[graffis-l] PEAK OIL, ANOTHER LOOK!

November 6, 2007

Arab News: Telling the Whole Truth About Oil

Posted by: " Mark Graffis "

mgraffis

Tue Nov 6, 2007 3:48 am (PST)

http://www.arabnews.com/?page=7 & section=0 & article=103243 & d=6 & m=11 & y=2007

Telling the Whole Truth About Oil

Gwynne Dyer, Arab News

If a diplomat is “an honest man sent abroad to lie for the good of

his country” (Sir Henry Wotton, 1612), then oil industry executives used

to be the business world’s equivalent of diplomats. The big international

companies were chronically optimistic about the extent of their reserves,

and state-controlled oil companies were even more prone to exaggeration.

But now we have the spectacle of oil companies telling the truth about

oil supplies or at least more of the truth than usual. The occasion was

last week’s Oil and Money conference in London, and the most spectacular

truth-teller was Christophe de Margerie, CEO of the French oil company

Total, one of the international “big five.” Last year his predecessor,

Thierry Desmarest, caused a flutter in the industry by predicting that

world oil output would peak around 2020. This year, de Margerie said that

“100 million barrels (per day)...is now in my view an optimistic

case.”

He was referring to the International Energy Agency’s estimate that

world oil output would reach 116 million barrels/day by 2030, and the

slightly more optimistic US government prediction that it will reach 118

million b/d by that date. Even these acts of faith are really a forecast

of crisis, since calculations based on current trends (like a 15 percent

annual growth in Chinese demand) suggest that 140 million b/d will be

needed by 2030.

The implication of De Margerie’s remarks is that the crisis is coming

a lot sooner than that. World oil output is nearing 90 million b/d now,

but it is never going to reach 100 million b/d. “Peak oil” may be just a

few years away, or it may be right now. (You will never know until after

the fact, since it is the point at which global oil production goes into

gradual but irreversible decline.)

Peak oil was first forecast by an American petroleum geologist, M.

King Hubbert, who noticed that the curves for oil discoveries and oil

production were a very close match, but with a lag of thirty to forty

years between the discovery curve and the production curve. At that

point, in 1956, Hubbert was the director of research for Shell Oil, and

the focus of his research was American oil production, then still the

biggest in the world.

At that time, American oil output was still rising rapidly, but

Hubbert noticed that the shape of the output curve closely fitted the

curve plotting the growth of American oil reserves during the years of

the great discoveries in Texas, Oklahoma and California. However, there

had been no other huge discoveries since, so the annual amount added to

American oil reserves had peaked and begun to decline in the late 1930s.

Hubbert simply assumed that the production curve would continue to match

the discovery curve with a three or four-decade lag, in which case, he

predicted, US oil production would peak and start to decline in 1970.

That is exactly what it did, and American oil production is now down to

about half of output in that peak year. So “Hubbert’s Curve” became

famous in the industry, and was duly applied to global discovery and

production rates as well.

Oil discoveries worldwide peaked in the 1960s, so Hubbert’s own

forecast was that peak oil production worldwide would arrive in the

1990s. The discovery of two giant new oilfields in the 1970s (probably

the last two) in the North Sea and the Alaskan North Slope pushed that

date down a bit, however, and one of Hubbert’s successors as chief of

research at Shell, Colin J. Campbell, subsequently calculated that peak

production globally would not arrive until 2007. Now, in other

words.

It is still deeply unpopular in the oil industry to talk about peak

oil, but essentially what de Margerie was saying, albeit in a cautious

and coded way, is that it is here or nearly here. The same sort of talk

is coming from Rex Tillerson, chairman of ExxonMobil, who told the

Financial Times earlier this year that he believed oil production from

sources outside the Organization of Petroleum Exporting Countries could

see “a little more growth” but would soon level off. And OPEC is

generally assumed to be pumping very close to maximum capacity.

The International Energy Agency predicts that demand for oil will

rise by 2 percent annually up to 2012.

The recent surge in the oil price, which may see it reach $100 a

barrel in the near future, is largely a mirage caused by the collapse in

the value of the US dollar. (The price of oil is generally quoted in US

dollars, but cost of a barrel of oil in euros or yen has risen far less

dramatically this year.) But the longer-term trend, which saw the price

rise fivefold between 1999 and 2005, was driven by the tightening supply

situation as demand raced ahead while production did not.

