Jack-2 and the Lower Tertiary of the Deepwater Gulf of Mexico

[editor's note, by Dave Cohen] Fellow TOD contributor Bubba is co-author of this report. He is an industry insider. It seemed important for those of us concerned about peak oil to respond to the Jack-2 test well result and all the publicity it has spawned. I also had conversations about this piece with Byron King at Whiskey And Gunpowder. Byron writes frequently about peak oil issues. I take full responsibility for this post's contents since I did the final editing.

With the successful test drilling of Jack-2 in the ultra deepwater Gulf of Mexico, there has been a media blitz proclaiming the good news. The "peak oil" theory is under attack. From Business Week's September 7, 2006 article Plenty of Oil--Just Drill Deeper The discovery of reserves in the Gulf of Mexico means supply isn't topping out, we learn

You can tune out all the scare talk about Peak Oil for a while--probably a long while. Peak Oil is the theory, on the verge of becoming conventional wisdom, that the world's petroleum supply is topping out and will not be able to meet global demand soaring along with the economies of China and India. But a successful test in a mammoth field deep beneath the Gulf of Mexico, announced on Sept. 5 by Chevron (CVX), Devon Energy (DVN), and Norway's Statoil (STO), should help put that scary scenario on hold for decades....

Cambridge Energy Research Associates predicts world oil and natural gas liquids capacity could increase as much as 25% by 2015. Says Robert W. Esser, a director of CERA: "Peak Oil theory is garbage as far as we're concerned."

Let's take a closer look at the prospectivity, geology, economics, technology, reservoirs, hydrocarbons and logistics of the Lower Tertiary play in the Gulf of Mexico (henceforth the LTGOM).
There is no doubt that the successful Jack-2 test well is a technological achievement as Chevron's September 5 press release announces. This well test set many deepwater drilling records.
More than a half a dozen world records for test equipment pressure, depth, and duration in deepwater were set during the Jack well test. For example, the perforating guns were fired at world record depths and pressures. Additionally, the test tree and other drill stem test tools set world records, helping Chevron and co-owners conduct the deepest extended drill stem test in deepwater Gulf of Mexico history.
More importantly, it demonstrated that these reservoirs are capable of producing at rates that are potentially economic. But in the end, what did Jack-2 prove and what how significant is it relative to the future of exploration and production in the Lower Tertiary of the Gulf of Mexico? What has been missing is a realistic appraisal of the discovery that goes beyond the public hyperbole.

Summary of Findings

Sections below describe the LTGOM play in some depth. For those who want to skip the details, here is a summary of our conclusions.
  • Large estimated recoverable reserves (EUR) numbers have been quoted in the business and popular press—anywhere from 3 to 15 billion barrels (Gb). Many of these articles have given the public the misperception that all of these billions of barrels were demonstrated by and will shortly flow from the Jack discovery alone. This report is meant to enlighten TOD readers on the true significance of the Jack discovery, the Lower Tertiary play in general, and what can truly be expected from it.

    The LTGOM play consists of a number of fields as shown in Figure 1 below. All of these fields have a EUR in the 350 million to 500 million-barrel range according to Rigzone and other unpublished sources. The production capacity of the various fields and the types of fluid they can deliver vary considerably. Aside from their great depth, the reservoirs and fluids present many challenges. Some of these fields will get produced, others will not. It is important for everyone to understand that the large EUR numbers quoted do not apply to any one field but rather represent the entire Lower Tertiary region.

  • The Jack-2 well test indicated a flow of 6000 barrels per day. This one data point encourages further appraisal but does not guarantee flow rates that will justify the massive (billions of dollars) investment required to put the LTGOM into full-scale production. Whether the economics of commercial exploitation is favorable for the various fields remains an open question.
  • Implementing development plans, where they exist, for these fields pushes the limits of deepwater technology. A myriad of questions exist about completion and production of the wells. Unanswered logistical concerns include securing rigs, transporting produced oil to market and what to do with associated natural gas.
  • Realistically, initial production of some fields (eg. Great White and Cascade) may happen by 2009 or 2010 at the earliest. The other fields that do get developed, including Jack, will likely not achieve first production before the 2012 to 2014 period. Delays are likely given that many technical problems are being solved for the first time. Under most forecasted scenarios, production from the LTGOM will likely only offset declines in US production that will have occurred by then.

    In comments relating the Great White field [Marvin] Odum [Shell's executive vice president of exploration and production in the Americas] said:

    [Marvin] Odum [Shell's executive vice president of exploration and production in the Americas] said while the Gulf of Mexico will remain a key producing region of the world's biggest energy consumer, it was unclear if new discoveries could counter decline rates at existing fields.

    "It's going to continue to be very important from a total output standpoint, whether there is real growth potential meaning to grow above volumes we have today or if it is just replacement volumes," the Shell official said.

I return to this last point in the final section. The other findings are discussed in more detail below.


Going back to May of 2005, Emergence of the Lower Tertiary Wilcox trend in the deepwater Gulf of Mexico provides a window on the geology of the area.
The Wilcox stratigraphic section has long been recognized as an important petroleum resource in Southeast Texas to Southwestern Louisiana, producing primarily gas from fluvial, deltaic and shallow marine sandstone reservoirs since the 1930s. The total estimated ultimate recovery for the onshore Wilcox is 24 Tcf gas or 4 BBoe. Not until the drilling of the BAHA 2 well in March 2001, was the linked depositional system of the Wilcox from shelf fluvial deltaics to basin deepwater turbidites, a distance greater than 250 mi (403 km), tested by the drill bit.

Although this wildcat, drilled in 7,790 ft (2,375 m) of water in the Alaminos Canyon area of the Northwest GoM was noncommercial, it established a working petroleum system in the Perdido Fold Belt (PFB), Fig. 1. The soon-to-follow nearby discoveries, Trident in July 2001 and Great White in June 2002, proved the significant hydrocarbon potential of the PFB by documenting oil accumulations in a variety of turbidite deposits from sheet sands to amalgamated and leveed channel systems.

Figure 1 -- Discoveries in PFB of the Wilcox
Click to Enlarge

As Figure 1 indicates, the LTGOM play contains a number of fields. Not shown is the Anadarko's Kaskida in the Keathley Canyon area—see Oil discovered at Kaskida prospect from the Houston Business Journal, August 31, 2006. From the World Oil paper cited above:

More than 12 Bbbl of oil in place have been discovered to date [May, 2005]. Potential recoverable reserves per discovery range from 30 to 400 MMboe, with a 69% success rate, i.e., 9/13 [4 dry holes]. Trend-potential ranges from 3 to 15 Bbbl of recoverable oil.
So, you can readily see the origin of the EUR numbers thrown around in the press. The reserves estimate applies to the entire Lower Tertiary play, not just to the Jack discovery as has been implied by press reports. More on this below.

The Geology, Reservoirs and Fluids

It is always a useful exercise when evaluating hyped new discoveries to ask a simple question: What hasn't been discussed? In the case of the Jack-2 test, no news source has addressed the characteristics of the Jack-2 reservoir and what kind of oil flowed from the well at a rate of 6000 barrels per day.

  • The LTGOM play contains oil of highly variable quality. Some of it is high gravity condensate (40+ ° API) Some of the oil is low gravity, highly viscous sour crude with upwards of 4% sulfur content. Generally speaking, the oil in the western fields (Great White etc.) is better than the eastern fields (Chinook, Stones, Cascade).
  • Given their great depth, many of these reservoirs are at very high pressure, about 20,000 psi. Thermal cracking of immature oil into lighter fractions is incomplete in some fields, indicating that the oil was formed only a short (geological) time ago and has not migrated far. As for associated gas, the Gas-to-Oil Ration (GOR) is low. However, some gas will be produced.
  • Most of the oil-bearing reservoirs are low-permeability very-fine-grained turbidite sandstones. Some are so fine-grained that they are almost siltstones. These reservoirs, due to their deep burial depths, are also well lithified, and will be challenged to flow their oil at the necessary rates to pay out the required investments. That was the main reason for the Jack 2 well test - to prove that oil could be produced at sufficiently-high rates to warrant further development work.

Thus, the fields are not uniform across the LTGOM region. Moreover, four appraisal wells have been dry holes. Although the Great White reservoir (link above) in the western part of the LTGOM contains light, sweet crude, even now Shell has not committed to its development.

Shell Exploration and Production Co. expects to make an investment decision on a potentially large deepwater oil and natural gas field in the U.S. Gulf of Mexico this year, a company official said.

The Great White field could eventually pump 130,000 barrels of oil equivalent per day of natural gas and crude for the U.S. market, according to figures from Shell....

The St Malo, Jack and Kaskida fields are also promising. According to Business Week, the Jack-2 test flowed light, sweet crude. However, the low permeability and high viscosity of the heavy, sour crude in some of the other fields—Stones, Das Bump, Cascade and Chinook—present well flow rate challenges, especially at such great depths.

The Economics and Technology

Assuming commercial oil discoveries, the economics of producing the LTGOM depends on many factors and can not be divorced from technology concerns.
Key technical challenges for trend commerciality are: 1) reservoir quality and flow capability; 2) drilling and completion technology; and 3) development of infrastructure. Continued discoveries in the trend and successful flow tests planned in early 2006 could very well transform the Lower Tertiary Wilcox into a world-class petroleum system in the deepwater GoM.

Several inherent technical challenges need to be addressed to ensure economic feasibility of the Lower Tertiary Wilcox trend. These range from the cost-effective drilling of complex salt canopies and evaluating deep structural targets to the completion and production of reservoirs in water depths that have not occurred to date.

Understanding the oil chemistry, reservoir quality and associated flow capability will determine the drilling/ completion technology, and ultimately the creation of infrastructure needed to transform the Lower Tertiary Wilcox into a world-class petroleum system in the deepwater GoM.

