Peak oil – Feb 15

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Many more articles are available through the Energy Bulletin homepage

Running out of oil may not be the issue at all
Kristen Hays, Houston Chronicle
All the talk of when the world will run out of oil could be rendered irrelevant because of geopolitical issues that block access to untapped reserves, the head of international exploration and production for Chevron Corp. said Wednesday.

John Watson told energy executives and analysts that the so-called peak oil debate focuses on the level of resources below the ground. He joined the prevailing view of speakers at the Cambridge Energy Research Associates’ annual conference in Houston that the planet won’t run out of oil anytime soon despite opposing theories that a peak and subsequent drop-off in production is imminent or even ongoing.

“Every time we say we’re about to be tapped out, we find new ways to squeeze more out of reservoirs,” he said.

…But worldwide oil production could still lag behind demand if politics get in the way of access, Watson said.

“The truth is we could still run short of oil, above ground where access and politics come into play,” Watson said.

He specifically mentioned lack of access to areas of the Gulf of Mexico, calling it a “great policy contradiction” to promote energy independence in the United States while blocking the ability to drill in off-limits areas of the Gulf.

Watson said other above-ground risks include gaining access when national oil companies control about 80 percent of reserves.

…Watson said other above-ground risks include higher costs of finding oil that could chill production and the lack of enough engineers and other professionals to replace the industry’s aging work force.

“Above-ground peak oil will trump below-ground peak oil every time,” Watson said.
(14 Feb 2007)
The difficulty of finding cheap oil excacerbates what Watson calls “above-ground peak oil.” For example, more elaborate equipment is needed to extract oil. Also, countries with oil reserves gain the upper-hand in negotiations with international oil companies, as we’ve seen in Venezuela and elsewhere. -BA

Peak Oil Theory Could Distort Energy Policy and Debate (guest editorial)
Peter M. Jackson, Journal of Petroleum Technology
The “peak oil” debate continues to rage without any obvious progress. In essence, the peak oil lobby suggests, as it has been doing unsuccessfully for many years, that global production will soon reach a peak and then decline rapidly thereafter with dire global consequences. The “market view” of Cambridge Energy Research Assocs. (CERA), based on 2 decades of research, is also not a view of unlimited resources, but concludes that a plateau rather than a peak will occur-although not tomorrow-and that supply will not “run dry” soon thereafter. We hold that above-ground factors will play the major role in dictating the end of the age of oil.

To summarize several primary conclusions:

• Based on a detailed bottom-up approach, CERA sees no evidence of a peak before 2030. Global production eventually will follow an undulating plateau for one or more decades before declining slowly. Global resources, including both conventional and unconventional oil, are adequate to support strong production growth and a period on an undulating plateau.

• Despite his valuable contribution, M. King Hubbert’s methodology falls down because it does not consider likely resource growth, application of new technology, basic commercial factors, or the impact of geopolitics on production. His approach does not work in all cases-including on the United States itself-and cannot reliably model a global production outlook. For example, production in 2005 in the contiguous 48 states in the United States was 66% higher than Hubbert projected.
• The debate should now move toward a better understanding of the key drivers of production, including the scale of global resources and the likely production outlook, which form the core of current disagreements and confusion. At the same time, there is a need to identify the signposts that will herald the onset of the inevitable slowdown of production growth and to ensure that policymakers outside the energy community have a clear understanding of possible outcomes and risks.

We respect the urgency and seriousness with which some with whom we disagree put their case. However, the peak oil theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues. Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges of delivering liquid fuels to meet the needs of growing economies. This is a very important debate, and as such it deserves a rational and measured discourse.

…It is no longer sensible to allow the issues about future supplies to be clouded in a debate grounded in a flawed technical argument. There is general agreement that a peak or plateau of sorts will develop in the next 50 years, and it is not helpful to couch the debate in terms of a superficial analysis of reservoir constraints. We believe that, considering the multitude of above- and below-ground factors that will control future productive capacity, it is not possible to calculate reliably the date of the peak except in general terms, nor is this the key issue.

Peter M. Jackson is Director of Oil Industry Activity for Cambridge Energy Research Assocs., responsible for global oil and gas capacity outlook worldwide. A major component of his research is aimed at understanding current trends and challenges in productive capacity and reserves distribution as well as forecasting which areas will become a focus for E&P industry investment over the next 10 years. …
(Feb 2007 issue)
Seems to be the same material as was covered in a CERA press release and report on peak oil last November. A flurry of responses to their study ensued, but as far as I can tell, CERA has not responded.

