Energy Security

[Misifus]

All good points Bill Moore.

Here's what I add:

...[1] but regardless the demand for oil is increasing rapidly based on the rise of the rest (India, China, and numerous others) and [2]even minor interruptions in global supply have caused major panics among the economists...

1. True that the industrialization of emerging economies has increased the demand for oil. However, I believe the effect on price is not as catastrophic as our emotions would lead us to believe. Hence my comparisons of the priced products I posted upthread.

2. This is true. Much of this is panic trading. While I don't favor heavy regulation/intervention by government, one regulation to consider is not to allow "traders" to trade oil unless they can actually take delivery of the oil. This would keep the Goldman Sachs types from driving up the price via speculation when some temporary world event creates a panic. Another factor overlooked is the increase of the price due to the devaluation of the dollar.

I was impressed by their strategic view of the world and their grandiose plans for ensuring there would be sufficient oil for the next couple of decades, but after researching some of their proposals I noted very little of the production they planned for actually happened?

Most oil people at senior technical or managerial levels are well-traveled and many become fairly sophisticated regarding the global interactions of the world. Nevertheless, plans and strategies are not always implemented as envisioned, and even if they are outcomes may not always be as expected. Really not too different from man's others endeavors/follies - like our recent wars abroad, social engineering programs like Welfare, the design of the Edsel, etc. Once upon a time when I was uniform a really attractive lady in Washington, D.C. told me how surprised she was that military officers were so well-informed about the world, well-traveled, and could even speak multiple languages. I felt a little bit insulted but I was nice to her since I was trying to get a date with her...which I did

[3]I suspect more could be produced, but if major producers like Saudi are thinking strategically long term, I doubt they would want to produce more which in turn would drive down the price and two drain their fields quicker (whether in a few years, or a few decades). [4]Why we're not producing more is a bit of mystery to me and can lead to a good conspiracies on price fixing.

[3] KSA could easily produce more. Part of the reason they don't is that they tend to produce their key reservoirs more responsibly than private oil companies do. [4] I have never been privy to any conspiracy on price fixing other than what OPEC does out in the open regarding curtailments. Apparently the US doesn't really care about price-fixing anyways. Iraq and Kuwait continue to be OPEC members, which is something we could have easily prevented in the wake of Gulf wars 1 & 2. While I don't believe there is any price conspiracy on the part of non-OPEC oil companies, they are all pretty happy to take any windfall that comes from OPEC curtailments. Nevertheless, the oil does remain cheap in spite of OPEC efforts when compared to the price increases of other products as I have shown upthread.

Where I live the power plants are fueled by oil, so you can imagine what the cost of electricity is.

I am pro-nuclear power. We need the oil for other stuff. Subject for a different thread.

...and when the price of oil goes up so does the price of everything else, and with the additive pain of average wages decreasing the impact is further magnified.

True, but the multiplier is less when compared to other products as shown upthread. It's not really the oil company's fault if wages are falling in the other industrial sectors. That has more to do with what our culture here in the US has done to our own industries and what we have done to our financial system, IMO.

[Surferbeetle]

Misifus,

Stimulating conversation on the cocktail circuit can, in the right instances, secure resources to accomplish projects, but it is not wise to conflate such conversational ability with the technical ability needed to make a definitive call on peak oil.

What would be interesting (on this thread) would be polite, ego-free when possible, informed discussion in English, German, or Spanish regarding energy and commodities and how they relate to war. Daniel Yergin writes interesting books and 10K's and 10Q's can be very interesting reads. Links provide an opportunity for others to follow a thought process and to delve more deeply into a topic than the SWJ format allows.

Incorrect assumptions regarding ones presumed 'abilities', 'superiority', and 'entitlement' are in large part what's wrong with America today. #SWJ is a rank free, free market of ideas that, in some ways, mirrors the forces of globalization...status quo is dead, problem solving is valued and rewarded.

#

[Misifus]

Misifus,

Stimulating conversation on the cocktail circuit can, in the right instances, secure resources to accomplish projects, but it is not wise to conflate such conversational ability with the technical ability needed to make a definitive call on peak oil.

