By Larry Kummer, from the Fabius Maximus website
Summary: The peak oil hysteria provides rich lessons for us today about learning from activists and the value of listening to our major professional institutions. Easy cynicism led people to believe outlandish forecasts, wasting valuable time and resources. Worse, we have had many such barrages by doomsters — aided by their clickbait-seeking enablers in the media — which have left us almost immune to warnings, no matter how well-founded. We can do better.
Where were you during the peak oil hysteria? It began in 2005 and died in 2013, marked by the opening and closing of The Oil Drum website. Despite their analysis and forecasts proving to be mostly wrong, most of their authors are still “experts” publishing elsewhere (see this bizarre example). That follows the pattern of modern American doomsters, such as those who in the 1970s predicted global catastrophes from pollution and famine. Perhaps the activists predicting a climate catastrophe will add their names to this list in the next decade.
It’s not just historical trivia. We must learn from these bouts of irrationality if we have any hope of regaining the ability to govern ourselves.
Maximum World Oil Production Forecasts
Memories have faded, but a decade ago the predictions of end of oil were hot news. Comment threads overflowed with people terrified of the future. Conferences were held and books sold trumpeting certain disaster as the lifeblood of our industrial civilization dried up. Many of the following names were highlighted in journalists’ Rolodexes as the go-to people for hot quotes. Then as now, the names least often consulted proved to have the more accurate forecasts.
- 2005 – Pickens, T. Boone (Oil & gas investor).
- 2007 – Bakhitari, A.M.S. Oil Executive ((Iranian National Oil Co. planner).
- 2007+ – Groppe, H. (Oil / gas expert & businessman).
- 2007 – Herrera, R. (Retired BP geologist).
- 2008+ – Westervelt, E.T. et al (US Army Corps of Engineers).
- 2009 – Deffeyes, K. (retired Princeton professor & retired Shell geologist).
- 2009 – Simmons, M.R. (Investment banker; see the posts about his work).
- 2010 – Goodstein, D. (Vice Provost, Cal Tech).
- 2010 – Wrobel, S. (Investment fund manager).
- 2010 – Bentley, R. (University energy analyst).
- 2010 – Campbell, C. (Retired oil company geologist; see the posts about his work).
- 2010 – Skrebowski, C. (Editor of Petroleum Review).
- 2011 – Meling, L.M. (Statoil oil company geologist).
- 2012 – Koppelaar, R.H.E.M. (Dutch oil analyst).
- 2012 – Pang Xiongqi (Petroleum Executive, China).
- 2015 – Husseini, S. (retired Saudi Aramco).
- 2020 – Laherrere, J. (Oil geologist , France).
- 2020+ – CERA Energy (consultants).
- 2020+ – Wood Mackenzie (consultants).
- 2025+ – Shell.
- 2030+ – EIA and IEA.
- No visible peak – Lynch, M.C. (Energy economist).
These predictions were made during 2003 – 2008 (collected by Robert Hirsh; most sources are listed here). Most were given with qualifying language expressing uncertainty about the dates. Some of these people, especially those associated with the Peak Oil movement, had given different dates — moving them out as time passed. Most of these are documented, but details of some have been lost over time.
The forecasts of major energy agencies’ look good a decade later. Much as with climate change, activists disparage (often contemptuously) analysis of the professional institutions — but in hindsight it is clear who we should have listened to.
Let’s look at these predictions in the context oil production history.
Forecasts of Oil Production made in 2008
The following table shows the actual production of crude oil and liquid fuels — and the IEA forecast for production in 2015 from their World Energy Outlook 2008, published as energy prices were on their way to a record high? Eight years later, how accurate was IEA’s forecast? It was eerily accurate — somewhat accidentally, as the IEA did not foresee the 2008-09 global recession and so over-estimated GDP growth.
The IEA and EIA use similar definitions for “liquid fuels”.
World Production vs. the WEO 2008 Forecast
(million barrels/day)
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Crude Oil | 73,864 | 73,478 | 73,164 | 74,062 | 72,871 | 74,653 | 74,734 | 76,160 | 76,248 | 77,833 | N/A |
| Liquid Fuels | 85,099 | 85,135 | 85,130 | 86,515 | 85,703 | 88,099 | 88,532 | 90,466 | 91,014 | 93,201 | 97,900* |
| WEO 2008 | 86,000 | 96,000 |
Historical data from the EIA website.
* The 2015 total is for Q3.
The bottom line: liquid fuel production increased by 15% during the decade after 2005, so that prices have plunged (exacerbated by the Saudi price war). Prices will remain under pressure unless OPEC reestablishes its control, production coming online from investments in the giant fields of Iran and Iraq, the spread of fracking to other nations, and new tech (e.g., hybrid and electric cars).
Also note the increasing difference between production of crude oil and all liquid fuels. The rise in crude oil and, more broadly, liquid fuels were driven by new sources whose potential was mostly ignored by the Peak Oil doomsters). Crude production rose from deepwater and fracking wells, plus mining bitumen (aka oil sands, which technically does not produce crude oil). Liquid fuels production rose from production of natural gas liquids, biodiesel, ethanol, and those converted from coal and gas. Most numbers you see for “world oil production” are for all liquid fuels.
While in 2008 the IEA accurately estimated liquid fuel production for 2015, they over-estimated demand. As a result, the WEO 2008 price forecast for 2015 was too high.
“The era of cheap oil is over … The average IEA crude oil import price, a proxy for international prices, is assumed in the Reference Scenario to average $100 per barrel in real year-2007 dollars over the period 2008-2015 and then to rise in a broadly linear manner to $122 in 2030.”
Conclusions
As many of us predicted during the peak oil hysteria, high oil prices had three great effects — all predictable…
- Increased efficiency of energy use — as consumers and businesses invested to increase the efficiency of the more expensive energy (and R&D produced more ways to do this).
- Increased production of oil (boosted by R&D making more “resources” into usable “reserves”. Today’s $30 oil shows that production growth has exceeded demand.
- New sources of liquid fuels — including both new hydrocarbon-based supplies (bitumen in Canada and Venezuela), new carbon-based fuels (e.g., coal to oil, although oil prices never rose to make this viable), and new carbohydrate-based supplies (e.g., ethanol from corn).
Only time will tell about the IEA’s forecast for 2030 of $122 oil (in 2007 dollars). But today’s oil glut gives us an opportunity to prepare alternative supplies in an inexpensive and orderly manner, not only reducing the risk of energy price shocks but also reducing pollution and the risk of unpleasant anthropogenic climate change. Let’s make use of the gift.
Equally important is that we learn from this experience with the peak oil movement. Activists and enthusiasts have terrible track records at long-range forecasting, despite their confidently loud predictions of doom — echoed by clickbait-seeking journalists . That does not imply that we should blindly trust major institutions (as the scandal about Flint’s water supply shows), but skepticism pays large dividends and allows more rational preparing for the future.
For More Information
For a deep look at these issues see Exxon’s new report “The Outlook for Energy: A View to 2040“. Also see these…
- Important: Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil).
- When will global oil production peak? Here is the answer!
- The three forms of Peak Oil (let’s hope for the benign form).
- Peak Oil Doomsters debunked, end of civilization called off!
- Prepare now, for oil prices will rise again.
To learn about the minerals that power our world, and will for many years more, I recommend reading the IEA report Resources to Reserves 2013. Here is a brief slidedeck of its contents. For a deeper look, see the IIASA’s Global Energy Assessment (a widely cited source document, including by the IPCC’s AR%). Here is a 113 page summary.
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The problem with Hubbert’s “Peak Oil” hypothesis was his vast underestimation of the original oil in place (OOIP).
I have to wonder how many times we have to explain this. Peak oil is not about what oil is in place. It’s about how fast we can extract it.
The peak oil calculation is dependent on the OOIP and economic recovery factor. All reservoirs have a “peak oil” point. “Peak oil” generally occurs early in a well’s production life…
Decline curves are generally plotted as rate vs cumulative production. A decline curve is dependent on original oil in place and the recovery factor. Hubbert simply calculated a hypothetical decline curve for the world.
Hubbert’s “Peak Oil” prediction was based on the assumption that the total recoverable reserves in the US and our OCS (offshore) were only 150-200 billion barrels. The current DOE estimate is 400 billion barrels – And that estimate was before 2006 and the shale boom and it didn’t include unconventional resource potential (which dwarfs the conventional potential). Shale oil like the Bakken and Eagle Ford is not unconventional oil. It is plain old crude oil. The recovery is unconventional because it’s different than the prior norm; hence they are described as unconventional resources. Oil shale (Green River) and tar sands (Athabasca oil sands) are unconventional oils because they are bitumous kerogens – essentially incompletely formed crude oil.
Here’s a link to Hubbert’s 1956 paper… http://www.hubbertpeak.com/hubbert/1956/1956.pdf
“Oil shale (Green River) and tar sands (Athabasca oil sands) are unconventional oils because they are bitumous kerogens – essentially incompletely formed crude oil.”
Wow, you really have no clue. Kerogen is the precursor for oil. It’s what oil is made from once cooked long enough. Bitumen is the opposite. It’s what’s left of oil after it has been cooked too long and all the light molecules have been boiled off. Do yourself a favour before you post too much more and read Oil 101.
Unconventional oil is vast, but difficult to extract, hence a low flow rate, and have a low ERoEI. Which makes their net enery output lower. That means more energy has to be diverted from society to get that oil. It’s called the Energy Trap. Google it.
From Wikipedia…
“Bituminous” means contains bitumen.
The “oils” (technically high-grade refinery feedstocks) in oil shales are generally bitumous kerogens or kerigenous bitumens.
EROEI is a meaningless phrase. It has no bearing on resource economics. It doesn’t matter how much energy it takes to extract, refine and transport fossil fuels. EROEI (Energy Returned on Energy Invested) is even dopier than AGW and Peak Oil. I don’t spend energy to fill my tank. I don’t give energy back to the gas & electric companies in exchange for them being nice enough to heat and light my home. My company doesn’t drill for oil & gas to make energy.
I spend money to fill my tank. My company drills wells for oil & gas to make money. My gas & electric bills are paid for with money. My pay check, ExxonMobil & Shell credit card statements and checks to the gas & electric companies aren’t denominated in joules, kilowatts or btu – They are denominated in $.
I don’t give a rat’s @ur momisugly$$ if 1 barrel of amoeba farts uses less energy to produce than 1 barrel of crude oil… Because the barrel of amoeba farts costs $1,100 and can’t be produced in sufficient quantities to be waiting for me at the Exxon or Shell station when I need it.
If oil companies (or any businesses) used EROEI to guide their investment decisions, they would go out of business (unless the gov’t was footing the bill).
What an odd timing for this article, Larry Kummer.
