The article requires subscription, but the comments section is excellent. Peak Oil 101, shortened version for people with ADD: Here are the Five Horsemen of Peak Oil: 1) Geological Peak. That is the point where we have consumed half the oil in the ground. So far we have consumed a trillion barrels. Estimates of remaining oil range, but the number appears to be 3 trillion barrels remaining in the ground. So we are not at geological peak. Hence skeptics of peak oil use this for their arguments, like this SA article does. 2) Flow Rate Peak. That's the point at which you cannot extract the oil fast enough to meet demand. This is especially so with old fields in decline (which is a fact) and new fields which have difficult geology (like this one). The flow rate from them does not keep up with decline, nor keep up with growing demand. The article failed to mention that North Sea is all in terminal decline and the UK has to now import oil. Indonesia peaked years ago and has to import oil forcing them out of OPEC. The Cantarell field in Mexico, the third largest in the world, and the US's 3rd import source, was producing 2.3mb/day at it's height. Today it's 560kb/day with a 41% drop from last year. WE ARE AT FLOW RATE PEAK NOW. 3) Geopolitical Peak. That's when exporting countries, due to their own growing demand, decide not to sell their oil abroad any longer but decide to keep what's in the ground for their own future domestic needs. So far only the US does this, but expect other countries to soon follow that. 4) ERoEI peak. This is the point at which it takes as many joules to extract the oil than you get from the oil extracted. That is, one barrel in to get 1 barrel out. Conventional wells in the 1960s were 100:1. That has dropped to about 25:1 today. Aging fields and new unconventional fields have very low ERoEI. The tar sands in Alberta for example is less than 6:1. Our entire society is based on the NET energy, not what's extractable. Calculations show that we will reach over all break even in oil extraction between 2020 and 2030. Once that is reached it basically means we have completely run out of oil. 5) Economic peak. This is the point where the economy cannot tollerate high oil prices and plunges the world into a recession, like this one which was caused by $140.barrel oil.
Another comment worthy of quoting: "As has been repeated ad nauseum by those who study the issue, we're in no danger of running out of oil any time soon. What we will be running out of is oil that is: 1) inexpensive enough to matter 2) minimally polluting (light sweet crude vs. heavy sulfurous oil) 3) very energy positive (i.e. it takes less energy to get the oil than the oil produces) 4) easily accessible (see item 1) The new finds are interesting, but many of the newer ones are deepwater finds with fields in scattered areas - expensive to drill. If the types and distribution of oil in these finds has been accurately assessed, I have yet to find the analyses. In fact, all I see in the press are estimated quantities of oil, which, by itself, is meaningless. What I *don't* see are either production costs or energy yield ratios (i.e. how much oil does it take to produce 1 barrel of new oil) for this new oil. The "peak oil" problem isn't as much energy as it is money and complexity. Right now, our society and the many complex technological tasks needed to keep it functioning depends on inexpensive hydrocarbons. When they get too expensive, activities like farming, transportation, chemical production and so on either become more expensive, or start breaking down. If we don't adapt quickly enough, many folks on planet earth will be getting unemployed at best and chronically hungry at worst. If governments will not deal with this effectively, we've got social and political problems. Big ones. Suppose everyone in Mexico couldn't get their produce to market next year or get fertilizer at a price they could afford. What do you think would happen there? And in the US? And central America? I hope technology can help us get past this. I hope new energy sources are found and implemented quickly. It would be nice if the "free" market can do this before a large number of us starve. Unfortunately, innovation doesn't happen on demand or on schedule." --------------------------------------------- Strictly speaking, we will NEVER run out of oil, because at least half of it is never going to be produced and will stay in the ground long after humans are gone...
so bascially we don;t have to worry about running out of oil, just worry about the effciency of getting it out, meeting demand , high oil prices
Excellent summary Pekelo, thank you for your post. What I find interesting is that the US (and many other countries) are in a recession, yet oil is still well above $60, a level that was considered incredibly expensive less than 5 years ago. Although part of this can be explained by lots of money / "liquidity" getting out of US Dollars into just about any asset class, I think it is a good indicator that the world has passed the flow rate peak. Also even though oil went quickly from $100 to $140 last year, if oil was to go to $80 or $90 or $100 in the coming months, this could be enough to derail those clichéd "green shoots".
Correct. It is possible that oil prices above $100 in the first half of 2008 were at least partly responsible for the economic contraction of the last 21 months.
Some Russian scientists beleive that hydrocarbons (oil) are a byproduct of some deep earth mechanism and is slowly replentishing depleated oil resevours. Few other scientists believe this theory. However, if this theory is non-sense then the question, "Why are there hydrocarbon deposits on one of Jupiter's moons?", begs an answer. I don't think that can be explained away by the decay of organic matter.
It wouldn't matter even if they were correct. What matters is (and I explained it above already) that it does it SLOWLY. It is actually so slow that its rate is IRRELEVANT compared to the daily usage of the world. To understand it easier, an example of an overused replenishable resource going extinct: If there were 10 million American buffalos at most and the new birth rate was 300K per year, that still meant shit for their survival, because the kind white folks were hunting it 500K per year. So it was just question of time (and math) when we ran out of buffalos.... And so we did...At one point, their numbers was in the low 3 digits....
you should have heard him near the peak, Pekelo's peak oil post. 07-13-08 09:06 PM Quote from Pekelo: Quote from JSSPMK: ... Shell last night, his firm opinion is that there is absolutely no problem with supply & that at current demand levels there is enough for at least 150 years of what's known already, excluding new fields being found. Please don't get me started on peak oil, because once I start I can't stop! rather than demand driven, He should realize that demand (well, usage) can not be more than supply. Supply has been pretty much the same since 2005 May even with prices quadruplying...What does that tell you about extra supply? adding that OPEC is not that interested in extremely high prices At this point it is out of the hand of OPEC and seriously, why would they sell more barrels for less money?? Oh that! Well, world oil production is peaking/plateauing right now, so usage (demand) has a limit. Now worldwide demand has been expected to grow without production limit. So we have an increasing demand with limited supply, thus priceincrease. As the price keep rising this destroys the extra demand, thus the equilibrium resumes. It is not speculation but simply fundamentals, the market finally recognizing that oil is a limited resource and there are no real substitutes aviable. The best we can hope is a nice long plateau before the inevitable decline in production... Now price can fluctuate according to everyday news and lots of other factors, but in the long run, there is only one direction to go, up.... Shell saying that we are good to go another 150 years is simply a lie.... "Markets are never wrong; opinions are." -J. L. Livermore
http://www.scientificamerican.com/article.cfm?id=squeezing-more-oil "The author predicts that by 2030, thanks to advanced technologies, wells will be able to extract half of the oil known to be underground, up from the current average of 35 percent. Together with new discoveries, the increased productivity could make oil last at least another century." Similar to what I have been saying. Iâm not a petroleum or reservoir engineer, but I was an engineer working in that industry.