[shortonsense]

Recently, in another thread, a discovery chart of new oil that most of us have seen by now...



was referenced in a different argument.

It was referenced in part because I often make the sarcastic statement that peakers start off with a commonly accepted "oil in the ground" number, and then start discarding anything and everything they don't like, aren't familiar with, hasn't been discovered yet even if there are seeps nearby, or isn't sitting right under existing infrastructure, or might be in some arbitrary water depth. And then, to cap it all off, they proclaim that running out isn't the issue, but lets chop the final number in half and proclaim THAT moment in time to the pinnacle trigger for <fill in your favorite green-Rambo scenario>.

Now, this 50% number appears quite arbitrary, and I would reference the following work by Hook, Secretary of ASPO as a possible reason why. When he studied some large fields he discovered that actually some 35% of URR had been produced at the onset of decline, not the mythical 50% often bandied about during speculation by the likes of us amateurs. His results encompass nearly the entire range of possibilities available, from 7% to 90%, so its value might be limited under ALL circumstances.

The histogram upon which I make this statement comes from Fig 11, Page 12, of his Natural Resources Research Paper.

http://www.tsl.uu.se/uhdsg/publications/GOF_NRR.pdf

So the experts apparently think that the range of when decline sets in certainly isn't specific to 50%, but thats another matter.

So we have a censored discovery graph because the single largest accumulation of oil discovered by man in 1935 is generally ignored because it isn't counted in anyone's reserves category, an unnecessary distinction which Hubbert certainly didn't make when he built in billions of barrels of future conversions from resources to reserves in his original, 1956 work.

Figure 21, Oil "undiscovered reserves" otherwise known as resources, which fits right in with explanations of the conversion of resources to reserves by Tyler here.

http://www.energybulletin.net/node/13630

http://peakoil.com/peak-oil-discussion/ ... 30-30.html

So, conservative estimates of the discovery in 1935 should be about 250 Billion barrels, but they aren't there. Presto...a censored graph. But thats not the INTERESTING censorship. You see, that oil falls into the resources/reserves distinction which Tyler makes, therefore it is ignored by anyone trying to cut cut cut the amount of oil available to humanity under ALL circumstances.

But here's even the more TRICKY censorship.

You see, Ghawar is on that discovery chart as well...only....its not. You see, Ghawar as estimated by even the TOD analytical specialists runs about 90-105 billion barrels URR.

http://www.theoildrum.com/node/2494

And its not on that graph either.

Which begs the question, while it is understood that peakers are genetically predisposed to underestimate all volumes, all the time, ( in order to achieve their Rapture as soon as possible ) why are they cutting back on known estimates of Ghawar on that discovery graph as well? Ghawar's discovery wells are listed as flowing by 1938

http://www.theoildrum.com/node/5432

and yet here we don't even have the amount it has PRODUCED showing up on the discovery graph?

Methinks....a wee bit of peaker tomfoolery is afoot? First you exclude the game changer, which Hubbert certainly didn't do, and then you actually start trying to hide the single largest field even discovered? Naughty naughty, backdating the TOD estimates means that there should be a nice, 100 BILLION spike somewhere near 1938...anyone else see it, because I sure don't.

Now, if peakers are going to use censored information, is it any surprise that they can be led to bogus conclusions?

And while we are at it, where are Oilfinders totals on that yellow projected discovery line? He's rounded up a decent 20-30 billion barrels for at least 2 years in a row....methinks....at the least some discovery chart like this needs updated with both the most current information, and the REAL historical information? For starters? Perhaps there is already such a graph which hasn't been censored? I must admit, googling around for these things runs into more peaker type censored info than most anything else.

[eastbay]

The chart only shows discovery data until 2006. Do we have a more current chart?

[copious.abundance]

I had a discussion with TonyPrep last week in my catalog thread on a similar topic. Important consideration pointed out at the link:

[...]

Here is a link to the full copy of the UK Energy Research Centre's report.

Go to page 25, where it talks about discoveries. Both in the narrative and beneath the graph it has the following explanation of the oft-shown graph.

