Those who irresponsibly if unwittingly claim that oil is plentiful as Professor Owen has done ("Higher Oil Output to Push Down Petrol Price" SMH 19th November) will be contributing to the torment faced by an unprepared world when scarcity occurs and consumer suffering intensifies. The longer we deny peak oil has been reached in a society based on cheap and abundant energy, the less time we'll have to change our way of life and meet the alternatives head on.

Professor Owen is an economist and obviously he has never discovered a drop of oil and has no access to confidential technical data. Published reserves from OPEC countries are political data and nothing to do with reality. OPEC countries were fighting between themselves after the counter shock of 1986 for the quotas computed from reserves and population.

Between 1985 and 1990 OPEC countries added 300 Gb in their reporting of so-called proved reserves, when the discovery of oil was about 10 Gb over these years. All OPEC members increased reserves by about 50%, except for the Neutral Zone owned 50/50 by Kuwait and Saudi Arabia. These two countries increased their reserves at different years to 1985 and 1990.

Proven reserves by country at the end of a year are reported in the "Oil and Gas Journal" (OGJ) prior to year-end and before any technical study can be carried out.

As at the end of 2004 there were 83 countries out of 105 which had not changed their reserves estimate - as if their production was exactly compensated by new discovery or revisions: it is a joke.

When any OPEC country announces their reserves, no one dares to challenge their views. BP Statistical Review is obliged to accept them, despite the fact that some BP geologists (F. Harper) publish graphs showing the contrary. World proved oil reserves have been increasing over the last 50 years and more recently because unconventional oil is now added (175 Gb for Canadian oil sands by OGJ) to the score. But every oil explorer knows that world oil discovery has peaked during the 1960s and since 1980 oil production is far above oil discovery, meaning that remaining reserves are decreasing, contrary to the politically motivated published proved reserves.

Promoting peak oil is not "scare tactics". Peak oil has already occurred in many countries. US oil discoveries peaked in the 1930s and US oil production peaked in 1970. North Sea oil discoveries peaked in 1977 and North Sea oil production peaked in 1999. World oil discoveries peaked in the 1960s and oil production (liquids being 83 Mb/d in 2004) will peak in the coming ten years, more likely to result in a bumpy plateau rather than a peak.

Indeed Professor Owen could be right in saying “An unexpected downturn in the world economy would drive the price down”. In fact it is not unexpected, as Paul Volcker (the former Fed chairman, before Alan Greenspan) said in July 2004 that there is 75 % probability that the world will be in crisis in the next five years. If his prediction comes to pass, demand and price will be chaotic and world production will indeed look like a bumpy plateau!

But the professor is wrong when he expects that unconventional oil, including oil shale, will compensate beyond the decline of conventional oilfields. Oil shale has been in production since 1837 (France 1837-1957, Scotland 1850-1962 and Australia 1865-2004) and peaked in 1980. In the 70s, billions of dollars were spent in the US to mine oil shale and to produce a few million barrels but all effort there stopped in the 80s.

SPP, the Australian company which has been attempting to develop the Australian oil shale for more than 25 years after an unsuccessful attempt with Exxon in the 80s, did build the Stuart oil shale plant with the Canadian firm Suncor (producing Canadian oil sands), but was bankrupted last year after failing to sustain for a long period the first phase, one of 4,500 b/d (phase three was assumed to reach 200,000 b/d).

Any hope of producing oil shale by mining is now gone despite the high oil price and only Shell is conducting a US in-situ pilot on the Green River oil shale which produces 10 b/d after several years of trying a cumbersome extraction process. The attempt involves electrical heat in several holes surrounded by walls of frozen rocks designed to prevent water cancelling out the heat. The electricity bill is rumoured to be $US2000/d for 10 b/d! Shell said that they will decide only in 2010 if they are to labour towards a commercial trial.

Oil sands in Canada and extra-heavy oil in Venezuela have very large reserves but production cannot be increased quickly as it involves huge investments (>$50,000/b/d), requires huge plants, large quantity of water and natural gas to make steam, leaving huge ponds of muddy wastes and demands a very large skilled workforce.

The Oxford Institute for Energy Studies (Skinner & Arnott April 2005) forecasts that the unconventional oil (Canadian bitumen & synthetic, Venezuelan synthetic, biofuels, GTL - which is gas to liquids - and other substitutes, produced at 2.2 Mb/d in 2004) will grow only to 7 Mb/d in 2020 and that the deepwater gains will peak to less than 7 Mb/d in 2013.

Exxon-Mobil said that to reach the 120 Mb/d forecasted for 2030 by USDOE and IEA, 50 Mb/d has to be provided by OPEC, with a good part from Saudi Arabia. Yet Al-Husseini, the retired VP E&P of Aramco stated recently that 50 Mb/d is impossible for OPEC and pure wishful thinking. It is obvious to oil seekers that unconventional, deepwater and new discoveries cannot fill the forecasted demand. Supply will not fill the growing demand in the next ten years.

When Professor Owen said that “$US35/b will encourage investment in future production facilities", he does not recognise that presently international and national oil companies enjoying over $US50/b are producing at maximum capacity and cannot invest their large profits in future production due to the paucity of prospects in exploration and production, outside some undeveloped poor fields in the Middle East. They would prefer to drill in frontier areas than to drill in Wall Street (merger and acquisition).

Despite this "insider knowledge", the oil companies are frantically drilling expensive deepwater wells at more than $US50M per well! If Professor Owen knows of any good prospects which could compensate for the decline in present production, he should tell oil companies where to go and keep his economics for his students

Jean Laherrere Les Pres Haut 37290 Boussay France

jean.laherrere (at) wanadoo.fr, www.oilcrisis.com/laherrere

Former Head of Exploratioin Techniques with TOTAL, who explored the Simpson Desert with Australians (in particular Dean Drayton) and planned the "French line" across in 1963.