Are Peak Oil Theories Complete Nonsense?

Some how I wonder if you have kept up, I know were moving fast.
I recall your Brazillian well statement, and I also recall responding with the subject of "stated reserves", and even offert the novel concept of coutries not possesing transparencey of their new reserve data.
US Geological Survey is dependent on other countries "officials". They have no other way of doing it.

"The government-run oil company Petroleo Brasileiro SA, or Petrobras, said the new "ultra-deep" Tupi field could hold as much as 8 billion barrels of recoverable light crude, sending Petrobras shares soaring and prompting predictions that Brazil could join the world's "top 10" oil producers."

Key points that concern me:
1. "goverment-run oil co. Petroleo Brasileiro SA" um did they say goverment run, who benifits here?
2. "said the new "ultra-deep" Tupi field could hold as much as 8 billion barrels of recoverable light crude"
did they say something about mabey or "could hold"?
3. ". . .sending Petrobras shares soaring . . ." so just telling the world they have more, gives them a favorable place in the market. Hmmmmm.

Just cause they say its so, doesnt make it so, especially when big money is involved.
I wont repeat myself, go back, keep up, and read my respons earlier in the thread.

Bad reference.

heheheh, Anarchy baby!

"Truelly, I hope you are right, really. "

I am and here is the whole article I offered. No, he is not an anarchist nor is he promoting young earth creationism. He is simply laying out the facts. We will not run out of oil for a hundred years at best, likely much longer. That doesn't mean there won't be problems politically, but it won't be due to lack of oil in the groung. Notice the author at the bottom, a geologist.

Are We Running Out of Oil?

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Policy Backgrounder

No. 159

January 29, 2003

by David Deming Download this page in PDF format

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History of Oil Prognostication
Reserves versus Resources
How Much Oil is Left?
The Role of Technology
Hubbert's Prediction of Declining Production
Is an Oil Economy Sustainable?
Notes

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"Estimates of the world's oil reserves have risen faster than production."
Oil is a nonrenewable resource. Every gallon of petroleum burned today is unavailable for use by future generations. Over the past 150 years, geologists and other scientists often have predicted that our oil reserves would run dry within a few years. When oil prices rise for an extended period, the news media fill with dire warnings that a crisis is upon us. Environmentalists argue that governments must develop new energy technologies that do not rely on fossil fuels. The facts contradict these harbingers of doom:


World oil production continued to increase through the end of the 20th century.
Prices of gasoline and other petroleum products, adjusted for inflation, are lower than they have been for most of the last 150 years.
Estimates of the world’s total endowment of oil have increased faster than oil has been taken from the ground.
How is this possible? We have not run out of oil because new technologies increase the amount of recoverable oil, and market prices — which signal scarcity — encourage new exploration and development. Rather than ending, the Oil Age has barely begun.

History of Oil Prognostications
The history of the petroleum industry is punctuated by periodic claims that the supply will be exhausted, followed by the discovery of new oil fields and the development of technologies for recovering additional supplies. For instance:


Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. In 1855, an advertisement for Kier’s Rock Oil advised consumers to “hurry, before this wonderful product is depleted from Nature’s laboratory.”1
In 1874, the state geologist of Pennsylvania, the nation’s leading oil-producing state, estimated that only enough U.S. oil remained to keep the nation’s kerosene lamps burning for four years.2
"Warnings of U.S. oil shortages were made before the first well was drilled in 1859."
Seven such oil shortage scares occurred before 1950.3 As a writer in the Oil Trade Journal noted in 1918: At regularly recurring intervals in the quarter of a century that I have been following the ins and outs of the oil business[,] there has always arisen the bugaboo of an approaching oil famine, with plenty of individuals ready to prove that the commercial supply of crude oil would become exhausted within a given time — usually only a few years distant.4

1973 Oil Embargo.

"After the revolution in Iran, oil prices returned to the long-term average of $10 to $20 a barrel, in real terms."
The 1973 Arab oil embargo gave rise to renewed claims that the world’s oil supply would be exhausted shortly. “The Oil Crisis: This Time the Wolf Is Here,” warned an article in the influential journal Foreign Affairs.5 Geologists had cried wolf many times, acknowledged the authors of a respected and widely used textbook on economic geology in 1981; “finally, however, the wolves are with us.” The authors predicted that the United States was entering an incipient 125-year-long “energy gap,” projected to be at its worst shortly after the year 2000.6

The predictions of the 1970s were followed in a few years by a glut of cheap oil:


The long-term inflation-adjusted price of oil from 1880 through 1970 averaged $10 to $20 a barrel.7
The price of oil soared to over $50 a barrel in inflation-adjusted 1996 U.S. dollars following the 1979 political revolution in Iran.8 [See Figure I.]
But by 1986, inflation-adjusted oil prices had collapsed to one-third their 1980 peak.9
"When projected shortages failed to appear, doomsayers made new predictions."


When projected crises failed to occur, doomsayers moved their predictions forward by a few years and published again in more visible and prestigious journals:




In 1989, one expert forecast that world oil production would peak that very year and oil prices would reach $50 a barrel by 1994.10
In 1995, a respected geologist predicted in World Oil that petroleum production would peak in 1996, and after 1999 major increases in crude oil prices would have dire consequences. He warned that “[m]any of the world’s developed societies may look more like today’s Russia than the U.S.”11
A 1998 Scientific American article entitled “The End of Cheap Oil” predicted that world oil production would peak in 2002 and warned that “what our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend.”12
Similar admonitions were published in the two most influential scientific journals in the world, Nature and Science. A 1998 article in Science was titled “The Next Oil Crisis Looms Large — and Perhaps Close.”13 A 1999 Nature article was subtitled “[A] permanent decline in global oil production rate is virtually certain to begin within 20 years.”14

1990s Oil Glut.

