Peak Oil News: It's the End of Oil / Oil Is Here to Stay

Sunday, October 23, 2005

It's the End of Oil / Oil Is Here to Stay


It's the End of Oil

World oil production is� about to reach a peak and� go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron's ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. ExxonMobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s--the moment now known as "Hubbert's Peak." I believe world oil production is about to reach a similar peak.

Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod--new technology. Or you could decide that you have already caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can't work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, but the Canadian operations to convert the deposits into transportable oil consume large amounts of natural gas, which is in short supply.

And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point. Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5-billion-bbl. halfway mark late this year. For two years, I've been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier.

Kenneth Deffeyes is the author of Beyond Oil (Farrar, Straus & Giroux; 224 pages)

Oil Is Here to Stay

The "Peak Oil" theory fits nicely� on a cocktail napkin. Its curve looks like this: Colonel Edwin Drake starts pumping crude in Pennsylvania in 1859. We've been pumping faster and faster ever since. Sooner or later, on this finite planet of ours, it just has to run out. U.S. production peaked in the 1970s. Global production will soon be on the downside of the same dismal curve.

Nonsense. Technology and politics--not geology--determine how much we pump and what it costs.

America currently consumes about 7 billion bbl. of oil a year. When production in Persian Gulf fields was ramped up by 12 billion bbl. a year in the 1960s, global prices collapsed. That made it politically painless for the U.S. to ban almost all new drilling off the Florida and California coasts and then in much of Alaska. With oil, as with textiles, domestic production peaked because others began producing the same stuff cheaper, while we contrived to make our production more expensive. Today Alaska contains 18 billion bbl. of off-limits crude. We've embargoed at least an additional 30 billion bbl. beneath our coastal waters. And we could fuel many of our heavy trucks and delivery vehicles for a decade with the 20 billion bbl. worth of natural gas we've placed off limits in federal Rocky Mountain lands.

Outside our borders, Alberta's tar sands contain 180 billion bbl. recoverable with current technology, and Calgarians are pumping that oil today. A total of several trillion barrels of oil soak the sands of Canada and Venezuela alone--a century's worth at the current global rate of consumption. Then there are methane hydrates. The U.S contains some 30 trillion bbl. worth of those frozen hydrocarbons off the shores of Alaska, the continental coasts and under the Rockies. There's little doubt they too can be extracted economically. If we try, we'll certainly find cheap ways to transform North America's 1 trillion bbl. worth of coal into crude as well. General Patton's Third Army completed its roll across Europe on coal liquefied with German technology.

The price of oil has always fluctuated. In inflation-adjusted dollars, it was higher in the early '80s than it is today. Extraction technologies continue to improve much faster than supply horizons recede. We've got the right know-how and the right planet. What we lack is the political will.

Peter Huber is the co-author, with Mark Mills, of The Bottomless Well (Basic Books; 214 pages)


At 5:10 PM, October 24, 2005, Blogger peakoil20 said...

How come, even with peak oil appearing in mainstream publications such as Time, does a majority of the public sit idly by? I guess they just don't know enought to care that much.

At 1:05 AM, October 25, 2005, Blogger John Murney said...

patience, my friend. We are making tremendous progress.

At 12:05 PM, October 30, 2005, Anonymous Anonymous said...

Charles Dickens' ghost of Christmas Present showed Scrooge two starving and dirty urchins and said, "... these are Want and Ignorance. Beware them both but most of all, beware Ignorance ..." or words to that effect.

It is easier and more exciting to be ignorant - to leave one's domocratic and social responsiblities to preachers, politicians and industrialists. It is so easy to later celebrate the crumbling clay feet of a few of these false idols. Cynicism is a form of self-inflicted ignorance and ironically it is promulgated by those who would appear on the surface to be its targets. While we rattle our wooden swords and chant angry phrases at corrupt politicians and big business leaders, we are relieved of the responsiblities of democracy - to take charge of our own lives.

The fact is we are not about to run out of oil and gas. That will be clear as time goes by - only a few years, maybe a decade or so.

We know where the reserves are, how to get at them and how to produce them cleanly and efficiently. We can produce hydrocarbon-based fuels that don't pollute the environment. We do not have to give up the good life - though it is certain that the next generation of petroleum will cost a bit more. This can be effectively overcome with conservation. High-tech diesels for example. When will we stop vested interests from keeping this technology out of North America?

Also, watch the price of diesel fuel go up when it is in demand! Why let this happen? Free enterprise works. Let's re-take our responsibilities and with that, re-take our prerogatives.

Rudy Krueger
Alberta, Canada

At 8:51 PM, November 20, 2005, Anonymous Emily Burke said...

Unfortunately, you are wrong. It would be nice if it were the case that we are not running out of oil, but we are. There have been numerous studies showing environmental warnings that oil (and thereby, gasoline) has peaked, and although studies vary, it seems to be in agreeance that the supply has either plateaued, or is in decline. Its true that we could dig up all the fossil fuels in the world to satisfy our oil hungry needs. And, it's true that we know how to get at the various reserves we have found; it's simply a matter of the cost of them. And I'm not referring to the economoic cost, although I'm sure it won't be financially cheap to extract the oil we need. The fact is that in order to reach the oil, at least in Alberta, the Yukon, and Alaska, we will need to do serious damage to our environment. There is a very real risk towards the water needed to extract the Albertan Oil Sands. a) the increasing emissions of sulphur dioxide from the oil sands could possibly acidify and kill many of the northern lakes of Alberta and Saskatchewan. B) the water that is needed to extract the oil from the sand is taken out of the Athabasca river and put into the sand, where it remains, and thereby is taken out of the hydrological cycle. That is an awfully large amount of fresh water lost to the environment.

We can only hope people make more of an effort to educate themselves on both sides of this very real issue, in an attempt to save their own planet before we leach every possible resource out of it.

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