News When will the world reach peak fossil fuel production?

[apeiron]

The latest on what the oil companies are saying...

http://www-static.shell.com/static/aboutshell/downloads/aboutshell/signals_signposts.pdf

Shell says we need to be worried as we are about to enter the zone of extraordinary misery/opportunity.

Shell does not dwell on the reasons why the oil won't be there, but focuses on the geopolitical stress to be expected from developing nations expecting their fair share of the global economic cake.

Underlying global demand for energy by 2050 could triple from its 2000 level if
emerging economies follow historical patterns of development.
In broad-brush terms, natural innovation and competition could spur improvements
in energy efficiency to moderate underlying demand by about 20% over this
time. Ordinary rates of supply growth -- taking into account technological,
geological, competitive, financial and political realities -- could naturally boost
energy production by about 50%. But this still leaves a gap between businessas-
usual supply and business-as-usual demand of around 400 EJ/a – the size of
the whole industry in 2000.
This gap – this Zone of Uncertainty – will have to be bridged by some combination of
extraordinary demand moderation and extraordinary production acceleration.

So even with optimistic efficiency measures and optimistic supply growth, there is still a huge gap to be filled (or expect a very unhappy world with a demographics that pits the young, angry and populous against the old, weary and nervous).

 

[nismaratwork]

How very enlightened of them...

 

[Greg Bernhardt]

"The world can be powered by alternative energy, using today's technology, in 20-40 years, says Stanford researcher Mark Z. Jacobson"

http://news.stanford.edu/news/2011/january/jacobson-world-energy-012611.html

 

[nismaratwork]

"The world can be powered by alternative energy, using today's technology, in 20-40 years, says Stanford researcher Mark Z. Jacobson"

http://news.stanford.edu/news/2011/january/jacobson-world-energy-012611.html

But converting will be a massive undertaking on the scale of the moon landings. What is needed most is the societal and political will to make it happen.

There is no political will, no corporate motivation as a stake in anyone nation is no longer necessary in the long-run. As a society, I can't even imagine it until it's far too late... can you?

I think that's why we need a bridge: Nuclear, and even then I have my doubts.

 

[mheslep]

"The world can be powered by alternative energy, using today's technology, in 20-40 years, says Stanford researcher Mark Z. Jacobson"

http://news.stanford.edu/news/2011/january/jacobson-world-energy-012611.html

I don't see a cost total this time. When Jacobson came out with this proposal in 2009, his cost was $100 trillion worldwide over twenty years. For even just the US portion of such a plan, the cost is far more than the Apollo program with which he wants to compare.
2009 Version:
http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030&print=true
http://news.stanford.edu/news/2009/october19/jacobson-energy-study-102009.html
https://www.physicsforums.com/showpost.php?p=2543785&postcount=84

I believe Jacobson's view is coming inevitably, but in a different timescale than he imagines, say 2070, not his 2030, and for a lot less money (constant dollars).

 

[mheslep]

Regardless of which politicians say what, the economic logic of oil pricing (and so subsidies among other market manipulations like ME airbases and support for despotic rulers) is clear enough.

Richard Heinberg is writing a book with a nice explanation.
http://postcarbon.us1.list-manage1.com/track/click?u=311db31977054c5ef58219392&id=4e04de2333&e=00411b992d

Here's another Heinberg appearance: a 911 Truther petition
We Want Real Answers About 9/11
http://www.911truth.org/article.php?story=20041026093059633
See #45.

 

[apeiron]

Here's another Heinberg appearance: a 911 Truther petition
We Want Real Answers About 9/11
http://www.911truth.org/article.php?story=20041026093059633
See #45.

Attacking the man rather than the argument again, hey?

 

[nismaratwork]

Attacking the man rather than the argument again, hey?

When there's nothing left... ad hominem. Another variation would be, "those who can't, ad hominem."

 

[nismaratwork]

I don't see a cost total this time. When Jacobson came out with this proposal in 2009, his cost was $100 trillion worldwide over twenty years. For even just the US portion of such a plan, the cost is far more than the Apollo program with which he wants to compare.
2009 Version:
http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030&print=true
http://news.stanford.edu/news/2009/october19/jacobson-energy-study-102009.html
https://www.physicsforums.com/showpost.php?p=2543785&postcount=84

I believe Jacobson's view is coming inevitably, but in a different timescale than he imagines, say 2070, not his 2030, and for a lot less money (constant dollars).

