Guest post by Mike Jonas
On Dec 13, Willis Eschenbach posted a convincing (and eloquent as always) argument “The R/P Ratio” against Peak Oil being imminent. I would like to present a different view. In fact I draw the opposite inference from the same statistic.
From the BP data [1], Willis argued that the “R/P ratio” – the ratio of reserves R to production rate P – is higher than ever, and that therefore the world is even more able to continue producing oil at today’s rate than it was yesterday at yesterday’s lower rate.
My argument is that the high R/P ratio shows that it is getting very difficult to increase P in spite of a high R and a high oil price. This argument is based on two factors of which Willis took no account – the reliability of stated reserves and the quality of the oil.
Reliability
The first major hiatus in the oil world occurred in 1973, when OPEC caused the price of oil to quadruple. The second was the Iranian revolution in 1979. Their effects are clearly seen in the historical oil price:
Figure 1 – Historical Oil Price – click image to enlarge
Over the following years, 1980 to 1988, the world’s oil reserve increased by 331.5 billion barrels, of which 329.6 were OPEC.
Figure 2 – Historical Oil Reserve – click image to enlarge
What is thought to have happened is that certain OPEC countries artificially inflated their reserves so that they could sell more oil, because OPEC production quotas were based on official reserve figures [17][22]. It is quite possible that none of this reported increase in reserves actually exists. There has recently been supporting information from Wikileaks [2].
Questions about the reliability of reserve figures are not restricted to the reserves declared between 1980 and 1988. For example, the UAE’s official reserve has been stuck on exactly 97.8bn barrels since 1996 (and was at 98.1bn barrels from 1989 to 1995), in spite of total production of 15bn barrels over that period (21bn barrels 1989-2010) and no major discoveries [21]. That’s mathematically possible, but rather unlikely.
Some other countries have similar patterns – Iran reserve at 92.9bn barrels from 1986 to 1993 (9bn barrels produced), Iraq 100.0 from 1987 to 1995 (5 produced) and 115.0 from 2001 to 2010 (8 produced), Kuwait 96.5 from 1991 to 2002 (8 produced) and 101.5 from 2004 to 2010 (7 produced), Saudi Arabia in a tight range 260.1 to 264.6 from 1989 to 2010 and not falling more than 0.1 in any one year (75 produced).
It does appear likely that a significant proportion of stated reserves do not in fact exist.
Quality
After 1988, the next significant increases in world reserves occurred in 2002 and 2008-9.
Figure 3 – Annual change in reserves – click image to enlarge
In 2002, most of the 60.7 billion barrel increase was in Russia, Iran and Qatar, and I haven’t checked it. I have no reason to suppose that it was anything but a genuine increase in good quality oil. However, of the 123.0 billion barrels increase in 2008-9, 111.8 were in Venezuela. This is an ultra-heavy crude, difficult and expensive to produce at high production rates [3].
This is where the problem lies. Much of the easy oil has gone. We are into the difficult and expensive stuff. It is a major challenge to maintain high production rates. Heavy and unconventional oil are now dominant in world reserves [4] …
Figure 4 – Total World Oil Reserves by Type – click image to enlarge
[http://en.wikipedia.org/wiki/File:Total_World_Oil_Reserves.PNG]
… to the extent that actually being able to increase the total production rate may prove to be out of reach [8].
Global oil production has basically flatlined for the last 5 or 6 years …
Figure 5 – World Oil Production – click image to enlarge
… while the oil price has surged over the same period (Fig.1). I would argue that a high R/P ratio does not necessarily indicate an ability to increase production. Rather, a high R/P together with a high oil price would seem to indicate that it is difficult to increase production. Note that for 5 years now the price of oil has been higher (in 2010 dollar terms) than it was after the 1973 oil shock.
In Venezuela (heavy and very heavy oil), the production rate has declined nearly 30% from 1965 to 2010. In 2006, before the large 2008-9 increases in reserve, its R/P was already high at 85, but was still exactly what it had been in 1985. From 1985 to 1998, production did increase markedly, bringing R/P down to 60, but production has been in decline since.
