By Andy May
“Prediction is very difficult, especially about the future” (old Danish proverb, sometimes attributed to Niels Bohr or Yogi Berra)
In November, 2016 the USGS (United States Geological Survey) reported their assessment of the recent discovery of 20 billion barrels of oil equivalent (technically recoverable) in the Midland Basin of West Texas. About the same time IHS researcher Peter Blomquist published an estimate of 35 billion barrels. Compare these estimates with Ghawar Field in Saudi Arabia, the largest conventional oil field in the world, which contained 80 billion barrels when discovered. There is an old saying in the oil and gas exploration business “big discoveries get bigger and small discoveries get smaller.” As a retired petrophysicist who has been involved with many discoveries of all sizes, I can say this is what I’ve always seen, although I have no statistics to back the statement up. Twenty or thirty years from now when the field is mostly developed, it is very likely the estimated ultimate hydrocarbon recovery from the field will be larger than either of those estimates.
Producing oil and gas from shale was unknown in the 1950’s when the irascible geologist Marion King Hubbert predicted that U.S. oil production would peak in the early 1970’s and decline thereafter. How is that prediction working out? Does the new shale production technology make a difference?
Definition of critical terms
Government regulations impose strict rules on how oil and gas reserves are estimated. Because, proven reserves are used to compute the equity of an oil and gas company, the calculation is very conservative. As long as a company follows the rules (and they do or they risk going to jail) accessing any “booked” proven reserves means drilling a well that is “economic,” completing it and producing the reserves. By economic, we mean the cost of drilling, completing, transporting and selling the oil or gas will pay the company back for its costs and provide a reasonable profit after taxes and royalties to the land owner are paid. Besides proven reserves, most companies keep track of probable reserves and possible reserves, these do not affect the equity of the company, but they can affect how investors value a company, and thus the stock price. Finally, there is one other category, called “technically recoverable reserves.” This is the broadest category, it is simply an estimate of how much oil and gas can be produced using current technology, regardless of cost or profitability.
Estimates of technically recoverable reserves are very broad brush. To make the estimate a geoscientist will typically map an oil or gas bearing formation and use the best estimate of the formations average oil and/or gas content to compute the OIP or oil-in-place after converting the gas to oil-equivalent. Once this volume is computed, it will be reduced by an estimated “recovery factor” to account for the oil left in the ground after the field is abandoned. Generally, very conservative values are used for both the volume of hydrocarbons and the recovery factor.
The US Department of the Interior Bureau of Ocean Energy Management published an estimate of the oil and gas reserves for the Gulf of Mexico Outer Continental Shelf in 2015, here. They estimated that total original reserves of this region of the Gulf of Mexico were 22 billion barrels of oil and 193 trillion cubic feet of gas. How did they define reserves? See figure 1:
Figure 1, source BOEM.
Here, reserves are defined as developed (a well has been drilled and completed that is expected to produce them), proven and undeveloped (field infrastructure has been built, but the well needed to produce the hydrocarbons has not been drilled yet) and justified reserves (these are discovered and mapped and both the government and the company have approved the field for development). The estimate above also includes oil and gas already produced. Contingent resources are mostly producible, but uneconomic, oil and gas left behind in abandoned fields. The undiscovered resources are estimated using statistical techniques, the methodology can be seen here. U.S. onshore reserves are defined differently as are reserves in other countries, but proven, probable and possible “reserves” usually have a commerciality component. Technically recoverable reserves do not have a commerciality hurdle, they only meet a technology hurdle.
Right after a field is discovered a calculation of economically producible reserves must be made because fields are very expensive to develop. Pipelines must be built, wells drilled, facilities constructed and all of this must be done with borrowed money. No oil is produced or sold and no money made until this work is done. As a result, this early assessment will be very conservative. In one field I was involved in, Bohai Bay Block 0436 in China, our initial estimate of proven reserves was only 80 million barrels of oil in the first 20 years. After twenty years, the field had produced 150 million barrels and the field is still producing today. We knew the upside potential of the field at the beginning, but we were only confident enough, with the data we had at the time, in the 80 million barrels. Thus, we used that as the “official” estimate and as the basis for borrowing the development money.
The impact of technology
In the early days of oil and gas, drillers selected the location of their exploration wells based on the presence of oil and gas seeps on the surface, for example the La Brea tar pits in Los Angeles, or the Binagadi tar lake near Baku, Azerbaijan. Figure 2 is a picture of the La Brea tar pits in 1875, you can see the old wooden drilling rigs in the background.
Figure 2, source La Brea Tar Pits Museum.
Once all the seeps had been drilled, early geologists like the legendary Everett Carpenter, found that they could locate anticlinal oil and gas accumulations by mapping surface geology in prospective areas. This new technology was used to find many very large oil fields, like El Dorado in Kansas. Later the development of commercial resistivity surveys (Schlumberger, 1912) and seismic surveys revolutionized oil and gas exploration. Reflection seismic was first tried by Dr. J. C. Archer in 1921 in Oklahoma. It was used to discover oil near Seminole, Oklahoma in 1928 as you can see in figure 3.
Figure 3, source here.
