Oil Depletion? It's All In The Assumptions -- Part 1

Posted on October 11, 2005
Posted By: Ronald R. Cooke
 
Good News

In good news for the SUV set, Daniel Yergin's Cambridge Energy Research Associates (CERA), is predicting we will soon be awash in light, sweet crude - ideal for making gasoline.

CERA's Worldwide Liquids Capacity Outlook To 2010— Tight Supply Or Excess Of Riches predicts we humans will have 6 to 7.5 million barrels per day of excess capacity and we can expect an extended period of lower prices – perhaps by 2007. Petroleum production will be expanding faster than demand over the next 5 years. The report has tabulated 20 to 30 new projects with a capacity of over 75,000 barrels per day that will become available in each and every year until 2010. By then, worldwide production could increase by up to 16 million Bbl/day. However, most of the increased production will come from reworking existing fields, rather than new oil discoveries, and after 2010 the majority of new production will come from OPEC.

CERA doesn't believe in peak oil, at least not before 2010, and probably not before 2020. The report indicates that the “inflexion” point will come between 2030 and 2040. Moreover, rather than a “peak,” it will be an “undulating plateau” that will continue for several decades. OPEC, the company claims, will be able to add 8.8 Mbl/day by 2010 and can continue its expansion – at a somewhat slower rate – beyond 2010. Non-OPEC production will experience a robust increase through 2010, and then slow significantly thereafter. Unconventional oil production will increase throughout this period, supplying almost 35 percent of the world's oil by 2020.

Then Yergin adds a sobering caveat: "The main risks to our Supply Expansion scenario are above ground, not below ground – changes in the political and operating climate that could delay expansion.” In CERA’s downside “Delay and Disruption” scenario, capacity increases by only 11.5 million barrels between 2004 and 2010.

Whoops.

What is the implication? Will delayed projects and disruptions in the supply chain lead to temporary shortages before "Peak Oil" hits us? Perhaps we should review CERA's implied assumptions. They are, after all, the basis of CERA's optimistic conclusions.

Assumptions

Underlying every data analysis and series of conclusions is a collection of assumptions. In order to avoid oil shortages, temporary or longer term, for example, we have to make multiple assumptions about our ability to find, produce, transport, refine and distribute oil (the supply chain). At some point in our analysis, these assumptions have to be tested for credibility.

Will they hold up under careful examination?

Assumption # 1. Peace in Iraq.

A key element for any increase in Middle East oil production has to be Iraq. Estimates of found oil range from 46 to 112 Bbl, with another 100 Bbl a strong "maybe it's there". If there is no peace in Iraq, or if Iraq succumbs to the policies of an Islamic Theocracy, then Iraq's contributions to OPEC's annual production volumes will never reach the levels envisioned by the International Energy Agency (IEA). If Iraq's government is stable, and favors a high production policy, then world oil supplies will be a little closer to the IEA's projections through 2020.

The future of Iraq rests on the outcome of an escalating cultural conflict between Islamist and Western values. Until that gets resolved, we can only guess at the future of Iraqi oil production.

Assumption # 2. Political and labor stability.

Any optimistic analysis of oil production must assume there will be relative political and labor stability in the Middle East, North West Africa, South America, and Caspian regions. As recent events have shown, however, these areas are prone to conflict that disrupts the flow of oil. Up until 2004, temporary disruptions in one region could usually be replaced by production from other resources. Going forward, there may not be sufficient spare capacity to cover lost production from one or more regions. As a result, sporadic shortages are a possible reality.

Assumption # 3. Islamist terrorist activity will not disrupt the supply chain.

Islamist terrorist activity will continue to disrupt the supply chain from time to time. The land locked Caspian, for example, could be the source of 60 Bbl of oil. Maybe more. And these wells are coming on-line. But most of the oil in this region must pass through a very long pipeline in order to reach the consumer. History suggests political volatility in this region will eventually disrupt supply chain operations. Perhaps for multiple years.

