pstarr wrote:I don't believe expertise is required.
This is the sort of thinking that led you to accept faulty analyses in the first place. Some amount of understanding is required in order to interpret the data. Your attitude is the same as I have seen from so many Creationists I have debated: “Sure, I am an electrical engineer, but no particular expertise is required to see that evolution is hogwash.”
Here is a sampling of what you missed. This was debated over at TOD, when someone tried to point out that the bumps were due to Manifa, Khursaniyah, Khurais, etc. coming online. The problem is that the bumps in production occurred before various projects came online. This bit was missed by many who assumed that bumps must be due to projects. They had concluded that Saudi had peaked, therefore the only way they could raise production was with new projects. It is of some interest to go back and look at some of the forecasts by certain TOD posters for Saudi production and see how far off the mark they were. Stuart forecast Saudi production at the end of 2009 at 6.5 million bpd and falling. Ace made similar forecasts, as did Westexas (his Saudi HL, updated through 2008, is at this point looking pretty shaky). The question is, “Why were they so far off, and why did you support those forecasts?” Because you didn’t have the expertise to sort wheat from chaff.
Something else to consider. Year by year depletion marches on. I often hear that all of the world’s big fields are tapped out. Why then hasn’t Saudi fallen off the cliff? Because they have lots of smaller fields that have been more than compensating. I am not one who believes that when Ghawar peaks, the world has peaked. I forget what the exact number was, but I think it is something like 19 out of 20 of the world’s megafields have peaked; Ghawar still being somewhat uncertain. But while the other 19 were peaking, world oil production rose by something like 20 million barrels. That is probably completely counter-intuitive to someone who doesn’t understand the big picture. But the world does not live and die entirely on the megafields.
Here is another area in which lack of expertise led you astray. Here’s one way I was certain that those HL ‘studies’ looking at Saudi were in error. When the Saudis started cutting production back in 2005, I did a couple of analyses. In 1982, Saudi Arabia stopped allowing their oil and gas data to be scrutinized. Prior to that, outsiders had some access to information on their reserves. When that accessibility was shut down, Saudi proven oil reserves were estimated to be 164.60 billion barrels. I have yet to find a challenge to this number. It seems to be accepted that this number does represent their reserves in 1982. However, in 1990 they mysteriously raised their reserve estimate by 90 billion barrels. Since the data are now hidden from public view, there is obviously a great deal of skepticism regarding this new estimate.
So, I started with the assumption that the 1982 estimate of 164.60 billion barrels was correct, and then I just subtracted Saudi production since then. I calculated their total production since 1982 as 69 billion barrels, leaving 95 billion barrels of reserves. This approach would imply either that their 1982 reserves were overstated, or that the HL models showing Saudi Arabia at 70 billion barrels remaining (or 75% depleted) are in error. Since I can’t find any legitimate challenge to the 1982 number, and because we have experience with reserves growth (see next paragraph), it seemed far more likely that the latter was the case.
We know that reserves sometimes legitimately grow, and new discoveries take place. In 1982, U.S. reserves were 27.858 billion barrels. In 2005, U.S. reserves were 21.757 billion barrels. So the U.S. drew down reserves by 6 billion barrels. Guess how much oil we produced in the interim? 56.9 billion barrels. Thus, in the past 24 years the U.S. has produced 57 billion barrels of oil and pulled reserves down by only 6 billion barrels. The reason is that there were discoveries that took place over the past 24 years. The same will hold true in Saudi.
Second thing, as I was pointing out, the comments from the Saudis for why they were dropping production in 2005 were backed up by OECD inventory data. Inventories were high and rising. Their comments were met by derision in many quarters, as some sloppy analysts insisted (with the only evidence being their conviction that Saudi had peaked) they were lying to cover up the fact that Ghawar had peaked. And if I put myself in the position of managing Saudis reserves, their moves are consistent with the moves I would have made: They were cutting production because they could see inventories rising, and wanted to avoid a glut and subsequent price crash. Where they did make a mistake is that when inventories pulled down, they were too slow to raise production, leading to much speculation that they couldn’t; this helped fuel runaway prices, which ultimately crushed demand. Had they moved in time, they could have headed off oil at over $100 a barrel before it did so much damage to the economy. (I am a fan of higher oil prices, as I want to see consumption reined in. But that was too much, too quickly.)
Bottom line? I don’t think Saudi has geologically peaked, but so long as the economy stays in the dumps they won’t be called upon to demonstrate it. But make no mistake about it: All indications are that they are still sitting on quite a lot of oil. It is tough to make a solid case that they are setting on less than 100 billion barrels still. Their production isn’t going to fall off of a cliff any time soon.
Note for those who are unfamiliar with my position: None of this means that I think we should trust the Saudis to continue supplying us with cheap oil. Our energy security is far too important to leave in the hands of countries whose oil reserves are not open, and who could cut us off at any moment. But we will remain dependent upon them for the foreseeable future, so I think it is very important to understand what is going on there.
RR