Huge Petroleum Find In Gulf of Mexico

Jerry Corsi: HUGE PETROLEUM FIND IN GULF OF MEXICO.

Last week, Royal Dutch Shell PLC announced the discovery of 100 million barrels of oil in the Gulf of Mexico at a depth more than 25,000 feet below the seabed, in 7,217 feet of water, according to a report in the Wall Street Journal.

The report once again confirms the argument my co-author Craig Smith and I made in writing "Black Gold Stranglehold: The Politics of Oil and the Myth of Scarcity," namely that oil is generated by abiotic processes on an ongoing basis deep within the mantle of the earth.

In other words, oil is not (and never has been) a "fossil fuel," produced by biological material, including dead dinosaurs, ancient forests, or today's favorite championed by the remaining advocates supporting the biological theory of the origin of oil – plankton.

Six months earlier, BP announced a "giant" discovery of oil in its Tiber prospect in the Gulf of Mexico.

The Wall Street Journal further reported that in 2008 alone, 15 discoveries of large oil reserves were found in the Gulf of Mexico, largely due to advances in deep-water drilling technology.

Brazil discovers giant offshore oil fields in Atlantic

One of the continuing fallacies of peak oil theory is that there is a reliable way to know how much undiscovered oil remains yet in the earth.

Peak-oil theorists are typically fossil-fuel advocates who believe that since there were only a limited number of fossils, the oil produced from those fossils must also be limited.

Abiotic oil theory postulates that oil is formed on a constant basis deep within the mantle of the earth, requiring no deterioration of biological material to produce the oil.

In November 2007, Brazil announced the discovery of a huge offshore oil field that could contain as much as 8 billion barrels of oil, enough to expand Brazil's 14.4 billion barrels of proven oil reserves by 40–50 percent.

The "ultra-deep" Tupi field was found under 7,060 feet of water (1.34 miles down), under 10,000 feet of sand and rocks (another 1.89 miles down), and another 6,600 feet of salt (1.25 miles), for a total of 4.48 miles below the surface of the Atlantic Ocean.

Sergio Gabrielli, the chief executive officer of the state-run oil firm Petroleo Brasileiro SA (PBR), told Brazil's President Luiz Inacio Lula da Silva that reserves in the pre-salt area off Brazil's coast are much larger even than the Tupi field, possibly containing as much as 80 billion barrels in oil reserves.

By specializing in advanced ultra-deep offshore oil exploration, Brazil has moved from being a country dependent on ethanol for its gasoline consumption to becoming a net exporter of oil within less than a decade.

That Brazil has effectively become the Saudi Arabia of the Western Hemisphere should be enough to cast doubt on the peak-oil theory.

With three-quarters of the world's surface under water, how many more Tupi fields are there yet to be discovered?

The abiotic-oil theory predicts deep-water finds of oil will dramatically increase estimates of world oil reserves in coming decades.

Why the world will never run out of oil

Economist Julian Simon, then a professor of business administration at the University of Maryland and a senior fellow at the Cato Institute, was famous for taking a contrarian position on energy resources, arguing that our perception of scarcity was not validated by the current or historical factual record of energy abundance.

Simon argued that gloomy predictions about running out of oil, coal or any other energy resource, including natural gas, were typically wrong for several reasons, including these:

* Typically, all energy resources exist on earth in quantities much larger than initially estimated;

* Advances in technology make exploration and recovery of previously difficult-to-develop energy resources more efficient and economically affordable;

* Improvements in productivity lead to more efficient use of energy resources over time;

* Alternative sources of energy are found, even while predominately used energy resources remain abundant;

* Previously dominant energy resources, such as coal, become less dominant as more efficient energy resources, such as oil, become more understood and utilized – a process Simon believed would continue as liquefied natural gas replaces oil applications, culminating in nuclear energy replacing many current applications of oil and natural gas.

Simon's energy-resource analysis essentially maintains that we will be running automobiles with nuclear batteries long before we run out of oil.

Yet peak-oil theorists insist we have only another 10 years left before the world's oil supply begins to dwindle.

Red Alert believes that scientists in the next 10 years will accept that peak oil, like global warming, was predicated on "junk science."

Still, that does not mean peak-oil theorists or global-warming alarmists will abandon their ideological views.

Plentiful New Oil

Excellent article at Seeking Alpha by Jason Schwarz: The 'Peak Oil' Myth: New Oil Is Plentiful

The data is becoming conclusive that peak oil is a myth. High oil prices (USO) (OIL) are doing their job as oil exploration is flush with new finds:

1. An offshore find by Brazilian state oil company Petrobras (PBR) in partnership with BG Group (BRGYY.PK) and Repsol-YPF may be the world's biggest discovery in 30 years, the head of the National Petroleum Agency said. A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve. "This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren't going to find any more and that we have to change our way of life," said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc.

2. A trio of oil companies led by Chevron Corp. (CVX) has tapped a petroleum pool deep beneath the Gulf of Mexico that could boost U.S. reserves by more than 50 percent. A test well indicates it could be the biggest new domestic oil discovery since Alaska's Prudhoe Bay a generation ago. Chevron estimated the 300-square-mile region where its test well sits could hold up to 15 billion barrels of oil and natural gas

3. Kosmos Energy says its oil field at West Cape Three Points is the largest discovery in deep water West Africa and potentially the largest single field discovery in the region.

4. A new oil discovery has been made by Statoil (STO) in the Ragnarrock prospect near the Sleipner area in the North Sea. "It is encouraging that Statoil has made an oil discovery in a little-explored exploration model that is close to our North Sea infrastructure," says Frode Fasteland, acting exploration manager for the North Sea.

