[Pops]

I'm surprised no one has posted the Maugeri paper since every cornucopian in the media is acting as if this one paper is the be all and end all of the PO "debate".

Here is a good post by Hamiton at econobrowser, it concludes:

$this->bbcode_second_pass_quote('', 'I') agree with Maugeri that new production from places like the United States and Iraq is going to be very helpful. But I think he substantially overstates the case for optimism. If we are counting on sources such as shale/tight oil, oil sands, and deepwater to replace production lost from mature conventional oil fields, the days of cheap oil are never going to return.

[Pops]

And the Archdruid: On the Far Side of Denial:
$this->bbcode_second_pass_quote('', 'O')ver the last few weeks, a number of my fellow peak oil writers have expressed worries about this outpouring of counterfactual drivel. Myself, I find it a very hopeful sign. What we are seeing is the shattering of the consensus that has excluded any discussion of peak oil from the collective conversation of our time. Plenty of pundits who refused to talk about peak oil at all are now talking about it incessantly. Even though they’re screeching at the top of their lungs that it can’t happen, and scrabbling around for any argument, however feeble or blatantly false, they can use to back up that proposition, they’re still talking about it.

[Pops]

Euan Mearns @ TOD:
$this->bbcode_second_pass_quote('', 'M')augeri's analysis and conclusions are critically dependent upon the decline rates applied to existing and future fields, and yet he does not explicitly say what these decline rates will be. However, Maugeri’s assumptions can be derived from his Table 2, which projects gross and net capacity additions over the period to 2020. Doing so suggests he uses an average annual decline rate for all fields of 1.6% over this period, which is less than half of the IEA and CERA estimates for 2008 (4.1%/year and 4.5%/year respectively). The discrepancy is even greater since the IEA and other analysts project an increase in average decline rates over the 2011-20 period. If we replace Maugeri’s 1.6% decline rate assumption with the IEA estimate of 4.1%, the projected loss of production capacity over the period to 2020 increases from 11 mb/d to 26.5 mb/d. In turn, the projected global production capacity in 2020 reduces from 110.6 mb/d to 95.1mb/d (a reduction of 14%). Since average decline rates would be expected to increase over this period, this projection must be considered optimistic.

[Pops]

Heading Out at TOD:
$this->bbcode_second_pass_quote('', 'S')igh! I explained last time that with the change in well orientation from vertical to horizontal, that there was a change in the apparent decline rates. When the wells run horizontally at the top of the reservoir, they are no longer reduced in productive length each year as vertical wells are, because the driving water flood slowly fills the reservoir below the oil as it is displaced. This does not mean that because the apparent decline rate from the well has fallen that it will ultimately produce more oil.

[Graeme]

And this from Oilprice:

Looking at Leonardi Maugeri's Views on Peak Oil

$this->bbcode_second_pass_quote('', 'A')bout half of Maugeri's calculated 17.6 mb/d in net additional production capacity comes from two countries-- the United States and Iraq (see his Table 2). I have earlier discussed the situation for the United States. To briefly recap, more than half of the increase in total U.S. oil production since 2005 has come from biofuels and natural gas liquids, neither of which should be added to conventional crude production for purposes of calculating the available supply. Another important contribution to recent U.S. production gains has come from shale/tight oil. I agree with Maugeri that this will be an important factor in the future, but it is not cheap, and there are some big uncertainties in extrapolating recent gains, about which I will have more to say below.

But first let's take a look at Iraq, which by itself accounts for 5.1 mb/d, or 29% of the net combined global gains that Maugeri is anticipating. His starting point for these calculations (see his Table 1) is the "production target" associated with a dozen oil fields for which the Iraqi government has signed contracts with oil companies. These targets call for these fields to reach maximum levels of production which, when added together, come to 11.6 mb/d. To win a contract, oil companies had to specify two key parameters: a "target" level of production and a remuneration per barrel, with awards going to the companies that specified the highest target and lowest remuneration. Some have characterized the announced targets simply as propaganda. Once awarded, there seems to be a separate process in which the production targets get renegotiated. Maugeri acknowledges the logistic and security challenges in meeting the targets, and accordingly cuts the official estimates in half. Doing so would still be a stunning achievement, requiring an Iraq that would be substantially more stable and successful over the next decade than it has been over the last three.