Actually the cocktail circuit secures few resources in any instances. And if you are conflating such with technical abilities, then you are sadly mistaken. Try again, and try to be less mysterious about your qualifications regarding the oil industry. You are not impressing anybody, at least not me.

What would be interesting (on this thread) would be polite, ego-free when possible...

Yes, it would be and judging from your tone on an array of the many subjects you post on SWJ, it would be interesting indeed. You appear to style yourself as a global expert on many subjects. I limit myself to two, oil & gas being one of them.

[Fuchs]

Misifus, you play the insider expert card a bit too much.

Experts of all kinds disagree with experts of their very same kind quite often. Being an expert does not equal being correct, nor does being an outsider equal being unqualified.

As case in point, my hero Jan Gotlib Bloch, who got right what the experts of the trade did not get right.

Also keep in mind that many dissenting insiders shut up in order to keep their fine job. We're talking about a big business sector, after all - not a sector of freelancers.

[Misifus]

Misifus, you play the insider expert card a bit too much.

This thread needed an insider. Just read the thread before I entered. It was pretty much a "group think" thread with no form of self-calibration. This party needed to be crashed in order to get some thought injected into it.

Also keep in mind that many dissenting insiders shut up in order to keep their fine job...

Agreed! Perhaps Superbeetle is really an insider, or at least hints at it. Olly-olly-oxen-free! Or is it more correct to say "Alles, alles auch sind frei!"

[Misifus]

Okay, since y'all like to link around. Consider the following:

From http://www.guardian.co.uk/commentisf...y-fossil-fuels

The peak oil brigade is leading us into bad policymaking on energy

From http://online.wsj.com/article/SB1000...998674340.html

The date of the predicted peak has moved over the years. It was once supposed to arrive by Thanksgiving 2005. Then the "unbridgeable supply demand gap" was expected "after 2007." Then it was to arrive in 2011. Now "there is a significant risk of a peak before 2020."

Lol! Just like I said upthread about the end-of-the-world forecasters. "No problemo! If the aliens don't come pick us up this year, then they will come pick us up next year."

This is actually the fifth time in modern history that we've seen widespread fear that the world was running out of oil. The first was in the 1880s, when production was concentrated in Pennsylvania and it was said that no oil would be found west of the Mississippi.

Lol! And they are still finding oil & gas in Pennsylvania even. Yup.

By 2010, U.S. oil production was 3½ times higher than Hubbert had estimated: 5.5 million barrels per day versus Hubbert's 1971 estimate of no more than 1.5 million barrels per day. Hardly a "minor deviation."

When one is ordained a "prophet," then one needs to prophesize correctly. Ya think?

From http://reason.com/archives/2006/05/0...nic/singlepage

In 1969 Hubbert predicted that world oil production would peak around 2000 [it didn't].

Lol! Again! When one is ordained a "prophet," then one needs to prophesize correctly. Ya think?

"Colin Campbell has the worst forecasting record on oil supply,” says Lynch, “and that’s saying a lot.” He points out that in a 1989 article for the journal Noroil, Campbell claimed the peak of world oil production had already passed and incorrectly predicted that oil would soon cost $30 to $50 a barrel. As for Matthew Simmons, Lynch dismisses him with a sneer: “Petroleum engineers know a lot more about petroleum engineering than a Harvard MBA."

I certainly agree with that!

One petroleum engineer— Michael Economides of the University of Houston—calls peak oil predictions “the figments of the imaginations of born-again pessimist geologists.” Like Lynch, Economides, who worked in Russia to boost that country’s oil production in the last decade, rejects Simmons’ analysis. Saudi Arabia, which currently produces about 10 million barrels of oil a day, “is underproducing every one of their wells,” he claims. “I can produce 20 million barrels of oil in Saudi Arabia.”

And that is still the case in KSA. Around here Economides is affectionately known as My Big Fat Greek Professor.