If there is something worse than to predict a Peak Oil that doesn’t take place is to miss a Peak Oil that has already taken place.
As some people have explained to you, conventional oil has been on an undulating plateau since 2005. This is easily seen by anybody because all the growth in oil production since then has come from US and Canada. The rest of the world together has been flat producing to this date.
See for example Matt Mushalik’s “World outside US and Canada doesn’t produce more crude oil than in 2005“.
The best comment in this page is from Vangel Vesovski. He has explained to you why the unsustainability of unconventional oil cannot continue, but you have nothing to answer to him.
Peak Oil has taken place in the summer of 2015. Since then oil production is going down and will continue going down in 2016. The lack of investments in E&P due to the oil price crisis means than projects delayed or cancelled are going to significantly affect future production and we are going to have a gap by 2020 projected at 3 million barrels per day. Weak economic conditions or outright global recession will do the rest by crashing demand. Since the world less US and Canada has been unable to increase production for 10 years despite billions invested in capex, what comes next is decline.
You are at the uncomfortable situation of calling hysteric to Peak Oil prognosticators right after Peak Oil has taken place. Well done.
The Bakken, Eagle Ford and other shale oil plays are not “unconventional oil,” They are regular crude oil. The recovery method is unconventional.
Hubbert underestimated the volume of crude oil in place and could not have accounted for recovery methods not even imagined in 1956.
Hubbert is irrelevant nowadays. The decline of Light Tight oil is like nothing Hubbert ever saw. The decline in US oil production over the next two years is going to be spectacular. The decline in the rest of the world is going to add up to that. Peak Oil was always a physical inevitability and the scene was set up when consumption overcome discoveries decades ago. The 2014 oil price crisis has brought it forward, but less not forget that we had Peak Conventional Oil in 2005, and Peak Oil Exports in 2007, so it is not as if this should have caught up by surprise. Peak Oil is already in the rear mirror, yet most people still don’t see it nor understand why.
The decline in US oil production over the next two years is going to be spectacular.
What else would you expect, with the price under $30/bbl?
Proved reserves will also decline… Even though the oil will still be there.
David Middleton,
So much for proof, eh?
Proved reserves vary with product prices, independently of resource volume.
Javier,
Oil production is limited by cartels to maximize profit, not limited by ability to produce. Lately one producer, Saudi, got pissy at Russia and Iran having a war in their back yard. The result? They opened the taps a bit and crashed oil prices to $25 / bbl. The collateral damage to the USA is shutdown of our exploration, that isn’t a technical issue, but a geopolitical economic war issue.
Don’t confuse deliberate control with technical limits.
Note, too, that China is hitting an economic wall and slowing fast, while Europe is very slow. Oil demand does not grow in slack economies. USA wages have been flat to down for a decade. Folks don’t buy more gas when they have less money.
https://chiefio.wordpress.com/2016/02/13/why-us-voters-are-angry-and-why-the-economy-is-stagnant/
Don’t confuse economic slowdown with limited oil avaiability.
The whole world population growth is slowed, especially in advanced economies that drive cars. Fewer drivers driving less (millennials especially drive less).
Don’t confuse less demand (slow or no growth) with inability to produce.
Companies do not produce inventory in excess of demand, that costs a lot of money. The markets are just reflecting prudence in supply creation in the face of a flattened global economic growth. Similarly you do not see GM building millions of cars to sit in lots unwanted.
Oil is a product, subject to all the usual rules of making products and inventory management.
Mike Smith,
Excellent analysis.
E.M.Smith,
I do not confuse those things.
You have a nice narrative about oil price wars and aggressors and victims, that the press has been pushing and a lot of people have bought. The evidence however shows that oil supply increased faster than oil demand, and oil price followed the demand/supply ratio as it usually does.
http://i1039.photobucket.com/albums/a475/Knownuthing/fig2_zpsbx7cyxsu.gif
Occam razor says it was the demand/supply ratio not a conspiracy. But people like a good conspiracy even if imaginary.
As oil supply is no longer growing, if demand is able to keep growing prices will stabilize and start increasing. But the damage to future production has already been done:
27 Billion Barrels Worth Of Oil Projects Now Cancelled
Oil price rout forces companies to slash $170 billion in projects from 2016-2020
TPH: Canceled projects could draw down 19 million daily oil barrels
We have reached the end of cheap to produce oil. Every increase in oil production is from expensive to produce oil. As we are in debt saturation and demand crisis that manifests as a deflationary crisis, we are not able to afford expensive oil. If oil is expensive, demand will go down and production will follow down. If oil is cheap expensive production will be shut down.
We have reached this point through decades long trends:
– Preferential consumption of cheap to produce oil in increasing amounts, until all giant fields are old and nearly depleted.
– Increase in debt to pay for consumption and growth when the economy was not able to grow enough, expending future wealth in the past. Now that future from where we took the wealth has arrived.
– A reduction in labor compensation due to population excess including globalization and outsourcing, that has increased capital compensation and promoted inequality. Now consumers cannot afford much and they are no longer credit worthy. A consumer or demand crisis manifests as a deflationary crisis.
Oil is not a product is a source of energy used to leverage work. We do not currently have a good substitute for it and we have reached peak production. The manifestations of this liquid fuel crisis are so far reaching that we might observe the symptoms (poor economic performance) without understanding the cause.
Javier says:
We have reached the end of cheap to produce oil.
That’s what Mike Smith said, in different words. And:
Peak Oil is already in the rear mirror, yet most people still don’t see it nor understand why.
You know things that people still don’t see or understand? So in addition to being an expert on the ‘climate’ (which correctly applies to regions, not to the globe), you’re a petroleum expert, too? I’m impressed.
In what other fields are you an expert? No need for all these different points of view, we can just rely on your comments. That will save lots of time reading.
BTW, ‘peak oil’ has been predicted repeatedly, since at least the 1920’s. Now you have it pegged to a single year. That couldn’t have anything to do with the global economy, could it? Nah. Because then your argument would be wrong.
Javier,
Saudi is the swing producer. They control that demand supply ratio. You show the graph of the result of their actions as ‘proof’ that their action doesn’t matter. Strange, that.
It is no grand conspiracy theory to describe the religion war truth of 1000 years. Sunni Shia conflict is well documented and the war with Iran fighting in Syria and Russia bombing Sunni is visible on most news channels. Russia Today has nice video, as does Al Jazeera America.
Then there is the oil shock history of the last time Saudi did this as clear precident.
The only speculative bit is motivation. It is remotely possible Saudi is ONLY acting from pecuniary motive and dosen’t care at all that this damages their chief rival and the Russian backers who are killing and bombing their fellow Sunni Arabs. But the much more likely motive is a “two fer” of both motives. Discipline OPEC cheaters and damage rivals.
BTW, we’ve seen this movie a few times already. The 70s Arab Oil Embargo, the 80s oil glut, wash and repeat.
It is simply not possible to say anything about production costs based on oil prices. Price is determined by the swing produce in OPEC. That might change, if Saudi runs out of cash before the frackers do. If not, Saudi continues to set prices for a couple of more decades.
BTW, the present $1.30 / gallon price of gasoline in Ok. pretty much proves there is no shortage of oil production, nor can there be until Saudi closes their taps.
We have LOTS of alternatives to oil as motor fuel (it is almost entirely used for transport fuel). From biodiesel to ethanol (already 10% substituted for gasoline here) to natural gas (many large trucks already use it and Love’s truck stops have CNG pumps – checked them out on a recent road trip) to GTL plants to CTL as done for decades in South Africa by Sasol company. And that doesn’t even start to scratch the surface. There are dozens more, from bacterial produced butanol drop in replacement for gasoline to DME injected diesel busses (in partial use / testing) and, back in the 70s Arab Oil Embargo, V.W. did an analysis design showing coal to methanol and methanol engines at about $4 / gallon of gasoline equivalent in todays dollars if nuclear process heat were used. Very livable.
Oh, and IIRC, Syntroleum corp had / has a trash to diesel facility running in California so LAX could be carbon PC.
We just don’t have any CHEAPER than dirt cheap oil. But they do put a lid on price at about $3 – $4 /gal.
You then wander off to some odd economic theories with cheap oil somehow causing an economic crisis.. We’ve had higher and lower fuel prices in real inflation adjusted prices in the past, so ‘existance proof’ kind of makes that point moot.
BTW, I’m an economist by degree and computer project manager for a living. I know a bit about economics and business and such. Your econ thesis ‘needs work’. The real causes of the global malaise are largely too much government regulation, too much taxation, too much crony socialism crony capitalism, and profligate debt (mostly by governments buying votes). Seasoned with a too fast attempt to move both India and China into modernity in less than one generation (screwing the developed economies with too rapid globalization). Oh, and a bit too much funny money pushing by central banks based on ‘Modern Monetary Theory’, which is wrong.
Get the stupids in governments out of the way and the economy would be fine.
https://chiefio.wordpress.com/2016/02/13/why-us-voters-are-angry-and-why-the-economy-is-stagnant/
In short, too much socialism / 3rd Way Economics , not enough free markets, and a severe lack of financial discipline. Oil just not relevant to the problem.
E.M.Smith,
Saudi Arabia “was” the swing producer. When Libya came off line in 2011 it became clear that Saudi Arabia no longer had the capability of acting as swing producer. Saudi Arabia has been pumping oil as much as possible, increasing tremendously its number of rigs for the past years, yet since January 2012 it has only increased peak production by 0.35 mbpd.
Looking at past oil prices and economic conditions tells you little about present capacity of the economy to withstand high oil prices. When the economy is growing strong is capable of withstanding much higher oil prices than when it is weak and barely not growing despite low oil prices.
Every economist has a recipe to cure the economy. Few are capable of recognizing that we are reaching the limits, and that means the end of economic growth. Free markets cannot solve a problem of limits.
We will certainly have to do with oil substitutives. That doesn’t mean that we are going to do well with them. Some are more expensive, some have less energy, some cannot be scaled enough, and some have all those problems.
“Peak Oil has taken place in the summer of 2015. ”
As much as I agree with you, I think that you are being fooled by the aggregate number that is being reported. We don’t really use much crude in our daily lives. We use petroleum products. And as you know, a barrel of heavy oil does not produce as many of the high-value products as does a barrel of light sweet. The aggregate also includes refinery gains and condensates that were not really reported accurately in years where there was no concern about peak production. As such, we are ignoring the fact that economic light sweet production is in our past and has been for almost a decade.
