Oil Production decline likely to be more gradual, than steep

mjpete · Tar Sands Joined: Feb 25, 2005 Posts: 43

It seems likely to be that oil production will not go into a steep decline like we often read, mostly because the areas where there still is oil, are not be exploited the way it has often been done in the past. In the past when oil companies produced most of the oil, there goal was always to pump as much oil as soon as possible to maximize their yearly profits. What this meant, is oil companies would develop a field to its maximum flow as soon as possible and as high a maximum flow as could be achieved. National oil companies it seems are likely to develop their fields differently. They may be inclined to sacrifise a higher peak flow early for a slower decline and longer production cycle. What this would mean is that overall peak oil may happen at a lower level, but the decline would be less severe.

Anyone have other thoughts or experience that would contradict this reasoning?

azreal60

That would make sense if it where not for the fact that we are already a little late on having companys do that. Yes a good portion of the worlds largest oil producers are nationalized, but of those, alot of them have been producing at their max flow rate for a Long time. I mean decades. And each and every year we get more past peak, any new finds will be pressured more and more, if only for local oil usage.
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Azreal60

big_rc

mjpete · Tar Sands Joined: Feb 25, 2005 Posts: 43

big_rc, Good points.

I would agree in general with most of what you said, and more than likely in many places this is probably true. A couple of places that I see that my scenario might hold sway is Russia and maybe Iran. Both of these are places where the leadership may take a longer term view, plus they are probably willing to keep production low, just to hurt the west, especially the USA.

deconstructionist

it seems to me that the original post has some merit, even if it is perhaps true only in the case of the FSU. They have increased production by about 4 mbpd since 1996... Someone somewhere else told me that Russia produces less per-day than just about everywhere else based on their amount of proven reserves. What that says to me is that their reserves will last longer. And I find it hard to believe that this is due to incomeptance or lack of investment in technology...

to address big_rc's points:
I think the view that the leaders of nations and multinational corporations are incompetant and have no foresight is not accurate. that may be what they would like to have us believe, but I'm not buying it. these people have vast teams of "experts" working for them on long and short term forecasts, ROI and cost-benefit analyses, contingency plans, etc. etc. I think that you mistakenly assume that their goal is simply to maximize profits on the short term, when it is my belief that it is their goal to solidify their power in the long-term. The exploitation of a natural resource shortage is an excellent method of population control, and centralization and consolidation of power.
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big_rc

I'm not saying that the resource rich countries don't have foresight. I'm saying that it is probably very hard for any state-owned national oil company to resist pushing fields too hard to make a leader happy.

After I wrote that first post, one country in particular came to mind. Norway. If there is a poster child for a well governed resource rich state, it is Norway. Norwegians have had every incentive to slowly develop their fields. Well what is happening these days. Norway's output is on a serious decline. If a state with an excellent government can not prevent a serious decline, what about all these other crappy states that are swimming in oil.
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Poordogabone · Tar Sands Joined: May 13, 2005 Posts: 44

I see no chance of a gentle slope down post peak unless America decides today that it would be a great idea to take the foot of the accelerator, litterately and figuratively(the economy).
We always have set standards for others to emulate.
We can whine about china and india but right now the average american uses 10 times to 20 times more oil than the average indien or chinese.
Also every barrel of crude now demands increasingly more energy to be extracted.That energy used for extracting energy business is just more pollution, faster depletion, pushes the peak back somewhat only to make the final fall steeper.

whereagles

Unless all the info coming from oil companies is horribly wrong and biased, I think technology, new discoveries and non-conventional oil can soften the 'cliff oil' scenario considerably, making the downslope curve as soft as the uphill one.

King Hubbert got it right the 1st time.. lol.

pup55 · Expert Joined: May 26, 2004 Posts: 3702

http://peakoil.com/fortopic2748.html

We did something like this awhile back. We reviewed the production data for all of the countries that werw post-peak and tried to deduce how steep the decline curve would be.

On average, the decline is about 6% for the first year after the peak, and usually after about 3 years post-peak, the proverbial average nation is pumping about 87% of peak capacity.

It remains to be seen whether or not future decline curves will be the same shape. When this year's BP Review comes out, we will have a chance to recalculate some of this.

Ludi

cube · Fusion Joined: Mar 12, 2005 Posts: 3591

It's impossible to predict how steep the downslope will be. There are too many wildcards.

For example if the USA takes it upon itself to "liberate" some more countries that will only exacerbate the problem. But if the major nations come to a consensus that steps should be taken to mitigate the problem then yeah we might get a 1% decline rate.

Personally I think 6% sounds more realistic. Very Happy

cube · Fusion Joined: Mar 12, 2005 Posts: 3591

Exponent · Coal Joined: Apr 25, 2006 Posts: 19

Might it also be that the slope of oil production decline won't necessarily correspond almost exactly to the slope of economic decline? It could very well be that when supply begins to consistently and obviously fall short of demand, even if only by 5 or 10 percent, the economy would decline much more severely.

Or if you're more optimistic, it could do the exact opposite, if alternative energy sources and/or conservation managed to succeed to a reasonable level.

Either way, the point is that in practical terms, the effects that people experience might follow a somewhat different curve than the straight-up amount of oil producted. And it's the effects that people experience that ultimately matter.

oswald622 · Heavy Crude Joined: Aug 28, 2005 Posts: 160

according to a hubbert linearization done over at the oil drum, there will be less than a 2% decline rate for about the first 15 years.

MonteQuest

Recent projections indicate an 8% decline which would reduce production by 50% in less than 9 years.

Even Exxon says existing field decline is 4 to 6%

I am also inclined to believe we are past mid-point ( because of over-stated reserves) and, due to tertiary extraction methods, the decline will be quite steep.

And if these declines are any indicator...

#3 Cantarell in Mexico ~ 14%/year decline.

#2 Burgan in Kuwait ~ 14%/year decline.

#13 Prudhoe Bay in Alaska ~ 11%/year decline.

#12 Samotlor in Russia ~ 9% decline.

Saudi Arabia just admitted an 8% decline for their mature fields.

But we won't know until it is past.

And that is too late.

Too late to mitigate.

Too late for the market to react.
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