Peak oil a hoax? Prove it.

[stickdog99]

I don't think you get my main point, which is that the vast majority of the oil that currently comes from SA, Iraq and Iran costs far less than $5 dollars a barrel to get out of the ground. Much of it costs less than $2.50 a barrel to extract and barrel. So the current markup up on the price of a barrel of this oil is generally well over 2000% just at barrel price. Then when you refine it into heating oil and gas that you sell $3.50+ a gallon, you are looking at a truly crazy mark up considering how cheap it is to produce this kind of oil.

[wintler2]

So now you want to talk about price.

I don't think you get my main point, which is that the vast majority of the oil that currently comes from SA, Iraq and Iran costs far less than $5 dollars a barrel to get out of the ground. Much of it costs less than $2.50 a barrel to extract and barrel. So the current markup up on the price of a barrel of this oil is generally well over 2000% just at barrel price. Then when you refine it into heating oil and gas that you sell $3.50+ a gallon, you are looking at a truly crazy mark up considering how cheap it is to produce this kind of oil.

1. Price is a different issue to volume extracted/'peaking', so strictly speaking is offtopic. (yes i'm anal about that, see last 20 pages of offtopic fantasies and personal attacks).

2. Where are you getting your numbers from? cos they're very very low.
2.a. Are you aware that Saudi Arabia's water cut is at least 30 maybe 75%? which surely increases its production costs from 'the good old days'
http://www.theoildrum.com/node/6052
2.b. And what cost are you ascribing to the hired thugs currently occupying Iraq? Remind me, is it a billion or a trillion a year that the US junta is laundering there?

3. Extraction/'lifting cost' is only 1 bit of the chain, theres also exploration, transport, refining, royalties, & tax.

4. Combined production from those countries is less than a quarter of global production, so doesn't control or lead global oil price.

Do you agree or disagree?

It is difficult for me to agree with someone who provides zero evidence to support their opinion.

[Pele'sDaughter]

http://www.nytimes.com/2011/08/25/us/25gas.html

Geologists Sharply Cut Estimate of Shale Gas

WASHINGTON — Federal geologists published new estimates this week for the amount of natural gas that exists in a giant rock formation known as the Marcellus Shale, which stretches from New York to Virginia.

The shale formation has about 84 trillion cubic feet of undiscovered, technically recoverable natural gas, according to the report from the United States Geological Survey. This is drastically lower than the 410 trillion cubic feet that was published earlier this year by the federal Energy Information Administration.

As a result, the Energy Information Administration, which is responsible for quantifying oil and gas supplies, has said it will slash its official estimate for the Marcellus Shale by nearly 80 percent, a move that is likely to generate new questions about how the agency calculates its estimates and why it was so far off in its projections.

The decision by the agency to lower the estimates comes amid growing scrutiny from Congress about how the administration calculates its numbers and why it depends on outside and industry-tied consultants to produce some of its reports.

Accurate estimates are important for lawmakers who are making long-term decisions about subsidies and policies relating to the nation’s energy mix. They are also essential for landowners and investors as they decide where and whether to lease their land to drillers or invest in gas companies. Some market analysts say that the large differences between public estimates for natural gas resources provide further evidence that there may be more risk and uncertainty involved with gas drilling than many investors realize. Amid growing questions about the administration’s research, Howard K. Gruenspecht, the agency’s acting director, appeared before Congress in July to reiterate that, despite some uncertainties, his agency’s estimates were accurate.

But on Tuesday, the administration said it would sharply downgrade those estimates. “We consider the U.S.G.S. to be the experts in this matter,” said Philip Budzik, an operations research analyst with the Energy Information Administration, according to Bloomberg, which was the first to report the decision by federal officials to downgrade their estimates. “They’re geologists; we’re not. We’re going to be taking this number and using it in our model.”

A spokesman for the administration added that while the new estimates were very important, drilling costs and well performance may have a larger impact on future natural gas production.

The new federal numbers are also much lower than the roughly 350 trillion cubic feet estimated to be technically recoverable in the Atlantic region, home to the Marcellus Shale, by the Potential Gas Committee, a nonprofit group of industry experts and academics, in an April report. Still, industry association officials cheered the new report.

