe that a centralized energy program at the federal level could do more harm than good, as it would come under the sway of big money lobbies and persue not what worked best, but what was best lobbied for and paid for. You mention what you call the "ludicrous" corn to ethanol program. This is a perfect example of Archer Daniels Midland, General Motors, and the farm lobby getting an "energy program" that may be more consumptive than helpful.
Now back to your points 3. the one I cosider "the biggie"., the "sinks" problem, in particular on GHG and the "resource depletion" concerning natural resources, biosphere, water, and plant/animal diversity. I see these as somewhat seperate but yet related to the energy issue. The fact is, there are many who consider these issues of far more pressing concern than peak oil itself. Al Gore, who seems to understand the problem of peak oil, in recent remarks on the "David Letterman Show" said, even if we have the oil and other fossil fuel in more than enough abundance, we can't burn it due to the critical Greenhouse Gas issue! If we accept that theory, then Peak Oil becomes a non-issue anyway. Even if we find ten new Saudi Arabia's, we cannot burn the fuel, at least not unless we can squester the carbon release!The carbon release issue poses a whole set of problems different than peak oil. One writer phrased it as the attempt to get energy without releasing carbon, which essentially rules out most currently existing technology, with or without the fuel to make it run. If we accept this paradigm as correct, then renewable energy (solar and wind), nuclear fusion, nuclear fission, and carbon sequestering become the only technology of the day. And one more thing: Methane recapture from waste.
Without carbon sequester, coal to liquid, gas to liquid, tar sand oil, Venesualan heavy oil, oil shale, peat bogs, etc. are all out of the question.
So to me, while different in nature than "peak oil", it is your argument of the "sinks", in particular the carbon sinks, that carries the most weight, and tells us where we must make our first and most pressing effort.
But again, this is a considerably different nature of problem, and future scenario, than straight up "peak oil" and poses a whole differentt set of problems, some of them perhaps much more daunting to solve than straight ahead peak oil would be.
Either way, we know that conservation and efficient design are the sure ways to bring carbon release down now. Solar, wind, methane recapture from waste, and use of natural gas and LPG Liquid Petroleum Gas or propane) and carbon sequester to make use of the remaining oil and coal and possibly some tar sand (although I don't hold out high hopes there).
You asked, "What substitutes do we have ready to come online within the next few years as it moves beyond $100 a barrel? None. We have none."
Well, at a $100 a barrel, oil is still relatively cheap, given the amount of energy it has per pound or per square foot. But the replacement is looking more and more like the electric power grid. The concept of the plug hybrid may be within two years per Toyota, and they know the hybrid business like nobody in the world. The idea of the "grid based transportation system" is far too radical to go into here (there have been many posts on TOD on it, including some of mine, and also, go check out
http://www.calcars.org
So my argument is still the same: Peak could have been yesterday, but my bet is still "peak, al liquids" 2020, and a very radical change in transportation fueling (well, not just radical, but completely revolutionary....it will rock the transport/liquid fuel market to the core....:-),, and could in fact leave much oil in the ground, many OPEC and other producers reeling, and collapse in price of oil.
Then, we attack the carbon sink!
Thank you for a fascinating discussion!
Roger Conner known to you as ThatsItImout
I think that the recognition of climate change is steadily gaining traction. Much too slowly, true, but soon there should be sufficient significant events like increased extreme weather, summer melting of the Arctic ice cap, to foster the chance of at least some serious policy and behavior change. However, we'll not know if any positive changes we might make will be sufficient to avert catastrophic climate change until many decades later so, sadly, we will almost certainly do too little, too late.
I would add just one major point to your 5:
6. Our economic and financial systems will be extremely threatened. They will very likely breakdown significantly and quite possibly break almost completely. This will probably severely prejudice our ability to cope with the other problems.
TODC ... you people are great!!!
Some xcellant responses to the BP ?
But I am the King atleast In my realm of wasteful
reflex.
BP = BRAIN POWER
I found Be Patient, Baked Potato , Begin peddaling, Burning Planet
in the top ten list....
CEO needs to relax, put a bunch of kindergarteners in the
music room with out adult supervision and ... well
sure is fun, no harm... no smell !
BP = BLIND PATCH
Don't we already have this data from EIA or IEA or CERA or all the Peak Oil books being published, and confident pundit and industry expert comments.
The decline rate vs the "new project" rate is the nub of the entire issue.
If this has not been done, or done accurately, what are we talking about?
... then I'll answer part of my own question: lack of verifiable and auditable OPEC data. Regardless of how much we know about "rest of world" the OPEC fog and misinformation renders the analysis less than useful
this also reinforces the problem of the transparency of URR data and makes us think about the ramifications of a lot of other data problems.
we need to know the answers to these questions as Matt and others have pointed out.
Its reasonable to assume that SA is capable of extracting using the same methods as are used in known fields.
