Content PEAK OIL: The End of Progress?  

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, bankers, and investors in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global Peak Oil. — Matt Savinar, Life After the Oil Crash.
It is an inconvenient truth that all proposals or efforts to slow global warming or to move toward sustainability are serious intellectual frauds if they do not advocate reducing populations to sustainable levels at the local, national, and global levels. — Albert A. Bartlett, physicist

Technology exists now to produce in virtually inexhaustible quantities just about all the products made by nature-- foodstuffs, oil, even pearls and diamonds . . .  We have in our hands now . . . the technology to feed, clothe and supply energy to an ever-growing population for the next 7 million years. — Julian Simon, economist

PEAK OIL is the term devised in 1956 by geophysicist M. King Hubbert to characterize his correlation between the phase when maximum U.S. petroleum production coincides with a downward gradient of U.S. oil reserves. ‘Peak' refers to the tip of his bell curve graph of the correlation.


United States Production Peak as Predicted by Hubbert

Hubbert used his correlation to predict correctly that U.S. oil production would peak between 1965 and 1970. In 1970, the U.S. produced 11 million barrels per day. Production had dropped to 5 million barrels a day by 2005, although consumption was about 20 million barrels per day. One consequence of the decline of U.S. production was that imports increased from 300 million barrels in 1955 to 3.1 billion barrels in 2005.

M. King Hubbert. "Exponential Growth as a Transient Phenomenon in Human History" (1976) In Margaret A. Storm, ed., Societal Issues: Scientific Viewpoints. New York: American Institute of Physics


The first U.S. oil well, near Titusville, Pennsylvania, 1863.

The correlation also applies to individual wells: when about half the petroleum is extracted, the extraction rate begins to decline.

In the intervening decades, many geophysicists have applied Hubbert's concept to regional and to global petroleum production and search for reserves. One of these investigators, Colin Campbell ( The Coming Oil Crisis ), examined the data on oil reserves and carried out a comprehensive analysis of the 150 year history of oil production (the first oil well was drilled in 1859) and the hitech search for oil reserves. Campbell estimates usable reserves to be 1800 billion barrels, of which 1600 billion have been discovered. He believes that the oil production peak has been reached. His update of Hubbert's curve looks like this:


M. King Hubbert
(1903 — 1989)


Colin J. Campbell

Current world petroleum usage is about 82 million barrels per day (U.S., 20.7 million; China, 6.5 million; Germany, 2.6 million; Russia, 2.5 million; Brazil, 2.1 million; Australia, 877 hundred thousand per day). If the estimate of reserves is accurate, this level of consumption could be continued for only 35 years (2043), although economic and population growth at their present rates would drive petroleum production to an increase of 1-2 percent per year.

To put this another way: half of planet Earth's petroleum was expended in 150 years; the other half will be exhausted in 35 years.

Why just oil? It is the largest segment of the world's energy raw materials use, being 40 percent, while coal use accounts for 27 percent, gas 21 percent, and hydroelectric/nuclear 12 percent. Although there are 20,000 petroleum fields worldwide, more than half of the known reserves are contained in the four dozen largest fields.


Wind farm in Yorkshire

The U.S. peak in 1970 introduced major changes in the world's economic power game. Within a few years, foreign producers, chiefly OPEC (the Organization of Petroleum Exporting Countries), set the price of oil, and this in turn led to the oil crises of the 1970s, when prices increased four-fold. One response was the development of North Sea oil by Britain and Norway. Oil income reversed the serious decline of the British economy (and benefited the governments of Margaret Thatcher and Tony Blair). However, the peak production rate of 2.9 million barrels a day fell to half that rate in 2007 and the implications for the British economy are serious. Accordingly, PM Malcolm Brown has introduced stringent conditions for the reduction of carbon dioxide emissions in the coming decade: the scenario to combat global warming happens to be consistent with North Sea oil depletion. The oil off-set is the generation of electrical power from wind turbines. The target is to produce 32 gigawatts by 2020, which is sufficient to supply electricity to every home in the country.


Explosion of the Chernobyl Reactor

Lacking a North Sea petroleum source, France solved its energy needs by going nuclear in the early 80s. Nearly 80 percent of its electrical energy needs are met by its 56 nuclear installations. The remainder of Europe also went nuclear; by 2006 there were 197 nuclear plants in EU countries. However, nuclear reactors are unpopular because of their hazard—a fear that became real with the 1986 Chernobyl disaster.