I agree with Maugeri that new production from places like the United States and Iraq is going to be very helpful. But I think he substantially overstates the case for optimism. If we are counting on sources such as shale/tight oil, oil sands, and deepwater to replace production lost from mature conventional oil fields, the days of cheap oil are never going to return.

[Pops]

And one more on the assumed decline rate:
$this->bbcode_second_pass_quote('', 'I')f we replace Maugeri’s 1.4% decline rate assumption with the IEA estimate of 4.1%, the projected loss of production capacity over the period to 2020 increases from 11 mb/d to 29.2 mb/d. In turn, the projected global production capacity in 2020 reduces from 110.6 mb/d to 92.4 mb/d (a reduction of 16%). Hence, a more realistic decline rate completely eliminates his projected increase. Since average decline rates would be expected to increase over this period, this projection must also be considered optimistic.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'Y')ibal field in Oman is a textbook case of what happens when enhanced oil recovery (EOR) methods are applied to oil reservoirs. Horizontal maximum recovery contact (MRC) wells combined with water flooding result in a temporary bumps in production but later precipitous declines and oil field depletion. This from 2004 Energy Bulletin

[ralfy]

I think it was mentioned in another thread.

[Ming]

$this->bbcode_second_pass_quote('pstarr', 'W')ow. Thanks Rockdoc for the treatise. I read the first sentence and it seemed inappropriate, almost irrelevant. I'll be sure to read the rest . . . someday.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'S')ame!

[rockdoc123]

$this->bbcode_second_pass_quote('', 'R')ockdoc you jumped in with insults and diversions. Maugeri was caught lying about production declines and reservoir depletion , brought on by new technology (used everywhere in the Middle East since, and elsewhere). Your lecture about the particulars of the timing of the implementation of the technology for this structure, or that, was beside the point.

[dinopello]

Dr. Rock has a terrible bedside manner.

Technology and geology I think will have less of an influence on how oil is produced and economics will be more and more influencial. The tight market and volatile prices are a recipe for (those in the know and with the staying power) making lots and lots of money, which in turn makes the system more volatile. Nobody wants the whole thing to collapse though, so there is that.

[autonomous]

Maugeri himself admits it is impossible to predict recoverable reserves from shale/tight oil formations based on available data (page 45):

$this->bbcode_second_pass_quote('Maugeri', 't')he huge differences in permeability, porosity, and thickness of a shale/tight oil formation require many more exploration wells be drilled in different areas of the field before making it possible to have an idea of the effective recoverability rate from the whole formation.... it is impossible to make any reasonable evaluation of the future production from a shale/tight oil formation based on the analysis of a few wells data and such limited activity.

[ralfy]

Here's the link where it was first discussed:

viewtopic.php?f=1&t=65521

[Pops]

It is instructive to me that many MSM outlets picked up on the "Harvard Study" (even though Harvard published a disclaimer disavowing any complicity) but I've yet to see any posting rebuttals. This is Chris Nelder at FT/alphville (he blogs at http://www.getreallist.com/)

$this->bbcode_second_pass_quote('', 'W')e must conclude that the key assumptions about reserve growth and its effect on decline rates in Maugeri’s report are muddled, speculative and unverifiable. And sprinkling those assertions with repeated declamations about how peak oil is a non-issue, insisting repeatedly that the only real constraints on his scenario have to do with political decisions and geopolitical risks, suggests that his report is more about grinding a political axe on behalf of the oil industry than offering a serious or transparent analysis. Finally we must note that Maugeri is well known for his hostility to peak oil, as is BP, which funded his report. After taking real-world risks, costs, and restrictions into account, the case for peak oil—which is about production rates, not production capacity or reserves—seems far more realistic.

[Pops]

And yet another, this time with a reaction from Maugeri, h/t Energy Bulletin

MONBIOT PEAK OIL U-TURN BASED ON DUFF MATHS

$this->bbcode_second_pass_quote('', 'W')hen I challenged Mr Maugeri about the discrepancy between the 2-3% decline rate and the 1.4%, he said the difference was explained by reserves growth – the tendency to squeeze more oil than originally expected from existing fields, through new technology, the exploitation of secondary reservoirs and so on. But in that case he seems to have counted it twice, to judge by his quote in the paragraph above. Or possibly even three times, since the notion of reserves growth is already accounted for in the existing estimates. Both the IEA and IHS-CERA numbers are observed overall decline rates: they reflect the actual loss of production that happened after – or in spite of – all the industry’s investment to boost flagging output at existing fields.