Note: Includes crude oil, condensate, NGL, LPG, heavy oil and syncrude. Discoveries based upon backdated 2P reserve estimates. While discoveries have fallen over time, the graph is potentially misleading since the discoveries for different years have not been estimated on a consistent basis. For example, the estimates for 1957 include 50 years of reserve growth, while the estimates for 2006 include only one year. This helps explain why comparable graphs published at different times have slightly different ‘heights’ and shapes for the backdated discovery data (e.g. Campbell, 2002b).

As I've stated at least a couple times in this thread, one reason why the past bumps are bigger is because they've backdated discovery sizes, and with reserve growth the older fields have had a chance to get bigger. This is not true for more recent discoveries. In a graphic using this kind of methodology, the more recent discoveries will always generally appear to be smaller. So I'm glad your own link confirms what I've already pointed out multiple times in this thread!

[copious.abundance]

BTW, another thing which seems to be missing are Canada's and Venezuela's oil sands -- though if they're only counting backdated P1 or P2 reserves it might not be surprising they don't show up since production in both areas is relatively recent. But that just goes back to what I said in my post above. Anyway, if they simply counted the approximate # of barrels in discoveries made in any particular year, thus including Canadian and Venezuelan oil sands, and if we assumed a recovery rate of about 15% for them, and arbitrarily placed their "discovery" date in 1965, we would have a chart that looked like this:



But this exposes another flaw of these charts: If and when Canadian and Venezuelan oil sands do start to show up on these charts, on which year will their "discovery" be placed? AFAIK they've known about the oil in those two places for 50-100 years. Where would they place the bar? I suspect the peak oil crowd would simply exclude it altogether, citing the excuse that these resources weren't "discovered" like a conventional oil field. They just gradually learned about them over time.

[shortonsense]

As I've stated at least a couple times in this thread, one reason why the past bumps are bigger is because they've backdated discovery sizes, and with reserve growth the older fields have had a chance to get bigger. This is not true for more recent discoveries. In a graphic using this kind of methodology, the more recent discoveries will always generally appear to be smaller. So I'm glad your own link confirms what I've already pointed out multiple times in this thread!

The field growth issue strikes me as insidious in a different way, because it would naturally lead to just all fields growing, newer ones even more than the older ones, if this type of stuff is valid.

Figure 3

http://pubs.usgs.gov/bul/b2172-d/B2172-D.pdf

This effect strikes me as a "rising tide lifts all boats" deal.

But how ballsy is it to try and do away with the largest oilfield in the world, which everyone knows the old sizes for ( 60 billion barrels, its empty! ) and TOD is obviously laboring away firming up its real size ( about 100 Billion ) and then it gets ignored? While I realize its convenient to disguise the true size of discoveries through time to make certain that embarrassing questions aren't asked, how valid of a scientific approach is that? Wonderful way to create a recruiting tool, "Look at discoveries! Aren't they terrible! We're all Doomed!" but holy cow, how can anyone expect to be taken seriously on resource depletion issues when you do this kind of stuff?

[Dr. Ofellati]

OP and guy right above me - practice makes perfect.

Say it with me - "it's all speculation. The rise in oil price is not based on fundamentals."

Practice practice.

Some day, a few decades from now, our donkey carts will cross paths and you can comment that there's plenty of oil but speculation has caused us to drive donkey carts.

[shortonsense]

AFAIK they've known about the oil in those two places for 50-100 years. Where would they place the bar? I suspect the peak oil crowd would simply exclude it altogether, citing the excuse that these resources weren't "discovered" like a conventional oil field. They just gradually learned about them over time.

I pegged the official discovery of the heavy oil in Venezuela as 1935. Standard Oil apparently drilled the discovery well for this heavy oil, 1935.

http://cohesion.rice.edu/naturalscience ... oc_id=2819

And its not really sands like Canada, this stuff is just heavy oil. You can argue that much of the Canadian sands aren't really oil, just sticky sand. But in Venezuela, its oil. Not the favorite stuff ( but certainly that hasn't stopped California ) , we're looking at a century of production, maybe a trillion barrels, slowly steaming and drilling their way through the place. Its like, as big as Massachusetts, and shallow. Like Tyler said, its all about economics, if Chavez ( or anyone else ) can make some money off of it, sooner or later, they will.

[shortonsense]

OP and guy right above me - practice makes perfect.

Say it with me - "it's all speculation. The rise in oil price is not based on fundamentals."

