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Peak oil - July 7

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Many more articles are available through the Energy Bulletin homepage.


Monbiot says he was wrong on peak oil but the crisis is undeniable

Jeremy Leggett, Guardian
... Ahead of the credit crunch, commentators echoed the incumbency mantras right across the media. Ahead of the oil crisis, the same is happening. Just Google "peak oil myth" and see what comes up. Yesterday George Monbiot joined this group with an article entitled We were wrong about peak oil. There's enough to fry us all.

The many misunderstandings he relays begin with the title. There is more than enough potential oil resource below ground to create the climate disaster he refers to. Peak oil is not about that. It is about when global production falls never again to reach past levels: a disaster, if the descent hits an oil-dependent global economy years ahead of expectations. This descent depends on flow rates in oilfields, not the amount of oil left. What worries those who believe the global oil peak is imminent is the evidence that the oil industry will not be able to maintain growing flow rates for much longer.

The whistleblowing in the run-up to the credit crunch involved a few maverick economists and some far-sighted financial journalists. The peak-oil whistleblowing is different. Many within the incumbency itself are sounding alarms. Every year, when the Association for the Study of Peak Oil (ASPO) meets, recently retired oilmen queue to give their latest assessments of how their industry is getting its asset assessment wrong. The latest ASPO event was held a few weeks ago in Vienna, which I attended.

There has been "a boom in oil production" of late, Monbiot says. Wrong. Global production has been essentially struggling along a plateau since 2004, as Bob Hirsch, an ex-Exxon advisor to the US Department of Energy describes. Hirsch expects the descent to begin in one to four years.

Monbiot is correct that there has been a small increase in oil production in the United States in recent years. But can that continue, as he infers? Gas-industry whistleblower Art Berman describes how the shale gas gold-rush of recent years, now extending into shale oil, may well be a giant ponzi scheme: decline rates in wells are unexpectedly fast, meaning more and more have to be drilled at ever more expense, meaning ever more money has to be borrowed against cash flows from production that fall ever further behind. He looks at the resulting disaster in the balance sheets of oil and gas companies, and expects the bankruptcies to start any time soon.

(4 July 2012)


Peak Oil Reloaded (1 of 2)

Oil Man, Le Monde (blog)
Pilule noire ou pilule verte ? Leonardo Maugeri, ancien dirigeant du groupe pétrolier italien ENI, affirme que le "peak oil" n'est qu'une chimère.

Premier problème : les analyses passées de Maugeri se sont elles-mêmes avérées... chimériques. A suivre lundi : la critique de l'ancien responsable des questions pétrolières au sein de l'Agence internationale de l'énergie, Olivier Rech. Cinglant.

(Olivier Rech dirige aujourd'hui Energy Funds Advisors, une société qui conseille des fonds d'investissements pour le compte de La Française AM, un important gestionnaire d'actifs parisien.)

Un nouveau rapport sur l'évolution future de la production mondiale de pétrole met en émoi le petit monde des gens qui s'interrogent sur l'avenir de notre [industrie thermo-mécanique et donc de l'économie de] croissance.

'Dormez bien, braves gens', annonce en substance ce nouveau rapport, 'et vous, banquiers et assureurs, n'allez surtout pas écouter les sornettes de ceux qui prétendent que le business du pétrole est condamné.'

Le Wall Street Journal, entre autres, applaudit.

... Le rapport Maugeri constitue jusqu'ici la charge la plus remarquable d'une vaste contre-offensive initiée il y a dix mois dans le Wall Street Journal par Daniel Yergin, vice-président de la puissante agence d'information pétrolière IHS. [Sur le front du débat autour du 'pic pétrolier', Yergin fait figure de chef de file des "optimistes" - dixit le très économiquement correct hebdomadaire The Economist, dont le propre optimisme flanche sensiblement ces derniers temps.]

Il faut dire que Big Oil a bien besoin d'encouragements, depuis que l'Agence internationale de l'énergie a reconnu que les extractions de pétrole conventionnel (74 Mb/j, soit 90 % de la production totale de brut) ont atteint leur pic historique en 2006, précisant qu'elles n'augmenteront plus "jamais".
(6 July 2012)
An English translation for this and the upcoming article on Olivier Rech are needed. If interested, contact Matthieu Auzanneau via http://petrole.blog.lemonde.fr/a-propos/ . Thanks! -BA

UPDATE: An English version of the article is now on Matthieu's website.


Oil and Illusions

Linh Dinh, CounterPunch
The flaws of bad government, oppression, injustice and corruption, etc., can be masked by an unearned windfall. Take Saudi Arabia and its oil, for example, or the United States and its oil, which was first sucked from its own soil and sea, then everybody else’s, thanks to its status as an empire.

