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Peak Oil
Over a Barrel
Paul Roberts, Mother Jones
Experts say we’re about to run out of oil. But we’re nowhere near having another technology ready to take its place.
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…If there is one positive sign, it’s that the high prices seem to have finally broken through America’s wall of energy denial. In fact, while energy experts like Skrebowski have been fretting about oil dependency and depleting reserves since the 1970s, today’s energy anxiety is no longer coming simply from academia or the political margins. In recent months, energy problems have come under intense focus by the mainstream media, filling radio and TV talk shows and newsmagazines. Whereas official U.S. policy still blames OPEC for our oil woes, even right-of-center, pro-business outlets like Business Week, The Economist, and Fortune have acceded that the biggest risk for U.S. energy security isn’t “foreign” producers or even environmentalists, but rather a decades-old domestic energy policy that remains focused almost entirely on finding new supplies while doing nothing to curb demand. “Much as we might like to, we can’t blame it on OPEC,” noted Fortune in August. “After all, Americans have been on a two-decade oil pig-out, gorging like oversized vacationers at a Vegas buffet.”
What’s more, while a powerful, ideologically driven minority — led, sadly, by the Bush administration — continues to insist that energy security is simply a question of drilling in the Arctic National Wildlife Refuge (ANWR) or browbeating OPEC, outside the White House, and certainly outside the Beltway, there’s a growing push to build a fundamentally new energy system. Thus, while the Bush administration dithered on climate change and the future of energy, individual states, like California and New York, enacted their own alternative energy policies and even sued utilities over carbon dioxide emissions. The corporate world, once a stalwart opponent of any policy reform, has become startlingly progressive. Toyota and Honda are busily rolling out hybrid cars. Agriculture and insurance firms warn of the future costs of oil-price swings and climate change. And energy companies like BP and Shell, eager to profit in the new energy order, are developing new fuels and technologies to help reduce oil use and emissions.
…And just as we’ve tended to underplay the flaws in our hydrocarbon energy system, we’ve also held far too rosy a notion of the various energy alternatives that are supposed to replace oil. In fact, to the extent that most politicians even discuss alternative energy, it tends to be in the rhetoric of American Can-Doism…
…This, then, is the central dilemma facing the architects of the next energy economy. Left to themselves, markets will indeed move us to new energy technologies, but these technologies may not be the ones we ultimately want or need. … a true energy revolution — one that begins moving away from fossil fuels entirely — can’t succeed or even get started until we can somehow induce the market to “see” the true costs of energy, and, specifically, just how environmentally and politically expensive “cheap” fossil fuels really are.
…once the United States finds itself in a real energy emergency, it will do what desperate states have always done when resources turn scarce: fight for them. In other words, the most pressing question may not be whether we have the right technologies, but whether we have enough time.
Paul Roberts is the author of The End of Oil and a regular contributor to Harper’s Magazine, for which he has written about the timber industry, the auto industry, and the destruction of the Florida Everglades.
(November-December 2004 issue)
A long comprehensive essay — one of the best I’ve seen in the liberal-left media. The only thing I might fault is an over-emphasis on alternative fuels for cars, and an under-emphasis on other aspects of the energy crisis. A discussion on the key role of conservation would also be welcome.
UPDATE (Nov 10). I just realized this article was published in Nov/Dec of 2004, not 2005. Oops! It’s still a good article.
-BA
How soon will world’s oil supplies peak?
John Dillin, Christian Science Monitor
The question provokes hot debate among experts, as concerns rise that America isn’t prepared for a dropoff.
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WASHINGTON – If world crude-oil production hits its peak and then falls within the next five to 10 years, would America be ready? The answer is, almost certainly not.
A debate unlike anything seen since the oil embargoes of the 1970s has erupted over the future of world petroleum supplies. A chorus of experts claims that the peak in production may be approaching, and that the impact of a peak and subsequent dropoff would be devastating to the world’s economies. Others insist that moment is still distant.
Some nations, including China, already appear to be taking steps to lock in future oil supplies from the Middle East, Africa, Central Asia, Canada, and South America.
The risks of future oil shortages are huge. As if to illustrate that point, the temporary ripple in supplies after hurricane Katrina sent gasoline prices in the US to record levels.
…”By their nature, the people who explore for oil [like ExxonMobil] are optimists. They have to be,” said Robert Hirsch, senior energy program adviser at SAIC, a research and engineering firm with headquarters in San Diego. “But we are betting our [American] civilization on the assumption that they are right.”
(9 November 2005)
Running on empty? (Denver PO conference)
Steve Raabe, Denver Post
…The [peak oil] issue takes center stage in Colorado this week at the Denver World Oil Conference sponsored by the Association for the Study of Peak Oil-USA.
