Jay,

You state:

"That was already a blow against 'peak oil' theorists, who say the world is running out of petroleum."

Peak oil theorists don't say that the world is "running out" of oil. That is not the point, and if you don't know what the actual crux of the issue is, please don't claim to.

Graham: You're right. My bloggish shorthand for peak oil thinking does not do it justice. Peak oilers believe that, given the pace of world growth and the depletion of supplies, the era of cheap petroleum is coming to an end. They predict that the world has about reached or will soon reach its volume limit in terms of annual oil production. They don't deny that oil will be pumped and burned for decades and decades. But they think the average marginal cost of extracting the stuff will rise. They believe prices from the wellhead to the pump will also be driven up sharply by supply and demand imbalances.

Very accurate statement in your comment.

Don't you believe that oil is finite and world production capacity will peak and start to decline one day (perhaps already), like it already did in the US, GB, Mexico, and dozens of other countries around the world? I would say that the current economic crisis was caused by constrained oil production that pushed the price up over $50/barrel and has kept it there(except for a short period during this past winter). After all, two deep recessions were caused by similar oil prices spikes in the 1970s, what's different about now?

Personally, I think we've reached the peak of production and things are going to get much worse instead of getting better. Your mileage may vary.

PS - peak oil isn't a "theory" but an observable fact about all oil fields and oil provinces.

The article mentioned here states that if the “giant” oil discovery contains about 4 billion barrels and that if the recovery rate if 35% then the actual number we should be talking about is about 868 million barrels.

Considering that the US uses about 20 million barrels a day this “giant” discovery would keep running the US less than two months.

I've posted a (hopefully) humourous field guide to the various attitudes and opinions one finds in researching the peak oil debate:

http://sv-macha.blogspot.com/2009/08/anthropological-field-guide-to-common.html

Jay, I'd be interested in which statement you most strongly agree with:

a. Oil supply is infinite, therefore oil production will never peak.

b. Oil production will peak, but decades or centuries from now.

c. Oil production will peak soon, but conservation, technological efficiency, and alternative energy will keep oil prices from rising.

d. Oil production will peak soon, but demand destruction due to global recessession will keep oil prices from rising.

e. Oil production has already peaked at 84 - 87 million barrels per day, and can be expected to start declining in the next few years. Oil prices can be expected to rise.

Rather than reading the unsupported thesis "Peak Oil theory is bunk", I'd much rather read "Peak Oil theory is bunk because..."

The people who believe in Peak Oil are not suggesting that some day soon there will not be any more oil. What they do say is there will be less oil and more expensive oil in the 21st Century. Cheap $10 a barrel oil is gone - forever.

Out of the thirty largest oil producing countries that provide 94% of the world's oil, 11 have already experienced Peak Oil, 8 have flat or falling oil production, and 11 see some increasing oil production. A few of the 11 include: China, Kazakhstan, Qatar, Azerbaijan, Canada, and others.

What must be taken into consideration is that the global annual oil field production depletion rates are now reaching 6% to 9%. IEA just confirmed that. Mexico's Cantrell Field, the 3rd-4th largest oil field in the world is experiencing a 16% decrease in oil production in 2009.

IEA in their annual report stated that the world will need an additional six (6) new Ghawar fields to meet future needs. The current Ghawar is the largest oil field ever found and it has been producing about 10 million barrels of oil per day for over 50 years. Finding one new Ghawar field, much less six, doesn't seem realistic.

People involved with the Peak Oil movement are all for new oil fields like the recent announcement by BP of a major find in the Gulf of Mexico. This is really great and is much like what is going on in Iran and Brazil right now , but the truth is much of these new oil finds are many , many years away and we must all understand that finding a new 8 billion oil field really means there is actual a "potential" of 2,8 billion barrels of oil because only 35% of original-oil-in-place can be recovered.

We must never forget that over 300,000 consumer products that we all depend on in our lives are made from oil.

Members of ASPO really believe in taking action today to find and invent alternative sources of renewable energy to replace oil - starting now. Tomorrow will be too late.

A world without enough oil is not a world any of us would want to live in. ASPO would like to be wrong about Peak OIl, but that doesn't seem to be in the cards based on the facts we have today about oil.

People like Daniel Yergin and Michael Lynch are doing the world a great disservice by giving it false hope. Their statement that "the problems about enough oil are above the ground and not below the ground" just doesn't fly anymore.

Some day in the near future Messrs. Yergin and Lynch will be saying loud and clear, "We were wrong."

Paul

Your 9/2/09 article in the sun "Md is better off than other states.This may be true BUT I suggest you write about the horrendous unfunded liability the state hass for pensions and benefits for state,local,and teachers.Its over one billion and the state with out stimulis money sould be in even worse shape.

Most estimates for the URR is 2-3 trillion barrels, with 2 trillion barrels you get a peak around 2010ish; with 3 trillion barrels you get a peak around 2025ish.

Please stop confusing reserves with production. Peak oil is not running out of reserves, or production all of a sudden becoming 0. Its intersting to note that US production peaked in 1970, Mexico appears to have peaked in 2004 (more time needed to say with certainity).

This "giant" oil field is puny compared to the rapid decline in the real oil field giants.

Readers need to understand what Peak Oil is: http://survivingpeakoil.blogspot.com/2009/06/net-hubbert-curve-what-does-it-mean-by.html

and

http://www.peakoilassociates.com/POAnalysis.html

You can't run cars on oil in the ground, production rate is what counts for the oil price and the future of the global economy.