Islamist terrorist activity, whether sporadic or sustained, will continue to be a potential threat to the flow of oil, not only in the nations of the Caspian, the Middle East, and North West Africa, but also within the borders of consuming nations.

Assumption # 4. The proven reserves claimed by OPEC actually exist.

It is unlikely the proven reserves claimed by OPEC actually exist. Many believe they are a fabrication of the quota justifications that occurred in the 1980s. Furthermore, the claim that "Proven" reserves are increasing needs to be examined because in a sense we are merely talking about definitions. Words. As the price of oil increases, it becomes economically feasible to spend more money on production. Make sense? So the reserves that could not be classified as "Proven" at $26.00 per barrel become damn attractive if the price for a barrel goes to $55.00. There isn't any more oil. It's just that "Probable" oil reserves become "Proven" oil reserves as the price of oil increases because we can afford to spend more money on recovery. All we did was reclassify the definition of the oil we already have in the ground. No one found any more oil. Not a drop.

Assumption # 5. There will not be a substantial increase in reserve depletion rates.

Only 4 "super-giant" oilfields have been found outside the Middle East since 1960 (in Russia, China, Alaska and Mexico) and all of these - except China - are now in decline. Oil production is in decline in 33 of the 48 largest oil producing nations. Using improved technology often increases the rate of depletion. New finds tend to be smaller and deplete faster. Worldwide, estimated rates of depletion run as high as 8 percent per year.

Assumption # 6. All proven and potential reserves will be produced on schedule.

This assumption only works if hundreds of exploration and drilling operations in multiple countries and oceans under a wide variety of operating conditions and technical challenges occur on a schedule that coincides with the IEA's demand projections. Everything has to work. No significant political or labor conflicts. No ideological confrontation. No financing or management Snafus. Cooperative weather. And a reasonably predictable growth in market demand so consumption can equal production (with a little to spare).

Assumption # 7. Middle Eastern production capacity will continually increase, reaching ~ 29 Mbl/d by 2010 and at least 43 Mbl/d by 2020.

Middle Eastern production capacity will increase. The goal of 29 Mbl/day by 2010, however, is ambitious, and few believe OAPEC will be able to deliver 43 to 50 Mbl/day by 2020. Exploration and production will be challenged by Islamist opposition in Iran, Iraq and Saudi Arabia (and perhaps elsewhere). There is a long list of reserve and technical restraints in this region. We must also understand that the creation of a large surplus capacity is NOT in OAPEC's selfish best interest. Faced with enormous population growth and big welfare bills, every Middle Eastern government knows that when the oil is gone, their regime is in trouble. Leaders may determine they can actually make more money, and enjoy greater personal longevity, - by pumping less.

Assumption # 8. The EROEI of all oil production exceeds 1.

EROEI. Energy Returned On Energy Invested means that the energy derived from exploration, production, refining, and transportation exceeds the energy consumed for these activities. We tend to forget. If the EROEI of any energy resource is 1 or less, then doing that activity no longer provides a net addition to our stockpile of energy.

The average EROEI of world oil production has been declining. I read somewhere that before 1950 the EROEI for oil was more than 100:1. By the 1970s it had dropped to 30:1, and by 2005 the average EROEI on new production had fallen to 10:1. As we go for oil in increasingly difficult environments (deep under the ocean, open pit mining, etc.) the EROEI will decline further. We have to face the facts. Just because there is oil in the ground does not mean it is practical to extract. Every well has its cost in money AND energy. At some point the EROEI for every well will fall to less than 1, making oil from that well an impractical resource for energy.

Assumption # 9. Unconventional oil production will increase throughout this period, supplying almost 35 percent of the world's oil by 2020.

We have inherited up to 7 Tbls of oil trapped in sand or shale formations. But that is a misleading number. Only 5 Tbl are worth mining and of that number, perhaps 25 percent will be feasible to produce because production cost and EROEI factors make extensive mining impractical. Given the production problems associated with squeezing oil from rock and sand, the rate of production will be painfully slow. A goal of 15 to 18 Mbl per day by 2020 from recoverable reserves of 620 to 910 Bbl appears reasonable.

