anaconda

The 'Peak Oil' Myth: New Oil Is Plentiful

To andre Sautou:
I gree with your analysis except for one HUGE assumption you make: That the energy required to produce the energy will go to a 1:1 ratio as quickly as you imply.

Corn ethanol is less than a 1:1 ratio, I think its about 1 33:1.
That's why corn ethanol is ludicrous to make.
(can only be made with government subsidies)

In the big scheme of things, ultra-deepwater, deep-drilling is still substantially over the 1:1 ratio -- I don't know the exact ratio, but oil companies wouldn't invest in it if it was less than 1:1 ratio.

Almost all hydrocarbons are over a 1:1 ratio. But admittedly some get pretty close to 1:1 ratio to the point they are marginal for economic production.

Liquid hydrocarbons -- oil and gas condensates don't fall into that category.

So your "Peak" gloom and doom, while is right on the analysis of the energy cost to produce energy, is wrong on how soon it will get there, if it gets there at all within a meaningful economic horizon. Over 30 years away and it has no impact on the economics of today.

That's what this blog commentary is about -- the economics of oil today. Not 30,50, or 60 years from today.

Go back asleep and wakeup 30 years from now and cry your "doom and gloom", otherwise you're wasting my time and more important for you -- your time.

So is pointless to "doom and gloom" about it now.

The 'Peak Oil' Myth: New Oil Is Plentiful

To AndyMan:
Nice "trick." Use a theoretical argument to squeeze "Peak" under the tent flap, like the perverbial camel's nose. Then, once an acknowledgement is given to the theoretical, bulldoze on to your real point: "Peak" is now, sorry charlie, it still doesn't wash.

And you crap in your own nest. You get greedy, which makes this writer look at your original reasoning more closely. And after doing so, it is clear your theoretical argument about "peak" is garbage too.

If oil is regenerating faster than it is being consumed -- "Peak" will NEVER happen.

Now this writer doesn't know if it is or not -- but for you to declare "peak" as a fact based on that fraudulent -- yes, fraudulent reasoning, makes this writer question all your other spin.

So lets look at it.

1) "[T]hey have been [depleting] since the first well ever drilled."

Sorry, but this type of argumentation is as fraudulent as your openning original line of about "theoretical peak."

The rational is false. Were they worried about "Peak" at the time of the first oil well? Actually, they were, as the history of the oil industry is repleat with warnings of "Peak." EACH TIME WRONG!

"Flat or most likely declining" This is PURE speculation on your part.
Your style: distract and then frame argument from your perspective.

But this writer put out the first facts: The continental shelf and margin are unexplored. The total verticle depth is reaching Abiotic oil that "fossil" theory said wasn't even there.

There are plenty of areas to explore and increase "flow rate," also we have no idea if these nationalized oil companies are maxed out on "flow rate" or not. This writer suspects there is a combination of under-investment and wanting to "squeeze" the market.

Oil is oil -- there is "easy" and "hard" oil, but the basic commodity is the same -- it's all Abiotic hydrocarbons.

Which from the very first comment, this writer acknowledged deep offshore oil, is expensive oil: $70 a barrel to "lift."

That has nothing to do with physical "Peak." When oil dipped briefly below $10 in the late 90's, the oil companies quit investing. That has effected the was is happening now. So, while this writer agrees you need to increase oil production, there is a logical reason why there has beed a plateau.

Not a decline like you falsely state.

3) In this aspect, actually, this writer agrees with you. But the new oil fields off shore like that Shell field in the Gulf of Mexico rumored to have 100 BILLION barrels, is a sample of the oil deposits that will be found where "Fossil' theory geologists said there would be NONE.

4) Makes sense from an oil chemistry and Abiotic theory point of view that heavier oil will be at the bottom. Agree with your point.

5) Oil will get more expensive to produce, but that's not physical "Peak", that's an argument for economic "Peak." Two completely different arguments -- even the oil companies acknowledge "economic peak." Which in itself, will have some unknown moderating effect on price in the future.

