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Peak oil debate in oil industry journal
Journal of Petroleum Technology (JPT)
Phil Hart (ASPO-Australia) reports at today’s Drumbeat on The Oil Drum:
The Society of Petroleum Engineers have just published the online version of their June 2007 Journal of Petroleum Technology, which is distributed to their 73,000 members and throughout the world’s oil and gas industry. They have included four responses to CERA’s February anti-peak oil editorial. A very brief summary of a paper I wrote with support from Chris Skrebowski is one of those, our full length original article is available here.
The SPE also gave Peter Jackson from CERA a right of reply. Well worth a read.. Enjoy!
(1 June 2007)
No More Gushers for ExxonMobil
Justin Fox, TIME Magazine
…It’s not just ExxonMobil. Oil-field-services provider Baker Hughes keeps a monthly tally of how many rigs are active around the world, and the rig count peaked at 6,227 in December 1981. In April of this year it was just 2,836. But ExxonMobil is the most cautious of the lot. Slightly smaller rival Shell spent 25% more on capital and exploration in 2006, and the other oil majors spent more than ExxonMobil relative to their size. The Dallas-based industry leader still reports that its oil and gas reserves are growing. But recent gains have been modest, and most have been in natural gas, not the crude that is refined into gasoline.
ExxonMobil’s official mantra is that “we are doing all we can to bring more petroleum products to market to meet growing energy needs.” The numbers say otherwise, and this is a company where numbers speak louder than words. The number that matters most is return on capital employed–that is, net profits divided by what’s been invested in oil rigs, pipelines, refineries, etc. ExxonMobil’s ratio, 32.2% last year, is consistently the industry’s best. When ExxonMobil gives more money to shareholders than it spends on capital and exploration, that means its executives can’t find enough new projects that they think will generate 30%-plus returns.
Getting their hands on oil fields is the biggest issue. “They can see the opportunities,” says veteran oil analyst Fadel Gheit of Oppenheimer & Co., “but they don’t have access to them.” Only 7% of the world’s estimated oil and gas reserves are in countries that allow companies like ExxonMobil free rein, according to consulting firm PFC Energy. Fully 65% are in the hands of state-owned companies such as Saudi Aramco, and the rest are in the likes of Russia and Venezuela, where Western companies can get a foothold one day but lose it the next.
(31 May 2007)
Earth’s natural wealth: an audit
David Cohen, New Scientist
“I GET excited every time I see a street cleaner,” says Hazel Prichard. It’s what they collect in their sacks that gets her juices flowing, because the grime and litter they sweep up off the streets is laced with traces of platinum, one of the world’s rarest and most expensive metals.
The catalytic converters that keep exhaust pollutants from cars, trucks and buses down to an acceptable level all use platinum, and over the years it is slowly but steadily lost through these vehicles’ exhaust pipes. Prichard, a geologist at the University of Cardiff in the UK, reckons that tonnes of the stuff is being sprayed out onto the world’s streets and highways every year, and she is hunting for places where it is concentrated enough to be worth recovering. One of her prime targets is the waste containers in road-sweeping machines.
This could prove lucrative, but Prichard is motivated by something far more significant than the chance of a quick buck. Platinum is a vital component not only of catalytic converters but also of fuel cells – and supplies are running out.
It has been estimated that if all the 500 million vehicles in use today were re-equipped with fuel cells, operating losses would mean that all the world’s sources of platinum would be exhausted within 15 years. Unlike with oil or diamonds, there is no synthetic alternative: platinum is a chemical element, and once we have used it all there is no way on earth of getting any more. What price then pollution-free cities?
It’s not just the world’s platinum that is being used up at an alarming rate. The same goes for many other rare metals such as indium, which is being consumed in unprecedented quantities for making LCDs for flat-screen TVs, and the tantalum needed to make compact electronic devices like cellphones.
