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Oil Supply/ Peak oil not till 2025


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In reply to: ian_whitchurch on Wednesday 29/03/06 09:24am

No Worries ...


As I said I glanced .... but one has to say it is at least a little skewed to one side of things.


I only mentioned some of it ... but did go thru one of his previous pieces in detail and there just seemed to be missing oilfields all over the place especially from the non opec countries and with stuff coming on line.


Of course a lot maybe I am including have been announced and are in the final stages of pre production before they start spending the serious money ....


In total I make it 3 million extra barrels of oil in 2006, 2007,2008,2009 each an every year.


Exisiting fields decline will total about 4.5 million barrels a day out to 2009.


Net increase is 7.5 million barrels a day ...


then subtract increased demand of say around 5.5 million barrels a day ... ignoring any reduction due to price elasticity of demand ....


I still come out with a much easier supply side equation as time goes on.


This is the same thing being produced by various bodies but my own view is almost the same as "International Energy Agency (IEA) " except I dont agree with their LNG supply outlook due to suspicion tar sands production explodes.


Matthew on the other hand paints a somewhat different picture and tone ... from easing supply constraints by IEA and US dept of energy OPEC itself ..... his tone is the contraints on the supply side remain longer and deeper.


just my little old view mind you ... but prefer to listen to IEA as opposed to Matty ...


Was a bull for a long time on oil ... but at best here maybe it keeps pace with inflation .... and certainly dont see any substantial sort of gain like we saw 2002/3/4/5 .....


Will be interesting to see what unfolds over time.


Cheers mate



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In reply to: kahuna1 on Wednesday 29/03/06 10:49am

Kahuna, where are you getting your numbers from? I'm currently reading 'Half Gone' by Jeremy Leggett. Pg 70 states "The Canadian Association of Petroleum forecasts an increase in supply to 2.6 mmbopd by 2015. Even if all current expansion plans for Alberta's tar sands come to fruition they will produce only 3 mmbopd by 2012. These are almost unnoticeable percentages of projected demand"


The author has studied Peak Oil for many years, and having read his book (nearly finished), he has a fairly impressive resume.



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In reply to: Optionsman on Tuesday 02/05/06 12:46am

Hi optionsman,


I think the title says it all .... their are two camps in this debate ... one is the peak oil and the others of which I sit .... more towards the peak oil side as supply demand will remain tight.


The author has studied Peak Oil for many years


Interesting the Author I presume calls the 3 mmboe a day or 4% of total oil supply nothing. With the price of oil above US$70- I suspect we see another rush of new projects in the coming 12 months in Canada.


I dont suppose he mentioned a little country called Venezuela in his chat about the topic ?

Or the fact that they have just got themselves a partner to develop the second largest tar sands deposits on the planet ... none other than China. China the country who tried desperatly to get into the Canada tar sands scene ... but in the main failed.


Current mania with resources has seen us hit 25 year highs for metals .... and suspect they keep going for now. Maybe they break them by 10% more or 20% more who knows.

But supply ... aside from the Iran threat use the below link an it gives you an idea.


However much like oils, the supply situation has been toned down or ignored. Oil and gas supply/ demand equaition will remain very tight for some years to come. But it has eased greatly from mid 2004 ... the outlook that is. Of course the price has continued higher ... such is life.


The supply outlook now mid 2006 bears little resemblance to how awful it looked late 2004.




Dont have an impressive resume ... well I do but who cares :}.

Now briefly about demand and increased demand or future demand growth.


I do not believe any current projection from supposid experts is correct in this direction.

Especially the peak oil doomsdayers.


A few reasons... with prices up here the actual demand per capita I suspect will retreat ... how much I don't know . Above US$70- I believe it begins to hit the price elasticity of demand point.


Secondly if we are to sit US$60- plus or US$70- plus as we have seen the viable alterantives are being explored with full backing and finacial support in some cases from actual goverments. This will result in new ethanol or electric cars which will cause some total demand destruction .... but the peak oil proponents would have us beleive due to China and India total demand will just keep growing and in fact if you look at their demand tables for any peak oil proponent they just keep growing at the same rate of growth irrespective of price.


Higher the price goes ... more viable alterantives become.


The actual tar sands themselves were not economic really below US$25- per barrel.

Well we are some way from there. On this topic China has tried and tried to get into the Canadian tar sands but to some extent frozen out by US interests. It is interesting reading that venuzuala opening the doors to China ... and basically China alone !!


Last on the topic of demand growth .... its a good one.


In the US car sales s well as Australia have taken a massive nose dive in one direction. New car sales of SUV and larger makes have fallen by a whopping 34% ... ours are the same. The initial impact of this I suppose is not much but taking the US eventually all cars have a life of say 8 years and this trend has been going on for 18 months so the effects on demand growth as yet to be really felt ... but the US consumes 25 million barrels of oil a day. Half is for personal use. SO around 12.5 million barrels .... if one assumes and I think its a fair call that a lagre SUV uses at least 35% more oil than a smaller car .... the full effect of this in the US alone .... 35% of 12.5 million barrels times a 34% switch ... about a reduction in demand for the US of 1.5 million barrels projected. This trend is not only in the US ... its world wide so by 2012 ... I suspect one can shave about 3 million barrels in demand off the top for this one alone.


