Dr. Kenneth Deffeyes on Peak Oil

16 Comments on "Dr. Kenneth Deffeyes on Peak Oil"

rockman on Sun, 6th Jul 2014 9:44 am 



“…when M. King Hubbert had recently issued his controversial predictions that U.S. oil production would peak during the ’70s.”

Once again I’ll risk boring the group by correcting this perennial mischaracterization. It would be nice if such folks would actually bother to read Hubbert’s original work instead of just repeating the ignorance of others. Hubbert clearly points out what he did: he projected the peak of production of JUST THOSE US OIL TRENDS HE ANALIZED. While he specifically points out his projection does not include production from other trends he actually mentions the shale and offshore trends and that his analysis did not apply to them. If one took the time to look at the trends he did base his projection upon one would find his work is still amazingly correct: those trends have continued to decline to very marginal levels…just as his projection said the would.

And the same is true for his global analysis: production from the global trends he studied has not increased. But global production has increased thanks to development of new technology, such as Deep Water production, and recently from very high oil prices. And Hubbert’s type of analysis could just as well be done on those new trends, as many are currently attempting. But they all suffer from a handicap that didn’t plague him: he was analyzing trends that had been heavily drilled and were in a mature phase. Not true for currently developing trends.

To appreciate that point one must consider the primary difference between the conventional reservoirs he analyzed and the current unconventional reservoirs like the shales. Consider the Frio Sand trend along the Texas coast. To date it has produced 4.5 BILLION BBLS OF OIL. And while being stripper wells most of the fields are still producing some oil. But trend began developing in the 1930’s and the vast majority of those fields were fully developed by the early 50’s with very little drilling potential remaining. Not to take anything away from Hubbert’s effort but he was projecting the peak production of fully developed trends well into their life cycle.

Now consider the unconventional shale trends. It would actually be easier to predict the peak production of the existing wells: that happens virtually the first day a well begins producing thanks to those very high decline rates. Folks trying to use Hubbert’s approach to predicting future production from the shales are applying the wrong methodology: he predicted the decline of exiting wells in developed trends and they are trying to predict production of wells not yet drilled. The Mother of All Apples to Oranges comparison IMHO. LOL.

Consider the effect of a significant decline in oil prices on the two very different dynamics. The drilling of the fully developed convention reservoirs was justified by the price of oil at that time. Prices could fall 70% and yet those wells would continue to produce since it costs relatively little to produce them. OTOH consider the projection of the peak production of the shale plays. Their future production is totally dependent upon future drilling activity…unlike the fully developed fields of Hubbert’s day. And such a projection of drilling activity is very dependent upon the price of oil. Does anyone believe the shale boom would continue if the current price of oil fell 70%? I doubt it. But existing shale wells would continue to be produced for the same reason as a conventional reservoir: low lifting cost. But the high decline rates of the shales precludes the long life seen in conventional reservoirs and thus trend production would decline very quickly. IOW the day oil prices fall would be the PO of these trends.

Nony on Sun, 6th Jul 2014 11:22 am 



I read all of the source documents, Rock. Hubbert did not make the caveat that you suggest. You keep repeating it. But the sources don’t back you up (give me the pages of the caveats).

He clearly was trying to estimate total oil recoverable (ever) and the resultant exhaustion of the total beer glass. I can cite several instances of this (1956 paper):

*lead where he talks about a navigators chart of the whole world to “tell where we are going”.

*page 16-17, where he discusses surveys of all the sedimentary basins of the world. NOT a few trends that he looked at…but holistic attempts to look at the whole world.

*Page 17, killer quote:

‘With these modifications we obtain a figure of about 1250 billion barrels for the ultimate potential reserves of crude oil for the whole world’

Note the words, ULTIMATE, POTENTIAL, WHOLE WORLD. Also, just read the buildup…he didn’t survey a few trends on his own…he went to the LITERATURE and looked at what others had written and attempted an estimate building on that. This was clearly an attempt to calculuate total ultimate resources, then to estimate depletion, and then to estimate peak.

P.s. You tend to make the same points over and over. But GIMF and I read up on stuff and check you. Sorry. Not just chitchat on forums, but actual papers…and Hubbert’s papers are VERY easy to read…not like Hotelling’s Rule with super hard math.) I mean, you can basically do the integral calculus in Hubbert’s papers by counting square boxes under the curve in the graph paper. 😉

Nony on Sun, 6th Jul 2014 11:24 am 



Hubbert also totally neglects price impact on oil recovery. You’re actually better than the old man in this respect, Rock. Hubbert was a technocrat from the 30s and had a bunch of weird Depression Era ecoomics political beliefs.

Nony on Sun, 6th Jul 2014 11:27 am 



Lastly, why are we posting stuff from 2005 from Deffeyes? It’s obviously dated and not news. And for that matter Deffeyes has refused to answer questions for the last few years about his failed predictions. Running stories like this just seems to show that really this place is a remnant of a failed fad. TOD is dead. And Google Analytics shows fracking searches are up and peak oil searches have crashed.