It is possible that the major factor here was Hugo Chavez being elected president in 1998, so let’s look at all the countries with above average R/P –
| R/P | |
| Venezuela | 233.9 |
| Iraq | 128.0 |
| Kuwait | 110.8 |
| UAE | 94.0 |
| Iran | 88.4 |
| Libya | 76.6 |
| Saudi Arabia | 72.4 |
| Kazakhstan | 62.1 |
| (World average) | 46.1 |
– maybe Venezuela, Iraq, Iran and Libya have political reasons for relatively low production rates. The UAE, whose oil is chiefly in Abu Dhabi, does have difficulty increasing production [10]. Kuwait [11][12] and Saudi Arabia [13] do too.
For comparison, Canada’s Alberta Tar Sands, which began production in 1967, have an R/P of 662. It is hoped that it may in future come down to around 150 (reserve 174bn bbls, prodn 720k bpd, target 3m bpd [6]).
[bbl = barrel, bpd = barrels per day]
There is a clear tendency for high R/P to be associated with heavy and unconventional oil, that is, oil for which high production rates are very difficult.
The Future
The oil industry has been successful in maintaining reporting a world R/P of 40+ since 1988.
Figure 6 – World R/P – click image to enlarge
But in order for the rate of oil production to keep increasing, a lot has to go right. Things like:
· Major new conventional oil discoveries.
· Technological progress in heavy and unconventional oil production.
· Political stability in producing countries.
· Political stability in consuming countries.
· A high oil price.
· Increasing demand in spite of the high oil price.
· Oil remaining competitive with alternatives.
· Non-obstruction by governments (think “carbon” trading and taxes, USA offshore exploration ban)
More optimistic estimates of the Peak Oil date range from 2014 [7] to the IEA’s 2035 or later [5][5a]. But in the IEA presentation, note that although foil #8 “Oil production becomes less crude” …
Figure 7 IEA forecast – click image to enlarge
… shows production increasing to at least 2035 , there is enormous (heroic?) reliance on “fields yet to be developed or found” which are more than half of all oil production by 2035. Note also the relatively low contribution from “unconventional oil”, and the rapid decline of currently producing conventional fields.
There is another figure worth keeping an eye on for the next few years – Saudi Arabia’s production rate. The IEA presentation [5] expects Saudi Arabia to increase production by 50% between 2009 and 2035.
Figure 8 – IEA forecast by country – click image to enlarge
In mid 2008 Saudi Arabia announced that they would increase production by 500k bpd [14], but production fell 8% over the next two years. Perhaps this confirms that the producing Saudi fields are already in decline [15]. In June 2011, Saudi Arabia again stated that they would raise production [16]. It will be interesting to see if they are able to.
Saudi Arabia’s (2010) R/P is 72. They do have some as yet undeveloped fields, but none are anything like as large as the now-declining Ghawar [20].
Conclusion
The increasing world R/P, together with the high oil price, probably means that it is getting ever more difficult to increase production, rather than that Peak Oil is obviously many years away. I suspect that we are already at or close to Peak Oil, but it can only be identified in retrospect [see footnote 4].
It is, admittedly, still mathematically possible that Peak Oil is many years away. I would agree that “Peak Oil & Gas” and “Peak Energy”, as opposed to “Peak Oil”, are many years away – provided sanity returns to western governments.
Footnotes
1. All production and reserve amounts, associated amounts (eg. R/P), and graphs, are from or derived from the BP data [1] unless otherwise indicated. BP’s reserve data includes “gas condensate and natural gas liquids“, but does not include the Canadian oil sands.
2. Oil reserves are relative to economic and operating conditions, so they can increase without new discoveries.
3. Why did I quote the IEA 2010 report instead of the 2011 report? Because in 2011 the IEA lost its marbles and interlaced everything with the need to reduce CO2 emissions [18]. When the world wakes up to the fact that CO2 emissions are not dangerous, much of the 2011 report will be useless. FWIW, in the 2011 report oil production is still expected to increase by a similar amount by 2035, with OPEC increasing its share [19].
4. I understand “Peak Oil” to mean the point in time after which global oil production does not materially increase. The peak in oil production does not signify ‘running out of oil’ [9]. It doesn’t mean that oil production cannot physically be increased, simply that it does not increase. Peak Oil can therefore be influenced by factors such as price, changes in use and efficiency of use, and competition from alternatives. Basically, it is only possible to identify it in retrospect.
