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Page added on May 19, 2014
Peak Oil: Forecast Totals Aren’t Always The Answer
‘The multiple forecasts of regional and global peaks that have been made since the 1950s have frequently proved premature. More optimistic forecasts have often proved equally incorrect, but it takes longer for their errors to become evident.’
Q: Where does this leave the broader energy dialogue in terms of the role of peak oil and the world economy?
Miller: ‘First, I don’t think that anyone’s past forecast has got anything to do with current forecasts. The fact that someone else made a call, based on the best information that was available at the time, and that call has subsequently turned out to be wrong, is an interesting fact. But what has it got to do with any new estimate? There’s just no connection. I’m sure some people will say, “Well you’re connected because you’re using the same methodologies.” Sometimes we do, sometimes we don’t, but we’re using better data and have much more experience. We should be getting closer and closer to a good estimate.
‘But we don’t even know what the shape of the peak is going to be—whether a sharp peak or a long, undulating plateau. I suspect it’s going to be the latter.
‘The charge that—because all previous estimates have been wrong, therefore all future estimates are going to be wrong as well—is just ludicrous and completely unscientific. I can’t be bothered to listen to that anymore.’
Nor should we.
The last point raised by Dr. Richard G. Miller * in an excellent interview conducted by Steve Andrews is one of the more common arguments offered by fossil fuel industry cheerleaders in their attempts to rebut the assertions of those of us concerned about our future energy supplies. That they challenge past forecasts in that manner while ignoring the sorry-ass record among their own is curious at the very least. Other characterizations would not be so charitable. [See this and this.]
It’s certainly convenient to decide which estimates one will use or dismiss to try to make a point, but if you criticize the efforts of others who made use of the best information of the day but fail to disclose the equally [and often greater] inaccuracies of your own peers, one has to ask whose interests are being served. Chances are it’s not the public’s.
More information today is telling us that conventional crude oil production maxed out a decade ago, and more liberal definitions of what is now considered production totals may suggest that supply problems have been solved, but the suggestion is not the reality. Changing or expanding definitions do not change the realities, limitations, and qualities of what’s now being produced.
Hurling accusations about the adequacy and accuracy of doom and gloom production forecasts are distractions at best, which is not unintentional. We will be better-served if we keep that in mind as we focus on the oil production issues which do matter beyond just the immediate.
* He’s a former BP geochemist, and the co-author of the recently published The Future of Oil Supply (by The Royal Society, on-line December 2, 2013)
3 Comments on "Peak Oil: Forecast Totals Aren’t Always The Answer"
rockman on Mon, 19th May 2014 8:22 am
Seems like an appropriate place to again point out how accurate Hubbert’s prediction was despite so many saying he wasn’t. More importantly why. He based his projection on a collection a very mature trends that had begun development more than 25 years early. His forecast wasn’t for all potential trends in the country…just those represented by his population statistics. It didn’t include the shales or Deep Water GOM because they were not a part of his data base. If one looks at the current state of decline those trends he was predicting they are right where he projected they would be.
It’s not very difficult to project any naturally occurring trend…once a distribution statistic is established. One can take a bag of 1,000 black and white marbles and develop a reasonably accurate prediction of how black marbles there are but only after you pull a sufficient number are pulled out…maybe around 100 to 200. But just drawing 10 or 20 out won’t do it. When Hubbert made his projection about 60% to 70% of the “marbles” had been pulled. Not to take anything away from his abilities but his prediction would have been much more impressive had he done it in 1937 instead of 1957.
So how difficult would it be to predict the peak of the new Eagle Ford, Bakken, DW GOM, DW Brazil, DW Africa, etc? No problem…just need to wait another 10 or 20 years. And thus the reason for most predictions being crap: insufficient data.
And then there’s the additional complication not present in the bag of marbles analogy: selection bias. If all the white marbles were 3X the size of the black ones they might be more readily grabbed. Thus with oil reservoirs: companies will drill for the biggest prospects first for the obvious reason. This has been the proven history of every trend developed: a heavy skew of the larger discoveries early on with size generally decreasing over time. Companies are not randomly drilling the current hot trends: they are spending many tens of $millions on seismic alone to bias the selection process. It doesn’t matter what the average size of field discoveries might be during the first 50% of URR…the second have will be composed of much smaller fields and, more important, producing at slower rates.
So how meaning full can the predictions (high or low) be for Arctic exploration given so little drilling to date? When you can’t determine an answer it usually better to say you don’t know then to offer some foolish unsupported number IMHO.
poaecdotcom on Mon, 19th May 2014 8:49 am
Interesting points Rock – nice post.
One slight disagreement in an otherwise solid thumbs up.
I would say there are enough marbles out on the Bakken, Eagle Ford bag to understand depletion rates.
It is hard to find that black marble that shows a frack well NOT depleting 40-70% in the first year. You can do some solid math / prediction modeling when you have an idea of depletion, hence you can get a pretty good handle on peak for those plays.
rockman on Mon, 19th May 2014 2:49 pm
P – The deletion rates of fractured reservoirs were very well understood many decades ago. The Bakken/EFS wells deplete just like fractured reservoirs were doing half a century ago. Nothing new these days in that regards. IOW there is nothing unique or surprising about those decline rates.
The “black marbles” I was talking about didn’t deal with depletion rates or URR. The white marbles are the number of commercial wells that will be drilled. So many white marbles (profitable wells) and so many black marbles (money losers). Some folks like to say there are X number of such wells left to drill but I’ve no rationalization for such numbers. Eventually, at current prices, we’ll run out of commercial Bakken/EFS wells to drill. That’s the marble stat I was eluding to.