Germany began thinking about an alternative energy source. In 2002, Chancellor Schroeder and the nuclear industry agreed to close all reactors in three decades. Coal powered energy plants continued, but solar energy became the new source. Today, solar manufacture and service sector employs 120,000 and German products are increasingly innovative and efficient. For an overview, click here.

Given the importance of peak oil, and its direct relevance climate change initiatives, why does the lead organization on climate change, IPCC (Intergovernmental Panel on Climate Change), take no notice of it? It was also ignored in a 2005 pronouncement on climate change signed by the scientific academies of ten major nations. The document contained the statement:

As nations and economies develop over the next 25 years, world primary energy demand is estimated to increase by almost 60%. Fossil fuels, which are responsible for the majority of carbon dioxide emissions produced by human activities, provide valuable resources for many nations and are projected to provide 85% of this demand.

This projection implies that by 2035, annual petroleum output would increase to 124 million barrels per day, yet well before then petroleum reserves would be exhausted given the projected rate of increase! How can ten academies of science commit an oversight of this magnitude? The question can be broadened: why was peak oil missing from the Major Economies Meeting on Energy Security and Climate Change that convened in Washington, D.C. in September, 2007? Why indeed do the major petroleum companies say nothing about it? Here the answer is probably that they don't wish to hazard the value of their stock.

Oil Reserves

The world's main oil reserves are tabulated as follows:

Top Oil Reserves

Country

Oil Reserves
(billions of barrels)

Saudi Arabia

261.5

Iraq

112.5

United Arab Emirates

97.8

Kuwait

96.5

Iran

89.7

Venezuela

72.6

Russia

48.6

Mexico

47.8

Libya

29.5

China

24.0

Nigeria

22.5

United States

21.0

This table of reserves does not include ‘tar sands' or ‘oil sands', which is a semi-solid form of oil sometimes called ‘bitumen'. The largest such deposit is the Athabasca Oil Sands in Fort McMurray, Alberta, Canada. Although these deposits have long been known, they did not reach commercial viability until the price of oil reached $35 per barrel. About 1.2 billion barrels are now produced annually, most of it sold in the U.S. The estimated volume of these reserves is 179 billion barrels, which makes Canada third after Saudi Arabia and Venezuela for oil reserves.

Athabasca Oil Sands, Alberta, Canada
Athabasca Oil Sands, Alberta, Canada

However, extracting and refining this source of oil has a negative side. Two tons of tar sands are needed to produce one barrel of oil. The refining process releases three times as much greenhouse gas as producing conventional crude. Upgrading it to refined produces, such as fuel, requires a substantial investment in refineries. At the current production rate, Canada 's Fort McMurray region, with a population of 61,000, will emit more greenhouse gases than Denmark, with a population of 5.4 million.

Royal Dutch Shell reports that in 2006 its Canadian oil sands unit made an after tax profit nearly double its worldwide profit on conventional crude. Shell will build a $27 billion oil sands refinery near Edmonton, which could boost Canada's synthetic oil production to 3.46 million barrels per day by 2015.

Tar sands occur in about 40 countries, the largest deposit being in the Orinoco River region of Venezuela, estimated to contain about 190 billion barrels, which is slightly larger than Canadian tar sands oil. But as in the Canada case, so in Venezuela extraction is a costly process that produces substantial greenhouse emissions. When these reserves are included in the global count, a dramatically new picture emerges. Venezuela slightly exceeds Saudi Arabia in reserves. Canada, which is not on the table, now comes in as the third largest holder of reserves.

Top Oil Reserves

Country

Oil Reserves
(billions of barrels)

Venezuela

270

Saudi Arabia

261.5

Canada

179

Iraq

112

How does the inclusion of tar sands oil alter the peak oil crisis? It extends the availability of oil about 35 years--oil will last until about 2080, given present rates of consumption. But this isn't a reliable forecast because growth, continuing at the present rate, will kick in other change factors, especially population growth. There is also no predicting just how climate change will affect economic activity.

The Politics of Oil: Iraq, Iran, and the Caspian Sea

(Coming soon)

Peak Oil and the Climate Change Initiative

(Coming soon)


Sources on Peak Oil

The Oil Depletion Protocol: A Plan for a Sensible Future

WHEREAS the passage of history has recorded an increasing pace of change, such that the demand for energy has grown rapidly in parallel with the world population over the past two hundred years since the Industrial Revolution;

WHEREAS the energy supply required by the population has come mainly from coal and petroleum, such resources having been formed but rarely in the geological past and being inevitably subject to depletion;

WHEREAS oil provides ninety percent of transport fuel, is essential to trade, and plays a critical role in the agriculture needed to feed the expanding population;

to continue ...

