Re: Matthew Simmons on Oil

From: Al Koop <koopa@gvsu.edu>
Date: Tue Aug 23 2005 - 23:58:53 EDT

There are hundreds and maybe thousands of published articles about how there are still immense amounts of oil still available on the earth. Another one appeared in the New York Times today: http://www.nytimes.com/2005/08/23/opinion/23tierney.html?th&emc=th

The author admits that he knows next to nothing about oil production but feels he can write an article in the New York Times about oil depletion that deserves to be read. Why, I have no idea. I have read hundreds of such articles; I am still looking for something besides shallow appeals to new technology and economic pressures, but have yet to find one article worth the effort to write it. Most of these articles are about 250 to 1000 words in length and offer us the logic that since we have not yet reached the peak of oil (even though some people have suggested we already would have) we still have a long time before problems will arise. They offer no data to rebut the claims that we are within 15 years of peak oil. They basically feed their gullible clientele exactly what they want to hear.

Now all of those concerned about peak oil are well aware of new technologies, and they also realize that we will find more oil fields. There is little evidence that these new technologies have increased the ultimate yield considerably, rather that they increase the rate at which the oil is recovered, meaning that the depletion rates of these high tech wells may be greater than current predictions suggest. We obviously will find more oil, but the likelihood that these will be large fields is small. The very large oil fields that are producing much of today's oil are referred to as "elephants" and all but one or two were found before 1970. Even with new technology there are not likely to be any large finds, with the possible exception of some deep sea or polar fields. Just as we likely still have not yet found millions of the earth's species, we are unlikely to find a new Canadian tiger or European giraffe or California hippopotamus. So too are we unlikely to find new o!
il "elephants" although we will surely find some new "beetles" that won't add that much more to current production.

No one knows what our ultimately recoverable reserves (URR) really are. The far out optimists who add up the proven reserves reported by various countries and the large oil companies have no way of verifying these numbers. Indeed, that is the point of Simmons book--we cannot take the word of the Saudis (and other OPEC countries). Even though they tell us they have 500 billion barrels yet to be produced, the evidence does not support such claims. Why should anyone take the word of those who can gain by exaggerating their reserves, rather than what the data seem to tell us?

Why aren't the big oil companies building new refineries if we so desperately need them? Probably because they are not stupid and realize that there will not be sufficient crude oil to keep all the refineries running in the near future. You don't want to to put huge amounts of money into an infrastructure designed to last 50 years if you will only need it for the next 5 years.

Al

>>> janice matchett <janmatch@earthlink.net> 08/23/05 2:11 PM >>>
wrote:

Reality:

We haven't even begun to tap into some of the huge deep oil well reserves.
We have more oil reserves today than ever
before. <http://www.radford.edu/~wkovarik/oil/5oilreservehistory.html>Oil
Reserve History http://www.radford.edu/~wkovarik/oil/5oilreservehistory.html

FACT: Oil bubbles up freely through fissures in the bottom of the ocean
Google Results 1 - 10 of about 9,150 for
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/oil%26r%3D67>oil
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/bubbles%26r%3D67>bubbles
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/up%26r%3D67>up
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/from%26r%3D67>from
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/fissures%26r%3D67>fissures
in the
<http://www.google.com//url?sa=X&oi=dict&q=http://www.answers.com/ocean%26r%3D67>ocean.
(0.27 seconds
http://www.google.com/search?hl=en&c2coff=1&q=oil+bubbles+up+from+fissures+in+the+ocean&spell=1

August 23, 2005 An Oil "Crisis"? By
<http://www.creators.com/opinion_writetheauthor.cfm?pg=write&columnsname=tso>Thomas
Sowell<http://www.creators.com/opinion_writetheauthor.cfm?pg=write&columnsname=tso>

http://realclearpolitics.com/Commentary/com-8_23_05_TS.html

8-23-05 <http://www.dailybreeze.com/opinion/articles/1791282.html>Oil
prices and the Rule of
Bigness
<http://www.naplesnews.com/npdn/pe_columnists/article/0,2071,NPDN_14960_4021955,00.html>James
K.
Glassman<http://www.naplesnews.com/npdn/pe_columnists/article/0,2071,NPDN_14960_4021955,00.html>:

Daily Breeze http://www.dailybreeze.com/opinion/articles/1791282.html

8-23-05 On the Move in the Oil, Gas, and Petrochemical Market, Washington
Group International Establishes Its Oil & Gas Headquarters in Houston The
Company Launches Hiring of Hundreds of Oil and Gas Professionals
http://phx.corporate-ir.net/phoenix.zhtml?c=70435&p=irol-newsArticle&ID=743745&highlight=

