Energy Institute Conference: Depletion is Happening
I attended this conference on behalf of Peakoil.com. It was fascinating, a gathering of Oil Industry insiders; however I have about 20 pages of notes and nearly 100 pages of handouts. I hope that the organisers will put the proceedings and presentations online, so I don’t have to write the whole thing up and introduce errors. I shall attempt to put up links to the various presentations and reports for this forum as they appear in the future.
In the meantime here is a summary of my impressions. Around 80 people attended. Aside from a few blaggers like me – I adopted a “I know nothing, I’m only here to learn” persona - the conference was attended by oil/energy professionals and academics (or both).
Interestingly there were a couple of representatives of the UK government there too, and also some environmental people. Most of the front two rows and the panel were on first-name terms, and there was much professional courtesy, with the exception of Odell and the ASPO representative (Roger Bentley) – about the only way to reconcile their differences would be by duelling, if they could agree on weapons.
Speakers: Chris Skrebowski, Editor, Petroleum Review; Roger Bentley, Senior Research Fellow, Department of Cybernetics, The University of Reading (ASPO representative); Francis Harper, BP; Professor Peter Odell, Professor Emeritus of International Energy Studies, Erasmus University; Dr Mike Smith, Technical Director, Energy Files; Dr Robert Arnott, Senior Research Fellow, Oxford Institute of Energy Studies; Dr Ken Chew, Vice President – Industry Performance and Strategy, IHS Energy (formerly Petroconsultants).
In his introduction, the Chairman, Martin Fry asked for a show of hands:
Oil Depletion: Concern: about a third of the meeting Crisis: around 25% No Problem: 4 people Abstainers: 2 (including me)
The industry does think that depletion is happening; there is a lot of disagreement on exactly when and how.
Many people believe that the USGS (US Geological Service) figures are wildly optimistic – although one speaker did point out that it was politicians that disseminated the most upbeat forecasts as though they were a certainty.
The debate between geologists and economists (primarily Arnott and Odell) is exceedingly polarised.
Nobody talked about the economic, social and political consequences of depletion. Mischievously I started bringing it up in the breaks with people and they would back off – “I don’t have the expertise to deal with that question” but this did flush out a few delegates who were interested in this aspect, including someone who is writing a book on the subject.
Professor Odell was unwell and gave a very lack-lustre presentation, which I felt was light on detail, however in the conference notes he has a substantial paper so I am reserving judgement.
Roger Bentley of ASPO gave an interesting presentation reinforcing their view. Unfortunately it was way too long for the slot, and like several others he had to cut a chunk out. I found this very irritating – the presenters should have ensured their seminars fitted the time.
The effervescent Dr Mike Smith of EnergyFiles (Motto: “I don’t do assertions, I do facts and figures”) contributed the most salient presentation of the day: that even using The Most Optimistic Production Figures of the Five most important Middle East Producer Countries (Iran, Iraq, Kuwait, Saudi, UAE), a demand gap appears within a decade. Using a variety of more realistic projections, demand exceeds supply somewhere between 2008-2012. To Smith, the arguments about URRs, non-conventional oil, etc are irrelevant: if present production can’t meet demand, it doesn’t matter whether there is more oil in the ground or not. I felt he was itching to talk about the effects of this but didn’t – I went up to him afterwards, asking about the economic consequences: “They will be severe”, was his reply.
Dr Ken Chew of IHS Energy (ex-Petroconsultants – the proprietary database that Campbell uses), gave a presentation as to why their figures are the most accurate. Obviously this was partly a sales pitch; but I was impressed: by showing how they reached their conclusions about reserves, and how they tried to mitigate unreliable countries’ declarations, as well as account for differences in reporting, better field micromanagement, improved technology, differences in geology, and other factors. To me it seemed very credible. In case you want to rush out and buy a copy, it’s $100,000, and for that I bet Dr Chew would sign it too.
Incidentally, although he was not present “Matt’s figures” (Simmons) were mentioned; they are represented as alternative datapoints on several of the presentations; if he was considered a left-field maverick, then they would have been omitted, or perhaps ridiculed. Instead they are presented as useful data.
At the end was the Q & A session.
I’ve been to lot of conferences: this was most unusual, in that, instead of just standing up, saying your name and who you represent, and asking the question, the procedure was to submit in writing at lunchtime. The only question I could have contributed: What might be the economic, social political consequences of depletion? I knew already that it would get a negative response, so I did not intend to ask it.
The Q & A was much livelier than some of the previous dry presentations. Apart from spats between those who support the ASPO position and the opposing faction, the economists, many interesting points came up. Professor Klaus Illum of ECO Consult from Denmark gave an eloquent speech about how enormous energy savings were capable of being made within Western societies, halving energy consumption gradually with the cost savings fuelling further sustainability. (A true powerdown solution) They have been working on a long-term study and Prof Illum promised me an English summary when available (which I will post here).
A UK Government Source (Who cannot be named but is influential – I knew who he was) stated that the UK energy policy was in a mess ("definitely not joined-up government"), and that the target of 10% Wind energy by 2010 was not going to be met: “We are a million miles away from offshore wind”.
Prof. Illum made another intervention, as Odell and the economists were getting tetchy: “Today we have heard specific concrete analyses. They are in conflict with the theoretical analyses of Arnott and Odell. A theory is refuted if it is in conflict with practical experience and historical data….we are at a singular point in history. We have built a world on oil and there is no substitute.”
(Whew, this guy may have No English Mothertongue, but he certainly puts his points across succinctly).
Odell, and perhaps this was because of his illness, made a rambling retort attacking Campbell, which ended with the statement that “there is no problem”; wide murmurs of disapproval.
There was a lot more discussion, some concerning hydrogen and natural gas, essentially rehashing arguments that members of this forum will have heard before.
At the end, the Main Moderator, Martin Fry, suggested that the conference should reconvene in 18 months to see how the position has developed. This received a muted assent, perhaps everyone was tired at the end of the day, but it sounded a good idea to me.
Positive Points that emerged:
1. Demand savings can make a huge impact – we are so wasteful in the West: using cars less/more fuel efficiency, more efficient public transport, local food production, greater insulation, and stopping avoidable energy losses all the way along the power chain would make a big difference.
2. Even a modest global increase of 1% in recovery rates would mean a considerable increase in oil available, putting back peak and giving us more time to prepare (though the speaker who said this, also said that it seems easy but would be technically hard to do).
3. There are one or two slight effects of the economist’s case: the high price of oil has stimulated a small amount of new exploration, often by companies that specialise in finding/working difficult fields. Governments/Companies do have increased revenue to optimise their technology in less developed parts of the oil world.
The technical papers would undoubtedly interest some people on this forum; I hope they will be put online soon so I can link to them.