“People should be listening to the peak oil debate because it will have a profound impact on our economy,” said conference organizer and energy analyst Steve Andrews. “Our transportation, food and manufacturing all revolve around plentiful, cheap oil.”
The conference, which runs Thursday and Friday, primarily will feature speakers who embrace the concept of peak production. Oil production will hit a peak, some of them warn, then leave a growing world economy thirsting for a declining resource.
Yet even within that constituency are projections that vary from a peak in the next couple of years to one that is still several decades away.
(8 November 2005)
There’s still lots of oil — at a price: IEA
Patrick Brethour, Globe and Mail
Agency warns West that costs include environmental woe, surrendering power to the Middle East
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CALGARY — In a stark admonition to the industrialized West, the International Energy Agency is warning that the world’s consumption of crude will soar over the next quarter decade, leaving Western economies increasingly dependent on oil from an unstable Middle East — and swimming in a soup of greenhouse gases.
Within that gloomy outlook, there is a bright spot. The IEA says there is ample oil to quench the growing thirst for oil for decades, dismissing the view of peak-oil advocates who contend the world is on the brink of a catastrophic drop in crude production.
Nicola Pochettino, senior energy analyst at the IEA, said the agency does not believe that physical supplies of oil will peak in the next quarter century, but that there is a question as to whether the world’s energy producers will invest enough. The agency says the world will need to spend $17-trillion (U.S.) by 2030 on a broad range of energy needs, including conventional oil and gas, an estimate that has risen $1-trillion from last year.
“Money can find oil. The problem is for the oil to find the money,” said Mr. Pochettino, noting that the IEA study examined 200 major oil fields, including those in Saudi Arabia that the peak-oil believers contend are on the verge of collapse.
(8 November 2005)
‘Flat out’ industry faces enormous challenges, SEG told
G. Alan Petzet, Oil & Gas Journal
HOUSTON, Nov. 8 — Operators and service companies face shortages of manpower, equipment, and services as they try to keep up with rising world oil and gas demand the next few decades, speakers told the Society of Exploration Geophysicists annual meeting in Houston Nov. 7.
Supplying enough energy to the world’s growing population is an immense challenge and an awesome responsibility, said Tim Cejka, president, ExxonMobil Exploration Co.
…Oil and service companies face supply challenges of geography, access, political risk, oil quality, and the expertise to deal with them, the speakers said.
The world, Bahorich said, appears to have produced 1 trillion bbl of the estimated 6-8 billion bbl of conventional oil in place and may have 1 trillion bbl of proved reserves, 1 trillion bbl of probable and possible reserves plus enhanced oil recovery volumes. Behind that lies another 7 trillion bbl of unconventional oil.
Industry must also deal with a crude slate that is becoming heavier and higher in sulfur, he noted.
Allegations of a peak in world oil production don’t hold water, Gould and Cejka said. “The trouble with peak oil theories is that geologists know nothing of economics and economists know little about geology,” Gould said. Neither do investment bankers, said Cejka. “The Saudi fields are world scale fields.
The world is not running out of oil, but access to acreage is becoming more difficult, Bahorich said.
Access to new basins and new ideas in old basins lead to better prospect availability, but some of the world remains inaccessible to western oil and gas companies, Cejka said.
(8 November 2005)
Mideast oil nations must up spare capacity
Adam Smallman, Schlumberger
LONDON – The International Energy Agency’s Chief Economist Fatih Birol said late Monday that Persian Gulf oil producers, mainly Saudi Arabia, have a duty to drive up their volumes of spare capacity by at least a third, or risk their reputation as reliable crude suppliers to the world.
In an interview with Dow Jones Newswires, Birol said producers in the region were enjoying massive margins between the cost of crude production and the sale price, and should plow some of their earnings into expanding the volume of spare crude capacity from 2 million barrels a day to 3 million barrels a day.
Most of the existing spare capacity is held by Saudi Arabia and while officials within the government and national oil company have consistently said they would maintain that level, they haven’t indicated that it will rise pro rata against increasing world oil demand.
(8 November 2005)
Global output ‘sufficient till 2006’
Reuters via Gulf News Online
Oil supplies are sufficient to meet global demand in the fourth quarter of 2005 and early 2006, the UAE minister of Energy said yesterday.
“Of course, current production from inside and outside the organisation (Opec) meets the need of the global market during the fourth quarter of this year and the beginning of next year,” Mohammad Bin Dha’en Al Hamili told the news agency WAM.
(8 November 2005)
The submitter of the article comments: “A very short article yet prominently featured on Page 1 of Gulf News Business Section. As usual with politicians, it’s what they omit or what they imply that I find the most interesting. Reading between the lines, could it be that an OPEC Oil Minister is implying that global supplies may not meet global demand in early 2006 ? If so, that is in line with the so-called “pessimists,” such as ASPO, etc.