This new 'giant' find will produce 300,000 barrels a day AFTER 2020. A drop in the ocean 10 years from now, considering we use 84m barrels a day. Not exactly a blow for peak oil.

Still pushing the misconception that Peak oil means there is no more oil. It does not. More oil will be found. It will take 7 to 10 years to bring production on line at Tiber. Top estimated at 4 to 6 billion barrels. Thats a lot of oil, about 3 months of world consumption. Except it produced at about 250K a day. You guys never calculate what has gone off line in close out production. Do some math and see if these finds will make up for what is no longer being pumped.

I did believe in Peak oil, until I thought about the fact it doesn't take into account all the surface of the ocean floor. The peak is way off.

Now I believe peak oil is pushed by oil companies to inflate the price of oil.

Your theory that Peak Oil is pushed by oil companies to pump up the price of oil is way off base. Oil companies generally deny or play down Peak Oil. They know if the world knows that oil will decline soon and prices will rise, alternatives will begin being ramped up like you wouldn't believe and the search for more alternatives will shift into overdrive. They want us to believe all we need is oil, and it will last forever, and of course, when oil production on a world scale is declining, they will have all sorts of excuses and reasons and people to blame, but will never tell the truth and just say.........it's Peak Oil. This would spell the beginning of the end for their business.

Richard said: "I did believe in Peak oil, until I thought about the fact it doesn't take into account all the surface of the ocean floor. The peak is way off."

Richard did you perchance think about cracking open a few books on oceanography and geology as well?
Not to mention talking to some people who actually work on oil rigs out on the oceans of the world?

Hey, ya never know, maybe you can find oil a couple thousand feet under the surface of the Marianas Trench and find a way to get it to a refinery... Hint, it's probably easier to mine for methane on Titan!

Maybe tomorrow you will "believe" something else...

Oil Companies and peak oil: A look at their willingness to spend on (types of) refineries and other industry infrastructure will tell all you need to know about their perception of the future for their business.

People just dont understand the concept of exponential growth. Demand for oil is growing exponentially with an easily defined window of time called a doubling rate. That is the time that it takes for demand to double.

Each time we pass this window, we need twice as much as we've ever needed throughout all of our proceeding history to make it through the next window.

Sooner or later, the discovery of a brand new planet earth completely stocked with oil won't be enough to meet demand.

Mike R said: "People just dont understand the concept of exponential growth."

Sad, but too true!

"Now, there’s a widely held belief that if you throw enough money at holes in the ground, oil is sure to come up. Well, there will be discoveries in new oil; there may be major discoveries. But look: we would have to discover this much new oil if we would have that 7% growth continue ten more years. Ask yourself: what do you think is the chance that oil discovered after the close of our meeting today will be in an amount equal to the total of all we’ve known about in all of history? And then realise if all that new oil could be found, that would be sufficient to let the historic 7% growth continue ten more years"

Excerpted from Dr. Albert Bartlett: Arithmetic, Population and Energy

Allow me to inject some data into this debate:

http://truecostblog.com/2009/07/14/is-peak-oil-real-a-list-of-countries-past-peak/

40 of the 54 oil producing nations in the world have passed peak production, according to BP's own data. None of the countries which passed a peak have ever surpassed it thereafter.

Peak oil is a certainty - it's just a question of exactly when. And since there are only 14 nations still growing their production, the answer is sooner rather than later.

I think that this issue needs to be analyzed in totality to understand our current situation with regard to Peak Oil.

The article raises two issues for me here. Firstly the term "running out of oil". Peak Oil is identified by more than the physical presence of oil. There are costs related to the geological environment in which the reserve exists. This has a fundamental bearing as to whether a reserve is economically viable to develop-is it profitable or not.?

All the easy to extract oil is either gone or in production decline (e.g North Sea).. The industry is now moving into more technologically challenging territory that is expensive to explore (not all exploratory wells yield positive results) and even more expensive to develop,

This leads to the second issue. The credit crisis, economic recession, and low demand for oil (and the subsequent low commodity price of oil) has left the oil development sector critically short of funding for new projects.

Most oil industry analysts agree that oil needs to be trading at at least 80 dollars a barrel to justify investment in costly new projects. Complicating this issue is that any speculative bull run on oil-even to only 100 dollars a barrel could kill any chances of a global economic recovery

In summary, the oil industry is exploring ever increasingly challenging geological environments while at the same time trying to rely on a stagnating world financial environment. Literally caught between a rock and a hard place.

Thank you for reading this. I hope that it helps to understand the complexity of issues surrounding our primary energy source. For more information www.theoildrum.com

Mr. Ronald Brown

BAS Applied Science-Coastal Management

'Peak oilers believe that, given the pace of world growth and the depletion of supplies, the era of cheap petroleum is coming to an end.'

You're right, and the large discovery by BP will change nothing to that. 10 more similar discoveries would not, either.

Because this oil drilled from a huge depth far offshore will not be cheap, far from it.

Keep the following numbers in mind about global conventional (pronounce that "cheap") oil:

Gigabarrels discovered per year around 60's: 50
Gigabarrels per year discovered now: 10

Gigabarrel discoveries referenced by this article: 6
Gigabarrels used yearly now: 30
Gigabarrels ever discovered: 2100
Gigabarrels ever used: 1100

Bottom line: about half the discovered oil has been used and we are now discovering about 1/3 of what we are now using. There is lots, lots more in oil sands and shale, but at a price less competitive with coal, nuclear, and wind. Thus the age of oil gently passes away. Hurrah for everybody.