RE:Good Read on US Gas ProductionAn excellent article. It looks like natural gas might be approaching peak production. Remember, at peak it is plentiful and cheap. How far are we from peak oil for the world as a whole? Everyone trash-talks oil because expected demand "growth" China will be weak. No one appreciates that just maintaining existing production is a massive challenge.
In OPEC, member countries are allowed to produce in proportion to their reserves, so that (theoretically) every OPEC member runs out of oil the same year in the distant future. You will note that any country reducing reserves at the end of the year in proportion to how much oil they pumped that year will be punished the following year with a lower production allotment. As a result, NO ONE EVER reduces their reserves. Saudi Arabia pumps 12m barrels a day for 40+ years, and they claim to have exactly the same amount of oil they had 40 years ago. That would be okay if they found new fields, but new finds in Saudi Arabia are minimal; it looks like all the big fields have been found.
It gets worse: During the Iran-Iraq war, Iraq wanted to sell more oil, so they announced a doubling of their reserves and doubled production They hadn't found any more oil in the field, their accountants had. Iran followed suit, followed by Saudi Arabia and then the rest of OPEC.
All of OPEC has an awful lot of paper barrels, and never reduces reserves for production. How much do they really have left? It's a mystery. I suspect a whole lot less than everyone thinks.
How is Saudi Arabia keeping production up? Shouldn't production be falling as reserves are falling? Nope. The Saudis have stuck sucking straws in the top of their formations and are water flooding from below. Those formations will go from pumping oil to pumping saltwater almost overnight. The only warning is that the water cut starts increasing, especially on the edges of the formation. Good luck trying to get that info; it's a massive state secret.