RE: Dangers of peak oil

From: Glenn Morton <>
Date: Fri May 21 2004 - 19:25:39 EDT

> -----Original Message-----
> From:
> [] On Behalf Of Innovatia
> Sent: Thursday, May 20, 2004 3:31 PM
> Glenn Morton,
> Three questions, if I may:
> 1. I recall from somewhere that the south China Sea has not
> been explored much. Where, if any, are the places on earth
> that have yet to be sufficiently explored?

I am not sure I would agree with you about the South China Sea. When I
was with ARCO back in the late 70s, my boss was involved in the Ya cheng
discovery--a big gas field. The company I currently work for used to
have fields down there. Is it all discovered? No, but it is also not
virgin territory either.

The real place that has had zero exploration and where I believe lie big
oil fields is Antarctica. However, current technology can not get any
oil out of there because you can't protect the platform and well head on
the sea floor from Rhode Island sized icebergs drifting off of that

> For instance, this Vermont-sized country of Belize on the
> southern Yucatan peninsula has not a single oil well, while
> eastern Mexico has many oil or gas wells.

First off, I am not an expert in Belizian geology, nor can I find much
on it. From looking at some maps I have, it appears that there is an
outcrop of pre-Tertiary volcanics or basement in the center of the
country. Another map shows less than 1000 feet of Tertiary strata over
parts of the country. Such thin sedimentary cover would be illsuited
for oil fields. That may be the wrong reason, and I will glady be
corrected by anyone with more experience there.

> > Most of the world's untapped reserves are in the hands of
> state-owned
> > oil companies in the Middle East.
> 2. Is politics a factor in keeping exploration from places
> with potentially large discoveries?

Politics always plays a role. Think of ANWR in Alaska. But, having said
that, economics plays a bigger role and the lwas of physics determine
when a field decline sets in. When one pumps oil out of the ground, one
reduces the pressure and that reduced pressure reduces oil flow. There
are two ways to keep the reservoir pressure up--the first way, the way
we like, is that water from the surrounding rocks flows in to replace
the voidage of oil taken out. The other way is to inject water into the
reservoir to maintain pressure. If the pressure drops to a certain
level, you have to shut in the field.

> > 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.
> 3. As I recall, M. King Hubbert's production-rate curves
> looked symmetrical, like a bell curve. The rates took as long
> to reach the peak as to decline. Is this because the curve
> was simplified for analytical purposes, or is there some
> reason other than high differential pressure that keepa a new
> well from reachin the peak flow rate for a while?

Hubbert's methodology applied to all out production. With politics, we
have never quite had all out production. However, predictions in the
1970s suggested that the world would peak out in oil production in the
1990s. It didn't happen and this 'failed' prediction is used to beat
the Hubbert Peakers over the head. Why did it fail? Because the price
of oil climbed so steeply in the early 1980s that people 1. bought
smaller cars, 2. put more insullation into the houses, 3. industries
conserved on energy 4. Double windows were installed on new houses 5 etc
etc etc.

What happened was that the rule which before had held that one needed a
fixed use of energy per GDP dollar was broken. Suddenly we got lots
more dollars of GDP out of fewer BTU's. The demand for oil plummeted and
I lost 2 jobs in 1986 and had to start my own business to survive. And
those savings, which have continued to today pushed the peak oil back by
probably 10 years. But, one can't conserve oneself into prosperity. The
lowered demand merely moved the peak back. If we are at peak,
conservation won't move the peak back at all. It will forestall the day
of reckoning a wee bit.

Now back to Hubbert's curve. Politics makes the shape of the curve
asymmetrical. And that has caused some analyxts, like Michael Lynch to
say in effect, "Production graphs don't fit Hubbert's theoretical model,
therefore Hubbert was wrong and we have plenty of oil." That is silly
of course. Production isn't a single variable function. There are lots
of variables which affect it. But Hubbert and the laws of physics lie
just below the surface of the asymmetrical curves.

One thing which will skew Hubbert's curve in a way that isn't favorable
to us. Hubbert's curve also assumes a constant technological level.
Over the years, we have learned how to suck a field dry very quickly. A
billion barrel field of 50 years ago is still producing. Offshore a
billion barrel field today will be abandoned after only 20-25 years.
The second half of the world's oil will be drawn down faster than the
first half (once again giving Lynch a reason to make money off his claim
that the curves don't fit Hubbert's theoretical curve.)
Received on Fri May 21 19:25:52 2004

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