The future of oil supply

[RenewableCandy]

Hey I'm going to draw a pretty graph of the types and amounts of money I could find behind the sofa if only I were to look hard enough...

[SleeperService]

Hey I'm going to draw a pretty graph of the types and amounts of money I could find behind the sofa if only I were to look hard enough...

Don't forget 'the money behind the sofas yet to be found' If your graph contains purple it will be authentic!! Note the use of pastel shades in Ralph's graph, bit of GCSE psychology there....

EDIT TO ADD: Just in case you have any question about what I think of TPTB look here I'm not sure about PIE being Far Left but could be interesting....

[biffvernon]

Fatih Birol, of the IEA, was someone who has acknowledged the proximity to and dangers of peak oil for a long time. He may not have shouted it from the rooftops but he's managed to keep his job. Surprisingly.

[PS_RalphW]

That diagram of reserves against economic development price is laughable. Oil has been over 100 for three years and yet shell has just abandoned gas to liquids as uneconomic. There are no plans for new coal liquids plants anywhere and those shale reserve numbers look dodgy. A recent estimate for current shale break even is 90. If oil fell to 60 drilling would be abandoned overnight. The ultimate technical reserve of us shale is probably about twenty billion barrels. I doubt that the rest of the world together has more than that. That diagram shows about a trillion barrels.

[Ralph]

The IEA is run by politicians on the usual gravy train rotation. I wouldn't trust them or their 'research' any further than I can throw them. The graph suggests that there are 8 times the amount of oil available that has already been extracted and used. I find that laughable. Even with increasing demand the suggestion is that the reserves will last for 300 years+.

I recommend you look at the graph again. Until the amateurs who focus on only their favorite subset of oil, onshore, light-sweet, political stable countries with reasonable tax structures, these guys have a better idea, they are focused on what these types of exclusionists miss….gasoline and diesel are manufactured products, and can be manufactured from all the items listed above. Which is why a cost supply curve of those items is far more important than whether or not gasoline and diesel can continue to be made in the same quantities from ONLY someones favorite thing, like crude oil.

A key distinction, and while you might not be happy with the IEA for all sorts of reasons, they have this one figured out far better than those who don't understand the power of chemical engineering.

No, the IEA is another Government/Industry mouthpiece acting in Industry's interests. Educated the men and women maybe but I think that is not the same about being honest. It's a fact of life that people in power lie to those they feel superior to, doesn't mean we have to like it.

So when Fatih was proclaiming peak oil, he was doing it as the mouthpiece to the Indsutry's interests? How very interesting…so why do you think the industry wants the IEA to declare peak oil?

Final question Ralph. If there are so many reserves why are the oil companies exploiting tar sands now?

Now. In the past. And tomorrow. WHY is this happening? Easy. $$$$$

According to your graph there is another 2,000 billion barrels to go at before the conventional oil is exhausted and about twice that before the minimum cost of oil shale production is reached.

Not mine. The IEA's. Figure 9.10, page 218 I believe. The 2008 WEO report.

I may be saying 'the sun rises in the east' many ways, but it does.

Of course it does. But saying it over and over again does not substantiate a bad and unrelated conclusion from such facts.

It is like saying the sun rises in the east! the sun rises in the east! the sun rises in the east! therefore peak oil happened last year!

Just doesn't work. I'm sure there is a word for this type of logical fallacy, but others probably are more familiar with it then I.

You're suggesting we're all excited about something that isn't going to happen for a very long time.

Are you? This website exists because people weren't excited about powerswitching and peak oil and whatnot?

Why, if this is so, do you spend so much effort here?

What "so much" effort? I post a time or two and then wander off for a few days.

We don't believe you, you source nothing that isn't in the open and most of that is there for a reason. Misinformation, something I used to know a great deal about.

Fatih Birol was proclaiming peak oil in 2006, you consider this misinformation? What, you figure oil production can just keeping increasing forever?