Mike Jonas
Jan 2012
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Mike Jonas (MA Maths Oxford UK) retired some years ago after nearly 40 years in I.T.. He worked for BP in the 1960s and 70s, including 3 years in Abu Dhabi.
References
[1] BP Statistical Review of World Energy, Jun 2011.
[2] Time report “Have Saudis Overstated How Much Oil Is Left?” Feb 2011
http://www.time.com/time/world/article/0,8599,2048242,00.html
[3] Wikipedia “Oil reserves in Venezuela”
http://en.wikipedia.org/wiki/Oil_reserves_in_Venezuela
[4] Wikipedia “Oil Reserves”
http://en.wikipedia.org/wiki/Oil_reserves
[5] IEA “World Energy Outlook 2010” Presentation to the Press Nov 2010
http://www.worldenergyoutlook.org/docs/weo2010/weo2010_london_nov9.pdf
NB. See Footnote 3 above.
[5a] Gail Tverberg, Comment on IEA “World Energy Outlook 2010”, Nov 2010.
http://www.countercurrents.org/tverberg101110.htm
[6] Popular Mechanics “New Tech to Tap North America’s Vast Oil Reserves” Oct 2009
http://www.popularmechanics.com/technology/engineering/4212552
[7] msnbc.com “Peak oil production predicted for 2014” Dec 2010.
http://www.msnbc.msn.com/id/35838273/ns/business-oil_and_energy/ – .TumIeGAch0I
[8] AAAS Member Central “Peak Oil Production May Already Be Here” Mar 2011.
http://www.sciencemag.org/content/331/6024/1510.short
[9] Energy Bulletin “Peak Oil Primer”
http://www.energybulletin.net/primer.php
[10] My comment on JudithCurry.com, re Zakum, Tupi and Peak Oil. Nov 2011.
http://judithcurry.com/2011/11/24/emails/ – comment-144017
[11] H. M. Shalaby “Refining of Kuwait’s Heavy Crude Oil: Material Challenges” Kuwait Institute for Scientific Research. Dec 2005
http://www.arabschool.org/pdf_notes/20_REFINING_OF_KUWAITS_HEAVY_CRUDE_OIL.pdf
[12] Bloomberg “Kuwait Reduces Its 2020 Heavy-Oil Production Target by More Than Half”. Oct 2010.
[13] WSJ “Facing Up to End of ‘Easy Oil’”. May 2011.
http://online.wsj.com/article/SB10001424052748704436004576299421455133398.html
[14] The Independent “Saudi King: “We will pump more Oil”” June 2008
http://www.independent.co.uk/news/world/middle-east/saudi-king-we-will-pump-more-oil-847830.html
[15] Energy Security “New study raises doubts about Saudi oil reserves” March 2004
http://www.iags.org/n0331043.htm
[16] NY Times “Saudi Arabia, Defying OPEC, Will Raise Its Oil Output” June 2011
http://www.nytimes.com/2011/06/11/business/energy-environment/11oil.html
[17] Telegraph article “Oil reserves ‘exaggerated by one third’” Dec 2011.
[18] IEA “World Energy Outlook 2011” Presentation to the press Nov 2011
http://www.worldenergyoutlook.org/docs/weo2011/homepage/WEO2011_Press_Launch_London.pdf
[19] IEA “World Energy Outlook 2011 Fact Sheet” (see “Global oil production”)
http://www.worldenergyoutlook.org/docs/weo2011/factsheets.pdf
[20] NY Times “Forecast of Rising Oil Demand Challenges Tired Saudi Fields” Feb 2004
http://www.nytimes.com/2004/02/24/business/24OIL.html?pagewanted=all
[21] Gerald Butt “Oil and Gas in the UAE”
http://www.geopowers.com/energie/sites/default/files/images/PDF – VAE.pdf
[22] Dr. Jean-Paul Rodrigue, Hofstra University “Changes in Major Crude Oil Reserves, 2001-2006” http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/oilreserves.html
Your initial assumption about it being harder to increase production due to the quality of the oil is simply false. Technology continues to advance, and make refining lower quality oil cheaper and easier and more efficient. The bottleneck in production is government regulation and restrictions on expanding production, but also the capital cycle that it simply takes TIME to expand production infrastructure, and reserves have expanded a LOT in the last few years. The industry is developing production infrastructure, but it takes 5-10 years for new facilities to reach full production capacity.
