World not running out of oil, say experts

The Times (U.K.) ^ | January 18, 2008 | Carl Mortished

[Stoat]

World not running out of oil, say experts

 

 

 

Carl Mortished, World Business Editor

 

Doom-laden forecasts that world oil supplies are poised to fall off the edge of a cliff are wide of the mark, according to leading oil industry experts who gave warning that human factors, not geology, will drive the oil market.

A landmark study of more than 800 oilfields by Cambridge Energy Research Associates (Cera) has concluded that rates of decline are only 4.5 per cent a year, almost half the rate previously believed, leading the consultancy to conclude that oil output will continue to rise over the next decade.

Peter Jackson, the report's author, said: “We will be able to grow supply to well over 100million barrels per day by 2017.” Current world oil output is in the region of 85million barrels a day.

The optimistic view of the world's oil resource was also given support by BP's chief economist, Peter Davies, who dismissed theories of “Peak Oil” as fallacious. Instead, he gave warning that world oil production would peak as demand weakened, because of political constraints, including taxation and government efforts to reduce greenhouse gas emissions.

 

 

Speaking to the All Party Parliamentary Group on Peak Oil, Mr Davies said that peaks in world production had been wrongly predicted throughout history but he agreed that oil might peak within a generation “as a result of a peaking of demand rather than supply”.

He said it was inconceivable that oil consumption would be unaffected by government policies to reduce carbon emissions. “There is a distinct possibilty that global oil consumption could peak as a result of such climate policies,” Mr Davies said.

The BP economist's remarks were echoed yesterday by Mr Jackson. “It is the above-ground risks that will influence the rate [of oil output],” he said.

Cera analysed the output of 811 oilfields, which produce 19 billion barrels a year, out of total world output of 32 billion. These included many of the giants, including Saudi Arabia's Ghawar, the largest known oilfield, which has been at the centre of the debate between peak oil analysts and their detractors.

In his book Twilight in the Desert, Matthew Simmons of Simmons & Co, the consultancy, said the big Saudi fields reached their peak output in 1981 but Cera yesterday said that Ghawar was not failing. “There is no technical evidence that Ghawar is about to decline,” said Mr Jackson.

Cera reckons that oil output, including unconventional oil, such as tar sands, could allow oil to peak at much higher levels of as much as 112 million barrels per day, with average rates of more than 100million bpd.

The Cera analysis targeted oilfields producing more than 10,000 barrels a day of conventional oil and concluded that overall output was declining at a rate of 4.5 per cent a year and that field decline rates were not increasing.

This is much lower than the 7 to 8percent average rate that is generally assumed in the industry. Typically, Peak Oil theorists believe that the output of oil reserves can be plotted on a graph as a bell curve, rising to a peak and then falling rapidly.

It was proposed in 1950 by M King Hubbert, a US geologist, who successfully predicted the peak of onshore oil production in the United States.

His analysis is disputed by many geologists today, who argue that technology has changed the equation, allowing oil companies to produce more oil from reservoirs than was previously possible.

Meanwhile, increases in the price of oil has made the extraction of difficult reserves economically viable.

[sphinx]

They're not ignoring unconventional oil:

P.Cera reckons that oil output, including unconventional oil, such as tar sands, could allow oil to peak at much higher levels of as much as 112 million barrels per day, with average rates of more than 100million bpd.

No one, including peak oil theorists (which I'm not), would disagree with this. As conventional oil declines, we will substitute alternatives. The issue is whether unconventional oil, which is somewhat move expensive, will be the price winner vs. other alternatives coming online.

[Smokin' Joe]

I must be very lucky to see the pumps when they are in their off cycles.

It all depends on the lift volume per stroke. some are steady and low volume, some are longer stroke (higher volume) and intermittent.

New wells might be flowing, nad not need a pump at all.

24,000 gallons of gas--about 8 semi-loads if iirc.

I don't mess around with the downstream end of the industry much, I am in exploration.

Either that was a very large facility with a lot of fuel islands, or the tanks were dry while you were putting the pumps in.

Not knowing what sort of arrangement the distributor had with the owner, whether the station was under new management, or what, I can't say one way or the other.

That fuel may have been paid for and waiting for y'all to finish installing the pumps. I don't know.

A gasoline shortage doesn't mean that crude storage tanks won't be full if the bottleneck in the supply chain is in the refining process.

So you could well have seen crude tanks full, and there still have been a gas shortage.

[thackney]

——24,000 gallons of gas—about 8 semi-loads if iirc.——

FYI, fuel trailers are most commonly ~9,000 gal, some up to 12,000.

http://www.truckpaper.com/listings/forsale/list.asp?bcatid=28&catid=64&ParentCategoryID=28

[seemoAR]

So, we had a shortage of refining capacity instead of an oil shortage. As I recall, we buried 3-8,000 gal tanks at that new Esso station.

[Smokin' Joe]

I stand corrected. Thanks.

[Smokin' Joe]

Well, that explains the 24000 gallons of fuel.

In 1974, iirc, the arabs embargoed us and the price of a barrel of crude oil doubled overnight.

Refineries have to shut down periodically for maintenance and upgrades, otherwise, they have more serious problems and longer delays, usually after a fire or explosion.

There are many reasons why crude oil tanks can be full during a shortage, not the least of which have to do with refining capacity, but may include having just been filled with refinery feedstocks (offloading tankers--i do not know where you saw these tanks, whether at a port or inland), or waiting for pipeline space to be sent out.

In general, though, if it costs more to do than it will bring in in revenue, it probably won't get done. It is a business, not a charity.

[thackney]

I was on the design team for a few Refined Product Truck Loading stations. We spent a ridiculous amount of time debating queue lengths and how much pavement to build based on projected sales.

The numbers are stuck in brain.

[Intimidator]

And by that measure it could be said that "Liberals" driving tiny, lawnmower-motor-powered cars are not using gasoline "liberally" either. I would imagine that most Conservatives don't consider their SUV's to be a 'waste' of gas either, but an entirely valid use for it, in that it provides a means of 'conserving' their families by providing a safer environment for them than the tiny cars do.

Doesn't matter to me really, its your wallet not mine, just saying.

[Stoat]

Doesn't matter to me really,

I'm sorry to hear that, given the fact that you took the time to submit a post here.

 its your wallet not mine,

Indeed it is, thankfully, and many people who "waste" their money on a car bigger than a rollerskate view it as a perfectly sound investment.  Among other rationales, it can be viewed as a more tangible sort of life insurance....many of us prefer paying a bit more up front than paying for completely unnecessary injuries suffered as a result of a needlessly damaging auto accident.  Thankfully, America is still a place where people are allowed to protect themselves and their families in this way if they so choose as opposed to being forced into tiny little cars that are totalled when they hit a bicycle or a cat.

Lying in a hospital bed while wondering whether you would even be there at all if you had opted for a slightly safer car is not the sort of question that many people enjoy pondering.

 just saying.

I'm unsure what this means, but I'm guessing that it ties in with your opening 'doesn't matter to me' disclaimer.