posted on Jul, 16 2010 @ 12:10 PM
Having been in the oil business as a professional engineer for over 30 years and reading some of the posts, I thought I might clarify a few things for
1) Peak Oil was originally postulated by geologist King Hubbert in 1956 that accurately predicted peak US oil in the lower 48 in 1969. The technique
used was really not geology, but a statistical analysis of production rate of a virgin geologic basin. Succinctly, as a new basin is drilled the
bigger more prolific oil fields are found first, primarily because they are bigger and easier to find (Duh). As the fields are brought on line
production increases rapidly and depletion occurs where the production begins to decline, even though new drilling continues. However the smaller
field’s new production is not sufficient to offset the decline of the large fields. This method has been applied to the world as a whole rather than
just a basin. Therefore exploration in virgin basins could invalidate the conclusion that we will soon reach peak oil. However, it is worthwhile to
note that there have been very few discoveries of supergiant (10 billion barrel+) fields since Prudhoe Bay Alaska in 1968.
2) Oil is not found in vast underground caverns. It is produced from the microscopic pore spaces between sand grains or solution holes in limestones.
Think about how a sponge holds water, these rocks hold oil and gas similarly.
3) There is a difference between oil in place and recoverable reserves. Recoverable reserves as defined by the Society of Petroleum Engineers are only
those barrels that can be economically recovered using existing technology. Primary reserves versus oil in place vary widely to as little as 5% to as
high as 40%. Additional reserves may be recovery using secondary and tertiary techniques to add an additional 10-30%. The recovery of over 50% of oil
in place is highly unusual. Ultimately, there’s that old problem called physics that makes additional recovery impossible.
4) The Saudi’s oil production comes primarily from the Ghawar Field discovered in 1936. This field is 10 times bigger that the second largest oil
field ever discovered. This field is a carbonate that has unusual characteristics that have made it extremely prolific for a very long time. These
characteristics are now creating production problems where the Saudis in the last ten years have undertaken a flurry of activity to maintain
production as well as exploration activity that have had marginal results. See Hubbert above.
5) In 1986 the world consumed approximately 55,000,000 bopd and had capacity of approximately 75,000,000 bopd. As a result oil prices declined and the
oil industry went into a severe depression until the early 2000’s. The economic activity grew such that oil consumption increased approximately
2,000,000 bopd per year. The winter of 1995-96 was the first time that demand exceeded supply. Currently the world consumes approximately 80,000,000
bopd and production capacity is around 87,000,000 bopd. Blame Goldman Sachs for the high prices rather than Exxon. Exxon makes money by selling
gasoline not crude oil and refinery margins are a lot better at low crude oil prices than high.
6) In 30 years I’ve never seen an oil reservoir become repressured that could not be explained by known proven engineering reasons. As such, the
abiotic theory of hydrocarbon origin to me has yet not been proven. Since I have worked in the oilfields in Russia and the FSU I pose one question. If
they have prolific oil wells that never deplete because of abiotic oil why do they pay me to try to produce oil from some of the most hostile
environments in the world?