Practice practice.

The price of oil has been rising in terms of real dollars since 1969, so obviously as we access more expensive oil, the price will generally trend upwards. 40 years now, you are just noticing?

[copious.abundance]

Ah, thanks shorty. Well, in my radically big graph above, you can re-imagine about 1/3 of the 1965 bar on the year 1935, and the other 2/3 . . . wherever.

[shortonsense]

Ah, thanks shorty. Well, in my radically big graph above, you can re-imagine about 1/3 of the 1965 bar on the year 1935, and the other 2/3 . . . wherever.

Your graph captures the problem PERFECTLY, once you allow in the real volumes of real discovered oil, you blow up the entire purpose for which that graph is intended. Instead of these nice, bell shaped, nicely scaled to consumption graphs, you are left asking the question, HOLY COW!!! Where is all THAT oil!

And then on the scale with consumption? Giggling ensues.To some extent, while honesty is valued above all in any argument, such honesty can also be misleading, because it does not encompass cost. The cost of producing oil from that spike in any reasonable amount could be $100/bbl, and its a perfect question to ask. But excluding it is just a giveaway for the bias. Hubbert certainly didn't do it, but those who followed in his footsteps have more of an agenda, Hubbert was a scientist, and understood science. Those who have come since...well..lets just say that the clues can be found in their books. Everytime comments in those books start talking about "Zionists", well, it doesn't take a genius to read between the lines.

[basil_hayden]

OP and guy right above me - practice makes perfect.

Say it with me - "it's all speculation. The rise in oil price is not based on fundamentals."

Practice practice.

Some day, a few decades from now, our donkey carts will cross paths and you can comment that there's plenty of oil but speculation has caused us to drive donkey carts.

Howdy, Gideon.

[mos6507]

Here is the thing. Not having read Hubbert's original work, but based on the era in which he lived, I do not think he factored in shale and tar sands. He was looking at the life cycle of oil rigs at the time. Light sweet crude. Now, assuming there are some hitherto magical ways to convert unconventional oil at a good flow rate and EROI, then the denialist manifesto has some weight to it. But I don't think there is. Unconventional oil is being brought on stream--but at a considerable cost. So yes, it's nice that it's there, and maybe in the end it (and shale gas) will mean the difference between the world hanging on for dear life or falling off the olduvai cliff. But at the very least, being on the back side of hubbert's curve for light sweet crude should spell the end of cheap oil. If that's enough for some of you to shout victory over doomers, so be it.

[shortonsense]

Here is the thing. Not having read Hubbert's original work, but based on the era in which he lived, I do not think he factored in shale and tar sands.

Sure he did. Tallied up their heating value right there in his original paper. Did you know that all the oil and gas in America is perhaps only 15-20% or so of all the heating value of all the fossil fuels in this country? And that the US has 1/3 of the total heating value of energy of the total planet?

One of the nice things about Hubbert is he faced facts head on, knew what was where, what it was worth, and talked about it, including lots of undiscovered resources. Tell me, when a Peaker is tallying up all of the oil and gas at the world level, how many billions of barrels or thousands of TCF do they add on to allow for future discoveries? Hubbert was nearly doubling the size of reserves by adding in all these undiscovered resources, Peakers use reserves as an upper bound and chop them smaller, if at all possible.

Its a notable difference between how Hubbert did his original work, and how it has been morphed into something designed to support an agenda.

Unconventional oil is being brought on stream--but at a considerable cost.

Exactly my point, and exactly as it should be. Move down in the resource pyramid and what happens? More resources are available, albeit perhaps at a lesser quality.

So yes, it's nice that it's there, and maybe in the end it (and shale gas) will mean the difference between the world hanging on for dear life or falling off the olduvai cliff.

You use the incorrect tense. Olduvai Gorge/Cliff was slated to start before the end of 2008. Instead what happened? A sustained reasonable price for natural gas drove a drilling boom of unconventionals of such magnitude that it repeaked the entire United States natural gas production, nearly 40 years after the last peak. And now storage is so full people don't know where to put the stuff, that isn't a MAYBE of any type, that is a full scale refutation of the value of pseudo science based speculation and peak theory in general. Prototyped here in the US because we tend to do things first.

