OT OT OT
Hi Don,
We will just have to agree to disagree about the implications of Peak Oil. :)
Re: "In a three year period, OPEC reserves doubled as countries jockeyed for their production allocations. Not one barrel of new oil was discovered to account for this accounting chicanery."
This type of argument is probably the one that bugs me the most on the Peak Oil theories I've seen.
It's not an "argument", Don. It's history. Sheesh.
Here's what a leading Peak Oil researcher had to say last year on the chicanery involved "reserve" calculation.
fromthewilderness.com
<COPY>
Dishonest Reserve Reporting and Definitions
There was no defense raised from any of the attending camps for overstated oil reserve estimates previously produced by either the US Geological Survey (USGS) or the IEA. It took little effort from experts like Campbell, Laherrère, Aleklett, Chris Skrebowski of the UK's Institute of Petroleum, and Professor Kenneth Deffeyes of Princeton to demonstrate that the books on oil reserves are as cooked as the books of Enron.
The chief misleading error always committed by both oil companies and government institutions is their failure to backdate reserve discoveries. When oil companies drill their first successful well in any field they generally have a reasonable idea of how much oil will be ultimately recoverable. The first problem is, that if they report the anticipated size of the field in the year of discovery, they have to pay taxes on all of it. Naturally, they report the reserve estimates as increasing over time to spread out the tax burden. They do it also to keep share prices up and stable, and to stimulate continued investment by reporting the discovery of new reserves in older fields that are not new discoveries at all. And in cases where national production is determined by stated "proven" reserves, estimates are sometime changed, as with the OPEC nations in the mid 1980s, simply as a result of an accountant applying an eraser to the previously stated reserves when more cash is needed as a result of increased production.
Experts like Campbell and Laherrère insist that all reserves everywhere should immediately be backdated to the first successful borehole in a field and then the amount pumped subsequently subtracted as a means of accurately determining how much oil is really left. To engage in honest discussion of what is really there, terms like Probable, Estimated, and even Proven Reserves need to be thrown out in favor of Ultimately Recoverable Reserves (URR) which have been properly backdated. Anything else is pandering to the needs of an accountant, a politician, or a stock market analyst.
There is a reason why -- in spite of all the reserve numbers put out by governments, oil companies and market analysts -- a company called Petroleum Consultants in Geneva Switzerland publishes an annual report on oil reserves country by country and charges a reported million dollars per copy. The CIA is reported to have a hand in its drafting and is a recipient of the work product. That is a testament in itself to the unreliability of reserve estimates from other sources."
<END COPY>
The point being, "reserves" are simply not what they appear to be to the casual observer.
***
On another salient matter, I'd ask you to examine the two charts on this page: dieoff.org
The point of the charts to educate you as to the real situation that the world faces with regard to new discoveries of oil. You are the only non-expert source I've seen claiming that additions to reserves are keeping up with consumption. Most experts in the field including but not limited to Matt Simmons, Campbell, Leherrere(sp?), Deffeyes, Heinberg and Robert O. Anderson, former CEO of ARCO all agree that discoveries peaked in the 1960s and have been in steep decline since then.
Furthermore, it is calculated by many of the above listed authorities that the world is currently consuming four barrels of crude oil for every new barrel being discovered.
We both know what this means.
As former Treasury Secretary Herb Klein observed, "if something can't go on forever, it won't." That's where we stand on oil consumption. While the world's corporate economy demands ever increasing consumption of oil to maintain prosperity, the simple fact of the matter is that the world it today running at full capacity to extract, refine and consume crude oil. Yet the world is expected to use dramatically more crude oil in the coming decades. Something's got to give. My suspicion is that what gives is the pollyannish projections of someone like Bill Korovik, the source you cited yesterday:
radford.edu
His analysis is, quite simply, much akin to the ~3% of scientists, employed by the oil industry, who don't see global warming.
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Re: When oil prices cratered in 1997-1998 to under $13 per barrel, everyone in the oil patch was in a blind panic.
Methinks thou doth protest to much. :) I was following the market and market coverage. No one I was aware of was "in a blind panic". Most of the producers were plenty sore about losing money, but they weren't panicked. The only people panicking would have been stripper well operators who were being marginalized. But that's around 2% of our domestic supply, so it's a "so what?" situation.
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Re: The US has been explored and drilled to death.
I like the metaphor calling the U.S. a pincushion of drill stems.
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Re: Drilling new wells costs money, about half a million dollars per hole.
It's not that simple, Don. You can drill a coal bed methane gas well in the Power River country in Wyoming for about $500K. But if you are working in the deepwater in the Gulf of Mexico, you can expect one platform project to cost, at a minimum, $1.5 Billion. That's quite a range. And a clear indication that if you are going after the big prize, capitalization costs prevent all but a handful of oil majors from playing the game.
***
Re: For all practical purposes, the Peak Oil theory is right wing, US oil company propaganda
That's the first time I've ever read that particular paranoid view. :)
Generally, it is my observation that the Peak Oil researchers and investigators tend, without exception, to be representatives of academia, independent consultants or otherwise complelely disassociated from the oil majors.
Re: It's sole purpose is to justify US oil companies taking oil that doesn't belong to them by force.
Again, that's the first time I've heard this theory put forward, and in view of the fact that almost 100% of the Peak Oil researchers are beseeching the world to conserve fuel, your comment about them as shills for the oil industry strikes me as being silly and paranoid in equal measure.
Rather, the major U.S. domiciled oil companies seem to prefer a corporate message to the public of "don't worry, be happy". There's plenty of reserves, we can grow the industry, there's no reason to improve CAFE standards, etc., etc.
This is the opposite viewpoint from that of the Peak Oil research community.
Ciao! |