We expect to find oil beneath polar ice and permafrost in the Artic. Although total recoverable oil is something of a mystery at this point, figure 55 to 100 Bbl (maybe more). Unfortunately, exploration, production and transportation in this frigid environment are no fun. And costly. So don't expect polar oil to yield enough production to avoid oil shortages.

We are learning how to drill in the deep waters (over 2,500 meters) of the ocean. There is oil in the Gulf of Mexico, along the coastal shelves of South America and Africa, and a number of other locations around the world. Recovery takes time, is a technical and operations challenge, and is very costly. Add another 80 to 120 Bbl of oil to the reserves we will ultimately recover.

In addition, one can expect we humans will pump out a limited amount of heavy oil and oil from coal bed methane deposits.

If we add up all of these resources, we probably have up to 1.1 Tbl of unconventional oil to play with over the next 20 years. But our estimate of annual production is much lower. Technical, weather, geography, political, environmental, cost and EROEI factors will limit total production to around 100 Bbl from 2005 to 2020. This estimate – by the way - mirrors the Energy Outlook projections made by ExxonMobile in its "World Liquids Production Outlook" presentation.

To these numbers we need to add, as CERA does, Natural Gas Liquids (NGL) and condensates as unconventional oil. If we add all of these forms of unconventional oil together, CERA's projections appear reasonable.

Assumption # 10. There is sufficient infrastructure to support a vigorous increase in production.

Oil is a cyclical business. Prices bounce up and down because there is almost always a mismatch between supply and demand. For a number of reasons, exploration and production investments have not kept up with projected increases in demand. That investment deficit has left us with insufficient spare production capacity to sustain the world's projected economic growth. Even if we have ample reserves in the ground, there is no guarantee enough oil wells will be developed in time to avoid sharply higher prices and possible shortages. We don't have enough oil rigs, tankers, petroleum engineers, or refinery capacity. The problem is systemic and will take several years to resolve.

Assumption # 11. Non-Muslim engineers, technicians and laborers will be permitted to work in the fields of the Middle East, North West Africa, and countries adjacent to the Caspian basin.

Non-Muslim engineers, technicians and laborers will be permitted to work in the fields of the Middle East, North West Africa, and countries adjacent to the Caspian basin. However, Islamist activity and local sociopolitical conflict could jeopardize personnel security. Iran's new government, for example, has made it clear that non-Muslim foreigners are not welcome to bid, or work, in Iran's oil patch.

Assumption # 12. There is sufficient capital to fund the proposed supply chain activities.

There is sufficient capital to fund all of the proposed supply chain activities if one assumes the credit markets will not be overly stressed by other economic events, such as a collapse of the market for Mortgage Backed Securities or a massive default on the loans outstanding to Hedge Funds.

Assumption # 13.There will be a dramatic decrease in the growth rate of oil consumption.

Emerging nations, like China and India, will increase their per-capita and total consumption of oil. Although I fully expect a decrease in the growth rate of oil consumption will occur, it will - as I point out in "Oil, Jihad and Destiny" – be due to recessive factors. Production will equal consumption only if there is a destruction of natural demand or if shortages force reduced consumption. In either case, the rate of growth decreases.

Assumption # 14. As a result of over production, we will be awash in oil.

It is more likely that Saudi Arabia will continue to act as a swing producer, restricting its production in order to encourage higher prices. Indeed, Saudi Aramco engineers may welcome the opportunity to take key wells off-line for service if the world appears to be "awash" in oil.

Assumption # 15. The price of oil will decline.

It is highly likely that the price of oil will fall below $40.00 per barrel. The history of the oil industry is characterized by volatile changes in price because of the chronic imbalance between supply and demand. But a temporary decline in price is no basis for making either public policy or personal choice decisions. For every short term decline, expect a subsequent increase in the price. The long term trend for all petroleum prices is UP.