But at the very least, being on the back side of hubbert's curve for light sweet crude should spell the end of cheap oil. If that's enough for some of you to shout victory over doomers, so be it.

Oil stopped being cheap in 1969, so certainly it never required the backside of Hubberts curve ( either of the two we have experienced since 1979 ) to do so. And its not about shouting victory, its about a dispassionate comparison between what was claimed, and what has actually happened to test the validity of the concept. Lets not forget, NOTHING in this peak oil theory is new, its just a recycling of what Jimmy was claiming back in the 70's, or Ehrlich if you are into the more biologically based Doom type scenario's.

[mos6507]

Exactly my point, and exactly as it should be. Move down in the resource pyramid and what happens? More resources are available, albeit perhaps at a lesser quality.

When EROEI reaches close to 1:1, it's irrelevant. For instance, the hydrocarbons on Titan are often used to illustrate this.

BAU as it functions today can not survive solely on poor EROEI fuels.

You use the incorrect tense. Olduvai Gorge/Cliff

When I tlak about Olduvai I don't mean literal Olduvai but more of the colloquial definition of us winding up smack dab the way we began.

Oil stopped being cheap in 1969

Wrong. Cheap is as vague a term as "plenty". Oil stops being "cheap" when it puts downward pressure on the economy that visibly drives down standard of living. If we get to the point where this downward pressure is chronic rather than brief and episodic, and it steadily intensifies, we've got a problem.

[shortonsense]

Exactly my point, and exactly as it should be. Move down in the resource pyramid and what happens? More resources are available, albeit perhaps at a lesser quality.

When EROEI reaches close to 1:1, it's irrelevant. For instance, the hydrocarbons on Titan are often used to illustrate this.

My opinion on the nonsense of using EROEI as a measure in an economic system is well known. However, EROEI is also a strawman in the sense that it ignores the form of the energy. I can put 10 units of solar energy into getting 1 unit of liquid hydrocarbons if the IRR for the company doing the process meets their standards. And we recently have references for the heavy oil in California for Chevron apparently doing exactly that.

So my EROEI can easily be <1 and yet production continues. Same as with a GTL process. And lets not forget, we can do that and fly airliners on the result.

http://www.enviro-news.com/news/qatar_a ... light.html

That plane is flying in direct contradiction to the nonsense idea of EROEI only being >1 for such activity to continue.

BAU as it functions today can not survive solely on poor EROEI fuels.

EROEI was getting poor when wooden casing was replaced with steel, when donkeys no longer hauled the small tanks of oil down to barges along the river bank, when wire rope replaced manila. Poor EROEI started when drilling began in water, directionally, all the methods used by modern industry are simply a reflection of how deep they have to drill, and in what conditions. Tell me, has this ever decreasing EROEI bothered you in any particular way? Are there shortages in your area, after nearly 100 years of these poor EROEI fuels? There certainly aren't in mine...so SOMEONE must be doing a decent job dealing with this issue.

When I tlak about Olduvai I don't mean literal Olduvai but more of the colloquial definition of us winding up smack dab the way we began.

I see. Everyone has gotten real quiet on that bit of silliness ever since it happened, but I understand your reference. It does have a catchy ring about it as well, a little bit scary sounding, a little primitive, Duncan can be credited for good marketing I think.

Oil stopped being cheap in 1969

Wrong. Cheap is as vague a term as "plenty".

Sure...which is why we've defined it using various econometrics. The real price of crude has been getting more expensive since 1969. The reference, and the method as to how to determine this has been explained.

Oil stops being "cheap" when it puts downward pressure on the economy that visibly drives down standard of living.

Thats as vague a definition as it gets. "Downward pressure on an economy"....you mean, like in the 70's? Or the 80's? Or this decade? And certainly "standard of living" would need defined in a better way, during the runup to peak price in 2008 I invested in a different form of transport, and my total cost outlay for 2008 fuel expenditures was lower than it was in 2007, thereby LIFTING my standard of living that year. Does that mean fuel was cheap in 2008? NO. It just means I mitigated the cost and raised my standard of living through efficiency. Fuzzy thinking Moss, you can do better.

If we get to the point where this downward pressure is chronic rather than brief and episodic, and it steadily intensifies, we've got a problem.