How long will global reserves of uranium last in a new nuclear age? Even reserves of such commonplace elements as zinc, copper, nickel and the phosphorus used in fertiliser will run out in the not-too-distant future. So just what proportion of these materials have …
(26 May 2007)
The rest of the article is behind a paywall. The article is also posted in full on the web.
Denial II – Why we deny our Energy Condition
Gregory Jeffers, Mentatt blog
..Our collective denial regarding our society’s energy situation begs the questions why and how (or, more precisely, the process of how)? The “why” is, perhaps, more simply explained. The “how” is somewhat more complicated.
I am often asked: Does the “government”, or “the President”, or do “They” know about “Peak Oil”? And, “if this is true, why haven’t I/we been thoroughly informed”? Though the United States federal government has funded and received detailed reports on the issue from the U.S. Department of Energy and the Pentagon, the American body politic, and the American people, have and must continue to deny the reality of a permanent and accelerating decline in energy supplies – if we do not continue this denial WE WOULD HAVE TO ACTUALLY DO SOMETHING ABOUT IT. And those “somethings” are going to have real and immediate intended AND unintended consequences, much to the chagrin of our political leaders.
Why isn’t this front-page news? Why, indeed. It is not a conspiracy. The mainstream media is in the business of selling advertising, not public service. While they delight in the opportunity to bleed one unfortunate sot or another on the rack, they have little incentive to gore their holy cow(s) – the energy intensive industries that make up the backbone of their advertising revenues – residential real estate and automobiles. ..
I am not suggesting American life is, or should be, fair. Only that we have deceived ourselves into believing that it is. ..
(28 May 2007)
Peak Oil
EurActiv
Is it possible that the world has reached or is close to the point of maximum oil production? Some geological experts believe so and if their “peak oil” theory is correct, this would have enormous consequences for energy security and for world economy. Nevertheless, the issue gets little attention in the EU’s energy security policy.
…The current debate on peak oil is being driven by the Association for the Study of Peak Oil and Gasexternal (ASPO) (see Wikipediaexternal for more information). This association was set up in 2000 by international oil consultant (and former vice-president of Fina) Colin Campbell and consists of scientists, academics and petroleum geologists. The “peak oilers” have developed quite a following all over the world and several countries now have ASPO associates. ASPO has effectively used the internet to spread its theory. A google search in May 2007 shows over 1.4 million results on the phrase “peak oil”.
There are several important issues in the peak oil debate:
Data transparency on reserves …
Global Peak oil dates…
Governments as well as parliaments are not yet fully aware or convinced of the peak oil issue. It is therefore not really present on the political agenda, contrary to the climate change debate. There have been sporadic contacts between ASPO members and the European Commission’s DG TREN (energy and transport) but without much effect on internal policies.
In the US House of Representatives, Republican congressman Roscoe Bartlettexternal has set up a bi-partisan “Peak Oil Caucus” and introduced a peak oil billexternal in January 2007.
The big oil companies seem to have a hard time responding to the peak oil issue. Some companies such as Shell or Total are aware of the issue but see the peak only in the mid-term future (2020-2030). Others like Chevron have started campaigns to warn about the declining reserves in the future. Chevron in 2006 had a remarkable advertising campaign with the slogan “It took us 125 years to use the first trillion barrels of oil. We’ll use the next trillion in 30”.
Most Western oil companies are more worried about other challenges to the oil-supply and demand issue. According to them lack of new investments and the rising energy nationalism (Russia, Venezuela) could endanger future supplies more than the geophysical limits. They also point to the development of new exploration and production technologies and the use of non-conventional sources of oil (oil shale, tar sands, deep-sea exploration, coal-to-liquids etc.).
EurActiv is the independent media portal fully dedicated to EU affairs. EurActiv has an original business model, based on five elements (corporate sponsoring, EurActor membership, advertising, EU projects, and content syndication). It is well funded and the content usage is free.
(1 June 2007)
Nice summary.
