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I've written up the news that Kuwait's oil reserves could be much lower than officially stated. This has huge ramifications for the whole of OPEC and therefore the world. I can't beleive the number one news story today is the whale in London. :blink:

Kuwaiti Reserve Reverse

I don't doubt the story but does anyone understand their motive. Surely, they would benefit from promoting that oil is scarce and thus push the price up?

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I don't doubt the story but does anyone understand their motive. Surely, they would benefit from promoting that oil is scarce and thus push the price up?

What you mean so GW-Bush gets more profit form his oil links and Blair can tax us more !

You will find many links that dispute the peak oil argument

Edited by Justice

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I think when you're dealing with things like peak oil it's more useful to study history than geology. I've heard it said that in the last century or more peak oil has been declared on five occasions. You also have to look at the history of science, and ask what happens when a commodity starts running out. When the Allied blockade of Germany during WWI started taking effect, and the supply of nitrates got strangled, the Haber process was quickly put into industrial production.

One might also look at the Manhattan project. When there was a real crisis the atomic bomb was developed in around four years. And when, in 1945, the US got the the bomb, it only took the Soviets four years to explode their bomb.

It's all about technological will, and the history of science tells us that problems can be dealt with VERY quickly. If it was announced that oil was going to run out in 2010, and governments believed the announcement, they'd deal with the problem, with very little fall out. No danger of a Mad Max scenario!

Have said this, I personally don't believe in peak oil, at least not in the foreseeable future.

Try the following:

World Oil Production Capacity To Increase up to 25% by 2015, No Peak Seen for Decades, CERA Tells House Committee

http://www.cera.com/news/details/1,,7776,00.html

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Guest magnoliawalls

I don't doubt the story but does anyone understand their motive. Surely, they would benefit from promoting that oil is scarce and thus push the price up?

I also wonder at the timing of this announcement - trying to scare the markets?

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Given that peak oil has actually occurred in over half of the significant oil producing countries, in most of them despite assurances from "experts" that it wouldn't happen, I don't think there's too much doubt that it's real.

I run my own model of future world oil production. I have Kuwait's total future production from proven, probable and as yet undiscovered reserves at 57 billion barrels. Not far from the figures quoted in that link.

My own opinion is that, in general, OPEC member countries are quoting original recoverable reserves rather than remaining reserves. This is based on pretty extensive research including having read plenty of documents and been involved with one of the OPEC national oil companies. The mentality certainly doesn't allow acknowledgement of resource depletion even though internally it's no secret.

In the case of Saudi Arabia it is my understanding that a royal decree prevents the publishing of any reduction in claimed reserves. Hence Saudi Reserves aren't reduced and in fact are essentially unchanged (as are most other OPEC members') for many years. It's simply implausible that each OPEC member discovers and produces EXACTLY the same amount in each year. Discovery just doesn't happen that way and they must be finding awfully small fields (an indication of limited remaining undiscovered resources) if it is. It just doesn't stack up.

I note that, to my understanding, there is effectively ZERO unused capacity worldwide right now. So any increase in production can only come from new development and that must also offset the declines from existing fields (that existing fields decline over time is something that no serious oil industry expert disputes since it's an observable fact).

I note that US oil stocks broke out to new highs yesterday whilst the general market was falling. That says it all IMO.

Regarding the general operations of OPEC, the quota calculation method provides a VERY strong incentive to overstate reserves since it translates, in practice, to an increased quota at the expense of other members. So your national income goes up which doesn't exactly encourage honest reporting...

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I think when you're dealing with things like peak oil it's more useful to study history than geology. I've heard it said that in the last century or more peak oil has been declared on five occasions. You also have to look at the history of science, and ask what happens when a commodity starts running out. When the Allied blockade of Germany during WWI started taking effect, and the supply of nitrates got strangled, the Haber process was quickly put into industrial production.

One might also look at the Manhattan project. When there was a real crisis the atomic bomb was developed in around four years. And when, in 1945, the US got the the bomb, it only took the Soviets four years to explode their bomb.

