Peak oil theories wrong, says ExxonMobil boss

[libertylover]

Comments????

THE world has an abundant supply of oil, and high petrol prices are just the reality of a globally traded commodity, ExxonMobil Australia chairman Mark Nolan said today.

Mr Nolan used his speech to the Asia Pacific oil and gas conference in Adelaide today to debunk the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.

Such predictions, he said, had been around since the 1920s, particularly at times of high oil prices.

“The fact is that the world has an abundance of oil and there is little question, scientifically, that abundant energy resources exist,” Mr Nolan said.

“According to the US Geological Survey, the earth currently has more than three trillion barrels of conventional, recoverable oil resources.

“So far we have produced one trillion.”

Mr Nolan said the oil industry had always underestimated the extent of global resources and the ability of technology to both extend the life of existing oil and gas fields and find new ones.

“We should not forget that we can recover almost twice as much oil today as when we first discovered it over 100 years ago,” he said.

“And when you consider that a further 10 per cent increase in recoverability will deliver 800 billion barrels of oil to our recoverable total, we have every reason to be sure that the end of oil is nowhere in sight.”

Mr Nolan said that by 2030, conventional fossil fuels (oil, gas and coal) would still account for 80 per cent of the world's energy requirements.

But Mr Nolan said it was very difficult to predict what would happen in the future with both crude oil and petrol prices.

“They are both regionally traded commodities, they are priced by the market, priced by the region,” he said.

“The fuel price is ultimately driven by the source of the product, which is the crude price, and of course that is traded regionally and internationally.”

Mr Nolan's comments were endorsed by the president of the Society of Petroleum Engineers, Eve Sprunt, who said the proponents of peak oil theory often confused oil reserves with available resources.

“When you are talking about reserves, you are only talking about a very small fraction of the total resource base,” she said.

“The reserves are the portion for which the infrastructure is largely in place, the technology is in place and that can be produced at the current oil price.

“But if you are planning for the long-term energy future of your country you need to understand the resource base.”

“The whole name of the game is moving resources into the reserves category.”

Ms Sprunt said high oil prices also presented opportunities such as the viable development of other fuels.

“It's a time when new alternatives emerge,” she said.

http://www.news.com.au/story/0,23599,20390685-1702,00.html

[mohillbilly]

I read an article years ago from Russian research that was conducted back in the late fifties i believe, at that time they PROVED that crude oil is a renewable resource. It is NOT fossil fuel like many say, it is derived from the heat and chemicals in the earths crust (more complicated than that reall) I tend to subscribe to that theory.

If I can find a link to the study, I will post it, wa some long and technical reading but ver informative

[kawalekm]

Interesting how he mentions that we've used one third of known reserves. *It makes me think of Matthew Simmon's estimation in his book "Twilight in the Desert" where he states that only 2/3 of the petroleum in a particular oil field is recoverable by conventional methods. *The remaining 1/3, if recoverable at all, is only obtainable by the most sophisticated technology (read expensive) with great difficulty. *So, if only 2 trillion is available, and we've used 1 trillion, that's the same as saying we've "reached the peak".

[libertylover]

k....it is something to ponder.

mo...do you have the article you are
speaking of? I, too, have heard oil
isn't fossil fuel.

[scottie12]

“[quote]The fact is that the world has an abundance of oil and there is little question, scientifically, that abundant energy resources exist,” Mr Nolan said.
“According to the US Geological Survey, the earth currently has more than three trillion barrels of conventional, recoverable oil resources.
“So far we have produced one trillion.”


