Guest Post: Past Peak Oil - Why Time Is Now Short

Tyler Durden's picture

Submitted by Chris Martenson

Note:  With so much going on with Europe's debt crisis, the continuing disaster and economic contraction in Japan, and the potential for a very hard landing in the Chinese growth miracle (which is in the running as my favorite "black swan candidate" for 2011), I am going to return our attention to oil in this report.  The next report will assess the developing and unfolding debt crisis that will drag down most of the developed economies at some point, and this report will provide essential context for understanding why this result is inevitable and when it will occur.

The Next Oil Shock

The only thing that could prevent another oil shock from happening before the end of 2012 would be another major economic contraction.  The emerging oil data continues to tell a tale of ever-tightening supplies that will soon be exceeded by rising global demand.  This time, we will not be able to blame speculators for the steep prices we experience; instead, we will have nothing to blame but geology.

Back in 2009, I wrote a pair of reports in which I calculated that we’d see another price spike in oil by 2010 or 2011, based on some assumptions about global GDP growth rates, rates of decline in existing oil fields, and new projects set to come online.  Given the recent price spike in oil (Brent crude over $126, now at $115) and recent oil supply data, those predictions turned out to be quite solid (for reference, oil was trading in the low $60s at the time). 

One part I whiffed on was in my prediction that the world community would have embraced the idea of Peak Oil by now and begun adjusting accordingly, but that’s not really true except in a few cases (e.g. Sweden).  Perhaps things are being differently and more seriously considered behind closed doors, but out in public the dominant story line concerns reinvigorating consumer demand, not a looming liquid fuel crisis.

How the major economies can continue proceeding with a business-as-usual mindset given the oil data is really quite a mystery to me, but that’s just how things happen to be at the moment.

At any rate, with Brent crude oil having lofted over $100/bbl at the beginning of February and remained above that big, round number for four months now, we are already in the middle of a price shock.  It may not be a perfect repeat of the circumstances of the 2008 oil shock, but it's close enough that the risk of an economic contraction, at least for the weaker economies, is not unthinkable here.  Japan, now in recession and 100% dependent on oil imports, comes to mind.

Looking at the new data and reading even minimally between the lines of recent International Energy Agency (IEA) statements, I am now ready to move my ‘Peak Oil is a statistically unavoidable fact’ event to sometime in 2012, which tightens my prediction from the prior range of 2012-2013.

Upon this recognition, the next shock will drive oil to new heights that are currently unimaginable for most.  First, $200/bbl will be breached, then $300, and then more.  And these are in current dollar terms; any additional dollar weakness will simply be additive to the actual quoted price.  By this I mean that if oil were to trade at $200 but the dollar lost one half of its value along the way, then oil would be priced at $400. 

Stampeding Into a Box Canyon

In 2009, I wrote a special report on oil that explored the interplay between energy and the economy.  At that time, the stock market was in the tank, global growth was in a freefall, and things looked gloomy.

But I knew that thin-air money is not without its charms and that we’d experience a rebound of sorts.  Here’s what I wrote:

I am of the opinion that these trillions and trillions of dollars, which, along with their foreign equivalents, are being applied to “ease the credit crunch,” will eventually find their mark and deliver what feels like a legitimate rebound in activity.  All those trillions have to eventually go somewhere and do something. 

For now, debts are defaulting faster than the various central banks and governments can inject new money and borrowing activity into the system.  Banks aren’t lending because there are very few compelling loans to make, especially if future losses have to actually be carried by the bank making the loan. 

But this won’t be true forever.  Sooner or later, all the trillions of new dollars will trot out of the barn, begin to gallop, and then thunder off, creating the appearance of a healthy advance.

It will be a cruel illusion, though, as this stampeding herd of money is headed straight into a box canyon.

Money is only one component of growth.  As we’ve strenuously proposed, energy is a necessary prerequisite for growth.


Well, here we are a couple of years later, with those trillions and trillions out of the barn and stampeding off trying to create some real and lasting economic growth.  As we score these efforts, it appears to us that the amount and type of growth that has been achieved is underwhelming, to say the least. 

Housing remains in a serious slump, wage-based income growth is poor, Europe remains mired in a serious debt crisis, Japan has slumped back into recession, and the US fiscal deficit is a structural nightmare.  Worse, GDP growth is relatively tepid and would be negative, deeply negative, without all the deficit spending and liquidity measures. 

As predicted, all that thin-air money, once released into the wild, had a mind of its own and created a serious bout of commodity inflation, especially in food and fuel, which is now seriously impacting the poor and middle classes. 

So it’s hard to call the trillions and trillions ‘well spent.’  I was hoping for better results.

Yet we can’t call the re-flation efforts a complete failure, as we are not in a serious, destructive deflation, and we’ve all been granted a bit more time to get ourselves prepared in whatever ways make sense. The gift of time has been invaluable, and for that I am grateful.  But in terms of creating a true and lasting economic miracle?  It turns out, once again, that 'printing' money electronically is no more effective than calling in the silver coin of the realm, making each unit slightly smaller, and then re-issuing it.  Real economic growth has not been created.

What has happened is that false demand, spurred on by trillions in thin-air money, has also spurred on renewed demand for oil, hastening the day that a geologically inspired supply/demand mismatch will finally arrive. 

We are driving at a high rate of speed into a box canyon.

World Crude Supply

Before we get into the specifics of where I think the immediate trouble lies in the world oil data, let's take a moment to look at the big picture.