In his great book, Human Action, Ludwig von Mises has a section where he discusses the error made by the Classical Liberals, who assumed that people would not choose a system that did not work over the system that they created. It is ironic that the very people who can understand how the Fed’s easy money policies the best have fallen for the shale story and disregarded the actual evidence or the theory. I understand that Julian Simon is held in high regard because I hold him in high regard as well. But the Straussians are also right about this. They point out that when we pull back the veil on all societies we find people in the background manipulating the game. And that is what is happening today. Had we lived in a system where people were able to pursue their interests in a free market there is no way that a capital destroying industry like shale would have attracted as much investment for as long as it did. We would have seen more investment in drilling for natural gas in locations that should have plenty of it but never received much attention and even in something like the recovery of methane hydrate crystals from known deposits. We would have a lot less alternative energy and more clean coal and nuclear.
Even worse are supposedly skeptical blogs like this one, which ignore the evidence. As I wrote before, it is easy to prove me wrong. All these guys have to do is to find evidence that the shale companies can generate positive cash flows by looking through the SEC filings. The fact that they can’t should tell us all that we need to know.
Correct Vagel. Shale oil in the US has always been a scam. It was all based on debt and never produced any profits. A new bubble that is now popping.
Riiight… I’m sure Shell Oil Corp just ran out and squandered $ Billions on a scam when they could have made money somewhere else… /sarc. (IIRC their play was in Canada)
No, I’m not going to waste weeks of my time digging through SEC filings to make you happy. I’m quite happy with my present understanding of oil economics (based on study of it since the 70s Arab Oil Embargo to today).
Shale makes money (and net energy) at prices over about $50 to $80 per bbl depending on particulars of the play. The biggest risks to profit are dirt cheap natural gas (substitution as in all those big rigs filling up on CNG at Love’s Truck Stops) and Saudi machinations in OPEC. Not the technology and not the financing.
E.M.Smith,
Shale oil was supposed to make money, but almost all producing companies have large in excess debts well above any money they have made. Therefore shale oil production so far has made no money.
Vangel Vesovski,
In 7 out of 7 comments you’ve attacked shale oil companies. I’ll admit to not knowing much about them. But it seems you have an axe to grind.
However, I agree with your comments re: Rothbard and von Mises, both of whom I’ve read.
” Then as now, the names least often consulted proved to have the more accurate forecasts.”
Thanks. The aggregation of predictions with sources is valuable. I’d love to see more of this sort of thing. We should not expect good predictions to always be spot on, and sometimes “bad” predictions can hit the mark. Having estimates that are systematically biased is a concern. The doom and gloom crowd (in my opinion over-represented in academia) has done that in a number of areas and they seem to be the go to guys for mainstream media.
A big concern is that often the “biased” forecasts are hidden deeper in some another analysis. For example: Electric cars, renewables, efficiency are shown to be economic in the long run, but the assumed escalation costs for fossil fuels are near incredible. Forecasts tend to show us reaching cliffs of catastrophe but the real world generally changes more incrementally.
Boone Pickens is a loudmouth promoter and should never be trusted.
Having said that, I will credit him as the author of this succinct restatement of economic truth:
“The solution to high prices is high prices.”
Like wise, the solution to low prices is low prices ….
Sigh
Javier said
Quote
As some people have explained to you, conventional oil has been on an undulating plateau since 2005.
Unquote
it will always be a plateau as price balances demand. Fact is we have several hundred years supply. Conventional or not, matters not. What matters is “does it work”
Simple
Yes, we do have several hundreds of years supply, but at what rate of extraction????? Another person who doesnt understand what peak oil means. It’s not about what’s in the ground, it’s about how fast we can get it from the ground.
huh, we get it out as fast as we like. Several hundred years supply is several hundred years supply. Who are you fooling, yourself?
So you think we can defy the laws of physics? No we cannot extract it as fast as we can. Conventional wells follow a bell curve. Tight shale wells follow a decay curve. Those are the facts. Ignoring those facts doesnt make it happen in our favour.
You need to read this: http://rsta.royalsocietypublishing.org/content/372/2006/20120320
Mexico production curve:
http://www.financialsense.com/sites/default/files/users/u247/images/2013/Mexico-Oil-Production-Chart-July-2013.jpg
North Sea production:
http://econbrowser.com/wp-content/uploads/2014/09/northseaoilprodn1.jpg
It’s not a matter of “how fast we can get it from the ground.” It’s a matter of how much is in place (OOIP) and what percentage of it we can economically recover (RF). As long as OOIP and RF keep going up “peak oil” will continue to move forward in time.
How fast we can get it out of the ground is at least in part dependent upon the technology used for extraction.
Technology is not stagnant.
“It’s not a matter of “how fast we can get it from the ground.””
I see, so when the world production stops meeting world demand, that’s not going to matter?????
Meeting world demand has nothing to do with “peak oil.”
Peak oil is simply a global application of a decline curve. A decline curve is based on OOIP and RF. Field production rates are generally set by drilling and recompletion tempos. The more wells you drill and recomplete, the faster you get the oil out of the ground.
No David Middleton,
Peak oil is the point in time of maximal oil production, so that before oil production was always lower and afterwards oil production is always lower. Whether this is the consequence of geology, technology, economy or debt, or a combination of them is irrelevant for the definition of Peak Oil. Obviously Richard Wakefield is correct that it is about the rate of extraction. When the derivative of the oil extraction versus time (or rate of oil extraction) while going from positive to negative reaches zero, at the highest value of oil extraction, that is the mathematical definition of Peak Oil.
“The more wells you drill and recomplete, the faster you get the oil out of the ground.”
Yet with all the drilling done at Hybernia, North Sea, Cantarell, etc, they continue to decline in production.
It’s pretty clear that some commenters here don’t understand basic econ. It matters not whether there is ‘peak oil’. If there is, that’s just the ‘peak’. So what?
What happens is this: as it becomes more difficult to extract oil, the price point moves. Oil products get more expensive. The markets will take care of that very efficiently.
(Also, the recent weakness in the price of oil argues that we are not at ‘peak oil’.)
If oil gradually rises to $200/bbl, for example, and gasoline costs $8 a gallon as a result, the markets will adjust. New cars will begin to get higher mileage. More R&D will be invested to drill deeper wells, improve fracking, etc.
But the impression some folks leave is that ‘peak oil’ means we’ll run out.
That. Will. Not. Happen.
What will happen is that the cost of petroleum products will rise. There is no crisis. New technologies will take the place of those that heavily depend on oil products.
The whole ‘peak oil’ argument is a tempest in a teapot. The markets will easily handle whatever comes along. The real problem is the growing bureaucracy. Big government. That is the problem, not ‘peak oil’.
The rate of extraction is the rate of demand at that price.
It is NOT the maximum technical ability to pump.
Basic economics.
NOBODY produces product in excess of demand for long. You go broke that way.
Educate yourself…
http://www.hubbertpeak.com/hubbert/1956/1956.pdf
So you want to use a 1956 limited definition no longer valid? Everybody but you understands that Peak Oil is the point of maximum production of crude oil. Even Wikipedia:
“is the point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline.”
https://en.wikipedia.org/wiki/Peak_oil
I am quite educated on the issue thank you.
David Middleton,
Javier says “educate yourself”. That’s always possible with you and me…
…but not with Javier. He thinks he knows it all.
I have observed odd prejudices and bizarre behavior on all sides on this issue. Oil companies have kept the knowledge of tap-able reserves under wraps while helping feed Peak Oil hysteria with a few calculated “we can neither confirm nor deny” remarks. This served to drive a wedge between those seeking to determine an assessment of short-term economic effects and others who were trying to start open public debate to explore options for post-petroleum survival.
In the early 70s the mere fact that ‘oil will run out’ was generally understood and could be debated easily without one being pressed on exactly when as people do now, AS IF not knowing or stating ‘exactly when’ makes your whole argument moot.
Now the future of oil has become a polarized issue. You either have to side with the oil companies who project hundreds of years of production (despite steeply declining EROEI of methods), fall in with wind and solar advocates who are crypto-advocating complete reliance on natural gas (either they haven’t figured it out yet or choose to leave the topic un-discussed, the silence is deafening), or jump in with the doom crowd who insist that Big Oil has been ‘hiding the decline’ and disaster is already under way. Or just for novelty’s sake talk a walk on the wild side of abiotic oil, which pretends that oil is inexhaustible (though not guaranteed to be accessible)
I sometimes long for the 70s, a time before the political noise rose up to shout down the simple message.
Abject nonsense.
Aramco
The latest world oil production and consumption chart from the US Energy Information Agency.
One can see why prices are falling because production has been as much as 2 million barrels per day higher than consumption. Stocks have been rising since 2014 and they are literally starting to run out of places to store it. More than a year out before production and consumption balance out again.
https://www.eia.gov/forecasts/steo/report/global_oil.cfm
http://s12.postimg.org/tnh6n7jf1/world_Oil_Prod_Cons_IEA_Feb16.png
Simple and wrong. Conventional oil production was not in a plateau prior to 2005, it was growing, and will not continue in a plateau when the exponentially increasing capex needed to sustain that plateau is not there, like now. Decline is already baked in the cake. Peak Oil is not about how much oil is in the ground, but about how much oil we produce. Non conventional oil from US is already declining since April 2015 and likely to decline even more in 2016 even if the oil price raises. Looks like the fracking bubble has popped.
Yes Javier, I agree that your comment is simple and wrong…,
USA production is falling due to Saudi Arabia producing excess oil for a year or two as an economic weapon against their bitter enemy, Iran, and their enabler, Russia.
Low and falling prices, not any technical limit on ability to produce.
You seem to think oil produces will always pump at maximum abilty. That is just wrong. Demand and price drive production in non OPEC nations. Politics and monopoly strategy drive production in OPEC and especially in Saudi. Note the complete absence of technical max ability to pump driving output increases. OPEC exists precisely for the purpose of preventing production at max abilty to pump.
E.M.Smith,
“USA production is falling due to Saudi Arabia producing excess oil for a year or two as an economic weapon against their bitter enemy, Iran, and their enabler, Russia.”
You haven’t even looked at oil production charts, have you?
Saudi Arabia produces more oil during the summer due to their strong consumption of electricity those months.
Saudi Arabia
Summer of 2012: 9,900 mbpd
Summer of 2013: 10,100 mbpd
Summer of 2014: 9,900 mbpd
So at the time the oil price crisis started Saudi Arabia was producing less oil (0.2 mbpd) than the previous year and the same amount than two years before.
US
Summer of 2012: 6,000 mbpd
Summer of 2013: 7,400 mbpd
Summer of 2014: 8,500 mbpd
So at the time the oil price crisis started US was producing a lot more oil (1.1 mbpd) than the previous year and a lot more oil (2.5 mbpd) than two years before.
I am afraid your narrative is not supported by the data. US produced the excess of oil that provoked the oil price crisis.
Saudi is the swing producer. “more” is relative to stability price point.
