[dcoyne78]

The original Oil Shock Model with dispersive discovery developed by WebHubbletelescope and presented in The Oil Conundrum is a bit hard for many people to understand, but it is a useful tool for future World output projections of C+C.

http://entroplet.com/ref/foundation/TheOilConundrum.pdf

Link to 700 page pdf above takes a while to download.

I have attempted to simplify the model in a blog post (link below)
http://oilpeakclimate.blogspot.com/2015/02/the-oil-shock-model-with-dispersive.html

A model is presented using a World URR of 2700 Gb (with 500 Gb from oil sands in Canada and Venezuela.)

[Paulo1]

Man, I don't know how simplified it is Dennis? I have capable math skills and it seems like wading to me, simply because I am a language guy and best communicate and understand concepts that way.

Visuals of past discoveries, overlaid with known URR, trends in modeling, drilling changes, and current useage as well as forcasted use paints a more understandable picture for me than substituting numbers into equations. (For example.....P2=P1+n-e where....)

While I have a somewhat technical background, that model simply doesn't 'speak' to me and I don't want it to if I were to be honest about it.

For me, the story of oil is a story about people and how we live. It is fascinating to imagine it coursing through our veins as it has influenced every aspect of our energy demanding lives. As the soon to be realized declines sets in, the narrative will continue to leap off the page in every way imaginable and in some ways we will not or cannot accept. There will be vast migrations, unending climate change, many losers, and a few winners. Unforseen events, (geo-political events), such is happening in Libya and Nigeria right now, or just about everywhere oil is produced, may absolutely shake production to its very core. Really, one Israli bombing raid on Iran will pretty well plunge us into immediate upheaval.

The point I am trying to make in such a clumsy and infurriating way for pure math thinkers is that the math only works on paper and when all inputs are equal and known. Our dependence on oil, and it's rate of decline and how we use it (life) isn't like that. Just MHO, and no intent to offend.

By the way, I really enjoy your posts and arguments at Ron's cafe!!

[Pops]

Thanks Dennis, I'm even in worse shape than Paulo because my math skills stop at checkbook balancing. But here is my model for all it's worth

PO=(you can't find it)*(you can't pump it)

With output as such;


(Pops, 2004)

What is different about my model, and if I may say, it's elegance, is that when we've peaked, I can go back and fill in the x & y values. Pretty clever I thought.


(sorry, I'll not mess up your thread any more, LOL)

[Keith_McClary]

The straightforward approach is just to convolve the discovery curve with an empirical production curve. What is the rationale for this method (I haven't read WebHubbletelescope's book)?

The extraction rate curve:

looks very similar to the production curve:

up to the present, but is assumed flat in the future. This needs some explanation, since the future extraction rate is an input to the model.

[Quinny]

Thanks

[dcoyne78]

The assumption is that there are limits to how quickly the oil can be extacted. The resources become more difficult to extract over time, and even maintaining a flat extraction rate might be optimistic. If the extraction rate falls, the decline is steeper.
Also note the extraction rate is flat from 1950 to 1960, while output increases. Output is producing reserves times the extraction rate.

We do not know what the future extraction rate will be, we can only guess. So far from 1993 to 2015 it has been increasing. What happens in the future depends on many factors such as oil price and demand for oil. Extraction rates might rise or fall or remain about where they are, my crystal ball is on the fritz so I am unsure

[dcoyne78]

Hi Keith,
As we have the empirical production curve and discovery data up to the present, we try to create a model which reproduces the empirical output data, then we can guess what future extraction rates might be and create scenarios for possible future output.

[dcoyne78]

Hi Pops,

Your model is correct in the sense that if we discover 2700 Gb of recoverable reserves of C+C, then we can only pump 2700 Gb of C+C and no more. My model (or really Webhubtelescope's model) shows how the production might play out if oil prices are high enough to justify the assumed extraction rates. Note that this model matches pretty well with Jean Laherrere's 2013 forecast. The difference is that we can play around with future extraction rates to see how this might affect future output.
Through Dec 2014 the world has produced roughly 1250 Gb of C+C so we have about 1450 Gb left to produce if the 2700 Gb estimate of C+C URR by Jean Laherrere is correct. Note that my analysis, using Hubbert Linearization suggests about 3000 Gb for C+C URR and the USGS estimates about 4000 Gb of C+C (including 1000 Gb of extra heavy oil). Decline rates for the model presented are a maximum of 2% per year.

[dcoyne78]

Hi all,

This was also posted at peak oil barrel, I realized there was an error, which is corrected after the link to the excel file at the end of the original post.

http://peakoilbarrel.com/oil-shock-model-dispersive-discovery-simplified/

[Pops]

Thanks DC, I really was just giving you a ration since I can't follow the maths. I've admired JL for a long time, especially his point that pretending to too much precision is a failing of many models - hence his guess at one point of 3-4 trillion barrels URR - note the large units and no decimals!

