[Plantagenet]

$this->bbcode_second_pass_quote('ROCKMAN', 'G')raeme - Can't stop...someone has got to keep all those kiwi cars fueled. Can't run them all with the power from Rotorua. I've also been lucky enough to see the glow worms.

[ROCKMAN]

Graeme - Sounds like a good group for all you hydrocarbon hogs to join. Then we wouldn't be tempted to supply your addiction. LOL

[SamInNebraska]

$this->bbcode_second_pass_quote('Graeme', '[')b]Peak Oil: a fertile concept

$this->bbcode_second_pass_quote('', '
')The problem may be simply that the idea had too much success. Let's go back to 1998, when Colin Campbell and Jean Laherrere raised up again a problem that had been first noticed by Marion King Hubbert, in 1956.

The pioneering work by Cambell and Laherrere gave rise to a whole scientific field....

But the predictions based on the peak oil concept turned out to be spectacularly successful, at least within the unavoidable uncertainties involved....

So, “peakers” won their bet with cornucopians.....

[Graeme]

$this->bbcode_second_pass_quote('ROCKMAN', 'G')raeme - Sounds like a good group for all you hydrocarbon hogs to join. Then we wouldn't be tempted to supply your addiction. LOL

[ROCKMAN]

Graeme - And have you signed into rehab yet? LOL. Wouldn't be any need to do drill if y'all didn't use the stuff. You keep confusing the chick and the egg, Mr. Cluck-cluck. LOL.

[Graeme]

On the contrary. If there were no suppliers, there would be no addicts! Furthermore, suppliers have been bllthely ignoring the consequences of "drug" use for decades just like the Romans.

[TheDude]

Fuel from agave, cripes, won't someone think of the worms?

7 years ago a guest contributor at Foucher/Brown's Graphoilogy blog posted a series on the The Hubbert Parabola showing which nations followed the Hubbert curve well, ones that were too early in their production history to say, and ones that didn't. 20/9/21 split. All of the OPEC heavies and the UK/Canada are in the third category. Interesting study and would be nice to have a followup - the contributor, Roberto Canogar, explains his method in detail and it's simple enough to execute.

[Graeme]

Dude, Thanks for getting us back on track. Is the reason, that the third group which doesn't follow the Hubbert parabola, because those countries are exploiting unconventional oil right up to alcohol as Pops and others said earlier?

[Pops]

Thanks Dude, I hadn't seen that before. Isn't it usually done the other way around, use the linearization to estimate the URR then guess the curve from that?

I wish we had more folks willing and able to revisit some of these topics with current numbers. Hasn't the JODI database and other open sources made the data more available than in 2000? Or has everyone simply acquiesced to the IMF version that prices will simply continue to rise and forever free up harder and harder production?

BTW
Matt @ CrudeOilPeak.info has a review here of Angola (the first of the 'bad-behaving' countries in the Graphology post) where he points out that there were 2 large discoveries in Angola and "these 2 cycles should have been modelled separately." Obviously the curve would act strange in that case wouldn't it?

Of course all the "bad actors" are also members of OPEC, which by it's nature constrains supply to increase price and I assume that would affect the model.

[TheDude]

Graeme - about the only poorly performing country on the list where unconventional production plays a part in increasing URR post initial peak would be Canada. The rest perform poorly due to excessive prorationing (OPEC especially KSA/UAE/Kuwait) and external events (Iran/Iraq war, UK with the Piper Alpha incident). Venezuela also has a lot of extra heavy oil which could be labeled unconventional but I don't think that's played quite so much a part in dragging them along as the tar sands have in Canada.

Heavy/sour fields like Kashagan and Manifa and UDW are unconventional as well, by one definition of the term.

You can use a least squares fit like Roberto to get your curve as well, it's really just another way of visualizing the same thing. I've always imagined in my mind a way of displaying how URR has changed over time, perhaps bubbles on the curve for each year that change with size. Might give that a try. Rapier just used a table in his TOD posts analyzing HL's weaknesses - he showed how with Texas the URR would jump around with each year, calling into question HL's utility - you get no end of false positives with it. When the plot settles down a bit then it becomes a bit more useful, but years ago I came to the conclusion that all you can conclude is that you're in the ballpark, rather than trying to futility pinpoint the precise year of peak.

[ROCKMAN]

Dude - Isn't that the inherent problem with using HL with different domains? Hubbert's original model specifically detailed that it applied to the oil domains that has been exploited in the lower 48 states. Mixing together the HL models of different domains, like the shale and the DW GOM, and expecting some coherent result is like mixing the height stats of New Guinea pigmies with those of the French and expecting to develop a meaning model to predict future heights of Canadians. LOL. Consider how US oil companies evaluate such relationships. We don't even use the domain Hubert used for his model. IOW would it make sense to use the HL of the Texas Frio oil trend to model future production expectations of the Bakken? Actually a trick question because there is no single HL of the Texas Frio trend. Off the top of my head I can think of at least 4 different portions of the Frio trend that would have very different HL models from each other. Maybe use the Eagle Ford Shale HL to model the Bakken? Nope...there are at least 3 different HL stats that define the EFS trend.

