220. KUWAIT DENIES RESERVE DOWNGRADE
The peak oil "hot topic" these days is a report by Petroleum Intelligence Weekly (PIW) suggesting that Kuwait's oil reserves are half of what is currently claimed. Here's the Reuters report:
Kuwait oil reserves only half official estimate-PIWThis news triggered a lot of whoops and teeth-baring in the peak oil monkey cage over the last few days, but that just demonstrates the peak oil community's insecurities and desperate need for immediate validation.
Friday 20 January 2006, 1:32pm EST
LONDON, Jan 20 (Reuters) - OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW). "PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday. It said that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are about 48 billion barrels.Source
The whole hullaballoo is based on just about the flimsiest evidence imaginable. First of all, the Kuwait Oil Company (KOC) flatly denies it:
PIW's Kuwait report 'not accurate'Second of all, the provenance of the information is highly suspect. The peak oilers are operating on a third hand report in Reuters, of a second hand article in PIW (which basically no one has read because it's behind a subscription fire wall), reporting on an internal document from the Kuwait Oil Company which no one has seen, and which was leaked by an unnamed source for unknown reasons. Who leaked it, and why? I think I'll wait for the story behind this document before I stop pressing the snooze button.
Posted: Saturday, January 21, 2006
Kuwait City
A senior Kuwaiti oil official has cast doubt on the accuracy of a report by industry newsletter Petroleum Intelligence Weekly (PIW) that the Opec producer's oil reserves are only half those officially stated.
'I have no idea where they got this figure from ... I don't think it's accurate,' Farouk Al Zanki, the chairman of state-run Kuwait Oil Company (KOC) said in Kuwait City.Source
Sooo... It looks like we're right back where we started from. The Kuwaitis say they have the reserves, and the peak oilers say they don't, and there's not a shred of bona fide evidence to decide the question. Of course, that's not a problem for the peak oilers because they believe it's all a conspiracy, and that's why they don't need evidence. The lack of evidence is just further proof that a nefarious conspiracy is operating.
Anyway, it's all a tempest in tea cup. Even if the Kuwaiti reserves are halved, who cares? How quickly, and to what extent, will that affect oil production in the next five or ten years? Not much. In fact, the peak oilers have carefully avoided the question of what downgraded Kuwaiti reserves would do to the world supply curve. Their reasoning is on this level: "The Kuwaiti oil reserves got downgraded, so look out! The shit is going to hit the fan soon!" Yes, now they can point to a 3rd hand report which has been denied by official sources, but they still can't point to PEAK OIL, and that's all that really matters.
Even if the Kuwaiti report is true, and all the other OPEC reserves are overstated, and peak oil happened last year, I'm still not particularly concerned about it because: a) I've admitted and accepted the reality of peak oil from the very beginning, and b) We don't really need oil. Today, it's primarily being used to fuel frivolous lifestyle bullshit like single-person commuting in the U.S.
The doomers are going to have to work a lot harder if they want to debunk the debunkers. And as long as civilization and the economy are up and running, the doomers will remain WRONG WRONG WRONG.
-- JD
posted by JD @ 5:23 PM
14 comments
14 Comments:
Humans are not rational. Instead they are very superstitious. Theories of doom are very attractive to idle minded people. Such theories make them feel important and wise, and gives them a reason to live.
JD:
Have you become the propaganda tool of the Kuwait Government?
I am not a bit surprised at all that the Kuwait Government would jump out denying this new report. I would be completely shocked, on the other hand, if they had kept silent. Think about this way: They have an official lie, which is exagerating the true figure of their oil reserve. They kept the lie for a couple decades and maintained that official position all the time. And now some one says they are lying. Would you not expect they to come out and continue to defend their official position? Would you expect that they keep their mouth shut, thus indirectly admitting that they have been lying all the years? No!
So why do you so hurry to jump out and defending the Kuwaitis, just as they are doing what they are expected to do, sticking to the position they always sticked to. The latest Kuwait Government statement says nothing new and adds nothing worth noting. If you trusted their figure in the past, you still trust them now. If you do not trust their past statements, why do you start to trust them now?
chris,
The USGS figures for Kuwait are: 86Gb (identified reserves) and 112 Gb (URR).
They arrived at those numbers by conducting a stupefyingly detailed survey of the geology of Kuwait. I'm not sure why an unconfirmed 3rd hand report should be given precedence over that survey. If the USGS made some error in geological assessment, what was it?
You might also want to look this over:USGS LINK
I don't believe the USGS has a good idea about what's going on in Kuwait - how could they?
The following report from the USGS describes the geology of Kuwait, Ghawar and neighboring areas. I encourage you to thumb through it, page by page. Look at the maps and figures. You'll see that the USGS knows an astounding amount about the geology and petroleum systems of Kuwait.
Total Petroleum Systems of the Paleozoic and Jurassic, Greater Ghawar Uplift and Adjoining Provinces of Central Saudi Arabia and Northern Arabian-Persian Gulf
What is your assessment of the OPEC quota wars? Or even why the reported reserves don't fall with production?
You're right. It looks fishy. But the bottom line is that those who say the numbers are wrong have no hard evidence to prove it. That's a big problem if you are trying to approach the question scientifically. Basically, I'm agnostic because there's not enough evidence to decide the question.
If you asked me my leanings, I'd say look at the USGS report above. I'm not a geologist, but that looks like in-depth, painstaking geology to me. It makes sense; the USGS is staffed with serious, hard working geologists. It certainly looks more credible than a pay-per-view story about a nebulous leaked memo which no one has authenticated.
chris, your link doesn't work.
