The Oil Drum: Australia/New Zealand

An update on the latest production numbers from the EIA along with graphs/charts of different oil production forecasts. 

World oil production (EIA Monthly) for crude oil + NGL. The median forecast is calculated from 14 models that are predicting a peak before 2020 (Bakhtiari, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM). 95% of the predictions  sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% forecast variability area in yellow is computed using a bootstrap technique). Click to Enlarge. 

Once, black caviar from the Caspian Sea was ubiquitous in Russia in its typical blue cans. Now, it has disappeared. "Peak Caviar" has taken place around 1980 in Russia

This is a guest post from WebHubbleTelescope. The post addresses the origins and relevance (or lack thereof) of the logistic equation as it is commonly used in projecting/modeling oil production forecasts. As far as I can see, this is the first time anyone has succeeded in deriving the Logistic oil model from first principles. I will follow this with a post on the Maximum Power Principle next week, which in my opinion may shed light on the logistic curve from the perspective of oil 'demand' (as opposed to supply).

Many people believe that the Logistic equation adequately models the Hubbert peak. This comes about for a few reasons:

1. We can (often/occasionally) get an adequate heuristic fit to the shape of the production data by matching it to a logistic sigmoid curve.
2. The logistic-growth formula dU/dt = U(U₀-U) carries some sort of physical significance.
3. The logistic has hung around for a long time, in modern terms, therefore it must have some practical value.

Rising North Sea oil production was a significant factor in keeping oil prices under control in the 1970s, 80s and 90s. Production peaked at 6.4 million barrels per day in 2000 and since then, declining North Sea Oil production is one significant reason that oil prices are now rising exponentially.

An update on the latest production numbers from the EIA along with graphs/charts of different oil production forecasts. This post is dedicated to the memory of Dr. Ali Morteza Samsam Bakhtiari who passed away last October.

World oil production (EIA Monthly) for crude oil + NGL. The median forecast is calculated from 13 models that are predicting a peak before 2020 (Bakhtiari, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM). 95% of the predictions  sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% confidence interval is computed using a bootstrap technique). Click to Enlarge. 

Cross-posted from Peak Energy

The Australian Financial Review today has a report on a plan by the Ziff brothers to revive Queensland's defunct shale oil industry (subscription required) - "a mining project worth as much as $14 billion near the Great Barrier Reef Marine Park". The report predicts the development would bring 16,000 new residents to the Whitsundays region and is already facing opposition from local groups like "Save Our Foreshore" concerned about damage to the environment and the tourism industry.

Bloomberg has a much smaller version of the story - "Ziff Seeks to Develop Australian Oil-Shale Project, Review Says".

Queensland Energy Resources Ltd., a closely held company backed by Ziff Brothers Investments, is seeking to develop an Australian oil-shale project valued at A$14 billion ($12 billion), the Australian Financial Review reported.

Consultants from New-York based Ziff recently met the Queensland government to discuss development of the project, which would require the relocation of a nearby airport, the paper said, citing government documents. The project, located in Queensland state near the Great Barrier Reef Marine Park, may contain as much as 9.7 billion barrels of oil resources, the Review said, citing a document lodged with the state's government.

Queensland Energy is scheduled to complete an initial study into possible development of the project within six months, the Review said, citing Simon Eldridge, the company's director of corporate affairs. The company acquired the project from Southern Pacific Minerals NL in 2004, the report said.

The original Stuart shale oil development in the area was done by Southern Pacific Petroleum.

This is a guest post by WebHubbleTelescope.

Sometimes I get a bit freaked out by the ferocity and doggedness of the so-called global warming deniers. The latest outpost for these contrarians, climateaudit.org, shows lots of activity, with much gnashing over numbers and statistics, with the end result that they get a science blog of the year award (a 1^st place tie actually). Fortunately, the blog remains open to commenting from both sides of the GW argument, which if nothing else makes it a worthy candidate for some type of award. Even though I don't agree with the nitpicking approach of the auditors, they do provide peer review for strengthening one's arguments and theories. I can only hope that this post on oil depletion modeling attracts the same ferocity from the peak oil deniers out there. Unfortunately, we don't have a complementary "oil depletion audit" site organized yet (though Stuart and Khebab, et al, seem to be working on it--see yesterday's post), so we have to rely on the devil's advocates on TOD to attempt to rip my Application of the Dispersive Discovery Model to shreds.  Not required, but see my previous post Finding Needles in a Haystack to prime your pump.