5. Shell (RDS.A) is currently analyzing and evaluating the well data of their own find in the Gulf of mexico to determine next steps. This find is rumored to be capable of producing 100 billion barrels. Operating in ultra-deep waters of the Gulf of Mexico, the Perdido spar will float on the surface in nearly 8,000 ft of water and is capable of producing as much as 130,000 barrels of oil equivalent per day.

...

The peak oil theory is a money making scam put out by the speculators looking for high commodity returns in a challenging market environment. Most of the above mentioned finds have occurred in the last two years alone. I didn't even mention the untapped Alaskan oil fields or the recent Danish and Australian finds. In the long term, crude prices will find stability at historic norms because there is no supply problem. How much longer will investors ignore these new oil finds?

Last Days Of Oil Age?

From the Times of London: Are these the last days of the Oil Age?

Oil ruled the 20th century; the shortage of oil will rule the 21st. There is now no doubt about the rising trend in oil prices. In 2003 a barrel of Brent crude sold for $29; in 2004 it rose to $38; in 2005 it rose to $54.50; in 2006 it rose to $65. Last Friday the price closed at $77.50. Some dealers expect it to test the $80 level quite shortly.

Last Tuesday the lead story in The Financial Times was the latest report from the International Energy Agency. The FT quoted the IEA as saying: “Oil looks extremely tight in five years’ time,” and that there are “prospects of even tighter natural gas markets at the turn of the decade”. For an international agency, that is inflammatory language. This steep rise in the oil price over a four-year period has been caused by demand rising at more than 2 per cent a year, while supplies had risen more slowly, by a healthy 4.1 per cent in 2004, but by only 1.25 per cent in 2005 and 0.5 per cent in 2006.

This has revived the “oil peak” debate among oil analysts. Some analysts believe that the world will never again be able to pump as much oil as we are pumping at present.

Peter Warburton’s excellent weekly risk analysis has pointed out that 27 of the 51 oil-producing nations listed in BP’s Statistical Review of World Energy reported output declines in 2006. One projection of world crude oil production actually forecasts a 10 per cent reduction in total world output between 2005 and 2015. That would be a revolution.

The oil peak debate can be left to the oil analysts. It is a complex issue, and there are some grounds for questioning the most pessimistic forecasts, including the likely development of the Canadian tar sands, and the success of American enhanced oil recovery techniques. Past forecasts of oil depletion have often proved wrong, and the present forecasts are uncertain. Nuclear power could increase energy supply, but a big nuclear programme has been left far too late in most countries.

The five-year view taken by the IEA is itself a central forecast. Some analysts think that the peak oil moment has already been reached; some still think that it will not come until 2020 – which is itself only 12 years away. Market trends and the statistics both support the IEA’s view that consumption is accelerating and supplies falling faster than expected. Of course, if the “crunch” point is only five years’ away for oil, and closer for natural gas, it has, for practical purposes, already arrived.

Those of us who remember the 1970s and early 1980s know how damaging the oil shocks were. They postponed the economic hopes of more than a decade, from 1974 to 1985. The rise of the oil price led to global inflation; at one point, around 1980, it looked as though global inflation could tip over into global hyper-inflation.

In the democracies, governments lost elections; in the Soviet Union, their regime was rocked. If governments found things very difficult, so did private individuals. Unemployment rose and the trade unions became very militant.

Investors were caught in a trap of rising nominal values but falling real values. In the property market, house prices rose, but the general price level rose even faster. For the first ten years of the inflation, gold proved to be a hedge and a protection; but this was followed by a period when the real purchasing power of gold was falling. Most people became poorer, except for those with access to oil money, but some became much poorer, much more quickly. Life became more of a gamble and societies became less stable. All this happened at a time when the supply of oil was being artificially restricted by the Opec oil cartel. There was no absolute shortage of oil, though analysts already knew that the oil peak would happen eventually. Now the situation has moved from a political problem, open to political settlement, to an absolute geological shortage. For the future, oil supply will be a zero-sum game. Some nations will be “haves” but others will be “have nots”.

The shortage of oil and natural gas, relative to demand, had already changed the balance of world power. Historians may well conclude that the US decision to invade Iraq was primarily motivated by the desire to gain physical control of Iraq’s oil and to provide defence support to other Middle Eastern oil powers. Political motivations are always mixed, but oil is an essential national interest of the United States. If the US is now deciding to withdraw from Iraq, the price will have to be paid in terms of loss of access to oil.

Russia, the leading producer of natural gas and one of the two leading oil producers, is the global winner. President Putin has already used oil and gas as a diplomatic weapon. The relationship between the European Union and Russia will naturally be influenced by increasing European dependence on Russian oil and gas. Germany may well turn towards Russia, out of weakness. The oil shocks of the 1970s had different effects on different European countries. Britain had some North Sea oil and the prospect of more, as did Norway. Germany and France had little or no oil of their own. Differential shocks in the coming period of oil shortage will make it harder to maintain the euro-zone. Differential shocks are a threat to single-currency systems.

The world is coming to the end of the age of oil, which produced its own technology, its balance of power, its own economy, its pattern of society. It does not greatly matter whether the oil supply has peaked already or is going to peak in five or 12 years’ time. There is a huge adjustment to be made. There will be some benefits, including higher efficiencies and perhaps a better approach to global warming. But nothing will take us back towards the innocent expectation of indefinite expansion of the first months of the new millennium.

Peak Oil Is Wrong

Peak oil "wrong," says Schwartz.