There are a number of ways to look at the petroleum data.  The one I prefer to look at is something called 'crude + condensate' (C+C), which leaves out things like ethanol and natural gas liquids, both of which are converted to 'barrel of oil equivalents' (BOE) and added to the C+C to yield total liquid fuels.  The reason I like to focus on C+C is that this is mainly conventional oil, the cheap and easy stuff, and it gives us a better idea of where we are in the Peak Oil story.

Note:  This next cluster of charts comes from data from the U. S. Energy Information Administration (EIA) that I am, frankly, uncomfortable with, so take them all with a grain of salt.  The EIA upwardly revised the data for 2010 and added between 750,000 and 800,000 barrels per day of production to each month.  This is the largest upward revision of which I am aware, and it's not yet clear to me why this occurred.  Further, the EIA obtained some of that data from IHS, which is the parent company of CERA, the organization that best qualifies for the 'influential Peak Oil deniers of the decade' award. 

And somewhat ominously, as suspect as the data may be, it has been an important source for decades for analysts, myself among them.  Quite recently, the EIA has announced that, due to budget cutbacks, it will immediately terminate the collection and distribution of international energy statistics -- right at the exact moment they are needed most.  Ugh.  Very disappointing, and all due to a $15 million budget cut. (Source). This echoes the loss of the M3 monetary statistic, which turned out to be a perfect gold-buying signal.  If this is a parallel event, it means that now is a great time to take Peak Oil more seriously.

A chart of C+C reveals that the world has been bouncing along in a channel roughly between 72 and 74 mbd since 2005:

Yes, a new high was made in December 2010 and was exceeded in January 2011, offering hope that the world could break out of this limiting band of production, but then production fell back in February due to the Libyan conflict.  I have added a purple dotted line to reflect where the data will most likely be for March after subtracting out the Libyan losses and the Saudi cutbacks.  As you can see, we will be right back in the 72-74 channel.  

Some will be tempted to write this off to a temporary setback due to the unrest in North Africa, but such unrest has always been part of the equation: Iraq, Nigeria, Kuwait, and many other countries have experienced supply disruptions along the way due to war and/or civil unrest.

Note also in this chart that oil production fell off by more than 2 mbd as a consequence of the global recession between 2008 and 2009.  From the lows in August 2009, it has since climbed more than 2.4 mbd to its current level.

Where did those gains come from?  Can we expect more? 

There's a very interesting story in here if we dig down one more layer. This next pie chart shows each region's relative contribution to the gains of 2.4 mbd that happened between August 2009 and February 2011: 

In the above chart, I had to include negative percentages for two regions, which is an odd way to display things (how does one draw a negative pie wedge?), but it still all sums to 100%.  I've included the negatives for comparison purposes and because they are important to keep in view.  It's clear that the Middle East is the most important region; no surprise there. North America is about evenly split in gains between the US (Bakken) and Canada (tar sands), and Russia and China are the major players in their respective regions.

Taking the analysis one level deeper, here are the seven major countries that contributed 88% of the August 2009 to February 2011 gains (in thousands of barrels per day): 

Saudi Arabia is the hands-down leader, being responsible for 700,000 barrels per day, or 29%, of the entire gains logged in that period.

There is a variety of interesting sub-stories that could be told across each of the other countries, but it's time to focus on the big fish.

Saudi Arabia – Where There's Smoke, There's Fire

Something is seriously wrong with the signals coming from the Kingdom of Saudi Arabia (KSA), and I am of the opinion that KSA is having geological difficulties that are preventing it from pumping more oil.  Said plainly, I am of the mind that the KSA is already at peak.

One troubling bit of information is that Saudi Arabia justified its lowered oil output for March by claiming that the oil markets are oversupplied, even as Brent crude was perched above $120/bbl. There are several possibilities here:

  1. There really is an oil glut, and the KSA is being truthful.
  2. There is an oversupply, but only of the heavier, poorer grades of oil that the KSA has in relative abundance.
  3. The KSA can produce more, but doesn’t want to, preferring to withhold oil production in the interest of receiving higher prices.
  4. The KSA is already past peak and cannot pump more, despite its best efforts, and the oversupply issue is really just a cover story for the fact that the KSA cannot pump more even if it wanted to. 

Let’s start at the beginning of this odd tale.  Early in May, the KSA said this:

Saudi lifts April oil output to 8.5 mln bpd-sources

May 01, 2011

DUBAI/KHOBAR, Saudi Arabia, May 1 (Reuters) - Saudi Arabia's crude oil output edged back up in April to around 8.5 million barrels per day (bpd) from roughly 8.3 million bpd in March as demand picks up, Saudi-based industry sources said on Sunday.

The kingdom slashed output by 800,000 bpd in March, due to oversupply, oil minister Ali al-Naimi said last month, adding that he expected production in April to be a little higher than March's level. 

So the story here is that the KSA claims to have 12.5 mbd of total capacity.  Therefore, meeting the Libyan shortfalls of 1.3 mbd should be simple enough; just open the taps and let it flow.  Yet the KSA barely cracked the 9 mbd mark, briefly, before falling back to 8.3 – 8.5 mbd, telling the world that this was a purposeful response to markets that were oversupplied.  That's one possibility.

Several analysts thought that perhaps the KSA was simply gaming the markets and trying to obtain the best possible prices:

Saudi unlikely to lift oil output quickly

May 3, 2011

WASHINGTON — Saudi Arabia is unlikely to boost oil production quickly to ease the rise of crude prices, because it needs high prices for its own increased spending, analysts at an international banking think tank said Tuesday. 

