Peak Oil

[Brentos]

All the best Brentos.

same to you SD. I think people should be wakened up about consumption and reliance on hydrocarbons. Just I wanted to try and give an alternative view on the current financial situation and how it relates to oil. I'd be curious to see what other information Hugo has. Perhaps I'm just a bit jaded by being taken in by Mike Ruppert's magnus opus
There are so many awesome potentials out there for new energy, like Cold Fusion, which has the navy's backing even:

http://science.slashdot.org/article.pl? ... 05/2148217

Its depressing to see such complete reliance on hydrocarbons.

[semper occultus]

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3207311.ece

World not running out of oil, say experts

Carl Mortished, World Business Editor
Doom-laden forecasts that world oil supplies are poised to fall off the edge of a cliff are wide of the mark, according to leading oil industry experts who gave warning that human factors, not geology, will drive the oil market.

A landmark study of more than 800 oilfields by Cambridge Energy Research Associates (Cera) has concluded that rates of decline are only 4.5 per cent a year, almost half the rate previously believed, leading the consultancy to conclude that oil output will continue to rise over the next decade.

Peter Jackson, the report's author, said: “We will be able to grow supply to well over 100million barrels per day by 2017.” Current world oil output is in the region of 85million barrels a day.

The optimistic view of the world's oil resource was also given support by BP's chief economist, Peter Davies, who dismissed theories of “Peak Oil” as fallacious. Instead, he gave warning that world oil production would peak as demand weakened, because of political constraints, including taxation and government efforts to reduce greenhouse gas emissions.

Speaking to the All Party Parliamentary Group on Peak Oil, Mr Davies said that peaks in world production had been wrongly predicted throughout history but he agreed that oil might peak within a generation “as a result of a peaking of demand rather than supply”.

He said it was inconceivable that oil consumption would be unaffected by government policies to reduce carbon emissions. “There is a distinct possibilty that global oil consumption could peak as a result of such climate policies,” Mr Davies said.

The BP economist's remarks were echoed yesterday by Mr Jackson. “It is the above-ground risks that will influence the rate [of oil output],” he said.

Cera analysed the output of 811 oilfields, which produce 19 billion barrels a year, out of total world output of 32 billion. These included many of the giants, including Saudi Arabia's Ghawar, the largest known oilfield, which has been at the centre of the debate between peak oil analysts and their detractors.

In his book Twilight in the Desert, Matthew Simmons of Simmons & Co, the consultancy, said the big Saudi fields reached their peak output in 1981 but Cera yesterday said that Ghawar was not failing. “There is no technical evidence that Ghawar is about to decline,” said Mr Jackson.

Cera reckons that oil output, including unconventional oil, such as tar sands, could allow oil to peak at much higher levels of as much as 112 million barrels per day, with average rates of more than 100million bpd.

The Cera analysis targeted oilfields producing more than 10,000 barrels a day of conventional oil and concluded that overall output was declining at a rate of 4.5 per cent a year and that field decline rates were not increasing.

This is much lower than the 7 to 8percent average rate that is generally assumed in the industry. Typically, Peak Oil theorists believe that the output of oil reserves can be plotted on a graph as a bell curve, rising to a peak and then falling rapidly.

It was proposed in 1950 by M King Hubbert, a US geologist, who successfully predicted the peak of onshore oil production in the United States.

His analysis is disputed by many geologists today, who argue that technology has changed the equation, allowing oil companies to produce more oil from reservoirs than was previously possible.

Meanwhile, increases in the price of oil has made the extraction of difficult reserves economically viable.

[winston smith]

slow_dazzle said

It is in the interests of Big Oil to create a perception of artificial abundance, not artificial scarcity. Basic stock market theory proves that one hands down.

I wish i understood the financial markets more. I always assumed that these big companies want to restrict/monopolise our access to these fundamental products so they can charge us more money. Restrict (or create the illusion of restricted) supply and increase demand and price.
Can anyone recommend a book that isnt too complicated that might give me a good overview of the financial system?

From the semper occultus (thankyou) article linked above re: Peak oil:

It was proposed in 1950 by M King Hubbert, a US geologist, who successfully predicted the peak of onshore oil production in the United States.

His analysis is disputed by many geologists today, who argue that technology has changed the equation, allowing oil companies to produce more oil from reservoirs than was previously possible.

