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‘Era of cheap energy is over,’ says Buckee
Shaun Polczer, Calgary Herald
Global oil production has peaked and will soon decline resulting in higher prices for consumers, Talisman Energy Inc. CEO Jim Buckee said Wednesday.
“I believe we’re already here (at the peak),” Buckee said at the company’s annual meeting in Calgary. “I think it’s fair to say the era of cheap energy is over.”
In 1956, Shell geologist Marion King Hubbert correctly predicted that United States production would peak in 1970. Buckee received a doctorate in astrophysics from Oxford that same year.
…Buckee said the vast majority of the current total comes from fields discovered almost half a century ago. Rather than a dramatic fall-off in production, he foresees a “gradual” plateau with demand “rationed” by higher prices.
When pressed to explain what that means for Talisman’s shareholders, Buckee described the scenario as “constructive . . . it means the price of oil goes up.”
Buckee has gained a contrarian reputation for steering Talisman away from oilsands, the East Coast and shallow gas –which he continued to insist are “uneconomic.” Yet, peak oil theory remains a controversial topic in industry circles, where it is given the same regard as Elvis sightings and Bigfoot.
But Peter Tertzakian, chief economist with Calgary-based ARC Financial Corporation in Calgary and author of the bestselling book A Thousand Barrels a Second, said Buckee is generally correct — with important caveats.
(10 May 2007)
Reporter Shaun Polczer is incorrect to say that the oil industry regards peak oil in the same light as Elvis sightings and Bigfoot. In fact, the oil industry almost universally agrees that peak oil is coming; the difference of opinion lies in the date and the magnitude of the impact. -BA
UPDATE: Contributor JA writes:
I live in Calgary and the headline on the printed version is different than the online version. The printed headline says: “World oil production maxed out: Talisman”.
Commemorating Adm Rickover’s speech on energy
Staff, Rep. Bartlett’s office
Congressman Roscoe Bartlett to Commemorate 50th Anniversary of Adm. Hyman Rickover Energy Speech
LIVE Via C-SPAN on Monday, May 14, 2007
Estimated time between 7:30 pm & 8:30 pm Eastern
Washington, DC – On Monday, May 14, 2007 Congressman Roscoe Bartlett will commemorate the 50th anniversary of a speech by Admiral Hyman Rickover, “Energy Resources and our Future,” in a Special Order speech estimated to be between 7:30 pm and 8:30 pm Eastern. C-SPAN will broadcast it LIVE on cable and the Internet. Streaming video on C-SPAN can be accessed on the Internet at www.cspan.org/watch/. A copy of the speech is on Rep. Bartlett’s website: bartlett.house.gov/EnergyUpdates/.
Congressman Bartlett said, “Admiral Hyman Rickover, the father of our nuclear navy, gave an amazingly prophetic speech to a group of physicians in Saint Paul, Minnesota, 50 years ago the 15th of this May. He noted that we have 8,000 years of recorded history and discussed the extraordinary contribution of energy, particularly oil, to the development of civilization. At that time we were 100 years into the age of oil.
However, Adm. Rickover noted that oil and all fossil fuels are finite resources that once burned are gone forever. Chevron has a new ad campaign that acknowledges we’re about half-way through the world’s total supply of oil. We’re nearing global peak oil — or maximum annual production of oil.
What will we do when oil production begins declining while demand for oil continues to grow? Adm. Rickover warned that we have an obligation to future generations to use these finite resources wisely and to transition from fossil fuels to other alternative and renewable sources of energy. I’ll discuss the benefits and limitations of the options foreseen by Admiral Rickover and others that have emerged.”
The speech by Admiral Rickover was delivered on May 14, 1957 to a meeting of the Annual Scientific Assembly of the Minnesota State Medical Association in St. Paul, Minnesota.
(10 May 2007)
Energy Bulletin was the first major site to post Admiral Rickover’s speech. We also posted an article in the Christian Science Monitor on the speech.