After producing 8.6 million barrels a day in 2010, the world's leading oil supplier will only kick up production to about 8.9 million barrels this year, said analysts at the Washington-based Institute of International Finance. 

"So far the production of crude oil in Saudi Arabia for the first quarter was around 8.7, 8.8 (million barrels a day). And recently some unconfirmed reports said that production dropped in March," said Garbis Iradian, the IIF's deputy director for Africa and the Middle East. 

"So we don't expect crude oil production in Saudi Arabia will rise over nine million barrels a day," he said.

While it's possible that the KSA production limitations are a matter of trying to engineer higher prices, one person I trust is Sadad Al-Husseini.  The former Aramco engineer, who has a lot of credibility in these matters, thinks that the production limits have more to do with the grades of available oil rather than any mercenary market tactics on the part of KSA.

Saudi Sweet Oil Supply Too Low to Offset Libya, al-Husseini Says

May 17, 2011

Saudi Arabia, the world’s biggest crude exporter, won’t be able to produce enough low-sulfur blends to replace lost Libyan output for refiners in Europe, said Sadad al-Husseini, a former Saudi Aramco executive. 

The country doesn’t have enough Arab Super Light to create sufficient amounts of low-sulfur, or sweet, oil similar to Libya’s grades, al-Husseini, Aramco’s former executive vice president for exploration and development, said today by e-mail.

The basic problem is that each refinery is geared for a specific and relatively narrow band of crude oil feedstocks, with the specific gravity and sulfur content being the most critical factors.  So it is not as simple as the KSA pumping more heavy sour crude to offset the lost Libyan production.  This is yet another possible explanation, and it is far more believable to me than either oversupplied markets or a pricing strategy.

The somewhat shocking news that followed just a few days after the above article was the begging by the IEA for OPEC to lift production.  Such a frank admission or plea has never been made before.  Reading between the lines, we can suspect that a serious supply shortage is looming if more oil does not find its way to market soon.

International Energy Agency Urges Oil Producers to Lift Output

May 19, 2011

PARIS — Expressing “serious concern” about elevated crude prices, the International Energy Agency on Thursday called for an increase in world oil production. It was an unusual move that highlighted consumer countries’ frustration at the failure of oil-producing nations to lift output in the face of rising demand and tighter supply.


The agency’s monthly Oil Market Report, respected by industry practitioners, has recently been warning about tightening market conditions as supply has not caught up with strong demand.

Despite commitments from Saudi Arabia, the biggest producer, to use its spare capacity to increase output and replace the supplies lost because of the uprising in Libya, the cartel’s production is now running 1.3 million barrels a day below the level seen before the crisis, according to the I.E.A.

Although the New York Times has positioned this unusual call by the IEA as perhaps a bit of political maneuvering, I feel they missed the real picture by not spending more time characterizing the mismatch between supply and demand.  If that's true, then we have a near-perfect repeat of the 2008 situation, where, in the six quarters preceding the oil price spike, demand exceeded supply in five of those quarters.

Confirming this view recently was Goldman Sachs' energy division, which said:

While near-term downside risk remains as the oil market negotiates the slowdown in the pace of world economic growth, we believe that the market will continue to tighten to critical levels by 2012, pushing oil prices substantially higher to restrain demand.

Events in the Middle East and North Africa are having a persistent impact, which leads us to increase our oil price targets. We expect that the ongoing loss of Libyan production and disappointing non-OPEC production will continue to tighten the oil market to critically tight levels in early 2012, with rising industry cost pressures likely to be felt this year.

We are now embedding in our forecasts that Libyan production losses will lead to the effective exhaustion of OPEC spare capacity by early 2012. Consequently, we are raising our Brent crude oil price forecast to $115/bbl, $120/bbl, and $130/bbl on a 3, 6, and 12 month horizon.


There’s a lot in there, including the idea that the unrest in the Middle East will be persistent, that non-OPEC production will continue to disappoint (which it should, as nearly every non-OPEC country is past peak), and that the more globally relevant Brent contract is the right one to quote now when discussing oil, not the US-centric WTIC contract.

So count Goldman Sachs among those that are now calculating an imminent supply-demand mismatch.

The End of Easy Oil

The really big news is that the Wall Street Journal finally ran an oil piece (on the front page, no less) acknowledging the difficulties involved in Saudi Arabia regarding oil production and the extraordinary efforts that are now underway to boost production by unlocking their remaining heavy oil reserves. 

The critical parts in this story revolve around the costs of getting this oil out of the ground (in terms of both energy and money), the decades it will take to get the oil out, and the clear implication that going after such oil tells us everything we need to know about where we are in the Peak Oil story in general (and specifically in Saudi Arabia).  All the better, easier, cheaper grades are already drilled and in production.  This is what's left:

Facing Up to End of 'Easy Oil'

WAFRA, Kuwait—The Arabian Peninsula has fueled the global economy with oil for five decades. How long it can continue to do so hinges on projects like one unfolding here in the desert sands along the Saudi Arabia-Kuwait border.

Saudi Arabia became the world's top oil producer by tapping its vast reserves of easy-to-drill, high-quality light oil. But as demand for energy grows and fields of "easy oil" around the world start to dry up, the Saudis are turning to a much tougher source: the billions of barrels of heavy oil trapped beneath the desert.

Heavy oil, which can be as thick as molasses, is harder to get out of the ground than light oil and costs more to refine into gasoline. Nevertheless, Saudi Arabia and Kuwait have embarked on an ambitious experiment to coax it out of the Wafra oil field, located in a sparsely populated expanse of desert shared by the two nations.

