this might push peak oil back a few years

[Sten]

http://finance.yahoo.com/real-estate/article/108509/cramped-on-land-big-oil-bets-at-sea

Chevron and other major oil companies are moving ever farther from shore in search of oil. That quest is paying off as these companies discover unexpectedly large quantities of oil -- oil that only they have the technology and financial muscle to find and produce.

In May, the first wells from Chevron's latest Gulf of Mexico project came online. The wells are now pumping 125,000 barrels of oil a day, making the project one of the gulf's biggest producers. In September, BP PLC announced what could be the biggest discovery in the gulf in years: a field that could hold three billion barrels.

Beyond the Gulf of Mexico, companies have announced big finds off the coasts of Brazil and Ghana, leading some experts to suggest the existence of a massive oil reservoir stretching across the Atlantic from Africa to South America. Production from deepwater projects -- those in water at least 1,000 feet deep -- grew by 67%, or by about 2.3 million barrels a day, between 2005 and 2008, according to PFC Energy, a Washington consulting firm.

The discoveries come as many of the giant oil fields of the past century are beginning to dry up, and as some experts are warning that global oil production could soon reach a peak and begin to decline. The new deepwater fields represent a huge and largely untapped source of oil, which could help ease fears that the world won't be able to meet demand for energy, which is expected to grow rapidly in coming years.

For oil companies, the discoveries mean something more: After a decade of retreat, large Western energy companies are taking back the lead in the quest to find oil. "A lot of people can get the very easy oil," says George Kirkland, Chevron's vice chairman. "There's just not a lot of it left."

[FMF DOC]

Yet the prices of gas are still on the rise... Of course now they it is to pay for the cost of that new technology.. It will never end, they got it figured out to the nanno penny what they need to charge so they still come out billions ahead.:munchin

[11Ber]

I heard somewhere recently that the rise in gas isn't directly tied to oil price...right now. It went something to the effect of the drop in gas demand last summer/winter led to a shutdown in many refineries and now that demand is going up, supply and output can not match it.

[Scimitar]

That's exactly what the illuminatii, Free Masons, and one world governement want you to think.... :D

Damn it I know I left my tinfoil hat around here somewhere....has anyone seen my tinfoil hat?
:cool:

S

(are there 3 'I's or 4 in Illuminatii?)

[nmap]

Keep in mind - the new discoveries will provide oil, but it will be expensive.

Our society is built on cheap and abundant oil.

And, too, there is the little matter of total discoveries versus use.

LINK (http://www.rigzone.com/news/article.asp?a_id=80855)

[Scimitar]

Nmap, I can't remember the numbers

What are we currently at with cost of delivery? It's something like 90% of all oil found gets used to actually find it, drill it, and deliver it to the end user?

What's the actual number, it's quite high?

Either way we're getting closer and closer to the point where it might be out there but it aint worth going to get it.

S

[nmap]

The best reference I have at hand suggests that our total for all fields, old and new, presently is between 11 and 18 to 1 and declining over time. It used to be 100:1, then declined to 30:1.

That was one of the nice things about the Saudi fields - oil was cheap and easy to produce. Those fields, in a healthy condition, are essential to the global economy. The only problem is - those are very old fields.

Here's an excerpt:


Energy Return On Investment (EROI or EROEI) is simply the energy that one obtains from an activity compared to the energy it took to generate that energy. The procedures are generally straightforward; simply divide the Energy Gained (Out) by the Energy Used (In), resulting in a unitless ratio. The running average EROI for the finding and production of US domestic oil has dropped from greater than 100 kilojoule returned per kilojoule invested in the 1930s to about 30 to 1 in the 1970s to between 11 and 18 to 1 today. This is a consequence of decreasing energy returns as oil reservoirs are depleted and as energy costs increase as exploration and development are shifted deeper and offshore (Cleveland et al. 1984, Hall et al. 1986, Cleveland 2004). Even that ratio reflects mostly pumping out oil fields that are half a century or more old since we are finding few significant new fields. In other words we can say that new oil is becoming increasingly more costly, in terms of dollars and energy, to find and extract. The increasing energy cost of a marginal barrel of oil or gas is one of the factors behind their increasing dollar cost, although if one corrects for general inflation the price of oil has increased only a moderate amount.

