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Energy: That's oil, folks...

News feature in Nature 445, 14-17 (4 January 2007) | doi:10.1038/445014a

Optimists see oil gushing for decades; pessimists see the planet's energy future already drying up.

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Don't say they didn't warn us. The poster for the meeting of the Association for the Study of Peak Oil and Gas in Boston this October featured American revolutionary Paul Revere on his midnight ride, bringing news of imminent calamity. Only this time it is not the British who are coming, but the end of the oil era, and with it much of western civilization.

Many attendees at the meeting were people who could tell you how to stock a bunker to survive the inevitable collapse of civilization, and then opine at length about the extent and characteristics of the great tar-sand deposits of Canada. Some of them conduct a thriving mini-business in preparing for the coming apocalypse — "deal with reality or reality will deal with you", as one website claims — while scrutinizing table after table of data on world oil production.

But this is not an easily dismissed fringe. Respected geologists with lifetimes of experience are genuinely concerned that the world is about to see an unprecedented crisis — a reduction in the supply of a primary fuel before an alternative is available. ...

Matthew Simmons, an energy investment banker in Houston, Texas, and self-described "petro-pessimist", argues that the world's great oilfields are moving quickly towards the end of their production, or have already passed into rapid decline. ...

Some people think that the declines we are seeing are indicators that the world is on the verge of, or has already passed, the maximum amount of oil that can physically be produced. In their view, oil production follows a bell-shaped trajectory, with the peak occurring when half of the total reserves have been consumed. ...

If you accept this principle, then the issue of when the peak comes depends mainly on the amount of reserves that remain untapped, and that in itself gives room for disagreement. But some don't accept these premises. To them, these arguments are simplistic geological determinism that does not take into account the role of oil prices. To the dissenters, reserves are not a geological given but a function of the current price and the extraction technology that price can buy. New reserves will be developed as the market demands.

Both sides issue regular, well-referenced reports that come to opposite conclusions on whether the world is running out of oil. "There's just no middle ground," says Kenneth Deffeyes, a geologist who has retired from Princeton University in New Jersey, and is a leading supporter of the peak-oil theory. His personal belief is that we are already a year past the peak. If he's wrong, though, he's sure that it will prove not to be by much: the peak is imminent, and unavoidable.

Meanwhile, a study from energy analysts Cambridge Energy Research Associates (CERA) in Massachusetts sees no sign of any peak in production occurring before 2030. And, crucially, CERA doesn't see a peak with a steep downside — rather a crest followed by an undulating plateau (see chart), which would be much less apocalyptic even if it happened today.

It's not that CERA thinks that oil production has no constraints, or that the geological resource can't be depleted. Even oil company executives say publicly that they see a problem. T. Boone Pickens, the maverick Texas oil magnate, has said that he thinks oil production may already have reached its maximum. And in October, during an address to the National Press Club in Washington DC, Shell Oil president John Hofmeister acknowledged that "the easy stuff is running out". "We may argue about when the peak is, but it doesn't change the argument that it's coming," says Robert Kaufmann, an energy economist at Boston University in Massachusetts. "I don't know if we are all Hubbertists now, but we are all recognizing that there is a finite quantity of oil."

Hubbert, in this context, is M. King Hubbert, the geophysicist who first predicted that oil production would peak quite suddenly [in the lower 48 states of the U.S.] — and that when it did, it would slump sharply thereafter...

Those in favour of the peak-oil theory argue that Hubbert's methods for analyzing US oil output can also be used to analyze the global production peak. Deffeyes, known to many as the charismatic protagonist of Basin and Range, the first of John McPhee's great popular accounts of modern geology, has emerged as a particularly prominent Hubbertist. ...

Changing with the times

But not everyone buys Deffeyes' interpretations. "The technique that Hubbert used in the 1950s is simply not applicable on a global basis in 2006," argues Peter Jackson, an oil and gas analyst who works for CERA near London, UK. Jackson authored CERA's background briefing paper "Why The Peak Oil Theory Falls Down" in November 2006. ...

Jackson, Deffeyes and everyone else in the debate agree that nearly 1.1 trillion barrels (175 trillion litres) of oil have been produced worldwide. A key difference is that supporters of the peak-oil theory argue that roughly that same amount remains to be pumped out of the earth's reserves, whereas CERA's report estimates those reserves at 3.7 trillion barrels, a number that would place the world well on this side of any peak in production.

One reason for the difference is that CERA is much more optimistic about the amount of oil that can be recovered from operating oilfields through the use of new technologies. ...

