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Peak Oil, Separating Facts from Fiction
Rembrandt Koppelaar, The Oil Drum
In the discussion about the date of peak oil production there is often a lack of a common framework. This makes it difficult to compare arguments concerning the date of peak oil / liquids production. In this post I outline a set of clear suppositions that, I hope, will help to understand the issue better.

My personal knowledge comes from dedicating a large part of the past years my life on the issue of peak oil and energy. In 2005 I and several friends established the Dutch Cluster of ASPO. Some of the information in this post comes from the ASPO Netherlands database which includes oil field developments throughout the world.

1. Liquids Production has not increased since the 4th quarter of 2004.

2. Current World conventional oil + NGL production is declining at an approximate annual rate of 4%. For 2006 this means that 4% of 81.76 mb/d (added sum of world conventional oil + NGL production) needs to come on-stream from new liquid sources such as oil fields under development to keep production steady.
3. The increase in world liquids production from current developments in the oil industry is sufficient to offset declines until 2010 plus an increase in production to meet low to medium demand.
4. The Peak in world liquids production is mainly influenced by new discoveries and non-conventional production increases, not by increasing the recovery factor of an oil field.
5. Oil Discoveries have been declining since the `60s. We are currently producing three to four times as much oil as is being found.
6. Conventional oil production will likely peak in the beginning of the next decade.
7. The increase of non-conventional liquids production has its limits due to scalability effects.
8. Liquids production will probably peak in the next decade.

(25 Oct 2006)
Koppelaar's main points are listed here; the article at The Oil Drum has the reasoning behind them. -BA

Cheaper to buy than find
Andrew Leonard, Salon
Pity the poor oil companies. A daily news alert from the Wall Street Journal, while providing teasers to three not particularly interesting articles on the international news business, did let slip an interesting observation. Third quarter profits for Big Oil are still looking good, but after that, "it's clear they are now being squeezed between falling crude prices and rising oil-field costs, raising doubts about the continuation of the big run-up in profits at companies like Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC."

That falling oil prices should lead to smaller profits for oil companies isn't noteworthy. But the acknowledgment of rising oil-field costs is.

...Rising oil-field costs might refer to the energy-intensive process of extracting oil from Canada's tar sands. Or drilling in unprecedentedly deep waters in the Gulf of Mexico. Or employing new technologies to extract the last bit of black goodness from nearly exhausted fields. Or, more prosaically, security costs in Nigeria, or Russian-style government-sponsored extortion. Whatever -- it all points to the same thing. The era of cheap oil is over.
(25 Oct 2006)
Leonard has been consistently mentioning peak oil ideas in his column for Salon, "How the World Works." -BA

Oil stuck below $159, traders question OPEC resolve (satire)
Jon S., Peak Energy (Seattle)
SINGAPORE (Reuteres) Oil deepened losses below $159 a barrel on Tuesday as traders waited for evidence that other OPEC members would follow Saudi Arabia's lead in cutting output.

...With oil prices still high by historical measures, analysts have questioned whether the full cuts OPEC agreed to will be implemented, and oil traders appear to be waiting for the proof.

"Until another third world country starves to death following the cut on stockpile levels we don’t expect a response" from prices, said Blonkles Gurb, a commodities analyst at National Paraguay Bank. "It may be a few weeks before anything happens (to stocks)."

Some OPEC ministers said another 500,000 bpd reduction could follow when the group meets in Abuja in December as they fear a supply glut could develop in the second quarter if peak winter demand fails to draw down toppy stockpiles.

Meanwhile, in the face of oil production cuts, construction of the huge asphalt pyramid commemorating the American-Iran conflict continues unabated in Saudi Arabia.

“It is a stupid and useless war, thus it is fitting that we celebrate it with our excess stupid and unrefinable heavy crude,” stated Abdullahi Jones, a spokesperson for the United States of Arabia.
(24 Oct 2006)
This is a satire on a real article from Reuters: Oil stuck below $59, traders question OPEC resolve.