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Libya Oil Head: Global Oil Output Can Only Reach 100 Million B/D
Dow Jones
LONDON – Global oil production can go no higher than 100 million barrels a day, the head of Libyan oil policy and Chief Executive of Libya’s National Oil Co. Shokri Ghanem said Tuesday.
“There is a ceiling or 100 million (barrels a day) and the world cannot continue to produce oil indefinitely,” Ghanem told an energy conference in London.
Once that ceiling is reached, global oil production will start to decline, Ghanem said. He didn’t specify where the data came from.
(30 October 2007)
No real alternative to oil: Rise in demand seems unavoidable
Matthew Saltmarsh, International Herald Tribune
During the early 1930s, when oil prospecting in the Gulf was in its infancy, George Lees, chief geologist for the Anglo Persian Oil Company, proclaimed that he would drink all the commercial oil that might be discovered in Bahrain.
In recent years, Bahrain has produced around 185,000 barrels a day – modest by regional standards, but not easy to drink.
The story resonates with those who are optimistic about the prospects for future oil supply.
Energy demand is surging as robust growth in developing economies offsets slower demand in the West. At the same time the scientific warnings are becoming ever starker over the global warming caused by more carbon emissions from fossil fuels.
Interest in alternative, sustainable energy sources has never been stronger.
Yet, despite accelerating investment, the output capacity of these energy forms remains barely more than embryonic. Fossil fuels, reliable and accessible, will continue to provide more than 90 percent of global commercial energy needs to 2030, according to the Organization of Petroleum Exporting Countries.
Leo Drollas, an executive director at the Center for Global Energy Studies in London, shares the assessment. “Oil will be the world’s most important energy source for some time,” he said. “Many times we hear that it’s the end of oil, it’s the end of the world. It’s never happened.”
Oil provides about 40 percent of the world’s primary energy, according to both OPEC, the exporter’s cartel, and the International Energy Agency, in Paris, which advises consumer governments.
…With that in mind, gauging the remaining viable life span of the world’s oil reservoirs is one of the most vexing questions in energy policy.
“You can arrive at any number of estimates,” Drollas said. “What counts is not estimates but what’s extracted. And here, factors like investment, economics, recovery rates and technology come in.”
…”It’s not that the oil’s not there,” said Paul Stevens, professor at the University of Dundee in Scotland. “It’s whether there’s the investment to get it out. The issues are geopolitical and economic.”
The largest reservoirs, or “super giants,” are the cheapest to develop, in terms of cost per barrel. But the last true super giants were discovered in 1967 and 1968, according to a paper by Robert Hirsch, Roger Bezdek and Robert Wendling that has become seminal to “peak oil” theorists, who argue that reserves will soon peak at a maximum production rate, and decline thereafter.
The 2005 paper, “Peaking of World Oil Production” collated estimated dates for the peak, ranging from last year to beyond 2025. It concluded that government intervention to slow demand was required, “because the economic and social implications of oil peaking would otherwise be chaotic.”
Peak oil theory is controversial. A study released last November by Cambridge Energy Research Associates, a U.S. consultancy, estimated the remaining oil base at 3.74 trillion barrels, well above peak theorists’ estimates.
…But squaring the needs of global economic growth with the imperative of curbing global warming will also depend on major long-term changes in consumption behavior.
Meanwhile, oil’s pride of place looks assured. Prices will rise and fall, reserves will run dry and be discovered. But the thirst will continue, and will continue to be quenched.
A two-part series looks at the prospects for oil, and its alternatives . For more, read Energy, Part Two, Wednesday, October 31.
(29 October 2007)
Disappointing article. The collection of quotes and assertions doesn’t help us sort out what is true from what is irrelevant or obsolete. One has to sympathize with journalist Matthew Saltmarsh, who normally seems to write on business subjects. A good reporter can usually parachute into a new field, talk to a few experts and come up with a creditable article. Unfortunately for Saltmarsh, the oil question is not such a field. He does make an effort to quote the peak oil side, but he still can’t get beyond the suicidal conventional wisdom:
…oil’s pride of place looks assured. Prices will rise and fall, reserves will run dry and be discovered. But the thirst will continue, and will continue to be quenched.
Nooooo!
-BA
‘Climate Change + Peak Oil = Cutting Carbon + Resilience Building’ or ‘Why Malcolm Wicks Really Hasn’t Got This Peak Oil Thing…’
Rob Hopkins, Transition Culture
I had just about got over the sense of outrage and indignation caused by reading John Vidal’s piece, Labour’s plan to abandon renewable energy targets, which revealed Gordon Brown’s administration as truly nailing their colours to the economic growth mast rather than the responding to the climate change one by withdrawing his support for the European target of 20% of energy from renewable sources by 2020. Just about. Then, the next day in a follow-up article, was a quote attributed to energy minister Malcolm Wicks, which read“at the end of the day, renewables is a means to an end. The end is bringing down carbon emissions”.