The same pattern of declining energy return on energy investment appears to be true for global petroleum production. Getting information on global oil production is very difficult, but a study currently submitted for publication indicates that the global EROI for petroleum production has been declining over the past 8 years and is currently about 18:1 (Gagnon and Hall, submitted). In fact, if the rate of decline continues linearly for several decades then it would take the energy in a barrel of oil to get a new barrel of oil. While we do not know whether that extrapolation is accurate, essentially all EROI studies of our principal fossil fuels do indicate that their EROI is declining over time, and that EROI declines especially rapidly with increased exploitation rates (e.g. drilling).

This decline appears to be reflected in economic news also. In November of 2004, The New York Times reported that for the previous three years oil exploration companies worldwide had spent more money in exploration than they had recovered in the dollar value of reserves found. Therefore it is possible that the energy “break-even” point has been approached or even reached for finding new oil. Whether we have reached this point or not the concept of EROI declining toward 1:1 makes irrelevant the reports of several oil analysts who believe that we may have substantially more oil left in the world, because it does not make sense to extract oil, at least for a fuel, when it requires more energy for the extraction than is found in the oil extracted.


LINK (http://netenergy.theoildrum.com/node/4678)

But here's where it becomes problematic:



Excerpt:

Just to give you a rough idea as to where we are at present with respect to EROI, “according to legendary oilman Charles Maxwell” on The Money Show, most countries report that it costs from $55 (Saudi Arabia) to $70-90 (Russia and most of OPEC) to $90 (Iran and Venezuela) to produce a barrel of oil. That is a lot of money but underneath the surface also represents a lot of energy. Recent work in our lab suggests that when you divide the energy produced by the energy used by oil and gas industries (data is available for only a few countries such as the US and UK) that these industries use about 17 MegaJoules (MJ) per dollar spent in 2006. This is the energy intensity per dollar spent for seeking and producing oil. This compares to about 14 MJ per dollar for heavy construction and about 8-9 MJ per dollar as a societal average, so it seems to be in the right ballpark. If we assume 5 percent inflation since 2006 we might expect there to be used about 16 MJ per dollar spent by the oil and gas industries in 2008. So if it takes Saudi Arabia $55 to produce a barrel then $55 times 16 MJ/$ equals about 880 MJ required per barrel. For Venezuela, which requires $90 a barrel, this number would be 1440 MJ required per barrel. Since a barrel of oil contains about 6164 MJ of energy, the EROI would be about 7:1 for Saudi Arabia to 4.3 for Venezuela or Iran. These estimates, although crude, indicate the seriousness of the problem and sound a clarion call for opening up data banks all around the world to greater scientific scrutiny while also calling for companies to make their energy, as well as dollar, costs explicit and public.


LINK (http://eroi.theoildrum.com/node/4762)

Notice the ambiguity? That's part of the problem. We cannot know just when the problem starts to kick in. Once it hits, fixing it becomes more difficult.

[GratefulCitizen]

OPEC's spare capacity is around 6 MBD.
Demand doesn't seem to be climbing much.

Here in the USA, net imports have declined significantly.
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTNTUS2&f=W

Prices are still being supported by money printing.
This is unsustainable.

A price collapse may come.
Production projects will be shelved.
Consumption will increase.
Spare capacity will diminish.
Another price spike will hit.

It's almost like the oil market is cyclical. :D

[GratefulCitizen]

Iraq they believe has some oil fields bigger than Saudi Arabia's I think.

Plenty of stuff in the works:
http://www.reuters.com/article/idUSLDE5BJ04J20091220?type=marketsNews
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=110432
http://www.hazardexonthenet.net/article.aspx?AreaID=2&ArticleID=30694

Another 9-10 mbp of production coming from Iraq on top of the 6 mpd spare capacity OPEC has...:munchin

The $64xxxxxxxx question: why would the price of oil be climbing right now?

Perhaps peak oil is coming and some financial players know it.
Perhaps an oil glut is coming and some financial players know it...and are planning to profit off of the price collapse.

Time will tell.