Meanwhile, increases in the price of oil has made the extraction of difficult reserves economically viable.

I guess i have always (so far) agreed with this position. I thought that a lot of the oil that had been found was too expensive to reach so that as the price went up (and if there was no energy alternative) then these opportunities would become viable and we pay more for them if we can. Technological progression would also play its part although I would really like to see it move us away from this dependency rather than just refine our ability to score and shoot up. Something along the lines of Tesla's Wireless broadcasting system would be fine.

Also, anyone got more than a passing interest in alternative energy inventors? Is it true they have an interesting tendency to leave this plane of existence early?

[overcoming hope]

Just wondering what the correlation might be between those who believe Peak Oil is a scam and Libertarians/Ron Paul supporters.

Have you read Palast's 'Armed Madhouse'?

Peak theory, originally known as Hubbert Peak Theory (Marion King Hubbert (October 5, 1903 – October 11, 1989) was a geoscientist who worked at the Shell research lab in Houston, Texas)

Palast makes a strong case that the theory was manufactured to create the impression that oil was becoming scarce in order to drive prices up.

sort of like diamonds, restrict the supply, raise the value.

the title of the report had something to do with 'lets take a gander at nuclear energy cause oil is running out"

and I bet there is a pretty strong correlation between libertarians that think peak oil is a scam, the reason proabably has something to do with looking at the issue from an economic standpoint.

***edit, just read the rebuttal in this thread to Palast's take, I'll admit I know very little about it, but I can't help noticing who is benefiting from the perception that oil is peaking. and I understand it is a finite resource, so it would be dishonest to say it is impossible, or better yet that it isn't inevitable, but perhaps that is what makes it such an easy situation to exploit, ball of lies wrapped in a skin of truth. Dammit, just stop randomly dissing libertarian minded folks and I wouldn't have to be writing this:(

[Pele'sDaughter]

Whether it's manufactured or not, the results will be the same for us bottom feeders. Personally, I'm leaning to the manufactured side of the argument though.

[ninakat]

Whether it's manufactured or not, the results will be the same for us bottom feeders.

That really is the point, which I've made repeatedly to the peak oil denialists. But many trust that the powers-that-be will look out for us little guys, regardless of the massive evidence that they hold us in contempt -- especially now that we're not as useful, and there are too many of us (in their view, that is).

[ninakat]

Nine Percent
Submitted by Richard Heinberg on October 29, 2008 - 10:55am.

The Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent."

This is a stunning figure.

Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months.

The Financial Times story goes on:

"The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as [oil] prices fall and investment decisions are delayed."

This is putting it mildly. Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right.

Inter alia, the IEA takes the requisite swat at "peak oil theorists," who, the agency somehow still believes, are saying that the world is "running out of oil." Of course that's NOT what peak oil theorists say, but a correct summation of their position would have to be followed with a statement to the effect that, "Our research supports their position," which would be just too embarrassing.

Sadly, the IEA feels it must pull its punch even further. With adequate investment in new small oilfields and unconventional sources like tarsands, it insists, the world can still achieve higher levels of production. In other words, if the $12 trillion that vanished from the world stock markets last week were invested in new tarsands projects, then theoretically a few more years of total oil production growth could be eked out (not growth in net energy production, mind you, but in the gross—and I do mean gross—production of exotic, very expensive stuff that it's physically possible to run your car on, assuming you could afford to do so).

Of course, any realistic assessment either of the likelihood of that level of investment appearing, or of the ability of new projects to really produce a sufficient rate of flow regardless of the size of the cash infusion, would end merely in a hearty belly-laugh.

Evidently peeved about being scooped on its planned November 12 press conference roll-out of the study, the IEA has disavowed the Financial Times story. But if nine percent is even close to being the final figure, then it's absolutely clear: July 2008 was the all-time peak in world oil production. Don't expect anyone at the IEA to officially admit that fact until 2025 or so. But among those who pay attention to the evidence and the terms of the debate, further ink need not be spilled in speculation.
Peak oil is history.

[nathan28]

Nine Percent
Submitted by Richard Heinberg on October 29, 2008 - 10:55am.

The Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent."

This is a stunning figure.

Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months.

The Financial Times story goes on:

"The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as [oil] prices fall and investment decisions are delayed."

This is putting it mildly. Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right.