From http://tucsoncitizen.com/wryheat/201...e-wrong-again/

The Energy Information Administration shows that world petroleum reserves in 1980 were put at 642 billion barrels. In 2010, EIA puts world reserves at 1,354 billion barrels. How can reserves more than double in the last 30 years in spite of the increasing consumption?

Well? Lucyyyyy! Youz gotz some 'splainin to do.

From http://articles.businessinsider.com/...t-s-peak-crude

Peak Oil Believers Wonder Why Every Government Ignores Them, Conclude It's Due To A Giant Cover Up

LMAO! No surprise to me why they are ignored. Should have ignored this thread myself!

From http://peakoil.com/enviroment/7-bill...hus-was-wrong/

7 Billion Reasons Malthus Was Wrong

Most doomsayers are wrong. Like I mentioned upthread, it's a psychosis from not being a true participant in making the world go round. C'mon now, get out of your mom's basement.

From http://www.postpeakliving.com/preparing-post-peak-life

Preparing for a Post Peak Life

OMG! This guy is a wacko and hilarious! You can even purchase his survival course. Very entertaining!

[Dayuhan]

I go away for a few days and find a lot of posts on return... hard to remember where I last was in the discussion, but a few points and opinions...

First, peak oil hysteria does exist. Here are a couple of classic examples:





You can go to any image search engine, type in "peak oil", and get dozens more. Many are deeply detailed, admirably referenced... and complete nonsense. Some go for the elegant bell curve, others for the abrupt dive; in some cases you get the feeling that they drew the chart first and then made the projections to fit.

I don't buy the idea of an imminent geological peak, a peak driven by an absence of oil to pump. I don't buy it for a whole lot of reasons, some of which I've explained in the past.

I do see potential for limited production due to political, security, and investment-related constraints. Any number of scenarios can be envisioned, all of which could result in major price spikes and significant economic dislocation. Again, the problem would not be an absence of oil, but that oil would become very expensive for some time. I don't see the idea of a "peak" being a useful way to describe this: it's more a situation where ability to increase production might be constrained, or where output might see a transient decrease, in response to factors not at all related to the geology or engineering of oilfields... factors like war, revolution, state collapse, etc, ad infinitum.

The idea that the US military or a key ally might be unable to fight a war because there isn't any fuel seems to me much overblown. Again, there would be fuel, it would just be very expensive. War is already very very expensive, it would just become a bit more so. It would also become more expensive for whoever was on the other side, though not all potential antagonists are as energy-intensive as we are.

We might speculate that added cost might make us a bit more cautious about embarking on wars, but that's probably overly optimistic. An unfavorable cost/benefit picture hasn't stopped us in the past.

I think what's generally neglected, particularly from the small war perspective, is the potential impact of major oil price spikes on oil-importing developing countries, especially those that have developed enough to be oil-dependent but remain in very tenuous economic condition. In many of these countries there's real potential for governments to fall and for potentially extended instability and conflict. Whether or not any such situation would require US intervention is of course another question, but it's an outcome worth considering.

In short, I don't by the "peak oil" argument, but I do see reason to be concerned over, and prepared for, the impact of possible supply interruptions or inability to increase supply, and associated price responses.

OMG! This guy is a wacko and hilarious! You can even purchase his survival course. Very entertaining!

The marketing of imminent doom has been very profitable for many people, throughout history... not quite as profitable as the marketing of salvation (though they often go together), but close. Being wrong is not an obstacle.

[Surferbeetle]

Agreed! Perhaps Superbeetle is really an insider, or at least hints at it. Olly-olly-oxen-free! Or is it more correct to say "Alles, alles auch sind frei!"

I have run back through some of your posts, which I probably should have done before posting in this thread. Didn't/don't particularly care for your tone with Rick M. in your most recent couple of posts, thus my tone with you in my recent posts.

The anagram makes the antenna twitch as well.

No, I am not an industry insider, just a civil engineer (most days, soldier some days) who is allergic to smoke, mirrors, and feathers. As for being an expert on things, I don't have a phd or four or five decades in the same field of work so I don't claim that particular moniker either.