Assumption # 16. Resource nationalism will not disrupt world oil markets.

If there is so much oil available for production, why are we drilling new wells in deep water? They are very expensive, challenge our best technology, pose an environmental hazard, and are at the mercy of the sea. Why don't we just drill on land?

Because the North Sea fields are declining, West Africa is in turmoil, Venezuela is politically unstable, Iraq is a crap shoot, Saudi Arabia is vulnerable to revolution, and Putin plans to use Russia's petroleum as a political weapon. China is buying up every drop it can find. The Italians have pointed out that the geographical flows of crude oil favor refineries on the Mediterranean coast over refineries located in North America.

Hmmmm. Are we witnessing an increase in resource nationalism?

The industrialized nations have no choice. Oil shortages will create a growing cadre of unemployed citizens and declining GDP. Political survival means drilling in every plausible location on this planet and competing with other nations for the oil that is left.

The race is on.

Assumption # 17. Technology will save us.

Optimists claim that continuing improvements in computer, exploration, and drilling technology will sharply increase oil production. In truth, the oil industry has been continually improving upstream exploration and production technology since the birth of the oil age. Engineers are currently hard at work on improvements for drilling fluids, drill bits, directional drilling, multilateral drilling, sensors, GPS, drill casing materials, CO2 injection, reservoir modeling software, and a thousand other opportunities to increase recovery operations. The point is, there is no magic solution that will suddenly increase our reserves. Almost every technical solution has already been explored. Yes. New technologies will increase production. But the net impact is more likely to be incremental – not revolutionary.

For example, much has been made about the use of CO2 injection to increase recoverable reserves. Granted. It is possible to recover 60 percent (or more) of the oil that in the ground as we humans struggle to liberate every drop of oil from existing reservoirs. But many of our older oil formations have already been flushed with fluids and chemicals in an effort to increase production. Consequently, the use of newer technology will not always yield dramatic improvements in mature field recovery. New finds, on the other hand, provide an opportunity to secure higher increases than older formations. Recovery rates will also be higher and faster for light oils than for heavier crude. And finally, it may - or may not - be economical to use newer technology, such as CO2 injection, on some wells. What does this all mean? Over a period of years, average world recovery rates are more likely to be in the 45 to 50 percent range.

And there is a downside to the application of reserve enhancement technology. If we increase the rate at which we drain our available reserves, - depletion happens sooner.

Assumption # 18. Higher prices will encourage the production of more oil.

The classic economist assumes higher prices will stimulate greater production. And it usually works. But our hydrocarbon resources are finite. New production involves a complex series of challenges that can take several years to overcome. In order to continue along the growth curve of projected demand through 2020, we humans will have to consume most of our "Proven" reserves, convert most of our "Probable" reserves into "Proven" reserves, and maximize a phenomenon peculiar to the petroleum industry called "Reserve Growth". Oil prices will have to increase in order to justify the economics of this sequence. Total oil production, however, will continue to be limited by the factors discussed above in Assumptions 1 – 17.

 
 
Authored By:
Ronald R. Cooke has over 33 years of professional marketing and business development experience. He has an extensive background in market research, industry analysis, and strategic planning. Prior experience includes technology assessment, operations analysis, and the evaluation of corporate financial performance. An economist by training, Ron has pursued the study of Cultural Economics since 1969. tceconomist.blogspot.com
 

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Comments

October, 11 2005

Ferdinand E. Banks says

Another great article about oil, and the best part is disagreeing with the illogical assumptions and conclusions of Mr Yergin. I was passed a copy of his Pulitzer Prize book when I taught in France, read it that night, and came to the conclusion that I wouldn't miss any more prime-time entertainment on that scholar's account. What's gone wrong anyway when we are confronted with a song-and-dance about 'undulating plateaus'? Sure, it's possible, but suppose it doesn't happen that way, and we get an unambiguous peak followed by a sharp decline. Then what happens to the value of our shares?