The Jack-2 test well contributed to understanding "the oil chemistry, reservoir quality and associated flow capability" for that particular field. The "cost-effective drilling of complex salt canopies and evaluating deep structural targets to the completion and production of reservoirs in water depths that have not occurred to date" presents a different set of problems as do the related well costs. Schlumberger's Chevron Oil Test Raises Gulf Deepwater Profile provides some details. The article relates some remarks Stephen Hadden, Devon's senior exploration and production vice president, made during a conference call with investors.
Devon's Cascade project, scheduled for startup in 2009, is poised to become the first deepwater lower tertiary discovery to come on line, he [Hadden] said. But first, the results of Jack's test must be used generate designs for wells and facilities. Lower tertiary wells may cost between $80 million and $120 million each, while producing facilities may cost between $600 million and $1.5 billion.
The start-up costs are very high and likely will be subject to inflation down the road, given the rising capital commodity costs of almost everything. Concerning marginal costs, a reasonable guess is that it is likely that unit technical costs will be $20 to $50 per barrel. At $20/bbl these projects will fly economically. At $30 and up, they will struggle to attract investment capital. It will all depend primarily on the well rates, per well EURs, and well costs, including completion & production. The higher the rates and EUR, the fewer wells that will be needed to drain the reservoirs. From Just Dig Deeper (cited at the very top), we learn that
Pioneering isn't cheap. Steel and skilled labor rates are going through the roof, as are rental rates for state-of-the-art offshore rigs. BP (BP), for example, will be paying $520,000 per day starting late next year for the same rig it is now getting for $190,000 per day. That's because these fancy rigs, which house 200 people and rise 415 feet into the air, are in short supply with drilling picking up. Still, energy experts believe that producing oil from ultra-deep wells can be profitable as long as oil, selling for $67 per barrel today, stays at or above $40 to $45.
All this gives us some rough idea of where the profit margin lies.

Other Logistical Challenges

Transportation infrastructure and associated natural gas present two crucial, related issues for producing the LTGOM fields. Schlumberger tells us that
... Distance from U.S. shores is also a major issue for producers, as there are no pipelines in place to carry hydrocarbons back onshore, said Zoe Sunderland, an analyst with Edinburgh-based consultancy Wood Mackenzie.

"It's just so far from anything," Sunderland said. Operators are considering using floating production, storage and offloading vessels instead of pipes. But any natural gas produced from the wells wouldn't be able to be transported that way and may have to be reinjected into the reservoir or released into the atmosphere via flaring.

The report goes on to say that the Mineral Management Service, from whom the operating companies lease these deepwater blocks, "frowns on gas flaring". Problems will mount if a lot of natural gas is produced. This may not be an issue, however, given the low GOR in these reservoirs based on current knowledge.

Reserves and Timing of Production Flows

Back to the hype. The reader should now be a position to properly evaluate these statements from Business Week.
One huge oil reserve, even if it could rival the 1968 discovery of Prudhoe Bay and increase U.S. reserves by up to 50%, will not turn around the world's tight energy markets, of course. It won't even bring the U.S. close to energy independence when oil and gas get into full-fledged production four or five years from now.

But the capability to find and recover petroleum at extreme depths, temperatures, and pressures, as demonstrated by the Chevron team, may indeed tip the balance of supply and demand in the long term. There will be a new frenzy of drilling at these depths in the Gulf of Mexico, where about a dozen promising exploration wells have already been drilled.

... Earlier drilling had established promising reserves in an area of the Gulf 300 miles long and 80 miles wide, but the Chevron project found a flow rate of more than 6,000 bbl. a day of light, sweet crude. The discovery confirmed the area's commercial viability, strengthening hopes that as much as 15 billion barrels of oil could be recovered in the vicinity.

Let's take the italicized statements one at a time.

First, the 15 billion barrels must be taken with a grain of salt. The low-end estimate of 3 billion barrels defines the actual range, reflecting the large degree of uncertainty in the LTGOM trend's EUR. Phrasing like "as much as 15 billion barrels" leads the reader to believe the high-end estimate. Devon Energy's Stephen J. Hadden, senior vice president of exploration and production states:

"With 273 blocks under lease and 19 exploratory prospects already identified, Devon's lower Tertiary position could more than double our current reserve base of about two billion equivalent barrels in the coming years."
Devon has a 25% share in Jack, Kaskida and St Malo. They also have a 50% share in Cascade. It is hard to see how Devon could double its current 2 billion barrels of oil equivalent reserves if the total EUR is anywhere close to the low-end of acknowledged range for the whole Lower Tertiary region.

Nonetheless, to recover 15 Gb of oil, one would need to drain an accumulaton covering 177,000 acres. This is equivalent to 276 square miles or 31 contiguous Gulf of Mexico lease blocks. Jack itself covers only two outer continental shelf blocks (Walker Ridge #758 and #759) or 18 square miles. The Jack-2 well (in #758) only tested 40% of the total net pay there according to Chevron's press release. Devon states that "the [original] Jack discovery on Walker Ridge block 759 was drilled in 2004. The discovery well encountered more than 350 net feet of pay. The Jack #2 well was drilled to delineate the discovery." The new well test represents one more piece of the puzzle, albeit an important one. Also look back at the Rigzone article cited in the Quick Summary above.

Second, what of Business Week's assertion that the LTGOM will "get into full-fledged production four or five years from now." Given all the factors covered above, this is a dubious statement. The Bloomberg update Chevron Well Tests New Gulf of Mexico Oil Deposit states:

The partners [Devon, Statoil & Chevron] plan to drill another appraisal well at the site in the Walker Ridge Block in 2007. A decision whether to develop Jack may be made in 2007 or 2008, Statoil's Mellbye said. The [Jack] field would start production in 2013 if development goes ahead, he said...
Furthermore, Devon Energy "expects to drill one to three exploratory wells from this inventory [19 exploratory Devon prospects] in each of the next several years." None of this sounds much like "full-fledged production" four or five years from now.

Assuming there are no serious delays, what production can we expect in the 2013? Here is Schlumberger's analysis.

The flow test, the first in the lower tertiary, indicates that the region's finds "will be most likely productive," said David Heikkinen, an analyst with Houston-based energy research firm Pickering Energy Partners. "That bodes very well for the industry as a whole."

Production from the [presumably, the entire Lower Tertiary] area could add 300,000 to 500,000 barrels of oil a day to U.S. output, Heikkinen said. The Gulf currently has a production capacity of about 1.5 million.

It is hard to imagine given all the considerations mentioned here that the Jack discovery alone could produce 3 to 5 hundred thousand barrels per day.

Finally, let's consider Business Week's statement that new ultra-deepwater production "may indeed tip the balance of supply and demand in the long term." In order to evaluate this issue, it is necessary to look at the larger supply issues.

The Big Picture

On July 22, 2002, a press release MMS: Oil Production Offshore GOM to Rise Steeply stated that
The Minerals Management Service (MMS), Gulf of Mexico Region, released new oil and gas daily production rate projections that encompass the year 2006. According to the new report, Daily Oil and Gas Production Rate Projections From 2002 Through 2006, Gulf of Mexico Outer Continental Shelf, MMS is forecasting a daily oil production rate of between 2.00 and 2.47 million barrels by the end of 2006.... These represent high case and low case estimates. MMS Director Johnnie Burton called the new projections "a healthy, sizeable increase in the range of possible oil production. Should the high case estimates be reached in 2006, we will see a 160-percent increase in oil production from the Gulf in the period 1995-2006."
Current Gulf of Mexico OCS production is approximately 1.5/mbd, down 25% from the MMS "low case" estimate of 2.0/mbd for 2006. It has yet to fully recover from the 2005 hurricanes. BP's Thunderhorse platform is still not operating and delayed until sometime in 2007 at current estimates. Did we fail to mention that the Lower Tertiary deepwater play in the Gulf of Mexico is prone to hurricanes?

The problem is bigger than that. US petroleum production averaged 5.093/mbd in the first 7 months of 2006. Assuming a generous future decline rate of about 5% for the US as a whole, production will be 4.149/mbd in 2010, a net decline of 0.944/mbd. Future production from the LTGOM might be 0.500/mbd sometime after that. If we add production from fields like Chevron's Tahiti, which is expected "to have a maximum daily production of 125,000 barrels", then it is reasonable to expect that Gulf of Mexico production will be a wash—declines will be offset six to eight years from now in the best case.

Business Week's assertion that really, really ultra-deepwater production from offshore regions like the LTGOM will "tip the balance of supply and demand in the long term" globally is unwarranted speculation. Believing that statement requires a large leap of faith and depends on many complex factors e.g. possible declines in the world's old elephant fields like Ghawar, existing declines in fields like Cantarell, the feasibility of commercial development in similar deepwater areas in other regions like West Africa's Gulf of Guinea, etc.

The current "peak oil" bashing going on in the media is more an indication of underlying concerns about the long term supply situation, not a refutation of peak oil theories. Those concerned about global oil depletion have never said that the world is running out of oil in the near-term or denied that advanced technology can increase recoverable reserves.

Regarding the big picture, one important question revolves around how people interpret these reserves estimates. Typically, there is a knee-jerk response that greets any large discovery because many, even some who should know better, believe that reserves and production flows are somehow equivalent. That is not the case. Another important question revolves around the use of extreme production measures in "final frontier" areas like the Walker Ridge deepwater. Rather than indicating continued abundance in oil supply, such measures may be viewed more accurately as indicating the great lengths oil producers must go to in order to find more oil to meet the world's insatiable demand. The "low-hanging fruit" is gone and so is the era of the cheap oil. Ultimately, this is the meaning of the Jack-2 test well and hopes for production from the Lower Tertiary of the Gulf of Mexico.

Dave, thanks for the great realistic assessment of the Chevron/Devon/Statoil discovery and the Willcox Trend. For some reason, a realistic assessment of our total enrgy supplies worldwide, aka Peak Oil is a political football I guess its just another manifestation of the political polarisation in our society
  I really do hpe that the optomistic projections are true and that the deep water drilling and production techniques are profitable worldwide. Our society needs time to adjust to the future, and these discoveries could be a real blessing for all of us. But this makes peak oil all the more important. We all need to Economise, Localise and Produce, to Quote Westtexas.

  Truth is liberating. It frees us from the paralysis of not knowing so that we can all act. Thanks again for taking such a big step forward!

Peak Oil as a political football

The media hype over Jack serves two purposes, and will do both "excellently", as excellently as the quality of Dave and Bubba's research:

1/ Peak Oil bashing. Lots of doubters are back home now. Nothing like giving people a reason to stop worrying

2/ Jack is exactly what is needed to push more offshore drilling forward. Florida's surfers more important than our energy security? Didn't think so.

