The battle for barrels : peak oil myths & world oil futures

249 Pages·2007·1.078 MB·English

by  Duncan Clarke

The BaTTle for Barrels
Peak oil Myths & World oil futures
Duncan Clarke
The BaTTle for Barrels
“This book effectively undermines the validity of the theory of
Peak Oil and comprehensively demolishes the arguments of its
proponents. It is a ‘must read’ antidote to the gloom and doom
conclusions of oil scarcity.”
Peter R. Odell, Professor Emeritus of International Energy
Studies, Erasmus University, Rotterdam (author, Why Carbon
Fuels Will Dominate the 21st Century’s Global Energy Economy)
“This is a serious work that serious readers should read, and
Duncan Clarke offers a smart and insightful survey of one of the
most intriguing issues of our times – Is the world running out of
oil? – explaining why the doomsayers are wrong. He diagnoses
the psychological mindset, the historical mistakes and the
current complexities concerning the evaluation of how much oil
lies beneath, and shows a positive view of our energy future.”
Leonardo Maugeri, senior vice-president, Eni SpA (author, The
Age of Oil: The Mythology, History, and Future of the World’s
Most Controversial Resource)
“Duncan Clarke provides a brilliant insight into the world
upstream, Peak Oil, international corporate strategies,
geopolitics, business, economics and technology. His unique
worldwide experience provides an astute analysis of critical
issues that clarify and interpret the historical future of oil and
the modern world in the 21st century.”
Dr Alfred J. Boulos, former senior director, International,
Conoco Inc; former president, Association of International
Petroleum Negotiators and European Petroleum Negotiators
Group
“This book portrays an independent mind and Duncan Clarke’s
analysis and interesting opinions shed much light. Few things
are trickier than reserve estimates. We had the rule: ‘You will
never know the reserves of a field, before it is depleted … and
even then.’ What about reserves of not yet discovered fields?
Gerry Dixon, former president of Petroconsultants, always said:
‘If we badly need it, we will find it.’ Clarke’s optimism on the
world is justified. One day oil may be depleted, unless humanity
does not need it before.”
Christian Suter, CEO, Petroconsultants, 1987–98, and member
of the board 1968–99
“The Battle for Barrels lucidly shows that not all is known on
potential oil reserves-in-ground, and Peak Oil is very wrong
on its view that such reserves are now fully known and finite.
Clarke credibly demonstrates that there is much conventional
oil to be discovered while economics and above-ground
factors such as global access and resource nationalism, plus
technologies, will shape real oil world futures in ways unlike
Peak Oil theorists presume, especially given the Earth’s vast oil
endowment.”
Fred Dekker, managing director, Wessex Exploration; former
vice-president, Asia Pacific New Ventures, Unocal Corporation
“Peak Oil has caught global attention because the media love
catastrophic news. Duncan Clarke, who has had close contact
with top leaders in the oil industry and its best experts over
three decades, has demystified this dogma and shown the crude
realities. Clarke demonstrates convincingly that the world’s
recoverable reserves, eventually limited but more extensive
than generally perceived, will be shaped not only by geology
but by future strategies, long-term oil prices, new technologies,
dynamic markets and shifting geopolitical access.”
André Coajou, former senior executive, Elf Aquitaine
(Exploration, New Ventures, Negotiations)
“The Battle for Barrels is a first-class treatise on the myriad
ideas and ‘almost theories’ on the end of oil and its impact on
our society. It separates facts from sensationalism, analyses
all relevant ideas, provides rationale to our understanding, and
makes a brilliant contribution to the field of energy economics.”
Professor Edmar de Almeida, Instituto de Economia,
Universidade Federal do Rio de Janeiro
First published in Great Britain in 2007 by
Profile Books Ltd
3a Exmouth House
Pine Street
London ec1r ojh
www.profilebooks.com
Copyright © Duncan Clarke 2007
The moral right of the author has been asserted.
All rights reserved. Without limiting the rights under copyright reserved above, no part
of this publication may be reproduced, stored or introduced into a retrieval system,
or transmitted, in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of both the copyright
owner and the publisher of this book.
Typeset in Times by MacGuru Ltd
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Printed and bound in Great Britain by
Clays, Bungay, Suffolk
A CIP catalogue record for this book is available from the British Library.
ISBN-10: 1 84668 012 3
ISBN-13: 978 1 84668 012 0
The paper this book is printed on is certified by the © 1996 Forest
Stewardship Council A.C. (FSC). It is ancient-forest friendly. The printer
holds FSC chain of custody SGS-COC-2061
SGS-COC-2061
Contents
Acknowledgements x
Introduction 1
Part 1 Thinking unthinkables 13
1 Questions on Peak Oil 15
2 Kalahari dawn and the art of tracking 18

Part 2 The “end of oil” and the “end of civilisation” 23
3 PetroApocalypse now 25
4 Classic “end-of-oil” syndromes 43
5 Peak Oil theoreticians, advocates and acolytes 50
6 The ultimate cult of concern 59

Part 3 Knowledge and mindsets in the oil game 65
7 Models and non-linear oil worlds 67
8 Homo economicus: why oil is no different 79
9 Peak Oil theory and the evidence 90
10 Counting crude oil beans 98
11 From Hubbert’s Peak to Dante’s Inferno 105
12 Glitterati in the desert 120
13 Onslaught on heresy 126
14 Peak Oil meets economics 134
Part 4 World oil: complexity and circumstance 145
15 Crude prices and crude reserves 147
16 Yesterday’s oil world and past discovery 151
17 Governments and national oil companies 158
18 World oil reserves and future potential 165
19 The 21st-century hydrocarbon game 183

Part 5 Twilight in the mind 191
20 Machiavelli’s judgement 193
21 Sunrise in the Kalahari sands 199

Notes 204
Notes on further reading 221

Appendices 223
1 Abbreviations and measures 225
2 SPE schema on reserves 229

Index 230
For Babette
Acknowledgements
There is a cast of many I must thank for their direct and
indirect contributions over the years to the ideas and efforts
that have borne fruit in The Battle for Barrels. It is not feasible to
cite all of them here, but for all those not mentioned an apology
is in order. All should remain blameless for any errors of commis-
sion or omission in the text.
Some early ideas on non-linear concepts were drawn from
scientists at the Centre Européen pour la Recherche Nucléaire
(CERN) in a series of casual discussions in Geneva in the mid-
1980s, accompanied by some vin ordinaire. They led me to rethink
the theory and practice of conventional economics. My initial
application of notions of chaos and complexity under uncer-
tainty to the world upstream is to be found in Strategic Petroleum
Insights, published by Petroconsultants in the late 1980s – a work
that sought to tackle the notions of reserve growth and world
oil endowment in dynamic terms. This thinking was enhanced
by an updated Global Pacific & Partners report published under
the same title in the early 1990s. Non-linear ideas have been a
template for most of our concepts, research and advisory work
since that time.
Christian Suter (then CEO of Petroconsultants) along with the
former president, Gerry Dixon, encouraged and supported many
of the original ventures undertaken for and with that firm. The