[Threepwood]

For those who disagree with everything stated or implied regarding oil depletion...
Pops

[quote="Pops"]Here are 10 facts about Peak Oil:

[list]
Peak Oil
1. This was true 100 years ago, and will be true 100 years from now, meanwhile oil continues to be plentiful and to revolutionize standards of living worldwide


Discoveries
2. The definition of 'conventional' is not fixed . offshore was considered unconventional till it became conventional- likewise how 'unconventional' would shale be when it's providing most of our oil?

Exploration Costs
3. Of course you take the lowest hanging fruit first, that does not make hand picking apples more economically viable than mechanized picking-

Energy Return On Energy Invested
4. As above, only if you ignore economy of scale and advances in technology.

Export Land Model
5. global production continues to rise

The Consequences of Cheap and Expensive Oil

7. 'Increasing oil prices can decrease oil demand by reducing the amount of oil consumers can afford to purchase' where freedom in the market allows, not in much of the world where oil is heavily taxed or subsidized-


9. EV's are 19thC technology predating the combustion engine which made horses/ electric cars/ steam redundant over 100 years ago

10. agree, privatization would help here too?

[Pops]

$this->bbcode_second_pass_quote('Threepwood', '
')Peak Oil
1. This was true 100 years ago, and will be true 100 years from now, meanwhile oil continues to be plentiful and to revolutionize standards of living worldwide

[Threepwood]

$this->bbcode_second_pass_quote('', 'H')ence "Peak"oil.
Are you saying that nothing will have changed regarding continually increasing production in 100 years?

[Strummer]

$this->bbcode_second_pass_quote('Threepwood', 'T')he oil industry is a more extreme example of this, when unskilled manual labor was first used to collect oil spewing out of the ground in TX- who in their right minds would have predicted that we’d get much cheaper oil by building floating cities, flying highly paid workers out on helicopters and drilling the sea bed?

[ROCKMAN]

“The definition of 'conventional' is not fixed”. Not really true. ”Unconventional oil” is not a term used in the industry. It’s a made up concept that probably came from the media misunderstand what the industry classified a “conventional” and “unconventional” RESERVOIRS. There is a very specific and unchanging definition for those two categories. Search on line for a detailed explanation. A fractured shale reservoir is an unconventional reservoir…always has been and always will be. One is free to define “unconventional” anyway they want. Which is why it actually has no fixed meaning IMHO.

Exploration costs: “But while operating costs may be rising, so are upstream profits”. Which gets back to the point that increasing oil prices are not a result of increased drilling costs but just the opposite. Higher oil prices allow more expensive/risky wells to be drilled. If oil prices collapse so will the amount of that can be spent on drilling a particular well.

ELM: Global oil production increases as the price of oil increases. ELM isn’t about the amount of global oil production…it’s about the amount of oil that’s exported. Global production may increase X% but if internal consumption by the exporters increase the same amount the global NET export oil volume does not increase. But even with an increase in net global oil exports it doesn’t guarantee any particular country will continue to import volumes as it had previously. Countries such as China and India are rapidly increasing their oil imports. If global net oil exports don’t at least match the growth in those new buyers some of the current importers will receive less oil even in the face of sustained net oil export.

But once the resources are exploited at a particular price they decline just as was seen in the US during the last 40 years. When prices increase previously uneconomic resources become viable and are developed as we are seeing in the shale plays today. No technology exists which would have made these plays commercial had not oil prices increased significantly. And as has been seen in every oil play ever developed in the US those viable shale wells will be drilled only until all are developed. Additional resources, which today are not economically viable, would only replace them if oil prices increase sufficiently.

“Privatization” is a very loaded term. It can mean anything to anyone IMHO. Thus it really has no meaning unless fully described.

[Threepwood]

$this->bbcode_second_pass_quote('', 'T')hose are some pretty frightening numbers, if you ask me, and the complete opposite of the claimed "technological progress" that is supposed to save us.

[Threepwood]

in response to ROCKMAN..

I take you points there..
Though all the supply/cost/demand arguments refer to market forces which are not very free to operate-
where you have state run oil companies, fixed/subsidized prices for consumers in one half of the world.. and prices so heavily taxed in the other that the market cost is buried. The U.S. consumer is somewhat unusual in having consumption influenced by actual price per barrel cost yes?

demand is largely unhinged from supply for political reasons- which I think is a larger real life problem than hypothetical ever increasing geological limits..

