Freddy Hutter, ...'s  Instablog

Freddy Hutter, TrendLines Research
Send Message
As a data analyst, Freddy Hutter of Trendlines Research provides guidance in chart format on the specialties of peak oil, realty bubbles, baseline GDP projections and election predictions. Virtually each day an update is published to the website's MemberVenue. All charts are made publicly... More
My company:
Trendlines Research
My blog:
TrendLines Chart Blog
  • Annual Update Of 22 Oil URR/EUR Estimates & LInearizations 3 comments
    Apr 6, 2012 7:34 PM

    (click to enlarge)click to enlarge ... more peak oil charts at my SA Instablog & website

    URR/EUR Highlights

    Oil Initially in Place (OIIP): 19-Tb.

    URR avg: 4,174-Gb (doubled since 1995) & rising 22-Gb for each $1/barrel crude price increase

    Remaining Resource: 2,886-Gb (doubled since Y2k)

    Inferred Depletion: 31%

    Remaining Resource/Annual Production Ratio: 90 (record low: 44 in 1995)

    Proved Reserves: 1,256-Gb (doubled since 1978) & growing by 49-Gb/yr (10-yr avg)

    Past Consumption: 1,288-Gb (to 2011/12/31 excl 5-Gb BTL)

    March 26 2012 delayed FreeVenue public release of Dec 26th MemberVenue guidance ~ Today's compilation update figures from BP, Brandt & Farrell, Campbell, EIA, ExxonMobil, Laherrère, Total & my own Hutter Peak Scenario-2500.

    Today's URR study Avg is 118-Gb higher than last year and 82-Gb less than the avg inferred within the last monthly update of our 16-model Tier-1 Scenarios Presentation. Its slightly different mix of practitioners has a URR Avg of 4,256-Gb. As most models are based on Proved Reserves ... not total economic resource, the Avg is substantially less than my own PS-2500, built on a URR platform of 6,977-Gb.

    Model Updates:

    No new practitioners added this year. Most upward movement by ExxonMobil, Laherrère & Hutter PS-2500

    The PS-2500 was developed with a composite production profile acting as a visual aid to better explain the relationship between varied resource categories and the contribution of each to annual flow. Each type of liquid has its unique profile and Peak Year. The 11 streams tracked as All Liquids include Regular Conventional Oil, NGL & Refinery Gain; and the non-conventionals: GTL, Deep Sea, Polar, Bitumen, X-Heavy, CTL, Kerogen & BTL (biofuels not incl in URR tally). RCO production peaked in 2005 and passed 50% of its 1.974-Tb URR in June/2007. All other streams are in growth mode.

    (click to enlarge)

    URR Growth Rate

    Chart#2 compares the growth rate of the 22-model Avg with OGJ & BP. It is seen the recent high-price regime fuelled favourable economics of previously thought fringe contingent (sub-commercial) resources. Discovery, development and technology advancements (especially of non-conventionals) fuelled a growth pace of 128-Gb/yr (4.9%) since 1996. This far surpasses URR's growth of 30-Gb/yr (2.3%) from 1957-1995.

    Unsustainable crude prices ($129/barrel high - July/2008) drove discoveries, exploration, and conversion of sub-commercial (contingent) resources over to the economic side of the ledger. But, subsequent sub-$90 pricing was a serious dampener of that headiness. Viewed via the 3-yr rolling average of the 22-models, additions to URR peaked @ 420-Gb in 2008, the growth rate slipping to 0-Gb in 2011. My analysis reveals over the last ten years URR has risen 22-Gb for every $1/barrel price increase. Similarly, each higher dollar added 2-Gb of Proved Reserves.

    The chart shows annual augments to URR have exceeded Annual Consumption (32-Gb in 2011) since 1993. Proved reserves grew by 49-Gb/yr last decade and total 1,249-Gb today. This explains the hiatus from heavy exploration over the last two decades. The sector's supply chain is founded on a Proved Reserve / Annual Production ratio of 40 (years). Having attained that threshold in 1988, it has been necessary to only add just over annual consumption to hold this ratio steady.

