Hubbert's Peak

From: Glenn Morton <glennmorton@entouch.net>
Date: Wed Sep 29 2004 - 23:23:38 EDT

One of the pleasures of the job I have, Dir. Of Integrated Technology, I
get to go to lots of conventions and professional meetings. Today, at
the Soc. Petroleum Engineers meeting (of which I am a proud member), I
ran into Ken Deffeyes, the author of the book, Hubbert's peak. I had
heard him quoted in the press that he felt like 2005 would be the year
in which oil output peaks. When I asked him about this, he said,
"Thanksgiving, plus or minus 3 week!". I laughed at that and he said,
that is what the charts are saying but that there is a lot of jitter in
the numbers. He was serious.

Given that the price continues to go up, and given the fact that the
market ignores statements by the Saudis that they will increase
production, it is quite evident that no one who is betting their
millions on the price of oil believe that the Saudi's have any spare
productive capacity in the quantities necessary to fuel the world. And
that would imply that Deffeyes might very well be correct. That isn't to
say that the price won't plummet. If economic activity drops, and the
oil demand falls accordingly, we could still have a short term price
collapse.

Just a reminder of a chart I saw last spring in a talk given by a major
oil company on the next 16 years. Present production is 80 million
barrels per day. The fields which make up that production will be
producing only 40 million barrels per day in 2020. Demand for oil will
be 120 million barrels per day. That leads to the logical conclusion
that the oil industry needs to put 80 million barrels per day additional
production online in the next 16 years. NO ONE in the oil industry I
mention this to, has ever said that this is possible. Today at lunch I
told a guy this factoid and he muttered, "That won't happen". And he is
right.

Sleep well, America.
Received on Thu Sep 30 00:03:23 2004

This archive was generated by hypermail 2.1.8 : Thu Sep 30 2004 - 00:03:24 EDT