[Pops]

$this->bbcode_second_pass_quote('Threepwood', '')$this->bbcode_second_pass_quote('', 'H')and picking the lowest fruit intuitively seems the cheapest easiest method, but using a very ‘expensive’ tractor/shaker to get those ‘hard to extract’ apples is even cheaper and easier

[Threepwood]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('Threepwood', '')$this->bbcode_second_pass_quote('', 'H')and picking the lowest fruit intuitively seems the cheapest easiest method, but using a very ‘expensive’ tractor/shaker to get those ‘hard to extract’ apples is even cheaper and easier

[kublikhan]

$this->bbcode_second_pass_quote('Threepwood', 'o')nly if you use the last decade to represent the long term trend.. instead of just looking at the actual long term trend

In the real world it is demonstrably true over time, extraction has become ever more 'difficult' and 'expensive' yet real world cost per barrel has been flat to even slowly declining over the last century- not withstanding the spikes and gluts produced by various unpredictable political factors. This is true even WITH ever increasing headwinds of taxes, regulations, fines , restrictions on oil extraction- direct & indirect. Removing that premium on the cost would also change the numbers significantly

[Threepwood]

$this->bbcode_second_pass_quote('', 'A')re you saying the cost rises of the last decade have been nothing more than a short term spike produced by political factors? And that you expect oil prices to fall to levels they were a decade ago, ie $30-$40?

[ROCKMAN]

Don't want to quibble over the definition of long term. But as far as the technology goes the hottest oil play in the US in recent times started over 20 years ago when they began horizontally drilling and frac’ng the Austin Chalk in Texas. Much more active than the EFS has been, the AC is another fine-grained fractured unconventional reservoir that covers an area at least 4X greater that the current EFS play. As pointed out by Ray Holifield (“Mr. Austin Chalk”): “The Giddings Field has been the incubator of many new ideas and technological improvements to oil field technologies that have transferred to other oil fields around the world. The Giddings Field is the largest oil field found in Texas during the last fifty years.” The EFS formation sits immediately below the AC.

You don’t hear too much about the AC these days because it has been rather well developed. Just as the EFS will be some day. Current high oil prices are leading some operators to pay attention to the AC again since it sits under acreage acquired to develop the EFS. But so does the Georgetown and Buda formations as well as other unconventional reservoirs overlapping their trends.

[Strummer]

$this->bbcode_second_pass_quote('Threepwood', 'I')'d be willing to bet we'll see that level or lower within a decade

[Threepwood]

$this->bbcode_second_pass_quote('Strummer', '')$this->bbcode_second_pass_quote('Threepwood', 'I')'d be willing to bet we'll see that level or lower within a decade

[Strummer]

$this->bbcode_second_pass_quote('Threepwood', 'M')althus found it extremely hard to believe that we wouldn't have run out of everything a long time ago, even while vastly underestimating growth rates. I'd hope China and the rest of the world continues to grow economically, raising standards of living and lowering pop growth globally.

[kublikhan]

And I assume you mean sustained prices around $50, not just a blip down for a few months like we had in 2009? If so, I'll take that bet. Let's look at your points one by one:

$this->bbcode_second_pass_quote('Threepwood', 'a')n Asian slowdown

[Pops]

$this->bbcode_second_pass_quote('Threepwood', 'o')nly if you use the last decade to represent the long term trend.. instead of just looking at the actual long term trend

[ROCKMAN]

“Malthus found it extremely hard to believe that we wouldn't have run out of everything a long time ago”. Ahh, the favorite straw man. I never see anyone use the term “running out” except for those folks who argue that we were not running out. The problem never really has been about running out of oil. The problem has been the cost of energy and if an economy can afford to function well at that price level. And lately, with the growth of economies such as China and India, a new problem has emerged: it’s not a question of the world running out of oil but in a world of increased oil production who can out bid who for access to that production? The planet is producing more oil than ever before yet oil consumption by the PIIGS has dropped more than 1/3. How can that be in a world of such abundance? In a world in which “we” aren’t running out of oil? That answer depends upon who “we” is obviously. A lot of folks started running out of oil a while ago.

[John_A]

$this->bbcode_second_pass_quote('Strummer', '
')Those are some pretty frightening numbers, if you ask me, and the complete opposite of the claimed "technological progress" that is supposed to save us.