Mike Jonas
Good presentation almost convincing, but there is a lot of evidence that you are wrong, as Peak oil predictors have been along. It’s the same doom and gloom predictions as the CAGW crowd.
As the song says:
“Won’t be fooled again”
The basic idea here is right, although I don’t necessarily agree in the details. Daniel Yergin explains in his 1991 book, ‘The Prize’–which is just about a bible of oil industry history that the idea of a ‘peak’ in production is quite fictitious.
All the evidence suggests that the rate at which oil can be pumped will plateau. This is because not as this author suggests that the light oil has been found; its because adding more wells onto a formation does translate into proportional increases in output. There isn’t enough underground pressure–which largely comes from the water table–to pump at an arbitrary rate.
In the middle east and other places, water injection is used to boost the rate of production. The water fraction pumped back out is well over ninety-percent now. Water injection is also constrained due to the cost of skimming the oil from the water. Higher rates of production become significantly more expensive as the wells start pumping only a few percent oil.
No where is there mention of oil-shale, curious since the US has it in spades.
One thing… I see a lot of evidence here in Alaska that there is a LOT (Billions of barrels) of oil in the ground that is not available for production at this time. The political and business environments are unfavorable in the extreme. Oil traveling through the pipeline has fallen dramatically (almost 50%) here, not because there is no oil, but because of hostile government (taxes) and environmental (psycho green nutjobs) concerns. Unfortunately I do not see this trend changing anytime soon…
mikelorry – the cheap oil is gone. The kind where you used a few mules to make a hole in the ground and started pumping. That’s why there is now deep water drilling – difficult, expensive and no fun for anybody.
I think this atricle presents are less rose-colored-glasses view of the oil outlook, sounding far more like one written by somebody with a more engineering or insiders view. Thanks!
I hear very strong and persistent rumors that a new field the size of Saudi Arabia’s Gawar field has been found off the coast of Antarctica. It extends up into the territorial waters of New Zealand. Nothing about it in the news but the pros are talking a lot about it.
no mention of oil shales – the largest deposits in the world are in the USA – ~1 trillion bbls. With horizontal drilling and massive fracking they can be economically and safely produced if Obama gets out of the way. mikelorrey is correct – even then it will take time
While I agree there is a limit to what can be produced, we are not necessarily close to that limit. Sure there are a lot of oil reserves that are inflated – I completely agree with this point. But there are still new oil reserves to be found, and existing ones that will flow again as we figure out new ways to extract the remaining oil.
What people predicting the fall in oil production continually fail to under-estimate is advances in technology. Technology makes oil extraction a) cheaper than before and b) more efficient. So even though the oil might be harder to extract, technology eventually makes it worthwhile. My dad was an oil-hunter (geologist) in the 60’s and I remember back then the same arguments that we would run out of oil soon (late ’60’s to 70’s mainly) – he didn’t buy it. No one dreamed we would find so much more, and become so much better at getting at it – other than people like my dad. If anyone figures out how to extract shale oil efficiently (and safely) we will be set for a long, long time. 30 years ago no one thought tar sands were worth anything but now they are viable.
The other problem I have with your argument is that I don’t really see oil demand increasing as drastically as in the past. Eventually as technology is improved, we will have better/cheaper alternative fuels, better electric cars that can be charged from coal burning or nuclear power plants, and oil demand will start to flatten out. Even “normal” combustion engine cars are improving drastically now. Higher prices will cause this to happen naturally (assuming we let them).
In 50 years we will likely have more oil available in the ground than there is demand to extract it (because it will cost more than the alternatives available). It will be used mainly in jets and other transport that can’t make as good of use of alternative fuels. I simply don’t buy the “running out of oil argument” as I have listened to it for 50 years now.
In any case, I respect your position and you certainly worked hard to back up your point of view. I enjoyed reading it – thanks.
Discussions of this nature would be greatly improved if commentators addressed what current and potential supply might be available at specified oil prices. For many years, the industry majors based their “reserves” analyses on the known supply that could be economically produced at US$25 per bbl. This was generally sweet, easily recovered crudes that could be produced at very low cost. Clearly such reserves are diminishing.