[kenneal - lagger]

Must be an economist around somewhere who can explain how this is,

There probably is! After all economists can explain how you can get continuous economic growth in a finite environment. If you can do that you can do anything.

Economics trumps science so it would seem.

[Ralph]

That diagram of reserves against economic development price is laughable.

They are generally referred to as cost/supply curves. Economists use them as the fundamental inputs to models for just about everything. They are easy enough to refute, just go get one from your world class university and we can compare them.

Certainly you haven't claimed that you know much about the cost of developing resource, beyond being a really smart fella, so where do you get your basis for contradicting their expertise (some of whom undoubtedly went to really good schools as well, plus have expertise on point)?

Oil has been over 100 for three years and yet shell has just abandoned gas to liquids as uneconomic.

Obviously, you aren't about to talk about the plants already up and running that are? Or the folks rounding up the financing to do it right now in the US?

Was speaking with the CEO on the phone a few weeks back, and he was mentioning that these types of modular plants are quite capable of being constructed in places like North Dakota where this type of construction is scalable and modular enough to keep those folks from doing all that flaring.

http://pintogtl.com/pinto-energy-announ ... ids-plant/

A recent estimate for current shale break even is 90. If oil fell to 60 drilling would be abandoned overnight.

And if it went to $150 Russia would turn on the Bazhenov turn on another million or two barrels a day. You aren't seriously suggesting that oil production follows the rules of economics are you? Heresy! Next you'll be saying that substitution and conservation can affect price as well, and we can cure out oil woes by simply using less, or buying cars not requiring liquid fuels!

The ultimate technical reserve of us shale is probably about twenty billion barrels. I doubt that the rest of the world together has more than that. That diagram shows about a trillion barrels.

I recommend reading this summers EIA reports on the topic. 300+ is the number from Table 1. I wonder about the correlation in that report coming out, and the editors of TOD seeing it, what it did to the US, and then matching those ideas up and realizing that they were about to go from a little egg on their faces to outright derision, and made their decision to flee the debate shortly thereafter.

ASPO-USA as well, they seemed to tank right about the same time. Things that make you go…hhmmmmmmm

http://www.eia.gov/analysis/studies/worldshalegas/

[Ralph]

Must be an economist around somewhere who can explain how this is,

There probably is! After all economists can explain how you can get continuous economic growth in a finite environment.

Of course economists don't talk about continuous economic growth, they are the folks who carry around definitions for NOT growth. Who ever taught you this about economists? They talk about NOT growth all the time?

"In economics, a recession is a business cycle contraction"

http://en.wikipedia.org/wiki/Recession

Contraction sure isn't continuous growth. Not that you can trust wiki all the time, but it does reinforce my point that we certainly need one around to keep everyone straight so they don't make the kind of mistake you just did!

If you can do that you can do anything.

Good thing they don't do that then. I was worried there for a minute that they had done something really dumb!

Economics trumps science so it would seem.

Nah…economists just know what they are doing better than you know what they are doing.

[RenewableCandy]

Must be an economist around somewhere who can explain how this is,

There probably is! After all economists can explain how you can get continuous economic growth in a finite environment.

Of course economists don't talk about continuous economic growth, they are the folks who carry around definitions for NOT growth. Who ever taught you this about economists? They talk about NOT growth all the time?

Well I've read some b***ocks in my time, but that's the star turd. Or are you (given that this is a UK site) trying to demonstrate that Usonians can do irony?

(with apols to VTsnowedin, who's actually quite good at it...)

[emordnilap]

Well I've read some b***ocks in my time, but that's the star turd.

RC, what on earth can you mean? Don't you think it's time you stopped mincing your words?

[SleeperService]

+1 RC

@Ralph
PO will happen, you and the IEA seem to think 300 years, I think we're on the plateau at the top right now. When will production start to decline? I'd suggest any date from today to about 15 years from now. Assuming the IEA reserve figures are close. Less if they're not. As it's in business interest to keep BAU going as long as possible then they'll stretch the plateau as far as possible at the expense of a steeper drop off and more rapid price increase.

