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Peak Oil Passnotes: To Sir [David King] With love
Edward Tapamor, ResourceInvestor.com
The U.K. has a problem: Its local oil and gas have peaked. There is no argument, it is not heresy in the local industry and you can say it without being dragged out of your office and exposed as a communist. U.K. North Sea production peaked some years back at about 3 million barrels per day and continues to decline at around 1.8 million barrels per day at the moment. The decline rate is around 7% a year.
The same thing has happened in the United States. Oil production peaked at the start of the 1970s and, despite the huge concentration of capital and wells, continues to decline. These are both basic facts.
The arguments arrive when the world is considered as a whole. Sir David King exposed his thinking in the past fortnight when setting out his ideas on the energy future for the U.K. They are not remarkable – for a politician.
He says: “The IEA’s assessment is that oil (and gas) reserves are sufficient to sustain economic growth “for the foreseeable future” and “to meet anticipated increases in world energy demand through to 2030.” This view is supported by its latest medium-term market outlook, which predicts global oil production capacity in 2012 will be around 9 million barrels per day – 10% – higher than in 2007.
Let us look just briefly at the idea that the world will add 9 million barrels per day by 2012. It is rubbish. At 85 million barrels per day at the moment, the world will need to add – at a modest 4% decline rate – an extra 3.4 million barrels per day in the next five years, simply to stand still. In order to stick an additional 9 million barrels per day then 12.4 million barrels per day is the actual amount needed.
So the world will add 12.4 million barrels per day within the next five years and five months? Surely, Sir King (to paraphrase Chris Moltisanti in The Sopranos) has found the magic pixies at the bottom of his garden compelling advocates for the oil exploration business. The pixies, in their wisdom, have explained that, despite all the major companies saying their production will be flat, despite the refusal of major state companies to allow in masses of new investment, despite the huge increase in costs delaying projects right, left and centre the oil will magically appear. Damn those persuasive pixies!
Then Sir King left the pixies and went to visit his friends the hobgoblins…
(3 August 2007)
Peak oil – expensive food
Mary King, Trinidad Express
..T&T [Trinidad & Tobago] produces oil and gas which are expected with reserves depletion to become too expensive to exploit within the next 15 to 20 years. Conforming to product specialisation, again dependent on cheap fuel transport, T&T exports energy products and imports much of its food from the rents earned.
Already food prices are increasing due to the increasing international energy prices, demand for food and to the high liquidity of the TT dollar in the local economy.
Local subsidised energy prices will have no impact on the world phenomenon of increasing prices of imported food.
We have to grow more food. Our experience with steel down-streamers suggests that the production of fertilisers by foreign direct investors in T&T will not mean cheaper fertilisers to local farmers. T&T will have no alternative but to follow in Cuba’s footsteps and develop an agricultural industry that moves progressively away from energy intensive techniques into small family lots and co-ops. We note approvingly that Caroni lands are being divided up into small family lots but are concerned about the intention to create large farms with the help of the Cubans. One can only hope that given Cuba’s experience and expertise these farms will not be fossil fuel intensive. ..
(30 Jul 2007)
Do your part to destroy the Earth
Joy Colangelo, Monterey Herald
By now, most of us have heard of peak oil, the concept that we’ve tapped the majority of the world’s oil reserves and are now on a downward trajectory. ..
Trouble is, we Americans haven’t changed our ways much, knowing what we know. We haven’t signed the environmental accords like every other country on the planet. We aren’t about to act like good world citizens, conserving resources, using alterative energy sources and leading the way out of the mess we made.
So we need a new strategy. We need to just get it over with. We need to go full steam ahead and just deplete the oil, run out of water and watch our genetically engineered crops fail.
It would also help if we got sicker. I mean, we spend twice as much money as the country ranked No. 1 in health-care delivery and outcomes (France), yet we rank 38th. We can do worse than that, people. So listen up: I’ve got some ideas you might not have thought of.
I’m preaching to the choir here, but to use up oil quickly and retain our reliance on countries whose values we deplore, we all need to drive big cars. So we’re pretty much right on target with SUV sales up 25 percent this year despite rising gas prices. Well done. I don’t think there’s much room for improvement here. ..
(5 Aug 2007)
The Round-Up: August 3rd 2007
Stoneleighb, The Oil Drum: Canada
The situation in the credit markets continues to worsen as a sudden attack of risk aversion rapidly dries up liquidity. And this is before the resetting of adjustable rate mortgages (ARMs) begins in earnest – to the tune of $50 billion – in October. Watch this space.
On the Canadian energy scene, Shell pumps $27 billion into the oil sands, even as oil patch profitability falls. Abu Dhabi wants to invest in Canadian power plants, and there are plans for BC to host an LNG terminal. Wind power grows rapidly in Ontario and Quebec, making a few enemies along the way. In BC they ask: should public transit be free?
On the climate front, water is the issue – too little and too much. Finally, in the tug-of-war between efficiency and resilience, efficiency has the upper hand, but what price will we pay for allowing our life support system to become brittle?
(3 August 2007)