Malcolm Wicks was the UK’s energy minister, then he wasn’t, and now he is again. He was the subject of a coruscating chapter in David Strahan’s Last Oil Shock, which tore into Wicks’s obfuscation on the peak oil issue. This one sentence offers a clear indication that Wicks still really hasn’t got it. It also shows the dangers of designing responses to climate change that do not address the peak oil question. Installing renewable energy capacity is about so much more than just cutting carbon emissions, or at least it should be.
Renewables are also about building resilience, about putting in place the ability of our communities and of the country as a whole, to withstand the shocks that peak oil will inevitably cause. If done properly, renewables can also strengthen local economies, support local currencies, provide a focus for community investment, and lead to the decentralisation of energy generation, which gives power (both literally and figuratively) to the local scale rather than centralising it in distant nuclear or coal-fired power stations.
It struck me that this statement, more than any I have yet read emerging from the present Government, encapsulates the extent to which those in charge of making such decisions (and of unmaking previously made ones) have missed the point. It is especially sobering that such a statement comes from the energy minister himself.
(29 October 2007)
Connecticut Peak Oil and Natural Gas Caucus to hold informational forum
Connecticut State Representative Terry Backer
Co-founders of the Connecticut Legislative Peak Oil and Natural Gas Caucus State Representative Terry Backer (Stratford) and Senator Bob Duff (Norwalk, Darien) announced an informational hearing will be held on November 1st 2007 12:30PM room 1C Legislative Office Building Hartford CT.
According to Representative Backer and Senator Duff Peak Oil is the event when oil supply reaches its maximum production, plateaus and then falls into terminal decline. There has been consistent evidence that the world’s oil supply either has or will reach peak production in the near term. The impact on the economy of the State and its people could be dramatic, enough so that more information is needed to plan appropriately by state leaders.
According to Rep. Backer every aspect of our life and environment could be affected negatively including; carbon emissions, water quality and transportation without proper planning and implementation.
The Peak Oil Caucus will hear from several speakers with expertise in Peak Oil and its impacts.
Sally Odland of the Lamont Doherty Earth Observatory,
Tom Whipple editor of the Peak Oil Review
Charlie Maxwell of Weeden and Company
John Kaufmann of the Oregon Department of Energy
Paul Sankowski of the Mayors Committee on Energy and Environment, Stratford CT.
The Caucus will hear presentations to learn more about Peak Oil and intelligent response to a reduced and dramatically more expensive oil supply to the state.
(26 October 2007)
SAFE founder Diamond discusses Iran sanction impacts on oil futures (video and transcript)
Monica Trauzzi, OnPoint, E&E TV
With the Energy Bill being debated in Congress, and oil prices hitting record highs, the United States’ domestic and foreign energy policies have become the center of discussion recently.
During today’s OnPoint, Securing America’s Future Energy (SAFE) president and founder, Robbie Diamond discusses how the U.S. can create a policy that will minimize oil dependence, expand domestic oil supplies, and increase the use of alternatives.
Diamond discusses SAFE’s Oil Shockwave simulation, which places former government officials in a mock oil catastrophe. He explains how this exercise can provide guidance to lawmakers on how to approach domestic and foreign energy policy issues.
…Monica Trauzzi: Are you at all expecting the dialogue on oil and national security to shift when we have a new president in office in 2009?
Robbie Diamond: I don’t think so. On the rhetorical side, everyone seems to be on the same page. I mean if you listen to the debates every candidate, every politician sounds the same. And that’s what’s so incredible about this issue.
But when it comes to solutions, when it comes to actually legislating…I mean one can put that into context of everything else going on and what are we doing on every other issue in the country?
And the truth is we can’t govern reactively. It’s like when the bridge falls down we can’t figure out why it fell down. We need to deal with this issue and be proactive about it. And so my thought is it’s not who’s in office, it’s really about political will.
And really, Securing America’s Future Energy was founded by looking and saying this debate on oil had really been dominated by car companies, oil companies, environmentalists. And really we were coming to deadlock for longtime. What we wanted to do was expand the pool of participants to be CEOs of major corporations who are principally consumers, who understand why oil matters to our everyday life and sort of speak for us at large.
And also generals and admirals who could speak about securing the supply lines around the world and going into these unstable regions and really coming from a broader perspective. And that’s really been the mission of the organization.
An oil shock wave is just a component in that, which is really diagnosing the problem. If one had to say what we’ve discovered from doing many oil shock waves, and the people who will participate, former Secretary Rubin, Abizaid, John Layman, Carol Browner, they’re not scripted. I mean they don’t know what’s going to happen, but what we’ve discovered doing it many times is that one is anything that happens anywhere in the world affects us here, affects everyone everywhere.
Two, prices can rise very dramatically and that we really haven’t seen anything yet.
Three, once in a crisis there’s really no good short-term solutions. Really the solutions we need have to be taken five years, 10 years before. When one looks at our fleets of cars, when one looks at new production, these things take a long time to come online. So most of the participants have said, geez, I wish we had done this 5, 10 years ago.
(30 October 2007)
Interview with James Smith, Chairman of Shell UK
Jeff Randall, Sky News
Full transcript of Jeff Randall’s interview with James Smith, Chairman of Shell UK, 29th October 2007.