The last part of your argument is an expansion on the your "replacement" strain argument. There is replacement oil -- lots of it. No "Peak" now, Again, like before, someday. NOT TODAY.

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To martinpw: The science is there and convincing.

1) The 15,000 "oil window" limit corollary of fossil theory is garbage, oil has been discovered below 20,000 feet deep 20 times over and more.

2) "Source rock" has been debunked.

3) Biomarkers has been debunked

4) Diamonoids prove oil comes from the mantle (hint Diamondoids are diamonds and they are only greated "At Depth" in the mantel.

5) Helium in oil

6) hydrocarbons in 'solfataric' vents -- sulphur like vents.

7) The known association between the world's biggest oil deposits and tectonic faults all over the world.

8) the Brazilian deep finds are way beyond the "oil window," causing stupid oil geologists to make claims about "burial age and maturation," as if 24 million years isn't enough if there is an "oil window," to crack the oil into methane gas. Sorry, martinpw that argument doesn't pass the smell test.

Sorry, martinpw, Russian CEO's don't talk to anybody publically -- remeber that's Putin's world. People keep their mouths shut.

As for the, Westerns like BP, do you really think they are going to come out and say, " guess what, we were wrong all those years, we put out, those cuddly commercials with dinosaurs in them - oil is practically unlimited." This writer doubts that.

Actually, the two rival "schools" of thought have the same scientific burden to prove their "case." Each starts at the same "starting line."

but you putting out that old canard allows people to assess your regard for scientific principles -- it's far more likely you are a shill for "Peak" oil because you are long on oil.

Although, in terms of practical reality, you are right. The science for Abiotic Theory must be flawless -- It is flawless.

Come on over to Oil Is Mastery website and argue any scientific point, martinpw, and this writer will crush your reasoing. That's how good the science is.

Do you got the 'guts' martinpw?

The 'Peak Oil' Myth: New Oil Is Plentiful

To ART005:
That is a thoughtful response. This writer suspects that regeneration is a function of crustal activity level. And it's possible that now is a moderate to quiet period, so there may not be a large regeneration rate at present.

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AndyMan: If you put if that way, then there is peak. But let's talk "meaningful" peak. This writer maintains that "Peak" a hundred years from now is not meaningful in an economically quantifiable way, today.

When does it become an economically quantifiable factor?

30 years, 40 years, only 20 years? No, if "Peak" happens in 20 years in 2028, at some minor level it will be able to be quantified in the economics of today.

But 30 years, so "peak" in 2038? This writer suspects that is economically too remote.

But this writer is convinced there will be no "Peak" for at least 50 years, if not farther out than that.

"Peak" is when half of all oil supplies have been consumed by textbook definition, but "Peak" as a slang word most definitely means imminent, likely to happen soon, if some are to be believed, already has happened.

This is a far cry from someday there will be "peak."

The 'Peak Oil' Myth: New Oil Is Plentiful

To crobar:
The Oil Drum is not an investing website. It is an "Oil" website, run by folks that believe in "peak" oil. Who underwrites the website is the question, not that they advise where to invest, besides if the charge is true, do you think "speculators" would be so 'ham' handed as to advertise its "purpose."

Second, of course, demand effects the price. But any dramatic drops in price will drive demand back up because oil is inherently is a productive substance. There will always be demand for oil -- unless it is banned.
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To martinpw: Abiotic oil is real. The hard science supporting Abiotic oil is copious. At what rate petroleum is regenerated is unknown.

"Fossil" theory literally has NO HARD SCIENCE supporting it.

Google the website Oil Is Mastery. The website has direct links to scientific papers that support Abiotic oil and contradict "fossil" theory.

Why do you think Russia is the #1 oil producer in the world, more than Saudi Arabia. How? By using Abiotic Principles in their exploration strategies. Laugh if you want, but Russia is laughing all the way to the bank.

