RE: Matthew Simmons on Oil

From: Glenn Morton <>
Date: Wed Aug 24 2005 - 07:29:13 EDT

janice matchett <> wrote:At 11:08 PM 8/23/2005, Glenn Morton wrote:

Might I suggest that multiplying a list of people who don't know what they are talking about is no substitute for being correct?


GRM: You didn't actually answer the question. You provided one person who

Scientific American, March 1998
Oil Production in the 21st Century

Recent innovations in undergroundimaging, steerable drilling and deep water oil production could recover more of what lies below. By Roger N. Anderson

(Roger N. Anderson is director of petroleum technology research at the Energy Center of Columbia University. After growing up with a father in the oil industry, Anderson completed his Ph.D. in earth sciences at the Scripps Institution of Oceanography at the University of California, San Diego. He sits on the board of directors of Bell Geospace and 4-D Systems and spends his summers consulting consulting for oil and service companies. Anderson has published more than 150 peer-reviewed scientific papers and holds seven U.S. patents.)

GRM: First off, of course steerable technology recovers more. I have used it. We have drilled wells 15,000 feet away from the platforms in the North Sea and elsewhere. But recovering more means that when we abandon the platform we won't leave that oil behind. It doesn't mean that there are gazillions of barrels out there that this technology is suddenly finding. If there were a billion barrels of oil 3 miles from an offshore platform, I can assure you that the industry wouldn't use steerable technology to go get it. They would build several new platforms. This technology is used to extract the remaining small quantities of oil left behind in an oil field.

BTW, this guy is on the board of Bell Geospace. I was one of the earlier customers of theirs. I have known everyone of their CEOs and presidents since they opened. They have some good people, a great product and I can tell you, in discussions with many of their people after work at conventions (over a beer), many of them share my views of the problems about to come upon the world. I don't know the guy listed above, but I doubt seriously that he expected his article to be misused as you are doing.


The New Pessimism about Petroleum Resources: Debunking the Hubbert Model (and Hubbert Modelers)
Michael C. Lynch

(Michael Lynch serves as President of Strategic Energy and Economic Research and a research affiliate at the Massachusetts Institute of Technology's Center for International Studies. He previously served as Chief Energy Economist at DRI-WEFA, Inc., a leading economic consulting firm, and is a Past-President of the United States Association for Energy Economics. He currently is working on a book, The Fog of Commerce: Oil Crises and Economic Security, to be published within the next year. He has combined SB-SM degrees in political science from M.I.T. and has performed a variety of studies related to international energy matters, including forecasting of the world oil market, energy and security and corporate strategy in the energy industries, as well as analysis of oil and gas supply.)

GRM: I know Michael Lynch. I have reviewed his articles prior to publication in the Oil and Gas Journal. I have little respect for Michael actually. I watched his presentation at the 2004 Offshore Technology Conference. He stilted his data. He claimed (boldly before a packed audience) that there was no problem in the UK production. I had just returned from the UK having been for 3 years the geophysical manager for the UK for an oil company. This was, remember, 2004. But he only showed the data up to 1999. Since then, the production in the UK has plummeted by almost 30%. The fact that he had to cook the data to support his claim made me sick. He only showed the data which supported his position and ignored the data which didn't, which is what I see in your Janice. As Matt Simmons said to me at that same convention: He will have a huge apology to give to the people of the United States when it does become clear that production has peaked. I agree.

GRM: Sometimes I think what Lynch is trying to say is that the production curves don't match exactly the Hubbert curve (gaussian distribution), and thus Hubbert theory is wrong. Ok, so what if that is correct? No real-life data matches perfectly a theoretical curve. So what if production is a wee bit above or below the theoretical prediction? It still in general follows Hubbert's curve.

GRM: I will challenge something Michael says:


And two recent discoveries, Kashagan in Kazakhstan and Azedagan in Iran, reportedly would together equal over ten percent of Campbell and Laherrere’s estimated remaining undiscovered oil. Statistically speaking, this is unlikely. Laherrere’s argument that the Middle East is near the end of its undiscovered oil is entirely based on the assumption that the observed fall-off in discoveries was due to a lack of geological opportunities, rather than government decision-making. (Laherrere 2001b) To an economist, the drop in exploration reflects optimal behavior: they do not waste money exploring for something they will not use for decades. "

Saudi Arabia has been thoroughly explored and there are no biggies left to be found. They have 90 some odd fields in that country which is probably about the right number given the area of the basin they have. Secondly, Kashagan was originally touted as a 50 billion barrel oil field. Yet BP sold it. Today it is touted as only a 12 billion barrel oil field, one that is very very far from the markets. Even Prudhoe bay, which was about the same size was almost too far from the markets to be able to produce it. Kashagan has not shown that there are vast quantities of oil left to be found to fuel the world. What it has shown is the opposite. BP didn't think it was worthwhile to stay with that field.

GRM: Janice, you seem not to understand the role of pressure in an oil field (and neither does Michale Lynch). When one first puts a field on production, the pressure in the reservoir is high. Oil gushes out often. But as matter is removed from the void space in the rock, the pressure drops. Eventually the pressure drops to the point where one must put a pump down the hole. At that point you will never again see the flow rates you used to see. A field can putter along for years in this state, producing small quantities of oil. Generally this is 2-10% of the original flow. Believe it or not, that same phenomenon will apply to the aggregate production of the world. There will come a time (mid-century) when the world produces about 10% of what it does today and it will do that for a really long time so long as we continue to drill new wells.



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Received on Wed Aug 24 07:29:57 2005

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