Oil Production: Will the Peak Hold?

[RGR]

Are you merely criticising the idea that Peak = 50% of URR extracted?

[biffvernon]

The North Sea peaked at least twice....what say you then?

The first peak was before the Piper Alpha disaster shutdown. The second peak was after the goal posts moved - the 'North Sea' got bigger when technology and licencing allowed a move into deeper water.

[clv101]

The North Sea peaked at least twice....what say you then?

The first peak was before the Piper Alpha disaster shutdown. The second peak was after the goal posts moved - the 'North Sea' got bigger when technology and licencing allowed a move into deeper water.

Yeah, it's this sort of comment that makes me think RGR is just being argumentative for the sake of it. Everyone knows this, it's not a criticism of "peak oil". It's similar to the why climate change deniers go on about water vapour.

[SunnyJim]

I suppose you get to feel vindicated if you do elicit personal attacks and vitriol in response to your arguments, and it certainly saves the bother of having to stick around defending a position if a thread goes down in flames.

You obviously aren't familiar with how I work. I defend positions forever, flamewars or not. And being attacked has nothing to do with vindication...it is expected.

You think I don't know what I'm in for when I show up at the average Doomer forum and basically tell everyone that their peak oil beliefs are about as scientific, coherent and consistent as religious beliefs?

Please RGR, don't turn this into a Doomer site. I love the fact that this site has been so open and unconfrontational. All views have been accepted as long as they are only expressed views. No-one has been out to change anyones point of view really on this site. Everyone has been able to express their point of view without worrying about people jumping all over it and being a pain in the arse. If you don't like someone's view fine. You simply accept it as their view and move on. No need to get on the superiority 'everyone must be converted' trip.

[clv101]

You obviously aren't familiar with how I work. I defend positions forever, flamewars or not. And being attacked has nothing to do with vindication...it is expected.

You think I don't know what I'm in for when I show up at the average Doomer forum and basically tell everyone that their peak oil beliefs are about as scientific, coherent and consistent as religious beliefs?

Is this how you discuss things in "real life" or just on anonymous Internet forums? Something to note about PowerSwitch is that most of the top ~50 or so posters actually know each other in real life. This isn't an anonymous forum for many of us and hence the discussions here have more of the niceties of real life than "average Doomer forum".

[EmptyBee]

RGR: thanks for the reply.

Regarding multiple peaks. I'm thinking that you are only really likely to see more-or-less classic Hubbert curve for aggregations of fields provided:

a) no "above ground" constraints upon production, such as oil crashing in price as in the 80s and 90s, and subsequent under-investment, the Piper Alpha disaster and subsequent regulatory tightening.

and

b) the tech applied to the fields being much the same prior to peak as post-peak.

So I accept that the Hubbert Curve is basically an idealised abstraction.

In the global picture today there are arguably significant non-geological constraints upon production in a number of countries. There's a lack of incentive to maximise production in oil producing nations that anticipate no long-term abatement of demand, and consequently no expected significant downside risk to price.

If there was a widespread anticipation of oil retreating to say, $30 a barrel, there would be a substantial incentive to "make hay while the sun shines" and invite in the IOCs to maximise production. However, given that there seems to be a growing consensus that "the era of cheap oil is over" (even if that's seen more in terms of persistent upward demand rather than a decline in supply) there's no real incentive to pump oil like there's no tomorrow, especially if you're a nation that's largely dependent upon oil income for the foreseeable future.

I've not seen any evidence that once you've passed peak technology is generally capable doing more than mitigating decline rates. If you can show me some examples of nations or oil provinces which have significant double-peaks brought about only by the application of technology rather than above ground factors I'd be interested to see them.

Returning to the North Sea: perhaps there's room for a significant "hump" on the current downslope with the application of enhanced oil recovery (CO2 injection etc) or whatever other tricks the oil companies can come up with, but I'd be surprised to hear anyone suggesting that any reversal of production decline was likely to be sustained for very long.

Regarding the USGS estimates:

Regarding the US Hubbert linearisation:

The first thing to notice is the place where the straight line meets the horizontal axis: 228 billion barrels. In one sense it is only a number representing the momentary position of the line. In the Hubbert interpretation, that intercept is the expected amount of oil extracted from the United States when the last well finally runs dry. In contrast, the U.S. Geological Survey in 2000 estimated a U.S. total of 362 billion barrels. Either that straight line is going to make a sudden turn, or the USGS was counting on bringing in Iraq as the fifty-first state.