Yes, I probably ought to have said OPEC was over producing via cheating and the US unconventional was squeezing too driving Saudi into reduction from their personal goals, and yet they chose to let price drop to discipline the cartel and damage Iran / Russia, perhaps with consultation with US Agencies and…
wasting even more hours of my time on irrelevat detail unlikely to be of benefit.
The key points remain: Saudi is THE swing producer. Their production rate determines global prices. They chose lower prices by keeping output higher than needed.
Yes, other suppliers raised output too much. At that point, the swing producer can reduce, to restablish prices, or let increased total production discipline the cartel. Saudi chose discipline and hurt Iran / Russia.
Happy now?
Note that Saudi has met with Russia and Iran now to discuss how well their leverage is working.
There is a small chance that unconventioal non-OPEC oil can become the swing producer, but that is not proven yet, and it is unlikely they would join the cartel anyway as their home countries want low prices and a broken OPEC. It can be forced into swing production cuts via price wars, happening now…
So we get to see who runs out of cash first. With Saudi controlling the swing and prices.
E.M.Smith,
Saudi Arabia stopped being the swing producer in 2005, and it was demonstrated during the Libyan crisis of 2011. Look at what happened. Arabia Saudi wasn’t able to increase production enough to compensate for Libyan loss, and about half of what incremented was direct burn (internal consumption). It was US who responded several years later to the Libyan loss of production.
http://crudeoilpeak.info/wp-content/uploads/2015/11/Saudi_US_incremental_Libya-loss_Jan2011-Sep2012.jpg
“I probably ought to have said OPEC was over producing via cheating and the US unconventional was squeezing too driving Saudi into reduction from their personal goals, and yet they chose to let price drop to discipline the cartel and damage Iran / Russia, perhaps with consultation with US Agencies and…”
You produce a narrative. It is good for writing fiction, but it is devoid of any actual fact. It also assumes that you have direct knowledge of other people’s intentions, which is obviously impossible.
“Happy now?”
Why should I be happy? You produce narrative that contradicts facts, and when I point it to you, you produce more narrative this time devoid of any fact and thus unfalsifiable. But if it makes you happy to believe all those tales, fine with me.
Javier: “You produce narrative that contradicts facts”
I am not persuaded you would recognise a ‘fact’ in this context if it bit you on the backside.
Sigh, Peak Oil is simply not relevant, we have plenty of all kinds, its cheap and at current consumption, several hundred years supply.
End of whining
Except I have posted links showing your logic is completely flawed. Peak oil happens, has happened to individual fields. It’s pie in the sky thinking that such reductions in production cannot happen globally. That some how we can defy the laws of physics.
There’s still too much oil in the ground and too much capacity for technological advancement to even begin to predict when a true “peak oil” point will be reached.
True, we dont know when precisely it will happen, but that does not mean it fundamentally cannot happen. All technological advancements do is kick the can down the road a bit. It’s buys us some time.
It will buy us a lot of time because there’s a hell of a lot of undiscovered and currently unrecoverable oil remaining in the ground.
“there’s a hell of a lot of undiscovered.”
Wow, you know how much is in the ground that has yet to be discovered???? Amazing! You put money into those companies who have yet to find those fields?
It doesn’t matter how much oil there is in the ground. What matters is how much we can get out and at what cost. There is no need to predict anything. Peak Oil has taken place in the summer of 2015.
J. Richard Wakefield:
For all practical purposes every resource – including crude oil – can be considered to be infinite.
This is a matter of basic economics that because you say you don’t understand the matter – I will again explain.
‘Peak oil’ is part of the fear of overpopulation.
The fallacy of overpopulation derives from the disproved Malthusian idea which wrongly assumes that humans are constrained like bacteria in a Petri dish: i.e. population expands until available resources are consumed when population collapses. The assumption is wrong because humans do not suffer such constraint: humans find and/or create new and alternative resources when existing resources become scarce.
The obvious example is food.
In the 1970s the Club of Rome predicted that human population would have collapsed from starvation by now. But human population has continued to rise and there are fewer starving people now than in the 1970s; n.b. there are less starving people in total and not merely fewer in percentage.
Now, the most common Malthusian assertion is ‘peak oil’. But humans need energy supply and oil is only one source of energy supply. Adoption of natural gas displaces some requirement for oil, fracking increases available oil supply at acceptable cost; etc..
In the real world, for all practical purposes there are no “physical” limits to natural resources so every natural resource can be considered to be infinite; i.e. the human ‘Petri dish’ can be considered as being unbounded. This a matter of basic economics which I explain as follows.
Humans do not run out of anything although they can suffer local and/or temporary shortages of anything. The usage of a resource may “peak” then decline, but the usage does not peak because of exhaustion of the resource (e.g. flint, antler bone and bronze each “peaked” long ago but still exist in large amounts).
A resource is cheap (in time, money and effort) to obtain when it is in abundant supply. But “low-hanging fruit are picked first”, so the cost of obtaining the resource increases with time. Nobody bothers to seek an alternative to a resource when it is cheap.
But the cost of obtaining an adequate supply of a resource increases with time and, eventually, it becomes worthwhile to look for
(a) alternative sources of the resource
and
(b) alternatives to the resource.
And alternatives to the resource often prove to have advantages.
For example, both (a) and (b) apply in the case of crude oil.
Many alternative sources have been found. These include opening of new oil fields by use of new technologies (e.g. to obtain oil from beneath sea bed) and synthesising crude oil from other substances (e.g. tar sands, natural gas and coal). Indeed, since 1994 it has been possible to provide synthetic crude oil from coal at competitive cost with natural crude oil and this constrains the maximum true cost of crude.
Alternatives to oil as a transport fuel are possible. Oil was the transport fuel of military submarines for decades but uranium is now their fuel of choice.
There is sufficient coal to provide synthetic crude oil for at least the next 300 years. Hay to feed horses was the major transport fuel 300 years ago and ‘peak hay’ was feared in the nineteenth century, but availability of hay is not a significant consideration for transportation today. Nobody can know what – if any – demand for crude oil will exist 300 years in the future.
Indeed, coal also demonstrates an ‘expanding Petri dish’.
Spoil heaps from old coal mines contain much coal that could not be usefully extracted from the spoil when the mines were operational. Now, modern technology enables the extraction from the spoil at a cost which is economic now and would have been economic if it had been available when the spoil was dumped.
These principles not only enable growing human population: they also increase human well-being.
The ingenuity which increases availability of resources also provides additional usefulness to the resources. For example, abundant energy supply and technologies to use it have freed people from the constraints of ‘renewable’ energy and the need for the power of muscles provided by slaves and animals. Malthusians are blind to the obvious truth that human ingenuity has freed humans from the need for slaves to operate treadmills, the oars of galleys, etc..
And these benefits also act to prevent overpopulation because population growth declines with affluence.
There are several reasons for this. Of most importance is that poor people need large families as ‘insurance’ to care for them at times of illness and old age. Affluent people can pay for that ‘insurance’ so do not need the costs of large families.
The result is that the indigenous populations of rich countries decline. But rich countries need to sustain population growth for economic growth so they need to import – and are importing – people from poor countries. Increased affluence in poor countries can be expected to reduce their population growth with resulting lack of people for import by rich countries.
Hence, the real foreseeable problem is population decrease; n.b. not population increase.
All projections and predictions indicate that human population will peak around the middle of this century and decline after that. So, we are confronted by the probability of ‘peak population’ resulting from growth of affluence around the world.
The Malthusian idea is wrong because it ignores basic economics and applies a wrong model; human population is NOT constrained by resources like the population of bacteria in a Petri dish. There is no existing or probable problem of lack of resources or of overpopulation of the world by humans.
Richard
Javier, you’re still missing the big picture. You say:
It doesn’t matter how much oil there is in the ground. What matters is how much we can get out and at what cost.
Of course it matters how much oil is still in the ground. The markets will price it at the cost of extraction. The markets will take care of it. If it’s there, it will be extracted when the price is right.
And:
Peak Oil has taken place in the summer of 2015.
Umm-m… that’s a prediction, no? You’re predicting that no new supplies will be discovered. But that’s what happened with the fracking boom. Before fracking took off, ‘peak oil’ was routinely predicted. They were wrong then. What makes you so sure you’re right now?
Currently oil is selling for under $30/bbl. That isn’t consistent with ‘peak oil’, is it? If oil is getting scarce, the price should be rising.
Low prices will force marginal producers out of business, or force them to curtail production until prices rise. It is low prices — not ‘peak oil’ — that will cure low prices.
I work for one of those companies. No one knows exactly how much oil remains to be discovered and recovered. However, we know that it is a staggeringly large volume.
Past history shows us that gov’t agencies always grossly underestimate what the oil industry will find and produce. Alaska’s North Slope has already produced 16 billion barrels of petroleum liquids. Currently developed areas will ultimately produce a total of about 30 billion barrels. The government’s original forecast for the North Slope’s total production was 10 billion barrels. The current USGS estimate for undiscovered oil in the Bakken play of Montana & North Dakota is 25 times larger than the same agency’s 1995 estimate. In 1987, the MMS undiscovered resource estimate for the Gulf of Mexico was 9 billion barrels. Today it is 48 billion barrels ( SOURCE pp 11).
The MMS increased the estimate of undiscovered oil in the Gulf of Mexico from 9 billion barrels in 1987 to the current 45 billion barrels because we discovered a helluva a lot more than 9 billion barrels in the Gulf over the last 20 years. Almost all of the large US fields discovered since 1988 were discovered in the deepwater of the Gulf of Mexico. In 1988, it was unclear whether or not the deepwater plays would prove to be economic.
Based on the gov’t’s track record, the estimated 116 billion barrels of undiscovered oil under Federal lands is more likely to be 680 billion barrels. That’s close to 100 years worth of current US consumption – And that’s just the undiscovered oil under Federal mineral leases.
When you factor in truly unconventional oil plays like the Green River Oil Shale, the numbers become staggering. “Peak Oil,” won’t be reached for hundreds of years if the gov’t would just get the Hell out of the way.
It’s just a matter of economics and technology. There will be periods of economic expansion in which demand out-paces supply and there will be periods of supply out-pacing demand… Like right now.
Technology improves economics. Smaller and smaller oil accumulations can be found and economically recovered even in an environment of stable inflation-adjusted prices because technology is continuously improving… And large discoveries continue to be made in plays that weren’t envisioned just a few years ago. Eventually, we will reach a point where the diminishing returns of technology can’t keep up with oil-related energy demand. But a properly functioning free market will already be delivering economical alternatives as oil begins to price itself out of the market.
Going back to the Gulf of Mexico, three of the ten largest discoveries in the Gulf’s history (since 1947) have been made since 1985. Two of the top five (#1 and #5) were discovered in 1998 and 1999. There have been several potentially huge discoveries made in the last 5-10 years in the ultra-deepwater Lower Tertiary play. We won’t know how large these are until they can be fully evaluated by appraisal drilling.
