The World Has Plenty of Oil By NANSEN G. SALERI March 4, 2008; Many energy analysts view the ongoing waltz of crude prices with the mystical $100 mark -- notwithstanding the dollar's anemia -- as another sign of the beginning of the end for the oil era. "[A]t the furthest out, it will be a crisis in 2008 to 2012," declares Matthew Simmons, the most vocal voice among the "neo-peak-oil" club. Tempering this pessimism only slightly is the viewpoint gaining ground among many industry leaders, who argue that daily production by 2030 of 100 million barrels will be difficult. In fact, we are nowhere close to reaching a peak in global oil supplies. [The World Has Plenty of Oil] Chad Crowe Given a set of assumptions, forecasting the peak-oil-point -- defined as the onset of global production decline -- is a relatively trivial problem. Four primary factors will pinpoint its exact timing. The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain. - What are the global resources in place? Estimates vary. But approximately six to eight trillion barrels each for conventional and unconventional oil resources (shale oil, tar sands, extra heavy oil) represent probable figures -- inclusive of future discoveries. As a matter of context, the globe has consumed only one out of a grand total of 12 to 16 trillion barrels underground. - What percentage of global resources is ultimately recoverable? The industry recovers an average of only one out of three barrels of conventional resources underground and considerably less for the unconventional. This benchmark, established over the past century, is poised to change upward. Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies. Even a 10% gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional 50-year supply at current consumption rates. The impact of modern oil extraction techniques is already evident across the globe. Abqaiq and Ghawar, two of the flagship oil fields of Saudi Arabia, are well on their way to recover at least two out of three barrels underground -- in the process raising recovery expectations for the remainder of the Kingdom's oil assets, which account for one quarter of world reserves. Are the lessons and successes of Ghawar transferable to the countless struggling fields around the world -- most conspicuously in Venezuela, Mexico, Iran or the former Soviet Union -- where irreversible declines in production are mistakenly accepted as the norm and in fact fuel the "neo-peak-oil" alarmism? The answer is a definitive yes. Hundred-dollar oil will provide a clear incentive for reinvigorating fields and unlocking extra barrels through the use of new technologies. The consequences for emerging oil-rich regions such as Iraq can be far more rewarding. By 2040 the country's production and reserves might potentially rival those of Saudi Arabia. Paradoxically, high crude prices may temporarily mask the inefficiencies of others, which may still remain profitable despite continuing to use 1960-vintage production methods. But modernism will inevitably prevail: The national oil companies that hold over 90% of the earth's conventional oil endowment will be pressed to adopt new and better technologies. - What will be the average rate of crude consumption between now and peak oil? Current daily global consumption stands around 86 million barrels, with projected annual increases ranging from 0% to 2% depending on various economic outlooks. Thus average consumption levels ranging from 90 to 110 million barrels represent a reasonable bracket. Any economic slowdown -- as intimated by the recent tremors in the global equity markets -- will favor the lower end of this spectrum. This is not to suggest that global supply capacity will grow steadily unimpeded by bottlenecks -- manpower, access, resource nationalism, legacy issues, logistical constraints, etc. -- within the energy equation. However, near-term obstacles do not determine the global supply ceiling at 2030 or 2050. Market forces, given the benefit of time and the burgeoning mobility of technology and innovation across borders, will tame transitional obstacles. - When will peak oil arrive? This widely accepted tipping point -- 50% of ultimately recoverable resources consumed -- is largely a tribute to King Hubbert, a distinguished Shell geologist who predicted the peak oil point for the U.S. lower 48 states. While his timing was very good (he forecast 1968 versus 1970 in fact), he underestimated peak daily production (9.5 million barrels actual versus eight million estimated). But modern extraction methods will undoubtedly stretch Hubbert's "50% assumption," which was based on Sputnik-era technologies. Even a modest shift -- to 55% of recoverable resources consumed -- will delay the onset by 20-25 years. Where do reasonable assumptions surrounding peak oil lead us? My view, subjective and imprecise, points to a period between 2045 and 2067 as the most likely outcome. Cambridge Energy Associates forecasts the global daily liquids production to rise to 115 million barrels by 2017 versus 86 million at present. Instead of a sharp peak per Hubbert's model, an undulating, multi-decade long plateau production era sets in -- i.e., no sudden-death ending. The world is not running out of oil anytime soon. A gradual transitioning on the global scale away from a fossil-based energy system may in fact happen during the 21st century. The root causes, however, will most likely have less to do with lack of supplies and far more with superior alternatives. The overused observation that "the Stone Age did not end due to a lack of stones" may in fact find its match. The solutions to global energy needs require an intelligent integration of environmental, geopolitical and technical perspectives each with its own subsets of complexity. On one of these -- the oil supply component -- the news is positive. Sufficient liquid crude supplies do exist to sustain production rates at or near 100 million barrels per day almost to the end of this century. Technology matters. The benefits of scientific advancement observable in the production of better mobile phones, TVs and life-extending pharmaceuticals will not, somehow, bypass the extraction of usable oil resources. To argue otherwise distracts from a focused debate on what the correct energy-policy priorities should be, both for the United States and the world community at large. Mr. Saleri, president and CEO of Quantum Reservoir Impact in Houston, was formerly head of reservoir management for Saudi Aramco.
