Tuesday, August 05, 2008

More On Peak Oil

While the price of oil continues its way down, to the relief of many, Tom and I are engaged in a civilized conversation regarding peak. I happen to believe that drilling will happen, and Nancy Pelosi will be forced to back down. It's just a matter of time and compromise. However, only 18 billion barrels of ~72 billion are estimated in the off-limits area. The balance is sitting in leaseholds managed by the oil companies, or leaseholds that need to be rebid because they expired. Kinda makes you wonder what the holdup is in getting the drilling started, doesn't it? More fodder for a later post.

In the meantime, I think Tom would agree that we need to determine just what is out there still. Especially since the U.S. Geological Survey, that veritable Fountain of Optimism, has just published an assessment of Arctic oil and gas. The assessment is everything an oil hungry nation could ask for. However it is terribly flawed.

David Hughes, writing at the tail of Peak Oil Review August 4, 2008, dissects the claims being made as neatly and cleanly as Tom dissected our Alderman's latest email blast about the Gale Community Center. I'd sure like to know what they are smoking over at the USGS. Why risk your credibility with conclusions that just don't make sense?


The North Coast said...

interesting that the Fountain of Optimism considers only 3.5 billion barrels to be recoverable in the fabled Bakken Formation.

Again, in the matter of the Arctic reserves, the USGS is only referring to the most that can be recovered under the most favorable conditions, and most readers will just unthinkingly assume that these reserves will somehow be reserved strictly for the U.S. market, without reference to the world market for oil, which is still growing inspite of recent demand destruction. That demand destruction will not last long.

Kheris said...

The fundamental problem is that the 'mean' that they cite is unreachable based on the statistical probabilities they also cited. I ran this past an agent on my staff, whose eyes crossed in dismay when she realized what was going on.