Master of Ossus wrote:The world has about 1-2% of spare capacity right now, not much more can be added no matter how high prices go. We are burning 80 billion barrels a year while finding only 13 billion or so a year. Where does this new production come from? Our oil base is shrinking, not growing.
Which ignores the fact that marginal fields can be brought into production as the price rises, which has been observed in the past.
You mean like the "highly successful" Quatif, Abu Sa'fah, and Hawtah trends projects in Saudi Arabia, which combined barely produce half a million barrels (and falling) despite aggressive branched horizontal drilling and water floods, among the most aggressive & high tech production technology used anywhere in the world. Or the Samotlor redevelopment project which produces a similar amount of oil, keeping in mind that Samotlor produced over 7 million barrels a day during its peak. All of which are non-sustainable I might add, in fact the Saudi fields I mentioned have seen significant production drops in the last 2-3 years, and Samotlor will soon follow in the next 5-10 years.
These four are by far the best "marginal" fields anywhere in the world, in most parts of the world they'd be considered as highly productive fields. Samotlor produces far more oil than Prudhoe Bay, and the latter is anything but marginal. The others such as the new projects in Chad and proposed developments in Saudi Arabia & the Mid East will only add a few tens of thousands of barrels a day at best. If you want to do the math the world is consuming 1000 barrels every second, how many of these marginal fields will have to be found and drilled to even think of meeting demand?
Let's put some numbers to it. MoO claims that higher prices will allow us to greatly increase production, far past the 5-10 million barrels/day numbers I put up. Let's give him 25 million/day. Let's say we can now develop a bunch of marginal fields, each giving 50,000 barrels a day, marginal by the standard of Saudi fields but considered average to excellent for most other parts of the world. Let's further assume that production at current fields doesn't fall, in reality it is but let's ignore that. Which means we'll have to find and develop 500 "marginal" oil fields. 500 oil fields which we're currently not tapping, and they each have to produce 50,000 barrels a day. Tell me, where are these oil fields? This is a best case hypothetical scenario.
Once again, how? Oil reservoirs are rate sensitive, higher production rates reduce the amount of ultimately recoverable oil, this has been proven time & time again in oil fields all over the world, there is no way around it. An overly high production rate will permanently damage the reservoirs, again, this has been proven in oil fields worldwide, Samotlor in the former USSR being the best example. There are billions of recoverable barrels there which ended up being permanently trapped in the ground due to gas caps and water encroachment, and this is also true of many of the Mid East fields.
Which only applies to the fields that are currently under production. You ignore the fact that other fields can be brought into production once the price rises high enough to make their development profitable.
Wrong. Rate sensitivity applies to all reservoirs, new and old. Also, once an oil reservoir is watered out, depressurized, and has a gas cap sitting on top of it there is no way to pull the oil out, period. 60% of the oil is still down there and it's stuck there for good. And once again, where is this new production going to come from? Where are these magical new fields?
No, but the "magic free market" also determines what is profitable and it allows for more fields to be brought into production as the price rises to make marginal fields profitable. This has been observed repeatedly in the past.
Again, where are these fields? From the above calculations, we need an absolute minimum of 500 of them, realistically, several thousand. Where are they?
I like the way you conceded for the sake of argument that your opponents' are correct in their understanding that lots of oil exist in other, undeveloped fields, but do not recognize the potential that these fields can be developed even though that is a fundamental part of your opponents' argument.
I have no idea what you're talking about here. For the sake of argument I've assumed that my opponents' most optimistic wet dreams are true, and then shown that even if they were true we still won't meet oil demand like they claim. If the hypothetical best case scenario doesn't work out, how can they claim everything will be fine in the real world?
Moving back to the real world, the question becomes very simple. Where are all these oil fields which are just waiting to be found or developed? I've shown how many we need, where are they? Find me 500 currently undeveloped fields with an average production potential of 50,000 bpd and I'll begin to entertain your claims of significantly increased oil production.
