Peak oil – July 10

July 10, 2012

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage.

Peak Oil Reloaded (1/2) – E.V.

Matthieu Auzanneau, Oil Man (blog), Le Monde
The black pill or the green pill, what’ll it be? Leonardo Maugeri, a former senior executive at Italy’s giant oil company ENI, says “peak oil” is nothing but a crazy fantasy.

First problem with that: Maugeri’s previous analyses show a rather unenviable track record. Coming up on this blog Monday July 7th in Part 2: a critique of Maugeri’s recent study by Olivier Rech, former developer of petroleum scenarios at the International Energy Agency. Promises to be a stinger!

A new report on the future of world petroleum production has caused quite a stir on planet “peak-oil.” That includes those of us who are concerned about the future of (the thermo-mechanical industry and thus of economic) growth.

“Not to worry, folks!” seems to be the core message of the report, “…and you bankers and insurers needn’t listen to any nonsense warning that the petroleum business is an endangered species.”

Among others, The Wall Street Journal is lapping it up.
(6 July 2012)

« Nier l’imminence du pic pétrolier est une erreur tragique », dit l’ancien expert pétrolier de l’AIE

Matthieu Auzanneau, Oil Man (blog), Le Monde
Olivier Rech, ancien responsable du pétrole au sein de l’Agence internationale de l’énergie (AIE), démonte le rapport Maugeri, selon lequel le pic pétrolier n’est qu’une chimère. Données inédites et exclusives à l’appui.

Qu’y a-t-il dans le rapport publié par Leonardo Maugeri, qui justifie la “révolution” qui, selon l’ancien dirigeant du groupe italien ENI, va dissiper le spectre d’un déclin imminent de la production mondiale d’or noir ?

Absolument rien, selon le Français Olivier Rech, qui fut en charge de la prospective pétrolière à l’AIE de 2006 à 2009. Voici ses réponses, en sept points. Elles s’appuient notamment sur son analyse historique du rythme de déclin de la production pétrolière existante, présentée ici pour la première fois.

Olivier Rech dirige aujourd’hui Energy Funds Advisors, société qui conseille un fonds d’investissements pour le compte de La Française AM, un important gestionnaire d’actifs parisien. Il a déjà pronostiqué sur ce blog un déclin de la production du pétrole et de ses substituts quelque part entre 2015 et 2020.
(9 July 2012)

If you would like to help by translating this article into French, please contact Matthieu Auzanneau.

Second in a series. The first article is online in French Peak Oil Reloaded (1/2) and in English.

The Guardian Is Ignoring The Critical Paradox Of Peak Oil

Nicole Foss, The Automatic Earth via Business Insider
George Monbiot recently made a major about-face on his peak oil stance, on the grounds that unconventional oil represents a new reality. The basis of his u-turn is a recent report on unconventional oil by Leonardo Maugeri, (former) oil executive at Italy’s Eni, published at Harvard Universit…

I sent George a short response to his article, by way of opening a dialogue:

What we are facing is a demand and price collapse that will render unconventional supplies uneconomic. Natural gas is leading the way over the next few years. The high cost and low EROEI are fatal flaws.

And received this reply:

If there’s a collapse in demand, peak oil is not an issue, right? If there’s a resurgence of demand, unconventionals become economic again. As for EROEI being a constraint, try telling that to the tar sands producers in Alberta.
With best wishes,

The debate continues. Here is my next installment:

A demand collapse will certainly put peak oil on the backburner for a number of years. The next few years will be remembered for financial crisis as we move into what will be at least as bad as the Great Depression (and very likely worse, since the bubble was much larger this time). Peak oil will not have gone away, however.

We have used the cheap and accessible oil (and other fossil fuels) and what remains will be exceptionally, and increasingly, expensive in both financial and energy terms. Predictable consequences will follow from this, but in a complex interaction with many other factors, notably the context of the huge credit bubble bursting. This amounts to crashing the operating system. For a while, resource constraints will be relieved due to economic seizure (i.e. the collapse of both the money supply and the velocity of money).

(9 July 2012)

The world is oil rich so let’s all enjoy it while we are here

Jimmy Young, Express (UK)
… One example of dodgy forecasting involved an unlikely coalition of geologists, oil firms, bankers, military strategists and environmentalists. After 10 years of research they concluded that oil production had peaked and was due to decline. In 1975 Marion King Hubbert, a geoscientist working for Shell said global supplies could peak in 1995. In 2003 geophysicist Kenneth Deffeyes said he was confident they would peak in 2004.

In 2005 investment banker Mathew Simmons predicted that Saudi Arabia could not increase its oil production. Since then its output has risen from nine million barrels a day to 10 million.

Meanwhile, a recent report by oil executive Leonardo Maugeri, which was published by Harvard University, provides compelling evidence that a new oil boom has begun. If, like me, you are confused I am not surprised.

One thing seems clear: we are not likely to run short of oil any time soon and one piece of good news is that at least some of the soothsayers now appear willing to own up to their faults. In a significant statement, leading environmentalist George Monbiot admits: “The facts have changed, now we must change too.”

