aaron hoffer wrote:
>
>
>
> Mark, I recall you saying that Russia's oil production declined
> dramatically about ten years ago or so. What I'm wondering, is what
> precipitated the drastic decline? Was it that the wells went dry?
> Or did the
> infrastructure erode after the oil price collapse in 1986? Or is
> the decline
> related to the break-up of the Soviet Union, where the production itself
> didn't actually fall but Russia just lost control of it? I hope I'm not
> treading old ground here, but until I came across this list I had never
> heard that Russian oil production had taken such a drastic fall. I would
> have thought something of that significance would be big news.
Russian crude oil production fell by almost half in a 3 year period, and is
now below 300m tonnes/pa and still falling. The reason that it didn't make
much obvious impact on world energy balances was that Soviet industry also
collapsed, so final demand fell by even more. And since exports have been
maintained, the net effect on the *capitalist* world market has been
minimal - so far.
This is a complicated but interesting story, and I know somethign about it
because I was in Siberia in the late 1980s when the collapse happened. It is
a combination of technical and reserve factors, but in effect Russia
experiences its Hubbert peak in a dramatic fashion, and that episode is a
solemn warning about what can happen, and will happen, to World Oil.
Mark
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