DOE says computer tools to extract more oil
Mike Jacobs, U.S. Dept of Energy
DOE-Funded Research Opens Way to 218 Billion Barrels of By-Passed Domestic Oil
Novel Computer Modeling Tools Make Recovery Accessible to Small Producers
WASHINGTON, DC – A joint venture in technology development between researchers at Texas A&M University and the Department of Energy has produced a new computer tool that will increase recovery of up to 218 billion barrels of by-passed oil remaining in mature domestic fields. The nation’s current proven reserve is 21 billion barrels.
The developed technology has already been adopted by two companies. As a result of widespread interest in advancing this technology, A&M researchers have an on-going industry research and development consortium funded by eight oil production and service companies, and won a grant from the National Science Foundation.
The groundbreaking Texas A&M technology was developed in a project managed by the Office of Fossil Energy’s National Energy Technology Laboratory which provided the research funding for this effort. Total investment was $890,000 with the government share of $630,000 and the university provided cost-sharing of $160,000 for this 3 year research project.
This approach adapts sophisticated computer modeling to the personal computer, using “Generalized Travel Time Inversion” technology. The developed software makes reservoir modeling capabilities feasible for small domestic producers. It will save time and money in predicting the location of such by-passed oil and in planning its recovery.
More than two-thirds of all the oil discovered in America to date remains in the ground and is economically unrecoverable with current technology. About 218 billion barrels of it, a volume approaching the proven reserves of Saudi Arabia, lies at depths of less than 5,000 feet. This by-passed oil represents a huge target for the roughly 7,000 independent producers active in the thousands of mature U.S. fields which cumulatively account for a significant share of the country’s crude oil supply.
Much by-passed oil lies in difficult-to-access pockets. Predicting the location and size of these elusive, compartmentalized deposits is costly because it often requires complex computing capabilities. Many independent producers aren’t able to commit the personnel or buy the expensive supercomputer time required to build and operate the models needed to find and produce these overlooked stores of oil.
The A&M research effort engineered a cost-effective way to streamline computer-generated reservoir models. It provides significant savings in computation time and manpower.
Reservoir characterization identifies “unswept” regions in these mature fields containing high oil or gas saturation. In this process, geoscientists first employ computer models to develop an accurate picture, or characterization, of a productive oil reservoir. “History matching” is then used to calibrate the model by correlating its predictions of oil and gas production to a reservoir’s actual production history.
A key input to the history matching process is data from tracer tests, in which traceable gases or liquids are injected into a well to determine the paths and velocities of fluids as they move through the reservoir. This information helps reservoir engineers calculate how much oil remains in the reservoir and determine the most efficient methods to sweep this residual oil from the reservoir.
In the Texas A&M project, researchers developed a novel, computerized method for rapidly interpreting field tracer tests. This innovation promises a cost-effective, time-saving solution for estimating the amounts of remaining oil in bypassed reservoir compartments. The new method integrates computer simulations with history matching techniques, allowing scientists to design tracer tests and interpret the data using practical PC-based software – a process that is much faster than conventional history matching. The cost and time savings coupled with the streamlined model and accessible PC-based tools make the technology feasible for small independent producers.
(10 May 2007)
Contributor Hudson H Luce is optimistic:
If this approach is viable, it could be a solution, for the next 30-50 years, of the peak oil problem, at least in the United States. With appropriate energy conservation and efficiency programs, especially as applied to transportation, along with controls on immigration and population growth, the US may not have to face a peak oil problem for the next 100 years.
Editor BA is skeptical:
The technical heavies at The Oil Drum will have to give us their analysis of this announcement. It seems to me, though, to be one of the many technological advances that will help extract more oil from existing fields, but which won’t make that much difference in the long run. One tip-off is the construction of the press release: playing up the technology and selling promises rather than realistic assessments:
More than two-thirds of all the oil discovered in America to date remains in the ground and is economically unrecoverable with current technology. About 218 billion barrels of it, a volume approaching the proven reserves of Saudi Arabia, lies at depths of less than 5,000 feet…
This is more PR than science, and as the late physicist Richard Feynman said in a report on the Challenger disaster:
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.
