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Peak Oil
Weathering the oil storm
Will tragic Katrina help us kick our oil habit?
Jack Z. Smith, Star-Telegram
A made-for-TV movie titled Oil Storm, shown nearly three months ago on the FX cable channel, drew little attention when it came out. Several weeks ago, I picked up a videocassette of the obscure flick from a table of giveaway items at work.
But it was only a week ago, on a Sunday evening as Hurricane Katrina howled toward a violent landfall on the Gulf Coast, that I found time to watch it. The fictional movie had its shortcomings. But the parallels to Katrina were striking.
…There’s a great debate raging over what is referred to in energy world shorthand as “peak oil.” The $64,000 question is when global oil production will hit its maximum capacity and then begin a steady, irreversible decline. Many of the world’s biggest reservoirs of cheap, easily recoverable oil already are facing production declines. Much of the globe’s remaining oil is in smaller reservoirs and is more costly to extract.
The United States, once the world’s top oil producer, saw its production peak more than three decades ago. We now import 60 percent of the oil we consume. No one talks seriously anymore about America achieving “energy independence.” The “peak oil” debate, once confined to narrow circles, is now a regular topic in the mass media.
…Unlike some observers, I doubt that world oil production will hit its final peak in the next few years.
From 1985-1993, I wrote about the energy industry as a business reporter for the Star-Telegram. I gained a healthy respect for oil companies’ ability to make persistent technological advances that steadily increased petroleum output.I wouldn’t be surprised if oil production doesn’t peak until, say, 2025 — or perhaps even later.
At the same time, we would be fools to ignore the pessimistic peak-oil theorists and savvy people such as Simmons, who knows the oil industry intimately and thinks on a global scale.
(4 September 2005)
Intelligent commentary by an editorial writer for a mainstream Texas newspaper.
Author of Oil, Jihad and Destiny on US energy pollicy
Ronald R. Cooke, Global Public Media
…The Energy Policy Act of 2005 is not about success. It’s about failure. It’s unlikely the new energy law will stabilize or lower fuel prices, give America any real energy security, provide an effective framework for energy independence, result in the use of cleaner energy resources, or create a net increase in American jobs. Unless we get really, really lucky, it will not solve the energy challenges facing America (and the rest of the world). In fact, the energy bill’s greatest impact – in all probability – will be to exacerbate the economic and cultural chaos that threatens to turn our whole existence upside down.
…It is most regrettable. Sad. When I wrote Oil, Jihad and Destiny, I entertained the naive notion that Congress would understand the problem of oil depletion and take intelligent corrective action. In fact, the “Best Case” scenario described in my book makes this fundamental assumption. Unfortunately for us voters, and our kids, Congress has put us on a path that makes the book’s “Production Crisis” scenario inevitable, and suggests the “Political Crisis” scenario is highly likely to happen.
Congress could have done a better job. America is the one nation on this planet with the financial and technical resources to launch an international program of science based cooperative energy research, development, production, and distribution. We could have made substantial improvements to energy efficiency and conservation, cooperative petroleum sharing agreements among nations, and long term international supplier/consumer agreements. Everyone on our planet would be a beneficiary. Creative cooperation is far more likely to be productive than political confrontation. The challenge is to get the players to focus their collective power on solving the problem, – rather than fighting with each other.
What we got from Congress was political expediency, evasion, pandering and conflict.
Ronald R. Cooke is author of Oil, Jihad and Destiny.
(5 September 2005)
You mean we don’t have to pay CERA/Yergin $2500 for 33 pages?
Prof. Goose, The Oil Drum
CERA has decided to give some more detail on its supply forecast, the one that predicts 16mb/d of new capacity by 2010 and no peak before 2020. Links and information below the fold.
They have a replay of a conference call presentation on the report, showing what they expect to come from where by 2010, some forecasts for specific regions, and a Q and A session. Some interesting points that can be checked against reality over the next few years: UK is expected to see a slight rise in 2007 before declining again based on fields under development and appraisal, North American production will rise slightly with deepwater Gulf of Mexico and oil sands offsetting declining conventional oil from US and Canada (this is probably right unless hurricanes keep sinking rigs), Ghawar in Saudi will decline to about 4mb/d, with total capacity rising slightly to about 11.5mb/d from 10.5 today (this doesn’t appear to include the possible Khurais project).
(4 September 2005)
The First Disruption
Rising oil prices are a warning we would do well to heed while we have the time
Dan Crawford, The Republic (Canada)
The most interesting thing about the current run of new record oil prices is how we collectively ignore what they mean. Every newspaper article about oil uses some variation of the phrase, “record prices due to supply concerns.” If put more accurately, the words would read, “record oil prices due to an expected disruption.”
The price of oil directly reflects world sentiment about the likelihood of a supply disruption or shortage unfolding. Current record-high prices would indicate that the consensus of the world is that we are on the verge of a disruption. Further evidence of this comes from the IEA—the International Energy Agency—which released a report entitled “Saving Oil in a Hurry.” It serves as a guide for countries about how to dramatically reduce their oil consumption in the wake of a supply crisis.
Every government, every company, right down to every person, knows that we are dangerously close to a disruption, a disruption that would end, at least temporarily, the energy-bliss lifestyles we have wallowed in each and every day till now. Instead of preparing for the supply disruption event, we have collectively choosen to ignore it and live within the comforts provided by denial.
(1-14 September 2005 issue)
From a future history
Policy Pete, Petroleum Policy and Geopolitics
“…There is no support for the idea that the First Energy War was caused by the impotent Energy Policy Act of 2005. Whatever its obvious deficiencies as policy, the act represented the best the US political system could offer after years of trying. The problems it failed to address were neither new nor difficult to understand technically, but they lacked a politically tenable solution.
