"Yergin's Explanation Is So Far Off The Mark It Suggests He Never Read The Paper He Cites."

[hatrack]

EDIT

In The Quest, Yergin writes: "Hubbert used a statistical approach to project the decline curve that one might encounter in some -- but not all -- oil fields, and then assume that the United States is one giant oil field." If this is what he actually did, it would be worthy of ridicule -- but it's not the approach Hubbert actually took. Yergin's explanation is so far off the mark it suggests he never read the paper he cites -- or if he did, perhaps it was a long time ago and he only remembers a caricature of it.

In his 1956 talk, Hubbert never discussed the peak and decline of individual oil fields. His idea, instead, was that the production from a large area -- such as the U.S. -- was the sum of a whole bunch of oil fields, and their ups and downs would tend to average out, giving you a smooth curve. The simplest kind of curve for trying to represent this, he thought, was a bell-shaped curve. Then Yergin marshals evidence to argue that there is plenty of oil, saying that we are finding oil faster than we've been using it in recent years.

It appears that Yergin is drawing data from the widely used Statistical Review of World Energy, assembled every year by oil giant BP. But the figures they have for "proved reserves" -- the oil fields that are already producing or are "on deck," ready to come online soon -- are questionable for many of the world's biggest producers. In particular, the numbers for OPEC countries in the Middle East -- like Saudi Arabia, Kuwait, Iran, Iraq, and others -- appear, to put it nicely, magical. Despite collectively producing a couple dozen billion barrels of oil each year, Middle East countries' reserves, as listed in the BP report, barely budge most years. And when they do change, they always go up, never down. It's as if a huge corporation got audited and claimed that their bank account was always exactly $572 million dollars, and never changed. It's not realistic.

What's more, during the time period Yergin chooses to emphasize -- 2007 to 2009 -- Canada and Venezuela put huge tar sands and heavy oil deposits on their books. By adding these low-quality sources, they more than doubled their proved reserves in a very short time. But it seems they won't be able to keep adding more oil to their books at this kind of rate in the future, continuing to double and double their reserves. From 2009 to 2010, their reserves stayed exactly the same.

EDIT

http://www.grist.org/oil/2011-09-27-the-quest-questioned

[Kolesar]

1. If you add a bunch of overlapping bell curves, the result is another bell curve

It's statistics!

[GeorgeGist]

2. Context is generally helpful.

:wtf: is a Yergin.

[Nederland]

3. Proven Reserves

But the figures they have for "proved reserves" -- the oil fields that are already producing or are "on deck," ready to come online soon -- are questionable for many of the world's biggest producers. In particular, the numbers for OPEC countries in the Middle East -- like Saudi Arabia, Kuwait, Iran, Iraq, and others -- appear, to put it nicely, magical. Despite collectively producing a couple dozen billion barrels of oil each year, Middle East countries' reserves, as listed in the BP report, barely budge most years. And when they do change, they always go up, never down. It's as if a huge corporation got audited and claimed that their bank account was always exactly $572 million dollars, and never changed. It's not realistic.

It's quite clear from this paragraph that the author has no clue what the definition of "proven reserves" actually is. My guess is that he is unaware that proven reserves can increase simply because the price of oil rises.

[NickB79]

5. Yet the proven reserves never drop when the price of oil drops

If the proven reserves were influenced as heavily as you assert because of the swings in the price of oil, why do we not see proven reserve numbers downgraded when the price of oil drops significantly? In the past 10 years, we've seen the price of oil go from $20/barrel to $147/barrel, then drop back down to $40/barrel, up to $100/barrel again, now down to $80/barrel.

Yet magically, the proven reserves numbers never budge.

[Javaman]

4. yergin has long been a tool of the oil corps...

once upon a time he believed in peak oil, but then he gave his soul over to CERN. Now he preaches their bullshit for big bucks.

anyone paying attention understands he's just another shill.