JD said:
"They (USGS) arrived at those numbers by conducting a stupefyingly detailed survey of the geology of Kuwait. I'm not sure why an unconfirmed 3rd hand report should be given precedence over that survey."
"3rd hand report" says who? I would best use that title to describe the USGS report. Has USGS sent any scientist to Kuwait, and did extensive geological exploration there? I don't think they did. The Kuwaitis never invited them. I consider USGS as a bunch of bureaucrates sitting in their nice air-conditioned offices in Washington, and took whatever data the Kuwaitis handed to them unchecked and compile into their "report". Such "report" has even less credibility than the official statement of the Kuwaitis government.
Quantoken
JD:
I would say there is hard evidences. The quota war did happen, and they did report a sudden jump of the reserve number, without the backing any major geological discovery, back in the 80's. Their official report of the reserves are black letter printed on white papers so that's a hard evidence of lying when you see that sudden jump, unless they can cite any major discovery attributable to that jump, and explain away why all nations had jumpped up their reserves at about the same time.
Second piece of hard evidence, is clearly that they did NOT reduce annual productions from the reserve year by year. The production number is not fictional. We actually burned fossil fuels that were produced from the reserve. So how can you not deduce the numbers produced, and that the reserves remain constant?
Quantoken
The USGS report does look very detailed but that does not lend it credibility. They are still third hand material. It's called bureaucracy, you know, reports of tens of thousands of pages which actually say nothing. Things like the White House CIA spy leak. The actually leakage was a simple one time event involving one person talk to another person for 10 seconds over the phone. The investigation lasted several years costing several hundred million dollars, and produced a report of ten thousand pages long, and they still can not spell out the simple truth who leaked it to who and when. That's bureaucracy! Using your logic, a 10 thousand painstaking investigation report must be very credible. They are less credible than a street rumor or a whistle blow by a deep throat! It's called bureaucracy for crying out loud.
Quantoken
Hi dc,
Welcome to POD. I agree with you about global warming and the production picture. In a way we've got way too much stuff out there left to burn.
dc, is it really necessary to resolve to name calling when discussing doomers? it makes the anti-doomer argument look just as visceral and unscientific as that of savinar and his ilk.
please, lets just stick to the facts.
and yes, i totally agree with you on climate change. i saw a post on PO.com after following the thread from the POD group about "them" talking about "us" again (side note, i miss WildWell here :( ). anyway, it was some guy saying basically that if PO is coming, he's going out with a bang, meaning new car and toys. that, to me, is the biggest danger of PO. resignation followed by incredible levels of selfishness.
it's very similar to the plight of AIDS victims who max out their credit cards and "live it up" expecting to live for just 2-3 more years and then, due to advances in medicine find themselves living for a decade and suddenly heavily in debt.
my philosophy. prepare, but never throw in the towel.
jd - Interesting blog. This is my first time visiting and commenting. I agree with you that it is important to treat the initial report (third-hand, from an anonymous source released for unknown reasons) skeptically.
The reason that peak oilers were to excited about the report is that it hints at cracks behind the facade of what we see as a corrupt program to boost reserve figures. In other words, while not necessarily a big deal in and of itself, it indicates there may be something more to the hypothesis that OPEC producers are inflating their (unaudited) stated reserves to increase their individual market shares.
Just as I think that the initial report needs to be treated skeptically, so, too, does the denial. Anyone who first saw the report knew it that officials had to it, and as soon and as vigorously as they could. C'mon now. Of course they'd deny the report. So to me, the fact that it happened isn't particularly interesting.
Hi ad,
Welcome to POD, and thanks for your comments. As I said in my reply to Chris Vernon, I'm basically an agnostic on the question of reserve inflation. I have no bona fide grounds for assuming that the Kuwaiti reserves are inflated. Certainly, the way they have handled their reserve reporting is politicized and suspicious, but that in itself does not prove that the number is wrong. It can only be definitively proved wrong by looking at the actual geology. I might change my mind if someone with strong geological credentials refuted the USGS number on geological grounds. Please refer to the USGS material (Total Petroleum Systems of the Paleozoic and Jurassic, Greater Ghawar Uplift and Adjoining Provinces of Central Saudi Arabia and Northern Arabian-Persian Gulf) which I linked to in my response to Chris Vernon. What is wrong with the USGS's geological analysis? No one is answering that question. Their only response is to scoff at the USGS, and that is not enough for me. The USGS has analyzed the geology of Kuwait in stultifying detail, and arrived at numbers similar to the official Kuwaiti numbers. That needs to be explained.
The USGS did not forecast production, only possible reserves under a very wide range of probability. A recent article by the USGS (AAPG Bulletin 89/8) compares the actual figures for the last eight years with what they forecast back when the World Petroleum Assessment 2000 was written in 1996. The World Petroleum Assessment 2000 estimated the amount of oil to be found from 1996 to 2021 at 95%, 50% and 5% probabilities. Their 50% probability is the one that is commonly quoted.
AAPG Bulletin 89/8 shows that in 27% of the time (1996-2004) only 11% of the oil predicted was actually discovered whilst 28% of the 'reserve growth' was realised. Both figures suggest that their 50% figures for both discovery and reserve growth were overoptimistic as both should be significantly larger in the first few years than in the last few years. It is therefore possible for Kuwait's reserves to be half of those commonly quoted if you take the USGS's 95% figures which are panning out to be more correct than their 50% figures..
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