That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world's thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly. Neither issue bodes well for the return of cheap oil over the long term.

The whole story is worth a read.  I’ve excerpted quite a bit because there’s so much important information in there that I wanted you to see.  Most importantly, the mainstream media in the US is finally waking up to the idea that all of the cheap and easy oil is gone.

They’ve not yet gotten to the appreciation of the idea of Net Energy, which is the real key to understanding why the future will not resemble the past, but they are edging ever closer. And they are beginning to circle around the idea that depletion in the fields that have driven the world’s economy for the past 50 years is a critical reality.

It’s not much of a hop, skip, and a jump from there to seeing it finally named for what it is:  Peak Oil, otherwise known as the geological reality that will resist all efforts at human ingenuity and technology because it is a matter of finite limits, not of willpower or optimism.

One thing I thought the article did an especially good job of was actually delving into the engineering realities involved in the project.  The article continues:

The Wafra project, however, is far more of a challenge than traditional steam projects. As in most of the Middle East, the oil at Wafra is trapped in a thick layer of limestone that also contains minerals that can build up inside pipes and corrode equipment.

An even bigger challenge is getting the two crucial elements for generating steam: water and a source of energy to boil it. Most successful steam projects are in places with easy access to relatively pure water and a cheap fuel source, usually natural gas. Saudi Arabia and Kuwait have little of either.

With no fresh-water sources in the Arabian desert, Chevron has been forced to use salt water found in the same underground reservoirs as the oil. That water is full of contaminants that must be removed before it can be boiled and injected into the ground.

Finding the energy to boil the water will be even tougher. Chevron could use oil instead of natural gas—literally burning oil to produce oil—but that would burn profits, too. So the company likely will be forced to import natural gas from overseas, an expensive process that involves chilling it to turn it into a liquid, then shipping it thousands of miles.

Some experts are shaking their heads.

The hurdles include mineral buildups, corrosion, water impurities, and the energy costs of heating all that water into steam.  In short, getting this stuff out of the ground is going to be far more difficult and costly than prior efforts.  End of story.

The reality involved in getting at the non-conventional oil is really just a story of declining net energy; the red curtain will extend down into the luscious green space that represents the surplus energy available to society. Less net energy means less economic activity and complexity.  It means less growth.  Below a certain level, it means no growth at all.  And eventually it means persistent negative growth, a possibility not yet priced into any financial markets.

In some cases I have my concerns about whether these heroic efforts are worth the trouble at all.  Perhaps we should invest the same amount of energy, talent, and expertise in energy conservation efforts and technological development.

At this point in the timeline, it's imperative for each of us to ask ourselves: how well prepared are we for this post-Peak Oil future? Part II of this report: How To Position for the Next Oil Shock explores the probable impact the next energy crisis will have on key asset classes, employment, and society in general. As we've shown above, we likely have little time left. Use it wisely.

Click here to access Part II: How To Position for the Next Oil Shock (free executive summary; paid enrollment required to access).

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imapopulistnow's picture

Abundant natural gas anyone?

Shell Game's picture

Give big oil a fifth of Jack and Ugly aNGie will start to look good..

Transformer's picture

As a long time believer in Peak Oil, I can tell you that it has been next year since about 2005.  I no longer believe, except to say that it is a self fulfilling prophecy.  What Heresy, you say?  The Russians have been trying to tell the world for a long time that Oil is Abiotic.  The west calls them fools.  However, using their fool theory, they have moved up to world's number one producer.  They have drilled over 352 super deep wells and keep producing more and more every year.

BP tried out the Abiotic theory in the Gulf of Mexico.  Unfortunately, they had none of the knowledge and experience the Russians have, and so bungled it big time.  Super high pressures and temps when you get down below the biological level, to where the oil is really coming from.

As long as the west subscribes to the oil from dinosaurs theory and stays above 16,000 ft, then of course, we can have peak oil.  Don't make some stupid or name calling reply to this until you've done a little research.  Knowledge will shut you up.

Screwball's picture

I have an open mind.  Where do I begin the research you speak of?

Transformer's picture

There were some Russian scientists who were quite upset at Gold for Plaigerizing (sp?) their theory.  Gold was able to pull it off due to the anti Russian sentiment at the time.


AUD's picture

The abiotic theory was first proposed by Dimitrii Mendeleev, of periodic table of the elements fame, in 1877. The abiotic theory has been accepted in Russia since the beginning of the oil industry.

If you bother to look at the evidence you'll see that the abiotic theory is far more logical than the biotic theory. It doesn't mean 'peak oil' is a false doctrine but it shouldn't be automatically blamed for volatile oil prices, a weak & unstable dollar is the more likely culprit.

DaveyJones's picture

yes that's the pesky problem with the abiotic theory, its refresher rate

bigwavedave's picture

Thomas Gold has long been proven to be a plagiarist and a fake. It is from his fraud that Abiotic oil theories have been corrupted. The commenter is correct. It is a Russian 'theory' which has some interesting math and even more interesting geology. Read the original papers. Compelling stuff. 

Rusty Shorts's picture

mm kay, lets see the evidence guy... and the names and locations of those 352 super deep wells in Russia. Since you're are so full of knowledge, walk us through the "Abiotic Oil" theory and how it is formed.

sun tzu's picture

In the 1950's, however, a few Russian scientists began questioning this traditional view and proposed instead that petroleum could form naturally deep inside the Earth.