There is still the question about how they manipulate production but in the big picture I suspect the overall production of the field does not change much of your pumping most of the time close to the reasonable flow rate and for SA as often as they have rested the fields they have also pumped them hard. Texas even under control did not change its peak date btw.
So sure there are still questions. But what I want to see is what happening with depletion in fields using modern extraction methods. All evidence points towards massive depletion rates or the cliff effect.
If we can confirm the cliff bubbles up from the field level which it should then I really believe our undulating plateau
is going to hit a sharp painful drop off.
If we can get enough numbers together we may be able to reasonable predict if the cliff exists and if so the decline rates.
There is enough evidence that we are peaked or close to the peak but we really don't know much about the post peak decline rates and in the context of peak oil this is the single most important even. If its slow and even then societies response can be late with less ill effect.
If there is good evidence for a cliff then its critical to find it and present it. We cannot handle a cliff.
Right now I'm convinced that we will see cliff after cliff in fields extracted with advanced methods this will lead to and overall massive decline. Consider if even a few of the larger fields start into massive decline we simply don't have the manpower to do the work needed to slow the declines.
For example do you really think Mexico is going to be able to get the rigs tubing etc etc for Cantrell over the next few years. Esp if even on major field in the ME is also collapsing ?
Try 4-5 going down hard at the same time.
I just don't see the NOC's handling this scenario well.
So I think were looking and a lot of crashing fields in the near future with basically nothing we can do since there just aren't enough rigs to do the massive amount of infill drilling to slow the declines.
Basically as we move over peak the constraint on production is going to be drilling rigs. And if you havent noticed this is already happenning and were not even off peak yet.
Some people on this board have remarked that flow did not increase when controls came off oil and gas in the seventies and eighties. Is there any paper or article in an industry publicantion on this?
There was considerable excess capacity in 1967, when the Texas RRC responded to an Arab oil embargo by flooding the world markets with oil.
Really kind of odd to think that three elected officials of the Texas Railroad Commission effectively controlled world oil prices for about 35 years.
But the rate of depletion/decline is a function both of technological progress and effective demand - and since demand is unforeseeable, so is the rate of depletion and the peak itself. The effective demand for oil may be influenced by anything from the cost of production itself to a butterfly flapping its wings in China to an asteroid collision (which might postpone the peak until eternity).
It's ASPO Gospel Truth. Here is Jean Laherrere speaking on 30 May 2006 at Lyon ("Quelle mobilité après la pétrole?") on the modelisation of future production:
"But obviously if there is demand constraint [...] the peak will transform itself into an undulating plateau" (FR: "Mais evidemment s'il y a contrainte par la demande [...] le pic va se transformer en plateau en tole ondulee.")
Source: http://www.oilcrisis.com/laherrere/CERTU2006mai30.pdf.
Here it is in logical form:
The peak year/decade is predictable only if demand is predictable.
Demand is not predictable.
Therefore, the peak year/decade is not predictable.
BTW it's interesting to note that Laherrere refers to an "undulating plateau" - exactly the same term used by CERA in its June 2005 report. In its press release on this report, CERA wrote: "The CERA analysis rejects the current fear that a near-term "peak" in world oil production and a coming exhaustion of supply are near. The report indicates that the "inflexion" point will come in the third or fourth decade of this century. Moreover, rather than a "peak," it will be an "undulating plateau" that will continue for several decades."
Source: http://www.cera.com/news/details/1,2318,7453,00.html
So what's the difference between Laherrere 2006 and CERA 2006 (give or take a decade)?
Demand is essentially unlimited, so peak should be predictable.
I am off on vacation next week and will be real busy the week I get back - but following that I may look at the N Sea Fields if no one else has done so by then.
does this link help eliminate the language barrier?
This is their 2006 report (in english) Don't know if the data is valuable or not.
I love being a lazy underworked office guy! Lets me do so many useful things on the clock!
Sorry about the formatting, but the available font isn't an equally spaced font.
UK Fields.
