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Peak Oil Exhorts Us to Reflect

Svenska Dagbladet, one of the largest newspapers in Sweden, has now made a review of the book Peeking at Peak Oil (read the article in Swedish). In a special note they have compared the predictions that Matt Simmons made for Saudi Arabia and the predictions in the new book Peeking at Peak Oil.

CONTROVERSIAL THEORY
During May the oil price sank by 16 percent. At the same time the oil storages of the OECD nations are at their fullest since 1991. While this is happening Kjell Aleklett has published a book summarising 10 years of controversial research on Peak Oil – the theory that oil production will soon reach its maximum level.

Peak Oil Exhorts Us to Reflect

Uppsala researchers warn of dependence on giant oilfields

The message in the book might have achieved more impact if the price of oil had been higher but political factors and economic cycles mean that the price will always vary. During the past 10 years since Professor Kjell Aleklett organised the first Peak Oil conference in Uppsala and began to build up a research group studying global energy systems, he and his colleagues have slowly but surely received greater acceptance of their ideas.

For many years the oil companies ridiculed the idea that a peak in oil production would ever be reached but took on a more humble tone after 2004 when Shell wrote down its reserves by 35 percent.

Fredrik Robelius’ doctoral thesis “Giant Oil Fields” that was published in 2007 became, after only one year, Uppsala University’s most downloaded research report ever. In total the Swedish researchers have now published over 20 studies. Kjell Aleklett has been invited to speak at OECD conferences and to testify for the US Congress.

“When I have lectured on “Peak Oil” in recent years I have often observed one or more people in the audience experience what we call their “peak moment”. That is the moment when they finally – and often suddenly – become convinced that Peak Oil is a reality”, writes Aleklett in Peaking at Peak Oil that is published by Springer Science + Business Media.

According to the book’s advertising Aleklett uses science to reveal the errors and deceit of energy authorities, companies and governments that are too terrified to acknowledge the truth.

What then is it that makes studies of the maximum of oil production, Peak Oil, so controversial? What insight is it that audiences are suddenly struck by?

If the research had only been about describing the world’s oil production there would not have been much to argue about. But what Aleklett and his research colleagues claim is that they can calculate when maximum production will be reached by looking at the discoveries that have already been made.

It may seem a rather banal insight that extraction of a resource depends on how much of it one has found. But Peak Oil is not about oil running out. On the contrary, the illustration on the cover of Aleklett’s book suggests that more than half of the oil that has been discovered remains to be produced.

Every oilfield has its own particular characteristics which determine its optimal rate of oil production. If one attempts to produce oil from the field too rapidly one risks reducing the total amount that can be produced from the field compared to if one had greater patience.

Peak Oil is about studying the oilfields in a region, a nation or the entire world, seeing what each can maximally produce and putting together the results into a production curve. There will always be fields being ramped up to their maximum production level while others will be at their peak and a third group will be showing declining production. It is more about statistics than physics. The problem is that the statistics are so poor. How much oil a nation possesses is considered by many of those nations to be a state secret. The numbers reported for nations such as Saudi Arabia and Venezuela are more about negotiating for a higher production quota within OPEC than giving a correct picture of how much oil exists. This uncertainty also applies to individual fields.

The information about how much oil will be produced from the world’s largest oilfield, the Saudi Arabian field Ghawar, varies between 66 to 150 billion barrels. Since the world’s current consumption of oil is 88.7 million barrels per day (including ethanol and processing gains. The real oil production according to BP is 83 Mb/d), or over 32 billion barrels per year, the uncertainty in the numbers for Ghawar is equivalent to the world’s entire oil consumption during 2.5 years.

The benefit of the Uppsala researchers’ work is that they have gathered together the information from many difference sources to make the picture a little clearer. What they warn for is that the world is frighteningly dependent on just a few giant oilfields in the Middle East. A giant field is defined as one that can produce 500 million barrels of oil during its lifetime. “The world’s oil production can be divided up into three segments that differ from each other by a factor of ten in terms of how many oilfields each segment represents”, writes Aleklett.

A third of the world’s oil production comes from the 21 largest giant fields. The next third comes from the remaining 291 giant fields while the remaining third comes from the rest of the world’s oilfields, some 47,500 in all.

BJÖRN LINDAHL
bjorn.lindahl@svd.se

Uncertain predictions of when Peak Oil will occur in Saudi Arabia

What happens with the giant fields, and especially the very largest, has great significance for the world’s energy supply. That eight of these 21 largest fields lie in Saudi Arabia explains why that nation plays a key role in the oil market.

Concern that Saudi Arabia’s oil sources will begin to decline reached a peak when one of the leading people in the Peak Oil movement, Matthew Simmons, published the book Twilight In the Desert in 2005 after having compiled information from more than 200 technical reports on Saudi Arabian oilfields.

He thought it nearly impossible that Saudi Arabia could increase its production to the 20-25 million barrels of oil per day figure used by some prognosticators. Neither did he think that the nation could maintain the production level it had in 2005.

Simmons emphasised that it was uncertain how high production was but the nation’s production quota within OPEC at that time was 9 million barrels per day. “Nothing in the existing information currently supports the assertion that Saudi Arabia can maintain production at the current level for more than five to ten years”, wrote Matthew Simmons.

When Kjell Aleklett analysed Saudi Arabia’s reserves he used a different method. He assumed that production from the Saudi Arabian fields is performed carefully. Since production from one of the giant fields, Abqaiq, has now begun to decline one can see how much of the reported reserves could be produced. For Saudi Arabia as a whole he sees 56 percent as a realistic number. His conclusion is that Saudi Arabia can increase its production to 12 million barrels per day and that the nation can maintain that level until 2029.

“Even with an increased production rate of 12 million barrels per day Saudi Arabia would still be the nation on Earth that passes its production peak last”, writes Kjell Aleklett.

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