I appreciate the desire to develop a Grand Uniform Law to predict global production. But Mother Earth makes that rather difficult. She just didn't distribute her goodies evenly. Nor did she distribute redneck independent oil men equally. LOL.

[Graeme]

Thanks for everybody's contributions. I'd now like to make a list of the reasons for poor-performing countries. I'm also using the ideas mentioned in the other fact number one thread started by Pops. This list may not be complete. It could be modified.

1) unconventional oil
2) different geologic domains (related to one)
3) Prorationing
4) external events
5) changing URR
6) economics
7) new technology

Talented mathematicians may wish to incorporate all of these factors into a new model, and use it to describe depletion of any commodity (not just oil and including biological ones) in a finite resource like the Earth. This model would not be valid if one considered the infinite resources of the entire universe. In principle, one could continue BAU if one mined resources from the moon, asteroids or Titan. But, as pointed out by Bardi in the OP, oil was supposed to be replaced by nuclear (or was it solar?) energy. Then we would have seen a bell-shaped curve for global peak oil. instead we just kept mining more carbon resources which is leading to catastrophic climate change. How daft can we be? Can resources on Earth be recycled? Can we live in harmony with Nature? Will we switch to a non-carbon energy source in time to avoid mass extinctions? Hmm.

[TheDude]

Well ROCK, I'm not really placing undue faith in any model, as Graeme points out you can pile quite a few more factors into your equation to get an ostensibly more accurate answer, but I believe a simple heuristic like HL has performed well enough - we have stalled production and seemingly permanent high prices at the beginning of the 21st century, right on schedule. And unconventional additions to supply like tight oil seem far too dependent on external factors of their own, especially the economics needed to justify their existence in the first place, that I'm dubious they'll add much in the end.

Really I think the only way to know the world is about to peak in a given year is a bottom up approach, if we suddenly find ourselves unable to cough up that 3.8 mb/d some year you'll be able to make a killing shorting XOM or whatever. But it takes a dedicated institution to really tackle such a chore, Skrebowski works on it on his own as I understand but I'm not sure what he does with his findings; after that you have to cough up some serious $$$$ to IHS to be privy to such knowledge. I think it was $10k the IHS coughed up to them for the 2008 WEO? rockdoc123's written about how they go about it, they have part of their staff dedicated to getting to the bottom of oil megaprojects.

I'm just as interested in attempting to assess whether the world is successfully moving away from petroleum.

[ralfy]

Interestingly enough, what the IEA shows in its earlier report confirms two of three predicaments shared by some on the matter: peak oil and global warming. The organization argues that strong government policies are needed to switch to renewable energy to minimize the effects of global warming while maximizing oil and gas production to minimize the effects of peak oil.

The catch has to do not only with the reality that governments have not coordinated or cooperated to deal with global warming and peak oil but also with a third predicament, which is increasing debt that needs to be fulfilled through increasing production and consumption of goods. And that ultimately means more CO2 emissions and more oil and gas used. The only way to address that is to lower resource consumption even before oil and gas production drops, but that is likely unacceptable to banks and a financial elite that profit from more loans and investments, businesses that need to sell more goods and services to profit, governments that earn from the same, including tax revenues from more sales of goods and services, and a growing global middle class that needs more goods and services to maintain its lifestyle.

[Pops]

$this->bbcode_second_pass_quote('ROCKMAN', 'D')ude - Isn't that the inherent problem with using HL with different domains?

[ROCKMAN]

Pops - Exactly right. It seems simple enough but some folks seem intent on including populations in Hubbert's original analysis that should be included. And then they criticize his work for not accurately predicting future US oil production rates. His work only predicted the future production of those geologic provinces that made up his study. He wasn't predicting US oil production rates...just of the fields he included in his analysis. Turns out he was rather accurate.

Your charts show exactly how it should be done: build a model, HL if one prefers, but build one for each different geologic domain and then combine them. But here's the problem: the fields Hubbert analyzed were rather mature and mostly fully developed. IOW he was analyzing a population that had already gone down much its discovery path a good bit. We don’t have that for the US shales. We don’t have that for the DW GOM although it doesn’t look like the discovery rate has decreased a bit…maybe. And DW Brazil…a long way to go before a future production model can be offered.

