Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: Jun 18, 2005 Posts: 3978 Location: In a van down by the river
Posted: Thu Jun 30, 2005 8:56 am Post subject:
Opec is the key to world decline and specifically SA.
Looking at the evidence they did cook their books back in the 90's and all of them doubled there known reserves with no evidence to support their claims.
The argument can also be made for a quicker decline because of how the oil has been extracted.
Horizontal drilling and 3-d seismic imaging have made the North Sea the example of what has happened with the use of greater technology in oil extraction. It does allow for higher peak extraction but then a corresponding steep decline.
The SA fields have also been using secondary recovery techniques (pumping in sea water) for years which boosts peak extraction but also decline rates when the field passes prime production. Pumping in see water is also inferior to tertiary extraction in which co2 is pumped in to the field to push the whole reserve towards the well head. Secondary extractions weakens the field and the water breaks through the oil and does not push the whole field.
The large oil fields that the US did not see the these techniques used until much later in there lives so that helps explain why they did not see as steep of declines.
There are a couple reasons we should be concerned bout a faster decline rate:
1. Use of secondary and tertiary methods. These keep field production rates up, but make for a steeper decline. This is possible for many of the larger fields, including Canterell an Ghawar those 2 fields along current account for ~10% of world production.
2. Offshore fields. These have been source of much supply growth in the past 10 years, and tend to have shorter lifespans with steep decline (e.g. North Sea) due to higher costs they pump full tilt.
3. Mathematical relationships:
Rate of discovery rose then fell (peak ~1960)
total reserves rose then fell (peak ~1980)
production rose and will fall
Rate of depletion is just beginning to rise (and wont decline under most oil is gone)
Joined: Apr 27, 2005 Posts: 108 Location: California
Posted: Thu Jun 30, 2005 7:42 pm Post subject:
pepper2000 is correct. This article makes no distinction between the various types of depletion--type 1, 2, or 3. Type 3--national depletion--is our signpost to world decline, not that of individual fields. An 8% depletion rate in an existing field or well is not unusual, but it is constantly offset by new drilling and production. At some point, these new wells don't offset the decline from others and the entire field enters depletion, and when all new wells and new production don't make up for the decline in all the fields in a country, you have type 3 depletion. The ODAC estimates that at about 1-1.2 mmbd/year.
Quote:
Beside decline itself, we could also try to to determine how much percent of the oil extracted will be sweet crude? And will we have enough natural gas to process it?
Generally the good stuff is produced first. But refining doesn't require natural gas. It is used to make supplemental hydrogen for removing sulfur in products, but that's only when refinery hydrogen from reformers is insufficient. And if you don't have natural gas, you can make it from other hydrocarbons like naphtha, thaough not as cheaply.
Joined: Oct 12, 2004 Posts: 1647 Location: Davis, California
Posted: Fri Jul 01, 2005 12:44 am Post subject:
Permanently_Baffled wrote:
Aaron wrote:
Lower US 48 oil producing states - Conventional extraction
Current major fields - MRE
See North Sea depletion rate \ Ybel depletion rate etc...
how come the US doesn't use MRE? I would of thought those evil, greedy american producers would be first up to maximise production
PB
The US peaked in the '70s, just as MRE was becoming popular. The older fields in the US never saw those technologies. We are probably applying MRE techniques right now, but during the 30s, 40s, 50s, 60s oil was so damn plentiful and cheap that it didn't even warrent the research to recover more oil. _________________ Joseph Stalin "It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything. "
I have been a big fan of Sprott since the crash of 2000 where he has been the best performing money manager since the internet bubble. I believe his fund groups had the best return in 2001. I know he made a fortune with PetroKazakhstan buying it under $1 among other stocks. I know I spend big time checking out what he is doing on the Canadian SEC equivalent Sedar.
Regarding this latest piece on oil I am not sure that his figures are accurate but he has been uncanningly accurate on the timing of many of his investments. Its hard to dispute him when he has been right so many times. I know he also has written a piece also on our real estate bubble and mortgage debt and that was also a scary scenario.
Joined: Aug 10, 2004 Posts: 1104 Location: San Diego, CA, USA
Posted: Mon Jul 04, 2005 10:55 am Post subject:
Speculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.
Answer these questions:
How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?
Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.
Speculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.
Answer these questions:
How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?
Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.
I'm not convinced of that, I think people will keep buying the black stuff at any price! crude oil prices have almost tripled in three years but the economy is still going strong, US GDP will be probably grow +4% this year, consumer confidence is very high despite higher gas prices. Inflation seems under control. Historically, it does not seem that oil demand is influenced much by prices.
The situation may changed but so far world economies are getting used to higher oil price (at least for rich countries). Demand destruction could happen faster in poor countries.
However, the last BP energy report shows that new discoverie numbers are going flat since 2003 so depletion could show its ugly face sooner than we think. _________________ ______________________________________
http://GraphOilogy.blogspot.com
Joined: Aug 10, 2004 Posts: 1104 Location: San Diego, CA, USA
Posted: Mon Jul 04, 2005 12:03 pm Post subject:
khebab wrote:
trespam wrote:
Speculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.
Answer these questions:
How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?
Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.
I'm not convinced of that, I think people will keep buying the black stuff at any price! crude oil prices have almost tripled in three years but the economy is still going strong, US GDP will be probably grow +4% this year, consumer confidence is very high despite higher gas prices. Inflation seems under control. Historically, it does not seem that oil demand is influenced much by prices.
The situation may changed but so far world economies are getting used to higher oil price (at least for rich countries). Demand destruction could happen faster in poor countries.
However, the last BP energy report shows that new discoverie numbers are going flat since 2003 so depletion could show its ugly face sooner than we think.
We've not hit depletion yet. There have been no shortages. There have been no gas lines. True depletion, once we hit it, changes the game. The end of economic growth (on a global, time averaged basis). Imbalances will unwind.
Speculation? Of course. But my gut tells me that once we hit true depletion, once world production drops by a few percentage points, recession starts, imbalances unwind, etc.
What's happened so far is not depletion, just speculation about upcoming depletion.
What you are missing in this discussion is the economic impact of any type of supply shortage. I would suggest that the US economy, in particular, is extremely sensitive to even one or two years of shortened supply. We aren't going to need to wait for supply to be halved before very bad things happen to the world's economies.
Also keep in mind the reaction of the power elite and the citizenry. Both are likely to panic in one form or another and that will compound the purely technical problems exponentially.
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