RE: Middle East oil supply

From: Glenn Morton (
Date: Thu May 23 2002 - 09:10:14 EDT

  • Next message: Glenn Morton: "RE: Middle East oil supply"

    Hi Burgy, you wrote:

    >-----Original Message-----
    >From: J Burgeson []
    >Sent: Wednesday, May 22, 2002 12:54 PM

    >>>For those who think we have a rosy energy future, take another think.
    >I ran across a quotation from the head of Atlantic Richfield recently with
    >an equally pessimistic outlook -- "two years from now we will
    >experience the
    >peak of oil production -- then it is all downhill."

    Do you have a reference to that? At that time it would have been R. O.
    Anderson or Thornton(forgot his first name). I worked for ARCO during that
    time frame but don't recall it (not that I would know every word our
    chairman said).

    >However, the statement was made in 1979.
    >What is it that makes us think the pessimistic view is right this
    >time when
    >it has been wrong in the past?

    The big difference is that in 1979 we were still finding more oil each year
    than the earth was pumping out of the ground. What could be seen, and what
    Anderson might have been saying is that, we will begin to find less each
    year than we pump out. That point actually is the beginning of the end,
    just like when a person or company begins to spend more money from their
    bank account than they put into it each month. Continue this behavior for
    long and you go bankrupt.

    Burgy, ever since 1980, we have been finding less oil each year than we have
    been pumping out of the ground. Over the past 10 years we have been pumping
    about 12 billion more barrels out of the ground than we find.
    is a picture from Colin Campbell's The Immanent Peak of Oil Production
    paper. Look at 1979. That was nearly the last year we found more oil than
    we pumped. That point really does mark the beginning of the end of the oil
    age (although I don't know if that is what the ARCO offical was speaking
    of.) The chart is in Giga barrels. We pump about 27-28 gigabarrels per year
    out of the ground, we are finding each year about 10-12 billion barrels.
    That hump of discoveries you see at 1975 is the North Sea oil fields. The
    UK North Sea is now declining fast. in 1999 we produced 137 million tonnes,
    2000 126 million tonnes, and 2001 118 million tonnes. There are rumors I am
    hearing that Venezuela is buying oil from Ecuador and re-exporting it as
    their own oil so that they don't have to leave OPEC! Within a few years,
    Venezuela won't be an exporter.

    What has kept production going up through this period is that it can take
    years before a discovery is brought on production. Thus, the discovery rate
    does not show WHEN we consume those barrels--that will be much later.

    And Burgy, I hope I am wrong, but much of the oil industry is waking up to
    the problem we will face in just a few years.


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