As to price elasticity of demand ... I don't know ... but viable alternatives ... gee even Australia is talking 5% ethanol blends in all petrol. Since we consume 300 million barrels a year ... it aint much on the global scale ..... but lots of countries talking along similar lines from electric cars to hybrids ect ect.


Add these factors together ... and its a bullish call long term growth of demand remainging the same as we saw 2000-2005 ... but thats exactly what the growth of demand tables seem to do in virtually every case.


Supply side ....


A group of guys with a lot more degree's than your peak oil guy had ....




I suspect personally with oil up here we see a massive increase in tar sands plans in Canada. Also feel the road to oil shale production has been tripped and the reserves of OIL shale are about twice the already massive tar sands recoverable amount and the USA itself is one of the larger holders. So too IS Australia.


Short term ... its Iran ... and the threat driving things ... but Russia clearly has stated it will not vote for anything in the UN unless they can prove Iran is actually moving towards producing a weapon. It still leaves China and since Iran awarded the lions share of its new exploration and development liciences in recent times to none other than China ...... it might remain a shouting match but the UN will do nothing with its hands tied like the good old cold war days with veto from Russia and Veto from China.


Have a good look at the web page ... its a beauty.


So far in the last month we have had the head of Exxon and both the Saudi and Kuwaiti oil ministers all say the same thing .... they don't know why oil is here other than the threat from Iran supplies are more than ample. That the US refinery situation is not great due to an outage .... makes sense ... drive the price of the unrefined product up when if anything the refinery being out lowers the actual demand.


I find it interesting the land of fear we live in ... with analyists who were calling say a price high of $21- for BHP in July 2005 ... now 9 months later one of them who was slow ... now calling BHP price target $38.


Certainly the spike in metals was larger and higher than I thought ... it might go 10/20/40/50 % or more higher .... but like oil ... eventually demand/supply will come to roost.


Price spikes have definate impacts and oil sitting above US$70- I suspect will cause more and more tightening around the globe ... slowing economic growth ... in the meantime all these expansions in capacity not only in oil will be coming on line ... will be a very interesting future I suspect ... not that this hasn't been a doosey.



Good Luck

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In reply to: kahuna1 on Tuesday 02/05/06 09:58am



You remember that table you had of new projects that should be coming on line in the next year or two ?


Would it be possible to get that reposted somewhere, so we can update it as and when news comes available .


As to higher prices causing demand destruction, the evidence is that it doesnt -




is somewhere to check out (much as I dont rate eia's forecasting, they are OK when looking backwards). Note that 1985's $20 oil demand was 15 mmbd, while 2005's demand for $30 oil was 20 mmbd.


Demand growth slowdown, I'll buy, but not demand destruction.


In the end it's going to be new projects vs decline rate plus increased demand from a developing third world.


Remember, 'peak oil' is not 'running out of oil' - it's hitting a limit on how much you can pull out per day.


Finally, I'll believe hybrids when I see a $15000 4 cylinder hybrid that does 50 mpg selling in Auto Alley. They are part of the solution, however.


And dont get me started on Little Johnny Howard f!cking up ethanol to protect a mate at Manildra. Because he was lazy, stupid and unwilling to use regulation right, I have signs at my local servo advertising 'No Ethanol'.


Nice one, Johnnie. And if it's part of the solution, why have punitive taxes to prevent me importing cheap Brazillian ethanol, rather than expensive Saudi crude ? Thats right, because John Howard's little mate at Manildra needs to be protected.


Ian Whitchurch





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This is the status of the top 20 oil producing wells. We are not finding deposits of this size. So, if peak oil is not upon us, it is very close.


1. Ghawar - S. Arabia - Level Production

2. Greater Burgan - Kuwait - CONFIRMED DECLINE ~14%

3. Bolivar Coastal - Venezuela - Level Production

4. Rumaila North & South - Iraq - Unknown

5. Safaniya - S. Arabia - Unknown

6. Kirkuk - Iraq - CONFIRMED DECLINE

7. Samotlor - C.I.S. - CONFIRMED DECLINE ~ 9%


9. East Baghdad - Iraq - Unknown


11. Gachsaran - Iran - Unknown

12. Abqaiq - S. Arabia - Level Production

13. Ahwaz - Iran - CONFIRMED DECLINE ~19%

14. Romashinko - C.I.S. - CONFIRMED DECLINE

15. Cantarell Complexx - Mexico - CONFIRMED DECLINE ~14%

16. Marun - Iran - CONFIRMED DECLINE

17. Zuluf - S. Arabia - Unknown

18. Berri - S. Arabia - CONFIRMED DECLINE

19. Agha Jari - Iran - CONFIRMED DECLINE

20. Daqing - China - CONFIRMED DECLINE

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It's all very learned sounding here, a bit too much for me to weigh in to the discussion, but I have a question for you all and would love to hear comments.