"The peak oil people simply don't know what they're talking about," said environmental futurist Peter Schwartz today at the Cleantech Forum in Washington, D.C.
Forget everything you've heard about peak oil as a driver of clean technology, said futurist Peter Schwartz today in a provocative closing session at the Cleantech Forum XVIII in Washington D.C.

"The peak oil people simply don't know what they're talking about, they don't know the facts," claimed Schwartz, co-founder and chairman of the Global Business Network and author of five books.

"Peak oil is wrong. We really don't know how much oil there is in most of the oil reservoirs of the world. Oil reservoirs are complex geological structures, and most of the data is in private hands, or in state governments, and they are not particularly forthcoming about how much is there." ...

"We don't know how much is out there," he said today. "And they tend to be very conservative, these estimates. And technology changes, and that opens up new reserves deep offshore. When I was at Shell, we could only drill into a thousand feet of water. Today, they're drilling into 10,000 feet of water, and 20,000 feet below that."

Are They Really Oil Wars?

Ismael Hossein-zadeh: Are They Really Oil Wars?

A most widely-cited factor behind the recent U.S. wars of choice is said to be oil. “No Blood for Oil” has been a rallying cry for most of the opponents of the war. While some of these opponents argue that the war is driven by the U.S. desire for cheap oil, others claim that it is prompted by big oil’s wish for high oil prices and profits. Interestingly, most antiwar forces use both claims interchangeably without paying attention to the fact that they are diametrically-opposed assertions.

Not only do the two arguments contradict each other, but each argument is also wanting and unconvincing on its own grounds; not because the U.S. does not wish for cheap oil, or because Big Oil does not desire higher oil prices, but because war is no longer the way to control or gain access to energy resources. Colonial-type occupation or direct control of energy resources is no longer efficient or economical and has, therefore, been abandoned for more than four decades.

The view that recent U.S. military adventures in the Middle East and the broader Central Asia are driven by energy considerations is further reinforced by the dubious theory of Peak Oil, which maintains that world production of conventional oil will soon reach—if it has not already reached—a maximum, or peak, and decline thereafter. It follows that, therefore, war power and military strength are key to access or control of the stagnant, shrinking, or soon-to-be-shrinking oil.

In this study I will first argue that while, prima facie, Peak Oil sounds like a reasonable thesis, it is dubious on both theoretical and empirical grounds. I will then show that war and military force are no longer the necessary or appropriate means to gain access to sources of energy, and that resorting to military measures can, indeed, lead to costly, not cheap, oil. Next, I will demonstrate that, despite the lucrative spoils of war resulting from high oil prices and profits, Big Oil prefers peace and stability, not war and geopolitical turbulence, in global energy markets. Finally, I will argue a case that behind the drive to war and military adventures in the Middle East lie some powerful special interests (vested in war, militarism, and geopolitical concerns of Israel) that use oil as an issue of “national interest”—as a façade or pretext—in order to justify military adventures to derive high dividends, both economic and geopolitical, from war.

Oil industry 'sleepwalking into crisis'

Former Shell chairman says that diminishing resources could push price of crude to $150 a barrel

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."

In an interview with The Independent on Sunday ahead of his address to the Association for the Study of Peak Oil in Ireland this week, Lord Oxburgh, one of the most respected names in the energy industry, said a rapid increase in the price of oil was inevitable as demand continued to outstrip supply. He said: "We can probably go on extracting oil from the ground for a very long time, but it is going to get very expensive indeed.

"And once you see oil prices in excess of $100 or $150 a barrel, the alternatives simply become more attractive on price grounds if on no others."

Lord Oxburgh added that oil majors must invest more heavily in developing viable alternatives to oil and gas. "If you look at it from oil companies' point of view, effectively what they're doing at the moment is continuing business as usual, and sticking their toes in the water in a number of areas which might become important in future.

"But at present there is a relatively poor business case for making significantly greater investment in these new areas."

Commenting on whether "peak oil" – the point when global oil production goes into terminal decline – was likely to be reached in the near future, he said: "In a way it scarcely matters; what really matters is the gap between production and demand. I don't know whether there is going to be a peak in world oil production, whether it's going to plateau and then slowly come down.

"It could well plateau within the next 20 years, and I guess I would be surprised if it hadn't."

The price of crude oil closed above $80 a barrel for the first time on Thursday, as a hurricane in Texas raised supply concerns.

US light crude hit $80.20, two cents higher than the price it touched on Wednesday. Oil prices have risen 30 per cent since the start of this year and are four times higher than their 2002 level.

The latest figures from the US Energy Information Administration show that global liquid fuels production in August was almost a million barrels per day lower than the same period in 2006.

The International Energy Agency has forecast what it calls an oil "supply crunch" by 2012, a prediction that Lord Oxburgh said could possibly come to pass.

Oil's Origin Revisted

Robert Matthews: Oil’s origins revisited.

Once upon a time, clever people scared themselves by trying to predict the end of the world. Sir Isaac Newton’s best estimate, for example – recently uncovered in archived manuscripts – was some time in the year 2060 [Yet more Newtonian idiocy].

Today smart people seem intent on scaring all of us by trying to predict an event no less apocalyptic for modern economies: the arrival of “peak oil”, after which output of crude oil falls into terminal decline.

Last week it was the turn of Fatih Birol, chief economist to the International Energy Agency (IEA), who argued that conventional crude output could plateau in 2020. How seriously we should take this is anyone’s guess. Only last month, the IEA itself was claiming the turning point would be 2030 – 10 years later than its current estimate. With Opec having just imposed its largest-ever cut in oil production, the IEA may well have to issue another estimate next month.

