RE: Dangers of peak oil

From: Glenn Morton <>
Date: Tue May 18 2004 - 22:51:03 EDT

We interupt this program for the Quote for the day. The Wall Street
Journal is a bit overly pessimistic also:

        "Through most of the 20th century, the major petroleum companies
focused on exploring for oil and natural gas. But the age of 'elephant'
strikes is over. There has been just one great find in the past 30
years: the 1999 discovery of Kashagan, a field off Kazakhstan in the
Caspian Sea. Today, the oil fields in the Western oil majors'
traditional strongholds--Alaska, the North Sea, and Texas--are in
decline. Most of the world's untapped reserves are in the hands of
state-owned oil companies in the Middle East.
        "The relative dry spell has left the majors--Exxon Mobil Corp.
BP, Royal Dutch/Shell Group, France's Total SA and ChevronTexaco
Corp.--under intense pressure to replace the reserves they use up, and
to increase their profits. Even though they still hunt for new oil,
their focus has shifted to 'high-grading' : selling tired fields or
entire operations and replacing them with riskier but more profitable
        "This emphasis on shifting around existing pools of oil and gas
poses a problem: It does little or nothing to increase the world's
overall petroleum stockpile. With U.S. oil prices hitting a record high
of $41.55 a barrel yesterday on the New York Mercantile Exchange amid
war worries and soaring demand, concerns are mounting about the
industry's ability to ensure supply keeps up with consumption.
        "The world isn't about to run out of oil. But oil consumption is
outpacing the industry's discovery of new reserves. At 40.6 years of
consumption covered by proven oil reserves in the ground in 2002, the
most recent year tracked, according to the BP Statistical Review, an
industry-data bible. That was down from 44.7 years in 1989." Bhushan
Bahree, "As Fresh Prospects Dry Up, Petroleum Industry strikes Deals."
Wall Street Journal, May 18, 2002, p. A1

Kashagan has about as much recoverable oil as Prudhoe Bay.

I might mention that even though we have 40 years of consumption covered
by reserves, it doesn't mean that we will get that oil out at the
production rate we need. As oil fields get old, the rate the oil comes
up the borehole gets smaller and smaller. This is because the pressure
in a new field is high and in an old field it is low. Pressure
differentials are what drive the oil up the wellbore. It takes lots
longer to get the 2nd half of the oil than it does the first half. One
thing is clear: We will be producing oil at the end of this century; we
just won't be producing it at a fast enough rate.

But of course, those outside the industry, like dentists, know more
about how we will create energy than those who actually work in the
industry. We who work in the industry are universally dummies and can't
see our way to the bathroom. Thus disregard this notice of doom and
gloom. We now return to the regular programming: Rebecca of Sunnybrook
Received on Tue May 18 22:52:14 2004

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