Sure...like we had in the 70's, and the early 80's. Nothing new now, except the trend for the real price of crude has continued to increase, thereby making it "less cheap" then its all time low price back in 1969.

[cynthia]

OP and guy right above me - practice makes perfect.

Say it with me - "it's all speculation. The rise in oil price is not based on fundamentals."

Practice practice.

Some day, a few decades from now, our donkey carts will cross paths and you can comment that there's plenty of oil but speculation has caused us to drive donkey carts.

Howdy, Gideon.

OMG! I was thinking the same thing reading the Doc's posts yesterday! Say, it's true G. I've missed you.
cynthia

[MD]

...

... the trend for the real price of crude has continued to increase, thereby making it "less cheap" then its all time low price back in 1969.

A trend that will continue. A trend that will force economies to change the way they use and cycle energy. Radically.

You are unwise to dismiss eroei in that context, especially if the trend should change rate.

It's a great time to be in the energy business!

[shortonsense]

...

... the trend for the real price of crude has continued to increase, thereby making it "less cheap" then its all time low price back in 1969.

A trend that will continue. A trend that will force economies to change the way they use and cycle energy. Radically.

Yes. And has been doing so for 40 years now. You think hybrids were an accident? Prototyping fuel cell vehicles in Southern California an accident? Businesses do these things for a reason, they practice with prototypes BEFORE they are actually needed so as to gain a competitive advantage when they are needed. You think the US would be building out 40% of all new electrical generation with windmills if it weren't for someone recognizing that burning coal for the next century may not be the smartest way to do things?

You are unwise to dismiss eroei in that context, especially if the trend should change rate.

Wise has nothing to do with it. When something is irrelevant, it is irrelevant. We have ZERO examples of EROEI providing the go/nogo decision on any oil and gas project, well, or field. Ever. In the history of mankind. We have examples of EROEI < 1 being a perfectly practical way to, for example, fly an airplane on natural gas. We have no examples of EROEI ever dictating the flow rate from a well or field, the amount of profit made on that well or field, or anything else pertinent to the peak oil argument.

Ever.

I simply notice the obvious, whether it is wise or not.

It's a great time to be in the energy business!

For some perhaps. With drilling rig activity being cut in half since last year, I'm betting there are a few out there who may disagree.

[mos6507]

I can put 10 units of solar energy into getting 1 unit of liquid hydrocarbons if the IRR for the company doing the process meets their standards. And we recently have references for the heavy oil in California for Chevron apparently doing exactly that.

I would characterize that with this image:

So my EROEI can easily be <1 and yet production continues. Same as with a GTL process. And lets not forget, we can do that and fly airliners on the result.

Sure, production continues. But who will afford it? Ferrari makes money, but there is no Ferrari in every garage. BAU persists because the common man has access to cheap energy slaves. That is what constitutes modernity in the 1st world as we know it. Those slaves will stop being so cheap until only the upper class will afford to have them.

That plane is flying in direct contradiction to the nonsense idea of EROEI only being >1 for such activity to continue.

That's not EROEI. That's diluting an expensive fuel with a cheaper one.

Are there shortages in your area, after nearly 100 years of these poor EROEI fuels? There certainly aren't in mine...so SOMEONE must be doing a decent job dealing with this issue.

Ah, "they'll" think of something. Trust the man. That's a formula for success! I can hear Bobby McFerrin singing his song right now.

Duncan can be credited for good marketing I think.

I don't think Duncan was the first guy to put forward the notion that industrialization would be a quick "pulse" and we'd be right back where we started. So don't throw out the theory just because his predictions are shaky. Other books like Overshoot and the entire ouvre of anarcho-primitivism set the bar really low on what constitutes sustainability. I'm not sure I'd set it THAT low, but I generally agree that it has to be pretty damn low outside of some renewable/nuke revolution.

Thats as vague a definition as it gets. "Downward pressure on an economy"....you mean, like in the 70's?

No, I mean a recession that doesn't have some happy ending to it.

"standard of living" would need defined in a better way

How's this?



Sound pleasant?

We won't get there immediately, but that's where we're headed.

Does that mean fuel was cheap in 2008? NO. It just means I mitigated the cost and raised my standard of living through efficiency. Fuzzy thinking Moss, you can do better.