And scott is thinking ; Isn't this statement almost an admittance that there is gonna be a shortage .(if'n we dont change our ways)
I mean - so this guy is saying that, so far , in the last 100 years or so , that we have used a quarter of the earths oil resources .
but , of course we could only expect the remaining 3 quarters to last as long as the previous quarter if we used it at the same pace .
surely the last 20 years of modern consumption would more than equal the previous 80 years of almost primitive consumption.
With all the new demands and uses for oil , and the necessity for our perpetual-growth-based economic system to constantly increase demand and consumption , how does this calculate mathematically?
I'm not sure what the base numbers are specifically.
(nobody probably really does,'company secrets'),
but i did hear a physics proffessor explain it "a long time ago'
I'm talking about calculating ' exponential growth of consumption of a finite resource' and
his take on it was that ----If we try to have %7 annual growth in consumption (or economic growth, or expansion)
that it is then a mathematical certainty , that every 10 years we will have doubled the consumption rate , and thus , to continue the same %7 growth for 10 more years would double the consumption rate again.
with each 10 year doubling cycle .

for example if say in 1950 we started this growth cycle and went from a 1950 consumption rate of 1 billion barrels per year ---by 1960 we would be consuming 2 b b p/yr ,
and so, continuing that rate of (healthy econimic GROWTH)
, by 1970 we would be consuming 4 billion bbp/yr-
1980 would be 8 bb p/yr
1990 would be 16 b b p/yr
2000 would be 32 billion b p/yr
2010 would be 64 billion b p/ yr
2020 would be 128 billion b p/yr

doesnt 3 trillion barrells seem like less and less , quicker and quicker .

Imagine every china-man wanting an SUV , making that doubling rate spin even faster .
It seems to me that ' exponential growth ' is the really relevant factor that nobody in the oil business wants to discuss.

[kawalekm]

Hey Scott
That statement hits the nail right on the head. I'm sick of statements like "at the current rate of consumption" we'll have oil/gas/coal for XXX number of years. Consumption has never stayed at the same level. If you factor in growth where oil consumption doubles every 20 years, that big reserve disappears MUCH faster. Historically, I think 20y/doubling is a fairly accurate estimation.
Michael

[mohillbilly]

This isnt the original documant I found years ago, but gives the jist of it......


http://www.vialls.com/wecontrolamerica/peakoil.html

[mangyhyena]

I actually believe we have enough oil left to run us for a long time. Yet the oil companies will periodically announce that the price will have to skyrocket because the supply is down or China is buying so much or what-have-you. They do it because doing so will screw us all while providing record-breaking profits.

However---Due to the oil company's periodic fleecing jobs I am all for alternative fuels, even if they are slightly more expensive than gas when they're not screwing us. The problem is that when the oil companies see alternatives being suggested and worse, taken seriously, the price magically comes back down. When the price comes down interest in alternative fuels goes down as well. They will wait until there is very little being done toward producing an alternative fuel and then they'll jack the price of gas up again. As sure as I'm typing this they are going to screw us again, and again, and again.

Hence, the oil companies jack the price way up, make a killing for a while, then bring the price down to MORE than it was before they jacked it up. And the people feel grateful to be paying more than they paid before the rip-off began. ARRRRGGGG!!!!!!!!!

I am so sick of this. I'm looking to produce an alternative fuel so I can at least stabilize my fuel cost instead of being at their mercy. One day I hope to do the end run around OPEC entirely.

I hope more people are sick of them this time around than the past times they've pulled this garbage. If so, maybe we can finally see an alternative offered to the masses.

[Olduvai]

In 2005 they were silently worrying about peak oil.

http://www.evworld.com/news.cfm?newsid=8563



"ExxonMobil Sounds Silent Peak Oil Alarm

Source: Bulletin of Atomic Scientists
[May 29, 2005]


SYNOPSIS: The fine print of The Outlook for Energy: A 2030 View report downplays the potential of oil shale, a misnomer, and Canadian tar sands.

Without any press conferences, grand announcements, or hyperbolic advertising campaigns, the Exxon Mobil Corporation, one of the world's largest publicly owned petroleum companies, has quietly joined the ranks of those who are predicting an impending plateau in non-OPEC oil production. Their report, The Outlook for Energy: A 2030 View, forecasts a peak in just five years.

