free html hit counter Peak Oil Debunked: 241. REMBRANDT ON THE "GROWING GAP" (PART ONE)

Saturday, February 18, 2006

241. REMBRANDT ON THE "GROWING GAP" (PART ONE)

[Note from JD: Rembrandt Koppelaar has written some thoughtful responses to my criticisms of Campbell's graph of the "Growing Gap" (see #230, #237 and #238 below for background). I'm going to break his responses into two parts so it does not become too unwieldy. My comments are given in italics, below Rembrandt's response.]

Item 230: the growing gap

1) Which brings us to the real dirty little secret of the peak oil community:

Despite the fact that this graph is a critical centerpiece of the peak oil argument, NOBODY KNOWS OR EVEN CARES WHERE THIS DISCOVERY DATA CAME FROM.


The discovery data published by Campbell comes from the Petroconsultant/IHS Energy database.

Petroconsultants was formed in the 50's by Harry Wasall, a field geologist who used to work for shell. The company initially was a consultancy called Wassal & associates covering Cuba and Latin America. Later it expanded when Wassall moved to Madrid in 1962 into Petroconsultants, covering the global oil industry.

"Petroconsultants maintained first class connections and was one of the first to computerize its database. It secured contracts to manage the major companies' data on a confidential basis. Over the years it expanded its network of contacts around the world, including the former Soviet Union. On Harry Wassal's death, Petroconsultants was acquired by IHS Energy of Denver, Colorado, and full under new management, leading to many changes in its staff and manner of doing business”
Source: C. Campbell, Oil Crisis, 2005 edition – Multi – Science Publishing Co. Ltd ISBN 0906522 39 0

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[JD's response: This explanation raises many unanswered questions. First of all, the quote from Campbell is just a paragraph of generic remarks about Petroconsultants, and says nothing about Petroconsultants being the source of the data for the "Growing Gap". We still don't any description by Campbell describing his sources and methodology. Secondly, Petroconsultants was acquired by IHS in 1996, and has not existed as a going concern for 10 years. So how is it that Colin Campbell had access to the Petroconsultants database in 2002 (when he published the first "Growing Gap" graph)? Petroconsultants didn't even exist at that time. And why does he cite "ExxonMobil 2002" as the source of the data, if in fact the source was Petroconsultants/IHS? Now, it is clear that IHS Energy maintains a highly detailed, proprietary database of discoveries in the oil and gas industry. It is called IRIS21. It is designed for corporate clients and is known to be very expensive. So, are we to assume that Colin Campbell, a retiree, is forking over his own money every year for ongoing access to this database?? That's a little hard to believe.

Now, IHS Energy does disclose gross figures from IRIS21 from time to time. For example, here is a screen shot of a presentation from IHS (see slide #4) (click to enlarge):

Did Campbell take his data from this graph? That seems highly unlikely for a number of reasons:

1) The IHS graph is for all liquids not Campbell's "regular conventional oil". So how did he break out the conventional oil from the non-conventional oil? Again: Is he purchasing access to their database?

2) If Campbell is getting his figures from IHS, why don't they match? I have transcribed both the IHS graph and "Growing Gap" graph, and there are a number of huge discrepancies. For example, for the 86-90 period, Campbell gives 83.6Gb of discovery (regular conventional) while IHS gives 67.6Gb of discovery (all liquids). That's a huge 16Gb difference, and it is not at all clear how discoveries of conventional oil can exceed discoveries of conventional + unconventional.

3) I would also point out a discrepancy noted by Antimatter. This is slide #6 of the IHS presentation:

As you can see, this figure is IHS's equivalent to Campbell's "Growing Gap", but there are many significant differences. For example, for 1999 and 2000, Campbell gives discovery of about 15Gb, while IHS gives values well exceeding 20Gb.

The bottom line: Even if Campbell is getting his figures from IHS (which is a highly suspect theory, for the reasons I've enumerated), why should we trust Campbell more than IHS with regard to IHS figures? Clearly IHS has better access to their own database than Campbell.

9 Comments:

At Sunday, February 19, 2006 at 1:49:00 AM PST, Blogger Chris Vernon said...

Both of Campbell's discrepancies could be explained by his back dating. His recent value is low because he's booked some of on a past year and his past value is high because it includes some recent discoveries.

