Peak Oil: Mexico
09-20-2009, 10:13 AM
#1
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Peak Oil: Mexico
Hi!
http://www.businessweek.com/magazine...8036488158.htm
cliff
NBO
http://www.businessweek.com/magazine...8036488158.htm
State-owned Petróleos Mexicanos, or Pemex, contributes some 40% of the national budget. Problem is, output at its main offshore field is plummeting. Last year, Mexico produced some 2.6 million barrels of oil daily, down 30% from its 2004 peak; now, it's 2.5 million a day, and without major new discoveries, Mexico's reserves will last for just nine more years.
Pemex engineers have long known that production would fall, but politicians have failed to take the decline seriously—until now.
Pemex engineers have long known that production would fall, but politicians have failed to take the decline seriously—until now.
NBO
09-20-2009, 12:19 PM
#2
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09-20-2009, 01:26 PM
#3
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Hi!
A little research:
The "Revolutionary New Discovery" is the same, tired old crap. This theory was first proposed in the 1500s, so it is over 500 years old.
Even the pro-oil article you cited said this, at the end:
The last word...
Focusing on positive, new technologies that will help improve our life, such as ANY of the alternative energy technologies, is more beneficial than hoping we can live in the past, of artificially cheap oil.
cliff
NBO
A little research:
Aw Jeez, not this **** again!
Abiogenic petroleum origin is an alternative hypothesis to the prevailing biological origin theory of petroleum origins. Most popular in Russia and Ukraine between the 1950s and 1980s, the abiogenic hypothesis has little support among contemporary petroleum geologists, who argue that abiogenic petroleum does not exist in significant amounts and that there is no indication that an application of the hypothesis is or has ever been of commercial value.
....
Although evidence exists for abiogenic formation of methane and hydrocarbon gases within the Earth, studies indicate they are not produced in commercially significant quantities (.02% of hydrocarbon gases were produced abiogenically)...
....
Although evidence exists for abiogenic formation of methane and hydrocarbon gases within the Earth, studies indicate they are not produced in commercially significant quantities (.02% of hydrocarbon gases were produced abiogenically)...
Nobody who has studied the subject for more than about 10 minutes disputes that abiotic hydrocarbons exist. Proving something that has been known for well over a century hardly seems like an achievement to me but YMMV. The problem, as has been pointed out repeatedly on this thread, is rate of production.
It doesn't actually matter even one bit how oil is made anyway, because we are pumping it out WAY faster then it was generated in the first place (by a factor of 10,000 at least, maybe a million).
...
Even if its continually renewed by the earth (fat chance), its just not going to be fast enough to matter.
...
Even if its continually renewed by the earth (fat chance), its just not going to be fast enough to matter.
It's amazing how the media can take a scientific paper with very limited and specific conclusion and blow it up into whatever conclusion they want.
What does the paper actually say?
Pressure can convert methane into heavier hydrocarbons. We have observed this in a diamond anvil pressure cell.
That's it, and yes that is perfectly true.
However the media instantly jumps from that to "We're saved, pass the cheetos". No discussion of rates. No discussion of where the methane to be converted is going to come from inside the earth. No discussion of why the existing reservoirs aren't refilling. No critical thought whatsoever.
What does the paper actually say?
Pressure can convert methane into heavier hydrocarbons. We have observed this in a diamond anvil pressure cell.
That's it, and yes that is perfectly true.
However the media instantly jumps from that to "We're saved, pass the cheetos". No discussion of rates. No discussion of where the methane to be converted is going to come from inside the earth. No discussion of why the existing reservoirs aren't refilling. No critical thought whatsoever.
Secondly I have a background in organic geochemistry and having spent the last 30+ years in the petroleum game...
What indeed is the proof for abiotic orgins......indeed there is none.
What indeed is the proof for abiotic orgins......indeed there is none.
While Kucherov's experiments have been proven in the laboratory, they have yet to be translated into reality, and there is no word on how long the world might have to wait to take advantage of the new discoveries.
Please be aware the science for biotic origins (oil was created from living matter) is long lived (since the 40's), well supported by experimental evidence and well supported by direct evidence in the field (match of oils to source rocks). There is a reason that each and every oil company in the world uses this theory for exploration.....it is rock solid (pun not intended). Note that these oil companies are not staffed by people unfamiliar with the science, Exxon, Shell, Statoil, Total etc. have 10's of Phd's in organic geochemistry on their research staff.
cliff
NBO
09-20-2009, 01:41 PM
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Peak oil is also a theory. Lower production in the face of declining demand should come as no surprise.
If you actually believe in peak oil, invest every dime you have in futures. You may get a nice return, you may not.
If you actually believe in peak oil, invest every dime you have in futures. You may get a nice return, you may not.
09-20-2009, 03:09 PM
#5
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Hi!