Calhoun on Sun, 6th Jul 2014 11:39 am 



If I recall correctly, this is the same lecture where he recommended XTO as a tock to buy. Anyone who followed his advice would have done well!

Rock, thanks for the explanation of hubbert’s original work and the limits of its application to LTO. But in his public explanation link indicates that he didn’t mention those fine points and he clearly predicted a peak before 2000.

I’m not criticizing him, jut saying that it’s reasonable to take away different messages from Hubbert because he delivered different messages at different times in different forums.

But his bottom line, IMHO, is that the decline of oil, and the paucity of acceptable alternative energy sources, will be the biggest challenge the human species has faced. He was a brilliant man who, unfortunately, gets pigeon-holed based on his prediction rather than his broader message. And the message is clear — the decline of oil production, whenever it occurs, will be catastrophic. Even if his prediction is off by 20 years, what difference will it make? The consequences will be the same.

ps, he also recognized that political and economic changes could push back his forecast, so he wasn’t unaware of that aspect of the equation.

Fulton J. Waterloo on Sun, 6th Jul 2014 1:22 pm 



NONY: better some “weird” depression era economic political beliefs than weird 1990’s economic bull$#i! Also,I love your use of google hits to determine the legitimacy of an economic or scientific issue. Really a high level of thought on your part…

Nony on Sun, 6th Jul 2014 2:21 pm 



Don’t hate the player, hate the game. 😉

Nony on Sun, 6th Jul 2014 2:59 pm 



I’m actually watching the video now. It’s hilarious. Very nice speaker…but oh so wrong. At minute, 5 he says price won’t generate more oil production in the US and we are in terminal decline. HELLO Bakken, hello Eagleferd. At minute 9, he says…heck for the EIA to be right about US, another Kuwait would need to be found…hello!

And there’s the classic mistake about discovery accounting. Yes, we did NOT find another Kuwait with the Bakken, because it was known. But we did discover we could produce a HECK of a lot more of it. Just look at the changes in the USGS estimates for URR from 150 MM barrels to 4MMM to 8 MMM. That’s why the “discoveries have peaked meme” is so screwed up. It’s not new discoveries…it’s finding more stuff in what you did discover.

shortonoil on Sun, 6th Jul 2014 3:16 pm 



Hubbert was wrong, Campbell was wrong, and Laharrere was wrong. In our study “Depletion: A determination for the world’s petroleum reserve” we go into extensive detail as to why that occurred. Yes they were wrong, but not by much, nor was there any way that they could have produced better models. At the time that they proposed their hypothesis the mathematics had not yet been invented to properly describe the petroleum production event. The production curve is a skewed logistic curve, and the skewed logistic curve has no explicit mathematical equation to describe it. It wasn’t until the mid 2000’s that the mathematics needed to define it became common knowledge. If you go to our site, and go to Study Graphs, graph# 29, you can see an example of the skewed logistic curve (PDF: Normal and Skewed Logistic).

The ironic part is that we ship our study to: Canada, Europe, Russia, China, South Africa, South America, Middle East, and Korea. A hand full go out in the US. There is not much question in my mind as to why the Empire is dying!

http://www.thehillsgroup.org/

Nony on Sun, 6th Jul 2014 3:17 pm 



Around minute 20, he talks about outcomes and predicts a best chance landing of worse recession since Great Depression. Well, we sure ain’t at Great Depression, now.

The dude was wrong. And he has failed to face the music with his bad prediction. Same as Campbell, Rune, Ace, Piccolo, Blanchard, etc. etc.

Nony on Sun, 6th Jul 2014 3:29 pm 



I ain’t buying your study, Hills-dude. And I am a crappy mathematician, but I am skeptical of you inventing any math.

Here’s a 1975 reference talking about the equation for skewed logistics distributions and giving tables for degrees of skew and kurtosis.

http://books.google.com/books?id=s_yaNy7s2ugC&pg=PA52&dq=skew+logistic+distribution&hl=en&sa=X&ei=obC5U4jrEdGxyASm5oC4CQ&ved=0CEsQ6AEwBQ#v=onepage&q=skew%20logistic%20distribution&f=false

Interesting, if you read the whole page linked, that they didn’t really find much value to using the distribution versus more general methods…

westexas on Sun, 6th Jul 2014 6:39 pm 



It is very likely that actual global crude oil production (45 or lower API gravity crude oil) peaked in 2005, while global natural gas production and associated liquids (condensates & natural gas liquids) have so far continued to increase.

As I have periodically noted, when we ask for the price of oil, we get the price of 45 or lower API gravity crude oil, but when we ask for the volume of oil, we get some combination of crude oil + condensate + NGL (Natural Gas Liquids) + biofuels + refinery gains.