The 9th largest field in the Gulf, Shell’s Mars Field, was discovered in 1989. Prior to the Mars discovery, no one seriously believed that Miocene-aged and older reservoirs existed that far away from the established Miocene plays in shallow waters. Decades of drilling results indicated that Miocene sandstones gradually “petered out” long before reaching the continental shelf. Since, the Mars discovery, many very large Miocene discoveries have been made in deepwater. The recent discoveries of even older, Lower Tertiary reservoirs in even deeper water was a huge surprise. Oligocene reservoirs were thought to have “petered out” even closer to shore than the Miocene reservoirs. No one knows how these sandstones got out that far into the Gulf while bypassing the shelf.
If we’re still finding giant-like fields in the Gulf of Mexico now in plays that we couldn’t even imagine 30 years ago… What will we find in the 85% of the US Outer Continental Shelf that has never been explored? The handful of discoveries offshore California were made long before modern technology was available. The very few exploratory wells that were allowed in the 1970’s in the Atlantic’s Baltimore Canyon were drilled long before 3d seismic reflection data were available.
Technology also enables us to steadily improve the efficiency of oil recovery from reservoirs. The Bakken formation is thought to have over 40 billion barrels of oil in place. The trick is in recovery techniques. The USGS assumes that 10% is the maximum recovery factor. Twenty years ago, few people thought that Bakken recovery factors could exceed 1%.
As you can see from the following chart, individual Bakken oil wells now produce 7 times as much oil as they did in 1991…
SOURCE
Over the past twenty years, drilling, completion and enhanced recovery methods have led to nearly a ten-fold improvement in Bakken oil recovery. There’s no reason to doubt that those recoveries will continue to improve… It’s just a matter of technology and economics.
“No one knows exactly how much oil remains to be discovered and recovered. However, we know that it is a staggeringly large volume.”
Kind of a contradictory comment, dont you think? We dont know, but we do know? Last time I looked oil in the ground is around 2 trillion barrels, of which we have consumed around a trillion. So we have used 1.3 of the bounty. The problem is, as with anything humans consume, we go after the easy and cheap stuff first.
“For all practical purposes every resource – including crude oil – can be considered to be infinite.”
I’ll remember that the next time I open a can of Coke when it empties.
“Peak oil’ is part of the fear of overpopulation.”
Egypt:
— 50% of the population is under 25 years of age.
— 80 million people, birth rate 3.5, twice Western Countries.
— imports 85-90% of their food requirements.
— oil production and export of that oil ended in 2005.
— borrows money to buy food on the open market.
Egypt is typical of most middle east countries. Now Saudi Arabia has joined the list as they have tapped out water reserves for crop production. They reached peak water.
So much for infinite resources…
It’s no more contradictory than not knowing exactly how many grains of sand are on a beach, yet knowing that it is a staggeringly large number.
“Peak Oil has taken place in the summer of 2015.”
Is that the 23 or the 24th time Peak Oil has been predicted?
PS, why the capitalization? Does it make the ridiculous look less so?
J. Richard, you don’t seem to know what the word “exactly” means.
Saying we don’t know exactly how much oil is out there, but we know there is lots of it is not contradictory.
Please, stop embarrassing yourself.
J. Richard, your numbers are bit out of date.
Regardless, the birth rate in Egypt has been plummeting in recent decades, the same as it has been for the rest of the world.
As to peak water, there’s always de-salination.
J. Richard Wakefield:
Congratulations! You have managed to post the daftest comment in the thread!
In response to my writing and explaining the true and accurate statement
You have replied saying in total
So, you don’t intend to buy another can of Coke to replace the empty one? That is the same as not intending to drill another oil well to replace an exhausted one.
Clearly, you failed to read the explanation I provided for you, so I will provide a different one.
Everything is finite in absolute terms: the world and everything in it will end will be consumed when the Sun expands to become a Red Giant. But that is not a reason for anybody to be concerned that the end of the world is imminent: for all practical purposes the world and everything in it can be considered to be infinite.
Richard
“So, you don’t intend to buy another can of Coke to replace the empty one? That is the same as not intending to drill another oil well to replace an exhausted one.”
Well, you missed the analogy then. Let’s be clear on the facts. We have been consuming oil faster than we have been finding new oil to consume. That’s been the case since the 1980s. Peak discovery was in the 1960s.
http://www.fraw.org.uk/mei/archive/handouts/e-series/e01/e01-prod_disc.png
That means, I had found several cases of Coke decades ago, which I’m still drinking from, but new discoveries of Coke have not been keeping up with my consumption rate. There is only one outcome from that, and it’s that I run out of Coke one day to keep up with my current consumption rate. I’m forced to consume less because there is less to consume. I have to ration what I have left.
You are correct in a sense that we never run out. But, as we have been saying from the beginning, Peak Oil isnt about running out, never has been. It’s about how fast we can extract it. At some point, if we already are not there, we will not be able to extract oil fast enough to meet demand. That means someone will have to do without the oil they need.
That said, I dont think we will reach that point. I think we are going to hit the debt brick wall. When that happens, demand for energy will plummet. Things will reset in 20-30 years, and then we will hit the energy brick wall. But we are talking about the future, which is notorious for not being predictable. Hell, the entire planet could be in civil war with Islam by then.
“J. Richard, your numbers are bit out of date.”
No, that’s as of 2014. 2015 numbers are not available yet.
“Regardless, the birth rate in Egypt has been plummeting in recent decades, the same as it has been for the rest of the world.”
False. In most Muslim states, the birth rate has been rising. In Europe for example, even though the birth rate has below replacement, the Muslim community’s birth rate has been increasing, dramatically. As much as 8 children per family.
https://youtu.be/6-3X5hIFXYU
“As to peak water, there’s always de-salination.”
Horrendously expensive.
dbstealey,
You have a very simple understanding of economics. Peak oil takes place when oil is very cheap (selling price), not expensive, as expensive oil promotes an increase in oil production, while cheap oil actually promotes a decrease in oil production, which is what we are seeing.
Peak oil is a combination of economics, debt and geology. An increase in the cost of production due to geology and depletion is met with a decrease in purchasing power by consumers due to excessive debt and lack of increase in labor compensation. As the consumer cannot pay the increasing costs of production those fall on the producer due to cheap prices leading to a reduction in oil production. When this reduction leads to higher prices the consumer cannot pay them leading to demand destruction and excess supply even at reduced output. This feedback cycle repeats leading to a terminal decline in oil production paired with economic destruction. Technology cannot reduce costs of production fast enough to affect the process.
Not really. It is the recognition of a past event. It carries the assumption that conditions are not going to allow a higher peak. The same could be said about peak fish consumption per capita, that was reached in 1988. It also carries the assumption that no more fish per capita will be captured in the future, but it is the recognition of a past event.
http://willmartin.com/wp-content/uploads/2015/03/peak-fish-per-capita.png
You are the one missing the big picture. All sort of peaks are coming and will take place in the next decades, because we live in a limited planet and we have undergone explosive growth. So close your eyes as you are not one able to face the consequences. You won’t be alone, a lot of people is refusing to accept the evidence.
Javier says:
So close your eyes as you are not one able to face the consequences.
The consequences will be a higher price per barrel. I think I’m able to face that.
@J.Richard:
Saudi has a Very large desal plant and uses hydroponic farming.
They have NO “peak water” and will never have one as long as oceans exist.
Using that water, they now have no “peak food” for any foreseeable future.
Egypt is in trouble due to bad government, not any technical limit. Using solar greenhouses they could grow functionally unlimited food IF they had a peaceful rule of law, no corrupt government, and a capitalist system to enable wealth to grow and investment to happen.
http://www.seawatergreenhouse.com/
The technology exists to make the entire Sahara food productive.
The Will and governance are missing…
E.M.Smith
They have NO “peak water” and will never have one as long as oceans exist – but only as long as affordable energy is locally available for use.
Using that water, they now have no “peak food” for any foreseeable future – but only as long as energy is available and the people AND government remain moral and corruption free. (See Zimbabwe, Haiti, The Congo, the USSR, China, and the former governments all across the lower rim of the Eastern Block.)
Oh Dear…
Just saw the Peak Fish Panic Graph…
Note that graph is only for wildcaught fish..
The reality in the marketplace is that fish farming has brought many more tons of farmed fish to market and total fish production continues to grow. There is NO shortage of fish.
You might have to console yourself with salmon, trout, abalone, tilapia, catfish, shrimp, oysters, and a dozen other species though…
Trout were once exotic and expensive in stores. I remember about $10/lb in the 1960 era when a $ was worth about 10x more than now. By the 1990s they were $2/lb at COSTCO and the cheapest fish they had. Nobody would bother with wild caught trout selling other than to the super rich food nut niche as there is no money in it. Shrimping and catfish and to some extent salmon are under similar price pressures
Peak Fish never happened, due to technological change. That is a Clue Stick moment if you think about it.
Mike,
Then there was the Peak Horse Manure Crisis of 1894.
Somehow, each ‘crisis’ evaporates. The predictions never seem to come true. I predict that the ‘peak oil crisis’ will follow the same pattern.
E.M.Smith,
“Just saw the Peak Fish Panic Graph… There is NO shortage of fish.”
Should have read the comment before answering. I was using it as an example that pointing to a peak in the past is not a prediction even if there is an assumption that conditions in the future will not allow for a higher peak.
Anyway you will agree with me that global fish consumption per capita, whatever its origin, is going down despite fish farming. So that is another fish peak.
And as far as I know oil cannot be farmed.
Javier: “And as far as I know oil cannot be farmed.”
You know wrong.
I run my old Mercedes on vegetable oil and have done for years.
Javier says:
dbstealey,
You have a very simple understanding of economics.
I suppose you could say that, since I only minored in Econ (but made the Dean’s List). However, some commenters here exceed your knowledge of economics, particularly WRT petroleum.
And ‘peak oil’ predictions have made lots of folks look foolish over the past century…
OIL RESERVES:
– 1885, U.S. Geological Survey: “Little or no chance for oil in California.”
– 1891, U.S. Geological Survey: “Little or no chance for oil in Kansas and Texas”
– 1914, U.S. Bureau of Mines: Total future production limit of 5.7 billion barrels of oil, at most a 10-year supply remaining.
– 1939, Department of the Interior: Oil reserves in the United States to be exhausted in 13 years.
– 1951, Department of the Interior, Oil and Gas Division: Oil reserves in the United States to be exhausted in 13 years.