The truck that delivered the food you ate in 2008 did not adapt to a different form of transportation. You are part of a larger system that is vulnerable to oil shocks. Just because the house of cards didn't completely fall apart doesn't mean it can withstand $150 oil let alond $200 and beyond when the time comes.

Sure...like we had in the 70's, and the early 80's. Nothing new now, except the trend for the real price of crude has continued to increase, thereby making it "less cheap" then its all time low price back in 1969.

It might be like the 70's at first, but what happens when we have less access to oil than we did during the worst parts of the embaro? Then what happens when we have half of even that? How low can we go before it is TEOTWAWKI?

[shortonsense]

So my EROEI can easily be <1 and yet production continues. Same as with a GTL process. And lets not forget, we can do that and fly airliners on the result.

Sure, production continues. But who will afford it?

?? Natural gas is currently going for perhaps $4/mcf? $5/mcf? 10 mcf required to make a barrel of synthetic crude, cost of $50. Sell crude for $80. Pocket difference, minus capital investment.

The more expensive crude gets, the better this equation works. Are you claiming that at $80/bbl, crude is too expensive to purchase, even if its made from natural gas?

That plane is flying in direct contradiction to the nonsense idea of EROEI only being >1 for such activity to continue.

That's not EROEI. That's diluting an expensive fuel with a cheaper one.

Then you don't understand EROEI. The natural gas energy equivalent to a barrel of crude is approximately 6000 scf to 1 barrel. It requires 10,000 scf to make that barrel, resulting in a basic EROEI calculation of 10 units of natural gas energy in to create 6 units of natural gas energy (now in liquid form) out....EROEI = Energy Returned ( 6 ) on Energy Invested ( 10 ) = 0.6 not counting anything else, which only makes that number worse.

Energy equations do not care about form.

Duncan can be credited for good marketing I think.

I don't think Duncan was the first guy to put forward the notion that industrialization would be a quick "pulse" and we'd be right back where we started.

Probably not. Duncan was the meathead who said the world would end in 2008 because of lack of natural gas, resulting in lack of electricity, resulting in dieoff. Yeah I know, sounds stupid to me too, but he was pretty popular under some rocks...until...as with peak oil....his predictions timeframe came and went and we all realized he didn't know anything about the earth sciences.

So don't throw out the theory just because his predictions are shaky.

Shaky? How often are you having those claimed "permanent blackouts" in your area?

Thats as vague a definition as it gets. "Downward pressure on an economy"....you mean, like in the 70's?

No, I mean a recession that doesn't have some happy ending to it.

But thats not what you said. You said, "downward pressure on the economy", a condition which can easily have been claimed to have taken place plenty of times before.

Does that mean fuel was cheap in 2008? NO. It just means I mitigated the cost and raised my standard of living through efficiency. Fuzzy thinking Moss, you can do better.

The truck that delivered the food you ate in 2008 did not adapt to a different form of transportation.

Wrong again. During the price spikes in 2008 many trucking companies were putting governors on their big rigs, cutting down speeds and conserving fuel, thereby driving down their cost per ton mile.

http://www.boston.com/news/nation/artic ... save_fuel/

Its beautiful when nothing but a change in behavior can have such an impact. It tends to negate the entire peaker argument to some extent.

You are part of a larger system that is vulnerable to oil shocks. Just because the house of cards didn't completely fall apart doesn't mean it can withstand $150 oil let alond $200 and beyond when the time comes.

It has already withstood $150 oil, just like it withstood, during the 70's and early 80's, nearly the same real price. I keep saying it Mos, none of this is new. Its all happened before. People drive less. People drive more efficiently. People buy Prius's. People bicycle. Some of us, like me, pay even less for our fuel because we use these techniques to use less of it. Why is basic efficiency such a tough concept to sell?

It might be like the 70's at first, but what happens when we have less access to oil than we did during the worst parts of the embaro? Then what happens when we have half of even that? How low can we go before it is TEOTWAWKI?

You assume that decreasing demand can only lead to TEOTWAWKI. I certainly do not. I listed countries which have been using less for longer periods of time than a decade...they didn't collapse...they built cars and shipped them to America, they cared for their citizens, they maintained their standard of living. Only peakers assume that decreasing demand is some sort of auto-trigger for Doom.