It will get a lot worse if de Margerie is right, and he almost

certainly is. sAt 08:37 AM 11/6/07, you wrote:

Arab News: Telling the Whole Truth

About Oil

Posted by: " Mark Graffis " mgraffis

mgraffis

Tue Nov 6, 2007 3:48 am (PST)

http://www.arabnews.com/?page=7 & section=0 & article=103243 & d=6 & m=11 & y=2007

Telling the Whole Truth About Oil

Gwynne Dyer, Arab News

If a diplomat is “an honest man sent abroad to lie for the good of his

country” (Sir Henry Wotton, 1612), then oil industry executives used to

be the business world’s equivalent of diplomats. The big international

companies were chronically optimistic about the extent of their reserves,

and state-controlled oil companies were even more prone to exaggeration.

But now we have the spectacle of oil companies telling the truth about

oil supplies — or at least more of the truth than usual. The occasion was

last week’s Oil and Money conference in London, and the most spectacular

truth-teller was Christophe de Margerie, CEO of the French oil company

Total, one of the international “big five.” Last year his predecessor,

Thierry Desmarest, caused a flutter in the industry by predicting that

world oil output would peak around 2020. This year, de Margerie said that

“100 million barrels (per day)...is now in my view an optimistic

case.”

He was referring to the International Energy Agency’s estimate that world

oil output would reach 116 million barrels/day by 2030, and the slightly

more optimistic US government prediction that it will reach 118 million

b/d by that date. Even these acts of faith are really a forecast of

crisis, since calculations based on current trends (like a 15 percent

annual growth in Chinese demand) suggest that 140 million b/d will be

needed by 2030.

The implication of De Margerie’s remarks is that the crisis is coming a

lot sooner than that. World oil output is nearing 90 million b/d now, but

it is never going to reach 100 million b/d. “Peak oil” may be just a few

years away, or it may be right now. (You will never know until after the

fact, since it is the point at which global oil production goes into

gradual but irreversible decline.)

Peak oil was first forecast by an American petroleum geologist, M. King

Hubbert, who noticed that the curves for oil discoveries and oil

production were a very close match, but with a lag of thirty to forty

years between the discovery curve and the production curve. At that

point, in 1956, Hubbert was the director of research for Shell Oil, and

the focus of his research was American oil production, then still the

biggest in the world.

At that time, American oil output was still rising rapidly, but Hubbert

noticed that the shape of the output curve closely fitted the curve

plotting the growth of American oil reserves during the years of the

great discoveries in Texas, Oklahoma and California. However, there had

been no other huge discoveries since, so the annual amount added to

American oil reserves had peaked and begun to decline in the late 1930s.

Hubbert simply assumed that the production curve would continue to match

the discovery curve with a three— or four-decade lag, in which case, he

predicted, US oil production would peak and start to decline in 1970.

That is exactly what it did, and American oil production is now down to

about half of output in that peak year. So “Hubbert’s Curve” became

famous in the industry, and was duly applied to global discovery and

production rates as well.

Oil discoveries worldwide peaked in the 1960s, so Hubbert’s own forecast

was that peak oil production worldwide would arrive in the 1990s. The

discovery of two giant new oilfields in the 1970s (probably the last two)

in the North Sea and the Alaskan North Slope pushed that date down a bit,

however, and one of Hubbert’s successors as chief of research at Shell,

Colin J. Campbell, subsequently calculated that peak production globally

would not arrive until 2007. Now, in other words.

It is still deeply unpopular in the oil industry to talk about peak oil,

but essentially what de Margerie was saying, albeit in a cautious and

coded way, is that it is here or nearly here. The same sort of talk is

coming from Rex Tillerson, chairman of ExxonMobil, who told the Financial

Times earlier this year that he believed oil production from sources

outside the Organization of Petroleum Exporting Countries could see “a

little more growth” but would soon level off. And OPEC is generally

assumed to be pumping very close to maximum capacity.

The International Energy Agency predicts that demand for oil will rise by

2 percent annually up to 2012.

The recent surge in the oil price, which may see it reach $100 a barrel

in the near future, is largely a mirage caused by the collapse in the

value of the US dollar. (The price of oil is generally quoted in US

dollars, but cost of a barrel of oil in euros or yen has risen far less

dramatically this year.) But the longer-term trend, which saw the price

rise fivefold between 1999 and 2005, was driven by the tightening supply

situation as demand raced ahead while production did not.

It will get a lot worse if de Margerie is right, and he almost certainly

is.

******

Kraig and Shirley Carroll ... in the woods of SE Kentucky

http://www.thehavens.com/

thehavens

606-376-3363

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November 6, 2007

Now, we have this rubbish peak oil again. It is a hoax sprede by those

there have an interest in it....and offer their solution to it. Which

of course is more government....more taxes.....less liberty. A bunch of

scammers. There is something going on in America, some powerful people

have pluged some oil field, and proclaim we are running out off oil.

