As you know those who make the case for "Peak Oil" are all constantly shouting that the end of the black stuff is nigh!
I’ve discussed this idea several times with Matt, and would like to refresh some points we came up with.
When good ol’ Henry Hubbert predicted the peak production of his oil fields in the 1970s, he did so based on "recoverable" oil.
One of the first scare tactics most peak oilers will relate is that we have to pump water into the fields to get the oil out. In his book Twilight in the Desert, Matthew Simmons describes water floods in Saudi Arabia as a sure sign that its giant oil field - or "elephant" field - is dying.
Not quite, says Matt.
"When a field is tapped, we get about 10% of the oil out under natural pressure, according to Department of Energy (DOE) estimates. Then, we have to add pressure using water or natural gas. Secondary recovery, or enhanced oil recovery (EOR), usually accounts for another 20%.
"That means we left about 70% of the oil in the ground...
"Back in Henry’s day, 30% is about all the oil they could get. However, EOR methods have improved. That’s why many of those same fields that he predicted would be used up by now are still merrily pumping away.
"Recent advances in EOR - including gas injection, polymers, and steam - are drastically improving our recovery efficiency. A Mississippi State University group is studying a further improvement in EOR. They're using naturally occurring bacteria to open up the holes in the reservoir and let more oil out.
"The DOE reports that an estimated 89 billion barrels of recoverable oil remain in fields that either are currently or were producing oil. There are currently 21.9 billion barrels of proven reserves in the U.S."
Let me put that number into greater perspective... the Artic National Wildlife Refuge might have 9 billion to16 billion barrels of oil in place.
At 50% recovery, that’s 4.5 to 8 billion barrels.
However, we don’t really know how much is there. We know that there is 10 to 20 times that much recoverable oil remaining in fields we’re already pumping.
Ghawar, Saudi Arabia’s golden goose oil field has produced 55 billion barrels of oil so far. Improved EOR provides us with a "find" on that scale sitting right across the pond in the U.S... And Matt's set out in a special report exactly how you could profit from this as Big Oil moves in for the kill.
The climate of high oil prices has spurred research collaboration between Big Oil, government, and academia.
The result could be an oil supply equal to all U.S. needs for the next decade.
Make sure you're positioned to benefit from it.
Regards,
James Woodburn
for Profit Watch