decline
ALBA............-0.14
ALWYN NORTH.....-0.04
ANDREW..........-0.02
ANGUS...........-0.27
ARBROATH........-0.16
ARDMORE.........-0.74
ARKWRIGHT.......-0.47
AUK.............-0.29
BALMORAL.........0.37
BANFF...........-0.24
BEATRICE........-0.13
BEAULY...........0.05
BEINN...........-0.48
BERYL...........-0.09
BIRCH............0.13
BITTERN.........-0.15
BLAKE...........-0.20
BRAE CENTRAL.....0.84
BRAE EAST.......-0.21
BRAEMAR.........-0.02
BRAE NORTH......-0.46
BRAE SOUTH.......0.17
BRENT...........-0.38
BRIMMOND........-1.00
BRITANNIA.......-0.15
BROOM............1.60
BRUCE...........-0.14
BUCHAN..........-0.08
BUCKLAND........-0.28
CALEDONIA.......-0.52
CAPTAIN.........-0.26
CHANTER.........-0.50
CLAPHAM.........-0.12
CLAYMORE........-0.11
CLYDE...........-0.04
COLUMBA BD......-0.30
COLUMBA E.......-0.33
COOK............-0.14
CORMORANT NORTH..0.02
CORMORANT SOUTH..0.05
CURLEW...........0.22
CYRUS...........-0.03
DEVERON..........0.04
DOUGLAS.........-0.23
DOUGLAS WEST....-0.07
DRAKE.........-0.51
DUNBAR........-0.28
DUNLIN.........0.22
DUNLIN SW......0.52
EGRET.........-0.70
EIDER.........-0.10
ELGIN.........-0.15
ELLON..........0.57
ERSKINE.......-0.23
EVEREST.......-0.21
FERGUS........-0.36
FIFE..........-0.14
FLEMING.......-0.26
FLORA.........-0.28
FOINAVEN......-0.16
FORTIES........0.22
FRANKLIN.......0.25
FULMAR.........0.79
GALLEY........-0.23
GANNET A.......0.04
GANNET B.......0.16
GANNET C......-0.17
GANNET D......-0.19
GANNET E......-0.09
GANNET F......-0.34
GANNET G......-0.10
GLAMIS........-0.89
GOLDENEYE......4.50
GRANT..........0.25
GRYPHON........0.65
GUILLEMOT A...-0.12
GUILLEMOT NW..-0.50
GUILLEMOT W...-0.68
HALLEY........-1.00
HAMISH........-1.00
HANNAY........-0.02
HARDING.......-0.20
HAWKINS.......-0.53
HEATHER .......0.10
HERON..........0.07
HIGHLANDER.....0.25
HOWE...........6.02
HUDSON........-0.23
IVANHOE.......-0.36
JADE..........-0.08
JAMES..........1.91
JANICE........-0.50
JOANNE........-0.14
JUDY...........0.12
KEITH..........0.00
KESTREL........0.03
KINGFISHER.....0.05
KITTIWAKE.....-0.31
KYLE...........0.22
LARCH.........-0.36
LEADON........-0.23
LENNOX........-0.27
LEVEN.........-0.48
LOMOND........-0.22
LOYAL.........-0.28
LYELL.........-0.06
MACCULLOCH....-0.17
MACHAR........-0.08
MACLURE........0.11
MADOES........-0.27
MAGNUS........-0.09
MALLARD........0.01
MARNOCK.......-0.47
MERLIN.........0.20
MILLER........-0.20
MIRREN.........0.06
MONAN.........-0.74
MONTROSE.......0.61
MUNGO.........-0.06
MURCHISON.....-0.04
NELSON........-0.17
NESS..........-0.56
NETHAN........-0.93
NEVIS.........-0.11
NINIAN........-0.04
ORION..........0.34
OSPREY.........0.16
OTTER.........-0.31
PELICAN........0.12
PENGUIN EAST..-0.50
PENGUIN WEST...0.50
PETRONELLA....-0.38
PIERCE.........0.35
PIPER.........-0.03
PLAYFAIR.......5.69
RENEE.........-0.37
ROB ROY.......-0.13
ROSS..........-0.34
RUBIE.........-0.28
SALTIRE........0.17
SCAPA.........-0.20
SCHIEHALLION..-0.29
SCOTER.........0.35
SCOTT.........-0.28
SEYMOUR.......-0.51
SHEARWATER....-0.50
SKENE.........-0.41
SKUA..........-0.99
SOUTH MAGNUS..-0.26
STATFJORD.....-0.13
STIRLING.......0.80
STRATHSPEY....-0.48
SYCAMORE......-0.84
TARTAN........-0.19
TEAL..........-0.32
TEAL SOUTH....-1.00
TELFORD.......-0.31
TERN..........-0.23
THELMA.........0.00
THISTLE.......-0.18
TIFFANY........0.11
TONI..........-0.16
TULLICH.......-0.22
WEST BRAE......0.22
Total decline from Offshore Fields -0.11
Toal Crude Oil from Offshore Fields 0.11
Here's one post:
Thanks for the kind words. The oil field is a particularly dis-franchised industry - we have always taken a backseat in many formats. When we were starving at $12 oil and had 85% of the people in our industry losing their homes to the bank in a single year - there were no cries of foul and let's give some money back the the oil companies to help their people. This is not whining, people in the oil business don't do that - we get up and go find work - there is a point here... During the down-turns in the oil industry, the talented people have esentially been forced out of this business - I cannot even begin to convey the magnitude of the losses - they are staggering. These people NEVER come back to the oil industry as they are smart and have found other career paths and moved on in other industries - understandable. These down-cycles have come in regular waves - usually less than 10 years apart - this is a major problem as I will further discuss below.
