[StarvingLion]

The game called Industrialism is very simple: Either you are conquering the world or someone is conquering you. Industrialism can never pay for itself so the entire notion of economics is of no importance.

Deindustrialisation (the notion that the carbon atom is detrimental) is suicide...simple as that.

I expect solar and wind will always be the "cheapest" and the "cleanest"...whatever that means...simply because the organizers (international banking cabal) of the losing team don't want you to know you are on the losing team.

The goofs at BP are bankrupt...aka they aint conquering any longer. What would you like them to say: "We're dead meat boys and girls"....lol.

[kanon]

$this->bbcode_second_pass_quote('ennui2', 'C')onsidering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.

I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.

[kublikhan]

If I am understanding correctly, BP assumed a price level of $100 a barrel for oil(plus whatever price natural gas and coal were back when oil was that high). They also cautioned that lower prices like today's environment would effect the numbers. They are using the definition "proved reserves" which does take price into consideration.

$this->bbcode_second_pass_quote('', 'W')hen analyzing costs, we use data from the period when oil prices were around $100 per barrel, and show how technology could reduce costs relative to this benchmark. Clearly, other deflationary forces are at play in the lower-oil-price environment – and these can and should be differentiated from the technology signal in this publication.

On the supply side, technology has helped the energy industry discover more oil and gas than society has consumed. Proved oil reserves, for example, now stand at more than twice the level they were at in 1980. Key technologies driving this phenomenon include advances in seismic imaging that enable geologists to pinpoint subsurface reservoirs more accurately, and new techniques to improve oil recovery that prolong production from reservoirs.

[vtsnowedin]

Peak oilers do not need to be defensive at all!
Considering the population trends and the human propensity to live better if possible it will be impossible to maintain current living standards even if all existing oil fields ceased to decline and all irregular means (such as fracking tight shale) are fully developed. The population is the push and the decline of oil fields is the shove and when it comes together the pain and deaths will be beyond imagination.

[ROCKMAN]

k - Exactly with respect to needing a price assumption to predict future reserves. Which is exactly why the slip in "resources" as a sub for reserves. Also why the jump back to 1980 to talk about reserves: in the last 12 months the amount of proven reserves has declined dramaticly as result of the oil price collapse. They also overplay the new tech card: all those advances since 1980 existed before the shale boom. Some tweaking but the shales could have been horizontally drilled and frac'd in 2002. But they weren't because the price of oil was too low.

And about that $100/bbl assumption: that's 2014 dollars. Are they using $100/bbl in their 2050 prediction or are they inflating that price by then? Remember the record high $35/bbl oil price in 1980, when adjusted for inflation, would be more than $110/bbl in 2014 dollars.

IMHO their words are no more then a very transparent effort to convince the public (i.e. potential stock holders) that the situation isn't exactly what it is. As has been said before: If you can't impress them with the facts fhen dazzel them with bullsh*t. LOL

[kublikhan]

For technology, I don't think they were claiming the technologies/techniques were newly invented, just improved. Their tone seems more like evolutionary advances, not revolutionary. Ex: seismic imaging has been around for a long time but what we have today is better than what we had 35 years ago. Would you agree with that?

$this->bbcode_second_pass_quote('', 'T')he most significant change to the oil and gas resource base in the past decade has been the development of production from shale and ‘tight’ (or low-permeability) rocks, particularly in the US. Estimates of shale resources, not only in the US but around the world, have more than doubled the total estimated volumes of oil and gas in place globally with development potential. New technology has been central to enabling the oil and gas industry to find and produce new sources of hydrocarbons. Advances in seismic imaging, for example, have helped reveal previously undiscovered oil and gas fields, particularly in deep water and below formations of salt in the subsurface. The shale revolution has been made possible largely by developments in directional and horizontal drilling and multistage hydraulic fracturing – techniques that have evolved over many years.

Seismic imaging
The emergence of three-dimensional seismic imaging during the 1990s had a dramatic impact on oil and gas exploration, in some instances raising exploration success rates from 30% to 50%. Since then, seismic acquisition technologies have advanced and can now illuminate the subsurface from different orientations. Multi- and wide-azimuth surveys, for example, enable surveys to be carried out in different directions over the same area. 4D seismic, which involves repeating the same survey at different times, plays an increasingly important role in helping to determine how reservoirs are changing as oil, gas and water move through the subsurface and are produced to the surface. These advances have been enabled by rapid increases in cost-effective computational processing capacity and deep algorithmic expertise to process and interpret vast streams of seismic data. As interest in tight oil, shale oil and shale gas grows, advances in imaging technologies that improve our understanding of subsurface factors and identification of ‘sweet spots’ will be of great value.