Your phrase in German is literally translated as "everything, everything also are free" Fuchs will most likely be by to give me a hard time about my translation, as he usually does, but if I didn't have the preceding english to go by I wouldn't have got what you are trying to say. For context I regularly enjoy the Neue Zurcher Zeitung, Frankfurter Allgemein Zeitung, Deutsche Welle Podcasts, El Pais, and occasionally Le Monde (it's my feo Spanish which gets me through so comprehension is low), and have spent over a decade living in Europe plus a couple of years in Iraq and some visits to Central America.

Again, from where I stand, the jury is still out on peak oil...too much uncertainty with man-made measurements/estimates given the surface area of the globe (estimated at 510072000 km2) and the associated volume number which increases as drilling goes ever deeper. I also question issues with time scales (geologic or centuries, or decades?) when measuring peaks (and I am visualizing hydrographs and thinking about peak flows) and considering the relationships with demographics and constraints such as economics or war. I contrast the concept of no peak oil with the claimed 'only 161,000 tons of gold mined have been mined in human history' estimate.

Appreciate the recent links. I write and post here with links in hopes that the bs card is thrown when I am out to lunch on whatever topic I happen to be thinking and writing about. I, of course, will do the same

__________________________________________________ ________________

I appreciate the nudge....

[Misifus]

I have run back through some of your posts, which I probably should have done before posting in this thread. Didn't/don't particularly care for your tone with Rick M. in your most recent couple of posts, thus my tone with you in my recent posts.

RickM can fight his own battles. I don't recall him asking for help. This isn't a team sport

No, I am not an industry insider

Then you should quit hinting/masquerading as such with your "...who knew things were this simple..." post upthread. Posts like that imply that you are an insider, especially when you mention things like Darcy, 3D simulation, etc.

Your phrase in German is literally translated as "everything, everything also are free"

You must not be familiar with the game of "Hide and Seek." It is believed that "olly-olly-oxen-free" derives from the German that I posted. See http:// en.wikipedia.org/wiki/Olly_olly_oxen_free. In other words, come out and say whether you are an industry insider or not. You have finally done this.

For context...[your bio]

Not really interested in that, unless applicable to this topic. I'm sure my wanderings/experience outside of this topic might be interesting to some, others may find it to be bragging. But I can assure you that if I make a definitive statement on a topic in this forum it is indeed because I have experience and/or expertise on it. I don't feign what I don't have. Nor do I go to the internet to grab something that makes it look like I know something that I really don't. Using the internet to back up one's expertise is different than using the internet to create a mask of expertise. This is what many Peak Oil'ers today have done.

Again, from where I stand, the jury is still out on peak oil...too much uncertainty...

The jury will always be out on this subject. This is why the topic is so attractive to anti-development types and Chicken Little doomsayers. They love to grab topics where there is no certainty of outcome so that they can propagate a crisis mentality and then help manage the crisis.

Appreciate the recent links. I write and post here with links in hopes that the bs card is thrown when I am out to lunch on whatever topic I happen to be thinking and writing about. I, of course, will do the same

Links can be helpful to research certain topics. Of course you are correct in that regard. There are certain subject matters that all reasonable men can discuss/debate on without specialized knowledge/training. There are other subjects that require specialized knowledge. Yourself being an engineer, already realize that it would be pointless for a civil engineer to debate bridge design with someone who only had an academic background in Political Science. OTOH, with today's "Wiki scholarship" we have created a race of pseudo-experts that only have superficial knowledge on a variety of subjects, for which they proclaim themselves to be experts. This becomes dangerous with regards to our economic, political, and military policies.

[Surferbeetle]

Hmmm....

Then you should quit hinting/masquerading as such with your "...who knew things were this simple..." post upthread. Posts like that imply that you are an insider, especially when you mention things like Darcy, 3D simulation, etc.

Yes, with qualifications.