Queensland Government: Queensland's Vulnerability to Rising Oil Prices (McNamara Report, April 2007)

The report concludes that the overwhelming evidence is that world oil production will peak within the next 10 years, and recommends that a prudent risk mitigation approach requires a mix of initiatives such as reduction in consumption of liquid fossil fuels, encouraging the development and use of alternative fuels, technologies and strategies, and preparation for demographic and regional changes, as Queenslanders change travel, work and living habits in response to rising fuel prices.

The Australian Scene

Albert A. Bartlett, Arithmetic, Population and Energy

This is the classic lecture that Bartlett, a retired physicist at the University of Colorado, has presented on 1500 occasions in many places, including the floor of the U.S. House of Representatives. He explains the practical meaning of numbers, particularly exponential functions, to non-mathematicians. Why exponential functions? They are the core of talk about growth rates of whatever kind (commercial, government, population, financial). Growth, in turn, is the core socio-economic vision of progress. If this be so, we would expect economists, corporate financial officers, finance ministers, demographers, &c to place this concept in the foreground of their work. Yet this they do not do. On the contrary, as Bartlett shows in many illustrations, the mathematically simple implications are evaded. Even economists of high caliber, such as Kenneth E. Boulding, have avoided it. Nevertheless, the implications are known in the oil industry, as we show here.

(url to be supplied)

Association for the Study of Peak Oil and Gas

Association for the Study of Peak Oil and GasThis is the leading organizational peak oil site, founded by Colin Campbell. The site publishes a newsletter, continuously monitors petroleum discoveries and production, and links to associated chapters in some 15 countries, including Australia, New Zealand, and China.

The Oil Drum: Discussions about Energy and Our Future

Reports and blogs on the dramas and melodramas of petroleum consumption, such as the strike in Italy about high fuel prices and a review-discussion of Peter M. Jackson's critique of peak oil (Why the “Peak Oil” Theory Falls Down).

Life After the Oil Crash

The creator of this site, Matt Savinar, is a California lawyer who discovered his talent for investigative journalism. He provides an outstanding view of the peak oil landscape and he has attracted an audience, including government and industry leaders.

Cambridge Energy Research Associates, Inc. (CERA)

CERA markets research and advice to energy companies, investors, technology providers, and governments. It claims to ‘deliver critical knowledge and independent analysis on energy markets, geopolitics, industry trends, and strategy. Our services help decision makers anticipate the energy future and formulate timely, successful plans in the face of rapid changes and uncertainty'. Chairman Daniel Yergin is a leading critic of peak oil — it will not peak before 2030.

Energy Bulletin

A clearinghouse for information regarding the peak in global energy supply. Publishes news, research and analysis concerning energy production statistics, models, projections and analysis; articles which provide insight into the implications of peak oil across broad areas including geopolitics, climate change, ecology, population, finance, urban design, &c; information on preparedness, such as renewable energy and alternative financial systems.

British Wind Energy Association

Real Climate: Climate Science from Climate Scientists

Climate scientists have created this site for the general public to explain climate change facts and theory and to make responses to developing stories. It also provides a primer about climate science.

Google News | Google Scholar


Books

 

 

  • Colin. J. Campbell, The Coming Oil Crisis
  • Brian Czech,  Shoveling Fuel for a Runaway Train
  • Peter Peterson, Running on Empty: How the Democratic and Republican Parties
    Are Bankrupting Our Future and What Americans Can Do About It
  • Kenneth F. Deffeyes, Hubbert's Peak: The Impending World Oil Shortage
  • Paul Roberts, The End of Oil: On the Edge of a Perilous New World
  • Jean-Francois Rischard, High Noon: 20 Global Problems and 20 Years to Solve Them
  • Julian Darley, High Noon for Natural Gas: The New Energy Crisis
  • Jeremy Leggett, The Empty Tank: Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe
  • David Goodstein, Out of Gas: The End of the Age of Oil
  • Tatsu Kambara and Christopher Howe, China and the Global Energy Crisis
  • Michael Klare, Resource Wars: The New Landscape of Global Conflict
  • Duncan Clarke, The Battle for the Barrels: Peak Oil Myths and World Oil Futures
  • Richard Heinberg, The Party's Over: Oil, War, and the Fate of Industrial Societies
  • Matthew R. Simmons, Twilight in the Desert: The Coming Oil Shock and the World Economy
  • Ronald R. Cooke, Oil, Jihad and Destiny: Will Declining Oil Production Plunge Our Planet into a Depression?
 
 
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