More oil found than used up

Peak Oil misconceptions have many times led to alarmist predictions and dire warnings of an end of global oil production before the current day. Time and again, those forecasts turned out wrong because oil reserves, including proven or cost-efficient reserves, have continued to grow, and more oil wells or fields have been brought under utilization than those peaked and declined. The following is a partial list, as collected by Jason Schwarz, Options Strategist for Lone Peak Asset Management, Westlake Village, CA:

1. An offshore find by Brazilian state oil company Petrobras (PBR) in partnership with BG Group (BRGYY.PK) and Repsol-YPF may be the world’s biggest discovery in 30 years, the head of the National Petroleum Agency said. A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil’s reserves and make the offshore bloc the world’s third-largest known oil reserve. “This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren’t going to find any more and that we have to change our way of life,” said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc.

2. A trio of oil companies led by Chevron Corp. (CVX) has tapped a petroleum pool deep beneath the Gulf of Mexico that could boost U.S. reserves by more than 50 percent. A test well indicates it could be the biggest new domestic oil discovery since Alaska’s Prudhoe Bay a generation ago. Chevron estimated the 300-square-mile region where its test well sits could hold up to 15 billion barrels of oil and natural gas.

3. Kosmos Energy says its oil field at West Cape Three Points is the largest discovery in deep water West Africa and potentially the largest single field discovery in the region.

4. A new oil discovery has been made by Statoil (STO) in the Ragnarrock prospect near the Sleipner area in the North Sea. “It is encouraging that Statoil has made an oil discovery in a little-explored exploration model that is close to our North Sea infrastructure,” says Frode Fasteland, acting exploration manager for the North Sea.

5. Shell (RDS.A) is currently analyzing and evaluating the well data of their own find in the Gulf of Mexico to determine next steps. This find is rumored to be capable of producing 100 billion barrels. Operating in ultra-deep waters of the Gulf of Mexico, the Perdido spar will float on the surface in nearly 8,000 ft of water and is capable of producing as much as 130,000 barrels of oil equivalent per day.

6. In Iraq, excavators have struck three oil fields with reserves estimated at about 2 billion barrels, Kurdish region’s Oil Minister Ashti Horami said.

7. Iran has discovered an oil field within its southwest Jofeir oilfield that is expected to boost Jofeir’s oil output to 33,000 barrels per day. Iran’s new discovery is estimated to have reserves of 750 million barrels, according to Iran’s Oil Minister, Gholamhossein Nozari.

8. The United States holds significant oil shale resources underlying a total area of 16,000 square miles. This represents the largest known concentration of oil shale in the world and holds an estimated 1.5 trillion barrels of oil with 800 billion recoverable barrels—enough to meet U.S. demand for oil at current levels for 110 years. More than 70 percent of American oil shale is on Federal land, primarily in Colorado, Utah, and Wyoming.

9. In western North Dakota there is a formation known as the Bakken Shale. The formation extends into Montana and Canada. Geologists have estimated the area holds hundreds of billions of barrels of oil. In an interview provided by USGS, scientist Brenda Pierce put the North Dakota oil in context: “Of the current USGS estimates, this is the largest oil accumulation in the lower 48. . . . It is also the largest continuous type of oil accumulation that we have ever assessed.” The USGS study says with today’s technology, about 4 billion barrels of oil can be pumped from the Bakken formation [7].

In the face of such overwhelming evidence, which seriously undermines the Peak Oil theory, proponents of the theory argue that their thesis is based on “proven,” not all, reserves. Proven reserves are reserves that, given a certain level of technology and a certain amount of investment, are proven or estimated to be economical, or cost efficient. Let us briefly examine this “proven vs. total reserves” argument of the Peak Oil champions.

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I feel sorry for those poor suckers in North Dakota.  Say goodbye to oil revenues forever....No more going out to dinner at McDonalds with those royalty checks.  Its back to canning fish for those bumpkins....  Enjoy your government funded windmill and your $5 per gallon algea fuel.......Haliburton was smart moving their headquarters to Dubai.  There ain't going to be any oil related economic development in this country under the neo-marxist  boy wonder...