The Bottomless Well: No Need To Curb Energy Consumption
by <http://capmag.com/author.asp?name=17>James K. Glassman (May 19,
2005) http://capmag.com/article.asp?ID=4235

Ignorance on Energy Matters Is Profound
By
<http://www.aei.org/publications/filter.all,pubID.22321//scholars/filter.all,scholarID.21/scholar.asp>James
K. Glassman Posted: Monday, April 18, 2005
http://www.aei.org/publications/filter.all,pubID.22321/pub_detail.asp

4/28/05 The Economist: "A Bottomless Beer Mug: Why the World is not
Running Out of Oil." Excerpt:

"Peter O'Dell of Rotterdam's Erasmus University points out that since 1971,
over 1500 billion barrels of oil have been added to our worldwide reserves.
Over the same 35-year period, under 800 billion barrels were consumed. One
can argue for a world which has been running into oil rather than running
out of it. What makes the estimates go up continuously is a combination of
economics and innovation. The IEA explains the process this way. Reserves
are constantly revised in line with new discoveries, changes in prices, and
technological advances. These revisions invariably add to the reserve base.
A few decades ago the average oil recovery rate from reservoirs was 20%.
Thanks to remarkable advances in technology this has risen to about 35%
today."

The New Age of Discovery.

"But there is a more practical fallacy embedded in the gloomy forecast,
too. 'I challenge the idea that the era of discovery is over in oil,' says
one expert. Thanks to the Cold War and other political constraints on
western investment, much of the world has yet to be explored with the aid
of the latest technologies. Most of the oil still undiscovered thanks to
the Cold War and other political constraints on western investment, called
environmentalism. New word for political constraints on western investment,
environmentalism. Already, the industry, (the oil industry), is exploring
underwater at depths that were unimaginable a decade or two ago. In the
Gulf of Mexico and elsewhere, oil rigs now float atop 3,000 meters, or
10,000 feet of water. These marvels of engineering [capitalism] are stuffed
with the latest in robotics, electronic sensors, and satellite equipment
using fancy multilateral wells that twist and turn in all directions, they
can hit giant underwater oil pockets miles away from the rigs." ...."

Lots more here:
<http://www.freerepublic.com/focus/f-news/1396154/posts>There's No Oil
Shortage May 3, 2005
http://www.freerepublic.com/focus/f-news/1396154/posts

Oil, Oil Everywhere
The Wall Street Journal Opinion Journal ^ | Sunday, January 30, 2005 12:01
a.m. EST | PETER HUBER AND MARK MILLS Posted on 01/30/2005 10:24:37 AM CST
by Woodworker
<http://www.freerepublic.com/focus/f-news/1331914/posts>http://www.freerepublic.com/focus/f-news/1331914/posts

Also, another idea:

Anything into Oil (solution to dependence on foregn oil?)
DISCOVER Vol. 24 No. 5 ^ | May 2003 | Brad Lemley
Posted on 04/21/2003 7:57:41 AM CDT by honway
<http://www.freerepublic.com/focus/f-news/897232/posts>http://www.freerepublic.com/focus/f-news/897232/posts

"......60 percent of America's petroleum supplies come from foreign
countries (24 percent is imported from Persian Gulf countries, including 6
percent from Iraq) - increasing to 64 percent by 2020. Our national
security, let alone our economy, must not be captive to volatile and
unreliable sources of energy. Keep in mind that in 1973, when only 36
percent of our supply was imported, OPEC was able to create an energy
crisis here by cutting supply and driving up prices.

Nearly 70 percent of oil reserves and 50 percent of gas reserves are
located on government lands. By 2020, U.S. oil and gas consumption will
increase by more than 30 percent and 60 percent, respectively. A labyrinth
of statutes, regulations and lawsuits have made access to these resources -
whether in the Alaska National Wildlife Reserve, the continental United
States, or off the coasts of California and Florida - extremely difficult
and costly.

Furthermore, a major refinery hasn't been built in more than 20 years, the
Environmental Protection Agency mandates a large variety of petroleum
blends for different parts of the country, and more pipeline delivery
systems are needed. The construction of power plants isn't keeping pace
with electricity demand, which will increase by 45 percent in 2020. And
there hasn't been a nuclear power plant licensed since 1979." ~ Rush
Limbaugh Thursday, January 10, 2002
http://www.rushlimbaugh.com/home/folder/daschle.member.html
Received on Wed Aug 24 00:00:33 2005

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