peak oil is myth. global warming is also a myth ( the globe is warming because of historical climate patterns, not fossil fuel caused) the war on terror is also a myth ( there is no war or terror, it more like war on the middle class. The proof is irrefutable) the rich pay all the taxes is also a myth ( as warren buffet famously stated, the rich pay less per % of wealth than their secretary) the war on drugs is also a myth. ( drug use and exports have increased in every nation that americans have provided help to fight the "war on drugs") There are many more such myths.
Agreed, So many scams out there. Your statement is contradicting. There is climate change and warming, we can feel it, see it with extreme weather. But the scam is blaming it on our carbon waste. Just a scam to introduce a carbon tax.
Peak is a myth. I currently handel private Placements in "Oil Drilling" deals and the "peak oil" issue is one of the on going jokes. A lot of people beleive that OPEC controls most of the US oil. That is a false belief as OPEC nations are only 40%. The majority of OIL exported to to the US is from Mexico and Canada. Also, We have 8 rigs pumping oil in from the Lousiana Delta Region, (Total 10 but 2 were dry holes), they are pumping like crazy. TEXAS, and the GULF OF MEXICO are the two top producing oil states, Lousiana is second runner up. Yet, we are finding more oil in proven areas. The US will have to look at domestic oil drilling projects as a serious source as we watch oil climb and climb. OPEC can still shock the world with their 40%, if they were to "make waves". IMHO, before we see "PEAK OIL" as they say, OIL will be 500 to 600 a barrel, even higher. We are not going to see "Alternitive" energy anytime soon, so OIL is here to stay. Its going a lot higher folks. Watch "THERE WILL BE BLOOD", rent it if you want the OIL STORY.
I'm convinced that people who don't 'get' peak oil probably never made it past high school algebra. This is not meant to be a put down. Calculus is all about rate of change (the derivative of a function) and area under the curve (the integral of a function). Peak oil is all about when the derivative of the production curve goes to zero. That's the mathematical definition of a peak. It is not about when the integral of the production curve goes to zero. That would be the mathematical definition of running out. Peak oil skeptics don't seem to understand that the rate of change is the issue. They keep harping on how much we have in the ground without seeming to realize that it don't mean squat if you can't get to it fast enough. Peak just means that the rate has dropped from its all-time maximum; it doesn't mean we've run out [yet]. My analogy: Try sucking air through a straw. You are surrounded by air! But if you can't get enough air through your straw, you die. Well, all those holes we drill in the ground for oil are a bunch of straws. Those straws have limited flow. So we drill more straws to keep the flow rising with demand. But we've run low on places to poke the straws. Now, the overall flow is reaching a maximum, but demand keeps increasing. In 1970, U.S. oil production peaked at about 10 million barrels per day. Today, it's about half that. Thus, it (the rate of production) peaked. Obviously, every other oil producing nation will someday follow. In fact, most already have. World production, which is the sum of all the separate producers, will therefore peak. The only question is the timing of the peak.
The main point is that technology and demand are changing the percentage that can be extracted. Peak oil is not about calculus nor drilling "straws" It is about clinging to a belief that oil has peaked, in spite of conservation, greater extraction %, new technologies, alternative fuels, alternative energy, LNG and oceanic methane hydrates, and etc. etc. As they said, even with CURRENT reserves and technology, we have a 40 year supply of oil left. With an increase of 5-10%, the amount goes up greatly. IF oil remains expensive, there will be a huge increase in the straws.
..and the idiots are marching in again expressing their ignorance. The first 4 posters in this thread are morons. Very well said and why shouldn't we put them down? After all anybody passing 3rd grade and STILL not getting peak oil, coal or uranium is a certified moron. I am not even going to debate them, because you don't wrestle with pigs....
OK, I will deal with this one, because he tried a logical approach although failed at math. Yes, it increases the extractable % but not the overall volume!!! Thus it makes the plateau a little bit longer before going down. I was glad to help although you are not smarter than a 5th grader...
current known oil = 40 year supply. Add in coal, natural gas, etc, and we are fine for quite a few decades. Technology will fix the rest. People who "will not even argue" are those who cover their ears and make noises until the other party stops talking. Too bad you are not smarter than a toddler. AS someone said, we didn't exit the stone age because we ran out of stones. You sound like an alternative medicine defender, railing against the medical community. Although the alternatives work little and never change, and medical research keeps advancing...
Can you speak to the substance of abiotic oil? White Tiger Feild? Ultra-deep Russian Oil drilling? http://www.gasresources.net/index.htm