Good points and here are 2 more

  1. This comes on the heels of the Energy Bill and pushes to peel back fees on drilling on public land.

  2. Midterm elections.  It is not unreasonable to suspect the timing of over-hyped discoveries and their causing a drop in oil prices less than 60 days from an election in which the pro-corporate party is in trouble.

It is also interesting that such speculation comes on the back side of the Katrina/Rita storms that battered offshore rigs in the GoF.  The whole thing reminds me of a salted gold prospect in the Rockies being sold to a NY speculator.
I really do hpe that the optomistic projections are true
I agree, but only if peak hits soon. If there is no realisation of peak, before these fields are produced, these fields will do nothing to transition us to a lower energy future but will just increase our consumption.


Perhaps a useful analogy is that we are half finished digging our own grave, and that the digging gets harder from here on out.
Excellent post Dave! I believe that a lot of the Peak Oil bashing going on is an attempt to squash the growing unease of the masses who recognize that something is wrong even if they do not know what exactly. We can keep trying to spread the word that this is, at best, a small reprieve that does nothing to change the long term picture.
We noticed that here have been 2 earthquakes in the GOM
(one today greater than 5.8 Richter) in the past 4 months.
These are highly unusual and impossible for operations
to plan against.
The GoM is a big place, Magnitude 6 earthquakes happen almost everywhere almost all the time on the timescale of oilfield operations, you don't use rigid structures in deepwater, pipelines are routinely engineered for earthquake tolerance, and tsunamis are imperceptible in water depths of more than a few hundred feet.

Next question?

Yes But:
There is a pressure wave that extends from the sea floor to the surface moving at 500 MPH that is no doubt not perpendicular to the sea surface. If it displaces the ocean water by 6 inches what effect does it have on a mile of drill string or production type tubing? Does the string ring or resonate at some freq and snap at the ocean floor or at the surface or some were between? I agree it is imperceptible on the surface do to inertia and the mass of the vessel.
an attempt to squash the growing unease of the masses who recognize that something is wrong even if they do not know what exactly.

My guess too, the "masses" are dumb but powerful, if they turn to fury before the stage is appropriately set fot their taming or culling, things will get UGLY for TPTB, beside everybody else...

Actually,  It is the thing that the Admin et al, are terrified of.  

Americans In The Streets.   Since the 60's & 70's with demonstrations and all.  What you see on how the "Message" is handled in the MSM was learned during Watergate, Vietnam war demos etc.  

Hmm.  Who was there to learn the lessons?  Cheney, Rumsfeld, and their staffs.

The Message will be managed, the populace will be lulled.

Anything and everything NOT to have the masses being angry and in the streets.

They will do EVERYTHING to displace the hoi poli's aggression to "Someone" else and NOT them.

Commies, Islamfacists, Terrorists, Evildoers... Someone Anyone, but NOT TPTB.


Excellent break down of the discovery, Dave and Bubba. It highlights one of the reasons I am very cautious about pinning a date on Peak Oil. I have always said that it could be 2010 from where I stand, but it is very hard to see out farther than that. The reason it is hard to see out farther than 2-3 years is that new discoveries will be made, and new projects will be announced. Fields will be depleted, and fields will be discovered.

But these factors overlook the very important question: Even if Peak Oil is ultimately delayed for 5 or 10 years, is this a problem we want to leave for our children to deal with? Isn't it better that we start mitigation efforts right now, while we still have the petroleum in place to begin a transition to a less consumptive society?

It is clear from the hyperbole following this discovery that many people just don't do basic math. They don't appreciate how much oil we use, and they don't appreciate the rapid growth of the economies of China and India. This situation is very similar to my ethanol debates, where people assume that we will naturally transition from oil to ethanol. Just a few cursory calculations will show that this isn't feasible. Likewise, a few calculations show that this new discovery will not save the day. But it seems that journalists usually don't do a sanity check on these numbers before reporting the rosy scenarios designed to make us all feel good about the future.

Keep up the good fight, but let's recognize that these sorts of discoveries are going to happen. Whether they ultimately delay Peak Oil by 2 years or 10 years will not matter in the end. This just gives us more time to act, if we can muster the political will to do so.

Right on, Robert Rapier! We all need to focus on doing the right things to help transition to a society based on sustainable energy. Five or ten years gained by new technolgy will help us transition to solar, wind and nuclear so that the world and modern civilisation can survive and prosper.

So what I'm going to focus on is 1.developing more oil and gas resources, primarily through redevelopment of old Texas fields, and 2.personally economising on energy use and 3. spreading the awareness of Peak Oil.

Five or ten years gained by new technolgy will help us transition to solar, wind and nuclear so that the world and modern civilisation can survive and prosper.

Sorry, but 5 or ten years more time also means 5 to 10 years more population growth, more arable land degradation and water waste.

If new finds are supposed to make a difference for the transition, they must more than compensate for the rapidly worsening general conditions.

Is there any plan how to make this a dure thing to happen?

My favourite wisdom: "Hoping just means you don't have a plan!"


My favourite wisdom: "Hoping just means you don't have a plan!"

Do you have one?

Good question.

Answer: Only half-way. I am working at it.
I recently did a 3-hour spanish-inquisition-style interview with Ottmar Edenhofer, chief economist of the Potsdam Institute for Climate Impact Research. One of my questions was if our economic system is really doomed to grow.
He slightly evaded the answer and said something along the lines of "climate-wise, we can probably afford to grow for another one or two decades. After that, we must find something new. I just don't know what."
If he can't figure how to get off the growth addiction as a full-time professional, how could I as an amateur in my leisure time?

But at least I don't buy complacency by the futile way of hoping. (Okay, that's how I see it.)



We could build a Kingsbury-Arnold spaceport. A linear accelerator in orbit that we can use as the second stage of a space launch facility. That drops the cost to orbit to ten dollars a pound and means we can build space colonies and evacuate the planet.
That, or some kind of zero point energy source are the only ways out that I see.
wkwillis?  One time member of Northwest L5?  If so, greetings from the past.  Nice to see that a few people remember that concept.  For anyone interested, scanned PDF copies of the two-part Analog article from 1979 are online at the website of the last holdouts that I know of from the original L5 Society.  That's the Sacramento L5 Society.

Even in 1979, when Don and I wrote that article, we were both well aware that growth could not continue indefinitely.  I thought of the orbiting spaceport as a kind of conceptual "existance proof" that a spacefaring civilization was possible and economically feasible--provided that the resources to build the required infrastructure could be mobilized.  But it was the capabilities that cheap space transportation enabled that I was interested in--not growth.

There are folks who have been giving serious thought to how to avoid the need for growth at the heart of our current economic system. Google "steady state economics" or variants.

"Hope is not a plan" is a snappier way of saying that. I think it's a military saying.

"Even if Peak Oil is ultimately delayed for 5 or 10 years, is this a problem we want to leave for our children to deal with?"

I don't know about the other people here, but I intend to stick around for longer than that.

I have a little test for everybody; take the oldest age you might conceivably reach, translate that into a date, and look at ASPO's or even the EIA's graphs. For most of us, no matter when the peak, the trough will be getting pretty close by the time we "slide off this mortal coil."  

In fact, dealing with the "growing trough" (is that a mixed metaphor or what?) at age 85 is a lot grimmer than at age 25. That's why I'm building the model homestead now.

(looming dearth? growing trough, anyone have a snappy label for this?)

Trough is the wrong word. It implies a sin wave, with peak, trough, peak. If there is only one peak, there can be no trough; only a gentle descent onto the vast plains of Oldavai. (which, being a gorge, has no plains. Damn, I can't seem to get my metaphors right today...)
"Sin wave" is a bit moralistic, eh? Another: In The Pilgrim's Progress, the protagonist sinks into a deep metaphorical bog called the Slough of Despond.
There is only perpetual decline if you assume a later increase in energy cannoy be based on anything besides oil.  I believe a trough is the most realistic projection, but then again I haven't bought into extreme fatalism.  

I really hate the stupid Olduvai references.  Who the hell came up with them anyway?  Such melodrama is best reserve for daytime soap operas.  

Approaching cliff?
Nearing chasm?
Looming abyss?
Falling off the side of the mountain?
Even the most optimistic estimates (i.e. cornucopians) admit a peak date between 2030 and 2050. That's not altogether fucking far away - within the lifespan of many people today.

Argument-wise, that's what I would focus on. The future, even under the best of circumstances, isn't far away.

The problem is our political system. It is fundametnally corrupted to keep the status-quo the status quo until the whole damn thing collapses. It is an impediment.

Take slavery - it took a goddamn civil war to end it and
near civil war in the 1960s to finally ensure African-Americans had the right to vote in the South; both were obvious, clear evils. Peak oil and the current endless growth base of our economy are like slavery and segregation in terms of their political intractability, only thousands upon thousands of times worse.  

Realisticaly, we should expect things to get far, far, far worse before change begins to be seriously talked about in this country.

"and near civil war in the 1960s to finally ensure African-Americans had the right to vote in the South"

Now if only the right to vote in the North, i.e. Ohio, could be guaranteed, and once guaranteed, in only one could guarantee that the votes will be counted.

Anyway that aside, I think you are wrong to argue that Peak Oilers should rest the case on the optomistic scenario.  People will go back to sleep, assured that the unnamed "they' will have adequate time to "come up with something".

The Peak Oil Event is on, now.  We could use the date at which the historic decline in wholesale/retail prices reversed in around Y2K as a starting point for the event.

But the most important point, as I see it, is the shift in the cost of producing oil/energy.  Here I think even Colin Campbell has made a mistake by claiming as he has on several occasions that the cost of production has not risen (he is making a point in relation to oil company profits and I appreciate that).

Even if it is true, for example, that technological advance means that deep water oil is being produced at a lower cost x-number of years after deep water began, the marginal cost of a barrel of oil has risen from the days of on-shore and shallow off-shore, because deep water remains a more expensive process.  Likewise with tar pit sludge.  Likewise with ultra-deep water.  Likewise with the rest of the now 'attractive' low-quality sulpher and metal laden sludge.
Likewise with natural gas as smaller and smaller finds require more and more effort.  Likewise with the increased military burden.  

This all adds up to more and more of the economy dedicated to the production of energy, in other words, a shift of resources to you guys in the industry (and the military), away from the rest of us and whatever it is we do (education, healthcare, entertainment, etc).  