Fatih Birol my have been right about 2006, as I said, and you agreed, we won't know when it happens until after the event. As biff has stated the main issue at the moment is being at or close to the Peak, this is when plans need to be made and things start to happen, once the drop-off happens that option will have gone. For ever.

[Ralph]

@Ralph
PO will happen, you and the IEA seem to think 300 years, I think we're on the plateau at the top right now.

Of COURSE peak oil will happen, according to Ruppert, Savinar, Fatih and TOD it HAS ALREADY HAPPENED. Turned out…they were wrong. Not a surprise, but certainly no one gets to run around at this point pretending that standard peaker prognostications will ever figure out when except by random chance.

And plateaus aren't the increases we've had again as of late, and nobody thinks peak oil is in 300 years. While I appreciate the effort you are going to in order to assemble an appropriate straw man, stop wasting your time.

When will production start to decline?

Production is ALWAYS declining, which is the entire point behind some past exercises of calculating field declines and whatnot. Amazing, there are these crazy folks in industry who keep finding, and producing, MORE! And they do it so well, the aggregate answer then goes up!

I hope industry pays those boys well, because they deserve it, to so easily discredit the likes of ASPO and Colin Campbell.

I'd suggest any date from today to about 15 years from now.

That is the time frame Colin was guessing into as well…except he started doing it 24 years ago. There is a Harvard trained geologist at Colorado School of Mines, undoubtedly everyone you know bumps into this guy and has gotten his speech on no matter how we arranges information, every time he applies Hubbert's method to something, it says the peak is 10-15 years off. Imagine that. But what would harvard trained geologists be worth anyway.

You wouldn't happen to be have noticed the same effect he did, and are just toying with me now are you? You wild and crazy guy!

How about we find a different way of answering this question, one that hasn't been so thoroughly discredited at this point?

Fatih Birol my have been right about 2006, as I said, and you agreed, we won't know when it happens until after the event.

7 years after the event. We know. He was wrong. But then, an economist has about as much chance of getting this right as website "experts", geologists with no experience with engineering, insurance actuaries with no experience in industry, amateur violin players, European academics who can't even be counted on to do appropriate research on the topic, or bunches of other folks just in it because they need something cool to rationalize collecting the guns, ammo, or solar panels on the roof. "Prepping" needs a rationalization, no different than academics looking to make a name for themselves while reaching for tenure.

As biff has stated the main issue at the moment is being at or close to the Peak, this is when plans need to be made and things start to happen, once the drop-off happens that option will have gone. For ever.

Yes, so when the world peaked in 1979 we dropped off forever. Oops. And when the US did it in 1970 or so it dropped off forever…until it didn't. And when the CIA was calling the Soviet peak back in 80's, they got it just as wrong as Colin did in 1989…you would think these folks would LEARN at some point, right?

Or maybe they are the folks who then fired up all the peak oil websites in their later years to keep the idea alive, that some might forget about how badly they screwed the pooch.

[RenewableCandy]

7 years after the event. We know. He was wrong.

Hairy objects of a spherical nature. 7 years after the event, we're still on the platueau. They're scraping up tarry cr@p and referring to it as "oil" and adding it to the totals to reassure people. They also happen, on the one side of The Pond, to have spotted a bit of extra gas. Big deal. It won't last.

[Ralph]

7 years after the event. We know. He was wrong.

Hairy objects of a spherical nature. 7 years after the event, we're still on the plateau.

No, we aren't.The old plateau was the one TOD discredited themselves on, and Hirsch got his panties in a wad over, and then of course we got ANOTHER plateau, higher than that one, I mean really, so now folks are going to claim that because higher plateaus are still plateaus, the increase along the way doesn't count?

[SleeperService]

If that graph was scaled from zero on the vertical it would look a lot flatter than it does. This chopping always accentuates vertical movements, the result is rather misleading visually.

From the last quarter of 2004 there has been an increase from ~84 million barrels a day to ~90 at the start of 2012. A modest increase compared to the growth in demand