[Twilight]

A pullback to considerably lower prices, under $100 per barrel, for a prolonged period is about the worst thing that could possibly happen right now. Energy would fall right off the agenda (G8, not bad) and energy efficiency/security lobbies all over the world would be discredited. For a transition to work, we had to call it early. That is why the oil shocks were such a tragically missed opportunity. Losing urgency and momentum and falling back into another several years of soothing complacency would guarantee subsequent collapse as the world meets peak oil twice victorious and unprepared.

Thankfully this seems rather unlikely to happen this year, but I do get the impression these nostalgic thinkers do not understand the implications of what they are wishing for.

[ROCKMAN]

Perhaps an even worse case scenario would be a pullback in prices following some lame effort by the current administration to reduce crude prices. The villagers would rejoice with the comfort of knowing the gov't will be there next time to save them.

If Cantarell Filed is declining as quickly as some believe, the lose to Gulf Coast refiners might continue a regional price shock even if worldwide prices pullback significantly. Odd how the impact of an asteroid might ultimately protect us from being overwhelmed by a short lived "nostalgic" optimism.

[TheDude]

$this->bbcode_second_pass_quote('Dreamtwister', 'I') actually had to right click on that image to see if you were making some sort of commentary, or if that was actually a sample of the latest oil "mega discovery".

[ROCKMAN]

Dude,
Cantarell Fld won't be inflating anytime soon but we may start hearing some confusing reports about a reservoir in the field that has yet to be produced. There are actually 4 seperate reservoirs in the field with all the production to date coming from just 3 of them. But I believe those 3 have produced over 25 billion bo. A report I stumbled into gave the 4th reservoir recoverable reserves of around 800 million. Not an insignificant amount but nothing to change the peak oil scales.

But you can bet the economists et all will jump all over any new completions as proof that PO is BS.

If decline at Catarell Fld is increasing quickly it's not surprising. It would have depleted years ago had Mexico not built the largest nitrogen generating facility in the world. The N2 is pumped into the reservoirs to increase pressures thus improving flow rate. Unfortunately you can't have it both ways. Increasing the flow rate actually causes a lower ultimate recovery factor. The best analogy is to picture a damned up river. Knock the damn down and the river drains quichkly but leaves behinds pools of water along its course. Open the damn slowly and these pools will drain much better.

Not a good analogy but reservoir dynamic flow models are too much for this forum.

[wisconsin_cur]

$this->bbcode_second_pass_quote('ROCKMAN', '
')If decline at Catarell Fld is increasing quickly it's not surprising. It would have depleted years ago had Mexico not built the largest nitrogen generating facility in the world. The N2 is pumped into the reservoirs to increase pressures thus improving flow rate. Unfortunately you can't have it both ways. Increasing the flow rate actually causes a lower ultimate recovery factor. The best analogy is to picture a damned up river. Knock the damn down and the river drains quichkly but leaves behinds pools of water along its course. Open the damn slowly and these pools will drain much better.

Not a good analogy but reservoir dynamic flow models are too much for this forum.

[ROCKMAN]

You're welcome Cheesehead (and I say that with affection),

I have dropped a few posts on the Depletion forum. Probably not a lot of detail though. I'll scan back and see what's worth repeating.

[KillTheHumans]

$this->bbcode_second_pass_quote('TheDude', '
')
OK KTH, tell us how Cantarell will magically reinflate. Or how by all rights it should be empty by now.

[hironegro]

$this->bbcode_second_pass_quote('KillTheHumans', '')$this->bbcode_second_pass_quote('TheDude', '
')
OK KTH, tell us how Cantarell will magically reinflate. Or how by all rights it should be empty by now.

[DantesPeak]

$this->bbcode_second_pass_quote('KillTheHumans', '')$this->bbcode_second_pass_quote('TheDude', '
')
OK KTH, tell us how Cantarell will magically reinflate. Or how by all rights it should be empty by now.

[KillTheHumans]

$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('KillTheHumans', '')$this->bbcode_second_pass_quote('TheDude', '
')
OK KTH, tell us how Cantarell will magically reinflate. Or how by all rights it should be empty by now.

[simontay78]

Another denial just surface!!!

http://onlinejournal.com/artman/publish ... 3361.shtml

$this->bbcode_second_pass_quote('', 'P')eak Oil is a scam. When looked at superficially and if one's outlook is that of the status quo, it sounds logical: when you have a finite resource, and your way of life burns that resource much faster than your way of life can replenish it; and once you get past the halfway point of what remains of that resource, your access to that resources will go into decline. Common sense enough. But, common sense is not always the best sense. In this case, the explanation provided doesn't even add up to common sense.