In the past, many who expressed such concerns were dismissed as eager catastrophists, peddling the latest Malthusian prophecy of the impending collapse of fossil-fueled civilization. Their reliance on private oil-reserve data that is unverifiable by other analysts, and their use of models that ignore political and economic factors, have led to frequent erroneous pronouncements. They were countered by the extreme optimists, who believed that we would never need to think about such problems and that the markets would take care of everything. Up to now, those who worried about limited petroleum supplies have been at best ignored, and at worst openly ridiculed.

All the more reason that the public should heed the silent alarm sounded by the ExxonMobil report, which is more credible than other predictions for several reasons. First and foremost is that the source is ExxonMobil. No oil company, much less one with so much managerial, scientific, and engineering talent, has ever discussed peak oil production before. Given the profound implications of this forecast, it must have been published only after a thorough review.

Second, the majority of non-OPEC producers such as the United States, Britain, Norway, and Mexico, who satisfy 60 percent of world oil demand, are already in a production plateau or decline. (All of ExxonMobil's crude oil production comes from non-OPEC fields.) Third, the production peak cited by the report is quite close at hand. If it were twenty-five years instead of five years in the future, one might be more skeptical, since new technologies or new discoveries could change the outlook during that longer period. But five years is too short a time frame for any new developments to have an impact on this result. *"

They probably realized what an acknowledgement of peak oil would do to their stock and were trying to publicly soothe investors nerves.

http://www.energybulletin.net/37027.html

http://online.wsj.com/article/SB119543677899797558.html?mod=googlenews_wsj

http://lifeaftertheoilcrash.net/Index.html

http://www.theoildrum.com/

http://www.dieoff.org/

http://www.peakoilstore.com/forum/index

http://www.peakoil.net/

[jgelt]

Well yes and no and lots in between.

Peak oil theory was developed by a man named Hubbert (sp?) who was an oil field geologist. He came up with a statistical model to show when oil production would drop off and at points heroic (expensive) methods would fail to avert the drop off.

This model for oil fileds tends be uncannily correct.

Then the thoery was apllied to the Earth treating all oil fileds on the planet as if they were one big oil field. Here's where it gets dicey. The fact is the earth will not behave as one big oil field. For example we could drill in the Anatartic where huge resevres might be. Its not like a single oil filed at all. That means Hubberts peakas apllied to earth, might behave in a similar fashion to a single oil filed. It might not. The level of prduction drop off might be far more or far less inclined to follow the curve.

Persoannly I beilve in abiotic oil, or deep oil as some folks call it. There's enough doubt in the current theory of fosil fuel creation that it is certainly possible. However at this time the proof of abiotic oil is missing, thus we have to assume that we may be living with a limited supply.

Production in most of the known oil fields is showing every sign of peaking, meaning the untapped oil will not remain so for long.

The current price jumps in oil of the last couple months has nothing to do with supply. This is almost entirely an artifact of inflation. A combination of under the radar bailouts, other countires sending their dollars home and oil producers divesfying their holdings out of dollars is devaluing our overseas purchasing power and thus making prices rise.

[LobsterPond]

How Ironic to read this now. . Didn't Exxon just decide to get out of the oil business?

[JAK]

We should think of oil as a strategic resource to help us transition to a sustainable economy. Not sure how exactly. Maybe tax the crap out of oil, upstream as it enters your country, and eliminate all other forms of taxation. Of course that assumes the government is on our side.

[MooseToo]

jak - so people are hurting now trying to meet their fuel and heating needs and your suggestion is to hit them a whole lot harder - i hope you're not a doctor -

[JAK]

More like a dentist. It's only going to get worse.
Yet bad as it is, some people are still building oversized houses, etc.