Mexico,
Ya know. I do wonder why everyone tries to keep the Bakken a secret. No doubt there is a tremendous amount of wind energy there . But why no mention of the Bakken by Obama. And the USGS has refused  for over a year to release a detailed report on the methods they used last year to determine the Bakken’s reserves.
Does make ya wonder doesn’t it.
But don’t worry about North Dakota.
They can still plant seeds and raise them pigs.
Wells will still be dropped and production increased simply because of long term contracts with pipeline companies that are reaching completion.. These wells are very profitable at 30 bucks a barrel.

Most of the wells now in production paid back in less than 3 months. The wells can only flare gas for 1 year or they must pay royalties on the flared gas, so gas plants will be built.

North Dakota is one of the few states with a budget surplus.  

There is a bit of snow there right now.  But the way this kern county and Cali are going. I may have to set roots back in the old home state.

Did you know that North Dakota has the longest life expectancy  of any state? 

By the way Haliburton set up shop in North Dakota years ago. So did Enron. They go by EOG now.

Obama and the dems are idiots when it comes to petroleum industry.  Just listen to our infamous Peolosi at Denver (DNC) when she spouted (paraphrasing) "we need to get away from harmful hydrocarbon fuel and get into clean burning natural gas".  I think she said this like 5 times in her speach.  It's a wonder why somebody didn't yank her off of the stage for sounding so stupid.

Whether it's the Bakken, Barnette, Woodford, Applachian or even our very own Monterey, the oil shales are not well understood and very costly to produce (multistage frac, horizontal drilling).  Additionally, the best in class recovery rates are below 10% in most cases and ultimate recoverable don't get much higher based on known technologies.  Therefore, the current price envrionment will dampen oil shale technology growth and result in even higher prices when the crude demand returns.

I read JPT, world oil and other petroleum rags on regular basis to see which direction we are headed.  The problem is that all of the easy oil is pretty much gone.  The GOM development Shell speaks of (#5) is reaching down 9,000' water depth.  For you non oil folks, that's almost two miles of water.  Therefore, our energy development must be hydrocabon +.  Shutting down hydrocarbon exploration and production (like the dems want) is not very smart as the capital and the R&D to develop other form (+) will take some time.  In the near term, we should drill offshore Ca and develope some of that reserve for our economic future.  If you are against this idea, stop driving your car in protest.

a couple of things i want to point out here

notice that the price of oil began to get seriously expensive within 2 years of the olympic games in China???  Also, did anyone else notice when the price of oil started to decline??? 

ding ding ding ding...we have a winner.

right after the chinese olympics were over

ladies and gentlemen, we paid, through high oil and gas prices, for the Chinese to host the olymipics AND build all the necessary venues to run said events.

China has ZERO infrasructure...everything you saw on TV was run off of diesel generators.  the chinese Government began hoarding oil and diesel back in late 06.

thats all im going to say about the PUKE oil BS

Casooner,

Horizontal drilling and Fract. Pays very well in the Bakken at 30 bucks/barrel.  Some wells come in flowing at 3000 barrels/day through a 1/2 inch choke.  These 45 degree light sweet continuous reserves are just starting to be utilized. 

Kern's wells were supposed to be dry decades ago.  According to peak oil. 

But new techniques seem to make them run on forever. As long as someone writes the check.

As said in one of the posts above. What really destroys the myth of peak oil is the abundance of alternatives at low costs. You start driving up the price of crude and consumption collapses. And money turns to alternatives.

As far as Pelosi and LNG. She is just taking her cue from T-Boone Pickens. He is the guy pushing the unlimited supply of LNG. Remember him The petro Guru.

Oh, Besides windmills and LNG. T-Boone has huge interests in the Bakken. Imagine that.

“More oil found than used up”

For the decade of 1998 to 2008, five barrels of oil have been extracted for each new barrel of proven reserves found.

Peak oil has never been about petroleum supplies actually becoming completely exhausted. That will never happen.

The problem is the available rate of extraction meeting demand. 

Peak reserve discovery in the USA occurred during the decade of the 1930’s, and has declined dramatically ever since. Our actual peak production occurred in 1970, at 10.5 million barrels per day. Today, our production stands at less than 5.5 million barrels per day, while demand still stands at over 19 million barrels per day.