I dont know if I agree, however, with the author's beliefs about the EROEI. That's thermodynamics, not economics, and although the good Professor Ugo Bardi of Florence University has tried to convince me that I should pay more attention to it, I'm really not sure. If it takes more energy to obtain oil than the energy in the oil, but the money cost of the inputs are sufficiently low, then from the point of view of mainstream economics that 'transformation' might be quite satisfactory - at least in the short run, and perhaps longer. (This is what the Hawkins-Simon condition is all about.)

October, 11 2005

Len Gould says

So what do you think are the odds? Is it a 6 to 4 chance the optomists are correct? 10 to 1? 1 to 1? Is it rational to follow a particular national policy if there's only a 10% chance of economic and social disaster that way?

I vote for the replacement strategy asap regardless of forcasts. That way, the worst case scenario is that the oil resources actually does last for 50 years or so.

October, 11 2005

Graham Cowan says

If it costs you more energy to obtain oil than the oil yields, then you must be getting energy somewhere else, and for reasons that seem good to you, converting it lossily to oil-borne energy. This may make sense in a world with hundreds of trillions of thermal barrels-of-oil-equivalent in uranium, and with cars that that uranium can't be used directly in; which is to say, it may well make sense here. Run them on nuclear gasoline.

Viewers-with-alarm of the prospect that some energy source other than conventional light crude oil may have an EROEI that is not substantially greater than 1 do not seem to include anyone capable of the necessary arithmetic. Essentially they wring their hands and wish someone, somewhere would add two and two for them -- but don't say four!

--- Graham Cowan, former hydrogen fan
boron as energy carrier: real-car range, nuclear cachet

October, 11 2005

Joseph Somsel says

Prof. Banks,

I think your comment about EROEI stems from the in precision in our common usage of the word "energy." There is some physical insight gained by rating energy forms in terms of "energy quality" but even then, we don't have an air-tight methodology.

The problem lies in that no energy source is extracted, processed and delivered using energy from just that source. Cross-fertilization occurs so that oil requires natural gas which needs electricity which needs coal which needs oil. All need labor which has its own set of energy inputs.

EROEI is particularly good at spotting perpetual motion proposals early on as well as hidden subsidies. It can also inform one of interdependencies such as the price of natural gas affecting fertlizer costs affecting corn production affecting ethanol costs, for example. In this case, ethanol is dependent on the relative cost of natural gas.

While EROEI has merit in our analysis of energy sources and markets, I will grant that valuatiion in stable currency is the only method that can provide a relative human valuation across energy sources, processing technologies, human needs, and final consumption.

October, 12 2005

Ferdinand E. Banks says

Graham Cowan's 'nuclear gasoline' is the appropriate term, although renewables may have an important part to play in this process/activity. And I'm not talking about what I want, but what must come about in order to get the energy that we cannot do without, and in the desired form. In addition, I am not bad-mouthing EROEI. Clearly it belongs in the discussion - note that I said discussion and not 'debate' - but as yet in a minor role.

A main value of forums like this is that opinions such as those promulgated by Mr Yergin and his CERA associates and supporters are not allowed to pass unchallenged. At the same time it needs to be emphasized that it doesn't make the slightest difference if it turns out that Yergin and Co are completely right. The point is that as of now, the probability is that they have missed the point.

In a continuation of this discussion, Ronald Cooke says that BP supports the CERA thesis about the remoteness of peak oil. That's interesting, in the light of BP's present ambition to continue with a volume-to-value switch that apparently features the dumping of production growth targets, and instead concentrating on what BP calls its 'Big Five' oil provinces: Mexico, Trinidad, Angola, Azerbaijan and Indonesia. In other words, localities where it is certain that Lord Browne will not be able to participate in any of the oil bonanzas that CERA is thinking of.