Each of these technologies allow oil and gas to be found and produced that could not have been found before. Other significant discoveries include the Hughes tri-cone drilling bit, patented by Howard Hughes Sr. in 1909. (figure 4).
Figure 4, source Texas Monthly.
That bit allowed wells to be drilled deeper and faster, greatly accelerating field development. These early discoveries were followed by the invention of water flooding old fields, the invention of modern well logging tools in the 1950’s and 1960’s to better assess the production potential of wells, the development of CO2 flooding (1970’s), 3D seismic surveys (1964), horizontal drilling (1980’s) and most recently widespread unconventional shale oil and gas wells (late 1990’s).
At every stage of technology development, it seems, someone says we are going to run out of oil and gas. Near the end of the “drilling surface oil seeps period” in 1885, when it was getting harder and harder to find more oil, the Pennsylvania state geologist proclaimed (according to Daniel Yergin’s The Quest):
“… ‘the amazing exhibition of oil’ was only a ‘temporary and vanishing phenomenon – one which young men will live to see come to its natural end.’ “
That same year John Archbold (Rockefeller’s partner in Standard Oil), when he heard oil had been discovered in Oklahoma, said:
“Why, I’ll drink every gallon of oil found west of the Mississippi.”
Of course, not long after this, modern petroleum geology and Hughes’ famous tri-cone bit revolutionized the oil and gas industry and unimaginable amounts of oil and gas were discovered as a result. And, yes, quite a lot of the oil and gas was found west of the Mississippi River. We have no record of Mr. Archbold drinking any of it, however.
By the end of WW I, the world had entered what Daniel Yergin calls the “Oil Age” and everyone knew it. According to Yergin, Lord Curzon, Great Britain’s foreign secretary once said:
“The Allied cause [in WW I] had floated to victory upon a wave of oil.”
Between 1914 and 1920 the numbers of registered automobiles grew fivefold and the director of the US Bureau of Mines said:
“… the oil fields of this country will reach their maximum production, and from that time on we will face an ever-increasing decline.”
This led President Wilson to say:
“There seemed to be no method by which we could assure ourselves of the necessary supply at home and abroad.”
The entire world came to depend upon oil for its automobiles, trains, ships and for light at night. The Japanese bombed Pearl Harbor for oil, Hitler invaded Russia for oil, the US had a secure supply of oil and prevailed in WW II largely for that reason. What would the world look like today if Hitler had invaded and conquered Azerbaijan and Kazakhstan rather than try and take St. Petersburg and Moscow? Perhaps very different.
At the start of WW II yet another “end of oil” panic started, it even affected the US Department of the Interior which announced:
“American oil supplies will last only another 13 years.”
Then in 1949, the department announced:
“… the end of U.S. oil supplies is in sight.”
After WW II, the US could no longer produce enough oil and did became a net importer for the first time. This led to worries about supplies and, in response, strong alliances with the major Gulf states of Saudi Arabia and Kuwait were formed to ensure a supply. President Truman was not only worried about losing access to Middle Eastern oil, he was also worried about the Soviets taking over Middle Eastern oil fields, especially in Iran. As a result, he ordered a new plan to be developed, according to the Brookings Institution:
“It is no coincidence that much of the early preoccupation with the potential Soviet threat after the end of World War II centered on the remaining Soviet presence in Iran. But unknown to the public until the recent declassification of National Security Council documents (first uncovered by a reporter for the Kansas City Star, Steve Everly) was the extent of Truman administration concern about the possible Soviet takeover of the oil fields. Equally surprising was that the Truman administration built its strategy not so much on defending the oil fields in the face of a possible Soviet invasion, as on denying the Soviet Union use of the oil fields if it should invade.
The administration quickly developed a detailed plan that was signed by President Truman in 1949 as NSC 26/2 and later supplemented by a series of additional NSC directives. The plan, developed in coordination with the British government and American and British oil companies without the knowledge of governments in the region, called for moving explosives to the Middle East, where they would be stored for use. In case of a Soviet invasion, and as a last resort, the oil installations and refineries would be blown up and oil fields plugged to make it impossible for the Soviet Union to use the oil resources.”
However, the 1950’s saw an explosion of new oil and gas technology, not oil fields. Oil and gas exploration expanded worldwide, particularly offshore, and supplies were abundant until the early 1970’s when Middle Eastern politics caused supplies to tighten, resulting in severe oil shortages. Again, the cries that “the end of oil is near” were heard. This time led by an irascible geologist named Marion King Hubbert. In the late 1950’s, using novel mathematics, he predicted that US oil production would peak in the early 1970’s. The rapid growth in oil and gas technology in the 1950’s was slowing at this time and large discoveries had been made so prices were falling. They stayed low during the 1960’s and by the time of the 1973 Arab-Israeli war, supplies and demand were nearly balanced. These two events allowed the Gulf states to engineer a boycott. Then prices spiraled just as many North American conventional oil fields were on a decline. At the time, it looked like Hubbert was correct.
The late 1960’s and the early 1970’s were filled with ominous predictions, in 1972 the Club of Rome predicted oil and natural gas would run out by 1992, in 1968 Paul Ehrlich predicted “65 million Americans will die of starvation between 1980 and 1989.” In 1978, Glenn Seaborg, chairman of the Atomic Energy Commission wrote:
“We are living in the twilight of the petroleum age.”