Like predictions of the Final Trump, attempts to guess when oil will run out have a long and sorry history. In 1874, the chief geologist of Pennsylvania, then America’s leading oil-producing state, estimated the nation only had enough of the stuff to last around four years. Nowadays, there seem to be almost as many views as experts, with some claiming peak oil may have been passed some years ago and others – as this newspaper reported recently – insisting it lies far in the future.

In the end, all the arguments centre on simple supply and demand: is there enough exploitable oil in the ground to meet projected needs? So far the ingenuity of petroleum engineers has kept the black gold flowing through advances in the technology of finding and extracting oil. But it seems obvious that it must run out eventually; after all, there’s no more of the stuff being made deep underground. Or is there?

According to the textbooks, oil is the product of 150 to 200 million- year-old fossilised remains of marine organisms being transformed by the combined effect of bacterial action, heat and pressure. But according to some scientists, there may be other sources of oil, created by different means, which remain undiscovered simply because no one expects to find them.

During the 1950s, a team led by the Soviet geologist Dr Nikolai Kudryavtsev of the All-Union Geological Research Institute pointed out that crude oil is sometimes found at sites with no obvious connection to fossilised organisms – such as the Siljan Ring structure of central Sweden, where tar and oil seep out of pure crystalline granite.

According to Dr Kudryavtsev and his colleagues, these puzzling discoveries suggest that oil can also be formed in the absence of living organisms – for example, from hydrocarbons trapped inside the Earth during its formation around 4.5 billion years ago.

Warren Buffett On Peak Oil

Warren Buffett and Charlie Munger On Peak Oil.

Q29: Doug Hicks, Akron Ohio. Oil will run out this century. Considering US policy is to do nothing until last second, will we face World War III? Will oil companies go to zero?

WB: Oil won’t run out - it doesn’t work this way. At some point the daily productive capacity will level off and then start declining gradually. There is the depletion aspect and the decline curves. We are producing 86m barrels per day or so, more than ever produced. We are closer, by my calculations, to almost our productive capacity, than we have ever been. I think our surplus capacity is less, and quite a bit less, than in past. Whatever that peak is, whether 5 or 10 yrs, the world will adjust, and we will think about it. Adjustments will cause demand to taper off. I don’t know how much oil is there, but there are lots of barrels of oil in place. We never recover total potential. We may have better engineering recovery in future. It is nothing like an on and off switch. You may still have enormous political considerations to get access to avail oil since it so important. There is nothing you can do over short period of time to wean world off oil.

CM: If we get another 200 yrs of growth dispersed over the world while population goes up, all oil coal and uranium will run out so you will have to use the sun. I think there will be some pain in this process. I think it is stupid to use up hydrocarbons of world so quickly. Stupid when there are few and limited alternatives. What should we have done? We should have brought all the oil over from Middle East and put it in our ground. Are we doing it now? No. Government policy is behind in rationality. If we have prosperous civilization, we must use the sun.

WB: Charlie, what is your over/under for oil production in 25 yrs?

CM: Oil in twenty five years, down.

WB: If this is true, that is big number. China is doing 10m cars this year, so down in 25ys is significant.

Also see here, here, and here.

It's A Myth The World Is Running Out

Irwin Stelzer: It’s a myth that the world’s oil is running out (Hat tip: stretched)

Another myth: we are running out of oil. According to WorldPublic Opinion.org, “majorities in 15 of the 16 nations surveyed around the world think that oil is running out . . . only 22% on average believe that ‘enough oil will be found so that it can remain a primary source of energy for the foreseeable future’ ”. Those majorities who think we are running out of oil include 85% of the British and 76% of the American citizens polled. Luckily, they are wrong.

Production of oil is being constrained by several forces, none of them due to God’s failure to put enough of the black gold under our feet. Several countries that are important sources of supply are in political turmoil, and unable to bring to market the oil they are capable of producing. Think Nigeria, where security problems have shut down about 20% of the nation’s capacity of 2.5m barrels a day and discouraged new investment, and Iraq, where political paralysis and terrorists have kept production at less than half its potential.

Other countries will not develop the reserves of oil known to lie under their territories.

Russia has made it clear that foreigners who invest in its oil industry might be playing a game with Vladimir Putin known as heads I win, tails you lose. Find nothing and you lose your money; find substantial reserves and the state squeezes you until your shareholders’ pips squeak. Only companies at least 51% owned by Russians – read FOPs, Friends of Putin – are allowed to look for oil in the new, difficult areas in which it is to be found. Little surprise that oil output dropped in the first quarter of this year.

Mexico’s president, Felipe Calderon, wants to revive Petroleos de Mexico (Pemex), the world’s third-largest oil producer, by contracting with foreign companies to introduce modern methods of extracting more from existing fields and finding new ones. But legislation is stalled by left-wingers who have seized and are sleeping at podiums in both houses of congress.

Saudi Arabia’s royal family has announced that it will not expand capacity. Abdallah Jum’ah, chief executive of the kingdom’s oil company, said high prices didn’t mean the world needs more oil because such market signals were “imperfect”, and energy minister Ali al-Naimi has announced that there are no plans to embark on a new round of expansion. The oil is there, but with current production yielding about $120 a barrel, there is no incentive to find more, especially since new production might drive down prices as demand from the slowing American economy falls.

Venezuela’s oil industry can only be described as a mess. President Hugo Chavez’s cronies are inadequate substitutes for the technicians they have replaced, so production is falling, while foreign investors are reluctant to trust hundreds of millions in exploration dollars to a regime that treats contracts as the first step in a negotiation.