    Similarly, the Remaining Resource/Annual Production ratio was a near-record 90 in 2011. Back in 1995, available Resource would have serviced only 44 years of then current production. This aspect of economics has escaped the McPeakster fraternity. Their wild thesis that peak production occurs sixty years after peak discovery is completely unfounded. It is as ludicrous as their dogmatic position that URR & Proved Reserves grow in the OECD ... but not OPEC nations.

    (click to enlarge)

    Linearization analysis is a guiding counterweight to geology/technology based estimates of Ultimate Economical Recoverable Resource (URR/EUR).

    When compared, All Liquids succumbs to a 3,456-Gb differential, mostly attributable to Bitumen, CTL, GTL & Kerogen not yet reflecting their massive potential flows. OTOH, this shortfall is somewhat mitigated by the taint of BTL influence. Biofuels-to-liquids are not included in our URR tally, but are indeed reflected in All Liquids production data.

    Based on these linearizations, the world won't run out of light sweet crude (RCO) until Year 2076 and there's enuf of the other stuff to take us to Year 2117.

    Linearization Method: URR/EUR Comparisons 2011/12/23

    Geo/Tech Method:

    4,510-Gb All Liquids 7,966-Gb
    1,990-Gb Regular Conventional Oil 1,999-Gb
    210-Gb Saudi Arabian Crude


    300-Gb NGL-GTL-Ref/Gain 1,727-Gb
    205-Gb Bitumen/X-Heavy-CTL-Kerogen 3,038-Gb
    180-Gb Deep Sea & Arctic 266-Gb

    All Liquids represents 11 major streams: Regular Conventional Oil, NGL & Refinery Gain; and the non-conventionals: GTL (gas-to-liquid), Deep Sea, Arctic, Bitumen, X-Heavy, CTL (coal-to-liquid), Kerogen & BTL (biofuels-to-liquid)

    original article

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Back To Freddy Hutter, TrendLines Research's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (3)
Track new comments
  • Paul Hanly
    , contributor
    Comments (839) | Send Message
    Thanks for making your analysis freely available on a delayed basis.


    Assuming your estimates of resources and usage are correct, have you done any analysis of cost of production of new sources in energy terms to the refinery door to enable comparison to existing cost of energy?


    An alternative hypothesis to Peak Oil about now is Peak Cheap Oil.


    The likely impact on price may well be the same if the net energy reclaimed per unit of reserves is far less for extreme (by today's standards) deep water drilling or for more expensive to develop or process resources like tar sands or oil from shale or coal.


    If price increases significantly because of costs of discovery, extraction and processing, the impact on marginal users and industries competing for consumer income will be significant.


    What are your thoughts on average net energy yields from newly discovered and alternative style sources and changes in blended prices?
    7 Apr 2012, 10:13 PM Reply Like
  • Paul Hanly
    , contributor
    Comments (839) | Send Message
    Freddy, you say "Based on these linearizations, the world won't run out of light sweet crude (RCO) until Year 2076 and there's enuf of the other stuff to take us to Year 2117."


    What assumptions of growth in usage do you make in that calculation?


    At 2% real growth pa doubling time based on Rule of 72 and exponential function is 36 years. Between now and 2048 we would use more than has ever been used in the recorded history to 2012. The resource life would be more than halved by 2048.


    And what assumptions do you make in cost per gallon of gas equivalent in terms of a percentage of estimated income as we approach the period of increasing scarcity?


    (I am concerned that we all need alternative sources of energy being developed as we go rather than leaving our future and foreign energy dependency as a problem for the next generation.)
    7 Apr 2012, 10:27 PM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3689) | Send Message
    Author’s reply » Paul, production weighted oil is only $26/barrel. It will be a generation 'til the rising price is sufficient to induce Peak Demand (99-Mbd). After that, All Liquids flow will decline by just under 1% per annum ... so mitigation and adaptation will be manageable.
    8 Apr 2012, 12:11 AM Reply Like
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.