It is a scenario from which escape could only occur if the rest of the economy was steadily increasing its real leverage (I don't accept the integrity of the GDP metric)  per BTU at a rate which outstripped the transfer of economic effort, resources and opportunity from the non-energy producing sector to the energy producing sector of the economy.

It is very difficult to measure the economic rebalancing, simply because the leverage (efficiency, effectiveness...) per btu is hard to quantify.  So to some extent we have to squint our eyes to discern the outline of what is happening (Einstein might have called it intuition). But it is happening and it is the essence of the Peak Oil event.

Correct me if I'm making a bad analogy, but in the LastSasquach's example, its taking more and more Sasquaches to maintain our Mongo supply(oil supply) and that is in turn the sign to you that we are at or very near Peak Mongos(Oil).
Sorry, I missed the last sasquatch's comment.   I met some Shuswap Indians once who eagerly described their encounters with bigfoot.  I don't know if they were munching mongos.  My only experience of mongos came a few decades back in a field on the edge of some Mexican rainforest.  It's all a little hazy...
It was a reference to a DrumBeat LastSasquach did a few weeks back explaining the problem of energy infrastructure in a society, with a very simplistic example using a tribe of Sasquatches.  Light read, but it conveyed what you are seeing as Peak Oil symptoms.

Telumehtar,  yes, I think your exactly on point....that's one thing that mainsteam media ignores...If the oil industry is willing to go to these depths and spend this kind of money off shore, it means that, at least in North America, they must not be able to find large prospects of oil.

This is interesting in that (a) are we to assume that unprospected/undiscovered Canadian onshore oil is essentially finished, and (b) is unprospected/undiscovered oil is basically non-existant in Mexico.  That one is a mystery due to the government socialized nature of their industry.

So, even if lots of oil can be found this deep offshore, it will increase the expense and effort required per barrel.

One other side point:  If Chevron/Devon does not have inside and very reliable information to the contrary, they would have to be deeply concerned that the Arabs could open the floodgates and drive down the price, leaving their azz hanging out on return on investment, unless, the Arabs go ahead and keep production (both onbook, and the various off book transactions, spot deals, etc. that we know go on) hgih enough to keep the oil price low enough to make it very hard for oil companies to come out ahead on these deep offshore projects....
(and interestingly, the crude oil price has come down....at how low a price can Chevron and others come out ahead on these dieal?)

Roger Conner  known to you as ThatsItImout

The dollar cost of deep-water GOM will be hidden for years with a subsidy granted by previous inexpensive petroleum. This is the case with tar-sands and even ethanol. Today's equipment was built when petroleum was $20/b.

We will really feel the pain when the next deep-water find must be produced with energy gleaned from, shale-oil, baked potatoes, and hemp seeds.

"This just gives us more time to act, if we can muster the political will to do so. "

On the scale required, I doubt it.

If the peak was today,  people will start preparing a week from now.

If peak is 2010 people will start preparing 2012.

ANY talk of "Buying Time"   will equate to the masses as

"XXX more minutes on the snooze alarm"  and fall back to sleep.

The inertia approaches infinity with 6 billion participants.

Again,  (For those Golding fans),  We are on the island with the lord of the flies.   Do you remember how many houses were built... That's where we're at.

They started three, 1st mostly complete, 2nd one 1/4,  3rd one not even started.

They already killed the "Mulberry scared boy", and Simon, Piggy will be next(watch out those of us who can "Think")...

Sorry, rambling there.    

I don't think a "Later" peak = more prep work accomplished.

I think it will be "More time on the Snooze alarm"

Boy am I ever starting to believe you! I have known about peak oil for 2 years and have seen virtually no progress made in addressing (much less acting on) earth's limited energy supply.

20 years ago energy-efficient refrigertors were introduced and today we have the Prius. Whoopdee doo! Where is a program to buy up necessary right of ways for light rail?  To install high-speed intercity bullet trains? What happened to the EV and why are we right this minute chewing up ag lands around our major cities?

I agree with other posters: this GOM find is a diversion. A media trick to sell advertising. Sounds like the much-hyped Kashagan find in 1998 that promised 200-300 bb and turned into 13. That was a disappointment by an order of magnitude. Is there any doubt this will be also?

What about those of us who have been trying to get people to think about unsustainable energy since 1973, pstarr? It's been like talking to a brick wall for 30 years.

I always have affection for the optimists because I see my younger self in them. I love their sense of hope.

But average humans will not change. They just won't. Been there, tried that ...

Could you explain this theory that the GOM find is a media trick to sell advertising? Are you suggesting that television stations dove under water and rigged the tests, or did they bribe Chevron?

Of course the discovery is blown out of proportion, but I think you are getting hysterical over another little bump in the road. Calm down and take a deep breathe. At this rate how are you ever going to handle lower oil prices?

Sometimes just being a little paranoid doesn't mean they aren't out to get you.
Could you explain this theory that the GOM find is a media trick to sell advertising?

You didn't miss this opportunity, did you?

A Faulty Proof Refutes His Whole Position

Should your opponent be in the right, but, luckily for your contention, choose a faulty proof, you can easily manage to refute it, and then claim that you have thus refuted his whole position. This is a trick which ought to be one of the first; it is, at bottom, an expedient by which an argumentum ad hominem is put forward as an argumentum ad rem. If no accurate proof occurs to him or to the bystanders, you have won the day. For example, if a man advances the ontological argument by way of proving God's existence, you can get the best of him, for the ontological argument may easily be refuted. This is the way in which bad advocates lose a good case, by trying to justify it by an authority which does not fit it, when no fitting one occurs to them.

Again, (For those Golding fans), We are on the island with the lord of the flies.

Then no worries, an "adult" will show up to save the day.  

Adults will show up...

I love Ed Anser's quote from a TV show.

Grownups are just kids that act like adults so the little ones don't get scared.

When I reached adulthood(by age),  I said, well the mystery is gone,  I know why things are all F#cked up now, The knuckle draggers that I went thru school with are going out and breeding and voting, and now are "Adults".

But these factors overlook the very important question: Even if Peak Oil is ultimately delayed for 5 or 10 years, is this a problem we want to leave for our children to deal with? Isn't it better that we start mitigation efforts right now, while we still have the petroleum in place to begin a transition to a less consumptive society?

Excellent point, and this is what we need to keep hammering away on. It's very poor stewardship and deeply immoral not to be transitioning to a less consumptive society, for at least two important reasons.

  1. Peak Oil - doing our very best to properly manage our resources so we don't leave our children in the lurch. Whether Peak Yesterday or Peak in 20 Years (Roger Conner), we must address the situation NOW.

  2. Global warming - doing our very best to reduce greenhouse gas accumulations (by burning less fossil fuels) so we leave our children with a habitable planet.
I agree with you, but at the same time, playing the devil's advocate (maybe not quite the right term), how many of the people here are doing anything about peak oil?  At some point government intervention is absolutely required to make a concentrated move towards alternatives.  

But rather than just sit back steweing about the fact that the government is not doing anything, how many here are actually doing something themselves?  I'm not talking about educating other people, although that is clearly noble and necessary, I am talking about actually taking tangible, physical steps to reduce one's own reliance on oil.  None of us can come close to solving the entire problem of peak oil on our own, but there are things each and every one of us can do to make a difference and be a part of the solution.  

There are too many here who have adopted a fatalistic attitude.  They go around pontificating at length about the inevitable "power down", "die off", and the ride back to "Olduvai gorge", and otherwise do jack to make a tangible difference.  Here's a little secret about fatalism: it's a cop out.  It's a lazy way of justifying not doing anything.  If you just assume everything will fail anyway, it's easy just to kick back and relax without feeling guilty about not actually doing anything to make a difference yourself.  

I am speaking to everyone who is here, reading this site, in saying that you have a special responsibility.  You have this responsibility because you are aware of the problem.  Just as if you come across someone bleeding in the street, it's your responsibility to call for help, not to walk on by and complain that others were unaware of his need for assistance.  

None of us can claim ignorance of what is going to happen.  So, it is our burden to not only advocate for change on a government and societal level, but also to make changes on a personal level.  And by that I mean doing whatever is within your power to move us toward a new energy paradigm.  Install solar panels or a windmill to generate power.  Consider converting your car to an EV.  Find ways to minimized your use of power around the house.  Walk or bike to work, or take public transportation.  Not everyone has the same means, but we all have some ability to make a difference, especially if we sacrifice (and how can we ask others to sacrifice if we are unwilling to do so ourselves?).  

I'm sure many here have already done what they can, but I would encourage those who haven't to try to do something, or many things, to make a tangible difference.  Any changes you make to save power, or generate power, or otherwise pollute and waste less, are infinitely more valuable than arguing about the end of the world as we know it, or the collapse of capitalism.  Let's stop imagining how the modern world will end, and instead start imagining how the world can continue on, albeit in a somewhat different form.  

You make the assumption that preserving the current economic system is a worthwhile project. Some of us here do not believe that is the case. So your belief leads you to the conclusion that you should "do something" like conserve, use alternative energy sources, etc. But if I don't want the current economic system to survive, my response will be quite different. It will include learning to live in a different kind of economy. That might convince you that I'm a doomer, when I consider myself optimistic that we'll get something better.

True, in my version there will be billions of deaths in the next few decades. But I also believe that will be true if your version of a transition to some alternative energy source happens.

While there are indeed some who seem to just be cheering on the "end of the world," I think it a mistake to assume that trying to "continue" is the best response to our circumstance. I think that by doing so you will cause a whole lot more pain, suffering and death than even those "olduvai" cheerers are contemplating.

I am promoting an overlooked option to reduce US oil use, and working to build more streetcars in New Orleans.  Personal consumption is air flights + 6 gallons/month.
If anything, the hype about the Gulf may actually hurt the situation by causing the price of crude oil to fall, which retards the ability of explorationists to look for the resource and encourages that consumer to buy the "Hummer of His Hearts Desire" instead of a vehical that actually has good gas economy. The deep Gulf is like ANWAR, any discovery made is about 10 years from the gas pump if things go well, and further out than that if they don't.
Superb, well-researched post -- again -- Dave.

My thought is that there are reasons that this kind of analysis does not make it into mainstream analysis.