October, 17 2005

Carl Kitchen says

Some observations on the EROEI discussion: Transportation-liquid -fuels are a higher level energy use for which people are willing to sacrafice primary energy sources at an EROEI less than 1. Some energy sources, hydroelectricity for instance, can, under ideal circumstances, have an EROEI ratio much greater than 1 but are priced economicaly at higher levels because the additional unit produced is requires an EROEI greater than 1, as when electricity is generated by burning coal. Although many higher level energy uses can have an EROEI less than 1 or be priced at coresponding levels, an economy can't function without a base energy source which has both an EROEI greater than 1 and a corresponding price. An economy can't expand unless the aditional unit produced of this base energy source remains less than 1 in EROEI and corresponding price. At this time, that base energy source is coal. What is the present and likely future EROEI of coal?

October, 18 2005

Murray Duffin says

I seriously doubt that EROEI is likely to be an issue by 2020. Both tarsands and shale oil are likely to have an EROEI at least slightly better than 1. The reaL issues are: how many of the above enumerated assumptions will prove valid, and to what degree?: how fast can we produce unconventional oil?; how fast are existing sources of conventional oil declining and how rapidly will their decline accelerate? We can all reach our own conclusions about the assumptions. Tar sands production estimates for 2015 are not above 3 Mb/d, and are unlikely to get to 5 Mb/d by 2020. Orinoco bitumen production is less than 1 Mb/d now and there is little to no investment in growth. Shale oil is essentially non-existant today, and if production does start it will not get to a rate of even 3 Mb/d by 2020. Overall we might get to 8 Mb/d by 2020 as a very optimistic assumption, not the 15-18 that Cooke proposes. NGLs will grow with NG production, but NG growth production is very infrastructure limited, and North American production is at risk of collapse. Decline rates are very hard to get at. I have seen estimates from 2 Mb/d/yr to 4%/yr. If we assume 2.5 Mb/d/yr, nearly all of the CERA new projects are consumed in offsetting declines. Laherrere has an all liquids peak about 2013. ASPO have just moved their peak out to 2010, based on revised deep water availability. Deffeyes seems to be sticking with Nov. 2005, but it is not clear that he has considered all liquids. Yergin and his CERA colleagues seem to be smoking some real good stuff. Murray

October, 18 2005

Frank Horgos says

For the pessimsts out there who think Dr. Yergin is smoking pot, let me remind you that the 1973 worldwide peak oil supply period occured at 55MMBOPD because the U.S. oil price was held below $3/B from 1958 to 1973 by the NE liberal political establishment controlled U.S. Congress upon the advice of hair brained, academia based, so-called petroleum consultants, thereby, eliminating all economic incentive for major oil companies to invest in expanding domestic oil production In similar fashion, in 1960 the U.S. Congress as a result of receiving permission from the U.S. Supreme Court in 1955 to control natural gas prices at the wellhead set Area wellhead prices at such low levels as to discourage the major oil companies from developing domestic gas reserves to make up for the lost oil profits, forcing them to go overseas where the economics were considerably better.

Not to be outdone by others with more blatantly stupid acts following the policy of " not being able to see the forest for the trees", the U.S. Congress got into its oil price setting mode once again in 1985 agreeing to cooperate with the Group of Seven industrial countries to hold the price of oil below $15/B in order to encourage economic growth in Third World, i.e., China and India, countries in support of its newly found, academia generated, One World Economy concept. The mechanism to be used to control the oil price was the Strategic Oil Reserve and each of the Group of Seven agreed to develop crude oil storage facilities sufficient to hold a thirty day supply which in total would amount to 2.0 billion barrels. Unfortunately, the two faced, hypocritical, liberal establishment led, U.S. Congress didn't have the fortitude to tell the citizentry they were going to spend billions of dollars to store crude oil so they could control the oil price and instead used the excuse the crude oil reserves were to be used in case of a ntional emergency. The end result was that at $15/B not only did domestic oil operations come to a screeching halt, so did international oil producing operations. As even the most braindead, acadenia based, petroleum economists should have learned from the 1973 world oil supply shortages, keeping the price of a commodity below its replacement cost for too long will, without a doubt, result in future shortages and higher prices.