So an unfixable problem IMHO: one cannot come up with a well-supported model of future global production without developing well supported production models of the all the major developing plays. For instance who has a credible production model for future shale development in the EU? There’s no certain there will be such a play of any significance. And on top of the geologic uncertainties one has the add the economics variable. IOW how could one devise a credible future production model of the US oily shales without using an equally credible oil price model. Folks like to predict X Bakken or Eagle Ford wells in the future and thus produce a production curve. But the number of wells drilled will be impacted by the price of oil as well as other factors. While they may not state it such assumptions about future production trends assume a sufficient oil price to support those efforts. There’s no such guarantee just as the NG shale players painfully discovered at the end of ’08.

[Pops]

$this->bbcode_second_pass_quote('ROCKMAN', 'P')His work only predicted the future production of those geologic provinces that made up his study. He wasn't predicting US oil production rates...just of the fields he included in his analysis. Turns out he was rather accurate.

[ROCKMAN]

Pops - Very simply I look at the data he modeled. He didn't model global production...that wasn't his data base. He didn't model the DW GOM or DW Brazil...that wasn't his data base. He didn't model the fractured shales in Texas, Poland or anywhere else...those weren't his data base. He modeled the existing fields in the US that had begun significant development in the 40's. Regardless of how anyone choses to characterize his analysis it is what it is: a forecast based on a very specific populations of fields. As such it has no relevance on any other geologic province. Maybe he was trying to offer that such an analytical approach could be applied to other regions of the world in order to forecast future "world" production. But not even a rooky geologist would try to extrapolate his analysis to other regions. Perhaps he just wasn’t clear in his writings or perhaps some folks try to read too much between the lines. Who knows…maybe he took the "King" title too serious and got full of himself. LOL.

But regardless his model is what it is: a production history and extrapolation forward of a specific geologic province that is actually rather unique in the world. I can't think of any other geologic province that has followed such a development path. I’m sure in X years some clever geologist or engineer will develop a similar model for the Bakken, Eagle Ford, DW GOM, DW Brazil, et al plays. All it will take is the time to develop a similar extensive production history like that Hubbert used in his model.

Now if he really wanted to impress the world he would have drawn his peak point in the 70’s in 1935. But, of course, he couldn’t because he didn’t have enough production history of those trends. Which is the basic problem many current forecasters have. And now that I think of it I wonder how many of those armchair visionaries realize just how far down the exploration path those trends were when Hubbert produced his curve. Not to take anything away from his talent but the vast majority of the fields in his analysis were already discovered and some were many years into their production history. I also wonder if most understand the important aspect of his work didn’t have not as much to do with the decline of existing production but a decline of the DISCOVERY RATE of new fields. By the time he made his prediction the vast major of the major fields in his statistical population were not only discovered but fully developed. Again he should be given great praise for recognizing the distribution pattern of field discoveries most of us take for granted today: the big fields/wells are discovered early on with much of the later efforts finding progressively smaller accumulations. As simplistic as that presumption seems today apparently in his time it wasn’t so.

I wonder if a good bit of resistance he met in his day came from the same mind set we see coming out in the press releases of many of the oil pubcos today?

[Pops]

So then I take it your view is we are not only not near peak, we have no way of forecasting it.

So the POD is simply PO Denial.

.

[Graeme]

Here are some recent views on PO by Charles Hall, Jörg Friedrichs and Simon Snowden. I'll quote the first author:

$this->bbcode_second_pass_quote('', 'T')he world has recently been exposed to many optimistic estimates on the future of oil production and the media has eagerly picked up these projections. International Energy Agency estimates that by 2020, the USA is projected to become the largest global oil producer, to the extent that it is to become a net oil exporter by 2030. These perspectives are offered as an alternative to the pessimistic Hubbert curve projections that imply we are at, or near, maximum global production of oil. But if you dig into the rationales for this optimism, it is based principally on two concepts. There are new developments in the oil industry, specifically directional (horizontal) drilling and fracking, principally in the Eagle Ford play of Texas and the Bakken region of North Dakota and Montana. And, stated less frequently, the addition of other fluids to what is called oil, most importantly natural gas liquids, which are expected to increase as a result of fracking for gas. In fact, there has been little, if any, increase in the global production of conventional oil since 2005, and most of that has been in the USA.

The basic issue is that there is a huge difference between the quantity of oil left in the ground (a lot), and the amount of high-quality oil that can be extracted and refined at a significant energy profit (not so much). My research with colleagues has shown that global energy return on investment (EROI) of oil is declining. Oil that used to be extracted at a gain of 20–40 joules per joule invested is now being extracted at 10–20 joules per joule or less, as we have depleted the best resources. Hence, oil prices must rise.

The oil that we are exploiting now is deep, offshore, tight and heavy, and gives far less EROI. If current trends continue, it will take a barrel of oil to extract a barrel of oil. Economic profitability will presumably cease at an EROI of something like 6:1.