posted by JMS @ 12:13 AM
Have a sleep in - till $100
So far our joint Peak Oil Nightmare is pretty dead on accurate. I surely hope it doesn't remain true to actual events, that dream has a horrific conclusion.
We'll find out shortly.
The price of oil is in a peaking stage right now... Expect a 10-year bear market for the price of oil."Peak oil" forgot to consider that 'proven reserves' is just a subset of actual oil resources, and that the production 'tail' is far longer than assumed by the bell curve looking peak .... it really looks more like a Boltzmann curve. (if you look at well-by-well production and general resource extraction). It also ignores the inevitable 'pull' of prices.Take the permian basin in west Texas... peaked years ago, back in the 1970s and is now well under 1 million barrels a day, but the oil in place for it is still 30+ billion barrels according to geological study... That's enough to supply the US for multiple years!At the rate of pumping, west texas, which peaked decades ago, will still be producing in 2070, at some lower rate, doing tertiary extraction.Saudi Arabia has the same deal. 260 billion barrels of 'proven reserves' but they have only pumped 100 billion barrels so far, and 'oil in place' could top 700+ billion barrels according to the Saudi estimates. Even at 15 million barrels a day, a 50% production increase, they won't chew through the 260 billion barrels for another 50 years. ... and even then, they'll have lots of oil underground to squeeze out through advanced extraction techniques.Globally, this concepts of *lots* of non-cheap oil holds also with the tar sands, oil shales and other hard-to-extract oil resources.At $60 a barrel, these options look economical. The conclusion is obvious - oil prices this high are not sustainable long-term, and/or they *are* sustainable with large ramp up in production and resources.We've seen the end of *cheap* oil (sub-$25/barrel) ... but not the end of oil.
PS. "Lots of non-cheap oil"is vague:Specifically, there is about 4 trillion of conventional and non-conventional oil resources.
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