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Running on Fumes
Sonia Shah, OnEarth
How bad is the current energy crisis? Really, really bad, says oil expert Charley Maxwell.
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After half a century in the oil business, Charles Maxwell is widely referred to as the dean of energy analysts…
You are famous for coining the term “energy crisis” in the 1970s. Do you think that we’re entering another crisis now?
I do. In the first energy crisis, we tried to keep prices low and ration the physical gasoline. People sat in these long queues and it was a huge loss of time and money. When the second energy crisis hit, in the late seventies and early eighties, we just allowed the price to rise. And that’s what we’re doing now — rationing by price. The fact that gasoline recently hit $3.20 a gallon would suggest that we are in crisis. I would say even $2.50, which is where it is now, represents some form of crisis.
What are the underlying reasons?
There are four, I think. First and foremost, there was a lot of oil that could have been discovered that wasn’t, because the national oil companies such as Saudi Aramco didn’t invest enough in exploration. Second, the big oil companies didn’t exercise much vision. When prices went up in 2000, they basically pocketed the money. Of course, if you’re an executive and you have stock options, you start to think that the whole world depends on your stock price rather than on getting more oil. And who’s to say that we should have more oil? If it means that everyone is going to work harder and longer to make possible the greater use of SUVs, is that a worthy end in the world of God?
And the other two reasons?
The third is political instability around the world. And the fourth is that we are now approaching the 50 percent mark of recoverable oil. Global oil production will reach a maximum rate and then it will inexorably start to go down. I predict that will be between 2015 and 2020. When that happens it will be the single biggest problem that we face.
Exxon has said there could be up to 4.8 trillion barrels of oil still recoverable. And there are other industry estimates that go as high as 7 trillion.
I read that stuff and it’s good background humor, you know what I mean? But I really hope they don’t think anyone takes them seriously.
(10 Dec 2006)
Related: Exxon Mobil issues bullish outlook on hydrocarbon reserves, demand
Legislation introduced to prepare SF for oil shortage
San Francisco Examiner
Supervisor Ross Mirkarimi wants The City to create a Peak Oil Preparedness Task Force, to ensure San Francisco is prepared when the world’s oil supply reaches maximum production, resulting in major gas price increases that will threaten the local economy.
Mirkarimi introduced legislation Tuesday that would establish a seven-member task force charged with laying out a game plan to deal with the impacts of peak oil, which some experts say could occur within the decade.
The plan would address the expected decrease in tourism, increase in food prices and the need for alternative-fuel transit.
(15 Dec 2006)
OPEC Bulletin covers Peak Oil
OPEC Bulletin November – December 2006
Nov-Dec. 2006
Via the ODAC News, Douglas Low writes:
Note: this article was in ODAC News a few weeks ago, it is the opening speech at the 27th Oil and Money conference. What is surprising is that it has been republished in the OPEC Bulletin. Note that the Bulletin is about 5 Mb big:
Dr. Shokri Ghanem, chairman of the People’s committee, the National Oil Corporation (NOC) of Libya, winner of the 2006 Petroleum Executive Award
The question of ‘peak oil’
The question of peak oil output, which once was the concern of few individuals, has become a concern of some countries, as well as several organizations. Despite the fact that many are unhappy with Hubbert’s peak oil predictions, his 1970 peak oil theory for the US turned out to be quite accurate, and for many, particularly the pessimists, his end-of-the-century peak oil predictions for the world also proved to be correct.
However, while some of the more pessimistic oil specialists are declaring that peak oil has already been passed, or at best is here now, others believe it is not going to arrive before 2010. Some optimists give the world a little more breathing space – that is to say up to 2020, and perhaps even up to 2030. However, all in all, most would appear to agree that peak oil output is not very far away for all of us. It could take place sometime within the next decade or so, which in fact means that there is not much time left for a world economy to be driven largely by oil.
Furthermore, under any of these scenarios, and since peak oil output is not about the time at which oil will run out, but the time at which production can no longer be increased to cope with increased demand, it seems the only way the oil price can go is up.
This conclusion seems to be in line with the view held by the peak oil output advocates who argue that the ongoing oil price rises are mainly due to supply-demand imbalances. This is because we are at, or near, the production peak of world oil, if not on the downward slope of the Hubbert’s peak curve. This is not to deny the role of other factors (such as geopolitical), but only to stress the importance of supply and demand for crude oil as the prime factor in determining the price of the commodity
(November – December 2006)
The article appears on pages 62-64
Angolan oil output to peak in 2011 – bank
Business Day (SA)
ANGOLAN oil production is set to peak in 2011 at 2.6-million barrels a day, and begin to decline from 2012, according to the World Bank.
“According to our estimates, in the absence of new discoveries, production is expected to start declining from 2012 onwards,” World Bank economist Francisco Carneiro said yesterday.
Production, buoyed by the end of a 27-year civil war in 2002 and heavy foreign investment from oil groups such as ExxonMobil and Chevron, has risen more than 10% to 1.4-million barrels since last year.
Next year, production is expected to hit 2-million barrels.
(13 Dec 2006)
This is an earlier but massively higher peak than projected by Colin Campbell in the December 2003 ASPO Newsletter. Colin projected a peak in 2019 of about 1.9mb/d. Growth from 1.4 to 2mb/d in a year would be a heroic effort, but surely not in the Angola’s best interests if it only brings the peak date forward. -AF
[Video] Portland Peak Oil Task Force Interview
Peak Moment Television via Lawns to Lunch
Randy White writes: “This is an Interview I did with Peak Moment Television about the Portland Peak Oil Task Force, and how other people can get their cities to take action regarding creating action plans for dealing with Peak Oil.
(14 Dec 2006)
Peak Blogs
Rob Hopkins, Transition Culture
These are dark days indeed. Apparently the world is facing a new danger, to join peak oil and peak gas in an unholy Trinity, peak blogs. The BBC reports that apparently the middle of 2007 is when the world will hit peak blogs, and from that point total global blog post production will go into a relentless and steady decline. Although total global blog production currently stands at about 1.3 million individual posts a day (about half of which is the steady stream of over-optimistic nonsense churned out by Transition Culture), it is estimated by the analysts Gartner that the world will peak mid-2007 at around 100 million blog sites. Kenneth Deffeyes has not yet been quoted as saying anything about Thanksgiving Day, but it is surely only a matter of time. Apparently the reason is that the kinds of people daft enough to spend hours of their lives writing the kind of drivel that most blogs contain are a limited species, and as a resource they are pretty much exhausted.
(15 Dec 2006)
Peak Oil Update – December 2006: Production Forecasts and EIA Oil Production Numbers
Khebab, The Oil Drum
An update on the last production numbers from the EIA along with different oil production forecasts.
(15 Dec 2006)
Awesome work by Khebab. I hadn’t noticed in last month’s update, although it was shown there also, just how high and late Jean Lahèrrere now places his projected all liquids peak – 93mbpd around 2018. -AF
