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Al Fin

Al Fin

Al Fin runs a number of very successful blogs that cover, energy, technology, news and politics.

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Is Peak Oil Slipping Backwards to the Year 2060 and Beyond?

“The estimates for how much oil there is in the world continue to increase,” according to William M Colton, Exxon Mobil’s vice president for corporate strategic planning. “There’s enough oil to supply the world’s needs as far as anyone can see.” Just as prices rose sharply and peak oil concerns re-emerged, huge deep water oil fields were found off the coasts of Brazil and Africa. Higher prices also stimulated “unconventional” oil production from massive Canadian oil sands projects, which now provide North America with more oil than Saudi Arabia. In 2009, the United States increased domestic oil production for the first time in decades. The longer “life horizon” and drop in natural gas prices make it a particularly attractive choice to power producers now, given its relatively low carbon emissions and flexibility as a generating fuel. _Source

Oil Reserves

Much of the fashionable panic surrounding "peak oil DOOM!" is reminiscent of the catastrophic circus that surrounded Y2K. While it is true that the Y2K problem required the attention and effort of thousands of professionals to solve, the same thing is obviously true for ongoing energy supplies in the face of rising global populations and expectations. Maintaining reliable energy supplies is an ongoing problem which is solvable as appropriate effort is applied.

...at least one positive development has resulted from the sharp rise in oil prices of recent years. The influx of capital to oil companies from high prices, combined with expectations that prices are unlikely to fall very far, has boosted investment in oil exploration and production, especially in what the industry terms “frontier” areas – namely enhanced oil recovery (more oil from existing fields), the deep (or ultra-deep) water and the Arctic. Massive new reserves have been identified, proven up, and brought to production – whilst reserves previously considered impossible to reach are now no more than a horizontal drilling or steam injection technique away. All this should help ensure supply can meet global demand for far longer than was expected just a few years ago – pushing back the oft-cited “peak oil” date by decades.

...most of this newly-discovered potential avoids the above-ground risks and cartel policies that constrain oil production in most of the world’s largest proven deposits – the bulk of which lie in Organisation of Petroleum Exporting Countries (OPEC), or are controlled by national oil companies in central Asia and Russia. It is the technical expertise and project management skills of the most dynamic multinational and independent oil companies that hold the key to these new hard-to-get-at reserves, rather than the whims of Arab dictators or the level of OPEC budget deficits. A similar, but even more dramatic change has taken place with gas, where new techniques mean huge “tight” gas deposits present in many rocks are now recoverable. The International Energy Agency (IEA) recently estimated that natural gas reserves could last twice as long as previously expected – up to 250 years.

...Some experts claim enhanced oil recovery (EOR) could potentially double the amount of oil that can be extracted globally. Most fields only recover just over a half of the original oil in place and sometimes less than a third. With modern techniques field development should be able to extract a far higher proportion of the oil, while more and more oil can be made recoverable from existing wells.

The three main types of EOR are gas injection, steam (both cyclic stimulation and flooding), and chemical injection. They have been around for a long time, but are increasingly viable economically and nimble technologically....Natural gas injection is also an improving technique used to maintain reservoir pressures, especially where it is difficult to bring the gas to market, and where gas is produced alongside oil. Other gases, such as nitrogen and carbon dioxide, can also be used.

...The newest of the major EOR techniques involves inoculating reservoirs with microbes that will make the oil flow more freely. Such developing techniques may create a new jump in recoverable reserve estimates for many fields in the near future. Above all, EOR extends the life of oil fields – many North Sea fields were expected to have run dry by now, but continue to produce often in the hands of specialist oil producers that focus on enhanced recovery.

...Faced with falling reserves and barred from acquiring fresh production in areas such as the Middle East, international oil majors began to search for new large deposits in the deep waters of the Gulf of Mexico in the 1990s – on the back of a proven drilling record in shallower Gulf areas, and in the North Sea. Exploration and drilling below 10,000ft of water and through miles of hard rock, thick salt and tightly-packed sands required the development of supercomputers and three-dimensional imaging techniques as well as equipment that could withstand the heat and pressures common at such depths, not to mention submarine robots to make repairs.

That technology is now available to drill in other areas such as the Arctic and elsewhere...Similar advances in technology have opened up huge unconventional oil shale resources in Canada. This is moving to the US, where the Bakken shale field is now the country’s fastest-growing major oil field. Production has reached about 350,000bpd, from 100,000bpd a decade ago. In a recent report, consultancy firm PFC Energy projected production would climb to 450,000bpd by 2013. _Industrial Fuels and Power - Jeremy Bowden

Meanwhile, Exxon Mobil forecasts that by 2030, gas will surpass coal as an energy source.