With higher oil prices, new oil and gas technology was developed at a frenetic pace. The 1970’s and 1980’s saw the development and implementation of 3-D seismic, deep water drilling, CO2 flooding of old oil fields, horizontal drilling, coal-bed methane production, formation image logs, NMR logging and many other critical technologies. The mid 1970’s and the early 1980’s were a wonderful time to be in the business. The new technology worked well, a lot of oil and gas was found, too much as a matter of fact; and the industry crashed in 1986 with the world awash in oil. It took many years to use up the surplus.
Research did not stop during this period, but it did slow down. In particular, UPR (Union Pacific Resources) perfected drilling and hydraulically fracturing (“fracking”) horizontal wells in a Texas formation called the Austin Chalk. At the same time a small oil and gas company, Mitchell Energy, was developing novel methods of hydraulically fracturing shale reservoirs, in particular, the Barnett Shale in Texas. Mitchell was drilling vertical wells and completing them; but having a hard time making the wells “economic” or profitable. George Mitchell, the owner of Mitchell Energy, was a victim of the low oil prices (as low as $10/barrel) of the late 1990’s and had to sell his company to Devon Energy in 2001. At Devon they combined the horizontal well technology that they had in house, with the novel shale completion techniques developed at Mitchell and were very successful. And, lucky for them, oil and gas prices started to rise, making the technology even more profitable.
The early days of shale completions were slow going, but by about 2005 drilling and completion technology, new petrophysical well evaluation technology, micro-seismic technology and new 3D seismic interpretation techniques had matured and the resulting oil and gas discoveries were huge. Unconventional oil and gas (shale production) is very different from conventional oil and gas. Where conventional reservoirs are small and hard to find, but very high permeability (meaning high oil and gas flow rates per foot of reservoir in the well), unconventional “resource” plays are enormous and cover huge areas, but very low permeability. We know where they are, the work is in figuring out how to drill and complete the wells in a profitable way. The author worked as a shale petrophysicist for Devon Energy and saw that it takes four or five wells (minimum) just to figure out if a shale play will work, sometimes more.
It took 17 dry holes and $10,000,000 for Harold Hamm and Continental Resources to figure out how to drill and complete a profitable well in the prolific Bakken Shale. He didn’t drill all of those wells to find the oil, he knew the oil was there, he drilled them to figure out how to successfully place the well in the formation and complete (“frack”) the well. Today, based on what he learned, we could do it with one well. It’s much more a science and engineering problem than an exploration problem. But, the technology worked and once again we are awash in oil and prices are low. It will continue to work and the technology will spread overseas, greatly increasing global production. As Daniel Yergin points out in The Quest:
“Hubbert got the date right, but his projection on supply was far off. Hubbert greatly underestimated the amount of oil that would be found – and – produced in the United States. By 2010 U.S. production was four times higher than Hubbert had estimated- 5.9 million barrels per day versus Hubbert’s 1971 estimate of no more than 1.5 million barrels per day.”
A comparison of actual oil production versus a version of Hubbert’s curve is shown in figure 5 (slightly different from the one Yergin used):
Figure 5, source
Technically Recoverable Reserves
So clearly Hubbert’s Malthusian curve did not predict oil supply correctly, new technology has allowed us to tap into oil that was not part of the potential supply when he did his calculation. Paul Ehrlich’s ominous 1968 prediction in The Population Bomb that 65 million Americans would starve to death in the 1980’s was incorrect for the same reason. He could not have predicted the green technology revolution that included natural gas based fertilizer (the Haber-Bosch process) and Nobel Prize winner Norman Borlaug’s new hybrid strains of wheat, rice and corn. Some might say, well Hubbert was wrong then; but what about tomorrow? Isn’t oil still a finite resource? Let’s examine that idea. Table 1 shows a rough estimate of the technically recoverable reserves of oil and gas known today, using only known oil and gas technology. More deposits will obviously be found and technology will improve in the future.
Table 1
The reserve estimates are in billions of barrels of oil equivalent. NGL and oil volumes are presented as is and natural gas is converted to oil-equivalent using the USGS conversion of 6 MCF to one barrel of oil. The table includes the “proven” worldwide oil, gas and NGL reserves from BP’s 2016 reserves summary. It also includes the 2012 USGS estimate of undiscovered “conventional” oil and gas reserves fully risked, the EIA estimate of unconventional shale oil and gas reserves, and the IEA oil shale (kerogen) and oil sands (bitumen) reserve estimates. Our estimate of 1,682 BBOE in world-wide unconventional shale oil and gas reserves is lower than the IEA estimate of 2,781. The spread in these estimates gives us an idea about how uncertain these numbers are. Our estimate of 781 BBO in oil sand bitumen reserves is lower than the IEA estimate of 1,000 to 1,500 BBO. So, please consider this table very conservative.
The USGS also has a report on oil shale “in-place” kerogen volumes here with different numbers. “Shale oil” is actual oil trapped in shale, for example the Bakken in North Dakota or the Eagle Ford in Texas. “Oil shale” is different, it is kerogen (not oil) trapped in a shale, an example is the Green River Formation in Colorado. Oil shale has been mined in several places around the world since the 1830’s. Shell has completed a pilot production operation, in the Green River oil shale in the Piceance Basin, in Colorado; that proved oil shale could be produced in an environmentally friendly and economic way. They estimate the Green River oil shale could ultimately produce 500 to 1,100 billion barrels of recoverable oil using their technique. Compare that to the 1,242 billion barrel estimate in table 1.
