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T. Boone Pickens: we peaked last year, globally (video interview)
Julian Darley et al, Global Public Media
Legendary Texas oilman and chair of BP Capital, T. Boone Pickens, holds an impromptu video question and answer session at ASPO Houston with Global Public Media’s Julian Darley and other journalists. Pickens talks about the peaking of world oil production, which he says occurred in 2006.
79 year old billionaire T. Boone Pickens is ranked by Forbes Magazine as the 131st richest person in the world. Pickens was a well-known takeover artist who he grew his company, Mesa Petroleum, by acquisitions rather than by exploration alone. In recent years Pickens has spoken out on the issue of peak oil and he advocates, amongst other responses, the promotion of renewable energy technologies.
(23 October 2007)
Global Oil Output Has Already Peaked, Pickens Says
Jim Kennett, Bloomberg
World oil output has already peaked, and prices that have surged to record highs above $90 a barrel are a sign of things to come, said investor Boone Pickens, chairman of Dallas-based BP Capital LLC.
Global production has peaked at 85 million barrels a day, Pickens, 79, said in an interview today at a Houston conference sponsored by the Association for the Study of Peak Oil & Gas, a non-profit think tank. Oil will rise to $100 a barrel before falling to $80 again, he said. Earlier this week, he said crude would reach $100 by year’s end.
“As this unfolds, you’re going to have to find alternatives that are going to do the job that oil is doing,” Pickens said. “Everyone is going to have to come to grips with this in the next two or three years. People are going to have to figure it out.”
(19 October 2007)
Related from AP: Oilman Pickens says $100 oil coming.
Robert Hirsh interview (transcription)
David Strahan, ContreInfo
David Strahan : Robert Hirsch, thanks for talking to me, you have just made a presentation at the ASPO conference in Huston on the basis of your latest paper which is called “World oil shortage scenarios for mitigation planing” and you have come up with some interesting stuff on the relationship between the oil supply and economic growth. Just tell me a little bit about that.
Robert Hirsch : Oil, it has been said many times, is the lifeblood of modern economies and the question is, when peaking, the maximum of oil production occurs and we begin to go into decline, what impact is that likely to have on world GDP ? It is very difficult to calculate something like that. Economists don’t do it correctly because they simply deal with oil price. Oil price will clearly go up when oil is in shortage but the thing that the economists can’t deal with and one can only approximate is what will happen when actual shortages occur along with very high prices and so what I did was to go back to a number of estimates that people have made as well as what actually happened in 1973 and 1979 when we had real shortages. We have had oil price run ups at other times but those where the two times we had oil shortages. If one looks then at various estimates plus what actually happened, one determines that the percent decline in oil availability is likely to be approximately equal to the percent decline in world GDP. So then if one calculates a range of 2 to 5 percent, some people think the number may be larger, 2 to 5 percent per year increase in oil shortage, one comes up with a rather disastrous indication world GDP will decline by 2 to 5 percent a year in tandem with increasing oil shortages.
David Strahan : That’s a very dramatic conclusion because I think most economists and most economic studies would suggest that there is a rather less than unity relationship between the oil supply and economic growth. I think most of the numbers are something of the order of 0.5 percent. Why are you so convinced that actually the relationship is much stronger and much more significant than that.
Robert Hirsch : I think the available information indicates that this number is approximately correct. It is not precise because precision is impossible. You will know after we see what happens what the number actually turns out to be but I think it is relatively clear that a ratio of a 10th or 10, a 10th would be to small and a ratio of 10 would be too large. So the order of unity is roughly what it is likely to be and if that ends up being 2 or 1/2, that is essentially the same thing. That is still unity.
David Strahan : So what you really saying is that peak oil means peak economy ?
Robert Hirsch : When oil goes into decline yes. World GDP will decline, I am perfectly convinced of that. In talking to economists, they believe very much in their models and their models are econometric so they don’t deal directly with shortage, they deal with oil price and their models can handle oil prices changing relatively slowly but to a person, economist that I have talked to and I have talked to a number of very significant economists, they admit that their models cannot handle significant changes, rapid changes, shock changes, and that is what peak oil is likely to be.
(18 October 2007, transcription 22 October 2007)
A French site has been transcribing audio interviews conducted by British journalist David Strahan. Usually the top of the page has an introduction in French, but with the interview itself in English below.
David Strahan’s site has a podcast of the interview .
Houston ASPO Day 2 part 2
Heading Out, The Oil Drum
This is the last of the posts that deal with the content of the ASPO Conference last week in Houston. I will have my usual personal closing review tomorrow.
… the Government panel from before lunch returned to a question and answer session. It was pointed out that the will of the Congress, and all other politicians along the ladder, since they only respond when they see their constituents demanding action. So the audience (and you dear reader) are encouraged to first arrange a meeting with the legislator, or an aide. Then write a letter to the editor of your local paper, citing the meeting. But if you’re going look respectable, have a short piece of well-prepared paper (Debbie Cook handed an example out at the Saturday meeting) to illustrate the points (no more than one simple explicit graph on a page), and bring along an authoritative figure that can help lend credence and stature to your presentation. This will be particularly effective if you can tie it to some event related to energy that occurs, and you can expect that there will be one of these soon.
