The Unfounded Fear of the 'Peak Oil' Monster

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Andre, I'm not sure what you mean by getting data from industry. But you should be carefull relying on quotes from officials such as Burgan is "exhausted". He was saying they couldn't expand, and apparently they expect it to be fairly flat for years to come. Ghawar production fluctuates with market conditions, and relative quality premiums/discounts, but so far as I have seen, there is no evidence it is in decline. I don't think it's been above 5 mb/d for many years, not a level just recently reached.
The Uppsala group is mostly physicists, isn't it? And I've been doing this for 34.5 years, and have seen attitudes fluctuate, but between optimists and pessimists, not geologists and economists.
The Uppasla group has only been working for a short time, and I've seen very few detailed forecasts from more than a couple of years ago, that would allow judgement of their accuracy. Can you cite a couple? Thanks.

Mike Lynch of MA 9:03AM February 13, 2012

When it comes to field specific data I get most from the industry. In 2005 Kuwait Oil said that Burgan was exhausted and that production levels had dropped, I interpreted this as a peak in production.
I think that Gahwar peaked in 2005 because if you remove production from new fields Saudi would produce 25% less oil today. I also believe that Saudi is struggling just to prevent production from falling, at least the share of light crude is smaller now than before.
Well, scientists at Global energy systems here at Uppsala University has since 2004 given forecasts that have been much more accurate than those given by the economists and large oil agencies. Kjell Aleklett has also in detailed showed how the IEAs predictions are overestimated. IEA are using economists to determine the future production, therefore at least scientists at Global Energy systems have proven to be more accurate than the economists.
I have studied the subject for nearly ten years, I'm much aware of the history of the debate. Geologists vs economists was just a simplification made by me, however I believe that description to be pretty accurate. Geologists from the USGS did some very flawed predictions in the early 20th century, and economists (among others, even other geologists) has used that as an argument against peak oil. Even when King Hubbert predicted the peak in US oil production both other geologists and economists where against him. However during the last ten years IEA, EIA, BP, CERA, economists, oil market analysts, etc has made many flawed predictions and forecasts. They also seems to ignore key factors like the laws of thermodynamics (EROEI, net energy, etc).
If you still think I'm missing something then please explain what that is.

Andreas Larsson 9:20PM February 12, 2012

Interesting comments, Andre, but where do you get your field data? I'm not aware that either Burgan or Ghawar has shown any significant decline; neither has data published in the open.
And I believe you have your causality mixed. Geologists have not become 'right' in their pessimism, rather, events since the 1998 oil price collapse have affected oil production. It's rather as when Paul Ehrlich claims his apocalyptic predictions are correct because bad weather affects crop prices temporarily.
Describing the debate as between 'economists' and 'geologists' shows that you are not really aware of the history or content of the debate, but have picked up assertions made by some peak oil theorists. It is completely incorrect.

Mike Lynch of MA 9:25AM February 12, 2012

"And superfields began declining a long time ago, without causing global production to decline. "
A long time ago? Sounds like you don't have a clue.
Both the Ghawar Field and the Burgan Field peaked in 2005, the Cantarell Field peaked in 2004. The Tengiz Field peaked in 2010.

Andreas Larsson 5:27AM February 11, 2012

Historically scientists (or rather geologists) might have been wrong, however for the last at least 8 years the economists has been wrong. The International Energy Agency (IEA) (and CERA among others) has been using economic models to predict future oil production. And since 2004 they have been wrong. And because of this they changed tactics in 2008 and made the largest study of current oil fields. The results where that the fall in oil production is very steep. By 2035 76% of the production will be gone. And that is something that we won't be able to replace in a timely manner. The IEA even states that crude oil production peaked in 2006. Also NGL is used for other things and has lower energy contents than crude. Another more important thing is EROEI and net energy, what matters for society is net energy and soon one barrel of crude from tar sands will only give the net energy of half a barrel of conventional crude.
Also it's cheap oil that runs the current economy, the Oil Shockwave simulation concluded that 4% drop in supply resulted in a price rise of 177%.
And the oil net export market has been shrinking since 2005, if the trend continues it will be gone by 2030. Of cource this won't happen but the price will kill the economy over and over again.
Peak oil is a reality and we have already seen some effects of it.

Andreas Larsson 5:13AM February 11, 2012

No, Tom, I didn't say that my predictions must be right forever. THis is you creating a straw man.
Extrapolation of discoveries works only in a given basin, and if there is relatively free drilling and no particular technological impact. This is why the application of it to regions or the world does not work.
And superfields began declining a long time ago, without causing global production to decline.
But at least you are in relatively good company in misinterpreting supply conditions.

Mike Lynch of MA 7:49AM February 08, 2012

Gee, Mike, I guess you made some money making short term oil production predictions in the 80's and 90's ! That must mean your predictions will be "pretty good" forever, right ?
And now you point out that "very few anticipated prices at this level" - is that because you and your colleagues didn't see Peak Oil coming ?
"Geologists complain that economists assume discovery, which is often true"
"This ignorance of causality also drives their presumption ... in other words, blind extrapolation of the current trend."
Blind extrapolation of superfield discoveries ? And why no mention of the alarming decline rates of crude production from existing superfields?
Things that can't go on forever, don't.
Biofuels, heavy oil, oil sands and shale aren't going to save the day - time to take the red pill, Mike.

Tom Stone of NY 4:19PM February 07, 2012

Gee, Tom, I guess you know how to use Google! I have plenty of other bad forecasts besides that one, but if you knew anything about the subject, you would know: a) that my three decades plus record is pretty good; b) that nobody has a good price forecasting record; and c) that very few anticipated prices at this level.
Guess not everybody on the internet is MIT Tony Stark smart.
Mike

Mike Lynch of MA 7:29AM February 07, 2012

This guy is an eternal over-optimist:
http://www.forbes.com/forbes/2006/1002/098.html
In October 2006, with oil at $66.50/barrel, Mike predicted oil will fall to $45 by mid-2007 and could dip briefly into the 20s in 2008.
LOL
Not even close.
He always predicts that political unrest will clear up "soon", and big projects and discoveries are "coming", and oil prices will always be getting better "sometime next year", and production will be picking up "just as soon as..."
Well, not *everybody* from MIT is Tony-Stark smart.

Tom Stone of NY 11:21PM February 06, 2012

"First they ignore you, then they laugh at you, then they fight you, then you win." -- Gandhi
Looks like Peak Oil has reached the second or third stage of realization.

Jan Steinman 1:01PM February 06, 2012