Plateau Oil vs. Peak Oil with Steve Crower

10 Comments on "Plateau Oil vs. Peak Oil with Steve Crower"

rockman on Sat, 17th Sep 2016 4:10 pm 



“The Plateau Oil…new technologies that increase the existing oil fields…and new technologies that bring shale oil to the market. The effect will be a plateau-ing of oil production.”

Not unreasonable… Just a little late. Of course (subject to a plateau existing only in the eyes of the beholder) global oil production has been plateaued for 44 years since 1972:

https://commons.m.wikimedia.org/wiki/File:World_Oil_Production.png#mw-jump-to-license

Over the 4 decades before 1972 it increased rapidly by 1,100%. In the 4 decades since it has only increased 70%. But to another’s eyes for 11 years (2005 – 2016) it increased only about 30%. Actually if one were to cut the time periods shorter more “steps” become visible.

So two views: global oil production has not plateaued yet or it has gone through a number of upward stair-stepping plateaus over the last 4 decades.

But to the premise that plateaus develop in response to tech developments: perhaps proven to some degree by the stair-stepping. Prior to 1972 there were some tech improvements but nothing very radical. The rapid (and far from plateaued) increase since the 30’s was due to applying the existing tech to areas previously undrilled.

But then a plateau developed as those areas become rather mature. And then the stair-stepping began. And very major new tech began being applied first in the US and then globally: offshore drilling. And it has had smaller step-ups over the 5 decades that allowed drilling to progress from water depths of a few hundred feet to 10,000’+. And again smaller steps as this capability was extended to various new areas around the globe. This expansion was only made possible by tremendous increases in seismic tech. Offshore drilling was and continues to be completely dependent on seismic acquisition.

And then in the 90’s horizontal drilling tech was developed. As a result once prices increased sufficiently known hydrocarbon trends, such as US fractured shale formations, could be exploited.

So whether one perceives the long term or various short term plateaus: what’s next? First, all the existing proven tech can be applied in under drilled areas such as the conventional reservoirs in the Arctic and in other unconventional reservoirs around the world. But global shale development will be challenging given the tech infrastructure is very concentrated in the US. And how much, and more important, how quickly will Arctic reserves be developed?

And this leads to pure speculation: between the known hydrocarbon bearing basins and proven tech what, if any, are the future step-ups? Or have we reached that point in history where, though still on the plateau starting in 1972, that future down steps will be the rule instead of the up steps over the last 40+ years. IOW are we in the transion between an increasing plateau to a decreasing plateau? IOW no “cliff” ahead of us. Just the slow and continuous depletion of existing fields with increasingly fewer new fields developed to replace all that production.

Creedon on Sat, 17th Sep 2016 8:25 pm 



I love to read your stuff rockman. I don’t know, though that your analysis includes the level of debt involved in keeping the remaining oil on line. To my way of thinking, maintaining the plateau will involve phenomenal levels of debt over the next ten years.

joe on Sat, 17th Sep 2016 9:43 pm 



Plateau, Peak, whatever, they are the same thing. Easier, cheaper stuff goes first, then the harder stuff more expensive. It becomes economically costlier until theres no point getting it as its utility diminishes to the point of uselessness.
Coal is an example of what will happen to oil. Theres still lots of coal, but its economic cost is too high versus gas, and gas is looking at renewables in its wing mirrors. We dont use oil to keep the lights on any more. We use oil to make gasoline, its other products are fed into industry. My fear is what happens to those products when the use of gasoline drops. We could talk about cause-effect chain theories all day. Time will show the truth of it, and the real truth is, none of us really knows.

sparky on Sun, 18th Sep 2016 2:43 am 



.
vewing curves on a graph is only getting the big picture long term , over decades
that’s an eagle view into the misty future

the demand/supply equation is sensitive to technology , fields characteristics
economics ,politics and whatever else .
seen from the ground it will always look much more chaotic

certainly the upper part of the curve could last a couple of decade of sqiggles

the grand sweep of peak oil is the thing of course
but weekly numbers are simply not worth much attention
The data has too much noise to make small intervals significant

dave thompson on Sun, 18th Sep 2016 2:59 am 



I listened to about half of the above pod cast. These two clowns proved they do not know any more then me. Or anyone else for that mater. Truth to power,, we are still fucked because of overpopulation, resourse depletion, pollution and stupidity.

rockman on Sun, 18th Sep 2016 11:11 am 



Creedon – “…maintaining the plateau will involve phenomenal levels of debt over the next ten years.” Which is exactly what we’ve seen the last 10 years. And not just maintenance but a nice up-step…at least in the US. But at some point no matter what tech develops or how much capex is borrowed if there’s insufficient new opportunities then the inevitable down-steps will dominate the plateau. A fact that has countless millions blinded by the recent shale, oil sands and Deep Water up steps.

The very old joke: falling off a 20 story building is fun…soaring like a bird. It’s that eventual abrupt stop that’s a big problem. LOL.

rockman on Sun, 18th Sep 2016 11:19 am 



sparky – “The data has too much noise to make small intervals significant”. Well put. And if looking at the long term picture a lot of yearly and even decadal “white noise”. And back to our really big problem: the MSM and most politicians (and thus most of the public) exist for the most part in the very short time frame “universe”.

Geogeezer on Sun, 18th Sep 2016 1:18 pm 



sparky – well said. Too many “experts” look all the way back to the 90s to draw their conclusions. The oil business has been cyclic from the 1859 discoveries in a water well (60 feet) on the Piedras Pintas salt dome in Duval County Texas, and by Col. Drake in a well drilled near oil seeps (69.5 feet) on Oil Creek in Pennsylvania.

Recent ups and downs have been spectacular, but not unprecedented. The late 1980s bust was a humdinger caused by the Saudis ramping up production – similar to what has happened recently.

In the late 1950s US majors largely abandoned the continental US for the easy pickings of the Mid-East. Ironically some of them closed offices in Midland and began unwinding their Permian Basin holdings.

Discovery of the East Texas field in 1930 led to a drop in price making a barrel of oil worth about as much as a cup of coffee.

Oil always has – and probably always will be – a volatile commodity. Get yourself a long-term perspective or be ready for a surprise.

rockman on Sun, 18th Sep 2016 9:28 pm 



Also well put, geezer. Being an old fart doesn’t automatically mean one is smarter. But if you have much of a brain you learn from your mistakes. And if one has been making mistakes for 4 decades like the Rockman it means you’ve learned a lot. LOL.

makati1 on Sun, 18th Sep 2016 9:37 pm 



rockman, my 72 years have taught me a lot also. Some lessons were more painful than others, but those were the ones that stuck.

Without a college degree, I have been a lab tech, a mason’s helper, carpenter, cabinet maker, self-employed maintenance man, architect, estimator, project manager, secretary to five bishops in the Mormon Church, married and father of two, amateur biologist, and finally, retired and living half way around the world for new experiences and a more secure future.

True, a long life does not guarantee wisdom, but it sure makes it easier to see behind the curtain.