My comments are on today's Drumbeat, here:


I am not a technical expert, so don't critique specific mathematic or engineering or even formal "economics" issues.

However, it seems to me that physical reality trumps our "managed disinfotainment reality" every time.

Your reasoned arguement that Jack-2 ought to wake every person up to the reality that oil is getting more scarce and much more difficult to find and bring to market ought to be the big, single "take-away" analysis we see in the MSM.

The implications of this then ought to be explored in reasoned public discourse.

Dave -- can you or TOD editors send this to print and radio and other media publications>

The folks over at Common Dreams might be very, very interested in your analysis.

We need some kind of press release capability and some qualified volunteer who will run it.

I'll see what I can do vis-a-vis Common Dreams. Can someone make sure this appears on the Energy Bulletin?

Bart will catch it, not to worry.  

Dave, I'm emailing you now.  I have some press release credits that we can use...the problem is that this isn't a press release.  They don't like position papers, etc., editorially.  

I have experience working with the media (national, regional and local) in Canada.  Perhaps I can help with the following advice.

It costs to release material to the media.  Real dollars, plus a dumbing down.  In the US probably thousands of press releases are circulating daily.

I would suggest that someone begin accumulating a list of key media contacts.  Start at the top of the 'got half a brain or better' pile, columnists like Krugman at the NYT or reporters of note.  Get Krugman's phone number and phone him (and others).

Don't rant.  Forget all the shit you may believe about the impending end of civilization.  Just say you represent experts with an independent and logically argued view of the event in question.  [Hello, Mr. Ms. ----, my name is Eastexas.  I have information and technical analysis, which will help you understand the reality behind the spin regarding.... I do not represent any political or industry agenda.  I and my colleagues, all of whom have technical expertise, want only that the public be truthfully informed.  (optional: Please call me back. My number is .....)]

People, such as Krugman, have working brains and appreciate technical expertise.

It may be difficult to find the phone number/get past the secretary.  (Do not blow off the receptionist/researcher; these people are key, show them the upmost respect and remember that they too live busy lives). Don't give up. Krugman, for example, teaches at Princeton, if I recall.  Do a search for his phone number there, if need be. Call someone in the faculty who might have his number, not the departmental office, another professor.  Ask him/her for the number and failing that, ask him/her to relay the message and your number.

If you want to reach TV, forget shiney teeth and hairspray, find out who are the segment producers.  

Don't present your arguments orally unless asked and be prepared with a three or four sentence summary of the pith of the argument.  Also, be prepared with the coordinates of the experts.  Don't waste your time leaving messages with advice of where to go on the net.  Talk to someone. [Could I please send you...] Next day, phone back.  [Did you receive...?  Are there any questions I can answer or have answered?]

The goal should be to slowly work your way onto the go-to list among the opinion leaders -- the ones the lesser lights, the young and restless media types read, or possibly watch.  

Don't be surprised if it takes a good deal of effort to make the first contact.  It will get easier.  Have fun.

In my political work I've earned a lot of free press and in my experience "press releases" are a waste of time.  What you need is an event (like a press conference featuring somebody notable) early in the week and early in the day  at which something newsworthy is going to happen.

The media bias these days is he said-she said, so you can be successful even in reactive mode if you move quickly.  The event and the message needs to be short, focused, and provocative.  BTW I'm not impressed with Common Dreams, I do a ton of progressive news releases and they rarely pick them up.

Consider Prudhoe Bay.  One giant structure.  Very high porosity and high permeability reservoir.  Compared to ultra deep waters, pretty cheap drilling.  The uniform reservoir and very good reservoir qualities made it an excellent candidate for advanced recovery techniques.  

Essentially none of the Prudhoe Bay characteristics are true for the LTGOM play.  Aside from the obvious depth problems, two big problems are the reservoir quality and a series of "small" traps, compared to the one big structure at Prudhoe Bay.  Also note that high pressure, low permeability reservoirs are highly prone to rapid pressure declines in the first year of production.

However, the MSM jumped all over this story, basically with the assertion that LTGOM = Prudhoe Bay.  

As I related over on the open thread (the Dallas Morning News may get rid of 20% of their newsroom staff), the MSM accurately perceive the Peak Oil story as a threat to the stream of advertising revenue from the auto/home/finance industries.  

While I can understand the MSM's perceived financial interests, it does raise a question.  If people inside the MSM understand Peak Oil, but refuse to report on it because it would damage their advertising revenue, how does that make the MSM insiders different from the Enron executives (who knew the company was not really making money, but they didn't want to rock the boat).

Go back a few months to just before the Mexican elections. Same deal. PEMEX discovers huge new field in deepwater GOM. TOD skeptics discount it. Conservative "wins" election.
This discovery is propaganda. All news from now to November will be. MSM on board with Republican oil men.
Too much time for debunking stuff. They are operating in the month long feedback cycle of the past, not the instant feedback cycle of blogs and websites like this. No effect on the election.
The election doesn't hinge on peak oil anyway.  People are focused on much more immediate concerns (immediate for them, I'm sure many of us feel that peak oil is an immediate concern, but most people are blissfully unaware).  Polls are showing people are concerned about things like the Iraq war.  Whether or not gas prices drop a few cents (as they always do this time of year anyway) isn't going to have that big of an impact on the election.  

I also highly doubt the PEMEX discovery has any impact in Mexico.  You're assuming more people pay attention to oil than really do.  If everyone was that up to date on oil and energy, then I guess we wouldn't have a problem now, as the whole society would have long since realized the dangers of peak oil.  

I don't agree with you comparing today's Prudoe Bay versus today's ultra deep offshore.  If you want to compare with Alaska, you must compare against the 1960's and early 1970's when they started the great Alaska oil rush.  AND it was a huge undertaking to bring oil from Alaska to the US.  It was like the Manhattan project.  It employed thousands and paid them 4x normal salary at the minimum.  It required a budget unheard of in the oil industry and they met challenges unforeseen by their own engineers.

I seriously hope the ultra deep offshore is nothing like Alaska.  I don't even know how to imagine a project that is much bigger than Alaska's.  I also this new frontier can hold more oil than Alaska.

I'm not comparing the LTGOM to Prudhoe Bay, the MSM are.  

However, other than the cost, the North Slope of Alaska project was in no way comparable to the Manhattan Project.  I can't think of a single significant technological advance that was required to develop Prudhoe Bay and to transport the oil.  It was just very expensive.

Having said that, the North Slope of Alaska was a piece of cake compared to the problems facing the oil companies in the LTGOM.

My point was that the MSM are equating a group of ultra deep relatively small traps, with uncertain reservoir characteristics, to a large trap, with a very high reservoir quality.

These stories are making my life a lot harder. I get three laughs every time enter the lab now as opposed to just one. A point that has not been mentioned is that because it is not one continuous large oil field we are gonna need many many rigs. We dont have JackS*** ( pun intended) to drill that deep available. Yeah I know devon's got one booked. But there is a real shortage emerging and when you need 8-10 to drill each producing a few thousand barrels I can see it becoming impossible.
As for predictions here is mine. 2007 will have decleining production blamed on shortage of rigs. The oil is there but we were stupid enough not to build rigs. I can see CEO of transocean being dragged to testify. Oh its a wonderful world.
"If people inside the MSM understand Peak Oil, but refuse to report on it because it would damage their advertising revenue"

Is this just speculation or do you have anything to support it? Sounds like pure paranoia to me.

Sometimes when you are a nail, everything looks like a hammer.

Is this just speculation or do you have anything to support it?

Is this just speculation from YOU or either,
  • Do you pretend that MSM "reports Peak Oil"?
  • Do you have an explanation for MSM not reporting Peak Oil?
  • Do you deny Peak Oil?

The cheering was deafening. MSM: 15 bbl ready for the pumps.  Admittedly, certainly a commendable technologic accomplishment...but now you're telling us there are lumps in the gravy?  How dare you in the Church of Supply....

Anyway, maybe you could explain for this non-oil-field-type:  "Nonetheless, to recover 15 Gb of oil, one would need to drain an accumulation covering 177,000 acres. This is equivalent to 276 square miles or 31 contiguous Gulf of Mexico lease blocks. Jack itself covers only two outer continental shelf blocks (Walker Ridge #758 and #759) or 18 square miles."  
Why an area?  Why not volume?

Thank you so much for your time and effort.

Gila Monster,

Some stuff got edited out of the final version but the story goes like this.

If we take the high end of the estimates, the Jack  2 well could represent a "field" as big a 15 billion barrels.  Using what I know about this play I am going to assume the following average field parameters - 350  net feet of pay (announced in the Jack 1), 20% porosity, 75% oil saturation, 25% recovery efficiency, and an oil shrinkage factor of 1.2.  This renders a little less than 85,000 barrels of recoverable oil per acre, which is pretty rich.

However, to recover 15 billion barrels, one would need to drain 177 thousand acres, or 276 sq miles, or 31 contiguous US GOM offshore lease blocks.  Has anyone looked at Chevron and company's lease position around this discovery?  Jack covers no more than 2 OCS blocks or 18 sq mi (Walker Ridge 758 and 759)

This assumes that the reservoir is a tabular body of uniform and isotropic properties, which it most certainly is not, but it is a reasonable approximation for our illustrative purposes here.

And one of my online friends sent me this story (which he seems to fully believe) "proving" abiotic oil...


Aside from mentioning that the source (WorldNetDaily) is a right-wing nutcase web site, how does one refute this "science"? They sure make abiotic oil sound good - oil that just keeps replenishing itself eternally.

Sure, the theory may hold some truth, given temperature and pressure and time but, at what rate?  How much oil is produced, how fast?  

Here on TOD this subject has been fairly well covered.  See Archives.

I'd concur with Gila.  Ask him what the rate of regeneration is on a reserve that is producing abiotic oil.

Also might work him with a simplistic math problem.

If you have a well with a reserve of 1000 barrels, and you extract 100 barrels a year, with abiotic oil replenishing 10 barrels a year, then you have exactly 11 years worth of 100 barrel a year production before you are left with a well that produces 10 barrels a year every year after that.

Essentially a 90% loss and that is probably being far more generous than what abiotic oil would really do.

Admittedly true well production is a lot more complex, but it should get the point across.

