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I know the geological and physical facters governing the behaviour of oil fields, thank-you - I'm a graduate geologist. We were taught the Hubbert model at university (along with others), I've written complex simulations using the model etc... and studies seem to suggest that the model is correct and as far as I'm concerned, I'm not arguing with that until it is proved 100% incorrect -- which incidentally has not happened.
Agreed, there are exceptions to the model but most oil fields follow the Hubbert model which makes intuitive sense.
quote: There simply is no evidence that the world is in fact running out of oil. There is plenty of evidence of oil price manipulation.
I never claimed we were running out of oil, that's not the nature of Hubbert's peak which claims we have used half of the oil and besides we only run into problems when demand outstrips supply. Incidentally, Hubbert was correct regarding America's oil peak in the 70's.
I'll admit I'm not too hot on the politics and economics of the oil markets but I don't trust any economist that reckons the mysterious market forces will solve everything regardless of any physical, chamical or geological factors! It's totally absurd. They know exactly bugger-all about the geology and physics of the situation and pick and chose statistics to suit the point they wish to convey.
... oh and abiotic oil is a load of bollocks -- there is simpily no hard facts to suggest anything otherwise.
Now, my orginal query was regarding why the Saudi's do not let anyone audit their reserves. Do you have any idea why this is?
One other thing... You source all our info from news sites, do you not think for one moment that the articles could be incorrect / people could be lying?
Bush, Balir and other leading politicians have lied about much worse.
I don't believe in crazy conspiracy theories like many people on these forums do but I certainly don't trust any figures given out by Saudi oil officials, simply due to the fact that they won't let anyone audit their reserves.
These guys can say whatever the hell they want, and I'm well aware of the political pressure on people to produce the 'correct' results.
Originally posted by bigx01
there are a lot of wells that have been capped b/c they were to expensive to extract the oil from when it was even 25$ a bbl
the north slope in alaska was predicted back when it was discovered to only have around 7 billion bbls and to date has pumped more than 14 billion and counting. anwr is said to have 10-12 billion but may in fact have more than twice that amount. lets not forget the nearly trillion bbls that are just in tar sands alone. then we get to the vast quantities of shale here in the usa which has more oil than all of opec combined. what about the rest of the arctic coast in canada how many billion bbls of oil are there?
then we get to coal. when heated to 600-800 deg will produce nearly 1 bbl of oil and several cubic feet of gas for each ton. the coke that is left over makes a better fuel for coal fired plants than just plain coal or converted to even more liquid fuels. and it would be a cleaner source of fuel for power plants as the sulfer and other harmfull material is now in the oil where it is removed much easier.
right now every coal fired power plant should be distiling their coal before using it to produce power and selling the oil. a simple web search will give you information on the fischer-tropsch process for converting coal to gas. the usa could be more energy sufficient if we did just this little bit.
but i dont want to get off on a rant here
Originally posted by InTuneToDoom
Good posts. I've read that article Stellar but haven't had time to comment -- I'll be back later with some feedback.
I hear what you are saying but I find it difficult to completely alter my perspective on this considering what I've been taught in the past!
The price of oil is highly leveraged to the profit margins. The price of oil is going up because demand is going up and supply isn't. Why isn't supply going up despite high prices?
Oil companies spend money in prospecting and drilling, they make money by pumping.
What's happening is that despite very high prices they aren't in fact prospecting rapidly because they don't know where to go or be sure that they could make money at it. So they sell the oil that they have already at high prices. Marginal cost of production from *existing* wells is low.
Note that reserves (as in having a well and capping it) do have to be reported.
I have a relative who is a very high executive in BP who told me (a few years ago)---that he goes to many of the industry petroleum conferences. Then, he said that nobody has been discovering much of significance they way they used to for a while now.
In reality the only oil fields of any significance which have not been highly prospected and exploited with modern technology are, guess where? Iraq.
Oil spikes in the 70's were a result of OPEC intervention due to political problems, but price quickly declined because there wasn't actually a physical shortage of oil supply, and most prominently, non-OPEC and friendly NATO countries U.K. and Norway, found and rapidly delivered oil to the market. Both their oil fields are significantly declining, and they aren't finding more, despite extensive effort with modern technology.
Oil increase now---note, a sustained increase, not a spike---is due to more demand outstripping fundamental supply. OPEC has lost control of the price because it's pumping all out.
For fifty years or so, the OPEC cartel didn't control the price of oil. The Texas Railroad Commission (www.rrc.state.tx.us...) did. For some historical quirk it's called railroad but it regulated oil. And then, were Texas oil production went, so did the world price. In March 1971 sometime, Texas oil production peaked as Hubbert said it would, and the TRC set a "100% allocation" (pump all you can) to its members. That was the day the TRC lost its major power, forever. Oil production in the continental 48 states went into terminal decline.
If the same thing is happening with OPEC, then likely the same reason is to blame: not enough oil left. Oil comes out slower the less there is of it and the longer it's been produced.
In 1971 there were still other parts outside the US which weren't yet on the declining part of the curve. I worry that now, all of the planet---except Iraq---is on the declining part of the production curve, or will be soon.
The price of oil, certainly spot price, has virtually no relation to reserves. Because oil futures are settled with physical delivery and there is a significant cost for oil storage, this price must reflect only immediate supply and demand characteristics.
Western oil companies do have to report reserves semi-honestly. When there's a scandal it is in the direction of exaggeration, not underestimation. Witness the recent debacle at Shell.
This is because CEOs etc make money from their stock options and reporting declining reserves is bad for the stock price.
OPEC? Who knows.