Inter alia, the IEA takes the requisite swat at "peak oil theorists," who, the agency somehow still believes, are saying that the world is "running out of oil." Of course that's NOT what peak oil theorists say, but a correct summation of their position would have to be followed with a statement to the effect that, "Our research supports their position," which would be just too embarrassing.

Sadly, the IEA feels it must pull its punch even further. With adequate investment in new small oilfields and unconventional sources like tarsands, it insists, the world can still achieve higher levels of production. In other words, if the $12 trillion that vanished from the world stock markets last week were invested in new tarsands projects, then theoretically a few more years of total oil production growth could be eked out (not growth in net energy production, mind you, but in the gross—and I do mean gross—production of exotic, very expensive stuff that it's physically possible to run your car on, assuming you could afford to do so).

Of course, any realistic assessment either of the likelihood of that level of investment appearing, or of the ability of new projects to really produce a sufficient rate of flow regardless of the size of the cash infusion, would end merely in a hearty belly-laugh.

Evidently peeved about being scooped on its planned November 12 press conference roll-out of the study, the IEA has disavowed the Financial Times story. But if nine percent is even close to being the final figure, then it's absolutely clear: July 2008 was the all-time peak in world oil production. Don't expect anyone at the IEA to officially admit that fact until 2025 or so. But among those who pay attention to the evidence and the terms of the debate, further ink need not be spilled in speculation.
Peak oil is history.

Geological Peak Oil isn't a scam. But the Global Blackout/Economic Peak Oil nightmare we get is.

There are trillions of barrels of shale oil and superheavy oil available, right now. At US$50-60/barrel, they become commercially viable. Guess what?

Likewise, part of the reason we saw such high oil prices had to do with oil being so cheap in the '90s that there was little incentive for exploration or investment in existing fields.

And likewise, eventually, Iraq may come on-line for oil output.

And remember Peak Whale Blubber? "World To Go Dark?" As commodities become rare, even energy commodities, they tend to be supplanted by new ones.

That said, obviously geological supply of light oil is going to peak, probably soon, and oil is still a huge-ass problem. And let's not forget that every damn hurricane disrupts supply. We destroyed our infrastructure and indirectly a substantial part of our society here in the US to build a lifestyle based around consumer oil usage. Wars are being fought over its supply.

[winston smith]

Meanwhile, increases in the price of oil has made the extraction of difficult reserves economically viable.

Falkland Islands: First it was sovereignty, now it's oil

Ministry of Defence steps up surveillance of Argentinian navy as tensions escalate over black gold

By Kim Sengupta, Defence Correspondent

Thursday, 18 February 2010

The British military and the Foreign Office are stepping up surveillance of Argentinian naval action following the threat from Buenos Aires to blockade the Falkland Islands.

The imminent arrival of a British company’s oil rig in the area is an immediate source of friction between the two countries, which has reignited 28 years after the war with the discovery of rich petroleum and gas reserves around the islands.

The Argentinian government has declared that it was taking control of all shipping between its coastline and the disputed islands it calls Islas Malvinas and the adjoining South Georgia, a claim promptly rejected by the UK.

Buenos Aires has demanded that the Falklands should suspend oil exploration on the seabed, which is estimated to contain 60 billion barrels of oil – indicating that it has reserves on the scale of the North Sea. Last week Argentina detained a supply ship, the Thor Leader, which was transporting pipes to the islands from an Argentinian port.

The oil rig, the Ocean Guardian, is said to have been “buzzed” by Argentinian warplanes on its way to the South Atlantic, although other reports say that it may have been coastguard aircraft which was involved. Anibal Fernandez, the chef de cabinet in Buenos Aireas, said: “Any boat that wants to travel between ports on the Argentinian mainland to the Islas Malvinas, South Georgia and the South Sandwich islands? must first ask for permission from the Argentinian government.”

Following the 1982 war, an “economic zone” of 200 nautical miles was established around the Falklands. British military and diplomatic sources have stated that any attempt by the Argentinians to stop the rig in these waters would be in breach of international law.

They also pointed out that the Ocean Guardian was registered in the US and the detention of its crew would make Buenos Aires answerable for its action to Washington as well as Britain.

The British military maintains a force of 1,076 soldiers, and a small number of warplanes on the Falklands and there is a flotilla of ships offshore including, at present, the Type 42 frigate HMS York. The aircraft are on 15 minutes’ notice to fly.