Even if abiotic oil were true, it obviously cannot satiate the demand for oil, else the US would still be pumping locally in places like Texas at rates that existed 50 years ago instead of relying on sources abroad.  But we know Texas oil fields are pretty much a drop in the bucket compared to what they used to be.  Not seeing abiotic oil helping us out down here.

Abiotic oil whether true or not is irrelevant on a timescale that is useful to the current and immediate future generations of humankind.

I'm stunned by some of the people I've met who believe in abiotic oil; even ones who live in teepees and want the system to collapse. But they still drive, or in other ways are dependent on vehicles, and so like most of the population they follow the precepts of our secular religion -- which states:

The Market will provide.

If we need it, the market will make it appear, or provide a suitable substitute. It always has, and over the past 230 years since Adam Smith wrote "wealth of nations" and Watt figured out how to harness the power of coal, we've built our society in such a way that our very lives depend on it remaining true into the future.

Both the wikipedia article and discussion page for abiotic oil have useful debunking information.  But when it comes down to it, for decades we've lived in a society where people can choose what to believe and then have the government or industry tweak things to where the perception of reality equals the desired belief.  Eventually reality catches up but the longer it takes to happen, the nastier the consequences will be.
Dave an excellent summary.  As you know I am an optimist - so here's a few optimistic comments:


Are you or Bubba able to comment further on pressure.  By my calculation 20000 psi, at around 27,000 ft, with a 7000 ft seawater column translates to hard over pressure in the reservoir.  Is this an HP-HT regime (high pressure - high temperature)?


Kind of strange to have heavy oil (in some reservoirs) at such great depth - suggests to me that some of the oil may have been formed and trapped at shallower depth and has since been taken down as the basin subsided.  Getting hot, may then lead to cracking of the oil in the reservoir.  This is a bit different to the kinetics of primary cracking of kerogen in the source rocks.

Reservoir quality

Fine grainded, low permeability reservoir rocks are not surprising so far from shore and so deep down.  Reservoirs of this sort can easily be compartmentalised meaning that there can be no to poor connectivity bewteen one well and the next - this can place constraints on the volume of hydrocarbons contacted by individual wells.

Overpressure requires the presence of seals within or around the reservoir to prevent fluids flowing outwards - and dissipating the pressure.  What can happen here is that small over pressured cells can get really pumped up and may produce like gangbusters on a well test.  But if the connected fluid volume is small, the overpressures rapidly decline (up the well bore) leading to a rapid fall off in production.  Engineers can tell what the connected volume is by conducting an extended well test - and monitoring the pressure decline with time.

On a final optimistic note, the HP-HT was the final frontier in the North Sea.  Total have one field called the Elgin Field which has been pretty successful.  But other fields have had dreadful technical difficulties related to well engineering combined with poor reservoir performance.

We can all be as optimistic or pessimistic as we like, Euan. I don't think it will change anything.

We do, however, want people to have the facts as far as we can ascertain them.

That was satire.
Agreed that we ought to be bang slap in the middle of the optimometer.

So are Jack, or some of the other prospects HP-HT?

Wine time here - but pressure seems such a popular subject I may write a bit more later on.

Yeah, I'm tired...

Fellow pranksters,  since this has proven to be such a popular thread I thought a bit more detail may be required.

First up - I've worked on many "deep water" fields in the GOM - those with reservoirs around 17000 ft, most of the HP-HT fields in the UK and mid-Norway.   However, at the age of 95+ - I can't remember all the details.

Dave is entirley right to stick to known facts and to try and fit together the best picture from the public released data. However, extrapolating from these data for the LTGOM I see a picture of poor reservoir quality, variable hydrocarbon quality, high pressures that are known to create substantial well engineering problems, the prospect of basin and reservoir compartmentalisation that can significantly degrade prospectivity and reservoir productivity and all this in the deepest water, deepest drilled rocks and one of the most hostile climatic environments in the world.

To be fair, the Chevron press release which can be found here:


will be accurate, but may equally well be imbalanced.  What it says I have no doubt will be true and factually correct.  And it does mention an extended well test - 1 day, 30 days, how long?  It is the data about possible reserves, oil quality, reservoir quality and long-term deliverability, technical chalenges etc that are omitted.  This is the cause for concern.

The media speculation around this announcement has managed to talk this well test up out of all proportion - not Chevron's fault, they do not control the ignorant media.  However, is it not time that Chevron, and partners, issued a qualifying press release that frames the technical data in the appropriate context?

Re: Chevron, and partners, issued a qualifying press release

Should happen but never will.

You're aging rapidly...

Global warming... Too much sun
I don't know the exact length of the well test, but it was of significant length, weeks I think.  It was kind of an industry deal where a number of companies in the play but not in the Jack discovery helped pay for the test.  I would say that the results over all were "as predicted" without a lot of surprises.
Yea, it sounds like Jack is a good prospect.  But interesting to note the pooling of resources - I think this underlines the cost and marginality.

Any news on bottom hole temperatures.  I still struggle to get my head around the extreme rapid depositional rates here and how these affect geothermal gradients and maturity regimes.  I would guess 120 to 140 C to have low maturity oil with low GOR at such great depth.

Also interested to hear about diagenesis.  The sediment I gather is low maturity and is sitting in a low mature diagenetic regime (based on what you say about the oil).  Are the sediments lithified or loose? Oh, and you never mentioned average permeability - 200mD?

Finally, any information on seabed temperatures.  I would guess 5C, though I imagine it may be warmer in the GOM.

Bubba - I'm just plugging to get as much technical information into the public domain as possible - so just answer what you can.

I would repeat what I said before about the HP-HT being the final frontier in the North Sea (water depth around 300 to 500ft).  At high temperature, we are in the realm of gas condensate - which has low viscosity and is very mobile.  One or two of the fields have been very successful whilst others have turned out to be money pits.

The HP-LT will probably turn out to be the final frontier of the GOM.  High tempertaures in the North sea create one set of problems.  Low temperatures, low oil maturity and low GOR in the GOM will present a differnt set of problems.

Chevron, BP et al no doubt have the technical exprtise to tackle this - or to decide to walk away. Most companies will almost certainly wait until one of the prospects is developed and wait and see how it goes - before committing to further developments.

Definitely hard overpressure. Not necessarily high temperature.

Thick Miocene section is very shaley and dumped 10,000+ ft of sediment in a few million years - creating the overpressure.

Reservoir compartments are definitely a possibility.

Hydrocarbons are definitely not biodegraded.  They are very immature in a geo-chemical sense - very recent maturation with little migration - very little cracking of the molecules.

Thanks Dave and Bubba; this was well worth the wait. I would think that in  the longrun the play will go forward as it appears economic. But it is clear that this isn't just one "play;" it's many individual plays, many of which won't be developed until oil becomes very scarce--2030 and beyond.

The pressure and porosity issues look very critical as the former could cause the latter to collapse after only a small amount of extraction. This is why I asked if there were any analogues for this. It seems not, which would make me hesitant on the financial side. Also from the quotes you provided, it appears the pros are being very cautious as they probe further into the unknown.

You are right, each field is very different.  I don't really know of any good analogs right now for this. The whole trend is very unique from both geological and engineering perspectives.
Thanks for the information so far.

Can you give us non-geologist members a little background on how the area formed?

Do I understand correctly that the name Wilcox refers to the oil source rocks? And that the same source rocks in Texas have fully "cracked" oil?

The thick salt deposits under the Wilcox trend, those would have formed on a drying sea bed? And yet now are +20,000 feet down? With a further 7000 feet of water above. The ocean could not have raised that much, so the Gulf seafloor is... sinking? Sinking deeper than Mt Everest is high?

Sorry for the beginner questions. The mind kind of boggles at changes of this magnitude.

Wilcox is the name of the formation, and designates rocks of Lower Eocene age. In order to keep nomenclature simple, geologists try to keep names of formations the same in a geographic area. The Wilcox produces mainly gas onshore, but also has some oil. The source isn't definitely known, but it seems likely to me that a lot comes from within the formation.  Way, way updip the Wilcox has a lot of lignite coal
   My caveat is I am a landman and only know geology from a few college courses and a lifetime in the industry.
Yes it's sinking - under the massive accumulated weight of the sediment washed out into the Gulf of Mexico by the Mississipi and its ancestor watercourses over the past several million years. The buried sediment in its various grades is itself reservoir, seal and (I think) source rock.

In places the sedimentary pile can be over ten kilometres thick. At the moment the rate of sedimentation corresponds to about one cubic kilometer of fresh mud every five years - multiply that by a LONG time. That number would have varied in the recent past due to changes in land use patterns, and in the longer term due to climatic fluctuations.

Well, we know the Mediterranean dried up several times, so maybe the Gulf dried up or froze over and dumped a lot of salt and then a lot of dirt washed in on top of it when the sea came back. With continental drift it probably was long, long, before the Gulf formed, anyway. Probably before there was an identifiable North America, too.
Looks like $64.95 is the next lower-low for oil.  Probably get a pretty decent bounce this week.  
Oh, BTW, I happened to see the latest issue of Consumer Reports at a newstand (the October, 2006 issue).  The cover story is titled, "The Ethanol Myth."  I don't know if anyone else has read or posted on this article.  I thought it was interesting.  One of the main points was that FFV credits are actually increasing U.S. gasoline use, since they lead to the production of more, low-fuel-efficiency vehicles, most of which will never run on E-85.  I'm no ethanol expert, but I thought they made some good points.  They mention peak oil in the article as well.



This article was discussed on the Drum Beat yesterday.


I don't know if anyone else has read or posted on this article.

When unsure about a topic on TOD use the comments search :


Looking for Ethanol Myth or Consumer Reports.
The tricky part is to guess the right KEY STRING, this isn't Google :-(

SAT, from memory - $57 - 15 November - right?

I'm now memorising everything you say - which is tough when you don't have a memory - that's what happens when you get over 90.

So what's a decent bounce?  And what about gold?

Keep posting.

Cry Wolf,

I'm just talking about a few bucks to let the grocery baggers catch their breath.    

As for gold, I've always been a long-term planner.  I've been planning for months to buy GDX once HUI reaches 260.  It's at 313 now, down from 364 less than a week ago.  Those numbers pretty much illustrate my point that once these things turn, they turn hard.  There were people wanting to play the momentum game.  HUI's at 364 and rising fast, maybe I can make a few more bucks and then bail at 370.  In a blink, it's at 315.  No time to bail.  I'll just stick to my plan and start making purchases once it hits 260.  If it falls all the way to 240, i'll just keep buying all the way down.    


