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The latest peak oil projection: a stunning difference

John Kingston, Platts
A session with a leading Peak Oil supporter can always be a sobering experience. That was certainly the case May 28 at the “New Challenges for Crude Oil” conference in Geneva, where the president of main international Peak Oil group spoke.

Swedish professor Kjell Aleklett is actually a physics professor at Uppsale Universit, not a geology professor. But he is also the president of the Association for the Study of Peak Oil, and he was chair of the Platts’ conference.

He is about to present a paper for peer review and inclusion in the academic magazine Energy Policy. That paper will take issue with the International Energy Agency projections on oil supply out to 2030, by an enormous factor.

The difference between the IEA and Aleklett’s work is fairly straightforward. Aleklett adopts what he calls a “parameter” in determing the rate of depletion in fields that have yet to be developed or fields yet to be discovered, two key elements in the IEA’s projections.

The gap between his work and that of the IEA is huge. IEA projections of liquids supply see total output of 101.5 million b/d by 2030. Aleklett’s research sees it at a little more than 75 million b/d.

There are numerous areas where Aleklett said his research agreed with the IEA, including the projected rate of decline of existing fields. But beyond that, what Aleklett says are the different approaches toward depletion rates creates enormous differences in projections out to 2030. Output in fields to be developed would be 22.5 million b/d in the IEA forecast; it’s 13.6 in Aleklett’s. The difference in fields yet to be discovered is 19.2 million b/d vs. 8.7 million b/d.

Aleklett, like other Peak Oil proponents, also criticized the IEA practice of counting all barrels of NGLs equally with a barrel of crude, even though the BTU content is not equal.

Aleklett’s conclusions also hinted at a politically-driven agenda at IEA. He said the agency often takes the approach of “you should rely on us because we are telling you the truth, and governments around the world trust the IEA.” The IEA’s forecast on the rate of depletion is “outside reality.”

IEA forecasts are “demand-driven,” he said, assuming that if global economic growth averages 3%, “that is driving production.” “They’re giving oil supply estimates to support GDP esimtates,” he said. “They are not allowed to give oil that does not show an increase in GDP in the future.”
(30 May 2009)

Peak oil professor challenges IEA figures

Kate Mackenzie, Energysource (blog), Financial Times
Kjell Aleklett, a Swedish physics professor and president of ASPO, the main peak oil association, is taking on the IEA over future liquid hydrocarbon supply.

Platts reports Aleklett will present a paper for peer review and inclusion in the journal Energy Policy that says the IEA’s projections of liquid output of 101.5m barrels per day by 2030 is too high. He puts the number at 75m bpd.

The difference between the IEA and Aleklett’s work is fairly straightforward. Aleklett adopts what he calls a “parameter” in determining the rate of depletion in fields that have yet to be developed or fields yet to be discovered, two key elements in the IEA’s projections.

(As another data point, the US Energy Information Agency, which launched its annual International Energy Outlook report this week, projects 107m barrels per day of liquids production in 2030, including 12m from unconventional sources).

Platts points out Aleklett is a physicist, not a geologist. Either way, we await the peer review outcome with interest.
(29 May 2009)
Go, Kjell! -BA

Energy shock and oil myths
(Rubin and Tertzakian)
Colin Campbell, Macleans
Will soaring prices crush globalization? Don’t bet on it.

… Two years ago, Peter Tertzakian, the chief energy economist for ARC Financial Corp., appeared as a guest on The Daily Show with Jon Stewart. Talking about a future energy crisis, Stewart posed one of his trademark, over-the-top questions: “How long do we have before masked madmen roam the cities with AK-47s, Mad Max style?” Tertzakian, who looks like a brainy version of Stewart with glasses and flecks of grey hair, cracked a lopsided smile. “It may not come to that,” he deadpanned. “The good news is that although these transition periods in energy are uncomfortable, usually we come out for the better.” Just as whale oil was replaced by kerosene, which was eventually replaced by today’s fossil fuels, another shift will come.

In his latest book, The End of Energy Obesity, Tertzakian goes even farther, arguing that escaping the energy trap may not be as difficult as it’s made out to be. Some relatively painless changes in our everyday behaviour could radically, and quickly, reduce the amount of oil we need, he says. Many of Tertzakian’s arguments actually closely parallel Rubin’s. Both authors trace the same historical problems with society’s oil addiction and how closely energy consumption has always been tied to wealth creation. And both see problems with past efforts to create energy efficiencies—ironically, past gains have only prompted people to use more energy. But Tertzakian sees the world heading off on a very different trajectory than Rubin.

Too often, says Tertzakian, writers and economists who subscribe to the doomsday scenarios are “trapped into thinking about energy in the energy realm.” He argues you first need to flip the problem on its head. The amount of energy we use is actually much less than the amount that’s extracted at the source, he says
(1 June 2009)
Hope springs eternal in the business journalist’s heart. -BA

ExxonMobil’s 2008 Corporate Citizenship Report (CCR)

Press release, ExxonMobil
My name is Kristy Hellmer, and I am with ExxonMobil Media Relations. I would like to invite you to view ExxonMobil’s 2008 Corporate Citizenship Report (CCR) which is now available online:

The report details ExxonMobil’s actions to improve environmental, economic and social performance, while
providing energy to meet the world’s growing demand.

A key goal of ExxonMobil’s corporate citizenship strategy is to address the challenge of sustainability — balancing economic growth, social development, and environmental protection so that future generations are not compromised by actions taken today. ExxonMobil addresses the challenge of sustainability through six citizenship focus areas in the report: corporate governance, environmental performance, managing climate change risks, economic development and human rights and security.

You can also view the news release that summarizes highlights of our CCR and participate in an online web chat with Ken Cohen, ExxonMobil’s vice president of Public Affairs about the CCR at 2:30 p.m. CT on Friday, June 5 at Live Q&A on the
(28 May 2009)

Thank you for the note, Kristen. We’ll post an item with a link to the CCR.

Mostly our website is interested in ExxonMobil’s ideas about peak oil and the post-peak transition to other energy sources. We note that Exxon Mobil Chairman Rex Tillerson is skeptical.

“[Tillerson] said the world isn’t anywhere close to reaching “peak oil,” the point at which oil production will crest and then begin an irreversible decline as a result of dwindling petroleum deposits. A full-scale transition from fossil fuels could be ‘100 years away,’ he said.”
Fort Worth Star-Telegram May 27, 2009

We tend to agree with the large body of analysis from geologists and engineers that peak oil production will occur much sooner. In fact we may have already passed the peak. Because of ExxonMobil’s technical expertise and vast resources, it will be a key player in making the transition. ExxonMobil’s heritage as a corporation may rest on how well it helped the world understand and respond to peak oil.

Best wishes,
Bart Anderson
Energy Bulletin

Global Storage Constraints Limit Oil Stockpiling

John Liu, Bloomberg News
Global storage constraints are limiting the ability of most countries to stockpile more oil this year while China prepares to enlarge its reserves, the energy chief of the world’s third-biggest economy said.

“Crude stockpile facilities at most countries have been fully filled in the first half,” Zhang Guobao, director of the National Energy Administration, said in Beijing today. “It will be difficult for those countries to greatly increase crude reserves in the second half as they did in the first.”

Oil’s slump in New York from $147.27 a barrel last year has boosted fuel purchases for stockpiling. Even tankers are now being used for storage because of limited on-land capacity, Zhang said.
(1 June 2009)