Yes, but lower production in the face of increasing demand, does come as a surprise.
Mexico WANTS to produce more oil, and they can't, because the easily produced oil they have is declining, meaning their "container" of oil is getting drained...hence Peak Oil.
cliff
NBO
Yes, but lower production in the face of increasing demand, does come as a surprise.
Mexico WANTS to produce more oil, and they can't, because the easily produced oil they have is declining, meaning their "container" of oil is getting drained...hence Peak Oil.
cliff
NBO
09-20-2009, 03:12 PM
#6
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And, come to think of it, Peak Oil is NOT a theory. Here in the US, we have already peaked, and our oil production is declining. Mexico is in the same boat, as are a lot of other countries.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
09-20-2009, 03:30 PM
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The proven reseves in the world today are estimated to be good for at least another hundred years.
The odd thing is that alternative sources of energy may be used in the future to create hydrocarbon fuels.
Oil demand has dropped quite a bit recently, and new dicoveries keep happening. The low hanging fruit has been picked but there are still many finds to be developed. US production has been limited more by political factors than a lack of oil.
At the heart of Mexico's problem you may find both a bit of political and technical matters having much more effect than a true lack of oil.
--------------------------------------------------------------------------------------------------------------------------------------
rumBeat: January 31, 2007 The Oil Drum DrumBeat: February 1, 2007
An Update on Mexico's Oil Production--The Rapid Collapse of Cantarell by the Numbers
Posted by Sam Foucher on January 31, 2007 - 12:30pm
Topic: Supply/Production
Last year, I expressed my concerns about the eventual impact of a rapid collapse of Cantarell on Mexico's oil production (story here). The last production numbers from PEMEX seems to confirm the rapid decline of Cantarell as well as the inability of the Mexican to rapidly bring new production online. The Wall Street Journal (thanks to Jerôme) published an article on Cantarell last week:
The virtual collapse at Cantarell -- the world's second-biggest oilfield in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.
[Update: PEMEX has just put out a press release this morning (thanks Nate!) saying that its crude oil production rose to 3.153 million barrels per day in January, up 6% from December, as it may have fixed a few of technical problems at Cantarell (source). Still, this last estimate put Mexico right back on the low logistic curve on Figure 5 below, so even with this news the decline is still quite apparent.]
-------------------------
So the news isn't really new, nor is the poor management of Pemex.
The odd thing is that alternative sources of energy may be used in the future to create hydrocarbon fuels.
Oil demand has dropped quite a bit recently, and new dicoveries keep happening. The low hanging fruit has been picked but there are still many finds to be developed. US production has been limited more by political factors than a lack of oil.
At the heart of Mexico's problem you may find both a bit of political and technical matters having much more effect than a true lack of oil.
--------------------------------------------------------------------------------------------------------------------------------------
rumBeat: January 31, 2007 The Oil Drum DrumBeat: February 1, 2007
An Update on Mexico's Oil Production--The Rapid Collapse of Cantarell by the Numbers
Posted by Sam Foucher on January 31, 2007 - 12:30pm
Topic: Supply/Production
Last year, I expressed my concerns about the eventual impact of a rapid collapse of Cantarell on Mexico's oil production (story here). The last production numbers from PEMEX seems to confirm the rapid decline of Cantarell as well as the inability of the Mexican to rapidly bring new production online. The Wall Street Journal (thanks to Jerôme) published an article on Cantarell last week:
The virtual collapse at Cantarell -- the world's second-biggest oilfield in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.
[Update: PEMEX has just put out a press release this morning (thanks Nate!) saying that its crude oil production rose to 3.153 million barrels per day in January, up 6% from December, as it may have fixed a few of technical problems at Cantarell (source). Still, this last estimate put Mexico right back on the low logistic curve on Figure 5 below, so even with this news the decline is still quite apparent.]
-------------------------
So the news isn't really new, nor is the poor management of Pemex.
Last edited by jungle; 09-20-2009 at 04:01 PM.
09-20-2009, 04:05 PM
#8
Libertarian Resistance
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Since we're being technical
Originally Posted by atpcliff
And, come to think of it, Peak Oil is NOT a theory. Here in the US, we have already peaked, and our oil production is declining. Mexico is in the same boat, as are a lot of other countries.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
WW
09-20-2009, 06:17 PM
#9
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Posts: 6,191
Originally Posted by atpcliff
And, come to think of it, Peak Oil is NOT a theory. Here in the US, we have already peaked, and our oil production is declining. Mexico is in the same boat, as are a lot of other countries.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
If countries are Peaking, isn't it rather safe to assume that, unless our demand for oil is drastically cut, that Peaking will continue at other countries around the world?
cliff
NBO
PS-I would equate it to the "Earth is a Sphere" theory. I don't think it is a "theory", but some people do, and claim that the earth is actually flat. They are wrong.