The science supporting Abiotic Oil is based on chemical and physical laws, "fossil" theory ignores the numerous violations of chemical and physical laws.

Oil is Mastery is the most complete Abiotic Oil website in the world.
Check it out and don't let stupwitts like martinpw spew ignorance.

The 'Peak Oil' Myth: New Oil Is Plentiful

So, the "Peak" oil crowd and the longoil crowd are in high dungeon over this article. Pretty simple facts.

Sure, ultra-deepwater, deep-drilling is expensive, averaging $70 a barrel to "lift." But the oil is here, there, everywhere.

Fact: proven reserves are at an all-time high.

Fact: Continental shelf and margin oil exploration is in its infancy.

Fact: "Somebody" thinks there's oil down there and is spending big bucks to get it.

Fact: For years, Iraq was "officially" set at 115 billion barrels, now it turns out Iraq has at least 300 billion, more than Saudi Arabia, which inturn probably has more yet.

Fact: Colin Campbell and the other shill mentioned have been caught in so many lies, its sick. And both have been crying "Peak" oil for years -- always wrong, along with Simmons and Pickens. A pack of hacks.

Fact: Most areas haven't been explored "At Depth" when it seems "everyday" oil is coming in at beyond 25,000 feet TVD.

Fact: The west coast of the Americas is virtually unexplored.

Fact: Demand destruction is happening in America, as this writer types. Gasoline demand has gone down in the first world.

Prediction: Demand destruction will happen in the second world -- as they are less able to absorb the cost -- and governments can't subsidize consumption indefinitely.

Sure, oil will never be "cheap" again. There are too many consumers outside the United States, but "Peak" oil was not here, is not here, and won't be here, anytime soon.

Sometimes, you "Peak" oil freaks are too much.

But, hey if you're long on oil and you made your contribution to "The Oil Drum" and the rest of the scare mongers -- this writer understands why your're shilling -- big time -- because $20 off the high and you're in Palookaville.

Better cover your position because there will be a "correction," not big, but down just the same.

Too high a price does cut demand. That's a law of economics that some shills forget!

You know what they say: "you can always con a con, because they start to believe their own schtick."

No "peak" for you charlatons. The 'game' is over.

Oil Is Mastery

Petrobras: Extremely Overvalued

Mr. Von Altendorf,
By that response, I take it, that the "oil window" is inseperable from fossil theory? It would seem so, as your answer in a strict sense was non-responsive. But it does show that if the "oil window" is proved false, it brings into serious question the entire fossil theory.

That's not what my comment was about, but by your responses, particularly the last one, you have framed the issue, and made it clear what's really at stake, here.

And, this piece and responses, particularly, the gratuitous remark on Ghawar, mark you out as an acolyte of Mathew Simmons, a key Peak oil pusher, not 10 years from now, but imminent Peak oil.

That's what this piece was really all about -- a "hit job" on ultra-deepwater, deep-drilling, but without the courage to be explicit about the reasons for the "hit job," because should this oil find, be as big as initially stated, or anywhere near as big, it blows fossil theory out of the water.

Because it violates a cardinal principle of "fossil" theory -- the "oil window" and with your refusal to answer directly my question, but to skip over to the abiotic postulate, puts that in sharp relief.

This is really about the survival of fossil theory, isn't it?

And Mathew Simmon's reputation in the oil industry.

"...[A] single well test." True. The proof will be in the pudding, as they say.

But your piece was meant as a smear job. This is a quote from one of your responses: "It doesn't have to make financial sense." Obviously, American investors would strongly disagree.

And, that is the more explicit purpose of this piece -- scare investment away from Petrobas -- the stakes couldn't be higher!

Let the battle be joined.

The website Oil Is Mastery is an investment website forcussed on the ultra-deepwater, deep-drilling exploration and production sector of the oil industry.