 
At Sunday, February 19, 2006 at 4:36:00 AM PST, Blogger JD said...

chris, that's certainly one explanation. Do you have any grounds for believing that Campbell backdates discoveries as well as revisions? (The "Growing Gap" chart says "Revisions backdated".) It may make sense to backdate revisions (i.e. reserve growth), but I don't see how you can make a legitimate case for backdating discoveries. If Chevron announces discovery of a field in, say, 2002, I think you're going to have a hard time making the case that the discovery actually occurred in 1952. If they actually discovered the field in 1952, why didn't they notice it and announce it back then? It seems like a lot of wasted money and effort to spend money in 2002 to discover something you already discovered 50 years earlier.

 
At Sunday, February 19, 2006 at 5:09:00 AM PST, Blogger Chris Vernon said...

Yeah I know what you mean. I think there is a good case for revisions to be backdated but not much of a case for discoveries to be, I mean when would they be backdated to!

The problem is that it's not always clear from what the oil companies say what is a revision and what is a discovery. Saying something is a revision is a bit like saying they got it wrong initially, saying it's a discovery is universally positive.

 
At Sunday, February 19, 2006 at 5:48:00 AM PST, Blogger Rembrandt said...

2) If Campbell is getting his figures from IHS, why don't they match?

Because the transcription from the IHS energy graph you made is excluding Canada and the US. And Campbell's includes the US and Canada

3) As you can see, this figure is IHS's equivalent to Campbell's "Growing Gap", but there are many significant differences. For example, for 1999 and 2000, Campbell gives discovery of about 15Gb, while IHS gives values well exceeding 20Gb.

Because Campbell's graph gives the 3 year average number, while IHS gives an annual number and a five year average number, and because Campbell doesn't include deepwater.


And no he doesn't backdatae discoveries (I don't understand were you got this idea from).

 
At Sunday, February 19, 2006 at 6:22:00 AM PST, Blogger JD said...

Rembrandt, just as a matter of proper protocol, how do you know all these facts about Campbell's graph and methods? For example, if somebody asks me: "Campbell says his source is ExxonMobil (2002), so what makes you think that Campbell's figures come from IHS?" What do I tell them? "Rembrandt said so"? And what if they then ask: "Well, how does Rembrandt know?" What do I tell them? I don't think "Rembrandt just knows" is a very good answer.

Similarly, how do you know that the IHS graph does not include the US or Canada? And how do you know all this stuff about 3 year and 5 year averages etc.? Where is all this information coming from?

We can't have a legitimate debate if people are allowed to make statements with no sources/evidence.

 
At Sunday, February 19, 2006 at 10:55:00 AM PST, Blogger Rembrandt said...

For example, if somebody asks me: "Campbell says his source is ExxonMobil (2002), so what makes you think that Campbell's figures come from IHS?"

Because he told me so, and I have the same figures on my computer.

Similarly, how do you know that the IHS graph does not include the US or Canada?

Because i can read and it says so on the graph you posted.....

http://photos1.blogger.com/blogger/4189/1379/1600/IHSDiscovery.jpg


And how do you know all this stuff about 3 year and 5 year averages etc.? Where is all this information coming from?


This information comes from the underlying figures that I have were Campbell made his graph from, and secondly from reading the graphs you posted, which say annual or 5 year average. Campbell doesn't mention an average unfortunately, but i can tell from his database.

Clear enough?

 
At Sunday, February 19, 2006 at 3:59:00 PM PST, Blogger JD said...

Thank you, Rembrandt. That clears things up a lot. Also thanks for catching my error on the IHS chart. I'll be sure to put on my glasses next time. ;-)

 
At Monday, February 20, 2006 at 1:29:00 AM PST, Blogger Thomas said...

Campbell told me directly at a conference a year and a half ago that he has access to the IHS database. Campbell himself was employed by Petroconsultants at one time.

You have to realise what Petroconsultants really was: A networks of senior oil geologists that can't keep a secret. The whole basis of their work was getting inside data that the public did not have access to. I imagine it worked something like this: "Ok, Hank, so how much oil do you guys really believe is in that field?"

Really, it was industrial espionage.

Why did the oil companies, who bought the data, put up with this? I can't pretend to know this. But my personal guess is that 1) it's difficult to keep a secret, 2) they all benefit from "secretly" knowing each other's data 3) it feels better to reveal the data to a "neutral, third party agent" than directly to the competitor.

Campbell actually said that he feared the network would cease to be effictive when his generation of high-level geologists retired.

What I have described here is not hard, verifiable fact. It's what Campbell told me. And it doesn't clash with Rembrandt said.

I have also heard form Campbell directly that he backdates all revisions to the date of original discovery of a field.

-Thomas

 
At Monday, February 20, 2006 at 1:49:00 AM PST, Blogger JD said...

Thomas, thanks for sharing your info! :-)

 

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