Links can be helpful to research certain topics. Of course you are correct in that regard. There are certain subject matters that all reasonable men can discuss/debate on without specialized knowledge/training. There are other subjects that require specialized knowledge. Yourself being an engineer, already realize that it would be pointless for a civil engineer to debate bridge design with someone who only had an academic background in Political Science. OTOH, with today's "Wiki scholarship" we have created a race of pseudo-experts that only have superficial knowledge on a variety of subjects, for which they proclaim themselves to be experts. This becomes dangerous with regards to our economic, political, and military policies.

Ok, let's try a different tack regarding Darcy (and I failed to mention Manning among the other giants during my initial post) modeling (1D, 2D, and 3D) and some of my previous comments.

My, enjoyable but limited, classes/education in political science stressed the values of comparative analysis. Darcy was a very smart guy and his work is used in a variety of technical fields to include chemical engineering, civil engineering, mechanical engineering, petroleum engineering, geology, etc.

A degree in engineering from an ABET program introduces one to modeling forces in three dimensions in the first year via statics and dynamics. Second year of the civil program includes fluid mechanics (Darcy, Manning, et al) and soil mechanics (Darcy and others) surveying (coordinate systems, projection systems, etc). If one is able to specialize in H & H (hydraulics and hydrology) at the undergraduate level, coursework will include advanced fluid mechanics, wells & pumps, aquifiers, etc. 1D, 2D, and 3D modeling education is accomplished in all engineering classes. Later on at the work site training (not education) helps to solidify buttonology and concept skills used for some of the latest and greatest modeling software. Long story short...not just oil & gas folks use engineering modeling.

Continuing on with the technical approach....lacking stated bonafides (more than what has presented so far), links, etc are used to gauge the quality/applicability of statements of expertise. After all, any of us could just be some kid in his mom's basement

[Misifus]

Very good. Okay Darcy. His main contribution is known as Darcy's Law. Which is used to predict the flow rate of a reservoir at any instant in time. In the more simpler method, we can just consider it the ability of a fluid to flow through a rock. In the more complicated form it's simply the conduction equation for heat or electricity whereby we are looking at the conduction of those flows. The exception here is that that flow will change depending on the pressure decline of the reservoir (which is dependent on the size of the reservoir). So consider it a heat problem whereby the heat source diminishes at the boundary for each time step where heat is passed at the sink. Hence from your own background you can probably surmise that to predict a reservoir's flow, as a minimum, one must know the size of the reservoir, the permeability (conductivity), etc. Hubbert was not privy to that data on a local or even a global basis when he made his Peak Oil predictions, which is why he was wrong. He was full of scheisse. Geologists and Geophysicists come up with reservoir "structure," they do not determine reservoir "size." However, Hubbert wasn't even respecting his own academic discipline.

As a simple example, two reservoirs that both flow 200,000 bopd when they are both discovered but that have different sizes will have different flow rates after discovery at later points in time. A year later the smaller one may only be flowing 150,000 bopd while the larger one may be flowing 190,000 bopd. Hence Hubbert did not respect the physics of the problem when he did his work being that he ignored size. He simply did empirical trending analysis and kept on guessing until one of his predictions "looked" correct.

There are another set of equations known as the Arps equations. These are simple decline equations of a hyperbolic nature (with a subset of exponential and harmonic cases), in other words curve fitting. These equations are often used for simple empirical evaluations on reservoir decline and sometimes the amount of ultimate recovery, but reservoir size is NOT calculated from these decline curves. These equations are dangerous to use in anything beyond the field or well level. This kind of trending is why Hubbert was wrong. Hence his estimating of a peak was was simply luck. He actually guessed several dates and finally one of them came true for the Lower 48 in the US. Enough rolls of the dice and we will eventually roll sevens. As cited upthread, global reserves have gone up not down, we are not running out of oil, but are increasing the amount that is available. It would have been a monumental task for Hubbert to go through a study of each of the world's reservoirs to do this, nor would he have been given access to the proprietary data to do so. Nor could he know the size of future reservoirs. The engineering aspect, as you probably already guessed, becomes even more complicated because oil shrinks as it is brought to the surface and because the gas that comes with it expands. As an engineer yourself, you are probably then aware that in order to know reservoir size, then one also has to conduct material balance studies and know the PVT (pressure volume temperature) properties of the oil. All oils are different in this regard.

