Energy Security

[Dayuhan]

Hello again...

I should pause at this point and thank you and the others for your interest in this topic…. This sort of discussion is exactly what I had hoped for, and everything that has been said so far (including the occasional bit of disagreement) has been constructive, sensible and respectful.

The topic is interesting, though as with many interesting topics constructive, sensible, and respectful discussion is hardly the rule on the internet! Hope it stays this way...

2. As for apocalyptic views of peak oil, I have tried to steer clear of the doomer/survivalist perspective and have repeatedly asked the mainstream media to do the same

I wish you the best of luck in that quest, but it will be an uphill battle. Reasoned analysis fits poorly in a 30 second sound bite, and the apocalyptic scenario draws more attention than serious discussion.

I have dealt primarily with Energy Bulletin rather than The Oil Drum, but more for reasons of format.
I’m not sure what you are referring to at TOD specifically…
I am usually very pleased with the level of scholarship (ie. sourcing material and providing balanced conclusions) that I’ve seen so far.

I get the feeling that the material that is sourced and the processes that are applied to the data are selected with the goal of supporting a preconceived view. An example might be these charts:

http://www.theoildrum.com/tag/update

Where the data selected to provide the mean and median projections seem selected to suppport the declining curve. All very well to say that "95% of the predictions sees [sic] a production peak between 2008 and 2010", but it is worth pointing out 95% of the predictions they chose to analyze see that peak occurring. Subjecting carefully selected and less than comprehensive data to rigorous analytical processes has become a very common thing, but conclusions reached through this process remain questionable.

One thing that seems consistently missing from discussions of production is the medium to long term impact of the 90s oil glut. The glut actually went well beyond the 90s: oil was below $20 by 1986. There was a brief spike around the first phase of the Iraq war, but the rapid drop after that only served to convince many producers that price rises were likely to be transient phenomena. As late as 2002 prices were still bumping along at the $20 level. By 2004 we were into a serious escalation, but it wasn't immediately recognized. The early stages of the price spurt were marked by peaks and troughs, and the rise was not fully acknowledged to be driven by a fiundamental alteration of the supply/demand equation until 2005/2006.

What that means, to make a long story short, is that for close to 20 years prices were either too low or price increases were perceived as too transient to support comprehensive investment in exploration and production.

The production increase from 2006 on seems to me to be largely driven by short-term measures aimed at improving and maximizing existing capacity, rather than serious attempts to bring new capacity onstream.

The production decline after mid 2008 seems clearly price related to me. OPEC reduced production quotas, but there's more to it than that: major producers in the middle east had been running flat out for over a year, and when prices tanked there was an obvious incentive to pull facilities off line for badly needed maintenance work.

Will add more to this later...