To their credit, CERA does admit that oil supply is not inexhaustible; a peak (“plateau” in their words) will occur in the next 50 years, they say. -BA

Aubrey Meyer on the Confluence of Peak Oil and Climate Change…
Rob Hopkins, Transition Culture
Aubrey Meyer runs the Global Commons Institute and is the creator of the approach to climate change known as Contraction and Convergence. While he was in Totnes, teaching on Schumacher College’s Climate Change course, he gave a well-attended talk for Transition Town Totnes, where as well as speaking he treated the audience to some virtuouso violin playing. Prior to that I interviewed him at length about C&C and its relation to peak oil. Here is an extract from that, which explores the link between peak oil and climate change.

—
Q: How do you see the relationship between peak oil and climate change, and between Contraction and Converence and the Oil Depletion Protocol?

Aubrey Meyer: The Oil Depletion Protocol originated with Colin Campbell and is a very sensible idea, essentially that countries should agree not to produce above their depletion rate, so you can stabilise that over the medium terms as peak oil bites everywere. It may be that countries are going to agree to do that, OPEC doesn’t always behave itself within its own group terms, people break the quotas and so on, but the point about Colin was that he was completely disinterested in climate change because, as an oil geologist, he regarded it as something remote and over the horizon, not immediate, and as essentially an Act of God rather than an Act of Man, that there was nothing we could do about turbulence at a climatic level, it is kind of a given, regardless of what human beings do.

The real issue here is if you do the total carbon arithmetic of oil depletion and gas depletion and the non-depletion of coal, and also the emergence of these exotics, tar sands, deep water finds and so on, there clearly, in all categories, oil, coal and gas, is more than enough to fry the planet. I see now they are even talking about going into this Nazi programme, we did it in South Africa, converting coal into oil substitutes and so on. At this point, in one sense, the Greenpeace slogan comes to bear, “we’re not running out of oil, we’re running into it”, but the correct appreciation of that is that we are running out of oil but we’re not running out of it fast enough for it not to be a climate change issue.

I think a realistic reading of the future in terms of are we taking climate change seriously or not, requires an answer which says if we are taking this seriously we will have to cut through the known reserves, even the conventional crude reserves, never mind the exotics that are backing up behind it. A huge amount of money that is going to be invested in pursuing pipe dreams there could be better invested in programmes that are not contingent on the kind of growth delusion that is attached to all of that energy, frankly, fantasty, climate disaster.
(15 Feb 2007)

UK Environment Research Agency – No Peak Oil Strategy
NERK, UK
In March 2006 the Natural Environment Research Council (UK) undertook an initial consultation to feed into the development of the strategic themes identified by NERC Council. The consultation submissions were used to inform the decisions of the strategic development panels that were established to recommend NERC’s future priorities within each of the themes. Each panel produced a report that was reviewed and updated either by the NERC Science and Innovation Strategy Board (science themes) or the NERC Executive Boards (organisational themes). NERC Council then reviewed the reports and prioritised the challenges within the themes.

To help decide and confirm future research and funding priorities, NERC is asking its staff, stakeholders and others who are interested, to give their views on the draft strategy, which includes plans for some major new initiatives. The finalised strategy will be published later this year.

The consultation website will remain open until 16 April 2007

Excerpts from the draft strategy

4. Sustainable Use of Natural Resources

4.2. Global demand for natural resources continues to grow and, in the context of diminishing supply in some cases, competing resource needs will shape the future quality of our environment. In the UK, for example, there is now almost as much urban land space as there is cropland.

We need to extend the natural resource base by increasing knowledge of how nonrenewable resources such as fossil fuels and minerals can be used effectively, as well as searching for novel resources. We also need to be able to predict the effect on the environment of their exploitation, and the impact of the waste products that they produce.

4.17. Aid industry in locating and developing unconventional energy sources, such as tar sands and methane hydrates, or the generation of gas from coal deposits. Environmental science can also be used for enhanced oil recovery or zero-emission coal burning power stations.

7.2. The heat wave across Europe in 2003 caused 26,000 premature deaths, including 2000 deaths in the UK2. Air pollution was estimated to be responsible for one third of the deaths in Britain. Scientists predict that by 2050 such summer temperatures will be the norm, not the exception.

10.1. For the UK to remain competitive within the global economy we need a strong research base. A strong research base attracts and retains the highest-skilled people and companies with the potential to innovate and to turn innovation into commercial opportunity. NERC funded research makes a major contribution to the UK’s success in this area. The government recognises that natural and human-induced environmental changes have important implications for future global economic growth and development. Because of this, economic growth for the UK will depend increasingly on improved understanding and prediction of the environment in which human activity takes place, and of ecosystem services upon which human well-being depends.
(1X Feb 2007)
Our Contributor writes:

“The NERC organises and funds some great science in the UK. It’s directors have spoken out about population control and it has funded much science related to ozone depletion. It publishes environmental accounts about the impact of its own activities. It ‘gets’ climate change yet it appears blind to the impact of peak oil and has an economists view of sustainability. Help give its good people a prompt in the right direction.”