However, change that price to US$50, US$75, US$100, US$125 and it becomes obvious that dramatically more supply can become available from reworking old fields, from shale oil, from tar sands, from coal to oil conversion and in the gas area from shale gas particularly. What we are describing is a micro-economic supply curve.
So far as I know, the oil majors have declined to present “reserve” information in such a manner. If they did, the issue would become very much clearer.
To push it to an extreme, consider what available supply would become available if a sustained US$200 per bbl price could be guaranteed.
A major factor is that most of the alternative sources of crude are very capital intensive. Major companies can probably finance such sources off their corporate balance sheets, but non-major project proponents will generally struggle to source funding, given the memories of financiers of the disastrous first round of alternative projects, many of which went into the receivers hands when the oil price slumped to as low as $10 per bbl.
In fact, if the US wanted to assure energy security, all it has to do is to guarantee an offtake price of say $75 or $100 per bbl for 20 years for suitably qualified emergent projects, and you would see the markets flooded with oil. Clearly environmental factors have to be considered as well, but it seems to me that it will be a long time before we really have to worry about “Peak Oil”.
Oil seems to be a byproduct of processes in the Earths crust, we might be pumping oil forever…
We call the Oil Sands here in Canada, also, there is a lot of heavy oil in northern Alberta and Saskatchewan.
Together the Mike Jonas and Willis Eschenbach postings provide interesting reading. This is not the first time that learned folks arrive at opposite conclusions from inspecting the same material. The truth, whatever that may be, hardly matters. We are not going to run out of raw material for petroleum products in the near term.
Further, as has happened before, when push-comes-to-shove there will be a series of transitions to a new situation, again, whatever those might be. Recall, in the mid-to-late 1800s the use of horse-power in cities became intolerable – providing food for and removal of waste from (and deceased ones), filthy streets, disease, smell (well-to-do moved out from and onto the local hills), and so on.
Electric trolleys (inter-urban and intra-urban), steam trains, subways, autos and other adjustments/transitions replaced horses as major contributors to urban and then all developed society. Expect equally interesting changes over the next 100 years. The horse-powered society did not end because of a lack of horses.
Nice, very nice.
Now go back and recalculate using Barrel of Oil Equivalent for all the natural gas coming onstream.
The only limit to production CURRENTLY is political roadblocks. Take Venezuela. The Orinoco region has an abundance of water. The upgrading area has an abundance of natural gas. Throw both together and you are perfectly situated to run an upgrading industry. Except no one has added capacity since Chavez came in. “Upgrading” is rather simple. It is just delayed coking coupled with hydrotreating. With water and natural gas abundant, it is also cheap. Diluent is produced from coker naphtha. The upgraded crude is good quality.
Tar sands production is limited to pipeline availability. Again, a political roadblock over Keystone. The area of production has a huge supply of water and natural gas. Again, it is well situated for production.
The cutback in Saudi production in 2008 is clearly due to the world wide depression.
Then we have Alaska. Barely touched. Again, politics is keeping that from being produced. Russia has found massive oil in the Pacific, and we have West Africa. Politics again is limiting supply. And then there is the “stans”, plenty of untouched oil.
Furthermore, what is your definition of conventional production? Does this include horizontal drilling and fracking shale formations? Yes, vertical bores are going to go away. Everyone will transition to horizontal drilling, and it is still in its infancy. Oil production will increase as the technology spreads. And don’t forget about NGLs, which contain a substantial amount of butane and natural gasoline (drip). These again are limited due to pipelines in the USA. Eventually we’ll peak, but we have a few decades.
Throw in some more political problems: Mexico has an abundance of oil, but they are not allowed to use US companies to get it. The fields are offshore and they are having problems developing them. Colombia is promising. However the oil is in a wilderness, and due to the war, people have been hesitant to install the infrastructure. But it will eventually be exploited. Peru and Ecuador sued the crap out of Chevron-Texaco. Their fields will continue to flounder due to POLITICAL problems.
the capital cycle that it simply takes TIME to expand production infrastructure, and reserves have expanded a LOT in the last few years.
