Arthur Berman: “Peak Oil – The Hedonic Adjustment”

January 18, 2023

(Conversation recorded on January 2nd, 2022)

Show Summary

On this episode, petroleum geologist Arthur Berman returns to unpack the development and drawbacks of ‘peak oil’. Art explains how our institutions have redefined what is considered oil, which has created an illusion of constantly growing oil production. The reality is that – circa 2023 – fully 40% of what is called oil is comprised of things that are ‘not oil’. What does this imply for global peak oil? Is peak oil, an observation which has been around for decades and repeatedly proven ‘wrong’, even relevant today? Is a specific ‘peak’ date even helpful or should we be focusing on the logical implications of a declining primary resource for global economies? And then, what should we do?

About Arthur Berman

Arthur E. Berman is a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector.

To watch this video episode on Youtube

Show Notes and Links to learn more:

PDF Powerpoint used in the show

00:40 – Art Berman website, The Oil Drum + TGS Podcast Part 1 and Part 2

04:20 What is peak oil

05:38 Shale plays

07:46 Oil as the master resource

09:43M King Hubbert, Howard Scott

10:53M King Hubbert 1956 speech

11:54 Kjell Aleklett – Resilience

12:29 With no new drilling, all the current producing wells are declining at 6% per year *More recently updated to 8%*

13:19 Nate’s PhD writing

15:52 Low of 5% of energy going back to the energy production sector in 1999, now up to 10%+ (Figure 1)

16:00Oil Drum Article of Modeling Oil Depletion Using EIA data

18:42 – Slide #1

18:45Peak oil likely to have been November 2018

19:14$-37/per barrel oil prices

19:53 – Slide #1

21:32USA surpassing 2018 peaks

21:40 – Slide #2

22:26 – Slide #3

23:08 How is natural gas different from oil/petroleum

23:39Refinery gain 

23:51 – Slide #3

24:10 40% of what the IEA/EIA calls oil is not actually oil

25:20Large component of natural gas plant liquids is ethane, which is used to make baggies

26:25Oil is extremely energy dense, natural gas is 33% less energy dense than oil

27:36 Hedonic Adjustment

27:54NGL is 30% of what we consider oil production in the US

28:26 – Slide #8

28:35Natural gas liquefaction during extraction

29:09LNG process

31:57Different components of natural gas

32:24Natural Gas Plant Liquids

34:28 The hardest part of find new oil is the deepness – and correlating increasing heat/pressure

35:30 Types of crude oil and their qualities

36:36 – Slide #9

39:44What is NGPL used for

40:40 – Slide #13

40:50 Half the world oil consumption has been used since 1990

42:45The US oil supply is extremely light

42:55The US has reduced oil imports over last decades

43:07The US exports 3 million barrels, and imports 6-7 million barrels of heavy oil

43:50Diesel can have a greater energy content than Crude oil

44:08– Slide #11

46:00Ethanol is 40% of the heat content of that of Crude oil

48:52 – Slide #10

50:20 – Slide #14

51:20 Ethanol

52:38Nate’s piece in Nature Science journal (2005)

53:30Ethanol mixed fuels don’t take your car as far

54:56 – Slide #8

1:02:20Peak demand

1:03:31 Shell launched an investigation of M King Hubbert to prove him wrong

1:03:52Malthus, Paul Ehrlich (TGS Episode)

1:06:47Almost all of the fossil energy alternatives make electricity, which is limited in function


Teaser photo credit: Syncrude’s Mildred Lake mine site and plant near Fort McMurrayAlberta. By TastyCakes is the photographer, Jamitzky subsequently equalized the colour. – Transferred from en.wikipedia to Commons., Public Domain,

Nate Hagens

Nate Hagens

Nate is a well-known speaker on the big picture issues facing human society and currently teaches a systems synthesis Honors seminar at the University of Minnesota ‘Reality 101 – A Survey of the Human Predicament’   Nate is on the Boards of Post Carbon Institute, Bottleneck Foundation, IIER and Institute for the Study of Energy and the Future.  Previously, he was lead editor of The Oil Drum, one of the most popular and respected websites for analysis and discussion of global energy supplies and the future implications of the upcoming energy transition. Nate’s presentations address the opportunities and constraints we face after the coming peak of global economic growth. On the supply side, Nate focuses on the interrelationship between debt-based financial markets and natural resources, particularly energy with and the unique (and so far unplanned for) risks from the coming ‘Great Simplification’.  On the demand side, Nate addresses the evolutionarily-derived underpinnings to

Tags: peak oil, Resource Depletion