Hi Burgy,
You wrote:
>-----Original Message-----
>From: asa-owner@lists.calvin.edu [mailto:asa-owner@lists.calvin.edu]On
>Behalf Of J Burgeson
>Sent: Thursday, June 13, 2002 7:50 AM
>To Glenn on the energy problems:
>
>I was in the Denver Museum of Science yesterday -- saw a brief TV
>interview
>of a geologist, Tom Ahlbrandt, who was part of a US government project to
>measure energy resources recently (maybe in 2000 although this was not
>clear). The interview itself was recent.
>
>Tom agreed that the US supplies were inadaquate, but he insisted that the
>"crunch" when we might see energy supplies really begin to run short of
>demand was most probably in the year 2050. Even the worst case he could
>envision was 2020.
>
>The net of the display to the casual museum visitor was "don't worry, be
>happy, buy another SUV."
>
>Two numbers he mentioned were 6.5 Trillion in reserves and 0.28
>Trillion per
>year in current usage. I watched the interview (3 minutes) several
>times --
>those numbers give a 232 year supply at current rates. It was frustrating
>because it was clearly cut from a longer one with better detail.
First, there is what I belive to be an obvious mistatement of numbers
(whether you mis-heard or he goofed up is not clear). Current usage of oil
is .028 trillion NOT .28 trillion. .28 trillion is 280 billion and we use
77 million per day (approximately) multiply that by 365 and you will see the
error.
Secondly, I know of no one (other than this guy) who believes that there
are 6.5 trillion barrels of reserves on earth unless one is counting
dispersed oil (which is a wee bit of contamination in all soils and rocks
and occurs naturally). But that isn't RECOVERABLE oil. We will never get
that out of the ground.
Now as to his claim that we shouldn't have a problem, I would like to know
where the oil is coming from. The Gulf of Mexico, which is one of the
largest producting areas on earth today has the following history since
1980. Numbers are billions of barrels (approx. 4-5 billion produced per
year).
production Reserve adds Net (reserves-prod) MM bbls
1980-1984 20,500 29,000 +8,500
1985-1989 20,000 18,000 -2,000
1990-1994 21,000 12,000 -9,000
1995-1999 23,000 19,000 -4,000
Michael L. Godec, Vello A. Kuuskraa and Brian T. Kuck, “How US Gulf of
Mexico Development, Finding, Cost trends have Evolved,” Oil and Gas Journal
May 6, 2002, p. 54
One can't withdraw from the bank forever without emptying the bank account.
Platform installation is evidence of whether more fields are being put on
line or lost.
"The number of platforms being decommissioned in the Gulf of Mexico (GoM) is
exceeding the number of new platforms being installed for the first time in
something like 50 years." Anonymous, "Circle making Inroads in Gulf Platform
Decommissioning," Press & Journal (Aberdeen), May 7,2002, p. 18
Iran, a major producer has this written about it:
This year Iran is set to reach a rare moment in its modern history, as
domestic oil consumption overtakes exports.
"London-based analysts think it is only by breaking its Organisation of
Petroleum Exporting Countries production quota of 3.19 m barrels a day that
Iran is preventing exports falling below estimated internal consumption of
1.6 m bpd." Guy Dinmore, "Iran's Oil Crisis Threatens to Drain Country's
Lifeline," Financial Times, May 7, 2002, p. 14
Here are the estimated peak production years for various regions of the
world.
Peak yr Peak 1996 2040
Yr Gb/yr Gb/yr Gb/yr
North America 1984 5.6 5.2 .9
South Cen. America 2005 2.6 2.2 1.1
Europe 2001 2.7 2.5 .05
FSU 1987 4.6 2.6 1.7
Middle East 2010 12.0 7.5 5.4
Africa 2001 3.1 2.7 .09
Asia Pacific 2003 3.0 2.7 .09
Total 2007 30.0 25.4 11.3
Richard C. Duncan and Walter Youngquist, “Encircling the Peak of World Oil
Production,” Natural Resources Research, 8(1999):3:219-232, p. 228
**
Last year World Oil had an article on future demand. Here is what the
author said:
"Either EIA &IEA projections are wrong, or a crisis appears to be imminent.
The World Energy Outlook 2000, compiled by the U.S. Energy Information
Administration (EIA), and the International Energy Outlook 2001, authored by
the International Energy Agence (IEA), indicate that oil production in the
Arabian Gulf States must almost double by year 2020 to meet rising world
demand.
"The EIA outlooks states, 'The reference case projection implies aggressive
efforts by investment capital, to implement a wide range of production
capacity expansion. However, the combination of potential profitability and
the threat of competition from non-OPEC supplies argues for the pursuit of
an aggressive expansion strategy.'
"The reference case requires Gulf states to increase their oil production
80% by 2020. This means adding about 13 million bopd by 2020--with Saudi
Arabia increasing its capacity by more than 7 million bopd, to about 17
million bopd. This seems highly unrealistic. So, either EIA & IEA [is
correct]or a supply crisis is coming, because Saudi Arabia and its neighbors
cannot increase production by 80% for many technical, financial and
political reasons."