…JAMES SMITH: Energy requirements in the world I think are going to double over the coming decades, by mid century, and that is going to be driven by economic growth and by demographic growth and that’s assuming that we have significant improvement in energy efficiency, so that’s built in, so energy requirements will double. Even if with heroic growth in alternative or renewable energy, fossil fuels are still going to be a very important part of the energy mix by the middle of the century. It is 80% today, fossil fuels, by the middle of the century we think it will still be around 60% so what that means is that producing fossil fuels is going to be very important but also for climate change, taking the carbon out of the fossil fuels is going to be a crucial set of technologies. Clean coal technology in particular is going to be important.
…JAMES SMITH: Well I wouldn’t say that oil is running out. There is a talk about peak oil and I don’t actually subscribe to the peak oil principle. I think the easy oil …
JEFF RANDALL: What do you mean by peak oil?
JAMES SMITH: Well that somehow people are saying that oil is running out, as part of your question, I don’t think that’s the case. Probably the easy oil has been found, the big fields with the light crude that’s easy to produce and what we are looking into a future of is very substantial hydro-carbon resources but those hydro-carbon resources are going to be more difficult to produce, they are going to be heavier.
JEFF RANDALL: And more expensive.
JAMES SMITH:Probably more expensive to produce as well. Very large projects, complex projects, so technology, partnership and a resilient balance sheet are going to be very important for the future but if you have got those things, and I like to feel that we have, then you can look forward to a future of opportunity.
(29 October 2007)
As anyone knows who has spent five minutes reading about peak oil, it does NOT mean that “oil is running out.” The Shell executive uses the oil industry’s code words for peak oil: “the end of easy oil.” This would seem to confirm the judgment of James Schlesinger that many oil executives know about peak oil, but are not able to speak about it publicly. -BA
Beyond Petroleum
Matthew Ygelesias, Atlantic Monthly (blog)
Michael Klare, whose work I find consistently puzzling, has a piece out in The Nation called “Beyond the Age of Petroleum” warning in dire terms of “a fundamental, near epochal shift in US and indeed world history: we are nearing the end of the Petroleum Age and have entered the Age of Insufficiency.” Like Joseph Romm arguing with James Kunstler, I don’t really get this. Hybrid cars are already available on the market, are much more fuel efficient than conventional autos, and with the “hybrid premium” standing at a few thousand dollars and falling, it seems obvious that if drastically higher fuel prices emerge, middle class suburbanites are going to respond with slightly altered consumption habits (more expensive cars, fewer plasma TVs and granite countertops) rather than radical lifestyle alterations:
Suppose oil hits $160 a barrel and gasoline goes to $5 dollars a gallon in, say, 2015. That price would still be lower than many Europeans pay today. You could just go out and buy the best hybrid and cut your fuel bill in half, back to current levels. Hardly the end of suburbia.And suppose oil hit $280 a barrel and gasoline rose to $8 dollars a gallon in 2025. You would replace your hybrid with a plug-in hybrid, and those trips less than 30 miles that have made suburbia what it is today would actually cut your fuel bill by a factor of more than 10 — even if all the electricity were from zero-carbon sources like wind power — to far below what you are paying today. The extra cost of the vehicle would be paid for in fuel savings in well under five years.
Obviously, this would result in some economic hardship for many families, but it’s hardly an “epochal shift.” Indeed, even current gasoline prices are actually quite low as a share of household income by historical standards so even if plug-in technology doesn’t materialize (which is hard to believe) we’re not on the precipice of such never-before-seen apocalypse.
(30 October 2007)
Blogger Atrios puzzled about peak oil
Duncan Black (“Atrios”), Eschaton
I, too, generally get a bit puzzled about Kunstlerish views about the future of America in a world of rising oil prices. Certainly rising oil/gas prices, over time, might impact peoples’ behavior in terms of what kind of car they use and how much they use it. Over a longer time horizon high prices might impact to some degree our land use and transit policies, and the relative desirability of certain locations. Obviously high oil/gas prices would cause economic pain for lower income people with a heavy reliance on automobile usage, and potentially tip the economy into a nontrivial recession.
But when I think through how various levels might impact behavior, and I’ve done informal polling on this blog about it before, it’s just hard to see how any realistic scenario leads to the kind of of economic and social Armageddon that some authors predict. Even if there was a major price discontinuity, with gas shooting up to $10/gallon tomorrow, I just don’t see the country going through a sudden wrenching overhaul. People would be pissed. Stuff would be more expensive. But I really don’t see it in revolutionary terms.
-Atrios 10:42
I think some people assume that an inevitable result of lower oil supply/rising oil demand is disruptive supply shortages. Widespread persistent supply disruptions would indeed be a big deal, but they just aren’t an inevitable result of peak oil concerns. Arguably political instability caused by the economic pain of higher oil prices could lead to such disruptions, but there’s no simple cause and effect there.
-Atrios 11:35
(30 October 2007)
Atrios is a liberal Democrat blogger with a wide following. -BA