This so-called "abiogenic" petroleum might seep upward through cracks formed by asteroid impacts to form underground pools, according to one hypothesis. Some geologists have suggested probing ancient impact craters in the search for oil.


Abiogenic sources of oil have been found, but never in commercially profitable amounts. The controversy isn't over whether naturally forming oil reserves exist, said Larry Nation of the American Association of Petroleum Geologists. It's over how much they contribute to Earth's overall reserves and how much time and effort geologists should devote to seeking them out.


If abiogenic petroleum sources are indeed found to be abundant, it would mean Earth contains vast reserves of untapped petroleum and, since other rocky objects formed from the same raw material as Earth, that crude oil might exist on other planets or moons in the solar system, scientists say.

Rusty Shorts's picture

well, i just happen to know where several "ancient impact craters" are.

mkkby's picture

Simple, then shut us up by providing a credible reference.  Oh, too bad... you can't.

The author states perhaps we should invest in conservation.  We should not.  Nor should we invest in windmills, solar or anything other than delivery infrastructure.  The higher prices will bring out market forces, so conservation and renewables will happen organically.  No central planning, please!


CrashisOptimistic's picture

The problem with your theory is . . . you're not very bright or well informed.

The Russians . . . are Royal Dutch Shell.  They are Chevron.  They are BP.  They contract with those western oil companies to do their drilling and production.  Lukoil and Gazprom and Rosneft are not uber oil geniuses.  If they were, they wouldn't be negotiating merger with BP to drill in the Kara Sea.

You don't know anything about this matter.  Oil does not exist in significant quantities anywhere other than where we've been drilling, for the somewhat obvious reason that if it were there, drilling would be there.

Hyperdeep drilling is difficult.  It is not done to get at abiotic oil down deep.  It is done because salt geology puts oil in those rare locales where Thunderhorse is pumping and near Tupi.

Nevermind, you won't understand.  Just move on.

Transformer's picture

I guess no one here knows how to use google.  2nd google item:

The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not controversial nor presently a matter of academic debate. The period of debate about this extensive body of knowledge has been over for approximately two decades (Simakov 1986). The modern theory is presently applied extensively throughout the former U.S.S.R. as the guiding perspective for petroleum exploration and development projects. There are presently more than 80 oil and gas fields in the Caspian district alone which were explored and developed by applying the perspective of the modern theory and which produce from the crystalline basement rock. (Krayushkin, Chebanenko et al. 1994) Similarly, such exploration in the western Siberia cratonic-rift sedimentary basin has developed 90 petroleum fields of which 80 produce either partly or entirely from the crystalline basement. The exploration and discoveries of the 11 major and 1 giant fields on the northern flank of the Dneiper-Donets basin have already been noted. There are presently deep drilling exploration projects under way in Azerbaijan, Tatarstan, and Asian Siberia directed to testing potential oil and gas reservoirs in the crystalline basement. (

It appears that, unbeknownst to Westerners, there have actually been, for quite some time now, two competing theories concerning the origins of petroleum. One theory claims that oil is an organic 'fossil fuel' deposited in finite quantities near the planet's surface. The other theory claims that oil is continuously generated by natural processes in the Earth's magma. One theory is backed by a massive body of research representing fifty years of intense scientific inquiry. The other theory is an unproven relic of the eighteenth century. One theory anticipates deep oil reserves, refillable oil fields, migratory oil systems, deep sources of generation, and the spontaneous venting of gas and oil. The other theory has a difficult time explaining any such documented phenomena.

and here:


And for those of you averse to reading, here's an interview with Fletcher Prouty



And here's a site with a ton of references.


If you really want to know, just keep searching.  The proof is that Russia is now the worlds largest producer.  Just 6 years ago, to predict that any country would surpass Saudi Arabia, would be called Heresy by the very people who predict Peak Oil.  But remember, as long as the west sticks to the fossil theory, the price of oil goes up as the supplies get used up.  The Russians don't care, they just keep increasing production.  They long ago gave up on trying to convince the west.  I imagine at this point, they have no interest in convincing the west.  They get to sell abiotic oil to the west, at fossil fuels prices.  Good deal.

You know, it's one of those theories, "fossil fuel", that the world will look back on and laugh about in the future.



The Swiss Genome's picture

Nice work Transformer.

Glad to see others understand the situation . . . . .

Ignorance is Bliss !

Rusty Shorts's picture

Well, I was hoping for some peer reviewed research papers on the subject instead of an Huffington Post article.




Transformer's picture

So, the Huff Post article was the only one you read?  Stick your head back in the sand.

Rusty Shorts's picture

Dude, seeking alpha? michael rupert? are you kidding me?


Let's see some PEER REVIEWED RESEARCH PAPERS on "Abiotic Oil"  ...

Transformer's picture

Do you read Russian?  There's a couple peer reviewed articles mentioned in the above piece.  Only problem is they're in Russian and not generally available here.  Slightly conspiratorial, but do you think it might be possible that scientific papers from Russia have not been given a lot of attention in the western world?

There's plenty of data there, if you want to search it out.  But of course, when your belief system depends on certain data, it's very hard to look at something that contradicts.

Of course, if you would like to explain how Russia became the world's largest producer, I will listen.  AND, the problem would seem to be that when you start reading about how Russia got there, they talk about deep wells and Abiotic oil.   But then maybe they're just trying to throw us off with a pasal of lies.  Those damn Russians.  Seems all they're good for is teaching guys like LHO how to be an expert marksman, and sending spies over here.