I would also like to make the point that, to me, the most important force affecting oil prices today (and commodities prices in general) is the commodities bull market itself.  How do bull markets behave?  How long do they usually last?  Within the context of a bull market, how frequently do pullbacks occur and how severe do they tend to be?  Answering these questions will tell us much more about where oil prices are headed than anything geology-related (of course, i'll be crucified for saying that), supply/demand-related, or, God help us all, global events-related.        
No you hit the nail on the head - at the moment I see production = demand.  The Saudi mind bender is a bit more difficult to untangle.  But this year flat production = flat demand.  China imports down this year - but I begin to suspect that China are the mega-dealer on the market and may time their market movements....

There's a lot of new supply come on in June and July - combined with prices beginning to hit demand -but Damn - I wished I'd managed to work all that out 6 weeks ago.

So where's the supprt for Au in $/oz?

PS - the overall demand trend is up and has been for 23 years.

I'm betting on $520.
That low? I was expecting $580, but $520? Of course, I'm an amateur, but... We topped at $720 so that would be a 28% correction, isn't that rather large?
Where did you get China imports down this year? IMO I wouldnt put it past them to manipulate the situation.
This bull market for commodities has already gone on for the first third of the usual cycle of 18 years. The easy money is gone. Tungsten is not going to go up ten times again in real money, whatever happens in dollars. Ditto molybdenum, etc. Copper, nickel are probably at the upper end of their trading range. Lead for lead acid batteries and zinc for flow cells may continue up for a while, but don't rely on my advice because I haven't studied the subject.
Demand for oil has been rising relentlessly for 23 years - so it depends what you call a bull market?
He's probably referring to prices, not demand.

I'd like to hear what Stoneleigh has to say about the effect of a potential housing-led deflationary cycle in the U.S. on the current commodities bull market.  Will they co-exist?  I've found your posts helpful in the past, and I think this is an important topic.  If you're out there, please give me your thoughts.  


SAT - I got the oil price sitting close to the 200 day MA which has provided support since Jan 04.  Any specific geopolitical / economic reasons why it should break below this support now?  On the one hand we have high US stocks, global warming and hurricanes - a thing of the past - peace breaking out across the ME and Chinese imports falling this year, and the possibility of economic slow down.  On the other side of the equation is falling production in Mexico - and nearly everywhere else - and the prospect that the Chinese may return as buyers.

I think the possibility of demand falling ahead of the supply curve is a fascinating one.  Wouldn't it be ironic if peak oil was marked by $57 / bbl.

What we need is an ASPO conference in Dhahran.

Wow, $64.95 didn't even hold for a second, did it?  That makes two bad picks in a row for me.  I also had the Bucs beating the Ravens on Sunday (the Ravens won 27-0!).  I still think we'll see $66 again before we break below $60.


Wow.  So 57 on 11/15 is on the way back up again?

I think I undersatnd clearly now what is going on - at least for the next few hours.

Where do you think we're headed, Cry Wolf?
Right now to bed - I'll reply full tomorrow - here.

So far, you are the best price-picker here. There's no doubt about that. But it is all about time frame. In other words, WHEN. After mid-November - how much? and when?

You gave us your pick about a month ago as I recall. When are you gonna update your forecast? Admittedly, your competition is scarce right now. CERA is weak. But Jim Jubak threw a decent play out yesterday

If it hits $57 before November and then shoots up to $250, I will still give you all the credit in the world. Ultimately, I'd like to setup a showdown between you and guys like Pickens.

You Da Man. But you're gonna have to study-up.You must practice and prepare if you want Paris Hilton throwing you her panties from Caesar' box seats.

Meantime, I've got serious reservations about the Nymex going that low. OPEC has already (clearly) announced a new price window. I Don't know what the upper bound is. But Iran is on board for $60 as the floor.

You have momentum on your side.

How fast do you think they(OPEC) can implement changes to keep it from falling through $57.

How low do you think it will go before the real power steps in?

Oil CEO,

Good to hear from you.

As you probably already know, I didn't predict a $57 price on November 15th based on what OPEC may or may not do.  But even based on what they've been saying, talking about $60, I think you could easily imagine prices slipping a little below that level before output cuts have any impact.

I was expecting (and I continue to expect this, although it hasn't happened yet) equities to experience a pretty severe pullback during September and October.  I've been surprised at how well they've held up so far, but I think there will soon be a reversal.  Commodities weakness at this point is indicative of a global economic slowdown.  We all know what's going on in the housing market.  Once this weakness is recognized for what it is, equities will colapse and commodities will be dragged down even further.  So, while I was expecting equities to lead commodities lower, commodities actually ended up collapsing first.  People have misinterpreted the commodities collapse as a good reason to buy stocks.  Actually, they should be doing the opposite, since the commodities pullback indicates global economic weakness.  I think the selling in equities will begin very shortly, reaching peak intensity in late October/early November.  Commodities themselves tend to bottom out a few weeks after their respective shares, which is why I have November 15th as the lowpoint for oil.  

Longer term, i'm bullish.  On another thread, someone asked about 365 days from now, and I came out at $91.  

It will be interesting to see what Cry Wolf has to say.
This analysis highlights the increasingly difficult position that oil companies find themselves in. As oil gets harder to find, it takes a higher and higher likelihood of a big hit to make the gamble of possibly billions of $$ worthwhile. One could imagine a graph with a rising line of exploration costs vs a line of possible recoverable and see that these lines are crossing more often these days. 'Lots' of oil will never be extracted, even if we know it is there.

'Old McDonald had an oil rig, E R O E I!'

Dave and Bubba-have there been any reports as to the actual bottom hole temperature in the Lower Wilcox? Also, my geology is fuzzy-wouldn't gas be liquid in the reservoir at 20,000 lbs PSI? Would it be possible to produce the gas as LNG and put it directly in a tanker?
  Also, do any of the shallower salt domes have sub-salt potential?
The reservoirs are "low" temperature/high pressure but I don't know the temperature reading... I've learned that the concept of an "oil floor" is oversimplified.

No, you would need a liquefaction plant out in the middle of the Gulf for LNG  

 From my understanding, the way liquifaction plants work is by compressing the gas to a liquid. So if the gas is being produced at 20,000 PSI, it should already be liquid. But, I have no idea how an operator would strip the liquids from the gas. I figure gas compressors could be floated on a barge and natural gas used as fuel, but I'm not an engineer. Of course, this isn't my problem, I'm just curious.
Gases have critical points. At high enough temperatures any liquid will become a gas whether it is pressurised or not. There is an interesting "supercritical" zone in there where it starts to dissolve your equipment in the range between liquid and gas. It's used for solvent extraction of various things like caffeine, nicotine, etc.
It's pressurised enough that you can now just cool it to liquid methane temperatures, after you strip out the H2S, CO2, LPG, etc, but it's cheaper to do all that at lower pressures and then recompress the gas. Recompressing the gas is simple.
From my understanding, the way liquifaction plants work is by compressing the gas to a liquid. So if the gas is being produced at 20,000 PSI, it should already be liquid.

Bob, you made this same mistake yesterday and I explained how natural gas is liquefied but apparently you did not read my reply or you did not believe it. But once again I will explain it.

Natural gas is not liquefied by compressing it, it is liquefied by cooling it. LNG plants have very long cooling trains. The train is composed of cooling units linked together. Each unit cools the gas a few degrees until it reaches -161 degrees centigrade. It is then transferred to very large, heavily insulated storage tanks that hold it at -160 C. A boiloff vent allows the liquid to boiloff which holds it at -160 C.

Ron Pattersson

For those interested in the LNG process here is a great article. Turns it takes a lot more electricity than I thought it did. I knew it was a lot but not that much. 71 MW per train! Wow!

Two identical, low-NOx gas turbines, per LNG train with a power rating of 71 MW each provide the power for the compressors of the cooling circuits, which are closed loop refrigeration systems.

Also another interesting point. Propane and Butane are gleaned from the same process. Since they liquify at a higher temperature than methane, they are simply bled off at an earlier stage in the cooling process.

Ron Patterson

I wonder how many of those Pelamis gadgets you'd need to generate the 71 MW.
There is no free gas in any of these reservoirs.  There is associated gas which will evolve as the oil is brought to the surface.  The fields in the east have very low amounts of associated gas.  Those in the west (Great White, Trident, Tobago, etc.) have more "normal" gas/oil ratios.
Seems to me we find oil in the Gulf of Mexico almost everywhere we look.

New and improved tech will help bring it to market at a reasonable price.

And then that tech will do the same in other deep water oil locals around the world.

Hence...peak oil gets pushed back again....like it has been pushed back time and time again over the past decades.

yeah, that magical tech fairy is really something!
Gusher, the Gulf of Mexico is a mature province. That means most of the good prospects have been drilled, and mostl produced. The Lower Tertiary Sub Salt Trend on which the Jack 2 well is located is just about the end of the line in this province. The  American Gulf of Mexico has very little oil, most of the production is natural gas. The best prospects that are left are in Cuban and Mexican waters where US Companies are not allowed to operate by either the Constitutionof  Meico or the US embargo of Cuba. Oil will never be cheap again.  .
  If they taught Trolls to read, research and think maybe you could see this.
I wonder how much money Exxon has allocated for misinformation?  Would it be more or less than the Saudi's spend?
new and improved tech   tell us more about that one  yergin claims new tech will result in increased production ( supply)   but how is yergin quantifying the new technology such that he can predict increasing production
Great post! I just want to emphasize what was said in the editor's notes to the post, and a point that was made here when the Jack-2 news first broke (or should I say, got re-hyped). Even in the unlikely event that 15 GB get extracted from the LTGOM, that would amount to 6 months' world consumption at current rates, or two years of US consumption. Doesn't buy us much time at all, assuming we could get ourselves in the frame of mind to use it.

Somehow the MSM has never tried to get peoples' minds around our amazing voraciousness. 84 million barrels a day, 1000 barrels a SECOND. Yikes! This must be what Dick Cheney defends when he states that the American way of life is "non-negotiable."