This is a guest post from Ugo Bardi and Marco Pagani. Ugo Bardi teaches chemistry at the University of Florence, Italy. He is the president of the Italian section of the Association for the Study of Peak Oil and Gas (ASPO) (www.aspoitalia.net). Marco Pagani is a physicist presently teaching and physics in secondary schools. He is a member of ASPO-Italy, a social and environmental activist, and the blogger of ecoalfabeta. (ecoalfabeta.blogosfere.it)

Abstract: We examined the world production of 57 minerals reported in the database of the United States Geological Survey (USGS). Of these, we found 11 cases where production has clearly peaked and is now declining. Several more may be peaking or be close to peaking. Fitting the production curve with a logistic function we see that, in most cases, the ultimate amount extrapolated from the fitting corresponds well to the amount obtained summing the cumulative production so far and the reserves estimated by the USGS. These results are a clear indication that the Hubbert model is valid for the worldwide production of minerals and not just for regional cases. It strongly supports the concept that “Peak oil” is just one of several cases of worldwide peaking and decline of a depletable resource. Many more mineral resources may peak worldwide and start their decline in the near future.

The following analysis is based on a chart from Frederik Robelius (see Figure 2 below) from which I retrieved the production profile for Ghawar from 1950 to 2003 (xls file). Using the Hubbert Linearization method to fit a logistic curve, we get a size estimate for Ghawar close to what other TOD contributors (Stuart and Euan) derived using advanced analysis. A possible decline of Ghawar is happening in a context of record oil rig counts, record domestic consumption and record oil prices.


Fig. 1 Sources: oil supply from the EIA (crude oil + condensate); proven reserves, oil prices and domestic consumption from BP statistical review (2007); population from the UN; oil discoveries from IHS; the major currencies index from the Federal Reserve; Ghawar decline based on a logistic fit. Click To Enlarge.

Executive Summary:

• The fitting of a logistic curve (Hubbert Linearization) on Ghawar production produces an URR around 100.59 ± 8.59 Gb with a possible decline rate around 2.6%/year (asymptotic decline at 7.41%/year).
• The fitting of a logistic curve on non Ghawar production (crude oil + condensate) produces an URR around 60.13 ± 12.78 Gb.
• The Hubbert Linearization on total crude oil + condensate production gives an URR at 200 ± 24 Gb which is 20-40 Gb higher than the sum of the two above components.
• If Ghawar is in terminal decline, supply growth from other fields has to be at least 2% a year in order to maintain a flat production and 4% a year in order to maintain flat exports.

An update on the latest production numbers from the EIA along with graphs/charts of different oil production forecasts.

World oil production (EIA Monthly) for crude oil + NGL. The median forecast is calculated from 13 models that are predicting a peak before 2020 (Bakhiarti, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM). 95% of the predictions  sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% confidence interval is computed using a bootstrap technique). Click to Enlarge. 

Executive Summary:

1. Broad revision (from 1980 to 2004) by the EIA this month but not significant in amplitude.
2. Monthly production peaks are unchanged: 
1. All Liquids: the peak is still July 2006 at 85.54 mbpd ( 0.11 mbpd), the year to date average production in 2007 (6 months) is  84.28 mbpd ( 0.02 mbpd), down 0.07 mbpd from 2006 for the same period.
2. Crude Oil + NGL: the peak date remains May 2005 at 82.09 mbpd ( 0.01 mbpd), the year to date average production for 2007 (6 months) is  81.20 mbpd ( 0.04 mbpd), down 0.06 mbpd from 2006.
3. Crude Oil + Condensate: the peak date remains May 2005 at 74.30 mbpd ( 0.15 mbpd), the year to date average production for 2007 (6 months) is 73.23 mbpd ( 0.14 mbpd), down 0.25 mbpd from 2006.
4. NGPL: the peak date is still February 2007 at 8.03 mbpd ( 0.21 mbpd), the year to date average production for 2007 (6 months) is  7.97 mbpd ( 0.18 mbpd), up 0.19 mbpd from 2006.
3. Decline in crude oil + condensate continues: June 2007 estimate for crude oil + condensate is 72.82 mbpd compared to 73.11 mbpd one year ago and 73.92 mbpd two years ago.
4. Average forecast: the average forecast for crude oil + NGL based on 13 different projections (Figure above)  is showing a kind of production plateau around 81 +/- 4 mbpd with a decline after 2010 +/- 1 year.