The problem with high capital cost unconventional oil is the OPEC uncertainty. If most oil were owned and produced by commercial businesses then their reserve estimates could be relied on and their future production and hence the likely price be reasonably estimated.
Everyone in the oil industry remembers $8/b oil from the 1990s which was viewed as an attempt by OPEC to bankrupt alternative producers such as oil sands. Funding unconventional oil projects requires a large risk premium due to the possibility OPEC will again crash the oil price.
The solution is for governments to buy oil from unconventional sources on long term contracts at fixed price and implement other ways to mitigate the risk. Otherwise businesses carry all the risks and governments reap most of the rewards thru taxes.
First, thanks to Mike Jonas for submitting an interesting article with a good bit of data, along with references.
That said, I have to contribute a link to a high level USA government report from 2004 regarding USA shale oil “Strategic Significance of America’s Oil Shale Resource.” While it’s been several years since I’ve read this report, iirc it basically said that we have enough quality oil in shale deposits to basically cover all of the USA oil requirements for the next 100 years. That the oil is practical to recover at competitive rates – I believe it said with price at about $80/barrel – and perhaps lower. That we have roughly twice the oil as in the entire Canadian oil sands. Since that time, the entire frakking process has made large technological gains such that it is significantly cheaper and easier to recover that even when the report was written, using less resources and energy also.
Meanwhile, I don’t believe the shale oil is even included in the R/P calculations….
Please don’t misunderstand – I’m not trying to say that we ought to go for the shale oil first, or that it’s our best resource… we have a lot of conventional oil resources that are currently off limits because of government regulations, not for technical or scientific reasons. I’m just saying that here is evidence of massive oil resources that we have available but that aren’t being utilized primarily because of government moratoriums or delays. As a result, oil companies went towards deep sea drilling, rather then the cheaper and safer drilling in shallow waters or on land shale oil, the latter two having been for all intents and purposes eliminated from consideration because of government regulation.
I also have to note that as best I recall, there was no actual oil shortage associated with the 1973 OPEC fiasco. Oil prices simply don’t directly – or even close to directly – reflect actual/total availability or resources. They’re tied to political action, and heavily affected by the monopoly or virtual monopoly OPEC has had for decades. The 70’s ‘shortage’ was a shortage imposed by OPEC, not by an inability to produce sufficient oil.
Canada’s oil sands, and if we can get our government to start aiding rather than hurting production, our oil shale, may help break OPEC’s stranglehold on oil supplies and prices. Unfortunately, even with no government interference, it takes time to develop the necessary infrastructure in order to ramp up production.
The report link below is to Vol. 1 only, note that there is a vol. 2 which you can easily find by googling the title.
http://fossil.energy.gov/programs/reserves/npr/publications/npr_strategic_significancev1.pdf
There is a profound difference between “more difficult to produce” and “more expensive” that is ignored. It is more expensive to produce the tar deposits in Venezuela (even if it were not politically obstructed) but not more difficult per se. It is the refining that takes more work, to turn it into gasoline and Diesel. (Not too hard to do, just folks will use light sweet before they use heavy sour…)
Reserves is a Very Rubber Ruler. With almost as many variations in definition as the “what is is”… A major revision was done just a decade or two ago (and obsoleted many of my favorite terms). So just WHICH reserves are you comparing? Ultimately recoverable? Economic? etc.
So WHEN is “peak oil”? Far more in the future than any of us needs to worry about.
In the news today, China invested a chunk of money in Devon Oil and US Shale oil:
http://www.bbc.co.uk/news/business-16404499
Folks have finally decided prices will stay over $80/bbl and they can make a profit from shale oil. As Saudi had a habit of crashing oil prices to run unconventional oil out of business, folks had not been willing to invest in it. That’s now changed.
How much oil shale is there in the world?
http://en.wikipedia.org/wiki/Oil_shale
Yes, about 3 TRILLION barrels that even the wiki is willing to think of as ‘recoverable’. That means “ultimate reserves” are much larger…
That was the sound of several Trillion barrels of new reserves being brought to market…
So, about that peak oil…
Oil production is much more driven by politics and the economic definition of ‘reserves’ being sensitive to price than anything technical, and way after THAT comes “ultimate reserves” limits.