The essential point here is this - there is nobody who can perform the work needed to replenish the resources we are talking about - sure, we are drilling and doing work but it is so inefficient that is is a pethetic thing my friend - it's really terrible. As someone with 30 years of high-end experience, I am contacted almost daily with job offers - not a bad thing for me, but a terrible statement of the industry as a whole. I am published in 170 countries and have worked in more than 40 countries in the last 30 years - I dare say that there are no more than a few thousand people in the world that can say that - there should be 50,000 people with that kind of experience but there is not.
Peak oil is here - I agree with Simmons - he has an educated viewpoint that few really understand - even in our own business, few understand it because they have such little experience in this business (reference previous sentences)... The education of an advanced oil engineer that is worth his salt and actually contributes to new ideas and is highly productive is about 10 years (minimum - remember the time-frame I established above for industry down-turn cycles?) - there are few people in this industry now with 2-3 years and many people with weeks and months only - our rigs are staffed with drug-ridden flunkies - I would say about 80% of rig personell are extremely incompetant - these figures are rough of course but I believe I am being very conservative... the big picture is this - we would not be at or so near to peak oil if we had a robust and vibrant industry - to be perfectly honest, the petroleum industry is in a shambles and I think it will be 10 years before we start to make a decent recovery - and also, this is really too late, we are about 10-20 years too late in fact... we could be 3 decades behind the curve in the whole scenario - - to add fuel to fire, the other countries we are competing with have smarter and more motivated people than Americans... I know thta isn't what you want to hear - I don't like it either but it is a raw hard fact - other countries have a much more educated work-force than the United States. We are competing in a large sence with other countries for resources now and they not only have a better educated industry than the US - they are also closer to the resources in most cases and have better relationships, lower cost-structures, etc... yes, we are in Peak oil and it is getting worse, not better - we may catch up a little someday but I probably will not see it in my career.
Here's his other post:
no offense taken RockDoc, this is one of the reasons why I created the EnergyDigger.com website, to keep up with all this news... I had presumed from your screen name that you were a reservior engineer or a geologist.... your dealing with SPE papers and statistical data, much like the US government and some hedge funds out there - what I offer you is not hard data i nthe form you ask for and obviously prefer - but rather on the ground experience - I have drilled the new replacement wells as well as the workovers and I have seen first hand the declines and they are absolutely positivly real - even if I cannot support you with some SPE paper to that effect - the real issue here is graft - let me explain a particular situation and it will make more sense for you - try to put SPE papers and raw statistical data out of the picture for a moment and imagine that government and SPE figures are as about as accurate as the inflation figures and housing starts - - this is one of many variations of the same scenario in all phases of operations in Saudi - exploration/drilling, production, refining, etc..etc... - - - the royal family is now near 6,000 strong if not more... the king owns everything in that country - and i mean everything. By extension, the royal family has it's hands in everything that has anything to do with money - some flunky way down the list happens to control a mud (barite) supplier. The barite company sellign the barite to Aramco (via this low-level Saudi family member) decides to give the flunky a big cash award for accepting a lesser volume of barite but mark it as the full weight/volume as per the sale. The flunky makes off with a lot of cash and the barite supplier delivers the 60% of barite needed to drill the hole with. The drilling supervisor in charge of the operation is no idiot (my spelling is not great but I do know how to drill a well in my sleep) and confronts the Aramco manager with the issue decidely laying out the consequences of this action. The manager tells the supervisor to drill the well the best he can (because there is more than one cash award floating around, obviously) - - your hard working engineer drills the well with underbalanced drilling fluids which for the uninitiated causes blowouts among other greta things - I have seen three 30 million dollar Santa Fe rigs burned to the ground in as little as 4 months. BUT, let's say there is no fire, we get through this thing with our skin on and complete the well - Whew! OK.... well, theres another really big problem that will nag us for the remainder of the entire life of the well. When we drilled the well underbalanced (meaning the formation pressures are higher than the wellbore artificially induced drilling mud weight - the rheology of the drilling fluid systems did not build up what is termed a "skin" on the wall of the hole to seal the formation in from the chemicals and other formation fluids up and down the wellbore - as a reservior engineer, I can imagine you will greatly appreciate this particular example - if you take a core, it will be contaminated to unusable - and thus extreme formation damage has occurred - ultimately reducing the output and longevity of the well. SIGNIFICANTLY ! I have drilled wells over there in a field where I had everything i needed and brought in 600 bbl a day but most of the time, the wells can be ruined (in terms of Saudi rates) to less than 50 bbl/day... and that is day one, they can decline after that for the first year or two... the fields over there are all very homogenios - the wells can be batch drilled in a straight line across the desert and the results can be nearly identical with exceptions - the data I have is not printed but it is so firmly established that is is undisputible - at least for me.