It's all about technological will, and the history of science tells us that problems can be dealt with VERY quickly. If it was announced that oil was going to run out in 2010, and governments believed the announcement, they'd deal with the problem, with very little fall out. No danger of a Mad Max scenario!

Have said this, I personally don't believe in peak oil, at least not in the foreseeable future.

Try the following:

World Oil Production Capacity To Increase up to 25% by 2015, No Peak Seen for Decades, CERA Tells House Committee

http://www.cera.com/news/details/1,,7776,00.html

Hello Scipio,

I'm afraid I don't share your optimism...

Where is our cure for HIV, cancer, starvation, aging, crime prevention etc. etc?...

Conspiracy theories abound... Not all crises have rapid solutions.

:unsure:

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Hello Scipio,

I'm afraid I don't share your optimism...

Where is our cure for HIV, cancer, starvation, aging, crime prevention etc. etc?...

Conspiracy theories abound... Not all crises have rapid solutions.

:unsure:

if you were a pharmaceutical company then you would make a lot more money from preventative medicine than cures.FACT!

...so what's to stop them from keeping cures under wraps and coining it in with "new improved" preventers and inhibitors?

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if you were a pharmaceutical company then you would make a lot more money from preventative medicine than cures.FACT!

...so what's to stop them from keeping cures under wraps and coining it in with "new improved" preventers and inhibitors?

That might be possible with smaller companies, but the big pharmas are just too damn big to keep any secrets...and the ones that I know have due dilligence processes in place to prevent anything underhand like that from happening.

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I think when you're dealing with things like peak oil it's more useful to study history than geology. I've heard it said that in the last century or more peak oil has been declared on five occasions. You also have to look at the history of science, and ask what happens when a commodity starts running out. When the Allied blockade of Germany during WWI started taking effect, and the supply of nitrates got strangled, the Haber process was quickly put into industrial production.

One might also look at the Manhattan project. When there was a real crisis the atomic bomb was developed in around four years. And when, in 1945, the US got the the bomb, it only took the Soviets four years to explode their bomb.

It's all about technological will, and the history of science tells us that problems can be dealt with VERY quickly. If it was announced that oil was going to run out in 2010, and governments believed the announcement, they'd deal with the problem, with very little fall out. No danger of a Mad Max scenario!

Have said this, I personally don't believe in peak oil, at least not in the foreseeable future.

Try the following:

World Oil Production Capacity To Increase up to 25% by 2015, No Peak Seen for Decades, CERA Tells House Committee

http://www.cera.com/news/details/1,,7776,00.html

What you say is quite right. However, you omit the fact, abundant fossil fuels allowed the development of all these technological advances.

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I've written up the news that Kuwait's oil reserves could be much lower than officially stated. This has huge ramifications for the whole of OPEC and therefore the world. I can't beleive the number one news story today is the whale in London. :blink:

Kuwaiti Reserve Reverse

I'm not surprised actually. Isn't it pretty much recognised that many countries do overstate their reserves? So what's new?

Re: the whale, I think it's good that people are sometimes more concerned with the welfare of a rarely seen and particularly unlucky animal than oil. It'd be a sad world if was not thus.

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Re: the whale, I think it's good that people are sometimes more concerned with the welfare of a rarely seen and particularly unlucky animal than oil. It'd be a sad world if was not thus.

I don't think they are, it's just they don't understand what or who has the power over their quality of life, don't understand the mechanisms in place, and are kept dumbed down by whitewash reporting of such trivia.

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I note that, to my understanding, there is effectively ZERO unused capacity worldwide right now. So any increase in production can only come from new development and that must also offset the declines from existing fields (that existing fields decline over time is something that no serious oil industry expert disputes since it's an observable fact).

I note that US oil stocks broke out to new highs yesterday whilst the general market was falling. That says it all IMO.