As for the real reason of the "peak" in the Lower 48, it was simply economics it's not because "the easy oil had been found" like the Peak Oil wackos like to say, it's because there was even easier and more abundant oil to be found overseas. That is, for the given investment dollars, the rate of return was higher overseas and offshore US. A bigger prize and bigger bang for the buck. Hubbert's peak was nothing more than an illusion of economics. The industry is now coming back to the Lower 48 because the economics now look attractive again even though there is anti-oil sentiment here in the US. Trends like the Bakken shale are proving Hubbert and his followers to be the fools that they were and are.

Normal engineering programs do not cover what petroleum engineering programs cover. And "buttonology" doesn't quite get you there either. However, oil companies routinely hire civil, mechanical, and chemical engineers and then turn them into petroleum engineers via in-house or industry training. In fact many advise not to get an undergrad in petroleum engineering, but to get that undergrad in one of the more basic engineering disciplines, like mechanical (or civil) and then pick up a master's in petroleum engineering.

Okay, I think I am done with this topic. Hopefully those who have blindly bought into it or were buying into it have picked up a thought or two. I am glad that some military officers are concerned about energy security issues, because you know they really screwed up with Gulf War 1 in spite of having been given the proper advice. But when one doesn't know enough to know what one doesn't know, then dangerous recommendations can be made to policy makers.

[Dayuhan]

As for the real reason of the "peak" in the Lower 48, it was simply economics it's not because "the easy oil had been found" like the Peak Oil wackos like to say, it's because there was even easier and more abundant oil to be found overseas. That is, for the given investment dollars, the rate of return was higher overseas and offshore US.

Was that also, to some extent, because the US prefers to export its environmental impact, even if that means importing its energy?

I've sometimes noted, in the fracking debates (another place where hysteria sometimes reaches a deafening pitch), that while, say, the overall environmental impact of producing oil in Nigeria vastly exceeds the overall impact of producing fracked gas in Pennsylvania, many Americans would rather burn the Nigerian oil, because that environmental impact is far away, out of sight, and in someone else's back yard.

[Rick M]

Hi, Misifus

Thanks for your links: I have examined & enjoyed all of them and would like to offer a few observations on WSJ-Yergin, Sept. 2011:
http://online.wsj.com/article/SB1000...998674340.html

Although I do not share Yergin’s confidence in future oil supply, I have great respect for his intellect.
I read “The Prize” very carefully many years ago: it is a magnificent example of scholarship and writing style.

In the WSJ article, Yergin regards PO as “a point of maximum oil output.”
I agree with his definition: we don’t need to complicate the matter with “absolute geologic peak” or anything else.
Unless we have “peak demand” first, the maxing-out of global oil production (or, more imminently, the maxing-out of available oil exports) will be “an unprecedented problem.”

Hubbert predicted “that children born in 1965 would see all of the world’s oil used up in their lifetime.”
If living to 80 is not an unreasonable assumption, MKH was not that far off the mark, based on the oil world as he knew it in 1978 and the oil supply situation as we know it now. If I'm not mistaken, both the IEA and BP predict that proven reserves will not last another half-century.

Again, we have the sticky problem of definition, but if we take the definition of oil as Hubbert would have known it in his day (ie. liquid, pumpable crude), excluding NGL, GTL, bitumen & biofuels, then Hubbert’s 1978 prediction is certainly consistent with the more recent projections of both the IEA and BP Statistical Review.
By 2045, most experts concur that there will indeed be little conventional oil left, and the world will forever be dependent on lower-grade, less accessible sources of liquid fuels which will have a much lower net energy return.

You said, “By 2010, U.S. oil production was 3½ times higher than Hubbert had estimated: 5.5 million barrels per day versus Hubbert's 1971 estimate of no more than 1.5 million barrels per day. Hardly a "minor deviation."
Could you please provide a source for this? Yergin didn’t, and I can’t find one. I am aware of earlier projections by MKH re. US lower 48 oil production, but not one in 1971.
Yergin seems to be the only source for this: I don’t doubt his word, and I’m sure he has a citation for it, but I don’t yet have a copy of “The Quest.”