Oil sands are normally estimated separately because they are very heavy oil (bitumen) and sometimes mined, rather than produced with wells. Oil sands were produced in China 800 years ago. The most famous oil sands are those in the Athabasca region of Alberta, Canada. They produce economically from a variety of techniques. About 20% of the production is from surface mines and 80% is from in-situ steam flooding.
Using the BP world-wide annual oil and gas consumption rate for 2015 of 151 million barrels of oil-equivalent per day, the table calculates how many days and years each supply will last. These are “technical reserves” and price is not a factor in their calculation, except for the “proven” category. The total reserve is eight trillion barrels of oil-equivalent for the whole world and a supply that should last at least 148 years. The reserve is very conservative since it only relies on existing technology, remember only 132 years ago, a partner in Standard Oil proclaimed he would drink every gallon of oil found west of the Mississippi! It was innovative oil and gas technology that found billions of barrels of oil-equivalent west of the Mississippi. What will we invent and discover over the next 132 years? Consumption of oil and gas will probably increase over the next 25 years according to ExxonMobil’s 2017 Outlook. This is because they do not expect renewables and nuclear to increase in capacity as fast as demand will grow. But, for simplicities sake, I assumed oil and gas consumption would stay flat for this table.
The moral of the story? Never underestimate the ingenuity of mankind and never assume that technology is static. Also, the resources that technology recognizes today are not all the planet’s resources. There is oil west of the Mississippi!
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We have not even considered tapping the methane cathrates in the deep ocean floor. That will be oil/gas/condensate gen X hydrocarbon boon. We have several more bell curves yet to start.
Not to mention finally tapping into the oil shale.
Japan has done some preliminary work on this. The main problem is finding a way to produce them at commercial rates
Japan tapped i to the methane clathrate zone of the Nakai trough for exactly one week, to o prove technical feasibility, That is all. Discussed in essay Ice that Burns..
DK, read essay Ice That Burns in ebook Blowing Smoke. Most ocean methane clathrate cannot be tapped at all for geophysical reasons. There are exceptions like Japan’s Nankai Trough. There is now proof of technical feasibility for that sand based formation. It is still far from economic. When Japan can import Australian LNG at $8/mmbtu.
Actually “Prediction is not very difficult, especially about the future” The difficulty arises when the future arrives and the predictors are in denial, a lot like electricity in South Australia.
” Oil – Will we run out?” No. Next stupid question, please.
There are two other factors needed to predict the future of oil use — how much does it cost to produce a barrel of oil, and how much are people willing or able to pay for a barrel.
David Middleton, (February 17, 2017 at 2:19 pm)
“Dinosaurs have never been considered to be the source of oil.”
======
October, 1917…
Owing to most oil fields being associated with limestone, many theorists conclude that petroleum is the result of animal fats of pre-hlstoric animals. This query is well set at rest by Sir James Hector, when he says : “It is not so much the result of limestone as its capacity to store it.”
http://trove.nla.gov.au/newspaper/article/123538155?searchTerm=petroleum%2C%20oil&searchLimits=
* * * * *
Plankton, algae and other simple marine and lacustrine organisms are the source of oil.
Did did the orbiting pebble called “Comet Haley”–1/3 kerogen (equivalent to around 500 years of OPEC output)–have oceans and lakes filled with algae and other simple organisms?
Or is there another explanation?
“Titan, Saturn’s largest moon, is a mysterious place. Its thick atmosphere is rich in organic compounds. Some of them would be [considered] signs of life [by special pleaders peddling fossil fuels] if they were on our planet.”
http://www.esa.int/Our_Activities/Space_Science/Cassini-Huygens/Life_on_Titan
Whenever you see “fossil fuels” leaking into the ocean, you also see organism eating it and turning it into living organisms, as if they are trying say, “you got the story backwards, fossil fool!”
Nice departure from the curve of doom but it is only production. Factor in EROEI “energy returned on energy invested” and the uptick would level off a bit. Sooner or later there will be a close fit.
Until we use nuclear process heat to tap shale, and nuclear electricity to power grids and ground transportation it will be a steep downhill battle. Even then oil will just be a more gradual downslope. Shale folk like to say that “the natural gas is free”… because their point of view had the gas being wasted otherwise. Now that there are high pressure pipeline networks and electricity plants to use the gas, it can no longer be considered “free”.
Within the century the thought of using fossil fuels for anything other than jet fuel and chemical precursors to fertilizer and plastic, will be unconscionable. Before the turn of the next century fresh water will flow through pipelines that now carry oil. The current practice of using gas and oil for ground transportation will be viewed with sadness and resentful anger. They will say, you had the right technology all along (nuclear)… why did you not use it?
“Within the century the thought of using fossil fuels for anything other than jet fuel and chemical precursors to fertilizer and plastic, will be unconscionable.”