[ROCKMAN]

k - Yes: seismic is vastly better today then 30+ years ago. But is essential the same it was 10 years ago before the shale boom. And before the shale boom the industry was drilling horizontal laterals several times longer then the typical shale well during that boom. And 35 years ago the Rockman pumped fracs that pushed much more sand into a tite carbonate shale then the typical frac stage in the Eagle Ford Shale in the last few years.

IOW all tech to drill EFS wells as they were last year existed before the shale boom...before the price boom. Fantasizing about "future unimaginable tech advances" in the future is OK. As long as one remembers the key word in that phrase: unimaginable. LOL

[kublikhan]

Thanks Rock. Another question for you: You mentioned proven reserves declined dramatically in the last 12 months as the result of the oil price collapse. But this is not showing up in the EIA data. Do you know why this is? Full 2015 data is not in yet, but even previous price crashes like 2008-2009 and 85-86 show world proved reserves kept right on ticking up. You would think prices dropping by nearly half would show a corresponding decline in proved reserves.

I grabbed a definition of proved reserves from the EIA web site if it helps:

$this->bbcode_second_pass_quote('', 'P')roved reserves of crude oil as of December 31 of the report year are the estimated quantities of all liquids defined as crude oil, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Reservoirs are considered proved if economic producibility is supported by actual production or conclusive formation test (drill stem or wire line), or if economic producibility is supported by core analyses and/or electric or other log interpretations. The area of an oil reservoir considered proved includes: (1) that portion delineated by drilling and defined by gas -- oil and/or gas -- water contacts, if any; and (2) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons is considered to be the lower proved limit of the reservoir.

Volumes of crude oil placed in underground storage are not to be considered proved reserves.

Reserves of crude oil which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.

Estimates of proved crude oil reserves do not include the following: (1) oil that may become available from known reservoirs but is reported separately as "indicated additional reserves"; (2) natural gas liquids (including lease condensate); (3) oil, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; (4) oil that may occur in undrilled prospects; and (5) oil that may be recovered from oil shales, coal, gilsonite, and other such sources. It is necessary that production, gathering or transportation facilities be installed or operative for a reservoir to be considered proved.

[ralfy]

$this->bbcode_second_pass_quote('ennui2', 'C')onsidering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.

I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.

[ralfy]

$this->bbcode_second_pass_quote('kanon', '')$this->bbcode_second_pass_quote('ennui2', 'C')onsidering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.

I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.

[Revi]

I was thinking about how the whole economy will keep on going as long as it is fed by credit. Look at the US. We are now 19 trillion in debt and counting. Will we pay it back? I think not. It's like your neighbors who can keep the whole facade going as long as they get credit. They have big cars, lots of gasoline toys and a lifestyle that looks really great, but it's all because they can borrow money. Those of us who don't borrow have to make do with what we've got, and that means our cars are smaller and older. When the repo man comes the neighbors have nothing, but my old small truck can keep going as long as I keep it maintained. So it is with the economy. We'll see everything come crashing down when they quit feeding it with easy credit. The shale gas and oil boom was fueled by easy credit. Fracking and tar sands will stop when they can't continue to borrow money. That time is coming very soon.

[ennui2]

$this->bbcode_second_pass_quote('kanon', '
')I understand peak oil to mean maximum rate of production

[ennui2]

$this->bbcode_second_pass_quote('ralfy', '
')Oil is not currently cheap because production costs are still high.

[ennui2]

$this->bbcode_second_pass_quote('pstarr', '
')You are not the only consumer in the world. $40 (inflation adjusted) oil remains somewhat historically high, it had been less than $30 (inflation adjusted) for decades when I joined this web community.

[ennui2]

$this->bbcode_second_pass_quote('pstarr', '[')img]http://gailtheactuary.files.wordpress.com/2011/02/recessions-and-oil-spikes.png[/img]

[ennui2]

BTW here is a chart that blows Hubbert's curve right out of the water. The PO argument was initially founded on the Hubbert curve, and how he accurately predicted US peak. Well, now we're into a new paradigm and people are cherry picking which charts they think validate their argument and which to ignore, like this one.



Note that the falloff post Y2K corresponds with the "peak" of peak-oil concern of the mid 00s. Only the die-hards are still retconning their narratives to try to reconcile the fact that we're not just huddled behind our arrowslits plugging zombies by now.