P.S. Oh, by the way, it's about the geology and engineering -- if the oil is there, and can be "lifted' for production to market:

The financing will take care of itself -- and make everybody filthy rich.

Petrobras: Extremely Overvalued

A von Altendorf,
Do you subscribe to the "oil window" theory?

Petrobras: Extremely Overvalued

A von Altendorf,
Can't locate the average depth of Campos basin oil wells, have to assume current wells do not go below 15,000 feet deep below the sea floor. So, the objection on comparing relatively equal field depths versus different time allotments for your "maturation" statement goes by the boards, but does not change overall critque of "oil window" theory. "That dog don't hunt no more."

Petrobras: Extremely Overvalued

Mr. A von Altendorf:
You state that Petrobas hasn't actually reached Coricoa, but you already know what's down there is only gas -- based on the "oil window" theory? But that theory has been discredited many times over in the Gulf of Mexico, where the oil majors are drilling over 20,000 feet on a regular basis, and a couple are over 30,000 feet deep. Sakhalin Island has a well producing at over 30,000 feet deep. Producing light sweet crude.

There are many wells in Alaska drilled or drilling over 20,000 feet deep, and not for gas, but for oil.

The high pressure you cite, as a reason for gas, actually, is what holds the oil together at that temperature and depth. The "maturation" you cite isn't mentioned as a reason for oil cracking in "oil window" theory. The difference between 24 million and 75 million years, to "mature" into gas, doesn't seems like a credible distinction: At 24 million years the Campos reservoir would have plenty of time to be "cracked" into gas, if the other variables, depth and heat, where the determining factor you claim.

You mention halite -- rock salt, but neglect to mention the difficulty in getting accurate images through that salt -- others call it "abyssal salt" because of the difficulty of getting high resolution images because the salt absorbs and distorts energy waves. Until recently, nobody tried to explore through it because of that difficulty.

but you know exactly what's down there. Your assertion seems to be an overstatement based on the "oil window" theory.

Your follow up comments claim your analysis is based on geology. But by your own statements, there is no geological report, as they haven't reached the formation yet. I repeat: Your analysis is based on a theory that is obsolete and anachronistic -- disproven by geological FACTS, many times over, and by many OIL producing wells.

So, Petrobas has backed off their initial "slip of the tongue," which was possibly a bit giddy, but you fail to explain why Petrobas would come out with a "whole cloth" lie, because if you are correct, that's what it was.

Isn't it just as possible, that with the admitted difficulty of "lifting" the oil, that it was prudent to back off that intial giddy statement?

But you have a dilemma, you accuse them of lying -- their initial statements are much too detailed: 500 Fahrenheit, tremedous pressure, specific depths, and below the salt barrier -- over a kilometer of salt. Petrobas according to your analysis is either lying then or now.

This writer isn't interested in calling Petrobas a liar -- but suggests Petrobas realized "champaign popping" statements, which the 33 billion barrel statement certainly was, out ran their technological capability to get the oil -- therefore, the climb down. But this writer also suggests Petrobas and their field engineers and geologists know what is down there better than you do, sitting in your office.

Your analysis by implication states Petrobas is reckless, for to invest so much in ultra-deepwater, deep-drilling when Corioca is a potential failure -- gas only, wouldn't be worth the cost -- doesn't make sense. Petrobas already has enough drill ships leased for speculative exploration. Their investment, which you cite, only makes sense, if they are extremely confident of a whole series of discoveries along the same trend as a Corioca field that actually has the geological and oil properties first stated in their initial release.

Your analysis is based on an obsolete geological theory, the "oil window," a cynical view of Petrobas as liars, and a reckless company, acting like a drunken sailor in their investment decisions.

Your analysis doesn't fit the facts, as known to this writer, or Petrobas actions, and what is reasonable for an experienced exploration and production campany with specific expertise in the ultra-deepwater, deep-drilling field.

That calls into question the value of the analysis.