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Private industry conference finds much less oil (Text and podcast)
David Strahan, Last Oil Shock
A secretive gathering some of the world’s biggest oil companies has concluded the industry will discover far less oil than officially forecast, meaning global oil production may peak much sooner than many expect.
The Hedberg Research Conference on Understanding World Oil Resources was held by the American Association of Petroleum Geologists in Colorado Springs last November to try to reconcile widely divergent estimates of likely future reserves additions. But in an interview with Lastoilshock.com, oil executive Ray Leonard said the majority view was that future oil discovery would amount to some 250 billion barrels, rather than the 650 billion barrels suggested by the United States Geological Survey.
The Colorado meeting was attended by technical experts from all the supermajors along with some of the biggest state-owned oil companies such as Saudi Aramco. According to Mr Leonard, a vice president of the recently-formed Kuwait Energy Company, who presented a paper on Russian reserves as the former head of exploration for Yukos, the experts challenged the USGS’s regional assessments on the basis of their companies’ more detailed proprietary data. Mr Leonard says the majority opinion was that reserves growth from current fields might add around another 500 billion barrels, against the USGS estimate of 612 billion, and that non-conventional oil production would reach only 4-5 million barrels per day by 2015, also much lower than the most optimistic predictions.
Journalists were barred from the conference to allow open discussion of confidential information, although the Oil & Gas Journal later reported that the meeting had concluded oil production would peak between 2020 and 2040 at 90-100 million barrels per day. But Mr Leonard said that based on the range of numbers accepted by the majority of delegates at the conference, he expects output to plateau in five years’ time. “If there’s a world recession it could be a little longer, if United States invades another oil producing country it may happen a lot sooner. But it’s going to happen in around five years so we need to make some preparations”.
The USGS oil resource estimates have long been regarded as wildly optimistic by many peak oil forecasters. Its World Petroleum Assessment published in 2000 implied that the oil industry could discover some 22 billion barrels per year between 1995 and 2025, but in the first quarter of the forecast period discovery has averaged just 9 bn bbls annually. Last month the USGS revised down one of its most controversial regional assessments, when it slashed its estimate of East Greenland’s oil potential from 47 billion barrels to just 9 billion.
Listen to the interview with Ray Leonard.
(28 September 2007)
The end of Las Vegas
Why alternative energy sources won’t save us in the post-oil age
The room beamed with good intentions and positive thinking. So many ideas and innovations. You just had to believe.
On Aug. 27, inside the Dialogue Center at the Las Vegas Springs Preserve, the much-hyped $250 million beacon of alternative energy possibility, U.S. Sen. Harry Reid told the small group of concerned citizens and green business people in attendance that the time had come for Nevada to go renewable and lead the nation toward a clean energy future. Everybody agreed it was the right thing to do.
…”Global warming is here. Why? Because of fossil fuel,” Reid told the audience. “So what we need to do is stop using fossil fuel.” But, he added, “People need to be incentivized to do this.”
To that end, and to his credit, Reid has been doing a lot more than doling out platitudes. In a torrent of press releases, he has announced his opposition to three proposed coal plants; hailed a decision by the Bureau of Land Management to lease 123,000 acres of Nevada land for geothermal exploration; sung the praises of a Senate energy bill that he says will ramp down our oil use and ramp up renewable use; and, most recently, highlighted a report that shows coal is an unpopular energy source as a means to push the Silver State into a leadership position on all things renewable.
…Many energy experts say this a dangerous myth, one that will prevent us from adapting to a monumental change with no historical parallels. While it’s surely imperative we clean up our act in the name of preserving our planet, a potentially even bigger issue than that of global climate change is staring us down: an oil shortage.
These critics say the American way of life as we know it is on the wane. They say our addiction to fossil fuels and all of the glorious achievements that accompanied our discovery of oil back in the mid-18th century have convinced us that the way we live is an inalienable right that will continue on into eternity. Because we have technology. Because we have ingenuity. Because we’re Americans.
Fact is, none of that matters in the face of geology, experts say. Oil is a finite, fast-diminishing and, perhaps more importantly, unique resource that no amount of so-called alternatives can replace. Even if they could, we may already be too late to put together a plan.
“The renewables are not ready,” says Jan Lundberg, an oil industry analyst. “They are not going to deliver energy the way cheap oil used to.”
James Howard Kunstler, one of the most prominent speakers and prolific writers on the impending oil crisis, says of the push by Reid and other politicians to switch out energy sources: “What they are doing right now is blowing green smoke up the public’s ass.”
What’s more, the issue isn’t necessarily whether we run out of oil, but what happens when shortages throw the cost of energy into a schizophrenic tizzy of price spikes punctuated by brief, illusory drops, says Richard Heinberg, author of The Party’s Over.
…”More electric energy, whether from renewables or coal, does not address the liquid fuels crisis posed by globally peaking crude oil. There is no green energy economy around the corner.” — Jan Lundberg
(27 September 2007)
Long article about peak oil, with quotes from many peakists. Why can’t articles like this make it into the dailies and broadcasting networks? -BA
America’s New Religion
James Kunstler, Agora Financial
Okay, here’s the big problem in America; we made this unfortunate set of choices to create the drive-in utopia, the happy-motoring utopia. America’s oil consumption is the greatest misallocation of resources in the history of the world. We’re not going to be able to continue this living arrangement and that makes it, by definition, the greatest misallocation of resources in the history of the world.
But we like things the way they are. So we will not change our behavior until conditions force us to change. We Americans have put so much of our resources, so much of our wealth, so much of our spirit into constructing and assembling this energy-intensive infrastructure for daily life, that we can’t imagine letting go of it.
But get this; no combination of alternative fuels or systems for running them will allow us to run Walt Disney World, Wal-Mart, and the interstate highway system. We’re not going to run those things on any combination of solar, wind, nuclear, bio-fuel, used French fried potato oil, dark matter, or all the other things that we’re wishing for, or even a substantial fraction of it.
I’m not against alternative fuels or making investment in alternative systems. But what you need to know is we’ll probably be disappointed in what they can actually do for us. They can do things for us, but not the things that we’re wishing they can do for us. One of the main implications of “the long emergency,” therefore, is that we’re going to have to downscale everything we do. So the 3,000-mile Cesar salad will not be with us that much longer.
Let’s talk about the thing that the American people really do believe: when you wish upon a star your dreams come true. This is what adults all over America believe. This is a nice thought for children, but it’s not a good thing for adults to believe. So what we’ve got now in the US is a tremendous amount of delusional thinking, especially around the issues of energy, and especially around what we’re going to do in the face of a probable energy crisis.
(26 September 2007)
Vintage Kunstler. A little strange to see him featured on an investment website, but Agora is also home to Byron King who’s written extensively on peak oil.
The second section of Kunstler’s website is also online: America’s New Religion, Part II (HoweStreet). -BA