I realize that the very idea of Abiotic oil is calamitous for the whole progressive idea of how the world works and is coming to an end.  Peak Oil is kinda like Global Warming in that it makes a lot of money and power for those in control.  Yep, it's those damn elites again.  You don't suppose they might have a vested interest in Peak Oil?  Wars and more wars, not to mention $150 oil.

It's tuff to look behind the curtain.  Our pet theories don't always work out the way they are suppose to.

Transformer's picture

Rusty Shorts, Did you check out those peer reviewed article listed in my first reply?  Hard to find huh?  Even harder, to accept the idea that there might have been a huge scientific community of geologists working on theories that the west knows nothing about?

About a year ago, I got into an argument on line about 911.  some guy was just adamant about peer reviewed articles in a rcognized science journal.  Nothing else on the internet had any value to this guy about 911, unless it was in a peer reviewed paper.  So, I sent him the info on the thouroughly peer reviewed paper published by 9 eminent scientists where they had found extensive nano thermite in all dust samples tested from around ground zero.  He never even replied after that.

If you're looking for peer reviewed article about Abiotic Oil in western scientific journals, you won't find them.  I have read that such articles were translated and submitted back in the 70's and 80's but no upstanding western journal would print such fool theory geology, from the Russians, no less.  And as I pointed out, the Russians don't care what we thiink of their theory.  They just produce more oil than Saudi Arabia, using that same fool theory to find the oil and get it out with chrystal basement deep wells.

Results trumps theory every time.

DaveyJones's picture

Strange that we blew ourselves up to build the biggest embassy on top of stuff that regenerates

Ben Dover's picture

I've begun listening to the video, but likely won't have time to read any of the pieces you referenced.

Instead, let's try the ZH acid test - how much money do you have invested in this?

Transformer's picture

Invested in what?  Oil wells deeper than 16,000'?  Why I own lots of them. I'm a Russian Oligarch, who bought up some of the state owned oil infrastructure after things collapsed in '91.  Naomi Klein mentions me in her book.  /sarc

Uhh... let's see.  I'm trying to think of some possible way that I could have a financial investment in Abiotic oil, you know, to be clever... but I can't think of anything.  The coolest thing here on ZH is to be clever and funny. Maybe I could have sold short BP last year at just the right time, after their Abiotic experiment, only I didn't.  What little bit of investment I have is in PMs.  And I don't have a book out, or even a book deal.

Maybe you could tell me how one could be invested in this?


bigwavedave's picture

Transformer... Just give up. You provided enough information and Google can find the the original Russian papers I read 20 odd years ago.

They even did some compelling lab experiments decontructing and reconstructing hydrocarbons across the 'spread'. Very nice work and I for one am not surprised they are succeeding.

AnAnonymous's picture

Of course, if you would like to explain how Russia became the world's largest producer, I will listen.


Why would they not become the largest extractor?

As you reject the idea of oil as a finite resource, it still remains that oil is a limited resource and over a period of time, numerible.


So what? Why management of stock? Why should all oil extractors play the full open taps script without concerning themselves of regulation?


Your comment, it means nothing. Take a race. Stamina is a limited resource over a race. Stamina can be rebuilt though.

Now sometimes, a racer lets another racer take the lead in order to let him grow tired faster.

Why should all oil extractors run the race at full speed without concerning themselves with their capacity to sustain the effort?


So the answer on why Russia has become the number one oil extractor is because other extractors did not take up the challenge, they let Russia beat them as they manage their limit.


And please consider it is about limits, not about finite/infinite. Your comment on Russia taking the lead makes no sense either in a biotic or abiotic context.

Now matter what, oil extractors are bound to manage their limits, leaving them to let others take the lead willingfully.

knowless's picture

best skeptical summary i could find (just a summary of the debate):

Transformer's picture

Thanks for that.  I think that piece is one of the first I read about the subject.  It's a good one.

Ben Dover's picture

Thanks. I'll take a look. 

CrashisOptimistic's picture

You're failing badly.

Why not drill anywhere?  Why pay geologists to examine seismic studies.  If it's hyper deep anywhere coming up from the core, then why is there ever a dry hole drilled (as 2 of every 3 drilled are -- even *with* the seismic studies)?

How does this play out for Ghawar?  Did the seismic studies, carefully looking for NO openings downwards and none in the cap, somehow miss gaping underground canyons that flow this magical abiotic oil upwards into the field?

And if that is what happens, why do fields ever die?  Why does production every decline from a field?

Why are you doing this to yourself?  You're killing your kids.

tmosley's picture

Uhh, because it is going to accumulate in some places, whereas most of it simply seeps out to the surface and is oxidized into CO2 and water by oil eating bacteria?

Why do aquifers ever run dry?  All that water must have been produced by bacteria a billion years ago, and will never bee seen again.  Underground geology isn't complex or anything.

Transformer's picture

You know us arrogant westerners tend to think that all technology has been originated here.  I would like to think that there are vast new territories of technology to explore and develop.  The Russians have gone off on some other tangents, not just Abiotic Oil.  Here's one that most people know nothing about:

tmosley's picture

Suggest people read up on this as well:

Phage is the future for antimicrobials.  Antibiotics are a dead end.

trav7777's picture

The Western Oil Majors develop all the fields in Russia; it's been that way since the collapse.

sun tzu's picture

Who the hell is drilling off the Cuban coast for oil, shit-for-brains?

trav7777's picture

WTF does that have to do with Russia, fag?

tmosley's picture



Ok, to start, Trav wants Eugenics to be practiced.  He wants to "save" us from starvation caused by peak oil.  This is why he will NEVER accept the fact that new technology can every be implemented, and will deny facts that  are shoved right in his face (ie ionic liquids), or acknowledge the possibility of any form of nuclear, wind or solar application--even with another 20, 50, 100, 1000, or a billion years of research.