From p.36, Ch4 "The Hubbert Method"

Regarding the global Hubbert linearisation:

Attributing all the oil in the field to the year of the first successful well in that field produces this striking conclusion: The oilfields already in production contain 94 percent of all the oil we are ever going to find. Instead of an ultimate production of 2 trillion barrels, the best-fitting line on this graph hits the horizontal axis at 2.013 trillion. This is far below the 3.012-trillion-barrel estimate from the U.S. Geological Survey's 2000 World Petroleum Assessment.

From p48, Ch4 "The Hubbert Method".

"To Calculate when the peak of production would be reached, Hubbert needed and estimate of the total amount of oil that would ever be produced. Geologists call this all-important number the ultimate recoverable reserves. Twenty-five years of Hubbert's eminent geological contemporaries had been polled on the issue just a few months before he gave his paper. Their estimates ranged from 145 to 200 billion barrels. Hubbert decided on 200 billion barrels. With this figure he could work out the volume under his curve. If each of his grid squares was, say, 10 billion barrels, his curve could only occupy twenty squares. He could come up with a pretty well-constrained estimate of where the peak was, assuming the estimate of the ultimate recoverable reserves was right. The date he came up with was 1971.

What happened next?

Almost nobody believed Hubbert. Oil production was rising steadily at the time, and the whole thing seemed incredible. Never mind his standing as a world-class geologist based on his other work, many ridiculed the idea of Hubbert's Curve , as it became known. Shell censored the written version of Hubbert's address to the American Petroleum Institute, changing the wording of his conclusion to read that "the culmination should occur within the next few decades". The US Geological Survey, in particular, did everything it could to hike the estimates of ultimately recoverable American oil to a level that would make the problem go away. The US had 590 billion barrels of recoverable oil, the Survey said in 1961, meaning that the industry had thirty years of growth to look forward to."

From p.53-54, Ch3 "The Topping Point."
Citation from "Hubbert's Curve" a paper by Stephen Goodwin in Country Journal 1980.

Leggett's later discussions of the USGS estimates on global URR also cite the 2000 World Petroleum Assessment cited by Deffeyes:

"Undaunted by their track record on US domestic oil reserves in the years of opposition to Hubbert, the USGS conclusion for global ultimately recoverable reserves varied from 2,248 billion barrels to 3,896 billion, with a mean of 3,003 billion. Based on these figures the US Energy Information Administration projects a peak in production as late as 2037, assuming growth in demand of an average of 2 percent per year."

From p.64, Ch3 "The Topping Point."

I believe one of the main criticisms of the USGS's data is the probabilistic method of presenting the size of the resource: 95% probable, 50% probable and 5% probable. The trouble starts when the mean value of these estimates (as I believe is used by the EIA to justify their forecasts) incorporates the rather meaningless 5% figure resulting in rather fantastical figures.

[RGR]

[RGR]

[RGR]

So I accept that the Hubbert Curve is basically an idealised abstraction.

[clv101]

The first peak was before the Piper Alpha disaster shutdown. The second peak was after the goal posts moved - the 'North Sea' got bigger when technology and licencing allowed a move into deeper water.

Yeah, it's this sort of comment that makes me think RGR is just being argumentative for the sake of it. Everyone knows this, it's not a criticism of "peak oil".

Oh but it is. You know why the North Sea peaked twice....so do I. The point being, it wasn't geologic. Go look at Venezuela....I know exactly why it has two beautiful peaks....that reason isn't geologic either.

You see, a key component of Peakerdom is the claimed geologic link between a specific profile ( bell shaped curve ) and said geology. It isn't true. And if it isn't true, then the entire concept of using the profile goes right out the window.

My point is that your position seems to be focused against some people - the crazy doomers, the people who don't understand why the UK has two peaks etc... Just because there are some foolish people associated with "peak oil" is not a criticism of peak oil at all. A physical phenomena can't choose its believers.

If a load of crazy people had some mixed up views on earthquakes, would that have any influence on our understanding of earthquakes? Of course not. Similarly you shouldn't let your view of peak oil be influenced by some people.