Kathryn Z. Klaber, president of the Marcellus Shale Coalition, described them as “further affirmation that the Marcellus Shale will continue to safely produce prolific amounts of clean-burning American natural gas for generations to come.” The new estimates are much higher than the last assessment by the Geological Survey in 2002. Those estimates — which suggested the Marcellus contained only about two trillion feet of recoverable gas — were provided before new technology had drastically increased drilling for natural gas in shale formations.

In their report this week, federal geologists focused on “resource” estimates, which refer to the amount of gas that is in the ground and technically can be extracted. They did not focus on what are known as “reserve” estimates, which refer to how much of this gas can be profitably extracted from the ground. The geologists also did not discuss how high gas prices will have to rise before companies can make enough money to justify increased drilling.

Natural gas resource estimates like those produced by the federal Geological Survey and the Energy Information Administration have been criticized by market analysts and energy experts because they often give an overly optimistic and simplistic view of how useful natural gas will be as a source of fuel that can replace oil and coal. Resource estimates often include gas in pockets that are so small or so deep that it may never be drilled or produced at any price. The gas may also be in areas that are off limits or impractical to drill.

In April 2010, the Energy Information Administration revised its methodology for estimating natural gas production. Despite the change, some energy analysts say that in Texas significant discrepancies remain between the federal numbers and estimates produced by state regulators. Some energy analysts have also faulted regulators in Pennsylvania, which is the only gas-producing state to publish oil and gas production data every six months rather than providing it monthly. This practice, according to the energy analysts, limits the ability to accurately assess well performance and provide more exact long-term estimates for how much gas that part of the shale formation can actually produce over time.

“If the country is going to embrace natural gas as the fuel of the future,” said Bill Powers, the editor of the Powers Energy Investor, an energy research publication, “there needs to be a lot more transparency in how these estimates are calculated and a more skeptical and informed discussion about the economics of shale gas.”

[Marie Laveau]

Two confessions:

One: I haven't read this entire thread because I'm a peak oil forum refugee who read Dave McGowan's series of jabs and counter-jabs with Mike Ruppert, one of the big peak oil advocates. According to Rupert's story (and most of it is verifiable) he was an L.A. police detective mixed up with some pretty shady characters before being fired or quitting or something. So....I am steeped in Peak Oil facts, figures, lore, etc., but don't know where I stand on the subject exactly. I'll explain in a second.

Two: I've come to think that IF there is not a peak oil problem, and we are doing things like tar sands and shale, then there really is a concerted effort to destroy the planet. And that's probably, if someone held a gun to my head, what I would admit to.

Now. I was on a peak oil forum for about ten years, at the same time I was reading McGowan, but refusing to read his peak oil series because I couldn't believe he could possibly be right. The facts and figures were just too in-your-face.

What I've come to believe now is that we don't know shit about what they (meaning big oil- AND the people wilfully trying to destroy the planet) are up to regarding oil. Hell, there could be 500 years of oil left just in Ghawar alone. How would we possibly know?

Now, IF something like that is the case, and we are digging up Alberta (tar sands) and eastern Montana and western North and South Dakota (shale) like there is no tomorrow, not to mention the goddamned natural gas disaster.....well, then, things get a lot more ugly and a lot more....dare I say it....conspiracy laden.

[Marie Laveau]

Also, someone mentioned Matt Simmons. I always detested him. Straight out of the big boys camp, "exposing" peak oil? Yet, he "drowned" in his hot tub. Everyone figured that was a "suicide," but we don't know.

And there's a number of other shady characters around the peak oil camp, but, again, a person is then confronted by the fact that IF peak oil is a scam, then what the hell are we (no, THEY) doing destroying the planet with the tar sands, and macondo-type wells, and baaken shale, and natural gas?

It's not enough to just say it's a scam so big oil can make money. I mean, for god's sake, we are just now arguing over fiat currency. If THEY know fiat currency is bullshit AND they are already richer than god, why would they want more of it?

It doesn't make sense. No, I am slowly coming to the realization that someone(s) is trying to destroy the earth. I don't know why, though.

[eyeno]

Two: I've come to think that IF there is not a peak oil problem, and we are doing things like tar sands and shale, then there really is a concerted effort to destroy the planet. And that's probably, if someone held a gun to my head, what I would admit to.

No conspiracy need apply here.

There is a myth that basically states "If we were not running out of oil, then why would we be going to extremes to extract oil from tar sands when there are much easier methods?"