"Somehow the MSM has never tried to get peoples' minds around our amazing voraciousness. 84 million barrels a day, 1000 barrels a SECOND"

Their job is to NOT to let people get their heads around it.

WHO owns MSM?   CORPORATIONS! The SAME corporations that rewrote your Health bills for congress, the same corportions that wrote the Bankruptcy bill, the same ones that Bought the best gov in the world.  

They are DOING their job.  Have you seen ANY issue that was clearly stated when it ran counter to Corporations interests?  

Tell me One story that MSM ran the straight truth on when that story ran counter to the Corporations vested interest that own them and advertise on them?

Watergate. The Abu Graib prison scandal.Enron.
   I'm sure there are dozens more. We will never win them over to help with public awareness if we attack them as totally venial. The polarisation of our society is one of the huge problems-can't we concede that the cornucopians want the beest for the world, even if they are mistaken? I'm sure a very few of them are evil and raspicious, but most of them are trying to do a good job in their view, and if we can't conced that then we are fools.
This "huge" discovery is 15 billion barrels (which it probably isn't) and that bumps US reserves up to 30 billion barrels (which it probably doesn't).  Forget about possible production rates for a second... If the US had to rely on just its reserves (not import the other 60%) and the US uses 21 million barrels of oil a day, then the US has less than 4 years of supply left. Or did I miss a zero or something somewhere?
Au Contraire

Listen to what I said, not what you might have heard.    

I said that they are doing their job.  You(?) and I and many others here have worked for Fortune 100 companies,  When an organization/organism gets to a certain size it starts to protect itself.  It¡¦s only natural. If something threatens it, it raises it¡¦s defenses. (we do that ourselves with beliefs and our responses sometime fº.  

I have been on golf games etc, where one VP will say to another VP ¡§Hey Harvey, Who do you know over at  xxx,  Couldn¡¦t you talk to mention to them¡K.¡¨

BTW, Everyone if you want to rent a hilarious movie, rent ¡§Head Office¡¨   Danny DeVito, Rick Maranios,  Eddie Albert, Judge Rhineholt, Jane Seymour.   It about ¡§Inc. Incorporated¡¨  A Great Spoof on corp America.  

In one scene Judge Rhineholt is a young exec.  And he has to explain to the press why they are shutting down a plant in Allentown and moving it overseas.   He inadvertently got high just before the press conference/strike,  and the reporter asks ¡§Well, Doesn¡¦t Inc. Inc.  owe something to this town and jobs?   And Rhineholt (High) says ¡§Well in business school we were taught that the Corp¡¦s reason for being was to make money, so if moving it overseas is in it¡¦s best interest to do so¡K..

Anyway,  it¡¦s not a ¡§venial attack¡¨  in as much as it is a observation of business realities.
You don¡¦t think that the Redstone, Murdoch, etc don¡¦t have meetings and say ¡§How are we going to ¡§Frame¡¨ this topic?

Watergate,  Vietnam war demonstrations,  body bags on TV is EXACTY what you DON¡¦T see on TV today.   No Flights into Dover  with C130¡¦s loaded with coffins, not ¡§Indepth Reporting¡¨ on the returning Injured in the VA Hospitals covered THIS TIME.  


Watergate et al is what they Learned FROM.  Look at the nightly news now, versus then.  From that time on they said,  ¡§We WON¡¦T let THAT happen again.  

Next time you are out of the country,  Watch CNN News or the national news.    I was amazed and enlightened when I was in Brazil and Argentina in the 2002-2003 timeframe and watching not their national news but CNN.  I said to myself,  ¡§This story wouldn¡¦t  get this coverage in the states.  The topics and slant even for the (I thought) Globally consistent Corporate company, CNN was different.  I said,  No wonder they have different opinions,  they are getting wider selection of news.

¡§Abu Graib prison scandal¡¨  
I would say that this was a Great example of a ¡§Handled¡¨ story.  If it wasn¡¦t for Sy Hersch, you may not even heard what you did of it.   Compare MSNBCCNNFAUX news coverage of that topic compared to the coverage in Europe or other places in the world.
Great example of a ¡§Handled Message¡¨

¡§Enron.¡¨    Ditto.  If they didn¡¦t go bankrupt, you would have never known anything.  The trumped up energy shortage in California would never have been exposed.   The other examples are as many as ¡§the sands on the beach¡¨  

Not so much ¡§venial attack¡¨  as a observation on Group Dynamics in large multinational corps.  (BTST Been There Seen That).

Reflect back on GM, Standard Oil, and Firestone guilty charge on conspiracy to buy up all the trolley¡¦s so the country Could travel on GM Buses, using Standard Oil Gas, riding on Firestone Tires. http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy

I will leave you with this.

¡§Competition Is Bad For Business¡¨ -  John D. Rockefeller

The Corporations that make your lightbulbs as well as bring you your nightly news is just "Making GOOD Business" sense to "Keep on Message"  ALL parts of their business improves.


Seen Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives (Hardcover)
by Edwin Black?

"Book Description
Internal Combustion is the compelling tale of corruption and manipulation that subjected the U.S. and the world to an oil addiction that could have been avoided, that was never necessary, and that could be ended not in ten years, not in five years, but today."
Internal Combustion trailer on YouTube

And no I have no affiliation with the author or anything to gain from this.

can't we concede that the cornucopians want the beest for the world,

Make that "Some want nothing but the beast..."  

To be honest 15 billion barrels is not in the realm of reality for what has been discovered in this play and what is likely remaining.  I would put the high end at 5 billion barrels if all the stars align.
What really bugs me on this solemn day is there are still almost as many cops and cabbies flooring their police interceptors as ever...light-duty diesels time has come, ten+ years ago.
If I remember correctly, the economics of GOM oil production is fundamentally altered if we accept that hurricanes are now stronger and more frequent. Because making the gear strong enough to withstand a serious hurricane is way more expensive than the stuff they currently build.

i.e. if you build rigs that won't withstand a hundred-year hurricane because there's no point, and then it turns out that you get a hundred-year hurricane every five years, then you never get the oil out.

Does anybody know where they get the names for the fields from?

Jack, Cascade, Cantarell, Buzzard, Piper ... I always found these names to be quite quirky and attractive in some odd way. They rarely seem to be related to anything geographical though. Does anybody know how they are generated?

Cantarell is named for the fisherman who saw oil floating offshore from seepage and brought it to the attention of Pemex.
It's the company that finds them that decides.

In Norway many of the fields have names from Norse mythology or Norwegian folklore.

As mentioned already, in the FreeWorldTM oilfields tend to be named within the company responsible for the discovery. Different companies have different traditions.

Here's how it works for some big companies in the North Sea:

Shell name their North Sea fields after seabirds, or at least waterbirds. They started from A, but they have duplicated on some letters and missed others: Auk Brent(= Brent Goose) Cormorant Dunlin Eider Fulmar Guillemot Heron - last I saw they were up to Tern. There is an urban legend in the oil industry that their first North Sea discovery, Auk, was simply A-UK to be followed by B-UK etc., but them some wag pointed out what would happen on their sixth discovery. And Brent is itself an acronym for the members of the Jurassic Brent (geological) formation which occurs in several Northern North Sea fields. The members are themselves named after either lochs or glens: Broom Rannoch Etive Ness Tarbert.

BP have several North Sea fields named after Scottish saints - Andrew, Clair, Columba, Magnus, Ninian, Machar, Monan, Mirren and some others. Their North Atlantic Tertiary fields are named after Scottish mountains - Foinaven, Schiehallion, Loyal.

Conoco named their North Sea oilfields after famous Scottish geologists - Hutton Lyell Murchison - and a cluster of their fields in the Southern Gas Basin is named after British airplanes - Vulcan Victor Valiant Viscount Vanguard.

Enterprise Oil called their biggest field Nelson - their head office is in Trafalgar Square (think: Nelson's Column). Amerada Hess UK named their biggest field Scott (as in Sir Walter), and then branched out using the names of some of his characters - Ivanhoe, Rob Roy...

Mobil (back when they existed) had a field called Arthur and several others named after Knights of the Round Table - Lancelot, Gawain...

I have worked in countries where the government retains naming rights. They often seem to go for the dates of historic occasions, which has the virtue of being a plentiful source of names. And boring in a stolid, gray, Commie kinda way. Yawn.

In Angola the government assigns the names, but they are a bit more imaginative - they use the names of precious or radioactive metals, in Portuguese - Plutonio Palladio Cromio Platino Cobalto Uranio and a few others. Petrobras named its Campos Basin fields using the names of fish Marlim Albacora Dorado etc. etc.

I agree that some of the GoM field names are truly weird and wonderful, and adhere to no pattern, even within companies. Some of the North Slope names are like this as well. The names usually get assigned at the prospect i.e. pre-drill stage, probably by a shadowy cabal of geoscientists in the Exploration department. I've never seen it done myself - the names just seem to emerge from the corporate subconscious.

Two of the strangest oilfield names I know were coined back in the earlies when this business was still a very personal thing. But I would love to know where "Twofreds" and "Sho-Vel-Tum" came from. The former probably refers to the respective landowners, but what about the other? You can Google them - I didn't make them up.

Awesome, thanks!
That depends on where you live. In the North Dakota portion of the Williston basin, the North Dakota Industrial Commission determines field names and they are usually named after towns, townships, or geographic features, never after people except for T. Roosevelt who ranched in ND in the 1880's. Company suggested names are usually dismissed out of hand.
One thing that caught my eye:

Concerning marginal costs, a reasonable guess is that it is likely that unit technical costs will be $20 to $50 per barrel. At $20/bbl these projects will fly economically. At $30 and up, they will struggle to attract investment capital.

This past Sunday, one of the local newspapers (The Springfield (MA) Sunday Republican) featured a front-page article on falling oil and gas prices.  Local-hero Michael Lynch (yes, I live in a rough neighborhood) was quoted as saying that "oil prices would soon decline to about $40 per barrel and stabilize."

This begs the question:  If oil drops to $40 per barrel, how many of these expensive drilling projects will be put on hold?

Don't go by month on month.
Oilman Bob....oil will never be cheap?  I think $50 oil is cheap and we may see that soon.  

 The loss of purchasing power with the dollar is vastly overlooked.

So you agree. More oil to be found in the gulf...but not so much in the American gulf?  we'll see in the coming years.

When have pessimists ever been right about energy?