What about coal, as in coal-to-gas, coal-to-liquids? If coal is a source of viable substitutes for oil then the peak oil might just be a bit less of a drama than some are predicting.


Coal doesn't seem to get discussed much. I've read converting caol becomes economical at US$30barrel, we are way past that. And, if the Germans could make it use of the conversion back in WWII, surely it's not all that hard? I've had coal liquefacation plugged into Google Alerts for the last few weeks and plenty comes up. Does coal not get discussed much along with peak oil, because the peak oil debate is split along pro-oil or pro-enviroment lines, or is it too difficult to matter in the energy future?


cheers, mm

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There are always alternatives but every action has an affect on something else


I am not sure how much coal would be requred to replace oil reserves used, but I suspect its an awful lot. Higher demand for coal will result in higher prices for coal. Higher prices for coal will result in higher electricity costs. So we replace high costs at the petrol pump with high prices on home electricty.



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QUOTE (mooomooo @ Tuesday 02/05/06 05:17pm)



It's not about hard, it's about the rate and the cost-benefit.


The WW2 project was amazingly, horribly not cost-efficient - there's some stuff in Yergin's The Prize about how IG Farben etc wanted to bail on it.


CTL is also really, really hard to scale up to the hundreds of thousands of barrels per day - which is about what we are going to lose each year for about five years for decline at Burgan and Cantarell.


There was stuff on this very thread about one fo the flagship Chinese CTL projects.


The big thing that makes me cynical about CTL, Oil Shale etc is the acute lack of Bankable Feasibility Studies for CTL etc projects. Show me a BFS, show me CapEx, Opex, Water and Power usage, and then we argue about whether to build em.


The other non-trivial factor is that as the price of oil goes up, so does the cost of energy in general, as oil-fired power stations, oil-fired heating etc gets replaced by other stuff. Yep, that includes the coal feedstock for CTL.




Any chance of getting that table updated for bopd ?


The table I was asking Kahuna about was the projects that arent currently producing, but should be in the next couple of years. Some of them were quite chunky - in the 250-400 000 bopd range.



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In reply to: tradem on Tuesday 02/05/06 05:30pm

alot of these alternatives sound medium to long term-ish. in the meantime, those long energy stocks should make a pretty good return on their investments one would think.



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Hi Ian


This article pretty much sums up the bopd for the decling fields:


Oil fields are maturing. The newest Saudi oil field is Shaybah and it came online 10 years ago. West Texas oil field is nearing depletion with peak production at 1 million barrels a day and declining. Al-Huwaisah peaked at 47,000 barrels per day, Rima peaked at 47,000 barrels per day, Oman oil fields are not relevant too Saudi oil future. Looking at world production, there are four oil fields whose oil production exceeded one million barrels per day: China's Daging (1 million barrels per day for 35 years), Russia's Samotler (3.5 million barrels per day), Alaska's Prudoe Bay (1.5 million barrels per day), and Mexicos Cantrell (2 million barrels per day). Eight other giant oil fields have peaked: Oseberg, Brent (1985 peaked at 440,000 barrels per day), Gullfaks, Prudoe, Slaughter, Romashko, Forties (1980 peak at 523,000 barrels per day), and Samotler. Iran Peaked before the revolution: aghajar (peaked in 1973 with oil reserves of 28 billion barrels), Gach Saran (peaked in 1979 with oil reserves of 49 billion barrels), Muran (peaked in 1967 with oil reserves of 47 billion barrels), and Ahuraz (peaked in 1977 with oil reserves of 28 billion barrels).


Ghawar is the king of oil. Ghawar is the greatest oil and geological structure the world has ever known, spanning 170 miles in length. Ghawar was found in 1951 and has produced 55 billion barrels and in the last decade produced 18 billion barrels. Ghawar represents 55 to 65 percent of Saudi production. Ghawar produces 5 million barrels a day. In 1993 the water cut was 26%, in 1996 the water cut rose too 29%, and in 2003 the water cut reached 33%. Ghawar produces 6-8% of the worlds crude.


Abqaiq was discovered in 1940, 37 miles long. Abqaiq oil is of extraordinary quality: thick oil columns, good porosity, 36 api, and excellent permeability. In 1973, Abqaiq peaked at 1 million barrels per day.


Safaniya is the second most productive oil field and is the largest offshore oilfield. In 1980, Safaniya produced 1.5 million barrels per day of heavy oil, 27 api. In 1988, Safaniya reached a mature level of depletion and experience side step increases in cost.


Berri was discovered in 1964. Berri oil reserve was 8.3 billion barrels. In 1976, Berri oil production peaked at 800,000 barrels. The water cut is at 20%. By 1991, Berri had produced a total of 1.7 billion barrels of oil. In 1994, daily oil production had dropped to 300,000 barrels.









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