The mind is a terrible thing to decline
The upward glitch in the BP global oil production levels the past couple of years has a few people very concerned about massive book cooking. At PeakOil.com, a poster provided an interesting quote from a Matt Simmon's presentation from last year:
The single best data we get on OPEC oil production, the first source of media, comes from a fabulous firm called Petrologistics in Geneva, Switzerland. In case none of you have ever been to the offices of Petrologistics -- I haven't, I've just heard a lot about it -- it's a one-man show over a grocery store in Geneva. Conrad Gerber. I think it's basically a scam. He's frontrunning for somebody [inaudible] because there is no way on earth that anybody could be over a grocery store in Geneva and say, "Saudi Arabia is now producing..." But the fact that everybody has been so clammed up on their own information, we've left the world held hostage to Conrad Gerber's [inaudible] eye ... is itself alarming.Note the sarcasm concerning the "fabulous firm". But the BP data also does show a rise in Former Soviet Union (FSU) numbers as commenter TI reminds us:
This is important because on world scale we might have a similar situation. The oil supply increased exceptionally during 2003 - 2004. Did OPEC countries use up there spare capacity and was Russia overproducing? The oil markets seem to show that there really is not much spare capacity left.I repeat the numbers below, which show the FSU increasing at a perhaps unsustainable 10% per year, while OPEC showed a fairly significant increase of 7% in one year:
2000 2001 2002 2003 2004
31354 30628 28855 30686 32927 OPEC
35583 35541 36056 35870 35916 Non-OPEC
08013 08659 09533 10499 11417 FSU
74950 74828 74443 77054 80260 Total
Many people want to put price into the oil depletion model. In my mind, I have no problem conceptually adding a profit factor to a model to trend it the right way. Maintaining profit for the North Sea oil companies has to exert a huge influence in their desire to keep the production levels at a constant rate in the face of declining reserves. This may in fact help explain how the North Sea shoulder turns into a bump at the same level as the previous peak. The reverse shock of increasing extraction rate economically acts as a short-term profit maintainer, at the expense of a long-term economic outlook.
The WSJ does not believe in peak oil: The Oil Bubble
But then again, neither does the gearhead crowd: Sustainable Abiotic Oil vs Peak Oil
In particular, keep your eye on:
Myron Ebell, an environmental analyst at the Competitive Enterprise Institute, notes that roughly 90% of the oil on the planet rests under government-owned land and these resources are abysmally managed.Ebell has appeared with some regularity on Air America Radio and has gotten shredded by the likes of Thom Hartmann and Betsy Rosenberg as well as by the team at DemocracyNow!. But like a good foot soldier he remains mind-numbingly stoic in the face of reason. Either that, or as an alternative, his employers at the CEI will tell him to go packing. In other words, he has to keep his own profit margin up despite the inexorable momentum of the inevitable truth. Sad to say, but Ebell only has his short-term economic interests in mind.