In America, Congress alternates between calls for “energy independence” and refusals to allow drilling in what it considers environmentally sensitive areas in Alaska and offshore California and Florida.

There’s more, but you get the idea. There is a lot of oil out there to be found and produced, not even including the vast reserves in Canada’s tar sands. We might have reached the age of peak panic about oil supplies, but not of peak oil. ...

These $100+ prices have led to a massive flow of wealth, and hence power, from consuming to producing countries. If oil were still $20 or even $40 a barrel Russia would not have the wherewithal to revert to its bullying foreign policy, and America’s banks would not be going hats-in-hand to Arab capitals in search of new capital.

Kutcherov: Abiotic Oil Spill Could Last Forever

"... our planet may have enormous, inexhaustible resources of hydrocarbons." -- Vladimir A. Kutcherov, geologist, August 2009

"There is no doubt that our research proves that crude oil and natural gas are generated without the involvement of fossils. All types of bedrock can serve as reservoirs of oil." -- Vladimir A. Kutcherov, geologist, September 2009

F. William Engdahl: Gulf Oil Spill "Could Go on for Years and Years".

In a recent discussion, Vladimir Kutcherov, Professor at the Royal Institute of Technology in Sweden and the Russian State University of Oil and Gas, predicted that the present oil spill flooding the Gulf Coast shores of the United States “could go on for years and years … many years.” [1]

According to Kutcherov, a leading specialist in the theory of abiogenic deep origin of petroleum, “What BP drilled into was what we call a ‘migration channel,’ a deep fault on which hydrocarbons generated in the depth of our planet migrate to the crust and are accumulated in rocks, something like Ghawar in Saudi Arabia.”[2] Ghawar, the world’s most prolific oilfield has been producing millions of barrels daily for almost 70 years with no end in sight. According to the abiotic science, Ghawar like all elephant and giant oil and gas deposits all over the world, is located on a migration channel similar to that in the oil-rich Gulf of Mexico.

As I wrote at the time of the January 2010 Haiti earthquake disaster,[3] Haiti had been identified as having potentially huge hydrocarbon reserves, as has neighboring Cuba. Kutcherov estimates that the entire Gulf of Mexico is one of the planet’s most abundant accessible locations to extract oil and gas, at least before the Deepwater Horizon event this April.

“In my view the heads of BP reacted with panic at the scale of the oil spewing out of the well,” Kutcherov adds. “What is inexplicable at this point is why they are trying one thing, failing, then trying a second, failing, then a third. Given the scale of the disaster they should try every conceivable option, even if it is ten, all at once in hope one works. Otherwise, this oil source could spew oil for years given the volumes coming to the surface already.” [4]

He stresses, “It is difficult to estimate how big this leakage is. There is no objective information available.” But taking into consideration information about the last BP ‘giant’ discovery in the Gulf of Mexico, the Tiber field, some six miles deep, Kutcherov agrees with Ira Leifer a researcher in the Marine Science Institute at the University of California, Santa Barbara who says the oil may be gushing out at a rate of more than 100,000 barrels a day.[5]

What the enormity of the oil spill does is to also further discredit clearly the oil companies’ myth of “peak oil” which claims that the world is at or near the “peak” of economical oil extraction. That myth, which has been propagated in recent years by circles close to former oilman and Bush Vice President, Dick Cheney, has been effectively used by the giant oil majors to justify far higher oil prices than would be politically possible otherwise, by claiming a non-existent petroleum scarcity crisis.

...

Notes

[1] Vladimir Kutcherov, telephone discussion with the author, June 9, 2010.

[2] Ibid.

[3] F. William Engdahl, The Fateful Geological Prize Called Haiti, Global Research.ca, January 30, 2010, accessed in http://www.globalresearch.ca/index.php?context=va&aid=17287

[4] Vladimir Kutcherov, op. cit.

[5] Ira Leifer, Scientist: BP Well Could Be Leaking 100,000 Barrels of Oil a Day, June 9, 2010, accessed in http://www.democracynow.org/2010/6/9/scientist_bp_well_could_be_leaking

Endless Oil

Robert Langreth: Endless Oil?

Radical [sic] Russian researchers say we are looking for oil in all the wrong places.

Everybody [sic] knows [sic] that oil and gas drilled out of the earth comes from the remains of plants and animals trapped underground millions of years ago. This received wisdom [sic] so dominates our thinking that it is enshrined in the very language we use--fossil fuels. They took eons to form, and we are using them up far faster than they can be replenished.

What if the whole theory [sic] is wrong?

That's the premise of a small but passionate band of Russian and Ukrainian contrarians. They argue that oil and gas don't come from fossils; they're synthesized deep within the earth's mantle by heat, pressure and other purely chemical means, before gradually rising to the surface. Under the so-called abiotic theory of oil, finding all the energy we need is just a matter of looking beyond the traditional basins where fossils might have accumulated.

The idea that oil comes from fossils "is a myth. … We need to change this myth," says petroleum engineer Vladimir Kutcherov, at the Royal Institute of Technology in Sweden. "All kinds of rocks could have oil and gas deposits."

Alexander Kitchka of the Ukrainian National Academy of Sciences brashly estimates that 60% of the content of all oil is abiotic in origin, and not from fossil fuels. He says companies should drill deeper to find it.

Kitchka says oil may be found in all sorts of geological structures such as volcanic rock or deep-sea thermal vents where companies aren't looking today.