Could it be that you have not considered all factors when you accept a theory? I fully understand that most of us don't have all the answers in many areas, you may be correct and you may be wrong. You have not showed evidence of being correct though.
The answers are not in on this or MMGW yet, so I will freely admit I can't know the answer. Can you?
------------------------------------------------------------
The 'Peak Oil' Myth: New Oil Is Plentiful 92 comments
by: Jason Schwarz June 22, 2008 | about: BRGYY.PK / CVX / IYE / OIL / PBR / RDS.A / STO / UNG / USO / XLE / XOM
Jason Schwarz
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.
6. In Iraq, excavators have struck three oil fields with reserves estimated at about 2 billion barrels, Kurdish region's Oil Minister Ashti Horami said.
7. Iran has discovered an oil field within its southwest Jofeir oilfield that is expected to boost Jofeir's oil output to 33,000 barrels per day. Iran's new discovery is estimated to have reserves of 750 million barrels, according to Iran's Oil Minister, Gholamhossein Nozari.
8. The United States holds significant oil shale resources underlying a total area of 16,000 square miles. This represents the largest known concentration of oil shale in the world and holds an estimated 1.5 trillion barrels of oil with 800 billion recoverable barrells – enough to meet U.S. demand for oil at current levels for 110 years. More than 70 percent of American oil shale is on Federal land, primarily in Colorado, Utah, and Wyoming. In Utah, a developer says his company already has the technology to produce 4,000 barrels a day using a furnace that can heat up rock using its own fuel. ``This is not a science project,'' said Daniel G. Elcan, managing director of Oil Shale Exploration Corp. ``For many years, the high cost of extracting oil from shale exceeded the benefit. But today the calculus is changing,'' President George Bush said. Sen. Orrin Hatch, R-Utah, said the country has to do everything it can to boost energy production. ``We have as much oil in oil shale in Utah, Wyoming and Colorado as the rest of the world combined,'' he said.
9. In western North Dakota there is a formation known as the Bakken Shale. The formation extends into Montana and Canada. Geologists have estimated the area holds hundreds of billions of barrels of oil. In an interview provided by USGS, scientist Brenda Pierce put the North Dakota oil in context. "Of the current USGS estimates, this is the largest oil accumulation in the lower 48," Pierce says. "It is also the largest continuous type of oil accumulation that we have ever assessed." The USGS study says with todays technology, about 4 billion barrels of oil can be pumped from the Bakken formation. By comparison, the 4 billion barrels in North Dakota represent less than half the oil in the Arctic National Wildlife refuge which has an estimated 10 billion barrels of recoverable oil.
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? Probably until they can find other investment alternatives which won't happen in the broad market until financials (XLF) stop hemorrhaging. Respect the trend but understand that this is a bubble preparing to burst. When oil hit it's high of $139 it represented more than a 600% increase in crude since the bull market began, returns eerily similar to the dot.com craze.
There are many theories that sound good but just aren't true. Take Al Gore's global warming crusade. It sounded great, it made perfect sense but there was just one problem, the facts didn't support it. It seems that the masses who were loudly calling for a global warming crisis have shifted their energies to oil. We are bombarded on a daily basis by those who tell us that we should be fearful. They spin good news into bad. The latest absurdity had Goldman Sachs telling investors that China's 18% price increase will actually increase demand! That's a new one. Just like global warming, the rationale for peak oil sounds great, it makes sense, but there is just one small problem, the facts don't support it.
Disclosure: None
Last edited by jungle; 09-20-2009 at 09:09 PM.
09-21-2009, 03:40 AM
#10
Libertarian Resistance
Joined APC: Feb 2007
Position: 757 FO
Posts: 1,057
Originally Posted by atpcliff
Hi!
Yes, but lower production in the face of increasing demand, does come as a surprise.
Mexico WANTS to produce more oil, and they can't, because the easily produced oil they have is declining, meaning their "container" of oil is getting drained...hence Peak Oil.
cliff
NBO
Yes, but lower production in the face of increasing demand, does come as a surprise.
Mexico WANTS to produce more oil, and they can't, because the easily produced oil they have is declining, meaning their "container" of oil is getting drained...hence Peak Oil.
cliff
NBO
Your conclusion here might be true. It may also not be true. Your position requires a number of assumptions that you have not highlighted.
For example: you imply that Mexico's ability to produce the desired amount of oil is limited only by the amount of easily gotten oil available. Isn't it possible that a state controlled enterprise has had its "profits" diverted to other state projects? Have they delayed capital investments in equipment, exploration, research, etc? I don't have an extensive knowledge of PEMEX, but I would bet that yes-answers to these questions are at least possible. If so, running out of easily gotten oil is only part of the problem for Mexico and PEMEX.
I'd say your claim for peak oil in Mexico is not yet proven.
WW
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