Many analysts are expecting a lot of new oil supplies from multiple locations around the globe.


Clever technologists are finding ways to make every barrel of oil go that much further. This is true in many ways, not just in terms of improved efficiency at the consumer level.

The concept of "peak oil" is heavily dependent upon unknown factors which could change at any time. Only a fool would maintain a posture of predictive certainty in that atmosphere of uncertainy and rapid change.

By. Al Fin & Jeremy Bowden

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  • Anonymous on February 02 2011 said:
    Sound`s like an Exxon CEO on crack article. News to you, yes there is basically unlimited amound of oil left on the planet. Nothing new there. The question is, can the world afford to pay for it ?
  • Anonymous on February 02 2011 said:
    Doom is an intoxicating drink indeed. :sad: It is the drink of choice for large numbers of people with nothing important to do, justifying their unwillingness to work to solve problems.
  • Anonymous on February 02 2011 said:
    I wonder when or if Mr Fin is going to get the message. Peak oil is irrelevant when the oil price can go up over 100 dollars and continue up until it combines with certain macroeconomic and financial market forces to cut the ground out from under the global macroeconomy.I hope that you understand this Alfonso, and believe that you are capable of doing so. So please understand this simple point so that you can give the know-nothings a lesson in applied energy economics.
  • Anonymous on February 02 2011 said:
    the greenies need to stop the fear-mongering. let nature handle things we made may transition, from wood to whale to kerosene. when the time is right we will move from oil to gas and whatever is feasible.just get the two g's (government and Greenies) out of the oil business.
  • Anonymous on February 02 2011 said:
    What a remarkably fact free article that was AlFin! You get this weeks Gold Star badge for fact free :)FACT: Discovery peaked in the 1960sFACT: Extraction exceeded discoveries in the 1980sFACT: US production peaked in 1970/71FACT: Mexico production has fallen off a cliffFACT: North Sea oil production peaked around 2000FACT: All the trumpeted "huge discoveries" of late are in fact mere puddlesQUESTION: If there is so much oil, as you so often spout your mouth about, why are the oil companies hzaving to go into ever more inhospitable enmvironments to obtain these mere puddles?
  • Anonymous on February 02 2011 said:
    If there is so much oil, then why is oil at $91 and i'm paying $3+ for a gallon of gas?
  • Anonymous on February 03 2011 said:
    Steve in Hungary, you've got the right approach. Now add what I say in #3 and with the addition of some details you've got a very good lecture on oil. And everybody else, to include Mr Al Fin, please read these materials, memorize them, and be ready to sprout these realities whenever challenged.At last we seem to be on our way into the real world. Perhaps I'll just stop writing my new energy economics textbook, and stay drunk for a few months.
  • Anonymous on February 03 2011 said:
    No proof to back any of these claims up, no statistics. That graph is a joke. Sure, there is A LOT of unconventional oil on Earth, that is nothing new, but extracting it is too difficult. 'Some experts claim...' Who are these experts?!?! Using EOR can only increase extraction up to 60% at best, which is still pretty poor. Not to mention the environmental impacts. 'PFC Energy projected production would climb to 450,000bpd by 2013.' I'm so relieved to hear that, even though the world consumes almost 90 million barrels a day. 450 k is nothing mate. Oh, and when you say 'Many analysts are predicting big offshore oil finds' you might want to add more than ONE analyst, who doesn't know what he is talking about.
  • Anonymous on February 03 2011 said:
    If ther is so little oil then why is it priced at about the same level as a good mineral water?
  • Anonymous on February 03 2011 said:
    Mr. Fin misses the point. It is about daily production vs demand. The fact is daily production has peaked and demand is growing. None of the discoveries he discusses can change that.Dy
  • Anonymous on February 03 2011 said:
    How about gas's reserves being doubled in the last few years? The IEA now expects 250 years supply. Worried? Gone long on oil...?
  • Anonymous on February 03 2011 said:
    Al Fin misses the point that by the time the year 2060 comes around, no one will care about crude oil because it will no longer be needed for anything except lubricants, materials, and feedstocks.
  • Anonymous on February 03 2011 said:
    Above ground risk and speculation is enhancing oil price rises -investment is needed and that’s the way markets work. But, don’t forget, it still doesnt cost much more than a good mineral water…The same is happening with agro-commodities – trebling prices is hardly justified by falling stocks or even just slightly less supply than demand – but speculation enhances the price swing, and so ensures heavy investment, innovation, and plentiful supply for the future. There are sometimes technological blocks to market equilibrium, but I have faith in our geologists and engineers in this case – some of the best brains in the world are on the case. Gas is a fine example – would you believe it, all that gas!! The Qatariis are fuming!Anyway, the article simply highlights the fact that peak oil dates are likely to receed as prices rise. And as prices rise investment in alternatives will grow and erode demand growth. Jeremy Bowden - the original author.
  • Anonymous on February 03 2011 said:
    Mr. Bowden makes an excellent point about the recent explosion in shale gas (and shale oil) proved reserves, thanks to improved drilling and fraccing technology.These technologies are spreading like wildfire around the world, putting the proverbial screws to the extortionate national oil companies of OPEC, Russia, and so on. The calculations have changed rapidly, and will continue to do so thanks to newer technologies.Fred, you should not encourage the old sods whose religion is peak oil doomerism. They've got nothing important to do but project their inner doom onto the outer world.
  • Anonymous on February 04 2011 said:
    There you go again Al, letting emotions get in the way of intelligence. A statement like that needs some clarification, but I think that I will save my next long discussion of oil for my next lecture, hoping that Mr Al Fin will be there to tell me about all the oil that is around.The interesting thing here is that a couple of years ago it was possible for bloggers and politicians and this and that to say anything about energy that passed through their heads, but those days are over. People are getting the message at last.
  • Anonymous on February 05 2011 said:
    Hello Fred - Ferdinand Banks. I remember our discussions when I worked at IHS-CERA in Singapore. A point I didnt emphasise, is that we have to remember we are in a time of real demand shock in the oil market. The levels of economic growth over recent years has been far higher than anyone anticipated - yet still production has kept pace. Amazing really, and the OPEC supply cushion keeps growing.
  • Anonymous on February 06 2011 said:
    IHS-CERA in Singapore, Jeremy. Draws a blank from me. But everything considered those were interesting days, and when I left there I knew a lot of finance theory. I just wish that I remembered more of it.
  • Anonymous on February 15 2011 said:
    There's oil, but it's not as cheap as it used to be, nor do we enjoy the approximately 100 to 1 energy return from oil that occurred during the 1960s. Moreover, oil is not fungible. A comparison of deep water Orinoco basin asphalt to West Texas light sweet crude is simply misleading. Again costs and energy return differ widely.Gas and coal will give us some breathing room, however, the more we are forced to use these to make up for the 166 exajoules of energy that oil currently provides to the world each year, the faster these resources will deplete.I'd like to believe that we can continue to use energy at our current rate until 2100 or so. The military is less optimistic (http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf). Given that they have no economic interest in promoting a certain viewpoint, I'll have to give their estimate more credence.
  • tehChromic on January 19 2012 said:
    excellent article... because it provides direct evidence of the tremendous hype campaign underway to squeeze the most dollars from the last drops of oil.