That was only one example of graft hurting the Saudi oil production system - there are many many of these examples and that is just Saudi - Nigeria is even worse. Try North Africa or Eqypt, they are bad too - the European oilfields are much better run but less prolific. I drilled Japaneese Geothermals in Kyushu Island areas last year and they are extremely efficient but no real reserves except for the Northern Sapporro areas... Phillippines are the same - spent a month there last year. I spent January - June last year in Australia and they are declining at about 4% per year - falling behind very fast - a national emergency actually in their eyes. I lived in Venezuela and Columbia for 2 years in the mid 90's and graft is bad there as well but in a different way - the government runs the oilfields and need I say more about that??
Listen, I know you are trying to get the straight skinny here and I like hard fast numbers as much as the next guy, seriously, I am an engineer and that is a well know fact about the breed but I am telling you from first hand accounts at the most upstream end there is - I have been kidnapped 3 times in my career, twice in West Africa and once in South America - I have had morters land within 50 yards of me in Cabinda, Angola - - I flew into Kikwit, Zaire when ebola virus broke out and my company evacuated the country, I have worked hazard duty in the worst environments on earth and these experiences give one a keen eye for many things in life - including life itself - I have spent my entire adult career chasing oil - it has been my passion and my life for 30 years. I wish I had a better picture to paint but it is not as you say - the problem is real and I suggest only look at the real price of energy fuels today to justify my conclusions even if you cannot accept them at face value in this forum. It is actually a pretty simple equation but so many, including educated people find it hard to believe we are running so close to the edge on supply/demand.
That is my story and I am sticking to it...
Sounds to me like Saudi Arabia could have some serious BP problems brewing. If these comments are better in a different discussion, please move them.
BP = BEFORE POLITICS
Well said. But it is not just the people who left, it is also the people who NEVER JOINED.
Within the next 10 years, the remaining, upper echelon talent at Exp Manager , Drill Manager is due to retire.
Almost a whole generation of talent that should step into these shoes is not there.
From the late eighties and all through the nineties, people avoided the industry because it was seen as dirty, earth-raping and largely a sunset industry with zero security of tenure.
And it is at all levels. Chopper pilots, Rig electricans, Drillers you name it.
What really hurts is the loss of hands-on experience.
The Oil industry ate its own children.
You also have the problem that when you have a downturn you can persuade people under you to cut corners because they can't just go someplace else. Remember the Alaska pipeline they didn't inspect for twelve years because it was too dirty on the inside and just forgot about, and that took Alaska down for 400,000 barrels a year?
Works the same way in the computer business. We don't just import workers, we import ethics. Except in the computer business we haven't seen major catastrophes happening out in public.
I have sent out my resume to many companies and placement industries.
I have a diploma in electronic ( I was a techncial officer for about 10 years) I have degrees in geophysics and electrical engineering. I have spent the last 10 years in the IT industry and would like to move into something that interests me. I would be happy to accept an entry level position.
Guess how many people contacted me.
None not one. I did get two aoutomated reply.
However every position require practical experience. It is catch 22
May be a 42 year female has something to do with it. I don't know.
These industries may be desparate but they are not that desparate. I am not really surprised just a bit disappointed.
Just my experience
I worked in Asbestos Abatement during the boom (hysteria?) of the late '80s, and most of our workers came from a few villages in central Mexico. The pay was very good, the work was safe -- but very hard and unpleasant (full containment, moon suits, you can't talk with a HEPA respirator on).
The office was located in a city with a very large unemplyment rate, but the company early on gave up on trying to hire locals.
Did you ever hear the phrase "they don't pay me enough to do X"? THe answer is that no amount of money would be enough.
Years ago I was told the maximum age for schlumberger was 28y.
I will keep trying.
Cheers
Doesn't this statement contradict the rest of his comments, i.e. he basically says that everyone- SA, N. Africa, Nigeria- is completely incompetent. So who are these smarter and more motivated people?
http://www.appea.com.au/download.asp?ID=654
Crude oil production was down from 126.3 million barrels in 2004/05 to 113.3 million barrels in the latest year, according to the APPEA data. Trends in other petroleum commodities showed increases ranging from 15.9 per cent in liquefied natural gas sales, 3.3 per cent in liquefied petroleum gas, 2.8 per cent in condensate and 1.5 per cent in domestic gas.
Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields, so will be able to pump at the present rate for about 70 years even if it never discovers another drop of oil. In fact, Aramco and other NOCs national oil companies are likely to find plenty more if they look, since their territory has not been very thoroughly explored. Only 2,000 wildcat wells have ever been dug in the countries around the Gulf, according to Leonardo Maugeri, an Italian oilman, compared with more than 1m wells in the United States.
I always enjoy reading the economist magazine, they are so thorough on the information, but is this data true?
Is it true that they can pump for another 70 years at the same rate, EVEN if they never discover another drop of oil?