Much to his credit he admits that he and his colleagues made either vague or specific predictions and in all cases were wrong. In a rather rueful admission he ends by saying: “The problem we face is not that there is too little oil but that there is too much.”
(8 July 2012)
Suggested by Jeffrey J. Brown who writes: “More fallout from the Monbiot article. Some production and net export data:

EIA data for annual Saudi crude oil production (mbpd, Crude + Condensate);

2005: 9.6
2006: 9.2
2007: 8.7
2008: 9.3
2009: 8.3
2010: 8.9
2011: 9.5

BP data for annual Saudi net oil exports (mbpd, Total Petroleum Liquids):

2005: 9.1
2006: 8.7
2007: 8.2
2008: 8.4
2009: 7.3
2010: 7.2
2011: 8.3

How Many Years Of Oil Do We Have Left To Run Our Industrial Civilization, Keeping In Mind That Oil Is A Resource And Has An Economical End?

Bill McDonald, Forbes
Probably in excess of 50 years before oil production drops below half what is currently. Counting natural gas in total hydrocarbons, probably 90 to 140 years before total hydrocarbon use drops to below half what it is currently. It is likely that this will be enough time to transition to renewables, nuclear, and biomass, with some oil still used for long distance transportation.

… Both efficiency (2) and renewables (3) are still accelerating, and fracking is still improving.

The new resources are subject to both debate and politicized controversy. However, both are real, large, and growing.

While “peak oil” is still a valid mathematical concept, if there is not a sharp drop after the peak, or a massive price spike for a long time, most of the economic and social disruption forecast by the peak oil people becomes a much smaller issue.
(9 July 2012)

Europa am Peak

Norbert Rost, Heise
Der Höhepunkt der Ölversorgung ist vor 10 Jahren überschritten worden, das aber ist in der Politik noch nicht angekommen

Ob Europa die Euro-Krise überstehen wird, kann noch niemand beantworten. Doch die nächste Herausforderung lauert schon auf die Europäer, denn: Europa hat seinen Höhepunkt bereits überschritten: den Höhepunkt der Ölversorgung.

Die Grafik zeigt sowohl Europas Verbrauch (grün) wie auch dessen Förderung von Erdöl (blau). Unschwer zu erkennen ist, dass auf dem “alten Kontinent” seit jeher mehr Öl verbraucht als gefördert wird. Schon diese Situation ist gefährlich.

Gefährliches deutet sich auch in der unteren Förderkurve an, denn seit 2002 sinken die Fördermengen in Europa jedes Jahr. Der Peak Oil, wie das Fördermaximum genannt wird, ist für die Weltregion Europa also bereits seit 10 Jahren überschritten. Davor lag die Fördermenge für 6 Jahre auf einem Plateau. Der bei der Ölförderung vermutete “Peak” zeigt sich hier nicht in einer einjährigen Spitze, sondern in einem jahrelangen Gipfel. Es darf vermutet werden, dass die Welt-Ölförderkurve ein ähnliches Plateau ausprägen wird.
(9 July 2012)

Le altre fossili, la sfida dello shale

La Repubblica
Mel Gibson ha sbagliato incubo. In ‘Interceptor’, il secondo episodio della saga di ‘Mad Max’, la star di Hollywood si aggirava in un angosciante mondo del futuro dove bande di esseri umani si combattono per impadronirsi dell’ultima benzina rimasta. Un errore comprensibile: la fine della disponibilità del petrolio è stato il filo conduttore di molti film catastrofici, ma si tratta di una profezia che per un altro paio di secoli pare destinata ad andare smentita. Davanti all’umanità rimangono un’infinità di sfide, ma almeno quella di restare a breve senza carburante sembra pronta per l’archivio.

Negli ultimi decenni è fiorita una vasta letteratura scientifica sul “peak oil”, ovvero sul momento in cui i giacimenti di greggio avranno raggiunto il punto di produzione massima oltre il quale la quantità di oro nero estratto potrà andare solo diminuendo, segnando “l’inizio della fine”. C’è chi è convinto che il “picco del petrolio” sia già stato passato, c’è chi crede sia in corso esattamente ora e chi ci concede ancora qualche anno di tempo. Una banda di pessimisti di cui non fanno parte solo ambientalisti ansiosi di spingere il mondo verso le rinnovabili, ma anche pezzi di establishment come il Pentagono. Secondo il Joint Operating Environment 2010, già nel 2015 la differenza fra una domanda al galoppo e una produzione asfittica potrebbe aver raggiunto 10 milioni di barili al giorno. Ma mentre nella comunità dei geologi il dibattito sulla data esatta del “peak” si andava accendendo, l’industria delle perforazioni ha messo a segno una sequenza di straordinari avanzamenti tecnologici in grado di rimescolare tutte le carte.

… Una minoranza degli analisti, a iniziare da Michael Leibreich di Bloomberg New Energy Finance, si sforza ancora di mettere in guardia dal fatto che si tratta di proiezioni basate su presupposti sballati. “Tutti parlano di riserve e nessuno di prezzi”, sottolinea pronosticando vita breve per questa “isteria” mano a mano che i costi di estrazione e del gas andranno lievitando. Ma sta di fatto che con la percezione di questa nuova abbondanza si rischia di passare dall’incubo di finire a secco a quello di continuare a produrre allegramente una quantità di anidride carbonica sufficiente a innescare un devastante riscaldamento globale, passando per un vasto assortimento di altri gravissimi guai ambientali che vanno dalla sismicità indotta dal fracking all’inquinamento delle falde acquifere.
(8 July 2012)

Tags: Energy Infrastructure, Energy Policy, Fossil Fuels, Industry, Natural Gas, Oil, Shale Oil, Tar Sands