============
Try telling that to non-human organisms…
http://oceanexplorer.noaa.gov/explorations/06mexico/background/plan/media/iceworms_600.jpg
“Iceworms (Hesiocaeca methanicola) infest a solid piece of orange methane ice at 540m depth in the Gulf of Mexico.” -(NOAA, Photo by Ian MacDonald.)
[Finite fossils springing back to life in the blink of an eye, like the phoenix rising from the ashes. Amazing!]
“Most of the methane that rises toward the surface of the ocean floor vanishes before it even reaches the water. On page 484 of this issue, a team of researchers provides the clinching evidence for where all that methane goes: It is devoured by vast hordes of mud-dwelling microbes that belong to a previously unknown species of archaea.”
– ‘Inconceivable’ Bugs Eat Methane on the Ocean Floor, Science, July 2001
* * * *
“…methane is the primary food source for most microorganisms thriving in the ocean floor”
– Methane Devourer Discovered In The Arctic, ScienceDaily (Oct. 20, 2006)
* * * *
It’s unconscionable! Why do we let it happen? Why haven’t we invented a biocide of some kind to eliminate our competitors in the race for the last few precious drops?
Why not eliminate them?
Because they are an essential component in the life cycle of oil and those “predators” eat oil spills. Without those “predators,” the Gulf of Mexico would be the Gulf of Texaco. About 1-5 million barrels per year of crude oil leaks into the Gulf from more than 600 natural oil seeps. These seeps have been active for 10’s to 100’s of thousands of years, if not much longer.
While the “predators” do biodegrade some shallow oil accumulations, they aren’t compeitors.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” – Friedrich August von Hayek
I was in B-school in the 1990s but liked physics — my neighbor across the hall was a physics major who planned to work for NASA so he could tell people “why yes, I am a rocket scientist.” I remember one day we had a good laugh over the foolishness of our dependence on oil, which was clearly running out. He scoffed (as I nodded wisely in agreement) “I’ve met people who think fossil fuels will never run out!”
Well, never is a long time, but there sure turned out to be a lot of recoverable oil we not only didn’t know about, but assumed could not exist.
you can laugh over the foolishness of those who think the sun will always shine..:)
the point is made since a long time now, we can’ t predict the end of oil , we can’t even predict if or some resaon we will stop before using the last drop of it…
what is thepoint of peak oil? the real one?
is it “stop using oil when there is no more of it?” well…how come…
is it “”have a good idea to replace it?” well…i d like it but…
is” let me tell you what to do of your life”.
https://resistance71.wordpress.com/2011/06/12/tout-ce-que-vous-avez-toujours-voulu-savoir-sur-le-petrole-abiotique/#comment-90983
Great! Thanks – Hans
Conventional oil in the US flows the Hubbert curve very closely.
Unconventional oil is of course a new Hubbert curve, not the disproving of Hubbert’s principle.
Beware faux logic. Just because its always been OK up to date doesn’t mean it will always be OK tomorrow.
http://vps.templar.co.uk/Cartoons%20and%20Politics/Okay.png
Fossil fuel is already massively more expensive than it was, and at some point its gonna be more expensive than proper nuclear power, at which point bye bye natural gas market.
At some point unconventional oil will be more expensive than SynDiesel, made from water CO2 and nuclear power, Then bye bye oil market.
Shale oil is not unconventional oil. Hubbert’s peak oil prediction was based on the assumption that the total US recoverable resource was 150-200 billion barrels. Peak oil production was predicted to occur when half of that resource had been recovered.
?w=680
Hubbert’s prediction failed because the total recoverable resource was much larger than his estimate…
http://opstatic.com/img/usermedia/L56E0w4kSUiZxx50_nt9pw/w645.png
If the sum total of recoverable resource is equal to cumulative production + proved reserves + undiscovered recoverable resource, then peak oil occurred in 2004, assuming you smooth the curve with a Gaussian filter…
However proved reserves increase year after year and the undiscovered resource has been continuously revised upwards.
Going from Hubbert’s world of vertical drilling and associated success rates in oil trap targets to horizontal drilling of shale is like adding another dimension to the models. It does not even translate to prior models, assumptions, and assertions.
Excellent David, thanks.
Resourceguy,
Also… In Hubbert’s day, single-fold seismic was the norm and stacked CDP 2d seismic data was in its infancy.
“Fossil fuel is already massively more expensive than it was…’. Hm. When I was a kid (’70s) I paid 25 cents a gallon for regular. Now I pay about $2.50 a gallon.
When I was a kid, I couldn’t afford $2,500 for a Ford Mustang. Now I have to pay $25,000 for a Ford Mustang.
Our house back then sold for $25,000. I just checked Zillow. It’s valued at $492, 000. That’s almost a 2000% rise for a 50 year old house. Gas is up only 1000%, with huge taxes now being assessed.
Not massively higher. In fact, a pretty good deal – for me, and for a greedy Government.
“Fossil fuel is already massively more expensive than it was”
That depends what you’re comparing it to, of course.
Compared to getting your leaky sink fixed or buying a house in London, I doubt it very much indeed.
James (paraffin) Young. Saved the whale. Google.
Yes, in the days when Scotland was the World’s premier producer of petroleum products, and also when the first alarmists predicted we were going to run out of oil, about 1860.