Because of the above, it was not difficult for me to predict in 1969 after becoming aware of the robust oil demand growth in Japan and Rest of SE Asia and knowing world oil supply was stuck at 55MMBOPD because of fifteen years of $3/B oil prices that world oil supply and demand would come to balance in 1973 causing oil and gas prices to double and triple in price. In similar fashion it was not anymore difficult for me to start predicting in 2000 after analyzing the robust oil demand growth occuring in China, India, Korea and Viet Nam that world oil supply and demand would come together at 80MMBOPD in 2004 causing oil prices to rise to $50/B. My prediction of the $50/B oil price was actually supported by a DOE 1992 U.S. Energy Forecast Study which depicted a graph showing the 1992 oil price escalated at 2% inflation rate would be $50/B in 2004. My prediction simply took the $34/B oil price Saudi Arabia set on its "Arab Light" in 1981 as being the inflation adjusted value of oil compared to all the world's other commodities and escalating it at a 1.7% inflation rate to get roughly $50/B in 2004.

So, I say to all you "peak Oil" advocates, when does world oil production peak? At $3/B in 1973? At $15/B in 2004? Or, how about $65/B in 2033? Petroleum reservoir engineers like myself would tell you back in 1990 that we needed $40/B oil prices to make it economically possible to go after the 30+ billion barrels of crude oil remaining in major domestic oil field using existing proven oil recovery methods. Today, the domestic oil price needed to encourage investments to go after the 30+ billion barrels is closer to $45/B which is where those braindead U.S. politicians better start figuring out how to make sure the $45/B oil price sticks around for a long enough time to assure operators they aint gonna get scarificed at the altar of the "One World Economy" , Oxford conceived, farcical concept.

Have a good day!

October, 18 2005

Berol Robinson says

Concerning EROEI, I paraphrase George Orwell: "all energies are equal but some are more equal than others." Consider the example of oil sands which must be heated to liquify the bitumen so that it flows and can be extractedl. That heat need not come from the extracted oil; it might, for example, be generated by a nuclear reactor situated near the oil sands deposit. This is one scheme for running your car on nuclear energy.

Berol Robinson berol@ecolo.org

October, 18 2005

Patrick Mazza says

Further evidence that assumptions 4-7 are faulty come in Matt Simmons' elaborately detailed book on Saudi oil, "Twilight in the Desert." Simmons uses petroleum engineer articles vetted by Saudi Aramo itself to illustrate that the handful of supergiant fields that produce most Saudi oil are showing signs of aging and peaking soon, and that vigorous efforts to uncover new sources have fallen short.

October, 19 2005

Murray Duffin says

Don't worry Frank, the price is going to stay above $45/b, but that isn't going to push the peak out. Campbell, laherrere and Deffeyes are also petroleum geologists that know how reservoirs behave. Murray

October, 22 2005

Ferdinand E. Banks says

Mr Horgos

I've met and associated with liberals from academia all over the world since I began my teaching career, about 45 years ago. Until a few years ago, I don't remember any of them agreeing with me when I said that, when demand was taken into consideration, the oil price eventually had to go up and stay up. In fact, where top-drawer academics are concerned, people like Paul McAvoy and Robert Pindyck insisted that all that was needed to find all the natural gas that the US required was for regulation to be scrapped - something that those raving left wingers President Dwight Eisenhower and supreme court judge Sherman Minton had been unable to go along with some years earlier.

I do however sympathize with Dr Yergin, and doubt whether he is smoking off-brand cigarettes. His problem is that he can't or won't take the time to deal with the relatively simple mathematics required to understand this peak oil thing. His work on the oil market belongs in the sunday-supplement of one of those publications so dear to the hearts of the Oxford people that you mentioned.

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