I agree with Yergin’s point about “proved reserves” being an economic & a technical concept as well as a physical/geological concept.

Yergin states, “… the discovery rate for new oil fields is declining. But… most of the world’s supply is the result not of discoveries but of additions and extensions in existing fields.”

I agree with both his points, but I disagree with his implied conclusion: Yergin seems to imply that because of additions, extensions, EOR, etc, our future supply is assured.
This recent study by James Hamilton points out (p. 9) that until recently, the great bulk of new oil has not come from EOR and extending active reserves, but rather from new exploration frontiers (virgin territory), which we’ve pretty much run out of:
http://dss.ucsd.edu/~jhamilto/handbook_climate.pdf

So Yergin may be correct, but for a rather unhappy reason: most of our future supply will come from more intensive work in existing fields, primarily because we've exhausted all reasonable new exploration prospects.
We should hardly view that as reassuring.

[Dayuhan]

In the WSJ article, Yergin regards PO as “a point of maximum oil output.”
I agree with his definition: we don’t need to complicate the matter with “absolute geologic peak” or anything else.
Unless we have “peak demand” first, the maxing-out of global oil production (or, more imminently, the maxing-out of available oil exports) will be “an unprecedented problem.”

How do we know if any given peak is "maxing out"? If global production this year is lower than it was last year, that doesn't mean it can't be higher next year.

One of the great problems with much peak oil discourse is the common assumption that once a "peak" is reached only decline can follow. I've seen a number of PO analyses, for example, stating that Venezuela has "peaked". Certainly Venezuelan production has declined, but the constraints are in no way absolute and it's perfectly possible that Venezuelan production could at some point in the future exceed previous "peaks". "A peak" is not necessarily "the peak".

[Misifus]

Was that also, to some extent, because the US prefers to export its environmental impact, even if that means importing its energy?

Not really. It's really just like I said above. Later, however, the US became a pain in the butt to operate in. It's still a pain in the butt today with places like California. However, what we are doing regulatory-wise in this country is chasing away manufacturing. That's a topic for another thread.

I've sometimes noted, in the fracking debates (another place where hysteria sometimes reaches a deafening pitch), that while, say, the overall environmental impact of producing oil in Nigeria vastly exceeds the overall impact of producing fracked gas in Pennsylvania, many Americans would rather burn the Nigerian oil, because that environmental impact is far away, out of sight, and in someone else's back yard.

The fracking debate is indeed another hysteria. We have been fracking for decades. So some wacko a couple of years ago figures out he can say this causes earthquakes and stuff, and now we have the latest hysteria. Many of the reservoirs are already fractured to begin with. Take for example the Austin Chalk here in Texas. The Cantarell field offshore Mexico is also naturally fractured. Almost everything in Iran is naturally fractured. These reservoirs have huge fracture networks that go on for miles. The most one is going to get with a hydraulic fracture is about 1,000 ft. fracture. But in every well where a service company claims they have a created a 1,000 ft fracture, when I have gone back and done a pressure transient test on the well, I find that the fracture is only a couple of hundred feet at most. The fractures do help the wells flow better. It effectively increases the permeability of the rock in the near wellbore area.

[Misifus]

...I've seen a number of PO analyses, for example, stating that Venezuela has "peaked". Certainly Venezuelan production has declined, but the constraints are in no way absolute and it's perfectly possible that Venezuelan production could at some point in the future exceed previous "peaks". "A peak" is not necessarily "the peak".

All true. I was on the last plane out of Caracas before they closed the airport during the coup attempt on Chavez back in 2002. The field I had been looking at had great potential. It and several other fields had a complete halt in their development after the coup attempt. One must remember that the events of April 11, 2002 stared at the PDVSA headquarters and ended at the Miraflores presidential palace. Chavez purged PDVSA of its best technical people after the coup attempt. These former PDVSA employees I now run into all over the world. Venezuela production fell drastically after that. It was economic suicide for Venezuela.