Shouldn’t the price of an item relate to the quantity of the item being priced, and not to the quantity of the item + the quantity of (partial) substitutes?

In any case, a key question is the ratio of global condensate to Crude + Condensate (C+C) production. Unfortunately, we don’t appear to have any global data on the Condensate/(C+C) Ratio.

Insofar as I know, the only complete Condensate/(C+C) data base, from one agency, is the Texas RRC data base for Texas, which showed that the Texas Condensate/(C+C) ratio increased from 11.1% in 2005 to 15.4% in 2012. The 2013 Ratio (more subject to revision than the 2012 data) shows that the ratio fell, down to 14.7%, which probably reflects more focus on the crude oil prone areas in the Eagle Ford.

The EIA shows that Texas marketed gas production increased at 5%/year from 2005 to 2012, versus a 13%/year rate of increase in Condensate production. So, Texas condensate production increased 2.6 times faster than Texas marketed gas production increased, from 2005 to 2012.

The EIA shows that global dry gas production increased at 2.8%/year from 2005 to 2012, a 22% increase in seven years. What we don’t know is by what percentage that global condensate production increased from 2005 to 2012. What we do know is that global C+C production increased at only 0.4%/year from 2005 to 2012. In my opinion, the only reasonable conclusion is that rising condensate production accounted for virtually all of the increase in global C+C production from 2005 to 2012, which implies that actual global crude oil production was flat to down from 2005 to 2012, as annual Brent crude oil prices doubled from $55 in 2005 to $112 in 2012.

Normalized global gas, NGL and C+C production from 2002 to 2012 (2005 values = 100%):

http://i1095.photobucket.com/albums/i475/westexas/Slide1_zps45f11d98.jpg

Estimated* normalized global condensate and crude oil production from 2002 to 2012 (2005 values = 100%):

http://i1095.photobucket.com/albums/i475/westexas/Slide2_zpse294f080.jpg

*I’m assuming that the global Condensate/(C+C) Ratio was about 10% for 2002 to 2005 (versus 11% for Texas in 2005), and then I (conservatively) assume that condensate increased at the same rate as global gas production from 2005 to 2012, which is a much lower rate of increase in condensate (relative to the increase in gas production) than what we saw in Texas from 2005 to 2012.

Based on foregoing assumptions, I estimate that actual annual global crude oil production (45 or lower API gravity crude oil) increased from about 60 mbpd in 2002 to about 67 mbpd in 2005, as annual Brent crude oil prices doubled from $25 in 2002 to $55 in 2005.

At the (estimated) 2002 to 2005 rate of increase in global crude oil production, it would have been up to about 90 mbpd in 2013.

As annual Brent crude oil prices doubled again, from $55 in 2005 to an average of about $110 for 2011 to 2013 inclusive, I estimate that annual global crude oil production did not materially exceed about 67 mbpd, and probably averaged about 66 mbpd for 2006 to 2013 inclusive.

shortonoil on Mon, 7th Jul 2014 8:27 am 



The criticism directed at Dr. Deffeyes on this thread only goes to prove that Mongoloid troglodytes were cohabitants with African tree rats.

Another anthropological hypothesis has been substantiated!

Northwest Resident on Mon, 7th Jul 2014 9:25 am 



The criticism directed at Dr. Deffeyes on this thread comes from a goober that has on at least three occasions in the past declared that he is surprised he hasn’t been banned from this forum as he has from other forums. The Mongoloid troglodyte remains genetically pure because the African tree rats refused to mate with his ancestors, leaving the troglodyte (and busy worker of multiple sock-puppets) stranded on his own dead-end, last-of-the-line genetic branch. The troglodyte and all three (at least) of his sock puppets continually make the point that Hubbert was wrong, that TOD is dead, that the Peak Oil concept has died due to lack of any validity, that Google searches for fracking outrank Google searches for peak oil. The idiot Mongoloid also asserts that America can be a net exporter of NG right now, and that he knows how to do it. In sum, the idiot Mongoloid is here to cause trouble, stir up controversy, PRETEND that he knows what he’s talking about, to boost his own ego and along with his little army of sock puppets, to be confrontational. The Mongoloid troglodyte is in serious need of professional help, but not likely to get it.

Donal on Mon, 7th Jul 2014 10:11 am 



It seems like a lifetime ago, but I attended this conference. I was active then on The Oil Drum, so they posted my impressions, and those of other attendees:
http://www.theoildrum.com/story/2005/9/26/213716/427
Bartlett saying that Bush knew about Peak Oil was quite a surprise to some people. Looking back, we were being told that PO was going to unravel the world a lot more quickly than what has happened instead.
Never heard about Howe, Wulfinghoff or Spears again.

GregT on Tue, 8th Jul 2014 12:15 am 



You guys really need to lighten up.

You’re lumping all Mongoloid troglodytes together, and giving the less stupid ones a bad name.