Over-reliance on fossil fuels had been ignored for a generation, and the situation was passed down from one Congress to the next with much hand wringing but without noticeable change. Quite simply, there was no constituency for the drastic revamping of American life that would be required to deal with either the coming petroleum shortages or global climate change.
The people who had fashioned a totally new way of life following World War II, based on removal of transportation constraints and cheap energy, proved incapable of adjusting to life not only without SUVs and the suburbs, but above all without secure and reasonably-priced energy supplies. When the act at last was signed, to no fanfare, the economic system shrugged and sent energy prices even higher. However clear and long-standing the warnings, Americans continued to live as they always had….”
(4 September 2005)
Endless Saudi oil: miracle or mirage?
Don Stowers, Oil and Gas Financial Journal
There is little doubt that King Abdullah faces some serious challenges during his reign, among them reformers who would prefer a constitutional monarchy that would limit the power of the king; fundamentalist forces who despise the monarchy and seek a government run by Islamist clerics; infighting among the 3,000-strong royal family as to the line of succession; and the question as to how long oil production can continue at its present rate and if it can be increased to meet growing world demand.
(September 2005)
An editorial attempting to summarize the cultural and political situation in SA as relevant to oil production. Gives a summary of Matthew Simmon’s argument that SA may be close to peak production. – AF
Connect the Dots
James Howard Kunstler, Clusterf*ck Nation
…People are emailing me to ask is this the start of the Long Emergency?
…It is certainly an event of great significance. The effects of damage to our oil and gas infrastructure in the Gulf of Mexico is already being felt in rocketing gasoline prices and a burgeoning supply crisis, especially in the southeast. The home heating situation is becoming a crisis before householders even turn their furnaces on. Half the houses in America are heated with natural gas, which is now clocking in at $12 a unit (1000 cubic feet). It was $3 a unit in 2003. It could go to $16. Connect the dots.
(1 September 2005)
Peak oil – Hurricane Katrina’s aftermath only hints at what will happen when demand for crude outstrips supply
Staff, Houston Chronicle
THE July-August edition of Alcalde, the magazine for University of Texas at Austin alumni, contains an article about peak oil — the moment when global oil production will crest and then decline. According to the article, “How Long Do We Have,” the year U.S. oil production peaked, 1971, was accurately predicted by a Shell Oil geophysicist in 1956. The same formula puts peak global production in this decade or the next. …
Perhaps the shock of Katrina’s destruction, the demonstrated vulnerability of the nation’s energy supply and the rapid doubling of gasoline prices will move many Americans to ride mass transit, live closer to work or drive smaller cars. History, however, suggests that the moment will pass, things will settle down, and we will be grotesquely unprepared for the moment when there simply is not enough oil to go around and only the wealthy can afford it.
(4 September 2005)
New Zealand: When Petrol Hits $2 a Litre
Sarah Boyd, Dominion Post via RedNova
It’s not as far-fetched as it sounds. Economists say fuel could reach $2 a litre if price rises continue on their current track. What impact will it have on the Kiwi lifestyle?
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…The other big unknown hanging over all this is the future of oil supplies. Some experts believe the world is at, or near, peak oil — the point at which total oil production peaks and begins to rapidly decline. Then there are others who think peak production is not likely till about 2030 and that factors such as technological advances will push supplies out well beyond that.
In New Zealand, the MED tends toward the latter view, because it gives more credence to bodies such as the International Energy Agency and the US Geological Survey, which see 2030 as the time the world’s oil reserves will begin to decline.
Politically, the only group really challenging that thinking are the Greens, who argue for policies based on the assumption that the era of cheap oil is over. They’ve been trying to make “peak oil” a phrase that people bandy about this election.
Their proposals include a ban on imports of vehicles older than seven years unless they meet stringent fuel-efficiency standards, investment in upgrading the railways and requiring the oil companies to include a percentage of renewable fuel, such as ethanol, in petrol by 2008.
They also want to bring in a car registration system that would slap higher fees on less fuel-efficient vehicles. That might see the owner of a hybrid car like the Toyota Prius, with a fuel consumption of less than 5 litres per 100 kilometres, pay nothing or even get a rebate, while an SUV, guzzling more than 10 litres per 100km, might be hit for an extra $200 a year.
(4 September 2005)
Good, long summary covering the prospects of higher oil prices, their effects on New Zealand and what individuals can do.-BA
If hydrocarbons are renewable- then is “Peak Oil” a fraud?
Joel Bainerman, 321energy
Are hydrocarbons “renewable”- and if so- what does such a conclusion mean for the future of the world’s oil and natural gas supplies?
The question is critical due to the enormous amount of coverage the issue of “Peak Oil” is receiving from the mainstream press. If the supply of hydrocarbons is renewable- then the contrary to the conventional wisdom being touted throughout the mainstream press today- the world is NOT running out of oil.
Unbeknownst to Westerners, there have actually been for quite some time now two competing theories concerning the origins of petroleum. One theory claims that oil is an organic ‘fossil fuel’ deposited in finite quantities near the planet’s surface. The other theory claims that oil is continuously generated by natural processes in the Earth’s magma.
(3 September 2005)
Sigh, abiotic oil again. Joel Bainerman seems to be a reputable alternative journalist from Israel (his website). He even has written a good article on Peak Oil. But before anybody writes about abiotic oil, he or she should read Richard Heinberg on theThe Abiotic Oil Controversy.-BA