With oil, even hillbillies can live a comfy life and slather a veneer of culture onto their persons. That’s us. With oil, even a bad government can appear decent, because living standards are up, and the masses can buy toys. A barrel of black gold equals 3.8 years of human labor, and since each American consumes a world-highest 24 barrels a year, that’s 91 slaves for each man, woman and child. With oil, even debt and wage slaves can have their own slaves.

What a coincidence: the world’s first major oil well, Empire, was established in 1861, in Pennsylvania, the same year the American Civil War began. With black liquid slaves gushing from the ground, there was less of a need to enslave black (or any other) humans, at least not so overtly. The new black slaves are also much more powerful, flexible, storable, transportable and tradable. Cheaper to maintain, they also don’t revolt.

... Concurrent with the increase in oil and the actual wealth that it brought, we’ve also witnessed an explosion of magical or illusory wealth, in the form of images. It began with the invention of photography in the mid-19th century, just before the Empire oil well and American Civil War. With photos, then moving images, now on television, desktop, laptop, cellphone and Ipad, any man can own so much with his eyes. In actual life, he may be dirt poor, but through the screen, large or small, he is in control of a huge, almost infinite realm. One click, and he’s in Shanghai. With another, he has an Italian girlfriend. He can travel the world and has a thousand lovers, of all different races, in a day. If his mother is on Facebook, Twitter or Eroshare, he can date her too, but under a screenname, of course. Lured by the reproduced image’s lizard brain come-ons, its saturated colors, quick cuts and yes crotches, he is barely dwelling in this world, so that its outrages and scandals, even when committed in his name, hardly matter.

Flesh-and-blood exchanges are starved by virtual commerce.

Linh Dinh is the author of two books of stories, five of poems, and a novel, Love Like Hate. He’s tracking our deteriorating socialscape through his frequently updated photo blog, State of the Union.
(6-8 July 2012)



Serie 'Unser Öl': Warum unser Sprit nie wieder billig wird

Oliver Scheel, Frauenzimmer
EU-Kommissar: Autofahrer müssen mit steigenden Preisen rechnen
---
... Da die Erdölvorräte endlich sind und das bittere Ende sogar schon absehbar ist, wird der Ölpreis nicht mehr signifikant sinken. Das bestätigte unlängst der deutsche EU-Kommissar für Energie, Günther Oettinger. "Eine Debatte in der deutschen Politik wird den Preis an der Zapfsäule nicht wirklich beeinflussen, Autofahrer müssen mit weiter steigenden Preisen rechnen."

Der Grund für seine Aussage ist einfach. Nicht nur, dass die Erdölvorräte immer weniger werden, es wird vor allen Dingen immer schwieriger, die verbleibenden Ölfelder auszubeuten. Der oben genannte Pionier Drake musste nur 20 Meter tief bohren, bis ihm die kostbare Flüssigkeit entgegensprudelte. Heute sind die leicht zugänglichen Felder längst abgeerntet. Weil immer tiefer gebohrt werden muss, wird die Förderung teurer.

Leider wird sie nicht nur teurer, sondern auch weniger berechenbar und gefährlicher, wie das Unglück der Deepwater Horizon am 20. April 2010 der Welt dramatisch vor Augen führte.

... Da auch die Nachfrage nach Öl und Treibstoff vor allen in den bevölkerungsreichen Schwellenländern China, Indien und Brasilien mit insgesamt fast drei Milliarden Einwohnern wächst, ist nicht davon auszugehen, dass die Preise sinken. Eher wird es zu einer Verknappung kommen und damit zu einer weiteren Teuerung.

Experten erwarten, dass in den kommenden Jahren der 'Peak Oil‘ eintritt, der Höhepunkt der globalen Förderung. Für die deutschen bleibt also die bittere Erkenntnis: Billiger wird’s nicht. Daher macht es Sinn, sich nach alternativen Antriebsarten umzuschauen.

Im dritten Teil unserer Serie beleuchten wir den Umweltskandal des 'Gas-Flarings' - das kontrollierte Abfackeln von Erdgas. Jedes Jahr verbrennen etwa 30 Prozent des europäischen Gasverbrauchs, weil die Konzerne das Gas nicht auffangen wollen. Millionen Menschen erkranken, in manchen Regionen kann man kaum mehr atmen.
(X July 2012)



In the valley of the shadow of peak oil

Christopher Majka, Rabble
... [Peak oil] has also been the focus of environmentalists, who, as George Monbiot points out in his essay We were wrong on peak oil. There's enough to fry us all have been of two minds about its implications. On the one hand the inevitability of the decline oil provides a powerful impetus to wean human civilization off this black milk. Governments, agriculture, industry, and consumers might conceivably be jolted out of complacency faced with this stark reality, and its social, economic, and political implications -- even if they cared not a fig about the environment itself. The flip side of the sword of peak oil hanging over our collective heads, is that rather than embracing conservation, renewable energy, permaculture, life-style changes, and a steady-state economy, it might instead prompt a panicked leap from the oily frying pan into the coal and biofuel fire, clutching desperately at even-more damaging resources and technologies in order to avoid the inevitable. Furthermore, in the globally interconnected economy of the 21st century, replete with hysterical market forces, speculative banking practices over-leveraged on various esoteric derivative financial products, and debt-laden national economies, who knows what further chaos peak oil might unleash?

