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“Accumulating risks” to world energy supply: NPC
Chris Baltimore, Reuters
The world is not running out of hydrocarbons but there are “accumulating risks” to securing global crude oil and natural gas supplies through 2030, a high-level board of U.S. oil company executives found in a report obtained by Reuters on Thursday.
Those risks include “political hurdles, infrastructure requirements and availability of trained work force,” according to the study by the U.S. National Petroleum Council, conducted at the behest of U.S. Energy Secretary Sam Bodman.
The NPC, whose members include executives of big oil companies like ExxonMobil (XOM.N: Quote, Profile, Research) and Chevron Corp. (CVX.N: Quote, Profile, Research), will present the study at its July 18 meeting, according to a memo sent to NPC members this week which was also obtained by Reuters.
When Bodman called for the study in October 2005, he asked the council to study the concept of “peak oil,” whether the globe was running out of hydrocarbons.
(5 July 2007)
Apparently a leaked copy of the NPC report on peak oil. I hope the description in the Reuters article is wrong – so far, it sounds like oil industry public relations. What is called for is a rigorous study on a subject of world-changing import. Will the NPC be up to it? History will judge.
Some preliminary documents are on the NPC website:
These draft report sections are being made available in response to public interest in the study process and content of the final report, approval of which is planned for mid-July. Upon approval, the full report will be posted on this website for viewing and downloading and printed copies will be available for purchase in August.
-BA
UPDATE July 7: More text from an updated version of the article:
Matt Simmons, founder of Houston-based Simmons and Co. International, who has argued that world oil production is declining irreversibly, criticized the report’s findings.
Simmons, a member of the council who provided input for the report, pointed to a graph showing oil production from existing reserves falling below 20 million barrels per day (bpd) by 2030 from current levels near 75 million bpd.
In that chart, the addition of output from known reserves, enhanced oil techniques, unconventional sources like Canada’s oil sands and “exploration potential” boosts the total to near 120 million bpd by 2030.
“We don’t have any idea where those reserves are going to come from or how we are going to get them out of the ground,” Simmons said. “The odds of this ever happening are zero.”
On the other side of the issue, prominent energy expert Daniel Yergin, chairman of oil consultancy Cambridge Energy Research Associates, who served as vice chairman of demand issues for the council, has dismissed the idea of “peak oil.”
Instead, Yergin’s group has predicted an “undulating plateau” of crude oil production over several decades, followed by a slow decline.
Non-OPEC peak oil threat receding
Arabian Business
Non-OPEC peak oil, or the point of maximum production of oil, will not occur before 2014, according to analysts Wood Mackenzie.
The company has disputed views that a pinnacle may be in sight and contends strong supply growth will prevail in the short term. Barring unexpected disruptions to production, Wood Mackenzie expects total global capacity to grow steadily from 86.3 million barrels per day (bpd) in 2006 to 96.7 million bpd in 2010.
…But, says Kate Dourian, Platts’ Middle East editor, it is just a matter of time before non-OPEC oil declines because production is not being replaced fast enough to meet consumption. Dourian also stressed oil production is not as cut and dry as some analysts make out.
“Some sources say half the world’s oil has already been produced, whereas Saudi Aramco is saying there is still another trillion barrels out there,” she said.
This means exploration success is critical to the long-term oil production outlook of non-OPEC countries, said Broughton, who expects ‘yet-to-find’ oil production in the Asia Pacific region to account for 28% of its output by 2025.
“No-one knows what technology will be available in future to aid production,” added Dourian. “In Oman, saline water injection experiments are currently being undertaken. There are also enormous resources of oil sands in Canada.
(6 July 2007)
Canadian energy round-up – July 6
Stoneleigh, The Oil Drum: Candada
Today’s headlines lead with coverage of the on-going crisis in the debt markets, and an explanation of the financial engineering underlying much of the global liquidity bubble. Debt ratings have not been adjusted to reflect current market conditions, meaning that ‘asset’ valuations are over-stated. No institution wants to force asset sales for fear of revealing just how much real valuations differ from nominal ones, but eventually such a sale will occur – with the potential to cause an abrupt repricing of a wide range of ‘assets’ (many of which will actualy be revealed to be essentially worthless). Leverage will magnify the losses, leading to a very serious financial crisis. One estimate (below) puts the potential losses, once assets are eventually marked to market, at 20 times the sum involved in the LTCM crisis in 1998 – so far, and getting worse by the day.
The Round-Up is also convering the Canadian energy scene, as well as environmental and international news, in that order. Oil companies leaving Venezuela and aiming for the oil sands are finding that all is not clear sailing, while China is entering the oil sands for the first time. Nunavut seeks control over future oil and gas revenues, Newfoundland and Labrador wants to bypass Quebec in selling electricity to the US, and the slow down in natural gas drilling is hurting frontier communities in Alberta and BC.
(6 July 2007)
A Peak Oil Tale
Jason McGhee, Personal blog
This is a fictional story about how a small town in New England might be ravaged by the menace of peak oil and how the government has the unenviable task of deciding the fate of such a place.
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No one cared that broken windows had tattered, yellowing plastic over the place where the glass had once been. Or that nothing lived in their front yard but flies. The fact is that everything from the street signs to the people’s brains had rusted over, a deep kind of decay where no steel is left intact. Houses that once had fruit trees now had owners that ripped out the trees by their roots. Too much trouble one might suppose. After all, there’s some work involved in having a tree. Yards turned to dirt. If you believed in the wrath of mother nature, you might say that the rain stopped when the people turned bad. The folks in the Orchard didn’t need water anymore. They had liquor.
How long it would last, no one seemed to know. You see, everyone was smart enough to get that as time went on and they did nothing but sit around and drink stale beer and eat who-knows-what, that they’d run out of money. In other words, the rest of the world would just abandon them. You see times had gotten tough. There was always lightning in the air and eventually it would come down on the Orchard. It was just a matter of when. In the rest of the country, the way things were could change from block to block, but places like the Orchard were stagnant through and through.
The government had its priorities and its scribes knew the time had come for one of history’s many storms. Those in power had a choice. They knew that some in the land had virtue and that some did not. Into the ear of the leaders, words of warning were uttered, namely pointing out that in times of trouble past, the trouble makers were well known and did not disappoint with their actions. Once a troublemaker, always a troublemaker I suppose. It came to be that the government had a choice to make: who to save and who to leave to the wilds. This was left up to men simply called “Watchmen.” The watchmen were informed of the gravity of the situation facing America and knew what it would take to make a country survive Peak Oil.
(5 July 2007)
Contributor Jason McGhee writes:
I am posting a link here to the short story I am writing hoping that someone will read it. I have had no outlet for my concerns about Peak Oil, as everyone I meet is confident that the lights will always shine. Since I learned about Peak Oil I have become melancholy. It is such a strange age we live in.