Regarding the general operations of OPEC, the quota calculation method provides a VERY strong incentive to overstate reserves since it translates, in practice, to an increased quota at the expense of other members. So your national income goes up which doesn't exactly encourage honest reporting...

Smurf1976, you seem to be saying that we are virtually at Peak Oil now. A fascinating graph was published in December on The Oil Drum, which appeared to show exactly this:

http://www.theoildrum.com/story/2005/12/22/41839/374#more

In view of the sharp oil price rises of the last few years, the plateau in production would appear to be quite.... revealing I suppose you would say.

Yes it is quite disturbing to watch the next Great Depression develop before your very eyes, in an open society, yet not 1 in 100 folk out there have a scooby's what is happening. The big story is about the whale...

I wonder what historians will make of how we walked slap bang into a brick wall with our eyes wide shut.

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The big story is about the whale...

I wonder what historians will make of how we walked slap bang into a brick wall with our eyes wide shut.

Wrong thread but I can't resist

In my view

The Global seen significance of the (Navy trained) suicidal Whale is -

Leviathan_book.jpg

The Introduction of the New World Order!

Leviathan

"According to Hobbes, society is a population beneath an authority, to whom all individuals in that society surrender just enough of their natural right for the authority to be able to ensure internal peace and a common defense. This sovereign, whether monarch, aristocracy or democracy (though Hobbes prefers monarchy), should be a Leviathan, an absolute authority."

Further

In Leviathan, Hobbes explicitly states that the sovereign has authority to assert power over matters of faith and doctrine, and that not to do so is a recipe for discord.

ie We ARE the LITTLE HOBBITSES - are we not?

Wake UP!

LeviathanHobbes.jpg

post-1240-1137945391.jpg

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'Where is our cure for HIV, cancer, starvation, aging...'

Hold on, I was only suggesting that when it came to the crunch a replacement for oil could be found in years not decades - I never said that it would be possible find eternal life.

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'Where is our cure for HIV, cancer, starvation, aging...'

Hold on, I was only suggesting that when it came to the crunch a replacement for oil could be found in years not decades - I never said that it would be possible find eternal life.

I have no doubt we could find lots more oil (or subsitutes), but at what cost? Are we going to start exploring deep ocean floors? How deep do we drill? Its all about cost. All the larger reserves we have now are generally the expensive ones or the sour grades (much higher refining costs). And don't say Iraq has cheap oil, aside from the tragic human cost, Iraqi oil has been very expensive to extract in the last few years when you count the cost of military intervention and ongoing security. The days of cheap oil are over.

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I don't doubt the story but does anyone understand their motive.

This was touched upon at the end of another post but in case you missed it...

Very simple: the OPEC cartel manages supply to maximise income (volume x price) over time. The total supply is divided between it's members on a quota system based on their self-stated oil reserves. To say your reserves were half would lead to your quota being halved.

Members are rewarded for lying and their is no audit.

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I think when you're dealing with things like peak oil it's more useful to study history than geology. I've heard it said that in the last century or more peak oil has been declared on five occasions. You also have to look at the history of science, and ask what happens when a commodity starts running out. When the Allied blockade of Germany during WWI started taking effect, and the supply of nitrates got strangled, the Haber process was quickly put into industrial production.

One might also look at the Manhattan project. When there was a real crisis the atomic bomb was developed in around four years. And when, in 1945, the US got the the bomb, it only took the Soviets four years to explode their bomb.

It's all about technological will, and the history of science tells us that problems can be dealt with VERY quickly. If it was announced that oil was going to run out in 2010, and governments believed the announcement, they'd deal with the problem, with very little fall out. No danger of a Mad Max scenario!

Have said this, I personally don't believe in peak oil, at least not in the foreseeable future.