Funny how few people know that…
http://dgagdigs.homestead.com/RWG/index/Young_s_Works_docu.jpg
http://www.scottishshale.co.uk/
The Oil Age will ultimately end like all “ages” before it.
It is worth remembering the Stone Age didn’t end because humans ran out of stones; we just made a better mousetrap, then another, then another…
Correct. When we find something that delivers more $ value per btu, the Oil Age will come to an end.
The Stone Age didn’t end because prescient bureaucrats decided it was time to move on to the Bronze Age.
I have heard a Saudi oil minister using that exact same quote…
Have you apologised to Dr. Crockford for trying to discredit her yet, Skanky?
Technology is helping Mankind to get at more and more of the Earth’s very finite supply of fossil fuels Because the supply is finite then burning it up as quickly as possible will eventually cause the finite supply to run out. Mankind must switch to alternate energy sources and reduce our human population so that such alternate energy sources will be sufficient for our needs, before the Earth’s supply of fossil fuels run out. Development of alternate energy source technologies is important at this time but not the deployment of alternate energy source techmology that is not efficient or economically practical, is of no real value at this time.
The volume of fossil fuels in the Earth’s crust is not exactly finite. We just happen to be producing it much faster than the Earth generates it.
And we are nowhere near the point where we will have exhausted the Earth’s economically recoverable, much less technically, recoverable oil.
But OPEC are allowed to control the price of oil and hence the rate of development of the world, particularly poorer areas that can’t even get on the first world moving walkway. Less that 148 years is plenty of time to develop a world of sustainable countries by using petroleum derived energy efficient infrastructure and creating an innovative long term non-petroleum energy infrastructure. Limits of CO2 etc slow that process. We have a massive global workforce available, all they need is reasonably priced high energy petroleum fuel to get on with development.
…there is a new technique, using a high powered microwave device (linear accelerator), to heat the shale, down hole, to extract the trapped oil…and it works very well. We live in very extracting times….
Not bad. After all, based on NYT news 1894, London has been buried in nine feet of horse manure for over 70 years. http://www.historic-uk.com/HistoryUK/HistoryofBritain/Great-Horse-Manure-Crisis-of-1894/
If the various kings and generals over the decades had not listened to those crackpots who claimed knowledge of future shortages, our history might have been a lot less bloody. The ancient Greeks and ancient Romans knew how to deal with false prophets.
I did a quick search of this article and comments looking for the word,
subsidence, meaning; the gradual caving in or sinking of an area of land.
Do we really? know how much oil has been removed or how much subsidence has occurred over the history of oil production on this planet?
Below is the early history before modernization. This has been happening for a long, long time in certain areas of the planet.
How would subsidence affect plate tectonics over the longer time scale? What about heating of the planets core and its escape routes?
If you take a lump of bread dough and put your fist in the middle and push, the center goes down and the edges rise.
History of the petroleum industry
https://en.wikipedia.org/wiki/History_of_the_petroleum_industry
“””Four thousand years ago, according to Herodotus and confirmed by Diodorus Siculus, asphalt was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus (Ionian islands, Greece).[1] Great quantities of it were found on the banks of the river Issus[citation needed], one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society[citation needed].
Oil was exploited in the Roman province of Dacia, now in Romania, where it was called picula.[citation needed]
The earliest known oil wells were drilled in China in 347 AD or earlier. They had depths of up to about 800 feet (240 m) and were drilled using bits attached to bamboo poles.[2][3][unreliable source?] The oil was burned to evaporate brine and produce salt. By the 10th century, extensive bamboo pipelines connected oil wells with salt springs. The ancient records of China and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was known as burning water in Japan in the 7th century.[1] In his book Dream Pool Essays written in 1088, the polymathic scientist and statesman Shen Kuo of the Song Dynasty coined the word 石油 (Shíyóu, literally “rock oil”) for petroleum, which remains the term used in contemporary Chinese and Japanese (Sekiyū).
The first streets of Baghdad were paved with tar, derived from petroleum that became accessible from natural fields in the region. In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan. These fields were described by the Arab geographer Abu al-Hasan ‘Alī al-Mas’ūdī in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads. Distillation of Petroleum was described by the Persian alchemist, Muhammad ibn Zakarīya Rāzi (Rhazes).[4][unreliable source] There was production of chemicals such as kerosene in the alembic (al-ambiq),[5] which was mainly used for kerosene lamps.[6] Arab and Persian chemists also distilled crude oil in order to produce flammable products for military purposes. Through Islamic Spain, distillation became available in Western Europe by the 12th century.[7] It has also been present in Romania since the 13th century, being recorded as păcură.[8]
The earliest mention of petroleum in the Americas occurs in Sir Walter Raleigh’s account of the Trinidad Pitch Lake in 1595; while thirty-seven years later, the account of a visit of a Franciscan, Joseph de la Roche d’Allion, to the oil springs of New York was published in Gabriel Sagard’s Histoire du Canada. A Finnish born Swede, scientist and student of Carl Linnaeus, Peter Kalm, in his work Travels into North America published first in 1753 showed on a map the oil springs of Pennsylvania.[1]
In 1710 or 1711 (sources vary) the Russian-born Swiss physician and Greek teacher Eirini d’Eyrinys (also spelled as Eirini d’Eirinis) discovered asphaltum at Val-de-Travers, (Neuchâtel). He established a bitumen mine de la Presta there in 1719 that operated until 1986.[9][10][11][12]
In 1745 under the Empress Elizabeth of Russia the first oil well and refinery were built in Ukhta by Fiodor Priadunov. Through the process of distillation of the “rock oil” (petroleum) he received a kerosene-like substance, which was used in oil lamps by Russian churches and monasteries (though households still relied on candles).[13]
Oil sands were mined from 1745 in Merkwiller-Pechelbronn, Alsace under the direction of Louis Pierre Ancillon de la Sablonnière, by special appointment of Louis XV.[14][15] The Pechelbronn oil field was active until 1970, and was the birthplace of companies like Antar and Schlumberger. The first modern refinery was built there in 1857.[14]””””
I’m looking forward to reading the reserve study that will be included in the offering documents when Saudi Aramco goes public.