[Dont_Panic]

We all know that fossile fuels are finite and that we'll run out at some point.

What everybody seem to disagree about is when we'll reach a decline, how steep the decline will be and most importantly what EFFECTS that decline will have. Nobody knows for sure, but many camps claim they do (and that everybody who disagree are retarded). We may have reached max production now (although the expected peak looks like a plateau), but only time will tell.

Personally, I think we are at max production or close to it, but it certainly looks like the decline will not be as steep and sudden as the doomers think.

In any case, the time has come to jack up efforts to develop alternatives, of course driven by the high oil price. We will only change when we're forced to. Time will tell if it's too late.

[ROCKMAN]

Don't Panic -- I agree with you about the inaccuracy of predicting world oil decline rates. But when you consider how much of current production is coming from a very few mega fields one can look at their anticpated decline to gain some sense of the big picture. But this highlights a major roadblock to clarity. Production figures from many of these fields are intentionally hidden, Ghwar in Saudi is a perfect example. Mexico has been more forthcoming lately about the sudden rapid decline rate at Cantarell Fld.

All fields have unique decline profiles. To much detail to cover here but many of the biggest fields fall into a category of relatively rapid decline rates when they reach their individual tipping points. I wouldn't consider offering an estimate of a worldwide decline rate even though I have 30+ years in the oil production biz. But I suspect a drastic increase in decline rates will be seen in the next several years. Saudi et al can continue to claim excess production capability only so long. When there is a huge market ready to pay a very high bid for their oil and Saudi et al fail to deliver everyone will quickly become aware of the truth.

[TonyPrep]

Well, here we have it; the expert analysts that Bloomberg surveys each week are now worse than a coin toss:
$this->bbcode_second_pass_quote('', 'A')nalyst responses have been bearish in 21 of the past 22 weeks. The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.

[emersonbiggins]

One of JohnDenver's favorite subjects concerning speculators is the curious lack of futures in the onion market, and how the lack of traders has not caused a shortage of onions, at least as far as he can tell.

Well, shortages may not exist, but price volatility certainly does, which is where futures markets come in.

This is a great article from CNN (emphasis mine below).

$this->bbcode_second_pass_quote('', '[')b]What onions teach us about oil prices
Onions have no futures market, yet their recent price volatility makes the swings in oil and corn look tame.

By Jon Birger, senior writer
June 27, 2008: 10:09 AM EDT

(Fortune Magazine) -- Before the U.S. Commodity Futures Trading Commission starts scrutinizing the role that speculators may have played in driving up fuel and food prices, investigators may want to take a look at price swings in a commodity not in today's news: onions.

The bulbous root is the only commodity for which futures trading is banned. Back in 1958, onion growers convinced themselves that futures traders (and not the new farms sprouting up in Wisconsin) were responsible for falling onion prices, so they lobbied an up-and-coming Michigan Congressman named Gerald Ford to push through a law banning all futures trading in onions. The law still stands.

And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics' belief that futures trading diminishes extreme price swings. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April.

The volatility has been so extreme that the son of one of the original onion growers who lobbied Congress for the trading ban now thinks the onion market would operate more smoothly if a futures contract were in place.

...

[Plantagenet]

Very interesting about onions. But just what I'd expect.

Its amazing that people don't understand how futures contracts work. They may actually be helping to REDUCE the price of oil. When a speculator purchases a futures contract to buy oil at a set price, that price is locked in, no matter what geopolitical disasters occur. Thats why airline companies and other big users of oil make use the futures market to PROTECT THEMSELVES from high oil prices.

Restricting Americans from futures markets, as Congress wants to do, will put Americans at a disadvantage to people and companies in the EU and Asia when it comes to dealing with peak oil and rising oil prices.

[Eli]

Very true PA.

Imagine what would have happened if those nuts in KSA managed to blow up Rashtun?

Anyone who was locked in to sell oil at 140$ dollars would have been screwed as oil raced up to 200 dollars a barrel.

Bombing of Iran 200 $.

Let them cut out the speculators that worked really well in India.

[Cashmere]

Bomb Iran and it's 500, but they'll forcibly close down the exchanges well before it gets there.

[bobaloo]

Just keep the terrorists away from Walla Walla, Washington and I'll be happy.

[dukey]

i wouldn't worry about JohnDenver, every day the price just goes up and up, and every day he looks like more and more of an idiot.