Try the following:

World Oil Production Capacity To Increase up to 25% by 2015, No Peak Seen for Decades, CERA Tells House Committee

http://www.cera.com/news/details/1,,7776,00.html

Up to a point I share your scepticism about Peak Oil... I mean, it will happen, there is little doubt about that, since the peak in oil discoveries was >40 years ago. The world gets something like half its oil from giant fields that were all discovered either just before or just after the Second World War. No really giant field has been discovered in decades. We've used more oil than we have discovered for the last 20 years. The techical case for PO in the next decade (at most) is compelling. You should be wary of putting much faith in CERA, which is quasi-political and has a record of being too optimistic. You don't get paid for telling people what they don't want to hear.

The question is, will we pull the rabbit out of the hat? Undoubtedly we could, with the kind of national mobilisation that realised the Manhattan Project or the Apollo Programme. Were that to happen, we could all relax. But the problem is... it isn't happening. Denial reigns. Our government flusters about. Bush diverts attention to ultimately pointless ventures in Iraq and an armada of SUVs rolls and rolls and the masses remain in total and blissful ignorance. THAT'S the problem; the complete failure of leadership. Another point is that the Manhattan Project and Apollo Programmes were funded by an America with lots of oil and most of the world's gold. America today is up to its gills in debt.

We might get lucky. Say there's a mild crisis that knocks us into a recession, provides just the right mild warning jolt to make people get real.

Never forget that as things stand we have no substitute for abundant CHEAP oil, nor is there anything on the horizon.

Edited by malco

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Why the suspicion about coming clean about this now? Yes it will push prices up -

but surely their opec production limits will now be halved - ? Aren't they going to need ~$130 oil just to break even?

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malco,

I take your point that the US might at the moment be unwilling to spend large amounts of money on finding a substitute to oil. However... I think it's a self-correcting system.

IF the peak oil theorists are right (which personally I don't think they are) then obviously the price of oil will go up very rapidly. And if the price doesn't in itself constrain demand (and lead to a fall) then certain things automatically start happening.

Firstly, more resources will be put into exploration.

Secondly, it will become economical to drill in out of the way places.

The above two events could lead to a technological break-through, or the finding of large untapped reserves. But assuming they don't...

The oil price continues to remain high - for example at $100+ - then neccessity will become the mother of invention. It will become economical to launch a Manhattan project. And the impetus for such a project won't neccessarily come from America. America isn't the only country to be suffering from the effects of high oil prices. How would oil at $150 a barrel effect India and China? What would they do about it?

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IF the peak oil theorists are right (which personally I don't think they are) then obviously the price of oil will go up very rapidly. And if the price doesn't in itself constrain demand (and lead to a fall) then certain things automatically start happening.

I think the peak-oil theorists have just been handed a huge dose of credibility from kuwait.

Will we see another OPEC country following suit?

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Scipio, when you say the PO theorists "aren't right" what do you mean? Do you think oil production is going to increase forever? For the reasons I indicated, this cannot happen. There is no dispute that a peak will happen, the dispute is when it will happen. Debate is tending to close upon a very pessimistic scenario that we are PO about now, to PO being in about 15 years time. Ironically, oil is the first important mineral ever to peak.

I wouldn't put a lot of faith in higher prices leading to new discoveries that will save us all. Even if a new Saudi was discovered tomorrow, it would not alter the fundamental problem. That reflects the scale of the problem.

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I find it a little surprising that people don't accept peak oil theory. Granted there is a lot of discussion to be had over when it will happen but oil is simply not an unlimited resource. Also one of the problems with oil is that it's price is partly speculative and so its true price is masked. This is one reason why the peak may only be seen in hindsight. If the oil price rises and falls due to speculation then it is not a true reflection of how much it costs to produce.

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I accept peak oil theory - but also think "so what".

Like Scipio, I have touching faith in economies & people to adapt. Already today, somewhere like UK or Japan has much higher energy prices than (say) USA or Indonesia due to tax policies, but no apocalyptic results.

Price of fuel went up last year in Indonesia 126% (used to be subsidised) Yes, spending power has dropped, but fuel consumption also dropped quite dramatically without any noticable decline in standard of living. People think twice before driving aimlessly, use less aircon, etc. But hasn't been the end of the world.

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