Without question, USA petroleum production peaked long ago. Of course, the USA was first out of the chocks to produce oil on a large scale. Most of it is gone. The world as a whole is a mere 40 years behind us.

Peak oil discovery for the world occurred in the 1960’s. Most of the super giant fields in the Middle East were discovered before 1950. Most of the super giants are now in decline, in spite of aggressive secondary recovery techniques.

Additional capital investment is limited by the realities of depletion and physical geology. Once the energy expended exceeds energy gain, use as a net energy source is over, although oil could still be recovered as a chemical raw material if the need is essential.

Bakken is no secret, never has been. It was found decades ago. It’s a large field with very low porosity, and lack of potential for high volume recovery over the long term. That’s why it’s still in place. Deposits with more profit potential were exploited long before. Oil recovery is a business after all. Bakken horizontal wells flow rates peak fast, and decline rapidly. Recovery rates will help mitigate our overall domestic production decline, but cannot reverse the depletion rates of our existing, overage domestic fields.

BTW: The Kern River formation is still yielding 80,000 barrels per day as a result of creative engineering, and efficient management. Chevron is hoping to squeeze another 20 years production. The field peaked at 140,000 barrels per day in 1987. This recovery is energy subsidized by the use of large quantities of natural gas. The energy return on energy invested for Kern River Crude is now 1 barrel equivalent invested for every 2 barrels produced. When it hits 1 to 1, it’s over as an energy source.

Here’s an interesting article concerning Chevron’s present strategy to maintain production until 2025. However, once it’s gone, no amount of capital can create more.

http://www.theoildrum.com/n...

Although alternative energy sources will be brought on line, we are at least 30 years too late to avoid the economic disruptions that will be the result of ever rising energy equivalent prices. 

Oil is an amazing energy dense resource. There’s nothing out there that can deliver the huge energy net gain of oil for so low a cost.

Use 100% of American farmland for bio fuel production, and at best we could replace 20% of our liquid fuels. What would we eat then?

The only realistic short term solution is conservation, ( reduction of demand where feasible), over the next decade or more.

Of the 87 million barrels of petroleum used per day in the world, 12 million barrels is used simply to fuel the USA’s automobiles.  That’s 20% more oil than the USA produced at it’s peak 36 years ago.

Americans have refused to conserve, and are paying the consequences.

It didn’t have to be this way.

Don,
You still insist on using old data. Actually purposefully wrong data. Data that purposefully ignores over half the crude reserves in the world
 The same engineering that has kept the Kern fields open.
Will turn the Bakken and mid west reserves into the largest producing areas of the world.

Peak oil completely disregards unconventional resources. I don’t know how many times I am going to have to say  it before you stop ignoring that fact.  There have been a large number of discoveries in excess of ½ trillion barrels in the past few years. I listed them above. These are truly the largest of the giant reserves. Reserves that have never been dreamed of before. .

Horizontal drilling and fracking solved the density problem in the Bakken. That happened well over 5 years ago.  Flow rates of ALL WELLS drop off. In fact very few wells flow at all in Kern County. In fact. Are there any left?  But rates of 3000bpd have held for months in the Bakken, settling in at rates around 1000 BPD. Name one conventional well in Kern Count that has had that type of performance in the last 25 years, 75 years?.

The new Midwestern reserves make money at 30 bucks/barrel. That means when crude approaches 70 bucks.  You can’t chase drillers away from there.

When prices go over 70 bucks. Alternatives are hugely profitable. So they attract investments.

These are the stabilizing factors that kills the idea of peak oil.

There is no way you can keep consumption of crude at a level that will support 100 buck crude.

There is no way you can support the idea of peak oil if you include un-conventional resources and the effects of price on consumption.

Americans have learned to conserve. In fact they are conserving to the point that it in itself may be a problem.
Not only are they conserving gas. They are conserving cash. When they don’t buy plastic TV’s they not only reduce the consumption of crude. They stagnate the economy. 

Don,
A couple of gold charts. It isn't steady as you go as some might claim.

http://img378.imageshack.us...

http://quotes.ino.com/chart...