Fri, 02/18/2011 - 15:49 | 

trav7777 (Total Score:1)


wtf is wrong with eugenics?  Why should we condemn the cretins to a future of starvation?  Likewise, humanity as an institution, cannot afford to have itself breeded back into the stone ages by cretins.

genocide of inferior populations is in fact an evolutionary MANDATE




More eugenics bullshit:


by trav7777 

on Sun, 03/06/2011 - 22:18



You're an should not reproduce.


The SB IQ test was not in ANY WAY intended to promote eugenics.  IQ tests have literally nothing whatsoever to do with a DESIRE to promote one type of person over another.  Some people may have seized on them in order to justify such a promotion- in case you didn't figure out by what I said earlier, moron, I AM ONE OF THOSE PEOPLE.  I pretty clearly stated as much, so if you think you are going to say OMG RACISSS EUGENICIST and I am going to, what?  I'm gonna fuckin deny it when I JUST SUGGESTED IT?


Does it occur to you that east asians have the HIGHEST average score on these exams?  WTF, reality shits on you again.  I am not east asian, btw.  But it doesn't matter, as a general case does not speak to a specific one. 


Besides, the low IQ races underperform in every test of cognition, not just SB.  Pick a test.  The reality of subsaharan Africa is that intelligence there is exceptionally low, which is why people walk miles for water instead of building pipes and why it has no history of even the indigenous written word.


My race or sex has nothing to do with me; I am an individual.  It is a matter of fact that whites and males have substantially higher sigmas to their IQ distributions than other what?  You may be a white male and you are still an idiot.  Being a white male doesn't endow you with the genius IQ of other white males by the virtue of the irrelevant color of your skin.  That skin covers an idiot.


NO race norming would be performed for a reproduction threshold; the tests are race-blind.  The reason africans average lower scores is because africans have lower average cognitive capacity.  This is just simply the way it is.


Math and abstract reasoning are not racist, you sniveling idiot, and IQ tests are not crafted to reflect memorization.  JFC, they give these tests the world over.  Do the world a favor and attempt to become educated.


For you to claim that there is a "white" and "european" intelligence is utterly absurd.


reply flag as junk (0) 


by trav7777 

on Sun, 03/06/2011 - 22:25



the vast majority of people cannot understand geometric compounding.


So maybe we need to set the bar at 140; whatever.


The population needs to decrease and get smarter.  If at that point, we have to craft a BNW type outcome, fine.


Grow OR die leads to death because growth CANNOT continue forever.  I am a bacteria at 10 minutes to midnight sounding an alarm.






Now, he brings up the fact that blacks have low IQs.  Funny, considering that was the explicit distinction he picked for forced sterilization.


by trav7777 

on Thu, 12/30/2010 - 23:52



YES, some races are BETTER than others, if you want advanced medicine, electricity, the written word, the computer, the lightbulb and all the rest of that shit.


WTF is wrong with you people?  Especially that uncle tom apologist with his "RACISSSSS" epithet in the previous post?  I mean what.tha.fuck??


Look at HISTORY.  Which race is it that the people who invented EVERYTHING AROUND YOU came from?  And in the sickest of ironies, people from that race actually feel GUILT over the fact that it wasn't brown people who did everything!


They welcome  ALL cultures are NOT EQUAL.  I don't LIKE cultures of destruction and misery, of primitivity, like all throughout the brown world.  I don't WANT the ghetto culture of murder and criminality.  I don't WANT african culture that didn't possess the written word until it was oppressed by white people with it or the native american culture that ALSO lacked the written word and the fucking wheel.


WTF is the matter with people these days that they think all cultures are equivalent?  Multiculturalism is a SICK JOKE and a crime against human progress.


The more mexicans we get, the more we are like mexico.  The more the diversity, the lower the average IQ.  DO THE MATH, shit just keeps getting worse.  Diversity is a FRAUD and pretending that all races are equal is a crime.  For example, we continuously hear how bad the US is globally in terms of aptitude tests, but if you examine AT ALL the demographics breakdowns, you see that the bad aggregate score we have as a nation is ENTIRELY DUE to hispanics and blacks!  Yet NOBODY can mention these "hate facts" without having a white uncle tom condemn him as a RACIST.


People who refuse to accept reality as it IS are suicidal fools.




Thu, 12/30/2010 - 22:44 | trav7777 (Total Score:1)


AWSUMZ...I mean taking philosophy and guidance from a fucking wal mart cashier.


I truly WANT genes in my bloodline with average IQs of 85, I mean who wouldn't?


99/100 would choose to have sex, wtf?  And get knocked up by some ghetto thug who will end up in prison and pass on his criminal and idiot genes to the little mulatto offspring who then grow up with a trash mom and no dad?  Sounds like a recipe for technological progress to me, right?  I mean, think of ALL THE INVENTIONS by the brown people over the centuries...all one of them.


WOW...great advice wal mart.  99/100 would choose to doom their kids because they are incapable of constraining their sexual urges; what a fucking catastrophe.  Bunch of freakin whores.  When they can't throw on a pantsuit and go sit behind a desk and pretend to work but still get paid, more selectivity will be employed in mating patterns.