    but then, when you start with a quote from the VP of Exxon Mobil, well, you're not exactly hiding the fact that you're a hollow shill for a blood thirsty industry.

    make no mistake from that graph. We're moving past peak and onto the steep down slope of fossil production. The ride won't be pretty.
  • Phil on January 25 2012 said:
    If there was plenty of oil, it wouldn't cost $100+ a barrel.
  • Jim Letourneau on January 26 2012 said:
    The amount of oil on the planet hasn't changed but the price has varied from $33.55 to $147.27.

    Look for shale oil (another 3 or 4 "Bakkens"), improved injection (Wavefront's Powerwave), chemical EOR and MEOR to push out the peak.
  • MrColdWaterOfRealityMan on February 08 2012 said:
    Peak oil in 2060. No. Probably not. The article is typically innumerate (See http://en.wikipedia.org/wiki/Cubic_mile_of_oil for a quantitatve summary of the book of the same Title).

    The world still uses 30 billion barrels of oil a year. Each year that we're not discovering that amount of energetically and economically profitable oil is one year closer to powerdown.

    We can, and should, delay this as long as possible, but make no mistake, nobody is going to make a teacup of oil in a cubic yard of rock 7 miles deep worth getting. There may be many trillions of barrels of oil like this in the hydrocarbon horizon, but it may as well be on the moons of Jupiter for all the good it will ever do us.

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