Were he still living, Matt Simmons (author of “Twilight In The Desert”) would have material for a sequel.
Yes, that will be revealing!
I have a suspicion sometimes the Saudis are nearing the empty mark…
Wrong as usual.
Why do you keep on making pronouncements on subjects concerning which you have zero knowledge, and much of the time what knowledge you think you have is just plain wrong?
Do you enjoy demeaning yourself in public?
Yes, individuals like griff, filled with self-loathing and hate, do enjoy publicly demeaning themselves.
The offering is quite limited in scope so you and Matt and Griff will be waiting a long time. Oh yes, and Matt’s book was a piece of trash playing on a current events topic among the uneducated, along the lines of Ravi Batra predicting the great depression of 1990.
If they intend to list the shares in the U.S. (which I believe is Saudi Aramco’s announced intent), they are going to have to include a reserve study in order to comply with SEC requirements.
It’s all about Ghawar.
See:
https://www.bloomberg.com/news/articles/2017-01-17/saudi-aramco-ceo-says-oil-tax-rate-would-be-reduced-for-ipo
1st, where is my last post? hiding?
Oil production in time is having its effects on this planet.
I am not referring to pollution or CO2.
I am looking for the core source(s) of the recent temperature anomaly of the last century.
The abstract below, though older, is still being sited today by others and provides a base to help others understand the role of tectonics in the extraction of fluids from our planet.
Earthquakes triggered by fluid extraction
P. Segall12
1U.S. Geological Survey, Menlo Park, California 94025
2Department of Geophysics, Stanford University, Stanford, California 94305-2215
Abstract
Seismicity is correlated in space and time with production from some oil and gas fields where pore pressures have declined by several tens of megapascals. Reverse faulting has occurred both above and below petroleum reservoirs, and normal faulting has occurred on the flanks of at least one reservoir. The theory of poroelasticity requires that fluid extraction locally alter the state of stress. Calculations with simple geometries predict stress perturbations that are consistent with observed earthquake locations and focal mechanisms. Measurements of surface displacement and strain, pore pressure, stress, and poroelastic rock properties in such areas could be used to test theoretical predictions and improve our understanding of earthquake mechanics.
http://geology.gsapubs.org/content/17/10/942.short
[you must be new to online forums. sometimes comments are held based on words and phrases and number links of links making them look like S P A M. The longer the post, and the more links, the more the spam detector scrutinizes it. On a Friday night, when there aren’t a lot of moderators around, it may take until the next morning to be manually inspected and cleared. Don’t take any of it personally – Anthony Watts]
you must be new to online forums….Anthony Watts
Great sense of humor … thanks Anthony
A simple google scholar search,
oil extraction and subsidence, wow…
https://scholar.google.com/scholar?start=10&q=oil+extraction+and+subsidence&hl=en&as_sdt=0,14&as_ylo=2015&as_yhi=2017
And my two prior posts..?
It has never been about running out of oil. When you get an incorrect definition of the problem, you can’t address it. It is about obtaining increasing amounts of very cheap oil that allow our wasteful civilization to continue expanding.
The lowest hanging fruit is always picked first. It used to be that we just poked the ground and oil will come out by its own pressure. Nowadays we have to fracture the rocks to get a tiny stream of oil that requires tens of thousands of new wells every year just to sustain production. Technological advance has not prevented a escalation of costs. Just a few years ago 100% of our oil was economical at 20$/barrel (constant price). Nowadays a significant part of our production is uneconomical at 55$/barrel.
Increasing amounts of money produce a decreasing effect on oil production. The law of diminishing returns cannot be defeated for long.
http://i.imgur.com/wYhOBFv.jpg
And the cheap stuff is essentially nowhere to be found.
http://i.imgur.com/E28ggvS.png
Oh yes, we can fight the trend for a while when the price of oil is sufficiently high.
http://i.imgur.com/NYjEdpG.png
But that doesn’t mean that we can win this race, because we cannot sustain our wasteful civilization on ever increasingly expensive oil, even if we could produce ever increasing oil (we can’t).
Peak Oil comes when demand can no longer pay the cost of increasing production. A thorough look at the economical situation of the OECD shows that it is already quite close to that situation and their oil demand is not growing as it used to.