[SunnyJim]

The first peak was before the Piper Alpha disaster shutdown. The second peak was after the goal posts moved - the 'North Sea' got bigger when technology and licencing allowed a move into deeper water.

Yeah, it's this sort of comment that makes me think RGR is just being argumentative for the sake of it. Everyone knows this, it's not a criticism of "peak oil".

Oh but it is. You know why the North Sea peaked twice....so do I. The point being, it wasn't geologic. Go look at Venezuela....I know exactly why it has two beautiful peaks....that reason isn't geologic either.

You see, a key component of Peakerdom is the claimed geologic link between a specific profile ( bell shaped curve ) and said geology. It isn't true. And if it isn't true, then the entire concept of using the profile goes right out the window.

That argument doesn't hold at all! The hubbert bell shaped curve shows the limits of production. The outer limits, the posibilities of the curve. The dips and double peaks we see, that as you say are often caused by above ground factors) only tend to make the well last longer, but they also make the peak output of that curve lower. Two peaks don't reach as high as one peak! - This means that above ground factors when applied to the peak oil argument only serve to restrict the total production figures that can be reached, and serve to create a plateau of the peak. This does mean the rate of oil production is restricted which hopefully would mean decline rates would be less steep giving us more chance to adapt. This is what gives me hope and why there is no real need for talk of sudden collapse of civilisation. However, we still need to design a financial system that doesn't rely on continued economic growth as we will not see that on the down slope of 'energy converted to useful work in the economy'.

[RogerCO]

I have always instinctively felt very uncomfortable with the idealised (bell-shaped) Hubert curve - not so much on the up side where it is at least supported by some evidence (though even that is rarely a close fit to the ideal profile), but especially on the down-curve.

It seems obvious that (ignoring abiotic effects) there is a fixed (in human timescale) amount of oil like substances in any given reservoir. This would be the maximum area under the production curve.

Also at any given moment in time there is a maximum amount that could be recovered with the currently available technology - this will be less than the total and will be the current effective maximum area under the curve.

I simply can't see any reason why the production curve needs to be symmetrical. In fact it seems far more likely to me that it will be affected by both 'above ground' factors and the available technologies over the lifetime of a particular reservoir.

There is no way to confidently predict either the above ground geopolitical factors in the future, or the future development of extraction technology - the shape and slope of the down curve must be unknown.

There are, however, limits to the possible shapes set by the total area that can be enclosed by the curve.

One limit is a vertical cut-off, with either a flat production level or even a continuing growth in production up to the cut-off point.

The other limit is a steady decline from where-ever you are now to enclose the maximum available area. How far in the future the tail can extend will depend what proportion of the total you have used so far.

In between these limits are any number of S-shaped or jagged lines - predicting the actual shape is a job for witch doctors, although some informed guesswork can be brought to bear.

For me the important point about peak oil is not the actual peak, but the realisation that the total area is a finite fixed value; the available area can be extended up towards the total by application of technology (at an increasingly significant cost), and the shape of the decline and thus its social consequences, could be subject to a degree of human control.

We could decide to moderate our supply rates (leave it in the ground) rather than simply be driven by responding to the demand side.

This is the only real choice we (humanity in the mass through its governments) has. Managed descent or chaotic descent.

[SunnyJim]

Well said Roger (no pun intended).

I simply can't see any reason why the production curve needs to be symmetrical. In fact it seems far more likely to me that it will be affected by both 'above ground' factors and the available technologies over the lifetime of a particular reservoir.

Remember that Hubbert was basing his theory on emperical data from observations made in the field. It unfortunately also follows that as you sum lots of little fields up with their individual un-symetrical bell curves, the total curve tends to look more symetrical as the inconsistencies in lots of individual fields interfact. However, the fact still remains the the idealized hubbert curve relies on emperical observation.

However, there are other ways of determining when peak oil will occur, based on analysis of individual fields rather than taking the total oil reserve and drawing a bell curve. But as you say, it doesn't really matter does it? What is important is an understanding of the finiteness of oil and our ability to manipulate the curve. Pushing for more production now will hurt us later, causing steeper declines. I hope we never manage to increase production from current levels for this reason. Everything we do now to increase production will have to be paid for in the future by steeper declines.

[RGR]

My point is that your position seems to be focused against some people - the crazy doomers, the people who don't understand why the UK has two peaks etc...

[RGR]