However, rather than falling, world oil production continued to increase throughout the 1990s. Prices have not skyrocketed, suggesting that oil is not becoming more scarce:


Oil prices were generally stable at $20 to $30 a barrel throughout the 1990s. [See Figure I.]
In 2001, oil prices fell to a 30-year low after adjusting for inflation.
Furthermore, the inflation-adjusted retail price of gasoline, one of the most important derivatives of oil, fell to historic lows in the past few years. [See Figure II.]
Reserves versus Resources
Nonexperts, including some in the media, persistently predict oil shortage because they misunderstand petroleum terminology. Oil geologists speak of both reserves and resources.




Reserves are the portion of identified resources that can be economically extracted and exploited using current technology.
Resources include all fuels, both identified and unknown, and constitute the world’s endowment of fossil fuels.
Oil reserves are analogous to food stocks in a pantry. If a household divides its pantry stores by the daily food consumption rate, the same conclusion is always reached: the family will starve to death in a few weeks. Famine never occurs because the family periodically restocks the pantry.

Similarly, if oil reserves are divided by current production rates, exhaustion appears imminent. However, petroleum reserves are continually increased by ongoing exploration and development of resources. For 80 years, oil reserves in the United States have been equal to a 10- to 14-year supply at current rates of development.15 If they had not been continually replenished, we would have run out of oil by 1930.

How Much Oil Is Left?
Scaremongers are fond of reminding us that the total amount of oil in the Earth is finite and cannot be replaced during the span of human life. This is true; yet estimates of the world’s total oil endowment have grown faster than humanity can pump petroleum out of the ground.16

The Growing Endowment of Oil.

Estimates of the total amount of oil resources in the world grew throughout the 20th century [see Figure III].


In May 1920, the U.S. Geological Survey announced that the world’s total endowment of oil amounted to 60 billion barrels.17
In 1950, geologists estimated the world’s total oil endowment at around 600 billion barrels.
From 1970 through 1990, their estimates increased to between 1,500 and 2,000 billion barrels.
In 1994, the U.S. Geological Survey raised the estimate to 2,400 billion barrels, and their most recent estimate (2000) was of a 3,000-billion-barrel endowment.
By the year 2000, a total of 900 billion barrels of oil had been produced.18 Total world oil production in 2000 was 25 billion barrels.19 If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered, the world’s oil supply will not be exhausted until the year 2056.

"Oil shales may hold another 14,000 billion barrels -- a 500 year supply."
Additional Petroleum Resources.

The estimates above do not include unconventional oil resources. Conventional oil refers to oil that is pumped out of the ground with minimal processing; unconventional oil resources consist largely of tar sands and oil shales that require processing to extract liquid petroleum. Unconventional oil resources are very large. In the future, new technologies that allow extraction of these unconventional resources likely will increase the world’s reserves.


Oil production from tar sands in Canada and South America would add about 600 billion barrels to the world’s supply.20
Rocks found in the three western states of Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil.21
Worldwide, the oil-shale resource base could easily be as large as 14,000 billion barrels — more than 500 years of oil supply at year 2000 production rates.22
Unconventional oil resources are more expensive to extract and produce, but we can expect production costs to drop with time as improved technologies increase efficiency.

The Role of Technology
With every passing year it becomes possible to exploit oil resources that could not have been recovered with old technologies. The first American oil well drilled in 1859 by Colonel Edwin Drake in Titusville, Pa. — which was actually drilled by a local blacksmith known as Uncle Billy Smith — reached a total depth of 69 feet (21 meters).


Today’s drilling technology allows the completion of wells up to 30,000 feet (9,144 meters) deep.
The vast petroleum resources of the world’s submerged continental margins are accessible from offshore platforms that allow drilling in water depths to 9,000 feet (2,743 meters).
The amount of oil recoverable from a single well has greatly increased because new technologies allow the boring of multiple horizontal shafts from a single vertical shaft.
Four-dimensional seismic imaging enables engineers and geologists to see a subsurface petroleum reservoir drain over months to years, allowing them to increase the efficiency of its recovery.
New techniques and new technology have increased the efficiency of oil exploration. The success rate for exploratory petroleum wells has increased 50 percent over the past decade, according to energy economist Michael C. Lynch.23

Hubbert’s Prediction of Declining Production
Despite these facts, some environmentalists claim that declining oil production is inevitable, based on the so-called Hubbert model of energy production. They ignore the inaccuracy of Hubbert’s projections.



Problems with Hubbert’s Model.

In March 1956, M. King Hubbert, a research scientist for Shell Oil, predicted that oil production from the 48 contiguous United States would peak between 1965 and 1970.24 Hubbert’s prediction was initially called “utterly ridiculous.”25 But when U.S. oil production peaked in 1970, he became an instant celebrity and living legend.

"Environmentalists now tie their predictions of declining energy supplies to M. King Hubbert's model of energy production -- which has been consistently inaccurate."
Hubbert based his estimate on a mathematical model that assumes the production of a resource follows a bell-shaped curve — one that rises rapidly to a peak and declines just as quickly. In the case of petroleum, the model require