But I think you (and web) are right that the most difficult part - aside from knowing the ultimate recoverable - is guessing the economic impact. The task then is merely divining the unknowable and foretelling the unpredictable. LOL

[phaster]

$this->bbcode_second_pass_quote('Pops', 'T')hanks Dennis, I'm even in worse shape than Paulo because my math skills stop at checkbook balancing. But here is my model for all it's worth

PO=(you can't find it)*(you can't pump it)

With output as such;


(Pops, 2004)

What is different about my model, and if I may say, it's elegance, is that when we've peaked, I can go back and fill in the x & y values. Pretty clever I thought.


(sorry, I'll not mess up your thread any more, LOL)

[shortonoil]

If I am reading this right, you assume a URR then use the Shock Model to predict the extraction rate of the assumed URR. Not quit sure what was accomplished here?

URR is a function of price, and production cost. It is fundamentally reliant on the energy dynamics of the petroleum production system; energy is why petroleum is used in the first place. Your function m=k*exp(-k*t) where m=probability that a discovery will become a producing reserve t years after discovery is a restatement of the exponential decline function: Q=Qoe^-kt: where Q equals the amount present at time t; and Qo is the initial quantity. If you are assuming URR to start with, why not use it as Qo and skip the rest of the long drawn out derivation?

[dcoyne78]

Hi Shortonoil,

The maximum entropy probability distribution in the analysis is used to describe the probablility that it will take x years from the discovery of an oil field to the first production from that field. That function is convolved with a discovery model which is fit to backdated discovery data from Jean Laherrere. The resulting function gives the barrels of new producing reserves which are added to the total producing reserves each year. The 2700 Gb URR estimate by Jean Laherrere is quite conservative in my view.

A Hubbert curve analysis would not allow us to adjust the extraction rates. Using this analysis we can estimate what extraction rates (from producing reserves) were like over the 1960 to 2014 period and we can create scenarios for how output will decline in the future under different extraction rate scenarios for any given URR assumption.

Note that the URR I have used is 2700 Gb, where the USGS estimates technically recoverable resources of 4100 Gb.

If your assumption that petroleum will not be produced if it is an energy carrier proves false. As there are other sources of energy such as coal, natural gas, wind, solar, and nuclear power that can be used in the Petroleum Production system, it is unlikely that oil price will follow the trajectory of your model.

[ROCKMAN]

As always I admire such modeling efforts even when they are beyond my math skills. But, as pointed out, every model depends on the accuracy of the various assumptions made. IOW if a model is designed correctly it should give a fairly accurate prediction. But only to the level of the accuracy of those assumptions.

And that thusly brings me back to my feelings about models: They are great when one tries to analyze the sensitivity of the model for variations in the range of those assumptions made. IOW there may be 6 key metrics used to input a model. Running multiple times by varying the reasonable ranges of those 6 metrics reveals that errors in 4 of those assumptions result in only minor changes in the model. But two reveal that any inaccuracy by them will yield wildly different model result.

It's a truly great value to know where those sensitive nodes are. But the ability to predict the future? Back to my somewhat off color thought: modeling is a lot like masturbation: there really isn't think wrong with either...as long as you don't start feeling they're the real thing..

[dcoyne78]

Thanks Rockman,

I have no illusions that any model can accurately predict the future.

Based on the assumptions of the model I guess at future extraction rates. Staying the same, increasing or decreasing to see how annual decline rates will play out. In a more recent post I have considered how different URR levels from 3100 Gb to 3700 Gb might play out. See

http://oilpeakclimate.blogspot.com/2015 ... erent.html

Did you see my email?

[Pops]

Thanks D.C.
Really appreciate your particular projection-sans-prediction style, if that makes sense.

[Tanada]

Living as we do in such a politically unstable world I am always waiting for the next event and/or war in the Middle East, I think the next one will prove we are at peak. I say that because the world as a whole is getting pretty low on 'spare capacity' outside of storage to make up for any major disruption to supply.

[ennui2]

$this->bbcode_second_pass_quote('pstarr', '
')I consider the world's events now (especially those in the oil producing nations, and in the heavily importing nations like Greece, Italy, Portugal etc.) to be a function of economic-induced peak oil shock. A continuation of the oil-producton plateau which began around 2005. Since then we have dug deeper, gone to distant places, utilized our last magic tricks (fracting) to get at the high-hanging fruit. Well it seems we are on the ends of very fragile branches and they are snapping in mass.