Mexico's largest oil field in decline

<div class='quotetop'>QUOTE(tripp @ Nov 27 2006, 12:47 AM) [snapback]354362[/snapback]</div>

Its the decline of the American Empire... We're all doomed!!! Ahhh!

 

<div class='quotetop'>QUOTE(tripp @ Nov 26 2006, 11:47 PM) [snapback]354362[/snapback]</div>

The details of the story were pretty grim. In detail, for the field that supplies more than half of Mexican oil, output is now projected to decline an average of 14% per year over the next 8 years. If I did the math right, roughly speaking, absent new discoveries, the decline would be about equal to current Mexican oil exports.

In other words, if nothing else changes, Mexico will have no oil to export as of the middle of the next decade. Things always change, and we can probably outbid some of their domestic demand. Nevertheless, that's a pretty significant reduction.

Mexico, btw, is the 5th largest oil producer in the world, supplies 15% of our imports, and we're virtually their only export customer (92% of their exports go to us), per http://www.gravmag.com/oil.htm.

Probably the most interesting figure was at the end, where they said they needed annual investment of $18B/year to maintain output at current levels. I did the math, and that works out to -- $21/barrel in capital (investment) costs for that new oil. Assuming they can find it. That's $21/bbl, before the cost of pumping it and shipping it. That's about 3x the average cost of finding a barrel of oil, again per the website above. Which suggests that it's getting harder to find exploitable oil in Mexico.

The history of the field seems typical. Disovered 1976, started advanced recovery methods 1996, peaked 2004, now going into decline. Twenty years of easy oil, ten years of increasingly more difficult oil, and on into production decline. Maybe more advanced techniques can recover more, but in this case nobody is saying that, and in any case it'll never be as cheap as those first 20 years.

That's my model for world oil supply. It's not like there won't be any oil left, just that the easily-available cheap oil is drying up. Which is exactly would you'd expect as markets exploit a finite natural resource. The low-hanging fruit go (now mostly, went) first. Some may suggest that we have an infinite supply of such low-hanging fruit -- aided and abetted by the uncertainty around reserves figures for (e.g.) Saudia Arabia and other key producers. But I'd say the markets suggest otherwise. Now we celebrate finding oil under 10,000 feet of water and 10,000 feet of rock, as in the recent US find in the middle of the Gulf of Mexico. That'll be relatively expensive oil to produce. If this weren't the end of cheap oil, finding a big pool of expensive oil wouldn't have been such an event.

Even so, the figures in the article don't suggest that oil prices need to go much higher than they current are in order to maintain supply. Even with those high search costs, if all their other costs are average, Mexico ought to make money on their new oil, at current oil prices.

 

<div class='quotetop'>QUOTE(tripp @ Nov 26 2006, 11:47 PM) [snapback]354362[/snapback]</div>

Known reserves of oil world-wide keep increasing as our technology to drill deep ocean wells and to extract a greater % of oil from known wells keeps increasing.

Some easy answers as to where to get the oil:

ANWAR
Off American coastal waters
Oil conversion from coal and tar deposits
Iraq :lol:

Problem is not oil production as much as it is our refining capacity which must be increased.

Other solutions:
LNG - need distribution centers in the NorthEast
NUCLEAR - NUCLEAR - the most environmentally friendly of them all
Ramping up ethanol and E85 alternatives

 

<div class='quotetop'>QUOTE(tripp @ Nov 27 2006, 01:42 PM) [snapback]354487[/snapback]</div>

Screw that, let's invade Canada! Global warming is only going to enhance the livability of Canada.

Monroe Doctrine! Let's finish it.

 

<div class='quotetop'>QUOTE(burritos @ Nov 27 2006, 03:41 PM) [snapback]354531[/snapback]</div>

Been there, done that, Fifty-Four Forty or Fight. We cut, we ran, we settled for the 50th parallel.

Oh, and prior to that, there was the failed US invasion of Montreal during the US revolution. (I think I have the facts straight there - maybe it was some other early war.)

So, we're alreadly like 0-for-2 on Canadian invasions.