And we are fighting an already lost war against depletion, only we don’t know yet. OPEC has just performed a clever stunt to convince the world that it can produce more oil if needed, when the reality is that OPEC production shows a 10 year undulating plateau.
http://i.imgur.com/F7byAJR.jpg
China and Mexico are already showing the way that conventional production is going to take over the next years. The cuts in International Oil Companies exploration and development investments indicate that we are heading towards a serious oil crunch in 3-5 years time.
For more information check the HSBC Global Oil Supply Report:
https://drive.google.com/file/d/0B9wSgViWVAfzUEgzMlBfR3UxNDg/view
Peak Oil by any other name is still Peak Oil.
Javier, agree. A combination of geophysics and economics. Simmons book Twilight in the Desert makes pessimistic Aramco predictions.
Even if we reach ‘Peak Oil’ (wich I suspect will not be for a great deal longer than many seem to believe), as there are still vast areas of the world that have not been prospected for ‘tight’ oil and gas, that will not mean the end of fossil fuel burning.
Japan extracts gas from methane hydrate in world first
Japan says it has successfully extracted natural gas from frozen methane hydrate off its central coast, in a world first.
Methane hydrates, or clathrates, are a type of frozen “cage” of molecules of methane and water.
The gas field is about 50km away from Japan’s main island, in the Nankai Trough.
http://www.bbc.co.uk/news/business-21752441
Then there is in situ coal gasification.
Oil pioneer Algy Cluff said yesterday his company’s plans to tap coal reserves under the Firth of Forth were in keeping with the concept of Scottish independence.
And in announcing the first half results for Cluff Natural Resources (CNR), Mr Cluff criticised the previous UK Government’s support for North Sea windfarms.
Mr Cluff, chairman and chief executive of CNR, said large windfarms blocked access to gas fields and sucked up taxpayers’ money.
He also revealed that CNR could put the brakes on its push to set up an offshore underground coal gasification (UCG) development in the Firth of Forth.
https://www.energyvoice.com/otherenergy/85961/oil-pioneer-cluff-says-coal-gasification-fits-in-with-scottish-independence-concept/
Drilling date set for North Sea’s vast coal reserves
A billion-pound plan to reach untapped coal reserves under the North Sea will be under way by the end of the year, as the vast scale of the energy source beneath the North Sea is made clear.
Scientific data of the true extent of the coal deposits on the sea bed reveals that even a tiny percentage of them would be enough to power Britain for centuries to come, says a local expert.
http://www.thejournal.co.uk/news/north-east-news/drilling-date-set-north-seas-6896191
Both processes are in their infancy, hence expensive.
But research and development means that they can only get cheaper…and cheaper…and cheaper…
Origin of most fossil fuel:
During the early Earth, CO2 was the main constituent of the atmosphere (like Venus). Cyanobacteria started to photosynthesis CO2 – in effect sequestering carbon & hydrocarbons and ejecting oxygen.
in essence photosynthesis splits CO2 in to C (in the form of sugars which are carbon + water) + O2
For about 1 billion years this ejected oxygen reacted with the iron (Fe) and FeO in the early crust to make iron ore – the earth’s crust literally rusted. After that was complete O2 levels in the atmosphere began to grow. It is a simple matter of chemical accountancy that the amount of fossil fuels (coal, oil, gas) can be deduced from the amount of iron ore in the crust: for every two oxygen atoms in iron ore there must be one atom of carbon (unoxidised) somewhere in or on the earth’s crust. Doing that sum leads me to the conclusion, that on current rates of consumption, there is about 10 million years’ worth of fuel somewhere in the earth’s crust (about 1 billion gigatonne – 10^18). Much of this may be currently inaccessible, some may indeed be forever inaccessible, but one thing I am certain of is that it isn’t going to run out anytime soon!
Good point, the volumes are there. I take ristvan and Javier’s points on costs seriously. Costs matter, but relative to what? All other forms of energy are currently more expensive (wind, solar, biofuels), more dangerous (nuclear), dangerously intermittent (wind and solar), or take too much land (hydroelectric and wind). Until something comes along that is cheaper, fossil fuels will be used. Obviously, the longer we use them the more expensive they will get, but we will not run out. They may get too expensive at some point however.
I agree Andy. The problem is that we are totally dependent on oil for transportation. Alternatives do exist, like electricity, biofuel, methane, synthetic fuel, but we are not transitioning to them. Our use of oil for transportation increases every year in absolute terms, so our dependency from oil in transportation is increasing, not decreasing.
Oil is like the blood in our circulatory system. An oil crunch is like a stroke. An oil price spike usually triggers a recession. Mismatches between supply and demand are already producing price volatility, destroying demand when the price is too high through recessions and destroying production when the price is too low. Eventually no price will be found that will sustain both demand and production.
It is very hard to predict the future, but it is clear that our dependency from oil is unsustainable given the situation. We will transition to a society with a much lower dependency from oil. Whether we leave oil or oil leaves us remains to be seen.
It’s currently a tossup on whether Venezuela will turn around its condition or Putin. In the case of Russia, conventional oil is going to start a decline and it remains to be seen if sufficient capital will be arrayed for the shale development there that comes next. One thing is for certain however, the arm chair energy experts of today won’t see Russian shale coming.