Could you say that again, in English? :)
i am surprised you could not understand what i said, since you claim to have read all the ASPO folk. the Lower 48 means the continental US, which is where TRC had jurisdiction (basically Texas). the significance of going to 100% production means that the TRC was officially recognizing its own irrelevance (to setting oil prices). those who produce 100% are no longer players. only those with spare capacity, which they can turn on or off, get to set prices, which are set on the marginal barrel.
imagine you live on a deserted island ruled by you yourself, and you had an oil well in your backyard that produced up to 1000 bpd. you could set up your own "Raypec" and declare what percentage (less than 100%) of max capacity you would allow for the coming month. you could issue press releases and hold meetings in places like Geneva to announce the result of your deliberations each month. but nobody would care because your max capacity is a drop in the global bucket.
but if you could produce up 10 million bpd, and the world only needs 8 mmbpd, then you are a player. by turning on or off a couple mmbpd each month, you can set prices at the margin. that is what TRC was and OPEC is (still, presumably).
this price-setting scepter passed in the early 70s from TRC to OPEC. OPEC is only relevant to the extent that it can keep production at less than 100%, which is to say, the OPEC members must have capacity exceeding current production levels and greater than global demand or OPEC has no relevance. those already producing at 100% are already irrelevant at the margin, and there are indications that many OPEC members fall into this category.
the real issue is the extent to which Saudi Arabia can increase production as advertised. if that proves to be false, then it's "game over", ringing the Peak Oil bell. even if SA has the geological potential for this development, the required investments may break the regime, resulting in a chaotic environment like Iraq where oil cos are loathe to make big investment.
would be highly amused by your characterization of them as Right Wingers.
it seems you did not comprehend my sentence, and its meaning in context.
production does not fall off a cliff after the peak has been reached
that is oversimplifying and may turn out to be incorrect, although we will only know for sure in retrospect. as Simmons and Campbell have pointed out, the overuse of water injection in Ghawar and other large reservoirs may be causing long-term damage which will result in a very steep dropoff. Campbell has cited the case of Oman as an example. because a small number (14) of fairly old, supergiant reservoirs account for 20% of global production, if they are less healthy than assumed due to improper development, that could cause a steeper dropoff than predicted.
also, Hubbert's original model assumed a "rational" (economic cost-based) exploitation of available reservoirs would lead to fairly symmetrical production curve (with a slow dropoff). this model makes sense in a politically stable environment such as the Lower 48.
but as Deffeyes has noted, the geopolitical realities of the world since at least the 1970s have forced Western oil cos to develop costly, harder-to-produce reserves much earlier in the global production profile than would have occurred if reservoirs were selected for production solely based on economics. thus, these reservoirs (in places like the North Sea) will not be available to "cushion" the decline in the easier-to-produce reservoirs going forward.
This creates all sorts of financial chaos and volatility, but it does not even come close to meaning that the world is running out of crude oil
no duh. we are actually on the same page, you know. |