But the fluctuating price of oil means that fields abandoned after secondary production can be re-opened for tertiary production when demand calls. ...

Energy optimists point to recent discoveries such as the seven new oilfields uncovered in the deep waters of the Gulf of Mexico last year — reserves that are only accessible because of new technology. ...

But the peak-oil theorists are not convinced. "The problem is, if you go and talk to people whose job it is to actually go and find this stuff, they have no clue as to where these trillion barrels of reserves actually are," says Michael Rodgers of the energy analysis firm PFC Energy in Washington DC.

Who to trust?

Estimates of reserves that are published by oil companies, national governments and researchers such as the US Geological Survey are not to be trusted, according to the peak-oil supporters. Jeremy Gilbert, former chief petroleum engineer for BP, says that not all oil companies work to the same standards. ...

Most of the attention on OPEC focuses on Saudi Arabia, by far the biggest producer and the driver of oil prices worldwide. The country gets most of its oil from seven giant maturing oilfields. The three biggest fields have been producing oil for more than 50 years, and the oil industry constantly swirls with rumours that the biggest of all — the Ghawar field — has been increasingly cut with water to drive its production even higher....

New discoveries, such as in the Mexican section of the Gulf of Mexico or in Angola or Brazil, could change the date of an imminent oil peak, says Rodgers, but only slightly. "All you can do is take the cliff facing us in the next few years, and push it farther out over time. This has already happened." Fields of the size now being discovered, though, will not be large enough to push the peak back far. ...

A dipstick for the future

Some of the oil production to meet this future demand may come from alternative approaches — extracting oil from oil shale, for example, or liquefying natural gas or coal for fuel (see Nature 444, 677–678; 2006). These 'unconventional' sources of oil are some of the reasons that the CERA outlook is so optimistic. But many of the other sources, say peak-oil supporters, are not good alternatives — certainly not the sort of thing that can easily be used in vast quantities as a replacement for sweet Saudi crude, a high-quality oil with a low sulphur content, even if the price is right. In Alberta, Canada, geologists have focused on extracting oil from tar sands which could, in theory, help supply the world's needs for decades. But the process is expensive, both financially and environmentally; three barrels of water, for instance, are needed to produce each barrel of oil from the sands, and the production releases large amounts of greenhouse gases.

Thinking along those lines raises a parallel question: can we afford, in environmental terms, to put the peak off, and to keep turning oil into atmospheric carbon dioxide at an ever-increasing rate? From an environmental point of view, a peak might almost be welcome. If the subsequent rapid drop in production crashed the world economy, though — in the way that peak-oil supporters fear — those benefits might be hard to appreciate. What's more, the resources needed to develop the alternatives on which economic recovery would depend might not be available. ...

Alexandra Witze is Nature's Chief of Correspondents, America.

Editorial Notes: The full article is behind a paywall. Only excerpts are presented here to give the flavor of the original. Contributor SP writes:
Well it's long and covers a lot of ground, but most readers of EB will already know most of this. In a way the only interest is that it was published in Nature, and can therefore be considered "mainstream".
As one would expect from Nature, this piece is better quality journalism than in the typical "peak oil" article in the press. Still there is room for improvement. Perhaps in subsequent articles, Nature might go beyond the he-said-she-said frame of reference, in which an issue is automatically seen as a debate between two sides, equally striving for the truth. This has proved a poor model for reporting on global warming, and it is equally poor for peak oil. For one thing, certain groups have vested interests in squashing the idea of peak oil. Also, the demographics of peak oil writers are different than those of the skeptics. Peak oil counts among its ranks many retired employees of oil and energy companies, who are now free to speak out. Also, all the peak oil arguments are available free online. CERA has only put their press release online. Their 16-page report in which it makes its case against peak oil costs $1000. In contrast, many rebuttals to the CERA report are available online. The archives of Energy Bulletin, The Oil Drum, ODAC and the various ASPOs are full of background material and analyses. In future reporting, it would be good to go into more analysis. Which arguments are solid and which are PR talking points? What are the areas of agreement? Where exactly are the differences of opinion? I think there is much more agreement than first meets the eye. A minor point. Towards the end of the article, Witze writes "From an environmental point of view, a peak [in oil production] might almost be welcome." Actually, the fear is that after peak, oil would increasingly be replaced by coal, releasing even more greenhouse gases. Thanks to Nature for its coverage, and I hope we will see more in the future. -BA See also A further comment on "That's Oil, folks . . ." at The Oil Drum.

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