 

<div class='quotetop'>QUOTE(tripp @ Nov 27 2006, 11:43 AM) [snapback]354445[/snapback]</div>

a few million barrels a day here few million there and before you know it you have a significant increase in production. I think it is like preferring a bunch of hitters in a lineup rather than one slugger.

and = how bout them nukes. if it is good enough for Iran it should be good enough for us too :lol:

 

<div class='quotetop'>QUOTE(chogan @ Nov 27 2006, 04:23 PM) [snapback]354547[/snapback]</div>

3rd time's a charm. Didn't Canada get rid of their nukes recently? It'll be a cakewalk. They'll greet us with roses.

 

<div class='quotetop'>QUOTE(dbermanmd @ Nov 27 2006, 04:39 PM) [snapback]354555[/snapback]</div>

You're still reacting with that American glutton mentality; just keep on guzzling and find more and more oil so that the U.S. can maintain supplies necessary to maintain its gluttonous behavior. The real solution is to cut back on consumption. At least we're beginning to deal with the issues though. Hopefully it's not too late.

 

<div class='quotetop'>QUOTE(JackDodge @ Dec 5 2006, 08:16 AM) [snapback]357949[/snapback]</div>

Cutting back is like finding a whole new oil field that keeps growing and growing.

 

<div class='quotetop'>QUOTE(JackDodge @ Dec 5 2006, 11:16 AM) [snapback]357949[/snapback]</div>

You are still incorrect. The best way to a healthy environment is through a healthy economy. Our "gluttonous behavior" supplies the marketforces that will provide us with ways to develop alternate energy sources, to clean up current energy sources, and solve a whole bunch of energy related problems.

 

<div class='quotetop'>QUOTE(tripp @ Dec 5 2006, 12:49 PM) [snapback]358012[/snapback]</div>

Precisely? That hopefully we've started moving away from fossil fuel burning while there's still enough energy left to do so; that we've begun cleaning up our act before the air becomes so polluted that we can't breathe it any longer and won't have to resort to coal which will make it even worse. People who have a difficult time understanding how much more important the environment is than this economy of ours seem to believe that the human race and its economy are unrelated to the rest of the world. You've always seemed to have a pretty good grasp of the issue so it's a bit surprising to read a question like that coming from you.

<div class='quotetop'>QUOTE(dbermanmd @ Dec 5 2006, 01:02 PM) [snapback]358016[/snapback]</div>

A healthy environment is not dependent on a healthy economy. You sound like the VP in The Day After Tomorrow who said that the economy is just as important as the environment. Nonsense. Without a healthy environment the economy couldn't be healthy. The environment existed long before your precious economy and will be there long after said economy collapses.

 

<div class='quotetop'>QUOTE(dbermanmd @ Dec 5 2006, 02:02 PM) [snapback]358016[/snapback]</div>

Complete horsesh!t. Short-sighted, wrong-headed, dangerous thinking.

The economy considers the environment to be an 'externality', outside the loop of profit and loss. Until the economy prices natural resources at their replacement costs, the environment will continue to subsidise the economy.

Life is not an externality.

 

<div class='quotetop'>QUOTE(hyo silver @ Dec 5 2006, 02:17 PM) [snapback]358058[/snapback]</div>

No, what you're saying is wrong-headed, shortsighted and dangerous. What I say may threaten your comfortable and lucrative business and lifestyle but it's not dangerous per se. I didn't say life was an externality, whatever the heck that means since it's not a real word. Our going back to a simpler and healthier existence or finding a way to do it without polluting benefits everyone.

 

<div class='quotetop'>QUOTE(JackDodge @ Dec 5 2006, 02:03 PM) [snapback]358053[/snapback]</div>

You are entitled to your opinion no matter how incorrect it would prove to be. Prove to me how an unhealthy environment would prevent an economy from being healthy here in the US of A. If the economy collapses how do you propose to raise all the money you need to spend to clean up the environment, develop alternate energy sources, alternates to the ICE, etc?? Our healthy economy has presented us with hybrid techonology, a growing source(s) of alternate energy sources like solar (see todays NY Times), cleaner air and water than 30 years ago, etc. How could you do that in a recession or depression? It would be one of the first casualties of a faltering economy.

And the economy does not belong to me - it belongs to 300,000,000 Americans which is fairly well connected to another BILLION or so humans

<div class='quotetop'>QUOTE(hyo silver @ Dec 5 2006, 02:17 PM) [snapback]358058[/snapback]</div>

So you do not believe in carbon credits?