ennui2 wrote:Considering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.
I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.
BP Technology OutlookWhen analyzing costs, we use data from the period when oil prices were around $100 per barrel, and show how technology could reduce costs relative to this benchmark. Clearly, other deflationary forces are at play in the lower-oil-price environment – and these can and should be differentiated from the technology signal in this publication.
On the supply side, technology has helped the energy industry discover more oil and gas than society has consumed. Proved oil reserves, for example, now stand at more than twice the level they were at in 1980. Key technologies driving this phenomenon include advances in seismic imaging that enable geologists to pinpoint subsurface reservoirs more accurately, and new techniques to improve oil recovery that prolong production from reservoirs.
The Earth is not running out of oil and gas, BP saysthe global proved fossil fuel resources could increase from 2.9 trillion barrels of oil equivalent (boe) to 4.8 trillion boe by 2050
Proven reservesProven reserves, also called proved reserves, measured reserves, 1P, and Reserves, are business or political terms regarding fossil fuel energy sources. They are defined as a "Quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions." These terms relate to common fossil fuel reserves such as oil reserves, natural gas reserves, or coal reserves.
Operating conditions includes operational break-even price, regulatory and contractual approvals, without which these items cannot be classified as proven and are usually classified into probable. Price changes therefore can have a large impact on classification of proven reserves. Regulatory and contractual conditions may change, and also affect proven reserves amount.
The most significant change to the oil and gas resource base in the past decade has been the development of production from shale and ‘tight’ (or low-permeability) rocks, particularly in the US. Estimates of shale resources, not only in the US but around the world, have more than doubled the total estimated volumes of oil and gas in place globally with development potential. New technology has been central to enabling the oil and gas industry to find and produce new sources of hydrocarbons. Advances in seismic imaging, for example, have helped reveal previously undiscovered oil and gas fields, particularly in deep water and below formations of salt in the subsurface. The shale revolution has been made possible largely by developments in directional and horizontal drilling and multistage hydraulic fracturing – techniques that have evolved over many years.
Seismic imaging
The emergence of three-dimensional seismic imaging during the 1990s had a dramatic impact on oil and gas exploration, in some instances raising exploration success rates from 30% to 50%. Since then, seismic acquisition technologies have advanced and can now illuminate the subsurface from different orientations. Multi- and wide-azimuth surveys, for example, enable surveys to be carried out in different directions over the same area. 4D seismic, which involves repeating the same survey at different times, plays an increasingly important role in helping to determine how reservoirs are changing as oil, gas and water move through the subsurface and are produced to the surface. These advances have been enabled by rapid increases in cost-effective computational processing capacity and deep algorithmic expertise to process and interpret vast streams of seismic data. As interest in tight oil, shale oil and shale gas grows, advances in imaging technologies that improve our understanding of subsurface factors and identification of ‘sweet spots’ will be of great value.
Oil reserves 'exaggerated by one third'The scientist and researchers from Oxford University argue that official figures are inflated because member countries of the oil cartel, OPEC, over-reported reserves in the 1980s when competing for global market share. The researchers claim it is an open secret that OPEC is likely to have inflated its reserves, but that the International Energy Agency (IEA), BP, the Energy Information Administration and World Oil do not take this into account in their statistics.
Definitions, Sources and Explanatory NotesProved reserves of crude oil as of December 31 of the report year are the estimated quantities of all liquids defined as crude oil, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Reservoirs are considered proved if economic producibility is supported by actual production or conclusive formation test (drill stem or wire line), or if economic producibility is supported by core analyses and/or electric or other log interpretations. The area of an oil reservoir considered proved includes: (1) that portion delineated by drilling and defined by gas -- oil and/or gas -- water contacts, if any; and (2) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons is considered to be the lower proved limit of the reservoir.
Volumes of crude oil placed in underground storage are not to be considered proved reserves.
Reserves of crude oil which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.
Estimates of proved crude oil reserves do not include the following: (1) oil that may become available from known reservoirs but is reported separately as "indicated additional reserves"; (2) natural gas liquids (including lease condensate); (3) oil, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; (4) oil that may occur in undrilled prospects; and (5) oil that may be recovered from oil shales, coal, gilsonite, and other such sources. It is necessary that production, gathering or transportation facilities be installed or operative for a reservoir to be considered proved.
ennui2 wrote:Considering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.
I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.
kanon wrote:ennui2 wrote:Considering that oil is currently cheap, peakers really should be more on the defensive, not just laying back in their chairs and scoffing at predictions like this while they preach to the converted.
I agree that if PO doesn't get us first, AGW will, though, so there's really no way out of this vice. Pick your poison.
I'm no expert, but I don't think cheap oil disproves peak oil. There was a period where the pundits called it peak cheap oil, but they were wrong to equate peak oil with expensive oil. I understand peak oil to mean maximum rate of production, which implies that oil will be abundant at the peak. The definition of oil production has been modified to make it seem like there is more oil production than there was, but I don't think natural gas liquids or dilbit is really the same as oil. The mere existence of vast hydrocarbon stores does not disprove peak oil either, because most hydrocarbon deposits will never be produced under any circumstances. I also don't see PO as any kind of crisis on par with AGW. PO simply means we are closer to the end than the beginning of the petroleum age as new production fails to equal depletion decline. Oil prices will fall if people reduce demand, and there is lots of room for demand to fall simply due to reduced waste and available alternatives. Also, a surplus or glut of only a few percent in supply causes a disproportionate change in price. I don't see any reason to be defensive.
If we address AGW, then oil will become cheap due to falling demand, unless production is curtailed. If the lower price induces demand, this will make it more difficult to reduce emissions. It is not a matter of "picking your poison" because we have already chosen and the only issue is how bad will it get.
I said above that I wondered whether the shale and tar sand oil actually add anything to available useful oil and we see the "glut" getting larger as shale and tar sand activity drop off, so I do wonder if that is not in part a reason for the glut.
kanon wrote:I understand peak oil to mean maximum rate of production
kanon wrote:PO simply means we are closer to the end than the beginning of the petroleum age
kanon wrote:I don't see any reason to be defensive.
kanon wrote:I wondered whether the shale and tar sand oil actually add anything to available useful oil and we see the "glut" getting larger as shale and tar sand activity drop off, so I do wonder if that is not in part a reason for the glut.
ralfy wrote:Oil is not currently cheap because production costs are still high.
pstarr wrote:You are not the only consumer in the world. $40 (inflation adjusted) oil remains somewhat historically high, it had been less than $30 (inflation adjusted) for decades when I joined this web community.
pstarr wrote:It seems you would rather invent bad arguments to avoid having to make good arguments. I suggest therapy.
pstarr wrote:
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