Taking the lead
Congratulations for taking the lead in bringing more light and less heat on the issue of future world supply of crude oil.
I can't think of any issue that is more important to my children and grandchildren.
"Hubbert redux" by executive editor, Bob Williams, is a must read (OGJ, July 15, p. 15). I trust your great Journal to air this issue again and again. It must be explained to the industry and the public. Now.
Wayne E. Swearingen
Tulsa
Hubbert revisited—6
The article by Startzman, Barrufet, and Imam, "Multicyclic Hubbert model shows conventional gas output peaking in 2019" (OGJ, Aug. 16, 2004, p. 20) appears to be an interesting déjà vu, and reminds me that most statistical models do not expose the secrets of "layered Earth."
This model outputs four elements: production rate, total ultimate recovery, cumulative production, and future recovery. All these sound so convincing. But "where is the beef?"
The roots of all the outputs point to one thing only: reserves. And reserves are found by exploration only, and in the post-1980 period, exploration is completely guided by demand and pricing cycles.
Fig. 2 proves my view that the only commanding factor for enhanced production is the price/Mcf, which grew from <$0.50 in 1960s to >$5.00 in 2004. This resulted in a steady rise in gas production—from 33 tcf/year in 1968 to almost 90 tcf/year in 2004. Such rapid production growth also means rapid rise in reserves, and one can tie all such features with pricing.
In fact, if the current NYMEX spot price/Mcf (>$5.10/Mcf) continues to rise by 2%/year, we will find a lot more reserves in the coming 5 years in places which many pundits forecasted previously to be completely depleted. Price up tick is the leading energy behind future high-risk exploration investment, which provides hefty reserves.
As a geoscientist, I can show how much reserves remain to be explored and exploited within so called "mature basins" of the continental US. There are world class basins in this nation that could provide enough domestic reserves for another 100 years, but they are yet to be properly explored.
I wish academia would spend more time improving statistical models for predicting future pricing and consumption, rather then focusing on something like production peaking and reserves, etc. Overall reserve predictions are far more complex to work on and require in-depth geological intelligence on rocks housing all the energy resources.
S.K. Bhattacharjee (Kumar)
Sita Oil Exploration House Inc.
Houston
US respect and oil
Your editorial "US respect and oil," (OGJ, Aug. 9, 2004, p. 15) ignores two important realities. First is the fact that the Saudi ruling class provided much support to Al-Qaeda and Osama bin Laden. We have never received any kind of a meaningful apology for this support, and until Osama took overt action in Saudi Arabia, they were content to ignore the situation. This is hardly the behavior of someone whose feelings should concern us. Furthermore, the potentially greatest insult to the Saudis was posed by President Bush when he advocated getting rid of all Middle Eastern despots and replacing them with democratic governments. This certainly tells the Saudi royal family that we want them out of power. Isn't this the greatest insult and doesn't John Kerry's unrealistic desire to be free of Middle Eastern oil pale by comparison?
Byron J. Cook
Southwestern Oil Co.
Greenville, Mich.