Proven Reserves (these figures may be out of date by now):
– 1.3 Trillion barrels of ‘proven’ oil reserves exist worldwide (EIA)
– 1.8 to 6 Trillion barrels of oil are estimated in the U.S. Oil-Shale Reserves (DOE)
– 986 Billion barrels of oil are estimated using Coal-to-liquids (CTL) conversion of U.S. Coal Reserves (DOE)
– 173 to 315 Billion (1.7-2.5 Trillion potential) barrels of oil are estimated in the Oil Sands of Alberta, Canada (Alberta Department of Energy)
– 100 Billion barrels of heavy oil are estimated in the U.S. (DOE)
– 90 Billion barrels of oil are estimated in the Arctic (USGS)
– 89 Billion barrels of immobile oil are estimated recoverable using CO2 injection in the U.S. (DOE)
– 86 Billion barrels of oil are estimated in the U.S. Outer Continental Shelf (MMS)
– 60 to 80 Billion barrels of oil are estimated in U.S. Tar Sands (DOE)
– 32 Billion barrels of oil are estimated in ANWR, NPRA and the Central North Slope in Alaska (USGS)
– 31.4 Billion barrels of oil are estimated in the East Greenland Rift Basins Province (USGS)
– 7.3 Billion barrels of oil are estimated in the West Greenland–East Canada Province (USGS)
– 4.3 Billion (167 Billion potential) barrels of oil are estimated in the U.S. Bakken shale formation in North Dakota and Montana (USGS)
– 3.65 Billion barrels of oil are estimated in the U.S. Devonian-Mississippian Bakken Formation (USGS)
– 1.6 Billion barrels of oil are estimated in the U.S. Eastern Great Basin Province (USGS)
– 1.3 Billion barrels of oil are estimated in the U.S. Permian Basin Province (USGS)
– 1.1 Billion barrels of oil are estimated in the U.S. Powder River Basin Province (USGS)
– 990 Million barrels of oil are estimated in the U.S. Portion of the Michigan Basin (USGS)
– 393 Million barrels of oil are estimated in the U.S. San Joaquin Basin Province of California (USGS)
– 214 Million barrels of oil are estimated in the U.S. Illinois Basin (USGS)
– 172 Million barrels of oil are estimated in the U.S. Yukon Flats of East-Central Alaska (USGS)
– 131 Million barrels of oil are estimated in the U.S. Southwestern Wyoming Province (USGS)
– 109 Million barrels of oil are estimated in the U.S. Montana Thrust Belt Province (USGS)
– 104 Million barrels of oil are estimated in the U.S. Denver Basin Province (USGS)
– 98.5 Million barrels of oil are estimated in the U.S. Bend Arch-Fort Worth Basin Province (USGS)
– 94 Million barrels of oil are estimated in the U.S. Hanna, Laramie, Shirley Basins Province (USGS)
For Comparison:
– 260 Billion barrels of oil are estimated in Saudi Arabia (EIA)
– 80 Billion barrels of oil are estimated in Venezuela (EIA)
dbstealey, with all those numbers of reserves, how does that have anything to do with peak oil? It doesnt. Because, ever after many posts trying to explain it, you are making the same mistake as others who do not accept peak oil. It’s because you people do not understand what peak oil is. So one more time, maybe it will finally get through. Peak oil is not about how much oil is still in the ground. It is, and always has been, about extraction rates. You can have a trillion barrels of oil in the rock below your feet, but if it only produces a trickle, then it’s not going to meet demand. That doesnt even include the ERoEI aspect. If it costs more energy to extract that trillion barrels, then what’s the point?
J. Richard says:
…you people do not understand what peak oil is.
Well, one guy thinks he does:
“Peak Oil has taken place in the summer of 2015.”
Javier’s got it down to the season of the year!
And:
…how does that have anything to do with peak oil? It doesnt.
Well, it does, but since you didn’t get it I guess I’ll have to explain. If you look at the dates, you will see that ‘peak oil’ has been predicted incessantly, beginning in the 1800’s. But they were wrong. Every time. And as everyone knows, ‘peak oil’ is the top of the mountain; from that point on, there will be less oil available.
So now you think they’re right – ‘peak oil’ happened last summer. That sounds silly, doesn’t it, J? Because it will take a few years before we know if that’s right or not. Me? I think it’s gonna be another failed prediction.
dbstealey,
You talk about oil reserves, that is why you miss the point. You don’t understand that is the economy that does the extraction, and if the economy can’t do the extraction then it is the same how much oil is underground.
This graph contains all the info you need to know about why Peak Oil has already taken place. After 2005 the world had to expend every year tens of billions dollars more than the previous year to keep production flat. Only North America was capable of increase production but also at great and increasing expense.
http://i1039.photobucket.com/albums/a475/Knownuthing/560005-3_zpsyrnnpgmc.png
Since between 2005 and 2010 oil did not increase while demand was increasing, high oil prices caused an economic crisis from a highly indebted economy. High oil prices between 2010 and 2014 caused highly indebted oil importing countries all sorts of problems as they were outbid by China and India for the limited oil available.
The current price crisis is wrecking havoc between producers so the investments needed to keep production are not available. The oil decline is going to be significant and future production is going to be reduced for years even if prices recover.
With less oil the economy is going to do badly exacerbating the problem and entering a vicious circle. Bad economy -> reduced demand -> reduced production -> bad economy.
The economy won’t be able to do the extraction so those reserves are going to stay exactly where they are.
Javier: “The economy won’t be able to do the extraction so those reserves are going to stay exactly where they are.”
No they aren’t.
You can take that to the bank.
@Javier:
I read the comment first. I was making my own point from the same graph / critical of the selection bias.
Fish cosumption rises now as desire for it manifests,
@RACook:
But there will always be plentiful energy from this point forward, as long as governments don’t block nuclear power.
About 10, 000 years of land uranium, about 3x that thorium on land, and functionally unlimited from seawater at acceptable prices
https://chiefio.wordpress.com/2009/05/29/ulum-ultra-large-uranium-miner-ship/
Plus you don’t need nuclear for seawater greenhouses if you have a hot desert, which they do
http://www.seawatergreenhouse.com/
So no real limit for Saudi ever (other than goverment stupidity and wars, but I repeat myself…)
Grey,
Concur. As any chemical engineer knows, once you can produced the methanol you can pretty much produce any hydrocarbon.
We don’t need crude oil per say. As a feedstock, for producing transportation fuels and plastics, coal’s the next best feedstock followed by bio-mass. When you produce using these alternate feedstock’s, the resulting commodity prices for these products are higher but not significantly higher than they when produced using the highest oil prices we’ve seen.
And, respectfully, for those your that are going reply with the “Energy Returned on Energy Invested” argument… well I simply don’t agree. Roughly thirty years ago I realized the transportation fuels market is about the convenience of using a high energy density fuel in LIQUID form…. not about the heat content of the originating feedstock. In the worst case scenario, I can “buy” heat content by using bio-mass. It’s not optimal… but it can be done somewhat economically – its just not worth doing today.
Dave Kelly,
Concur back atcha. ☺
+1.
Peak oil is real and exists now:
http://www.peakoil.co.uk/image/emergency-delivery-nuggets.jpg
Origin of Oil, The Myth of Fossil Fuels
Peak oil and peak natural gas is based on a urban legend, the assertion that the origin of liquid oil, black coal, and ‘natural’ gas is from the conversion of plants is an Urban legend. (i.e. Observations and analysis does not support that assertion.)
The entire scientific basis of the cult of CAGW is incorrect. We are never going to run out of natural gas. Many of the new super deep natural gas fields refill as do many of the Middle East oil fields and natural gas fields.
http://www.amazon.com/The-Deep-Hot-Biosphere-Fossil/dp/0387952535
Thomas Gold’s book The Deep Hot Biosphere – The Myth of Fossil Fuels provides more than 50 observations that support the assertion that the origin of liquid oil, black coal, and natural gas is the CH4 that is extruded from the liquid core of the planet as it solidifies. The deep earth CH4 theory is not a new theory and is the standard theory in Russia and the Ukraine. The Ukraine Institute of Science threaten Gold with a law suit as there are hundreds of Ukraine and Russian scientific papers published 50 years ago support that theory.
A key logical pillar for that supports the deep CH4 theory is the helium in oil fields and natural gas fields Paradox
The fact that helium is found with natural gas and oil fields is one of the observations that can only be explained by the deep CH4 theory. Helium is formed from the radioactive decay of Uranium and Thorium. Metals dissolve in the super high pressure CH4 and then drop out as at specific pressures which occurs as specific depths as the CH4 moves to the surface of the earth. This phenomena is the reason why certain metals are concentrated up to a million times in the mantle. This same phenomena explains why there is heavy metals in oil and black coal.
As helium is a gas at all pressures in the earth, the helium that is produced by radioactive decay would remain in the vicinity of the Uranium and Thorium. The CH4 continues to flow up to surface of the earth and hence breaks the mantel which provides a path way for the helium that is produce by radioactive decay of concentrated Uranium and Thorium that is located by below the oil and natural gas fields, to move up to and accumulate in the natural gas and oil reserves.
I have researched this subject in depth (deep CH4 theory vs Late thin veneer theory/fossil fuel theory) and can provide dozens of observations in addition to Thomas Gold’s to support the assertion that the reason why the earth is 70% covered with water and why there are super large natural gas and oil fields is due to the fact that CH4 is extruded from the liquid core as it solidifies. As the core solidifies the liquid CH4 is extruded. The super high pressure CH4 moves the surface of the planet causing plate tectonics. The continents float on liquid CH4. The super high pressure CH4 that is pushed up from the core is the reason why the oldest ocean floor on the earth is 200 million years. A portion of the CH4 that is carried by the ocean floor remains at the edge of the continents where the ocean floor is pushed back into the mantel which explains why there are bands of mountains at the coast of continents.
While researching this subject I found, a very interesting set of papers published in the 1970’s by the API (American Petroleum Institute) on the formation of oil. (A better title of the collection of papers would be “the unexplained problems with the conventional formation of oil from plants and marine animals”, rather than “the formation of oil”). An example of the unanswered problems in the collection is how to explain the finding of massive oil reserves at the continental shelf. What is the source of the hydrocarbons? Marine environments are very efficient. There is very little plant or animal residue that is deposited on the ocean’s surface. A second primary issue is pressure does not convert long chain plant or animal hydrocarbons into shorter chain light oil molecules. The solution proposed in the API paper has the word “time” in quotations, however chemical reactions do not proceed from a lower state to a higher state due to ‘time’ just as water does not flow uphill regardless of the amount of time that passes. A chemical reaction that does not take place is at the conditions where the oil is found is a show stopper for the biological source hypothesis.
A third is why are there heavy elements in the oil? Think of the competing hypothesis for the formation of oil where the hydrocarbon comes from deep in the earth and hence picks up the sulfur and heavy metals as it migrates through the crust.