Mistaken projections. Two recent studies by prominent oil market experts
Guy Caruso (Center for Strategic and International Studies, Washington) and
Prof. Deromt Gately (New York University) show that such EIA and IEA
projections are wrong. In his study, 'How likely is the consensus projection
of oil production doubling in the Persian Gulf?', Gately states, 'Such
projections are not based on behavioral analysis of Gulf countries'
decisions. They are merely the calculated residual demand for OPEC oil, the
difference between projected world oil demand and non-OPEC oil supply.' A.
F. Alhajji, "Will Gulf States Live Up to EIA and IEA Projections?"" World
Oil, June 2001, p. 33
Bakhtiari in the Oil and Gas Journal agrees:
"Of the 11 OPEC members, the five smaller producers-namely Algeria,
Indonesia, Nigeria, Libya, and Qatar-don't stand much hope for future
capacity expansion, as they are already struggling to keep on par. All five
have already produced at least half of their ultimate reserves (Fig. 4).
Record-holder Indonesia has even produced over three fourths of its
estimated oil resources. " AM Samsam Bakhtiari OPEC'S EVOLVING ROLE: OPEC
capacity potential needed to meet projected demand not likely to
materialize, Oil and Gas Journal, July 9, 2001.
I would also point you to:
A.M. Samsam and F. Shahbudaghlou, "IEA, OPEC oil forecasts challenged," OGJ,
Apr. 30, 2001.
The North Sea is producing 25% of what it did merely 2 years ago. Australia
has problems also:
“Current reserves, however, are insufficient to sustain present levels of
production in the medium term. Estimates of future production of oil and
condensate suggest that at the mean expectation, production rates will drop
by around 33% by 2005 and 50% by 2010, largely as a result of a decline in
oil production. This forecast includes production from fields that have not
yet been discovered. Condensate production will continue to grow, but rate
of growth is constrained by gas production rates and overall by the
development timetable for the major gas fields.”
“The rate of discovery of new oil fields is insufficient to replace the
reserves that are being produced. If Australia is to maximize the
opportunity to maintain production at similar levels to the recent past, it
is probable that exploration effort will have to diversify to the frontier
basins to locate a new oil province whilst continuing to explore the full
potential of the known hydrocarbon-bearing basins. Australia still has a
remarkable number of basins that have received little or no exploration.” T.
G. Powell, “Understanding Australia’s Petroleum Resources, Future Production
Trends and The role of the Frontiers,” First Break, 19(2001):7;397-409, p.
397
Indonesia has produced about 77% of its reserves. Iraq and Mexico still have
lots of potential but won't live up to it for various reasons. Venezuela,
another OPEC country has problems:
"The reason for the shrinking capacity: a paucity of investment needed to
offset the sharp depletion rates in the couthtry's oil fields, particualrly
the well-exploited fields in the country's west. Some of PDVSA's wells have
been working since the first gusher came in near Lake Maracibo in 1914.
Alirio Parra, a former Venezuelan oil minister, says the country's output
capacity--assuming no further investment--is declining by as much as 25%
annually, compared with around 5% for the big fields in the Middle East. To
maintain Venezuela's current output capacity, PDVSA must find 750,000
barrels a day of production every year." Bhushan Rahree and Marc Lifsher,
"The Other Crisis Facing Venezuela," Wall Street Journal, April 18, 2002, p.
A9
As a general rule, the reserves are about 1000 times the daily production
rate. To maintain production Venezuela must find 750 million barrels of
reserves. That is a huge number in a country who started producing oil in
1914!
To finish, with a comment from Conoco's chairman:
"Unless the world would be ready for an extraordinary effort as, for
example, addressing itself to the "$1 trillion structural underinvestment in
the energy industry" noted by Archie Dunham, the Conoco Inc. chairman and
CEO, at the March 2001 Middle East Petroleum and Gas Conference at Dubai,10
there doesn't seems to be much hope to attain the capacities presently being
predicted. " AM Samsam Bakhtiari OPEC'S EVOLVING ROLE: OPEC capacity
potential needed to meet projected demand not likely to materialize, Oil and
Gas Journal, July 9, 2001.
These happy hop-alongs of energetic bliss are very unlikely to be correct.
Notice the variety of sources I pulled for this note. My view is not an
aberant one. While I am not immune to error either, I have worked in the oil
business in 10 different basins on 4 different continents during my life and
what I see doesn't give me a warm fuzzy feeling. The world is about to run
out of oil. I will stand on that until one of these happy hop-alongs says
something concrete, sensible, AND SOMETHING THAT MAKES ECONOMIC SENSE about
where this elusive energy is. And if they know, why on earth aren't they
putting their money where their mouth's are?
glenn
see http://www.glenn.morton.btinternet.co.uk/dmd.htm
for lots of creation/evolution information
anthropology/geology/paleontology/theology\
personal stories of struggle
>
This archive was generated by hypermail 2b29 : Thu Jun 13 2002 - 16:52:20 EDT