... An incendiary has just landed on this petro-landscape with the publication of Leonardo Maugeri's study Oil: The next revolution. The unprecedented upsurge of oil production capacity and what it means for the world published by the Belfer Center for Science and International Affairs of the Harvard Kennedy School. Maugeri, a world expert on oil, gas, and energy, has rewritten the narrative of peak oil. Examining current oil "plays" and those on the cusp of being developed, Maugeri forecasts a continuing rise in oil production from the current 93 million barrels a day (mbd) in 2011 to 110.6 mbd in 2020, an increase of 17.6 mbd (i.e., 19 per cent). This is actually a rather conservative estimate that considers both risk factors to development and the depletion rates of current oilfields. This expansion will be seen in all of the world's top 23 oil producers save for Norway, United Kingdom, Mexico, and Iran (and for the latter two this is due to political factors).

... What's responsible for this dramatic increase? In part it is due to unparallel investment in the sector which has increased since 2003 and which amounted to USD $1.5 trillion over the last three years. However, the principal factor is the "de-conventionalization" of oil supply, notably the US shale/tight oils, the Canadian bitumen sands, Venezuela's heavy oils, and Brazil's pre-salt oils.

... What all this means is that there are still massive quantities of conventional and unconventional oil in the ground, and peak oil appears to be nowhere on the immediate horizon. Long before peak oil impels us to change to renewable energy and sustainable practices, we will have cooked our goose through climate change and other environmental impacts. Moreover, Maugeri points out that the current upswing in oil production will lead to major overproduction of oil, and a consequent decline in prices, unless oil demand grows at an annual rate of 1.6 per cent for the entire next decade, thereby pouring an ever increasing amount of carbon dioxide into the atmosphere.

There is, however, the little problem of the environment .... Maugeri observes:

"The principal difficulty concerning shale gas is the effect of hydraulic fracturing on the environment, which is perceived as contributing to water and land contamination, natural gas infiltration into fresh water aquifers, poisoning of the subsoil because of the intensive use of chemicals, and even minor earthquakes."

And:

"Environmental concerns about massive tar sands exploitation may obstruct or delay future development .... There is strong environmental opposition to building new pipelines on U.S. territory to transport the corrosive and pollutant heavy oils from Canadian tar sands. Among other concerns, the tar sands' carbon footprint is 17 to 23 per cent larger than that of light oil. The same opposition that stopped the Keystone XL makes future prospects of Canadian oil exports to the U.S. less certain."

And:

"A revolution in environmental and emission-curbing technologies is required to sustain the development of most unconventional oils -- along with strong enforcement of existing rules. Without such a revolution, a continuous clash between the industry and environmental groups will force the governments to delay or constrain the development of new projects."

Christopher Majka studied oceanography, biology, mathematics, philosophy and Russian studies at Mount Alison and Dalhousie Universities and the Pushkin Institute in Moscow. He was also a guest researcher at the Edward Gray Institute at Oxford University. As a journalist he has written for many national and international publications. As a scientist he has published over 150 scientific papers and has contributed to five books. He is a review editor for four international publications, a research associate of the Nova Scotia Museum, a recipient of the Tom Brydges Award from the Ecological Monitoring and Assessment Network, and was selected as one of Canadian Geographic's Environmental Scientists of the Year in 2010. He is also a member of the Project Democracy team.
(4 July 2012)



Civilization and the Price of Oil

Stuart Jeanne Bramhall, Dissident Voice
I attended a lecture and workshop by Arizonan Guy McPherson last weekend that hit me like a kick in the head. McPherson, who posts at Nature Bats Last and recently published Walking Away from Empire: a Personal Journey, is on tour in New Zealand. According to McPherson and a growing number of prominent energy and economic analysts (including, among others, George Soros, Max Keiser, Gerald Celente, Paul Craig Roberts and Marc Faber), industrial society will grind to a halt some time before the end of the year. The evidence McPherson presents linking the price of oil to economic activity and declining oil reserves with stagnating production is extremely compelling. Seriously. We’re not talking theoretical any more. He’s got me and several dozen of my friends setting up planning meetings to plot our collective survival without imported oil and food, electricity and water that comes out of the tap.

McPherson’s basic premise is that a spike in the price of oil will spark a second global economic crisis. Only this one will be severe enough to bring global financial transactions and trade – and possibly our energy and telecommunications grids – to a total standstill. In other words, TEOTWAWKI (The End of the World as We Know It). In McPherson’s view, things look so bad on the climate change front that the impending TEOTWAWKI moment is actually incredibly good news.
(4 July 2012)

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