BTW, shale oil is only ONE of the “unconventional reserves” that exist…
I am perfectly comfortable with an orderly replacement of fuel processed from crude oil, to electrical energy produced by a fusion or nuclear process at least for private transport. I am perfectly comfortable with this transition, but in taking that step, I also see a need to unlock patents on the most efficient and most viable means of storing electrical energy, if such technology is patented and not marketed, then the patent should lapse into a form of “crown patent (British term) and available for open use but subject to whatever arrangements that can be made to feed compensatory payments back to the inventor or his backers.
A viable personal or family electric car network and power distribution can then be put in place by normal commercial arrangements in a competitive market to supply the needs of the consumer at the best possible price. The remaining crude oil supply is then reduced to the supply of diesel for long haul truck and rail transport between commercial centres, structured in such a way that supply of the fuel for the needs of communities will be at the most competitive rate and supply not manipulated by storing in ghost ships, or any of the other tricks to restrict supply and artificially inflate pricing.
This in itself should put peak oil on the back burner as other fuel and energy distribution schemes develop, doesn’t need to be over regulated but just reward those that give us the best for our consumer buck.! Remember also that there are means to limit market access, by shifting alternative fuels (Gas, LPG CNG) into the truck and train heavy hauling market and reduce crude oil refining to a more limited market of say lubricating oil and supply to chemical refiners for plastics and other products if the consumer needs them.
I’d rather the crude producers embrace this concept as necessary to ensure the future competitive marketing and future use of their product and in this way ensure some freedom to undertake the business and investment as a reasonably free enterprise. If future governments can work with the producers and ensure strategic development with the least possible disruption and repressive legislation, the better it will be..
Maybe a little idealistic, but we have seen the good the bad and the ugly, lets see if we can encourage competition and conserve at the same time. Government democratically elected to make life better and encourage rather than stifle adaptation and initiative. Try that for size!!
Mike Jonas, Interesting but new finds continue. The Eastern Mediterranean springs to mind with Noble Drilling announcing huge gas field finds off Israel and Cyprus. The single Cyprus field explored has enough gas to keep the island electricity generation going for 210 years (and Noble will have given conservative estimates to protect themselves) and this was from a single exploration block!
Source: http://www.rigzone.com/news/article.asp?a_id=113763
It would seem to me there is still plenty to be found!
All we know for sure is that today we are at Plateau Oil,
a basic world capacity ceiling of 100 million barrels per day.
Surpassing it significantly will require huge investments
all the way through the supply chain, from exploration
to recruiting new engineers and technicians.
Good luck with that as our educational system
continues to decline.
As mentioned above, it will also require
that Western governments end their parasitic corporate taxation
and stifling regulatory bureucracy.
Good luck with that as our bloato-Ruling Class
continues to metastasize so destructively.
Until world output regularly exceeds the 100 level
we only have the Plateau.
For those not believing in a near peak oil : if it is not difficult – generally speaking – to increase the production, why did North sea production peak in 2000 ? and why did UK become a net oil *importer* in 2004 , precisely when the oil prices started to climb to the heavens, loosing a comfortable source of income , and paying very much for a very expensive energy ?
can you find a simple and understandable explanation ?
I think neglecting the peak of fossil fuels productions of one of the weakest points of the IPCC scenarii – the three pillars of the climate change paradigm being : uncertain climate models, unreasonable fossil fuels reserves, and absurd economic theories.
I have a dispute with regards to the ‘high’ oil price. Prior to the quadrupling of oil price in the 70s, Nixon took the US off the gold standard and the price of god went from $35 and ounce to $140. So OPEC didn’t raise the price of oil, they demanded more dollars because the dollar had been devalued. Inflation continued, and the price of gold reached over $600 by 1981. Paul Volcker at the Fed brought the price of gold down and kept it in the $300-$400 range where it stayed until the late 90s. Now gold has gone well over $1500 an ounce. Is it really the case that producers consider the price of oil to be currently high? Perhaps it is still not high enough in real value to be worth extracting the oil.
The “harder to produce oil” mantra is funny considering that nowadays, most of the job in the “hardest” places is done by pressing buttons, moving joysticks and checking control screens.
No amount of facts is enough to convince peakoilers they are wrong since they keep believing they’ll end up being right, soon. It’s a religion.