Overzealousness recently backfired on the peak oil crowd after Platts investigated the actual data behind their claims that the first generation of deepwater Gulf of Mexico fields has failed to fulfill expectations.
Challenged on that assertion to provide backup data, peak oil guru Matt Simmons was unable to comply.
Since Platts has no axe to grind in this debate and strives only to serve as referee, we accepted the challenge and spent the better part of a month in our own painstaking review of US Minerals Management Service historical oil production records on the seven highest profile Gulf discoveries of the 1990s.
The result? The MMS records show those fields actually achieved their output targets and have produced 83% of the reserves predicted for the fields -- 1.5 billion barrels from initial estimates of 1.8 billion.
Ironically, both sides in the peak oil debate grabbed some degree of comfort from the Platts reports published February 19 in Oilgram News and on Global Alert.
Regardless of the actual production target success, Simmons cited the dramatic decline rates as further proof of his peak oil warnings.
Meanwhile, Simmons' opponents seemed to enjoy the results that showed he had been too aggressive in a report last year when he erroneously compared "most Gulf of Mexico deepwater fields" with the production profile for Shell's Ram Powell, charging that it "never reached its targeted maximum output and quickly peaked at lower levels."
Eventually, of course, Simmons may be proven correct in the peak oil debate. We won't know the answer for several years.
For now, however, Simmons and the peak oil crowd might want to employ more accuracy in citing examples to verify their claims, realizing that position in any debate is only as strong as its weakest background fact.
Citing Gulf of Mexico production data simply leaves them vulnerable to cackles from opponents like Steve Trammel at IHS-CERA, who told Platts: "I find it amusing that Mr. Simmons would pick one field and use that as the poster child for peak oil."
Listen to a related podcast with Gary Taylor.
I know this is off topic, but it is quite an unusual event in the petroleum market, I hear. What is going on with gasoline differentials in Chicago? 20+ cents under NYMEX for weeks now. When does this usually turn around?
Thanks to all contributors to this blog.
Let's figure how much the Gulf oil reserves do to combat Peak Oil.
By optimistic estimates, the reserves are:
40 billion barrels of oil.
World oil production (~= consumption):
84.62 mb/d during 2007.
# of days (in 2007 world comsumption) in the Gulf reserves:
470.
Same figure in # of years:
1.28
So the entire Gulf reserves (optimistic estimate figure) will push Peak Oil back by a year and less than four months.
Robin Datta's data are correct, as is Robin's math. However, the question of how far back in time Gulf of Mexico reserves will push peak oil is actually a matter of how quickly it can be produced, not how much oil is there. Obviously, the two quantities are related, but other factors such as geology, location of the fields in relation to each other, price, availability of rigs and crews, new technology coming on line, etc.,etc., will all influence the rate of production and hence the impact of Gulf oil on the timing of oil peak. It could be a little over a year, as Robin postulated, or it could be a lot longer.
Oil peak is about FLOWS. The flow of oil and oil reserves are certainly related, but not in any linear or predictable way when considering a small number of fields that have not yet been extensively logged.
And finally Simmons has slipped. CERA's been waiting for that for a long, long time..