Review of the Olduvai Gorge

ROCKMAN · Posted: Mon Jun 30, 2008 5:26 am Post subject: Re: Review of the Olduvai Gorge

Thanks Lowkey.

Not a very good comfort margin when you're talking about a NG plant to take 7 or 8 years to recover it's construction costs. Does anyone have any beleivable estimates of undiscovered reserves?

ROCKMAN · Posted: Mon Jun 30, 2008 7:42 am Post subject: Re: Review of the Olduvai Gorge

Thanks Matt. But I was focusing on New Zealand reserves.

As far as USGS reserve growth estimates the boys there have a difficult job. They do not have the data base that's really needed to develop even a rough idea of futrue reserves. Vitually all the data base is past preformances. This is handy for estimating recoveries from fields that have been producting for a while but of little use in analyzing new trends. As an example, the Deep Water trend in the Gulf of Mexico is much more significant than the industry had anticipate 10 to 15 years ago. But the industry had the data to evaluate the potential. The boys with the Survey didn't have the data so they were essentially blind to thew upside.

Dan1195 · Heavy Crude Joined: Mar 19, 2005 Posts: 255

I am always had one main problem with the Olduvai theory, that is the concept of the "cliff event" where essentially the light go out and never come back on or severe electricity shortages occur in the developed world within 5-10 years.

First off, very little oil is used to run the electricity grid in the developed world, so peak oil will NOT be a cause of this. NG shortages I do not forsee as a major issue in the near future, although we will need a significant percentage by say 2025 to safeguard against potential rapid drop offs in NG supply.

Second, any severe PO induced recession will lessen strain on the grid, less economic activity means less businesses operated and reduces demand and as McMansions are abandoned as more people find apartments or live with relatives (or worse become homeless) residential energy use will go down.

Electricity will always be there I believe, anyone who has a place to call home will stil be able to turn the lights on. Having that job may be another matter.

TheDude · Posted: Tue Jul 01, 2008 1:57 am Post subject: Re: Review of the Olduvai Gorge

I posted these links in a thread of Zardoz's just now and figured I'd bring 'em here as well:

IAEEL newsletter 1-2/00

The $230-billion Global Lighting Energy Bill

Pretty staggering amount of $ and kw we burn up to keep the sky lit at night. That would be the first and largest hunk of fat to be trimmed.
_________________
Cogito, ergo non satis bibivi
I will not abide another toe.

anagami · Posted: Thu Jul 03, 2008 12:28 am Post subject: Re: Review of the Olduvai Gorge

outcast · Heavy Crude Joined: Apr 21, 2008 Posts: 179

ccpo · Coal Joined: Apr 10, 2008 Posts: 17

ccpo · Coal Joined: Apr 10, 2008 Posts: 17

ccpo · Coal Joined: Apr 10, 2008 Posts: 17

ROCKMAN · Posted: Mon Jul 14, 2008 5:36 am Post subject: Re: Review of the Olduvai Gorge

Yes ccpo...a year old. When oil was half the price it is now. Doesn't hurt to stay current in these rapidly changing times, does it?

BTW, I've been a petroleum geologist for ove 30 years and have been incorporation the PO issue ( we actually refer to it as "reserve replacement" issue) in my economic anaylsis model for the last 15 years.

But hey...glad to listen to anything you have to contribute to the conversation.

ROCKMAN · Posted: Tue Jul 15, 2008 5:47 am Post subject: Re: Review of the Olduvai Gorge

Matt,

I thunk on it for a while and it's hard to come up with a percentage since its been something of a moving target. Also, most US exploration in the last 20 years have focused on natural gas. Actually most exploratory drilling isn't evaluated so much on price as probability of success. Exploration being what it is they can thow huge reserve numbers that can make it work at any price IF YOU IGNORE THE LOW PROBABILITY OF SUCCESS. A real life example: drilled a Deep Water Gulf of Mexico well for a client last fall: $148 million dry hole. When this prospect was developed and the drilling commitment made oil was probably around $50/bbl. But the well cost estimate at that time was probably around $60 million. (the actual cost should have been around $110 million but Sh__ happens, you know)

If I get your point, the economics of exploration drilling at $140/bbl are not that much better than they were when oil was $60/bbl. Life was very good for the oil patch back then. Cost have exploded and jump almost daily. Drilling rigs/personnel are another commodity just like oil: their cost rises with the price of oil. The oil service industry has been a much better investment the oil companies. They make the same profit on a dry hole as a producer. (p.s. basicly I'm also a service provider)

ccpo · Coal Joined: Apr 10, 2008 Posts: 17

ROCKMAN · Posted: Tue Jul 15, 2008 10:35 am Post subject: Re: Review of the Olduvai Gorge

I was teasing with you ccpo. I do need to be careful, though: can't see me smilling when I type.

I just started to bounce around here and TOD and suffer the same problem most do: jumping into an ongoing conversation it easy to miss back stories and end goals of any one chat. I particularly like it when folks disagree with me. Any good idea can stand scrutiny. And if it can't then it needs modification. So far I've been very impressed by the level of efforts all here make. Some of the individual research efforts are truly impressive.

AgentR · Posted: Tue Jul 15, 2008 4:31 pm Post subject: Re: Review of the Olduvai Gorge