Global Depression on the Horizon

U.S. Oil Reserves Get a Big Boost - Washington Post September 6, 2006

Chevron-Led Team Discovers Billions of Barrels in Gulf of Mexico's Deep Water

This looks to be the biggest discovery in the United States in a generation, really since the discovery of Prudhoe Bay 38 years ago," said Daniel Yergin, chairman of the consulting firm Cambridge Energy Research Associates Inc. "There's been a lot of anticipation about what's called the Wilcox formation, and this is the validation of the theory and of the technology," he said, using another name for the area of the Gulf.

"What's really happening is the opening up of a whole new horizon in the ultra-deep waters of the Gulf of Mexico, and it looks like the upside is very significant," Yergin said. "But it will take time and billions of dollars to get there."

Still, John P. Herrlin, an oil analyst with Merrill Lynch & Co., said the production test announcement was "meaningful because it opens a new fairway" in the deep-water Gulf of Mexico oil area, which also includes other geological prospects. Herrlin said the lower tertiary trend alone could hold 3 billion barrels to 15 billion barrels of recoverable oil reserves.

Chevron operates and owns 50 percent of the Jack No. 2 well. Devon Energy and Statoil ASA each own 25 percent of the project.

Chevron is the company with the most leases in the lower tertiary trend, which Hadden said is a couple of hundred miles long and 50 to 70 miles wide. Devon is next, followed by Anadarko Petroleum Corp., Exxon Mobil Corp., BP PLC and Royal Dutch Shell PLC.

There's a hole in the bottom of the sea

What better place than Boston to hold A Midnight Ride for Peak Oil?" asks Matthew Simmons, chair of ASPO-USA's advisory board. "We are recruiting the best minds in the business -- geologists, industry experts, academics, and environmentalists -- to take up arms with scientific data to meet the historic challenge of Peak Oil." Simmons is author of The Wall Street Journal -listed bestseller Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. For conference details, please see: www.aspousa.org/fall2006/index.cfm

In addition to Matthew Simmons and Robert Kaufmann, conference speakers will include Ali Samsam Bakhtiari of the National Iranian Oil Co. (retired), about whom I have written in Whiskey & Gunpowder; Roscoe Bartlett, U.S. congressional representative from Maryland; and more than 20 others. The full list of speakers may be viewed at the Conference Website.

Conference topics include:

· Oil and Gas Depletion (What's the evidence on Peak Oil? What geologic, political, economic, and technical constraints limit oil production? Why is forecasting a date for Peak Oil an inexact science?)

· Mitigation (What responses are available, and when can they be implemented?)

· Alternative Energy (What unconventional petroleum and nonpetroleum energy sources are available, and can they fill the depletion gap?)

· Economics (What economic challenges do decreasing energy supplies present?)

· Transportation (What is the future direction of personal transportation, its limitations and prospects, and how should planners and fleet managers respond?)

· Net Energy (What's the meaning of energy return on energy invested -- EROEI -- and why is it critical to intelligent responses to the Peak Oil dilemma?)

· Energy Security (Can we achieve energy security in a world of escalating competition for a finite resource?)

· Government Policy (What is the direction of energy policy at the local, state, and federal levels? Do these policies need obvious tweaks, or a massive overhaul?)

I am planning to attend, and I hope that many of you who read Whiskey & Gunpowder will also be there.

Note: Agora Financial, LLC has no financial or other business relationship to ASPO-USA, Boston University, or the World Oil Conference. We are running this promotional piece as a public service, and because we believe that the conference offers our readers the opportunity to improve their understanding of the critical topic of Peak Oil.

Debunking the hype over the Jack-2 'discovery' 2006

The Big Picture

In a July 22, 2002 press release, the US Minerals Management Service (MMS) forecasted a daily oil production rate of between 2.00 and 2.47 million barrels by the end of 2006. Current Gulf of Mexico OCS production is approximately 1.5/mbd, down 25% from the MMS "low case" estimate of 2.0/mbd for 2006. It has yet to fully recover from the 2005 hurricanes. BP's Thunder Horse platform is still not operating and is delayed until 2008. Did we fail to mention that the LTGOM deepwater play is prone to hurricanes?



Business Week's assertion that ultra-deepwater production from offshore regions like the LTGOM will "tip the balance of supply and demand in the long term" globally is unwarranted speculation. Believing that statement requires a large leap of faith and depends on optimistic outcomes: possible declines in the world's old elephant fields like Ghawar don’t occur; declines in fields like Cantarell are modest; commercial development in similar deepwater areas in other regions like West Africa's Gulf of Guinea proceeds; etc.  

The current "peak oil" bashing going on in the media is more an indication of underlying concerns about the long-term supply situation, not a refutation of peak oil theories. Those concerned about global oil depletion have never said that the world is running out of oil in the near-term or denied that advanced technology can increase recoverable reserves.     

BP Deepwater Horizon Well Permitted for 18,000 ft. but Drilling as Deep as 25,000 ft.

Note: Wikipedia Chevron Jack #2 oil rig

Jack 2 is a test well in the deep waters of the Gulf of Mexico (Walker Ridge Block 758) that successfully extracted oil from the lower Tertiary area of the Gulf in the second quarter of 2006. The field owners Chevron, Devon Energy and Norway's Statoil drilled to about 20,000 feet below the sea floor, the wellhead being 7000 feet below sea-level,^[1] for a total depth of 28,125 feet.^[2]

Jack 2 proved the existence of a new play in the deepwater Gulf of Mexico. The estimated oil reserves the play could contain range between 3 and 15 billion barrels. News of the find was credited for contributing to a drop in crude oil prices.^[4][5] The maximum estimate of 15 billion barrels (2.4×10⁹ m³) represents half of the total current estimate of U.S. reserves,^[5][6] equal to slightly less than two years of U.S. consumption at present levels.^[7]

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Did they just tell us everything we need to know?

What are the actual new estimates?

Did BP hit the motherlode?

What are the US statistics for deep drilling reserves in all tertiary fields?

What would two, three or even four year US independence from foreign oil mean?

What did the committee member Daniel Yergin leak? New Horizon for Deep oil Gulf drilling?

What happened to Merill Lynch and Newsweek since 2006?

Goldman Sach sold 44% stock. So did other committee enterpises including Democrats like John Kerry-Heinz and Pelosi. Who else did?

The list of usual suspects can go around the world. Opec, Russia, Strong-Gore group, Obama-Soros, the banking cartel, Israel and our middle east oil dependancy for Iran war and pipelines. All or part?

Looking at the tectonic plate and Haiti HAARP, plus the potential weather modification scalar technology , if it is a master plan for the global governance energy grid transition and tax structure then we could see more like this one. Lack of oil reserves would make for a short engagement, but we have been in the long quiet war for some time.