The answer is simple. One of my best friends started a company. His company developed a method to squeeze more oil from land that is hard to extract oil from. Yes it is more expensive than free flowing oil wells...but...it still pays for itself and makes money.

His philosophy is "I don't care if it costs more money to extract it this way. If I can get it out of the ground and still make money off the deal then the deal is viable. Yes there is easier oil to get but this oil can still be gotten out of the ground at a nice profit."

So he just sold part of his company for tens of millions of dollars. He still owns almost half the company which is also worth tens of millions.

He said, "each deal must stand on its own. this deal can make money because I can get the oil out of the ground at a profit regardless of the fact that we have many free flowing oil wells on the planet."

Simple economics. A barrel of oil extracted at a profit is a barrel of oil extracted at a profit regardless of the fact that some wells produce higher profits than others.

[Marie Laveau]

Thank you for posting that. It comfirms my long-held observation that business people are effing idiots. I got to watch it first-hand with my ex and his friends. All for the deal. To hell with the consequences.

I hope he doesn't want a glass of clean water with those tar sands.

Gawd.

[JackRiddler]

Two: I've come to think that IF there is not a peak oil problem, and we are doing things like tar sands and shale, then there really is a concerted effort to destroy the planet. And that's probably, if someone held a gun to my head, what I would admit to.

No conspiracy need apply here.

There is a myth that basically states "If we were not running out of oil, then why would we be going to extremes to extract oil from tar sands when there are much easier methods?"

The answer is simple....

Simple economics. A barrel of oil extracted at a profit is a barrel of oil extracted at a profit regardless of the fact that some wells produce higher profits than others.

Agreed that whoever owns a concession is considering their own interest, not those of others who may own other concessions elsewhere. Thus, if something makes a profit and the capitalist doesn't have a higher-margin alternative, he'll take the profit where he can get it.

However, how does this explain Saudi Arabia drilling offshore? All concessions in the country have the same owner, the state. How does this explain fields that actually do run dry? If fields do so, then nations and planets eventually will also.

.

[DoYouEverWonder]

There Will Be Oil

For decades, advocates of 'peak oil' have been predicting a crisis in energy supplies. They've been wrong at every turn, says Daniel Yergin.

Sept 7, 2011

Since the beginning of the 21st century, a fear has come to pervade the prospects for oil, fueling anxieties about the stability of global energy supplies. It has been stoked by rising prices and growing demand, especially as the people of China and other emerging economies have taken to the road.

This specter goes by the name of "peak oil."

Its advocates argue that the world is fast approaching (or has already reached) a point of maximum oil output. They warn that "an unprecedented crisis is just over the horizon." The result, it is said, will be "chaos," to say nothing of "war, starvation, economic recession, possibly even the extinction of homo sapiens."

Pulitzer Prize-winning author Dan Yergin says the global supply of oil and gas has risen in the last 20 years, defying the predictions of "peak oil" theorists. In the Big Interview with WSJ's David Wessel, he looks at the world's energy future.

The date of the predicted peak has moved over the years. It was once supposed to arrive by Thanksgiving 2005. Then the "unbridgeable supply demand gap" was expected "after 2007." Then it was to arrive in 2011. Now "there is a significant risk of a peak before 2020."

But there is another way to visualize the future availability of oil: as a "plateau."

In this view, the world has decades of further growth in production before flattening out into a plateau—perhaps sometime around midcentury—at which time a more gradual decline will begin. And that decline may well come not from a scarcity of resources but from greater efficiency, which will slacken global demand.

Those sounding the alarm over oil argue that about half the world's oil resources already have been produced and that the point of decline is nearing. "It's quite a simple theory and one that any beer-drinker understands," said the geologist Colin Campbell, one of the leaders of the movement. "The glass starts full and ends empty, and the faster you drink it, the quicker it's gone."

This is actually the fifth time in modern history that we've seen widespread fear that the world was running out of oil. The first was in the 1880s, when production was concentrated in Pennsylvania and it was said that no oil would be found west of the Mississippi. Then oil was found in Texas and Oklahoma. Similar fears emerged after the two world wars. And in the 1970s, it was said that the world was going to fall off the "oil mountain." But since 1978, world oil output has increased by 30%.

more...

http://online.wsj.com/article/SB10001424053111904060604576572552998674340.html?google_editors_picks=true

[JackRiddler]

.