Kutcherov points to a handful of productive oil fields in Vietnam and elsewhere that lay in hard rock such as granite. Traditional theory says oil shouldn't be present there. Certain wells in the Gulf of Mexico have produced more oil than expected. The abiotic crowd says they are slowly being refilled from a deeper source.

The abiotic oil theory goes back centuries and includes as its prominent champions Dimitri Mendeleev, best known for inventing the periodic table. It didn't gain much visibility in America until the late Cornell University astronomer Thomas Gold championed it in the 1980s. He said that oil contains organic compounds not because it is derived from fossils but because giant colonies of deep-earth bacteria feed on deep hydrocarbon pools way down in the mantle.

The New Oil Paradigm No One Is Talking About.

Offshore production is increasing, and the industry may soon be asked to reconsider its basic assumptions about oil. Over the past few decades, a number of industry experts and geologists have conducted research suggesting that the origin of hydrocarbons may be abiogenic, not organic. Stated simply, the abiogenic oil theory posits that oil is not formed from plants and animals compressed for millions of years in sediment rock. Instead, oil is a primordial substance created before the formation of Earth, and found deep underground.

The abiogenic theory raises questions about both "peak oil" and the conventional wisdom that petroleum is a "fossil fuel." The theory is not widely discussed in the West, though it has proponents dating back more than a century.

Deepwater wells are teeming with abiogenic potential. As early as 1995, a New York Times article quoted Dr. K. K. Bissada, a Texaco geochemist: "I think we pump oil out much faster than oil can come in. ... But from a long-term perspective, I believe that hydrocarbons are coming in from great depths and are filling the newer reservoirs at shallower depths.''

BP On The Peak Oil Hoax

Christof Rühl is chief economist at British Petroleum: BP: 'We should see volatility increase'.

Physical peak oil, which I have no reason to accept as a valid statement either on theoretical, scientific or ideological grounds, would be insensitive to prices. In fact the whole hypothesis of peak oil – which is that there is a certain amount of oil in the ground, consumed at a certain rate, and then it's finished – does not react to anything.

Whereas we believe that whatever can be turned into oil strongly depends on technology and technology depends on prices as well.

Therefore there will never be a moment when the world runs out of oil because there will always be a price at which the last drop of oil can clear the market. And you can turn anything into oil into if you are willing to pay the financial and environmental price.

Oil's Big Secret

Actually it's not so secret and I wouldn't call it dirty.

Raymond J. Learsy: Oil's Big Dirty Secret as Producers Rake in Hundreds of Billions.

But wait, suppose, just suppose they are wrong and willfully misleading us. That oil's origins are not, to repeat, not biological, according to the gospel we have been taught to believe. That in effect oil originates from deep carbon deposits dating to the very beginnings of the Earth's formation in quantities vastly greater than commonly thought. The very presence of methane in the solar system is cited as one of the key underpinnings of this theory's seriousness. Then by seepage through the earth's mantle, Abiotic oil becomes in essence a renewing resource migrating toward the Earth's crust until it escapes to the surface (i.e. Canada's tar sands as theorized by some) or trapped by impermeable strata forming petroleum reservoirs.

Much research has been done on Abiotic Theory by a bevy of Russian and Ukranian geologists starting during the Soviet era, most especially by Nikolai Alexandrovich Kurdryavtsev who proposed the modern Abiotic Theory of Petroleum in 1951.

Among Kurdryavtsev's colleagues was Professor V.A. Krayushkin, chair of the Dept. of Petroleum Exploration at the Ukranian Academy of Sciences and leader of the DneiperDonets Basin Exploration project in the Ukraine, an area that has yielded eleven giant oil fields holding at least 65 billion barrels of oil and some 100 billion cubic meters of recoverable gas, comparable to the North Slope of Alaska . The area had previously been designated as having no potential for petroleum production whatsoever. Exploration, according to a paper by Richard Heinberg, was conducted entirely according to the "perspective of the modern Russian Ukranian theory of abyssal, abiotic petroleum origins".

Question, how often have you heard of M. King Hubbert and his peak oil theories dating to 1949 and how often have you heard of Kurdryavtsev or Krayushkin? Certainly, for those having some interest in Peak Oil jargon, Hubbert's name comes up endlessly, while Kurdryavtsev and Krayushkin probably never, or rarely if at all. But then again Hubbert was Chief Consultant for Shell Oil's Production Research Division and his theories served their Marketing Department well. His predictions first made in 1949 that the fossil fuel era would be of very short duration made him, with help of the fine hand of oil industry flacks, probably the best known geophysicist of his time.

The "Oil Window"

According to biogenic fossil fuel theory, oil can only be found in sedimentary rock and not below the mythological 15,000 foot "Oil Window." See so-called "Dr." Kenneth Deffeyes's Hubbert's Peak.

The next chapter of this book explains that there is an "oil window" that depends on subsurface temperatures. The rule of thumb says that temperatures 7,500 feet down are hot enough to "crack" organic-rich sediments into oil molecules. However, beyond 15,000 feet the rocks are so hot that the oil molecules are further cracked into natural gas. The range from 7,000 to 15,000 feet is called the "oil window." If you drill deeper than 15,000 feet, you can find natural gas but little oil.