Are they really exploiting only 10 out the 80 fields?
He does a field by field examination of the largest fields. It is important to note that almost all the large fields were discovered before we landed a man on the moon. They are old fields. Many of the largest fields had peaked in production before 1982 when the field by field reporting was stopped. If they were dropping in production in the 1970's then how will they still be pumping the same amount of oil 100 years later (70 years from now)? None of the Texas fields have lasted so long (nor Alaska, or North Sea, or ...)
He writes a whole chapter on the exploration for oil. Here is a quote from the conclusion:
"It can be said with great certainty, however, that those who think Aramco has not made a zealous effort to find new oil resources in Saudi Arabia are simply misinformed. The effort has been made, and it has not been rewarded by the discovery of vast new quantities of oil or natural gas."
Read the book. Choose for yourself.
I've read the Simmons book -- but other experts, such as Maugeri, disagree with his conclusions.
So it's Simmons versus Maugeri. Who are we to believe?
Here's an article ("Is the party over") which inter alia addresses the Simmons-Maugeri `controversy', published in the German Frankfurter Allgemeine Zeitung just over two years ago:
http://www.odac-info.org/articles/FrankfurterAllgemeine230504.htm
German original (`Endgültig Schluß mit lustig?') here:
http://www.faz.net/s/RubEC1ACFE1EE274C81BCD3621EF555C83C/Doc~EF2C348BAC73B4B23A2A38CBF8C435679~ATpl~ Ecommon~Sprintpage.html
Extract:
"Up to now, Saudi Arabia has been the guarantor for the free flow of oil. Once again, the sheikhs are being called upon to set things right. However, doubt has recently increased as to whether the Saudis have the additional capacity to cover the increasing demand in the oil market for decades to come, and thus keep prices at least fairly reasonable. Maugeri, whose company is very involved in the Gulf, says he has reliable information that up to 2009, Saudi Arabia could produce much more than is necessary to regulate prices."
Note: no doubt the fact that SA didn't produce enough to regulate prices since 2004 doesn't mean they couldn't do so if they wanted to do so.
As a perplexed but reasonably well-read layman, I remain perplexed ... and the more I read, the more perplexed I get.
"The average decline rate in Saudi Aramco's mature fields -- Ghawar and
a few others -- "is in the range of 8 percent per year," without
additional remediation, according to the company's statement. This
means several hundred thousand barrels of daily oil production would
have to be added every year just to make up for the diminished
output."http://www.peakoil.net/Newspapers/20040224NYTTiredSaudiFields.doc
I would also list for inspection the data in Matt Simmons' book on the peaks in certain fields.
field bbl/d peak year
Ghawar 5,694,000 1981
Safaniya 1,544,000 1981
Abqaiq 1,094,061 1973
Berri 807,557 1976
Zuluf 658,000 1981
Khursaniyab 208,000 1979
Qatif 150,000 1979
Abu Sa'fab 139,000 1979
Abu Hadriya 130,000 1977
Harmaliya 129,877 1974
Marjan 108,000 1979
Dammam 61,000 1977
Fadhili 57,560 1977
Manifa 57,179 1966
Matthew R. Simmons, Twilight in the Desert, (New York: John Wiley &
Sons, 2005), p. 120
What is your source for this statement, please?
In general, "The Economist" is as good as it gets in journalism. But for oil they flub with spectacular gusto, and I have a WAG why. Who does the "Economist" hire for its reporters? Engineers? No. Scientists? Rarely. The "Economist" hires young people because they write well and generally have excellent liberal educations in the humanities or social sciences. These are extremely intelligent people who have learned that they are much smarter than most of the people who are sources of their articles.
The editors are excellent, because they tend to give the reporters as much freedom as possible, but the editors are cut from the same cloth as the reporters (which once upon a time most of them were).
Now what happens when you send a hyper-literate extremely intelligent reporter out to interview some crusty old oilmen?
Answer: The reporters are completely bamboozled by the guys who tell them what they think the reporters would like to hear. In other words, as so often happens, very clever people are outwitted by others who do not appear to be very sophisticated.
BTW, at "The Economist," they hardly ever hire an economist as a reporter. There is a snobbish (and true) prejudice that economists cannot write their way out of a brown paper bag, together with the conceit that any clever Oxbridge English major with First Class Honors can pick up any needed economics (or business) concept in a couple of hours.
None of this is meant as criticism of the "Economist." They do what they do very well--with a few exceptions, such as reporting on oil markets.
When the economist predicted $5/b was coming and would last a long time, it followed the period when SA pushed prices down to $10 during the 1998 opec feud. The Economist writer calculated that SA would be better off producing much more oil, theorizing that SA would make more net than when it was at $10!. (It was around here that I stopped my subscription.)
