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Peak Oil
‘Peak oil’ issue piques interest
Cathy Proctor, The Denver Business Journal via MSNBC
…The city of Denver will wade into the debate when it hosts a two-day seminar Nov. 10-11 on “peak oil” and what it may mean to Denver and the nation’s economy. The U.S. arm of the International Association for the Study of Peak Oil & Gas (www.aspo-usa.com) will co-host the event.
Mayor John Hickenlooper, the state’s most famous former petroleum geologist, said he heard Tom Petrie, chairman and CEO of Denver oil and gas investment firm Petrie Parkman & Company Inc., give a presentation on the topic about a year ago.
“It was so compelling that I thought more people should be aware of this going on,” Hickenlooper said. “That this is happening, has or is about to happen.
“I don’t think, ‘the sky is falling, the sky is falling.’ But the sooner we begin to examine what the alternatives could be, as the price of oil increases, the better off we’ll be and the less trauma and less economic hardship we’ll endure. Like any business, you want to plan for these things.”
Petrie has studied the world’s oil economy for years. The firm has advised Saudi Arabia about its natural gas resources, the state of Alaska on gas-pipeline options and the U.S. Department of Energy on the sale of an oilfield. Petrie has advised on more than $130 billion worth of energy-related mergers and acquisitions.
In early August, during a presentation at the Colorado Oil and Gas Association’s annual conference, Petrie told a crowd of oil and gas executives he believes “peak oil” could hit in the next decade.
“We’re a lot nearer to peak oil than some people like to acknowledge,” he said.
(14 August 2005)
Energy deficit grows, solutions wither
Mike Bendzela, Portland Press Herald
… Chris Skrebowski of the Petroleum Review calls the coming energy crunch a “tsunami.” Even Chevron acknowledges, “The era of easy oil is over,” in a two-page ad in The New Yorker.
As oil and gas reserves get low, they get more expensive. You can bet the renewables that depend on the current oil and gas infrastructure will soon be priced out of existence.
As this next energy crisis is going to be permanent, we must do ourselves the favor of facing the facts instead of clinging to fantasies – if we want to continue this project known as “civilization.”
(16 August 2005)
Written by killJOY, a frequent poster on peakoil.com
Running out of options
Jerome a Paris, Daily Kos
…Investments [by oil companies] throughout the 90s were minimal, i.e. just enough to keep up with fairly predictable demand increases. The oil industry was living with the nightmare of the mid-80s in its collective mind, when a glut of production after heavy investments lead to collapsing prices (and, in the US, to serious economic pain in the oil producing regions). Thus, when demand increased at a markerdly higher rhythm in the last few years, the industry was caught unaware and has now reached the point when it is purely and simply unable to produce significantly more than the world consumes.
This means that, on the oil front, we are now also extremely sensitive to external shocks that disturb supply. Consumers are showing that prices are not yet high enough to make them lower their demand, and whole chunks of Asia are on the brink of the car civilisation, and will not be deterred by somewhat highish gasoline prices. Therefore any adjustments to make demand equal supply currently come form the supply side, and any disruption of supplies that would prevent that will force an adjustment on the demand side, which can only come from massively higher prices (and I mean multiples of today’s prices, not just 10 or 20$/bl more).
So we have the combination of Bush (borrow and spend like there is no tomorrow, give money to the rich and to the corporations), Greenspan (flood the zone with money), the US consumer (stagnant wages, but cheap money from home equity withdrawals or plastic, thus still consuming – including lots of gas-guzzling SUVs), and the oil producers (unable or unwilling to invest), and we are getting very near the end of this exercise in burning your reserves:
* this is supposed to be an economic recovery, yet debt levels are at record highs and interest rates are still low. What will be available to cushion the shock when it comes? Not public deficts, not private debt, and not lower interest rates.
* this is an economy built on cheap oil. When it stops being cheap, what will happen to those that have suburban houses, 50 mile commutes, 15 MPG cars and no access to public transport? what will happen to the corresponding real estate markets? what will happen to the manufacturers of the gas-guzzlers?
The recent apparent prosperity comes from having burnt through all our capacity to absorb shocks. It can last for a while, so long as there are no shocks, but we all realise that this is not very reasonable (especially when your foreign policy consists in creating massive instability in the most sensitive area of the world). We are highly vulnerable, and the consequences of any shock will be brutal – and we know that shocks are coming on the money and oil fronts.