Richard Heinberg's The Abiotic Oil "Controversy"

the temperatures at depths below about 15,000 feet are high enough (above 275 degrees F) to break hydrocarbon bonds. What remains after these molecular bonds are severed is methane, whose molecule contains only a single carbon atom. For petroleum geologists this is not just a matter of theory, but of repeated and sometimes costly experience: they speak of an oil “window” that exists from roughly 7,500 feet to 15,000 feet, within which temperatures are appropriate for oil formation; look far outside the window, and you will most likely come up with a dry hole or, at best, natural gas only.

here

Oil starts out as organic material, any kind of organic material, from algae to dead fish to organic material found in fish fecal pellets. This material must sink to an oxygen-free bottom where the absence of oxygen allows it to decay. Then it must be covered with other sediment and pushed into the "oil window" which starts at a depth of 7,500 feet deep and ends at 15,000 feet in depth. Above 7,500 feet, the temperature is not hot enough to "crack" the organic material into oil molecules and below 15,000 feet, everything is cracked all the way into natural gas. Inside that window, the temperature is at "coffee pot" levels and after a few million years, the organic material is cracked into oil.

here

Much of the book explains how heat "cracks" the complicated organic residues of dead plants to create oil. In general, the material must have, at some point, been trapped between 7,000 and 15,000 feet below the earth's surface. This is called the "oil window." Closer to the surface, temperatures are too low to make oil; deeper down, it is so hot that the material gets turned into natural gas.

The Oil Window.

The oil window refers to the depth at which the process of turning kerogen into oil can occur – from 6,000-7,000 ft. to 13,000-15,000 ft. At this point our "source rock" (the original rock) will be "cracked" into oil. ("Cracking," apparently, is the term of choice used by petroleum geologists.) At greater depths you would not get oil from the cracking, but gas.

And the Wikipedia entry for Petroleum

Geologists often refer to an "oil window"

They all say "geologists" plural but so far Deffeyes is the only so-called "geologist" I've found who has made such a claim (in other words the whole world is learning from this moron).

The reality is that oil rigs have been drilling below 15,000 feet true vertical depth looking for oil since 1938. And guess what else? They've found it!!!

InfoGulf.Com via Offshore Mag: Exploration and Development Below 15,000 feet TVD.

For exploration greater than 15,000 ft TVD on the shelf during the period 2003-2005, 115 wellbores (45 in 2003, 41 in 2004, and 29 in 2005) were drilled by 35 operators.

Those wells were drilled at least 3 years ago. We are finding oil much deeper now. According to Chris at Anadarko, the Grand Cayman well was drilled to 32,440 feet TVD. According to Guy at Transocean they've gone down to 35,000 feet TVD. And Transocean is building ships that will drill to 40,000 feet TVD.

Furthermore, 275 degree heat is no problem for oil: Brazil Oil Trapped by 500-Degree Heat

For more of Mr. Deffeyes's pseudoscience see here: The Many Wrong Predictions Of Ken Deffeyes.

Matthew Simmons Deader Than Fossil Fuel

"A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it." -- Max Planck, physicist, 1949

"The human mind is a lot like the human egg and the human egg has a shut-off device. When one sperm gets in, it shuts down so the next one can't get in. The human mind has a big tendency of the same sort. And here again, it doesn't just catch ordinary mortals; it catches the deans of physics. According to Max Planck, the really innovative, important new physics was never really accepted by the old guard. Instead a new guard came along that was less brain-blocked by its previous conclusions. And if Max Planck's crowd had this consistency and commitment tendency that kept their old conclusions intact in spite of disconfirming evidence, you can imagine what the crowd that you and I are part of behaves like." -- Charles T. Munger, philosopher, 1995

"Science, we are told is tentative. And given the history of science, there is every reason to be tentative. No scientific theory withstands revision for long, and many are eventually superseded by theories that flatly contradict their predecessors. Scientific revolutions are common, painful, and real. New theories regularly overturn old ones, and no scientific theory is ever the final word. But if science is tentative, scientists are not. As philosopher of science Thomas Kuhn rightly noted, it takes a revolution to change scientific theories precisely because scientists do not hold their theories tentatively. Thus, in his Structure of Scientific Revolutions, Kuhn quotes with approval Max Planck, who wrote: 'A new scientific truth does not triumph by convincing it's opponents and making them see the light, but rather because it's opponents eventually die, and a new generation grows up that is familiar with it.'" -- William A. Dembski, philosopher, March 16th 2000

Matthew Simmons is dead.

Matt claimed that oil is finite because he was paid hundreds of millions of dollars to believe it.

Of course, everyone who has ever taken a high school level chemistry or physics class knows that atoms and compounds are infinite.

Bloomberg: Matthew Simmons Showed the Supply of Oil Is Finite, Says Morse: Tom Keene.

The late Matthew R. Simmons’ greatest contribution [sic] was showing that the supply of oil is finite, said Edward Morse, the New York-based head of commodities research at Credit Suisse Group AG.

Simmons, an energy investment banker and leading proponent of the “peak oil” theory that claims the Earth is running out of crude, died Aug. 8 at 67 in an accidental drowning at his home in North Haven, Maine, local officials said. He made “remarkable contributions” in making the energy market transparent and helping the U.S. understand Saudi Arabia, Morse said.

CNBC: 'Peak Oil' Theory Advocate Matt Simmons Dies.

Simmons' views on "peak oil" have long be considered controversial as have his recent statements regarding the oil spill in the Gulf of Mexico.

Simmons, who served as an energy advisor to President George W. Bush, asserted earlier this summer, that he expected BP would need to file for bankruptcy protection in the wake of the Deepwater Horizon accident. He also claimed there were two leaks in the Gulf of Mexico, not just the one on which BP had fixed its underwater cameras.

In the wake of Simmons' comments, the investment bank Simmons & Co. severed its ties with its founder, who until that point had served as its chairman emeritus.

