The New York Times had an article in their March 5, 2007 edition, “Oil innovations pump new life into old wells,” [Also posted at EB and Mobjectivist.] which is standard fare when it comes to U.S. media coverage of oil supply. The gist of the article was that technological innovation makes the concept of peak oil moot.
The article pointed out that oil production from the Kern River field (California) increased ~75,000 b/d over the last ~40 years, Duri field (Indonesia) production increased ~135,000 b/d over the last ~20 years and the ultimate recovery from the Means field (Texas) is expected to double over some previous estimate, all due to technological innovation. The article conveniently overlooked the rapid decline rates of an ever growing number of large fields.
For each isolated example they provide for a production increase in an old field, it’s easy to list multiple examples of fields that have had more dramatic decreases in production. As an example, the Prudhoe Bay field has declined ~1,250,000 b/d in less than half the time it took the Kern River field to increase ~75,000 b/d. While it took the Duri field ~20 years for production to increase ~135,000 b/d, production from the Cantarell complex (Mexico) is likely to decline ~1,700,000 b/d in an 11 year period (2004-2015).
If the examples provided in the NYTimes article are so dramatic, one has to ask the following questions: Why has California’s oil production declined ~500,000 b/d since 1985 in spite of the Kern River field exhibiting its dramatic increase? Why has Indonesia’s oil production declined ~600,000 b/d since the early 1980s if Duri is such a miracle? Why has Texas’ oil production declined ~2,500,000 b/d since 1972 even as the estimated ultimate recovery for the Means field doubled?
The obvious answer to those questions is that the examples the NYTimes article provides correspond to isolated incidences where advanced technology can get some “reasonably” large amount of extra oil out of an old field. The examples point out that it’s a slow process to increase production from old fields using advanced extraction techniques and that the maximum production levels are relatively low. Another point to be made is that methods such as steam flooding are extremely energy and labor intensive.
In California, Texas, and Indonesia, oil production continues to declines in spite of all the advanced technology used to try and stem the decline. One would reasonably expect that the best available technology has been used throughout the U.S. and other first world nations. In spite of all that technology, oil production in the U.S/48, excluding the deepwater Gulf of Mexico, has declined by ~5,800,000 b/d since it peaked in 1971. Deepwater Gulf of Mexico (GOM) production has increased significantly in recent years, although hurricanes have dampened the increase. The increase has been due to advances in technology. But that advanced technology, and the economics of deepwater oil production, have lead to very high production rates early in the production phase of a field followed soon after by rapid decline rates. Most offshore fields have average decline rates of >10%/year. In the case of the deepwater GOM, production will probably peak around 2010 and decline rapidly after the peak.
The NYTimes article mentions Canada’s oil sands, which have taken on a mythical status in the U.S. media because of the reported huge quantity of oil they contain. There has been a tremendous investment of money and effort in this region over the last 8 years with a corresponding oil production increase of ~500,000 b/d. During the same period, production in the North Sea region has declined by ~1,600,000 b/d.
Oil sands are even more energy and labor intensive than heavy oil production. Like heavy oil, the rate of production increase and the maximum production level are much lower than conventional oil deposits containing the same volume of oil. That is a concept that economists either don’t understand or are unwilling to admit. Multiple problems are further reducing the ability of the oil industry to rapidly increase production in the oil sands region and it’s likely that production targets for 2015 and 2020 will not be met.
The U.S. media, in general, wants to avoid discussing why many scientists believe that global oil production will probably peak in the near future, if it hasn’t already. They prefer happy talk of oil sands, coal-to-oil and cellulosic ethanol developments even if those developments have little probability of replacing declining conventional oil production. In the end, the talk may soothe the minds of the motoring public, but it won’t change the probability of peak oil.