A defence source said yesterday: “The Thor Leader was stopped at an Argentinian port. The rig will be sailing in international waters and any attempt to interfere with it would be in breach of international law and we have the forces available and ready in the region to address that problem if that is what the Government wants us to do.”

Earlier this week Air Chief Marshal Sir Stephen Dalton, the head of the Royal Air Force, drew attention to the situation in the South Atlantic in a speech to the International Institute of Strategic Studies (IISS) referred to “ the increasingly tense situation around the Falkland Islands” to stress the need for maintaining air superiority.

The Parliamentary all-party group on the Falklands yesterday called for Argentina’s ambassador in London to be censured over the actions of his government. The secretary of the group, the Conservative MP Andrew Rosindell, said: “Any attempt by Argentina to claim any sort of rights of sovereignty over the region is something we should take very seriously. I don’t think we should appease Buenos Aires – we found out last time what happens when we do that.”

Another member of the group, his fellow Tory MP Sir Nicholas Winterton, said: “They are trying to impede the economic progress of the Falkland Islands, because of course the encouragement of hydrocarbon exploration in the area is am important part of achieving a sustainable future for the islands.”

It is widely accepted the that Argentinian military does not have the capabilities to carry out another invasion of the islands, which are, in any case, far better defended now than they were three decades ago.

However, harassment of supply ships and the refusal to let them use Argentinian ports for supplies would significantly add to the cost for oil companies and, some analysts believe, this could be a tool to force the UK and the Falkland Islands to come to a deal with Buenos Aires.

There is also apprehension among some in Argentina that the situation may lead to the rejuvenation of the extreme right-wing in the country, which had been dormant since the fall of the military dictatorship.

Frederico Thomsen, a political analyst in Buenos Aires, said: “For centuries the Falklands were about some sheep, penguins and fish – and even so, we had a war. Should someone find ‘black gold’, things will get uncomfortable and nationalists will be stirred.”

http://www.independent.co.uk/news/uk/home-news/falkland-islands-first-it-was-sovereignty-now-its-oil-1903003.html

The only thing I have to add is my belief they knew about the oil before the war.

[ninakat]

The following article seems to be making the rounds on various sites. I think he makes a number of good points, but it needs editing for typos and I really take issue with the idea that somehow the military is going to do without -- uh, no, the military will always have enough oil, I have no doubt about that. Still, overall, it seems fairly accurate (not that I'm an expert on every aspect of this, but I have done a lot of researching for over 5 years now). At any rate, check out the comments section if you're not afraid to get heartburn (or heartache, in my case).

The Imminent Crash Of The Oil Supply

What Is Going To Happen And Why Weren't We Forewarned?

By Nicholas C. Arguimbau

April 23, 2010 "Information Clearing House" -- Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.

What does it imply? The supply of the world's most essential energy source is going off a cliff. Not in the distant future, but in a year and a half. Production of all liquid fuels, including oil, will drop within 20 years to half what it is today. And the difference needs to be made up with "unidentified projects," which one of the world's leading petroleum geologists says is just a "euphemism for rank shortage," and the world's foremost oil industry banker says is "faith based."



http://www.eia.doe.gov/conference/2009/ ... eetnam.pdf

This graph was prepared for a DOE meeting in spring, 2009. Take a good look at what it says, assuming it to be correct:

1`. Conventional oil will be almost all gone in 20 years, and there is nothing known to replace it.

2.. Production of petroleum from existing conventional sources has been dropping at a rate slightly over 4% per year for at least a year and will continue to do so for the indefinite future.

3. The graph implies that we are past the peak of production and that there are750 billion barrels of conventional oil left (the areas under the "conventional" portion of the graph, extrapolated to the right as an exponent ional). Assuming that the remaining reserves were 900 billion or more at the halfway point, then we are at least 150 billion barrels, or 5 years, past the midpoint.

4. Total petroleum production from all presently known sources, conventional and unconventional, will remain "flat" at approximately 83 mbpd for the next two years and then will proceed to drop for the foreseeable future, at first slowly but by 4% per year after 2015.