BP's recent efforts to cap the Macondo well and establish a $20 billion claim fund have made these highly controversial comments unlikely.

Also see Matt Simmons and ANWR, Simmons' Predictions Flop...Pathetically, etc.

Afraid of Reality

Raymond J. Learsy asks: Why Does Abiotic Oil Theory Ignite Peak Oil Theorists' Fulminations?? I think the answer is obvious. (Hat tip: Anaconda)

Abiotic Oil, calling into question the overarching theory that the origins of fossil fuel are of biological/organic origin was touched upon in my previous post, "Oil's Big Dirty Secret as Producers Rake in Hundreds of Billions," 04.12.08.

The comments to the post were wide ranging and the Peak Oil missionaries were apoplectic that one dared question their gospel intoning the sanctity of the biological origin of fossil fuels and its rapidly diminishing availability. Clearly the words "Abiotic Oil" stir up heated passions and clear concern among those in the oil patch who would be impacted were the theory to take hold. My post highlighted the issue without offering an opinion on Abiotic Oil Theory's viability. It did however attempt to outline the reasons why the oil industry would happily not have the concept of "Abiotic Oil" taken with any grain of seriousness.

Mexico Will Run Out Of Oil In 9 Years

Analysts watch, wince as Mexico's oil supply dwindles.

"Mexico's oil production is in decline. There's probably no way to stop it," said Mike Rodgers, an expert at one of the top oil industry consulting firms, PFC Energy in Houston.

Mexico is the second largest supplier of oil to the United States (about 1.5-million barrels a day). But output from its major fields is dwindling fast, according to official figures from the state-owned oil giant Petroleos Mexicanos (Pemex). The country's known oil reserves will run out in nine years, the government says, potentially undermining the nation's oil-dependent budget.

Mexico's decline only adds more pressure to prices in a tight global oil market, which hit $83 a barrel Thursday. Worse still, its emptying wells are only a reflection of a global decline in aging oil fields around the world.

With no major oil fields left to discover, analysts say the world is approaching "peak oil," the moment at which oil production hits its maximum capacity and slowly starts to fall.

Mexican output peaked at just over 3.4-million barrels a day in 2004. "I don't believe we'll ever see it that high again, no matter how much is invested," said David Shields, an oil industry consultant in Mexico City.

Daily output at Mexico's biggest oil field, Cantarell, highlights the problem. Production there dropped by a staggering half a million barrels in the last 18 months, to 1.5-million barrels from 2-million. Once the world's second-biggest oil field, it is expected to continue losing production, down to as little as 600,000 barrels a day by 2013.

Without Oil Sands Reserves Would've Fallen Last Year

Global oil reserves up only 1% last year

CALGARY -- Record global oil and gas profits of US$243-billion and record spending of US$401-billion have resulted in a marginal 1% increase in world oil reserves last year -- all of it coming from a 1.9-billion-barrel addition from Canada's oilsands, according to a new study.

Without Canada's contribution, 228 public oil and gas companies active globally and included in the study would have collectively produced more oil than they found, John S. Herold, a U.S.-based independent petroleum research company, and Harrison Lovegrove & Co., a global oil and gas advisory firm, said in the 2007 Global Upstream Performance Review, released yesterday.

...

The challenges are heating up the debate over peak oil, the report says.

"Without expressing a position on the matter, we believe that the issue has become part of the industry's long-term planning," the study says.

"If the peak oil theory is correct, and a decline in world production is imminent, a company must choose among four alternatives -- try to become a dominant participant, find a niche operational talent, harvest assets or liquidate quickly."

Infinite Oil Reserves

Right Side News: Peak Oil Bites the Dust?

What peak oil? Why an oil glut is ahead ... In May, less than a month after the blowout of the Deepwater Horizon oil rig in the Gulf of Mexico, a key milestone was achieved with little notice: Total U.S. supplies of petroleum and products refined from it (including the Strategic Petroleum Reserve) surpassed 1.8 billion barrels, reaching the highest level in the last 20 years. Since then the total has continued to edge upward, hitting 1.87 billion barrels in the week ended August 27, according to the Energy Information Administration.

Despite the Iraq War and the resulting production disruptions, despite the moratorium on drilling in the Gulf, despite turmoil in Nigeria and ongoing cross-border transshipment quarrels in Central Asia and the multiple, repeated declarations that "peak oil" has arrived and supplies will inevitably dwindle, the United States has more petroleum on hand today than it has had since at least the beginning of the first Gulf War. – CNN

Oil Falls Below $70

OPEC calls emergency meeting as oil prices fall.

Oil prices dropped below $70 a barrel for the first time in 14 months Thursday, prompting the OPEC cartel to call for an emergency meeting next week to establish some stability in prices that have plummeted recently after rising for months.

Oil prices have tumbled by nearly $40 a barrel in just three weeks as indications grow that demand for energy will slow along with weakening economies around the world. As recently as July, oil was trading at a record of $145 a barrel.

The decline in oil prices could provide a form of stimulus to the global economy as consumers pay less to fill up their tanks. If oil prices stay at current levels, American consumers would have $250 billion more, over a year, to save or spend elsewhere, according to Lawrence Goldstein, an energy economist. Some analysts expect oil prices to keep declining, perhaps to as low as $50 a barrel in coming months.

Americans will probably see lower energy bills this winter, as gasoline and heating oil futures also dropped sharply on Thursday. Gasoline prices now average $3.08 a gallon, or 3.8 liters, down from a summer peak of $4.11 a gallon, according to AAA.

Must be peak oil.