Some bloody crooks.

tirsdag 6. nov 2007 kl. 16:57 skrev The Havens:

>

Arab News: Telling the Whole Truth About Oil

>

> Posted by: " Mark Graffis " mgraffis mgraffis

>

> Tue Nov 6, 2007 3:48 am (PST)

>

> http://www.arabnews.com/

> ?page=7 & section=0 & article=103243 & d=6 & m=11 & y=2007

> Telling the Whole Truth About Oil

> Gwynne Dyer, Arab News

> If a diplomat is “an honest man sent abroad to lie for the good of his

> country” (Sir Henry Wotton, 1612), then oil industry executives used

> to be the business world’s equivalent of diplomats. The big

> international companies were chronically optimistic about the extent

> of their reserves, and state-controlled oil companies were even more

> prone to exaggeration. But now we have the spectacle of oil companies

> telling the truth about oil supplies or at least more of the truth

> than usual. The occasion was last week’s Oil and Money conference in

> London, and the most spectacular truth-teller was Christophe de

> Margerie, CEO of the French oil company Total, one of the

> international “big five.” Last year his predecessor, Thierry

> Desmarest, caused a flutter in the industry by predicting that world

> oil output would peak around 2020. This year, de Margerie said that

> “100 million barrels (per day)...is now in my view an optimistic > case.”

> He was referring to the International Energy Agency’s estimate that

> world oil output would reach 116 million barrels/day by 2030, and the

> slightly more optimistic US government prediction that it will reach

> 118 million b/d by that date. Even these acts of faith are really a

> forecast of crisis, since calculations based on current trends (like a

> 15 percent annual growth in Chinese demand) suggest that 140 million

> b/d will be needed by 2030.

> The implication of De Margerie’s remarks is that the crisis is coming

> a lot sooner than that. World oil output is nearing 90 million b/d

> now, but it is never going to reach 100 million b/d. “Peak oil” may be

> just a few years away, or it may be right now. (You will never know

> until after the fact, since it is the point at which global oil

> production goes into gradual but irreversible decline.)

> Peak oil was first forecast by an American petroleum geologist, M.

> King Hubbert, who noticed that the curves for oil discoveries and oil

> production were a very close match, but with a lag of thirty to forty

> years between the discovery curve and the production curve. At that

> point, in 1956, Hubbert was the director of research for Shell Oil,

> and the focus of his research was American oil production, then still

> the biggest in the world.

> At that time, American oil output was still rising rapidly, but

> Hubbert noticed that the shape of the output curve closely fitted the

> curve plotting the growth of American oil reserves during the years of

> the great discoveries in Texas, Oklahoma and California. However,

> there had been no other huge discoveries since, so the annual amount

> added to American oil reserves had peaked and begun to decline in the

> late 1930s. Hubbert simply assumed that the production curve would

> continue to match the discovery curve with a three or four-decade

> lag, in which case, he predicted, US oil production would peak and

> start to decline in 1970. That is exactly what it did, and American

> oil production is now down to about half of output in that peak year.

> So “Hubbert’s Curve” became famous in the industry, and was duly

> applied to global discovery and production rates as well.

>

> Oil discoveries worldwide peaked in the 1960s, so Hubbert’s own

> forecast was that peak oil production worldwide would arrive in the

> 1990s. The discovery of two giant new oilfields in the 1970s (probably

> the last two) in the North Sea and the Alaskan North Slope pushed that

> date down a bit, however, and one of Hubbert’s successors as chief of

> research at Shell, Colin J. Campbell, subsequently calculated that

> peak production globally would not arrive until 2007. Now, in other

> words.

> It is still deeply unpopular in the oil industry to talk about peak

> oil, but essentially what de Margerie was saying, albeit in a cautious

> and coded way, is that it is here or nearly here. The same sort of

> talk is coming from Rex Tillerson, chairman of ExxonMobil, who told

> the Financial Times earlier this year that he believed oil production

> from sources outside the Organization of Petroleum Exporting Countries

> could see “a little more growth” but would soon level off. And OPEC is

> generally assumed to be pumping very close to maximum capacity.

> The International Energy Agency predicts that demand for oil will rise

> by 2 percent annually up to 2012.

> The recent surge in the oil price, which may see it reach $100 a

> barrel in the near future, is largely a mirage caused by the collapse

> in the value of the US dollar. (The price of oil is generally quoted

> in US dollars, but cost of a barrel of oil in euros or yen has risen

> far less dramatically this year.) But the longer-term trend, which saw

> the price rise fivefold between 1999 and 2005, was driven by the

> tightening supply situation as demand raced ahead while production did

> not.

> It will get a lot worse if de Margerie is right, and he almost

> certainly is.

>

> sAt 08:37 AM 11/6/07, you wrote:

>

> Arab News: Telling the Whole Truth About Oil