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More racism: 


by trav7777 

on Wed, 03/02/2011 - 14:09



huh?  Average brain size of blacks IS smaller.


This is what we call a "hate fact."


Oh and while I'm up, STFU you uncle tom racebaiting fuckstick


reply flag as junk (3) 







So, basically, this sociopath's whole thesis is "kill the darkies, and anyone I don't like because anyone who disagrees with me is clearly stupid".  He wants to sterilize/murder between 50 and 97% of the population, with the explicit goal of exterminating all blacks.  


Can anyone really take this guy seriously with all the shit he has posted?  All he is doing is presenting a one sided argument to try to stir up sentiment in his favor so he can exterminate a bunch of people.  Basically, the guy is a petite Hitler, a fucking monster, waiting for an audience.

So now the mystery as to why this guy so aggressively attacks anyone who denies peak oil, or indeed any of the garbage he spouts, is attacked VICIOUSLY, and without relent.  He will say literally ANYTHING, whether slight fudging of the truth, a half truth, outright lie that seems plausible, or a lie completely out of left field.  I have never seen such a dark purpose behind a series of posts, and the fact that these posts have been made over the course of more than a year is absolutely CHILLING.  This guy is a mass murderer looking for a victim.

And Trav, so you know, I will post this response to every post I see from you from now on.  You're fucking dead to me, save for this post.


The Navigator's picture

And THAT is why I won't post ANY comments after 2 drinks.

God, I hope to remember that rule after 2 drinks !

Fiat2Zero's picture

Regardless tmosley,

You should attack the argument, not the individual, the facts that are pertinent.

ZH isn't a court and you're not trying to discredit a star witness.

If the arguments are wrong them it should be easy enough to dispatch them with logic.

Dismissing "crazy ideas" is a bad precedent as well. The founder of modern atomic theory was widely ridiculed for saying all matter was made of the same pieces. Just another Berkeley crazy (until he was proven right).

For all you who believe only in science, I will remind you of this very famous quote "science advances one funeral at a time," that is it is even more hierarchical in some ways than other social structures (and wrong ideas are kept alive by the powerful scientist).

Attack the argument, not the man.

And remember, history doesn't repeat (but it often rhymes)

trav7777's picture

nothing I said in ANY of Cliff's spam is incorrect.

I challenge ANYONE to dispute them.

Want to dispute average IQs, go ahead, brian size, go ahead, this silly notion of "equality," go ahead.

Mosely-claven can't, so he just throws them out and expects likeminded pavlovian lemmings with their conditioned political correctness to say ZOMG, RAYCISSSS.

tmosley's picture

I have torn down his arguments a thousand times over.  He dismisses all science, all experiment, and all of human history.  He is certifiable.  A normal human being doesn't act like that.  I just found out why--he wants to murder between half and 95% of the human race.

Pope Clement's picture

Rusty- Anonymous peer review is a most despicable censorship device - fuck those silver backed trogolodite academic pussies who avoid taking responsibility for their views and reviews. 

Zedge Hero's picture

Let's not forget that the Soviet Union fell in 1991 and then 4 to 5 years later they started to produce more, so it's to say how long did it take for new oil (WESTERN) technology that had been absent for decades to finally come to Russia and vastly improved their falling oil production.

In the two years before the Soviet collapse they lost two millions barrels in two years with this abiotic crap theory at hand.  Soviet Union falls and then they produce more with west tech at hand.  Simple history.

Look again at the chart- the USSR was producing 8 million more barrels than Saudi in 1985 and they are trying to close back in on their old Soviet highs of production.

Anybody who seriously uses abiotic THEORY just needs to pick up a history book.

Abiotic is idiotic

HedgleeDooRight's picture

Crash, Let the little retarded clowns chase their abiotic oil fantasies.  Let them chase jet contrails, and unicorns. 

Life is too short to waste one's time on the slaying of the slain more than once. 

sun tzu's picture

Keep your heads up each others asses while discussing the flat earth. You're learning alot that way. We don't want to waste our time on your chicken little stupidity



Saturn's smoggy moon Titan has hundreds of times more natural gas and other liquid hydrocarbons than all the known oil and natural gas reserves on Earth, scientists said today.

The hydrocarbons rain from the sky on the miserable moon, collecting in vast deposits that form lakes and dunes. This much was known. But now the stuff has been quantified using observations from NASA's Cassini spacecraft.

"Titan is just covered in carbon-bearing material — it's a giant factory of organic chemicals," said Ralph Lorenz, a Cassini radar team member from the Johns Hopkins University Applied Physics Laboratory. "This vast carbon inventory is an important window into the geology and climate history of Titan."



From NASA:


Titan's Surface Organics Surpass Oil Reserves on Earth

Saturn's orange moon Titan has hundreds of times more liquid hydrocarbons than all the known oil and natural gas reserves on Earth, according to new data from NASA's Cassini spacecraft. The hydrocarbons rain from the sky, collecting in vast deposits that form lakes and dunes. 

The new findings from the study led by Ralph Lorenz, Cassini radar team member from the Johns Hopkins University Applied Physics Laboratory, Laurel, Md., are reported in the Jan. 29 issue of the Geophysical Research Letters. 

"Titan is just covered in carbon-bearing material -- it's a giant factory of organic chemicals," said Lorenz. "This vast carbon inventory is an important window into the geology and climate history of Titan." 

I suppose the oil and methane on Titan came from dinosaurs and algae too? Go away, stupidass.

trav7777's picture

METHANE is on Titan, not crude oil.  Idiot