Aside from what would happen to the rest of the oil industry - widespread collapse, resulting in much lower produciton - it seems that SA is in fact doing better at $75, and may soon do better still at $100.
AS an aside, oil is more like a food than a mineral, and not just because of the growing interchangeability. Oil and gas are not recycled like the metals; when we burn them, they're gone.
At TOD, you have to shoot fast!
What all this means to me is that the Saudis will become major exporters of refined product in the not-too-distant future. This, of course, is the same strategy that the the Canadians are using to exploit their oil sands assets, but the Canadian bichumin (sp?) is not as scalable as the new Saudi sour crude apparently is so the Canadians cannot ramp up production as rapidly as the Saudis will.
I would expect this Saudi strategy to be successful (assuming the new plants do not become targets in the ever-enlarging ME wars). Product exports from new Saudi sour crude should serve to mitigate some of the declines that Ghawar may experience in the next few years.
All this said, though, and for whatever it's worth, I am inclined to believe the thrust of the Bhaktiari comments cited below: namely that the peak in light sweet crude underlies and dominates the entire oil discussion, making the production of downstream products from non-sweet-crude sources simply an alleviation of the eventual trend toward lesser useable oil products being available, not a reversal of that trend.
So, the number of barrels reported must be first cut in half to allow for what you can actually extract, then you must allow for the decline in oil as compared to water, and that is when you look at numbers like the ones reported in the Economist and only shake your head.
as noted here:
Saudi expansion on track
Saudi Arabia: Monday, November 14 - 2005 at 09:20
Saudi Arabia says its plan to boost oil production capacity by 1.5m bpd by 2009 is on track. The Oil Ministry statement answered reported comments by a former top executive of state oil firm Saudi Aramco, who said the kingdom may fall behind its schedule to raise output to 12.5m bpd due to shortages of oil rigs and equipment Source
And this is dated last November, and there are several other articles i've seen that says pretty much the same thing. Its even been mentioned here at TOD, so there is no reason to believe that Saudi can maintain their production rate if they are swallowing up oil rigs from around the world.
The Economist is generally a good magazine to read, but when it comes to Oil related articles, i'd give them an F for failure to follow up and verify the information.
"The World's Giant Oil Fields" by Matthew R. Simmons, white paper published by Simmons And Company International, undated, circa 2001, 67 pages, PDF.
Paper: 258k PDF
Appendix A, pages 65-66, contains a list of the world's 120 largest oil fields, date of discovery, estimated daily production as of 2000.
Quote: "After months of digging through numerous statistics and the help of knowledgeable experts on various regions of the world, the majority of remaining "giant oilfields" can be identified. This energy white paper sets out the best data that now exists on how many giant oilfields there are, where they are located, their ages, and their probable current production. Some important questions arise from this work, including the need for far better transparency on the actual daily production rates from these fields, the need for some detail on which fields have now peaked, when the balance of all the massive old fields will probably peak and what the decline rates for this remarkably important pool of giant oilfields is likely to be over the next five to ten years."
The biggest source of field-by-field production data comes from the Annual International Petroleum Encyclopedia. This remains one of the few sources of published annual production estimates for many of the non-OPEC oilfields and a few OPEC fields. Some data came from IHS Energy Group and The International Energy Agency (IEA). Particularly helpful input came from Will Davie, Herman Franssen, Jean Laherrere, John Fitzgibbons, Ted Peterson, Colin Campbell, Robert Ebel and Richard Nehring."
That means that somewhere over 60% of production is from smaller fields yielding less than 100,000 bpd, and we need to understand those depletion dynamics as well. I'd guess there might be real differences in the technology used, and the decline rates, when compared to giant fields.
That is a very good point--needs much more discussion here on TOD.
I am not a petrogeologist, but as we are forced to find every more distant, smaller oil pockets at ever increasing costs--the economics tend to force a 'bottlebrush superstraw' approach to try and recoup the sunk costs as quickly as possible-- this leads to a sharp production peak and rapid depletion. My guess is the oil treadmill will have to go ever faster on these small fields as the big fields rollover.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
However, the opposite scenario is also plausible: with a dearth of new rigs and skilled people, companies drilling small fields may use a lower technology, lower production rate, slower depletion, long lifespan approach. Big difference in results.
Comments from industry insiders?
Bhaktiari states: "We are entering an era in which we know nothing much, where we have a brand-new set of rules...One of these new rules, in my opinion, is that there will be in the very near future nothing like business as usual. In my opinion, nothing is usual from now on for any of the countries involved. And the lower you are in the pile, the worse it is going to get."
Bakhtiari believes that the world is at Peak Oil, producing about as much conventional oil on a daily basis as will ever be produced, now about 84 million barrels per day. From here on, the oil markets of the world will be dealing with the ongoing effects of oil field depletion and irreversible production decline. By 2025, Bakhtiari expects that the world's daily production of conventional oil will fall to a level between 50-55 million barrels of oil per day. Bakhtiari counsels that the world's governments, industries, and people accept the fact and begin to prepare. There is no time to lose.