[walls0stone]

hey, if you can pay for it...great kudos.. no one has the right to tell anyone what kind of home to live in. *If you start down that road then it's a strole to Commy-land. *

I mean, what if the health nutts, who feel just as upstanding about the way they live, came to you and said...who inspected the food in your garden? *You can't do that.. get back to your Mc Mannor and get rid of that clothes line.

Oh and DRILL! This Bull about it taking years... it's as simple as drilling any hole.. just takes more time and pays better. I'm watching it here at home.. Gas wells over and over. Men need jobs? towns need income? DRILL!

[JBinKC]

If this were true why can't the industry keep up with demand and cap supply at 73 1/2 mill bbls/day since 2005?

I think the main reason why oil has risen so sharply is related to sulfur content. Sweet crude is what is quoted and what is in major short supply. Ever since the new diesel emission requirements (sometime last year) oil prices have risen sharply.

I really don't think there is enough refining capacity to handle sour crudes to meet emission standards for both diesel and unleaded gasoline.

[walls0stone]

So drop the restrictions.. build whatever needs built...but I promis the speculaters will get out and the price will go down when you increase supply..it's business 101

[JBinKC]

They aren't going to drop the restrictions and oil refinery capacity will continue to be capped but if they did oil would likely drop $50/bbl but since capex in the industry is also ballooning I can't see it going lower.

I think prices will continue to stay high until demand destruction has done its job (when it is obvious when worldwide refined oil stockpiles consistently rise).

[walls0stone]

the sulfer question created a problem in the constrution industry.. the engins gell twice as easy..creating the need for more, petro based condioner....or keep the engine running all day in freezing weather.

[JAK]

hey, if you can pay for it...great kudos.. no one has the right to tell anyone what kind of home to live in. *If you start down that road then it's a strole to Commy-land. *

I mean, what if the health nutts, who feel just as upstanding about the way they live, came to you and said...who inspected the food in your garden? *You can't do that.. get back to your Mc Mannor and get rid of that clothes line.Actually as you know in a free country people have the right to tell you whatever they want. I'm not forcing my will on you, just my opinion. *;D

As for the governments role. I just think people should pay the full cost of the harm they cause, and that should be passed on to all those that were harmed. The governments role is to try and let that happen without getting in the way. Usually the best we can hope for is for the government to stop helping one group harm another. It's not the size of the house, or the government, that matters, its the harm. Commy-land eh. They say the Winter Palace and all the other works in St.Petersburgh were built on bones. I'm sure Pete the Great paid good money, to some folks. I doubt the people that supplied the bones were paid all that well.

I understand its a museum now. How many of those do we need?

Men need jobs? Kings need bones? DRILL! DRILL! DRILL!

[walls0stone]

what harm is done by a large house? is that like the cow fart scare?

so are you saying that the carbon tax is fair?


If I can afford to keep my windows open in January and keep the house at 90..then it's my business.

I'm guessing that the next step would be to clear my woodlots to fuel the fires of the people who don't have enough wood. no matter the timber value.

[JAK]

Well it depends largely on where the house is, and the number of occupants. Besides the energy and materials that go into construction, its largely a matter of surface area. Don't get me wrong though. I have a great deal of admiration for some large houses, well designed, natural materials, hand crafted. Don't have alot of patience for giant vinyl boxes. Personally, I prefer dwellings over buildings. Dwellings are something human scale, designed by humans, crafted by humans, lived in by humans. Buildings are an fabrication of the construction industry, for builders, suppliers, developers, and financiers, not for people. Some dwellings can be quite large. Most aren't, but my main point is that dwellings are increasingly rare these days.

Carbon tax. Don't know of any fair tax yet.
In theory, yes the carbon tax could be quite fair. Will it be? Doubt it.

As for you and your open windows in January, keeping your house at 90, that is your business. I doubt that you are fully aware of the total cost. Neither am I. Making you aware is something I make my business, but really shouldn't unless I actually learn something new. Not knowing any more myself, I can really only suggest that you look into it, as I do the same. Point taken.

Cheers.