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Although CERA has put more spin on this report than Tiger Woods drops on a sand wedge, it’s still an intriguing look at a critical topic. Shell apparently thought so, too, and posted the article at The Wall Street Journal: New Fields May Offset Oil Drop. (A three-page summary of the report is available at No Evidence of Precipitous Fall on Horizon for World Oil Production: Global 4.5% Decline Rate Means No Near-Term Peak: CERA/IHS Study on CERA's website.) Any credible projection of future oil supplies must be based, CERA suggests, “on a comprehensive understanding of the production history of and behavior of existing fields…In other words, how much oil supply will come from currently producing fields ten years from now?” CERA looked at 811 fields, half large, half small, in its proprietary data base, and concluded that the global decline rate is 4.5% per year. Many in the peak oil community think this number is too low by half—Schlumberger CEO Andrew Gould used 8% in a corporate newsletter last spring--but let’s take it at face value for a moment.
Depletion never sleeps. Consider the enormous implications of a 4.5% decline rate. If you start with 85 million barrels a day in 2007, but lose 4.5% each year, by 2017 you’ve lost 31 mbd. That’s the equivalent of losing the world’s four largest oil producers: Saudi Arabia, Russia, the USA and Iran. By 2030, you’ve lost 55 mbd, or as much as all the non-Opec nations now provide. Remarkably, CERA finds this to be “good news.” “Some of the gloomy, pessimistic ‘peak oil’ views…result from an assumption of high decline rates,” said Peter Jackson, lead author of the CERA report. “This new analysis provides the basis for more confidence about the future availability of oil.”
To his credit, Wall Street Journal reporter Neil King observed that, “The study strikes a more optimistic tone than do many heavy hitters in the industry.” Tom Petrie, a Merrill Lynch vice president with a distinguished career in energy banking, told King, “However you spin it, a 4.5% decline rate is a very sobering fact. People are running hard to find new sources of oil, and that’s just to keep even. When was the last time we discovered another Iran?”
“One Iran” is what we are now losing to depletion each year, and Ben Bernanke can’t do anything about it. Forget resource nationalism. If Hugo Chavez turned into George Washington tomorrow, we would still have a serious depletion problem on our hands.
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http://www.energybulletin.net/39353.html