5. Demand will begin to outstrip supply in 2012, and will already be 10 million barrels per day above supply in only five years. The United States Joint Forces Command concurs with these specific findings. http://www.jfcom.mil/newslink/storyarch ... 2010_o.pdf , at 31. 10 million bpd is equivalent to half the United States' entire consumption. To make up the difference, the world would have to find another Saudi Arabia and get it into full production in five years, an impossibility. See The Oil Drum, http://www.theoildrum.com/node/5154

(continues)

[Simulist]

I don't see any way around this. And when you couple this with a sudden and explosive rise in population... now that just might be something to lose sleep over.

Arithmetic, Population, and Energy just might be the most boring series of YouTube videos you will ever see, but they might also be the most important.

[wintler2]

I find it fascinating that there has been precious little "evidence from those who believe peak oil is a scam" (quote OP) on this thread or my older one yet 21 out of 49 respondents to the poll still say PO is a scam. Its that identity-politics-based-faith again, i'm telling ya, and it trumps reason and evidence in most humans. Makes sense, it used to be maladaptive to get thrown out of the tribe no matter what wacky vision their shaman had this week. Now, reality has some important breaking news for homo sapiens, but most of us are switched to Divert.

[JackRiddler]

The interest of the oil companies in creating the idea of peak oil is low. What they might gain through price increases by pretending a shortage (always a nice windfall, but temporary), they lose in investment in new fields, which means their future business. No, their interest is to say it's abundant and to keep attracting capital, even as extraction gets less and less efficient.

The arguments I see against peak oil - when any are even ventured beyond "oil companies lie!!!" - basically amount to presenting the same evidence but battering a strawman version of peak oil, or else claiming that it's happening more slowly than the most dire predictions. So what? 9 percent or 4 percent, it's depleting, new reserves are not being discovered to replace what's going, and you can't assume these reserves will magically appear. If the economic models don't change drastically demand will exceed supply either soon or at some point within 20 to 30 years, which we should stop treating as though it's a long time. Either way, capital must migrate to the alternatives now. If we have more time than the most dire predictions, it shouldn't be wasted (like the 30 years since this problem first entered public consciousness have been wasted). If the tech fixes really do exist, they don't happen unless investment migrates to them. When demand exceeds supply, it's too late.

[wintler2]

The interest of the oil companies in creating the idea of peak oil is low. What they might gain through price increases by pretending a shortage (always a nice windfall, but temporary), they lose in investment in new fields, which means their future business. No, their interest is to say it's abundant and to keep attracting capital, even as extraction gets less and less efficient.

Oil companies also fear a word you just don't hear in Western countries: nationalisation, the appropriation of resources by the State in the common interest. Once global peak is common knowledge and prices skyrocket, nationalisations will accelerate, multinational oil corps will be only able to really profit in failed states. Tho there seem to be more and more of them.

..Either way, capital must migrate to the alternatives now. If we have more time than the most dire predictions, it shouldn't be wasted (like the 30 years since this problem first entered public consciousness have been wasted). If the tech fixes really do exist, they don't happen unless investment migrates to them. When demand exceeds supply, it's too late.

Capital is crippled by its petty allegiances (to this or that government, corporation or individual) and fatal vulnerability to inflation (which is fed by fiscal irresponsibility AND declining net energy).

Demand (at a price the economy could afford) already exceeded supply, presto GFC. $149/barrel broke the economy (GFC went public 8 weeks later), and at least some demand was pushed to other fuels or no fuel (hence $30 now 80/barrel).

I'm one of those that that thinks it wont take $149/barrel to crash the monetary merrygoround again, maybe 100 or 130. Demand wont exceed supply, physically can't in fact, but alot of demand has been and will continue to be destroyed as we ration by price. Destroying demand for twinkies is uneventful, destroying demand for the prince of fuels is making increasing numbers of people poor, bored, hungry and angry. Failing an Oil Depletion Protocol (managed sharing), bring on the nationalisations, say i.

[Monk]

Peak oil is real for the simple reason that oil is a limited resource. You can see that in two-thirds of oil-producing countries where production has peaked.

What's debatable is when it will take place. That means we need to looking at the remaining oil-producing countries and estimate their supply. The problem is that they don't allow external audits. That means we'll have to assume that they are giving overstated numbers.

Next, we look at demand. There's a 3 pct drop for OECD countries because of the economic crisis but demand for China, India, is rising. If we're hoping that a global economic collapse will decrease oil consumption, then we have to imagine that the effect of that is the same as from oil shortage.

How about technology? There's lag time and other costs. The same goes for renewable energy.