This article was brought to my attention by DirtyDingus on The Motley Fool. Before I go any further, please read it. Nothing else makes any sense if you don’t because it’s a fairly radical idea that I hadn’t heard before. The basic synopsis is: Crude oil forms as a natural inorganic process which occurs between the mantle and the crust, somewhere between 5 and 20 miles deep. What this means, in simple terms, is oil is not the by-product of decaying dinosaurs, but a process that is ongoing. Their evidence is stated as such:
– By the late ’80s, the platform’s production had slipped to less than 4,000 barrels per day, and was considered pumped out. Done. Suddenly, in 1990, production soared back to 15,000 barrels a day, and the reserves which had been estimated at 60 million barrels in the ’70s, were recalculated at 400 million barrels. Interestingly, the measured geological age of the new oil was quantifiably different than the oil pumped in the ’70s.
– Similar results were seen at other Gulf of Mexico oil wells.
– Similar results were found in the Cook Inlet oil fields in Alaska.
– Similar results were found in oil fields in Uzbekistan.
– Similarly in the Middle East, where oil exploration and extraction have been underway for at least the last 20 years, known reserves have doubled.
The Cantarell Oil reserve in the Gulf of Mexico has been one of the largest oil producers in the world for years. However, by 1997, its production started declining, the article linked talks of it’s ultimate demise:
Even the largest fields we find offshore in the deepwater today only produce about 250,000 bbl/day. It will take about 4 of them to replace this decline in Cantarell.
And even the heavy oil field they mention won’t replace the loss of Cantarell by the end of the decade. And one must remember that all oil fields which are producing today, are in the process of declining.
The implications of this upcoming decline are tremendous to the world. This field produces half of what Ghawar does and it won’t be doing that much longer. The effect on the energy supply will be felt and there is no way for that not to happen. On Aug. 3, 2004, the OPEC president stated that OPEC has no more spare capacity. They are pumping all out and can’t satisfy the demand for oil. If fields like Cantarell begin declining, the problem of supplying the world with oil will only get worse.
As recently as two weeks ago, we were still reading of Cantarell’s demise. They were having to dig in deeper waters, and dig deeper in those waters. Almost sounding desperate.
We had a discussion of Hubbert’s Peak here, a lot of their assumptions are based on the rapidly declining Mexican oil production. Hubbert’s Peak has become the standard for gloom-and-doom prophecies based on current understandings of oil.
Now, a strange thing is happening at Cantarell, and there’s not a lot of detail yet, but, they are suddenly, according to Pemex, finding huge amounts of oil:
I swear I am starting to believe the “Sustainable Oil” theory. There are some odd things happening with oil production that were not supposed to happen. The Gulf is supposed to be nearly spent, as drilling there has been ongoing for a long time. But, production estimates now are going up after 50 years of drilling. It won’t solve all the world’s problems, but it sure will calm things down a little bit. And, it will push Hubbert’s Peak way back. Back far enough, IMO, to pursue energy alternatives for the future.