[Misifus]

You said, “By 2010, U.S. oil production was 3½ times higher than Hubbert had estimated: 5.5 million barrels per day versus Hubbert's 1971 estimate of no more than 1.5 million barrels per day. Hardly a "minor deviation." Could you please provide a source for this? Yergin didn’t, and I can’t find one.

I'm not going to do all of your research for you. You now seem to be defending Hubbert due to his time frame and the circumstances of his time. Like it's an excuse for being wrong. When one is in the business of predicting the future, then one should take his own time frame into account when making predictions. Now you question Yergin though you have cited him in the past. You also seem to be ignoring the fact that Hubbert was wrong about reserves. We have more oil now than ever.

But just to be nice to you, the Journal of Petroleum Technology, published by the Society of Petroleum Engineers, September 2011 issue, page 6, shows the world production by country with every monthly issue with a lag of a few months. Here's a sampling: For April 2011, USA is 5.594 million barrels per day (mmBOPD), Canada 2.854 mmBOPD, Saudi Arabia 8.940 mmBOPD, Mexico 2.573 mmBOPD, China 4.127 mmBOPD, and the Big Kahuna is Russia at 9.795 mmBOPD. And by the way, Russia is under-explored and under-optimized. There's so much oil in Russia it's unbelievable. They can't even use it, because they are knuckleheads. I mentioned upthread that I only work in the countries I choose to. I choose not to work in Russia because they are (1) the stupidest in the industry, and (2) one never knows when one is dealing with a criminal. It's actually safer in Mexico even with all the cartel nonsense there.

P.S. In fact I have a new theory. The stupider God made you, the more oil he put under the ground you breed on. This is why I like the Swiss.

[Surferbeetle]

Misifus,

Greatly appreciate the excellent posts.

Thermo was a tough, but fun class; and you are right, 'buttonolgy' does not do justice to the really interesting things (often black-box unfortunately) that are happening...mostly HEC-RAS, sometimes FLO2D, with the occasional CAD and ArcView when I get to play. MBA too, so, more time with SOW's, cost estimates, mods, meetings, budgets, and keeping track of the troops and projects.

So it goes

[Dayuhan]

Chavez purged PDVSA of its best technical people after the coup attempt. These former PDVSA employees I now run into all over the world. Venezuela production fell drastically after that. It was economic suicide for Venezuela.

I recall poor Hugo at one point claiming that if necessary the army would run the oil industry. I also recall wondering if he would order the oil industry people to fight a war... though given what I hear of the Venezuelan Army, there might not have been much difference.

[Rick M]

How do we know if any given peak is "maxing out"? If global production this year is lower than it was last year, that doesn't mean it can't be higher next year.

One of the great problems with much peak oil discourse is the common assumption that once a "peak" is reached only decline can follow. I've seen a number of PO analyses, for example, stating that Venezuela has "peaked". Certainly Venezuelan production has declined, but the constraints are in no way absolute and it's perfectly possible that Venezuelan production could at some point in the future exceed previous "peaks". "A peak" is not necessarily "the peak".

I agree, and have indicated up-thread that there is the possibility that the USA may exceed the 1970 peak, which is generally accepted as "the peak."

A few years ago this list of 54 oil-producing countries was posted at The Oil Drum:
http://www.theoildrum.com/node/5576

In determining whether a country should be considered post-peak or not, the following criteria were used:
"To be considered past-peak, a producer's current (2008) production has to be at least 10% less than its best year, and the best year must have occurred prior to 2005."

I find those criteria to be insufficient.
That said, just as we should not jump to premature conclusions, we also should not ignore the data and trends.
If a country like Romania peaked decades ago and is down by 68%, I think we can conclude that the world has almost certainly lost an important oil producer.
We can debate the time-lines and the circumstances & "ifs" in each country, but the overall trend seems pretty clear: we have a growing list of countries whose oil production is well below a prior production peak, and has been so for many years.
Whether that prior peak is "the peak" remains to be seen.