The deep earth CH4 hypothesis explains why unconnected oil fields across vast geological regions have similar amounts of heavy metals and sulfur. The source of the oil field is from CH4 that is extruded from the core as it solidifies. The liquid CH4 carries and picks up metals as it moves through the earth.
Raise the question to a higher level. What is source of hydrocarbons on this planet’s surface? Roughly 70% of the earth’s surface is covered by water. Where and when did that water come from? As almost no one is aware the solar wind strips water from the atmosphere. If there was no new source of hydrogen this planet would be dry and lifeless.
There are a number of commercial changes concerning the amount of oil and gas in recent years.
For those who have not noticed Canada is now constructing a LNG (Liquefied natural gas) export terminal at its West Coast to export natural gas. A few years ago Canada was planning to construct a port at the same location on its West coast to import LNG. What has changed? The discovery of massive reserves of deep earth CH4. North America suddenly has a massive surplus of “natural gas”. Why?
Saudi Arabia has 25% of the planet’s oil reserves half of which is contained in only eight fields. Half of Saudi Arabia production comes from a single field the Ghawar. Again why?
As most are aware a large mars sized object struck the earth roughly 500 million years after the formation of the solar system. The impact formed the moon and stripped the planet’s mantel of most of the volatile lighter elements. As 70% of the planet’s surface is covered by water a natural question to ask is: Where did the water come from, as the earth’s mantle contains almost no water or hydro carbon?
There are two theories to explain how water and hydrocarbons came onto the earth: the late veneer theory and the deep CH4 theory. The late veneer theory hypothesis: Comets struck the early earth after the big splat event covering the very hot earth with hydrocarbons. The late veneer hypothesis requires that the earth had a Venus like atmosphere (atmospheric pressure of say 60 atmospheres) for the early earth, except with methane.
There are multiple problems with that hypothesis (See Thomas Gold’s Book Deep Hot Biosphere for details. One of the key problems is the observation that the percentage of heavy gaseous elements in the earth’s current atmosphere does not match that of comets (Comets are residues of the early solar systems. The comet elemental composition does match that of the sun). The late veneer theory’s explanation for the miss match of isotopes in the earth’s atmosphere to that of comets is that the early solar system had a close encounter with another solar system which temporary provided a limited source of comets to cover the earth but not significantly change the element composition of the sun.
The second hypothesis is the deep earth hydrocarbon theory. This theory hypothesizes that massive amounts of hydrocarbons (5% of the total core mass) are located in the earth’s core. As the core cools these hydrocarbon (CH4) are released. At very high pressures the CH4 forms longer chain molecules.
The release of CH4 is still occurring as the upper surface of the ocean is saturated with CH4 which indicates that CH4 is being released from some source.
See Carnegie Institute of Sciences Deep Carbon Workshop presentations if you interested in this subject.
https://www.gl.ciw.edu/workshops/sloan_deep_carbon_workshop_may_2008
and…
http://www.sciencedaily.com/releases/2009/09/090910084259.htm
http://www.nature.com/ngeo/journal/v2/n8/abs/ngeo591.html
Yet every oil field has a chemical signature which can be traced to the origin sediments, which prove to be marine ecosystems. I suggest you read Oil 101. The abiotic theory of oil creation has been proven false.
Abiotic, abiogenic or otherwise inorganically sourced oil is physically possible… The chemical equations can actually be balanced. So, the hypothesis hasn’t been proven to be false. It’s just never been confirmed.
However, there simply is no evidence that significant volumes of it have ever existed on earth. All of the actual evidence supports the current paradigm. Marine and lacustrine ecosystems are the source of just about every drop of oil ever produced on Earth.
People tend to confuse methane, which is easily sourced from inorganic material with heavier hydrocarbon chains.
“People tend to confuse methane, which is easily sourced from inorganic material with heavier hydrocarbon chains.”
What happens when you subject methane to heat and pressure, particularly in the presence of a metal with catalytic properties?
As I stated, the chemical equations can be balanced. Inorganically sourced heavy hydrocarbons aren’t impossible.
There’s just no evidence of any significant volumes of inorganically sourced oil anywhere on Earth.
“metal with catalytic properties”
Therein lies your problem.
Not much of that to be found in a metallic form in the crust.
Zeolite catalysts are also used to make petroleum products from methane, Zeolites are syntheticly made now, but originally were found in natural rock.
There is plenty of catalytic material available in the crust, and more in the core, Iron is one of the FT catalysts, along with various mixes of Ni and or Co. I.e just what the core is presumed to be made of…
A lot of the basic information you are presenting is incorrect. Helium goes into solution like all gases but almost is as diffusive as H2. It becomes trapped in reservoirs if the geology is right.
yeah- nothing like a dense ball of molten iron to extrude the really low mass gasses like hydrogen that somehow filtered down in there when they were younger and knew no better.
gas extrusion is a challenge, too- the filaments are as fine as frog fur and could produce sinclair chains that slice organic matter into multicutured ribbons.
more study is obviously needed to prove the connection to zika virus, but we can’t wait till a country song is written to immortalize the travesty.
From David Middleton above:
“There’s still too much oil in the ground and too much capacity for technological advancement to even begin to predict when a true “peak oil” point will be reached.”
This really the crux of the “Peak Oil” debate. Oil resources should be viewed as a pyramid ; At the the top of the pyramid, there are a few extremely prolific, economic at any price / with any technology resources. As you move down the resource pyramid, there becomes an increasing amount of progressively lower grade resources, which need better technology / higher prices to be produced. The cross sectional area is proportionate to the volume of the resources – i.e. the lower the grade of the resource, the greater the total volume is & vice versa – the higher quality the resource, the less total volume of these resources exist.
Hubert basically didn’t recognize or think the bottom of the pyramid would ever be economic. Think about a pyramid in terms of area. If you sliced the pyramid 1/2 way up it’s height, the vast majority of the volume is still in the lower half of the pyramid. So it is with resources.
If you looked at the “upper half ” of the resource pyramid, those resources have peaked …. so Hubbert wasn’t entire wrong for the part of the resource pyramid he was looking at but where he was wrong was understanding where the base of the resource pyramid was. We still can’t say where the base of the pyramid ultimately will be because that will be driven by technology & price, neither of which is predictable in the future.
So, similarly, as David points out, there is still much oil in the ground (the lower part of the pyramid) and the real question will be is how far will technology and increasing prices allow us to push into the base of the pyramid , with ever decreasing resource quality but also with increasing resource volume. At this point, we don’t seem to be anywhere near that point, as technology & costs reduction to employ that technology continue to march forward.
The logical path of what will happen is that at some point the price of oil will become too high & other fuel sources will out compete it so the question of “peak oil” is really somewhat academic. As other commenters have noted, we won’t run out of oil, we will just transition into other fuels which will, at some unknown time, but probably far in the future, become more economic.
Hubbert simply didn’t know what he couldn’t have known in 1956… Otherwise, his math was sound.
Agreed!
His math may have been sound, but only an idiot would ignore the fact that technology improves and that increasing prices make previously uneconomical deposits economical.
His math may have been sound, but his assumptions were so bad that they would have failed a first year econ student.
Wakefield said
Quote
Conventional wells follow a bell curve. Tight shale wells follow a decay curve.
Unquote
Yawn, sorry, technology knows no such bounds, it can be used in any oil field. oh my god, its fracking, you cannot do that its not shale. Nobody is disregarding physics, its just that it is nothing to do with directional drilling introduced into a mature field.
Same as simple maths tells you that if you spent 10 billion to produce a million and a half barrels a day, it takes just so many days at usd 150 per barrel to recover that sum. I t is what it is.
Same as two hundred years supply of proven producible oil, is just that. matters not about peak oil, what somebody had for breakfast. its there.
So no fields have peaked and are in permanent decline? Guess you didnt read the paper I posted about recovery rates.
If we ever figure out how to drill in the deep sea we will have more fossil fuels then we can ever use. Im not sure that is a good idea, but I expect we might try and possibly even pull it off anyway.
Britain hits Black Gold…Feb 16 2016
http://wattsupwiththat.com/2016/02/16/britain-strikes-black-gold-at-gatwick-gusher/comment-page-1/#comment-2146606
The deep sea wont have any oil. Too young. Plate tectonics. The oil we extract from the ocean come from specific shallow marine environments. Nigeria and Brazil deposits are actually the same deposit. I’ll let you figure out how that can be.
Just on the Canada’s Business News Network, 48 oil companies in North America have filed for bankruptcy this year alone due to the low oil price, up from 45 last year.
The amount of value of the bankruptcies is 17 billion.
The bankruptcies are because of low price, not a shortage of oil !
Exploration and Production !! …high-risk, high-reward segment ! Only 1% of market !
” Companies in exploration and production — the industry’s high-risk, high-reward segment — have seen even higher numbers of bankruptcy filings and debt loads than oil field service firms. Among E&P firms, 42 filed for bankruptcy protection in 2015, together involving around $17 billion in cumulative debt, Haynes and Boone found in a Jan. 6 report. That’s still less than 1 percent of the estimated 6,000 independent oil and natural gas producers in the U.S “
The problem with the “deep sea” is a lack of sedimentary column, not age. Most of the sedimentary column of the Gulf of Mexico is very young (Pleistocene, Pliocene and Miocene).
“The bankruptcies are because of low price, not a shortage of oil !”
That’s what I posted. The low price.
Um, J. Richard, try again…
There have already been found deep asphalt in the Gulf Of Mexico, and there iare very deep methane seeps all over the place
http://www.deepseanews.com/2009/07/seeps-lophelia-carbonate-2/
long enough in duration for life to evolve to exploit it…
Not to mention that Japan has started extraction of methane clathrates ( more hydrocarbon than all other sources combined…) from the deep shelf.
I’ve got a link in one of my articles to deep oil identified near the middle ocean. Yes, unexplainable by current theory, yet it exists.
https://chiefio.wordpress.com/2012/09/16/theres-oil-on-that-ocean-bottom/
You might want to do just a small web search before leaping to conclusions about what exists and what is impossible.
Still with the same mistake of what peak oil. I never said these are not sources of petroleum. Again, peak oil is about extraction rates. So will those sources have high rates of extraction and be done at low cost and high ERoEI? Potential means nothing, ramping up to meaningful production means everything.
My local free weekly paper still has a “Peak Oil” column every week, so its still a darling on the Left.
http://wattsupwiththat.com/2016/02/16/britain-strikes-black-gold-at-gatwick-gusher/
“9.2 billion barrels of oil ” That’s about 15 years of UK consumption including growth of use. That’s assuming it can be extracted fast enough. 450 barrels per day is pretty puny.
” A spot in the south of England near Gatwick airport could hold a massive amount of oil even larger than that found at the North Sea oil fields. Investigations at the site in Horse Hill by UK Oil and Gas Investments (UKOG), have discovered the site could hold up to 100bn barrels of the black stuff – dwarfing the 45bn barrels produced by the North Sea in the last 40 years “…..Gatwick !