Bakhtiari is pessimistic about the prospects for large-scale energy projects based on manufactured fuels, such as coal-to-oil and gas-to-oil projects. His reasons are many, ranging from the scale and cost of such projects to the raw environmental degradation they cause. In addition, much of the feedstock for these projects, for raw material and/or process heat, is supposed to come from natural gas. But natural gas supplies are about to "peak" worldwide and commence their own irreversible curve of decline, so this is not a long-term solution. Of the 30-million-barrel-per-day decline in conventional oil production that Bakhtiari envisions over the next 20 years, he anticipates that manufactured fuels will substitute for only about 5 million barrels per day. "This is a drop of water in the ocean," says Bakhtiari.
In addition, Bakhtiari is pessimistic on the future of ethanol as an oil substitute, because it will pit the world's food supply against the needs of the world's built-up transportation system for liquid fuels. "People have to eat," says Bakhtiari.
"Cut thy spending and get thee to the nondiscretionary side of the economy."
I've been talking to a local farmer here (a good guy, pretty sharp) who is buying a $10,000 biofuel refinery so he can grow and make his own diesel.
He says the farmers in the Midwest he's talked to have been making their own fuel with these refineries for about 61 cents a gallon. This farmer is a guy who probably uses 5,000 gallons of diesel a year, so he can save some big money. Additionally, the feds give him a tax break, so the refinery will only cost about $7,500.
Have you heard of anything like this?
I'm going to monitor his progress and see how things turn out. It will, of course, take some acreage out of food production, but perhaps he'll be able to keep his tractors and trucks running.
I've been kicking around a scheme for a while. I can gow sunflower pretty well and rape. if I was to proccess it into oil, and sell it to the public at a fair market price with the condition that they brought the used product back to me so I could use it as biodesal and thus close part of the loop I could help lay the foundation for a moistly sustainable cooking oil bussines in my small town. I've great community support and can see people getting behind it. a project like that would take a lot of time away from vegatable proction and all the time involved in marketting. I'd like some hardball commentarrary from pro as i am a babe in the woods.
ps what is your market?
The concept of using vegetable oil as a fuel dates back to 1895 when Dr. Rudolf Diesel developed the first diesel engine to run on vegetable oil. He demonstrated his engine at the World Exhibition in Paris in 1900 and described an experiment using peanut oil as fuel in his engine.
In 1911 Rudolf Diesel stated: "The diesel engine can be fed with vegetable oils and would help considerably in the development of agriculture of the countries which use it." In 1912, Diesel said "the use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in course of time as important as petroleum and the coal tar products of the present time."
From:
http://www.wnbiodiesel.com/technology.html
Didn't Diesel use peanut oil? Just think, Jimmy Carter's solution to the energy crisis was right under his nose on his peanut farm.
I was lucky enough to hear Ali speak at the FINSIA lunch on the Monday before he appeared at the Senate on the Tuesday. It was a lunch to some of Australia's top investment bankers and fund managers. He had plenty to say but the comment that sticks in my mind was "Crude oil is the master domino. When you tumble crude oil, all the other dominoes tumble, whichever they are. And that is what makes this peak oil so important."
http://www.abc.net.au/pm/indexes/2006/pm_20060710.htm
(Just scroll down the page to find it)
You can read the full transcript of his Senate appearance
along with Dave Kilsby from ASPO in Sydney and Dodson & Sipe
http://www.aph.gov.au/hansard/senate/commttee/S9515.pdf
At the senate the next day he was quick to dispel any myth that ethanol would save the day.
He was quick to point out that rail was part of the answer.
This was repeated at the Senate.
many times ... always... it is never about what one should do, but what one hasn't .
scratch, scratch ... hey, all i know is i ain't cold , wet or hungry.
I got blankets, a raincoat (and enough sense to get out of the rain) and would eat maggots if i had to.
So I 'm ok.
Now about those radioactive bombs and well...
thats another story, makes my insides tickle.
My head hurt, my eyes bleed... just ruined my whole day !!!
Point... things can get a whole lot worse than mere conservation and shortages. Enjoy the show.
Counter-Point... eventually there are no safe havens...
eventually even the sweet spots are consumed.
This will be one episode you don't want to witness
Focus on life, not the alternative.
The words have more meaning than the punctuation (end) period. . . . .
think small, think fast ... PEACE
This is a fantastic link. It heartens me to read what our politicians are saying.
Also, can we get any information about what EOR techniques have been used in these fields?
http://www.ameinfo.com/71519.html
It is now producing 1.7 million or less.
The Chinese say that Daqing had 2.2 billion tonnes of reserves, with 500 million left. Output is expected to decline 7% a year to 2010, absent new efforts to maintain it.