As an individual, you still have the chance today to protect yourself from these inevitable trends, becuase the country as a whole will not escpae it, and neither will the rest of the world.
(15 August 2005)
More text and many comments from readers are available at the original article. Recommended by Big Gav at Peak Energy (Australia).
The truth about global oil supply
The world isn’t short of oil – and the price will go down, not up
Edward N Luttwak. The First Post (opinion)
…We don’t know precisely how much oil the world has left because the only reliable reserve statistics come from advanced countries such as the US and the UK, and even those can change as higher oil prices make old fields and small wells more economic to exploit.
Reserve statistics for oil-rich but troubled countries such as Russia, Iran and Iraq, by contrast, are so unreliable as to make them useless: they may be underestimated because there has been no systematic exploration using the latest methods, or overestimated because the true potential has been reduced by over-pumping and mismanagement.
But what we do know for sure, in simple terms, is that there is enough oil under the ground to meet all our needs for many years. The Saudi oil company Aramco estimates it has reserves of 460 billion barrels, or 134 years of production at current rates – and the US’s government estimate for Saudi Arabia is much higher than that.
So global reserves are not the issue, and have little impact on today’s oil price.
…in reality today’s $61 oil price is chiefly a reaction to the low oil prices of the past 20 years.
Cheap oil reduced investment in new, higher-cost production capacity which would have exploited deeper offshore oil, heavy oils and tar sands. It reduced investment in long-range pipelines and shipping to exploit remote natural gas finds. It reduced investment in other energy sources such as nuclear and coal, and in energy conservation. At the same time, it increased energy consumption – thanks to America’s ubiquitous SUVs, faster ships and larger commercial aircraft fleets.
High oil prices should reverse all these trends. This will happen quite quickly in greater use of coal, more gas transportation capacity and more oil production from high-cost sources.
Some changes – including improved energy conservation – will come slowly. Others, especially the increase in nuclear capacity, will come very slowly indeed.
Edward N Luttwak is Senior Fellow at the Center for Strategic and International Studies
(16 August 2005)
The usual go-back-to-sleep essay; the market will take care of any shortage. What’s strange is that it appeared in The First Post, which looks like a tabloid, running “news” stories such as the fact that the Nazis were against smoking. In the meantime, other members of the security and business elites are very concerned about energy. For example, see Securing America’s Future Energy (SAFE), originators of the Oil Shockwave scenario. For more on Luttwak, see the entry on him in Wikipedia.
-BA
Lundberg’s new website, new PO essays
Jan Lundberg, Culture Change
Since moving to a newly designed website, Peak Oil prophet Jan Lundberg has continued to publish his Culture Change newsletters. Some of the most recent ones:
Gasoline Price Reflects Dwindling Global Oil Reserves, Not Merely Oil Price (news release, Aug 15)
Termination of the fossil-fuels society (Aug 11)
The Plastic Generation’s transformation and the demise of the religion of techno-worship (Aug 2)
The machine we are part of hums a death song (July 27)
(August 2005)
Daily offering of energy and environment news
E&E News PM
SPOTLIGHT STORY
ENERGY MARKETS: Interior questions San Francisco Bay tidal project
The Interior Department is concerned a proposed tidal energy project in the San Francisco Bay could harm fish and wildlife in and around the Golden Gate National Recreation Area. Go to Spotlight Story.
THIS AFTERNOON’S STORIES
2. OIL AND GAS: Report calls drilling financial safeguards inadequate
3. ENDANGERED SPECIES: Feds hang price tag on West Coast plover protection
4. ENDANGERED SPECIES: Groups plan lawsuit over ESA listing delays
5. CLIMATE CHANGE: Leadership dispute stalls N.C. bill
6. HOUSE RACES: Calif. election for vacant House seat set for Oct. 4
FOCUS ON: Tar sands tour (AUDIO)
Greenwire senior reporter Mary O’Driscoll tells E&ETV about the oil boom underway in Alberta, Canada, and the future for the massive energy project.
(16 August 2005)
This non-partisan news site features a daily assortment of stories and videos on energy and environmental issues. It would be worth exploring the archives and other parts of the site. Unfortunately I haven’t had time yet to do it justice. -BA