Senator Whipple urged that you stay away from emotive issues. (Discussing population for example is a rapid way for a legislator to find an ex- in their title). You must relate it to the issues that a constituent understands (such as the price of gas). Build on the issues that are important, or viewed as such by the press. In the last 2 weeks, for example, there have been ten stories on air quality in the LA Times. Recognize that we cannot change the culture that quickly and that the social benefits of any change must be explained (simply). And remember that governance is an interlocking structure in that while some things are done at the city level, others are related to state action and yet others are reacting to federal regulation. You need to understand, when making a presentation, what can be achieved at that level.
… our own Professor Goose! PG’s summary hit some of the high points of the day, focusing on policy and social change. He noted that even though a lot of smart people are thinking about small portions of the problem, it is likely that policy progress/change will follow the path of a Punctuated Equilibrium Policy Model until a tipping point hits. Policies will bubble up from local and state policy innovations and mistakes until then. After the tipping point, top down solutions will be attempted by those in power.
He also made the point that problem in integrating the many approaches to the ideas and data surrounding the problems we face is a lot like squeezing sand; just as you think you have a grasp, it trickles away. This is a tough thing we face. PG concluded with the point that large scale social change requires a social movement, which he considers the communities behind “peak oil” and “climate change” to be. For us to address the problem, we need leadership and policy entrepreneurship. But most importantly, we need to get as many smart people as we can to keep having a discourse about the problem, challenge each other’s assumptions and ideas, and hopefully learn from each other to change our paradigm.
(22 October 2007)
Heading Out posted a wrap-up of the conference (Oct 23)
A few more thoughts on Saudi and Hubber Linearization (HL)
Luís de Sousa, The Oil Drum: Europe
There has been some discussion about how to apply the Hubbert Linearization (HL) to Saudi historical production in recent weeks at TOD. Trying not to fall into redundancy, let me have some loose thoughts on these models:
…Why am I, here stuck at this finisterra, concerned with this kind of stuff? Because like you, I want to know when will the lights of this oil party start to fade away. Do any of these models help on that? If you’re still undecided between these models you are probably on the right track.
The main problem with the discussions going around at TOD about Saudi and HL is that they have been concentrated on estimating a value for URR. This value is just a secondary result of HL and a number of which foreknowledge is advisable to check the method’s efficacy. The main object of the method is to model future production and enlighten a possible epoch for the peak.
As the last charts show, none of these models seem to be doing a good job on the production profile modelling chapter. When applied to the Saudi case HL is fitting very closely the recent Cumulative profile but doing terribly on the Production profile.
Maybe we should just throw all of these models overboard.
But not so fast, let’s thought about it a bit more.
That Dog Leg Up
This is a funny name Euan coined some time back when he started looking into Saudi’s HL. It characterizes a phenomenon where after a period along a certain logistic fit, production jumps up to another path. The Dog Leg Up fit uses solely four points, but there are good reasons to consider such model.
…The Dog Leg Up model forecasts Saudi production above 3.5 Gb/a for ten years more, but nothing assures us that our dog won’t stretch its leg a bit more. Also, it looks plausible that by constraining production again to the range of 3.2 – 3.5 Gb/a Saudi can keep up with constant production even longer and possibly avoid the terminal decline for two decades or more.
No worries then? At least not for tomorrow. But let me tell you that I’ll keep watching Saudi production regularly and recheck all these models every time another year stacks up to the time series.
Just in case.
(22 October 2007)
And another analysis just posted by the same author: Oil Prices around the World: Do Exchange Rates Matter?.
A terrifying prospect – sooner or later
David Haywood, New Zealand Herald
The basic premise of the peak oil theory seems unremarkable. Oil is a finite resource and therefore almost everyone agrees global oil production must reach a peak at some point, before going into decline.
The controversy arises over two questions: When will it happen? And what are the consequences?
Professor Richard Heinberg claims to know the answers. He has produced four books and a DVD on the subject of oil depletion, and has given more than 300 public lectures all over the world. He was recently invited to New Zealand as a peak oil expert by (among others) the Green Party and Engineers for Social Responsibility.
…[Micheael] Lynch also questions the quality of peak oil research, noting that nearly all of it has been published on the internet rather than in peer-reviewed journals.
Professor Heinberg doesn’t address such criticisms in his books. But, in person, he dismisses the arguments of peak oil critics.
He does, however, defend the publication record of peak oil theorists: “I would love to see a half-dozen articles on peak oil appear in Science or Nature but it’s a difficult process, and with relatively few people working on the problem I can imagine that it would be a daunting challenge.”
The dearth of peer-reviewed scientific work from the peak oil theorists is frustrating to the layperson trying to form an opinion on the subject – particularly when reputable organisations such as the US Department of Energy don’t predict peak oil until after 2030.
…This was underlined by a 2005 report commissioned by the US Department of Energy (The Hirsch Report) which found that unless emergency efforts are begun more than a decade in advance of peaking, then the economic, social, and political costs will be unprecedented. In this context, even the department’s claim that we have at least two decades before peak oil is far from reassuring – although Professor Heinberg is dismissive of such predictions.
Whether you believe Professor Heinberg or the department it seems that tough times may be ahead. If peak oil is occurring right now, as he claims, we should be scared to death. And, even if peak oil isn’t due for another two decades, we should probably still be terrified.
David Haywood is a science writer based in Christchurch
(23 October 2007
Mr. Haywood approaches peak oil with a refreshingly open mind, though the anti-peak sources he cites are rather old and threadbare. Tapping the wealth of online information about peak oil would answer a number of his questions. -BA
Daily As-Yet-Unnamed-Set-Of-Links – Tuesday October 23 2007
Big Gav, The Oil Drum: Australia/NZ
First edition of peak oil-related news from Down Under.
(23 October 2007)