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View Diary: Climate Change vs. Peak Oil (134 comments)

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  •  "Reserves" are a function of degree of exploration (1+ / 0-)
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    so increasing reserves mean extremely little.  When some oil is pumped out of the ground, there is less of it remaining.

    Reserves are going to tend to increase as a function of increased price because companies gain more (balance sheet) value in establishing reserves ahead of their production time frames (demonstrating an asset).

    Reserves to to get more aggressively defined, and potentially increase, as a resource gets more scarce.  That sounds paradoxical, but if you have an area (say 1970's Saudi Arabia)  where all you have to do for more oil is to poke a hole in the ground, then there is no point in establishing reserves ahead of time.  It is only when a resource is mroe questionable and harder to find that it is worth bothering to define a reserve.

    We shall not contribute to our own destruction.

    by James Wells on Sun Dec 18, 2011 at 07:40:34 PM PST

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    •  New technology has increased the recovery rate (0+ / 0-)

      In the old oil fields only 15% of the original oil in place was extracted, with water flood another 20% is extracted and with EOR enhanced oil recovery still another 15% can be extracted. Only in the US are all these methods being widely used.
      Reserves are established by geologists and I would go with the US Geologic Service estimates which change over time.
      A lazy dumb way to estimate reserves is by Hubbert's Linearization, i.e. extrapolate reserves from a historical production record.
      It's like estimating how far you can go based on your speed of travel instead of measuring how much gas is in your tank. It's backasswards reasoning.

      •  Peaks happen (0+ / 0-)

        Jeffrey Brown did a huge case study of major oil fields around the world, and made this observation:

        Figure One shows the 1972 Texas oil production peak lined up with the 1999 North Sea oil production peak (crude + condensate in both cases).   These two regions were developed by private companies, using the best available technology, with virtually no restrictions on drilling, yet both regions show clearly defined production peaks. Furthermore, the initial declines in both cases corresponded to sharply rising oil prices.  These two examples, which jointly accounted for about 9% of global cumulative crude oil production through 2005, show that, contrary to conventional wisdom, Peaks Happen, even in the best of circumstances.

        I've seen charts he's made for dozens of other fields that follow the same pattern.  The point being that even when you have great new technology, it doesn't really do a whole lot to prevent a peak and decline. - thoughts on energy, the environment, and society.

        by barath on Sun Dec 18, 2011 at 10:34:32 PM PST

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      •  That's ture, enemy (0+ / 0-)

        but the extraction technology increases cost, which means that oil price must be high enough to pay for it.

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