Yeah, I’ll wait for the official science on the deposit, not what someone thinks is there. Heard stories like this before only to be found to be significantly smaller than claimed (i.e. Brazil).
J. Richard Wakefield wrote above,
“True, we dont know when precisely it will happen, but that does not mean it fundamentally cannot happen. All technological advancements do is kick the can down the road a bit. It’s buys us some time.”
That is nothing but a lazy and lame excuse to avoid admitting how thoroughly wrong Peak Oil claims have been and are.
One can indefinitely cling to any assertion with the use of “fundamentally” possible.
Adding the layer of “we just don’t know when” is even more fantasizing.
What we certainly do know is that the vast known capacities are far in excess of amounts needed to push off any peak oil scenarios so far off into the distant future the concept is moot.
Anyone using continued ya buts to say, “Oh yeah, well it could happen” is placing their thumb, hand, leg and butt on the scales of rational measurement.
Find another hobby.
Peak Oil is a fools chant.
Still with the incorrect claim that peak oil is about running out of oil, I see. Why is it so difficult to understand that peak oil is about the rate of extraction, not about what’s in the ground?
I wonder what we were doing 200 years ago. Did they kick the can down the road?
lol
Actually, I think it was the horse that got kicked !! LOL
I wonder what we were doing 200 years ago.
We were worrying about ‘Peak Manure’.
“Then as now, the names least often consulted proved to have the more accurate forecasts.”
Tends to be the case. The “Experts” aren’t. They’re just the ones providing the latest panic the media wants to sell.
New report by Deloitte: “The crude downturn for exploration & production companies”
http://www2.deloitte.com/us/en/pages/energy-and-resources/articles/the-crude-downturn-for-exploration-and-production-companies.html
Excerpts:
E&P companies are slashing capex, which in turn slashes their future production. History shows that the memories of these downturns lingers in the minds of E&P executives and their lenders, so that prices recover much faster than capex — and production.
If this price war continues long enough, Texas and Alaska will beg to join OPEC (of course, it will not last that long).
Peak Oil had its uses for advocating bad public policy episodically. It worked in many occasions and venues, including courtrooms, utility commission hearings, and oval offices. Count this as another contrived truth praying on resource ignorance and the disbelief in the efficiency of choice and adaptation. Forcing the market to respond in inappropriate ways leads to such oddities as Solyndra bailouts and the automobile relics of Havana.
Minor quibble, you left out the Iran nuclear and their stored oil.
I think the fed has reached a limit on how long they can ease. US interest rates likely to go up, and with easing abroad there is likely to be flight to security in US. Lot of downward pressure for US oil price.
However, without new production coming on line in the US, supply is likely to taper off as wells mature (long term production rate reached after 4th year is substantially lower than first two years). I would think Iranian stores would too. We could see higher prices by the end of the year.
My eyes have glassed over. The discussion is moot, since we will live to see how the story plays out. What I find continually amazing in the discussion of Peak Oil, is that there is no contemplation of a necessary implication of the biotic oil hypothesis: All of the subterranean carbonaceous fuels must have derived from carbon that was originally in the atmosphere as carbon dioxide. Right? What must the original CO2 concentration been at that time? And where did that CO2 come from? –And if it came from somewhere other than the biosphere, who is to say it isn’t still coming? Inquiring minds want to know…
Actually. carbon came from rocks. Most of the carbon on the planet is in the form of carbonate rock. Carbon in the atmosphere and in the oceans is a small percent of the carbon cycle.
Mr. Wakefield, thanks. That is an interesting point of departure. There are apparently two carbon cycles, one involving the biosphere and one involving only the geosphere, hydrosphere, and atmosphere. I presume the primordial situation was the latter case. This involves vulcanism to produce atmospheric CO2, which reacts with rainwater to form carbonic acid, erodes silaceous rock into carbonates and silicates, which are washed out to sea, form seabed deposits, and are recycled into the volcanic magma by plate subduction.
But I notice a fair number of presumptions in this picture. It has to start with vulcanism, for example. And there must be a mechanism of plate subduction that brings it all back to volcanoes. I have my doubts about this model, but no point in taking them up here.
That aside, it then becomes true, as I said, that all the carbonaceous fuel on Earth must have derived from atmospheric CO2, which would have been an immense quantity (at least over time). Early atmospheric composition must have been very high in CO2, which I think is the case, but I am happy to turn this over to the experts.
One implication would be, given development of nuclear power for mobile applications, the prospect of mining carbonate rock for the sake of extracting the carbon, wherewith to make hydrocarbon fuels. (Or scooping it up from the seafloor.)
Generally speaking, it seems that there should be plentiful carbon in the general environment from which to make hydrocarbon fuels, so long as we recognize that our fission energy resources are phenomenally huge (over a thousand metric tons of uranium in a cubic kilometer of sea water). The elbow room this gives us is easily several thousand years. We have more than enough time to invent technology that will allow us to extract energy from matter in even more resourceful ways (my favorite is boron-10…so much for thorium!).
Fusion power? Feh. Someday, someday… Not needed for any serious or urgent purposes.
“But I notice a fair number of presumptions in this picture. It has to start with vulcanism, for example. And there must be a mechanism of plate subduction that brings it all back to volcanoes. I have my doubts about this model, but no point in taking them up here.”
Under plate tectonic theory, 4 billion years ago there were far more active plate boundaries than today. Over the last 4 billion years the number of plates has been reduced as they get consolidated. That means the early earth would have had far more volcanoes than today, than even a billion years ago.
As for separating the two cycles, not true. It’s actually one cycle with many branches. Life started at spreading ridges (hydrothermal vents, black smokers) so the carbon required for that life would have come from that volcanic activity.
“Generally speaking, it seems that there should be plentiful carbon in the general environment from which to make hydrocarbon fuels,”
The energy of fossil fuels doesnt come from the carbon atoms, but the bonds between them. So to get energy from carbonate rock wont work. To make hydrocarbons from carbonate rock would take more energy than you get back. This is the ERoEI (net energy) issue. Seems few people take this concept seriously. Yet it is fundamental of the Laws of Thermodynamics.
Me: “Generally speaking, it seems that there should be plentiful carbon in the general environment from which to make hydrocarbon fuels,”
Mr. Wakefield: “The energy of fossil fuels doesn’t come from the carbon atoms, but the bonds between them. So to get energy from carbonate rock wont work. To make hydrocarbons from carbonate rock would take more energy than you get back. This is the ERoEI (net energy) issue. Seems few people take this concept seriously. Yet it is fundamental of the Laws of Thermodynamics.”
Yup, that’s right. You misread me completely. I was not talking about burning carbonate rock (which itself is essentially a combustion product) but was referring to carbon sources as sources of raw materials from which to synthesize hydrocarbons by combination with water, in any number of currently-existing chemical processes, with the use of heat provided by nuclear power. I think this should have been evident, considering the portion of my sentence you failed to quote involved a reference to our fission energy resources. Hydrocarbons are useful as transportation fuels (among other purposes) and we would be synthesizing them even if all natural sources dried up.
My father was once employed to operate the fractional distillation columns that are the heart of modern petroleum refineries. My academic background was in energy conversion thermodynamics, propulsion thermodynamics, combustion chemistry, fission and fusion physics, and magnetohydrodynamics. It is a sad fact that the commentary in WUWT is marked by people beating each over the head with the 1st and/or 2nd Law, when it is not clear that the beater knows much more than the beatee.
(Thought experiment: I’m sure it is possible to arrive at a conversion ratio for the kilowatt-hours produced for the death of a bald eagle going through a wind turbine, since we know roughly the kill rate for hours and speeds of operation. One could also come up with an estimate of the amount of hydrocarbons that could be produced from recycling of all the carbon in an eagle’s body–and thus also the thermal kW per eagle from combustion of those hydrocarbons. Then it would be an interesting comparison to determine whether it is better to kill eagles in order to obtain wind power–or kill eagles to render them into synfuels. I don’t know what the answer is, but it seems that the exercise might freak out the environmental types.)
Most of the carbon on Earth is in the mantle, not as carbonates. It shows up in lava from the mantle boundary in mid ocean volcanism.
http://www.livescience.com/29326-lava-linked-deep-carbon-cycle.html
http://students.washington.edu/kpoinar/Class_projects_files/CCinMantle.pdf
Oh, and for the folks doubting carbon could be in the core, steel is made from an iron carbon solution (though on cooling separation can happen into grains)
https://en.m.wikipedia.org/wiki/Austenite
Carbonates came later after carbon sources oxidized in air, dissolved in water, and precipitated.
Some estimates have 75% ranges of Earth carbon in the mantle. We get bits of it as diamonds from very deep magma hardening, then lots of erosion…
There is no shortage of carbon… but most of it is way too deep 😉
” was referring to carbon sources as sources of raw materials from which to synthesize hydrocarbons by combination with water, in any number of currently-existing chemical processes, with the use of heat provided by nuclear power”
Negative ERoEI. But we dont need to do that. Build thorium reactors. Those reactors emit lots of protons (Hydrogen), which when mixed with steam and powered coal, you get diesel fuel.
A major factor in the drop of US oil production in past decades is the result of the govt placing many of the most promising sites off limits to development.
The Editor said
Quote
Estimates for the operating costs for the process of mining and refining Alberta’s bitumen into synthetic crude were $25 to $30 per barrel in 2008.
Unquote
Thank you, you have completed my point nicely. If the capital cost of the vastly expensive process equipment was covered in 66 days at oil price max, then the ongoing cost is?
Your input seems to answer that. That is where Oil Sands are expensive, relatively speaking.
That is way lower than what I have read. It’s closer to $80 per barrel.
Wakefield,
As I have said, people conflate different kinds of costs. $80 is roughly the lower-end of estimates for break-even cost for Alberta operations, including capital and operating costs — but not cost of capital and corporate-level costs.
Wakefield,
Lensman’s comments show the common confusion about oil production costs. Nobody will invest in Alberta’s oil fields unless their mean forecast for oil prices is far over their breakeven costs for the duration of the project (>$80). That includes the funds for replacement equipment and new mines (as the old ones deplete) — i.e., depreciation is a real cost.
First, they need to cover costs of running the company. Second, they need to earn a profit.Considering the boom-bust nature of the E&P biz, they have a high cost of capital — and need substantial expected profits.
Third and most important: if the mean of the probability curve for their forecast is $80 — then the left tail is the area in which the company loses lots of money (and they risk losing their jobs). Most of the left tail must be above the point at which they cover all costs and earn a profit.
It’s a moving target. Large-scale mining has some of the highest productivity rates of any goods-producing sector.