This is one of those articles that takes the facts of hydrocarbon depletion and spins them so that they sound like nothing need change as the oil keeps flowing. Hey, decades left before negative EROIE (a concept not even mentioned, as usual) and who knows what wondertech-fixes will come our way before then! Read about them in the Wall Street Journal! This is accompanied by beating strawmen versions of "peak oil" with sneers and platitudes. Who cares that people made mistaken claims about the future in 1890? It doesn't mean every claim of today is mistaken, nor does it tell us WHOSE claims about the future are mistaken: Campbell's, or Yergin's. Also, the observation that hydrocarbon energy sources deplete and net energy drops over time is not dependent on naming the exact month and year when Yergin will admit the peak on conventional oil fields has been reached globally.

Perhaps Yergin got the idea of the eventual plateau from the one that has obtained in global production since 2005?



For homework, compare the structure and logic employed in this article to that used by the typical 9/11 debunker hit-piece.

.

[Ben D]

]Iran to produce oil for 100 more years

Tue Jan 3, 2012 5:0PM GMT

Iran's oil minister says the country has enough reserves to produce oil for the next 100 years, while most countries will lose their reserves in the next 30 years.

Rostam Qasemi said on Tuesday that the oil reserves of other Middle Eastern countries will be depleted in the next 60 years. He went on to say that the member states of the Organization of Petroleum Exporting Countries (OPEC) own 70 percent of the global oil reserves with non-member oil producers having the remaining 30 percent.

“This comes while the share of the OPEC members in [global] oil production stands at 40 percent with non-member [oil-producing] countries having a 60-percent share,” he said.

The minister added that Iran's in-place oil reserves have been estimated to be at 600 billion barrels, adding that the country ranks first in terms of total oil and gas reserves.

Qasemi said Iran, the second biggest oil producer of OPEC, has the world's second largest gas reserves and is the fourth producer of natural gas in the world.

He stated that about 99.5 percent of the Iranian cities and 50 percent of villages are currently burning gas, putting the country ahead of Russia in this regard.

The minister added that the commercial value of Iran's total annual oil and gas output stands at USD 220 billion.

Qasemi added that the country's gas output should exceed one billion cubic meters per day by the end of the Iranian calendar year 1394 (March 20, 2015).

[DoYouEverWonder]

My oil field's bigger than your oil field. My oil field's bigger than yours.....

Iraq’s Basra on way to become world’s largest oil center

Azzaman, December 30, 2011

Iraq’s southern city of Basra is to emerge as the world’s largest oil center once current plans to boost the country’s oil output are completed, the Oil Ministry says.

“Basra produces the largest portion of (Iraq’s) oil because it has the largest fields,” said the ministry’s spokesperson Asem al-Jihad. “Concessions and service deals to develop southern oil fields … will certainly positively reflect on the Province turning Basra into (the world’s) largest city.”

Jihad said in a few years Basra would churn out 6-8 million barrels a day, a figure unmatched by any one city in the world.

“Basra has all the ingredients needed to develop its oil and gas riches,” he said. “This is a city that floats on a lake of oil, possesses efficient (oil) infrastructure and an extensive pipeline network.”

Basra currently produces more than 2 million barrels of oil a day, with nearly 1.8 million barrels a day earmarked for exports out of total Iraqi daily exports of about 2.1 million.

[url]http://www.azzaman.com/english/index.asp?fname=news\2011-12-30\kurd.htm[/url]

[wintler2]

BenD: Iran has lots of oil (according to Iran)
DoYouEverWonder : Iraq has lots of oil (according to Iraq)



I look forward to you addressing the topic of the thread, some day. I know from experience that evidence will not be forth-coming from y'all, but on-topic is really not too much to ask.

[Ben D]

Seems the dip in your graph is due to the change in policy following the overthrow of the Shah, and then for both Iran and Iraq, the consequences of the Iran - Iraq War...

Oil - Iran

Following the 1979 Iranian Revolution, Khomeini's government shifted the emphasis by decreeing a policy of oil conservation, with production reduced to a level sufficient to do no more than meet foreign exchange needs.

The efforts, initiated by the Shah, to develop the petrochemical industry were thwarted by the Iran-Iraq War.

[wintler2]

Seems the dip in your graph is due to the change in policy following the overthrow of the Shah, and then for both Iran and Iraq, the consequences of the Iran - Iraq War...

Thats well known, yes.

Its relevance to this thread is .. what?

Both countries production is <10% of global production.