Basically, you believe anything that doesn't have this crisis occurring during your lifetime. That is indeed one very profound way to resolve cognitive dissonance. On the other hand, this strikes me as a fairly radical bet for conservatives, don't you?

True, Jacobson is dreaming, but if you added nuclear to the mix and spread out the impact and transiition... oh right, you still haven't adressed that idea. I'd add, if everyone judged the content of one anohter's writing by the views we held, how many people here would listen to you at all? I don't see the point of inserting a standard you wouldn't normally apply, which is obvious given a detailed perusal of your posting history.

So... nuclear taking over for Coal, while we focus on portable fuel sources... how much would that cut the 100 trillion USD estimate? Oh, and what would be a reasonable price for the entire world to make that transition in 20 years?

 

[apeiron]

So... nuclear taking over for Coal, while we focus on portable fuel sources... how much would that cut the 100 trillion USD estimate? Oh, and what would be a reasonable price for the entire world to make that transition in 20 years?

On the subject of peak coal, a reminder that that wacky conspiracy theorist Heinberg has been writing articles for that notorious crank rag Nature . His rantings would never pass peer review in any serious journal, etc, etc.

http://www.energybulletin.net/stories/2010-11-18/fridley-heinberg-discuss-peak-coal-nature-journal

 

[Proton Soup]

Heh... probably a very long time, but then it might be a poor idea to breach a magma chamber by accident, and WOW that equipment would need to be tough. Still, I get your point, and there are other ways to exploit the geomagnetic field... just not cost effective.

If you added storage to wind, solar, and even more exotic means... efficient and reusable capacitor, then suddenly it's not insane to do this. I don't mean one house with a battery, I mean long term serious storage, and a new infrastructure to transmit it.

hey, guess what...

http://www.physorg.com/news/2011-02-magma-power-geothermal-energy.html

 

[nismaratwork]

hey, guess what...

http://www.physorg.com/news/2011-02-magma-power-geothermal-energy.html

Now that's more than impressive, but what leaps to mind is: you have to do all of this in a volcanically active region!

 

[apeiron]

How bad is it going to get with Middle East oil suppliers like Libya and Iran? First the risk of destruction and disruption of supply. Then later nationalisation and rationing if there is more democratic self-control.

Egypt, Bahrain are important too for their pipelines and shipping lanes. Moving oil is a strategic good just about as much as producing it.

 

[nismaratwork]

How bad is it going to get with Middle East oil suppliers like Libya and Iran? First the risk of destruction and disruption of supply. Then later nationalisation and rationing if there is more democratic self-control.

Egypt, Bahrain are important too for their pipelines and shipping lanes. Moving oil is a strategic good just about as much as producing it.

We have Israel... a base in Crete, the fifth fleet... if we have to have WWIII, this might be a good time to have it.

 

[apeiron]

We have Israel... a base in Crete, the fifth fleet... if we have to have WWIII, this might be a good time to have it.

How is that going to work? Wars create disruption of oil production, and disruption is precisely what the economy cannot afford. Especially if Saudi cannot crank up production to make up shortfalls, as seems to be the case.

Consider the history of these kinds of events.

Crises in Iran and Iraq

In 1979 and 1980, events in Iran and Iraq led to another round of crude oil price increases. The Iranian revolution resulted in the loss of 2 to 2.5 million barrels per day of oil production between November 1978 and June 1979. At one point production almost halted.

The Iranian revolution was the proximate cause of what would become the highest price in post-WWII history. However, its impact on prices would have been limited and of relatively short duration had it not been for subsequent events. Shortly after the revolution, production was up to 4 million barrels per day.

In September 1980, Iran already weakened by the revolution was invaded by Iraq. By November, the combined production of both countries was only a million barrels per day and 6.5 million barrels per day less than a year before. Consequently worldwide crude oil production was 10 percent lower than in 1979.

The combination of the Iranian revolution and the Iraq-Iran War cause crude oil prices to more than double increasing from $14 in 1978 to $35 per barrel in 1981.

Three decades later Iran's production is only two-thirds of the level reached under the government of Reza Pahlavi, the former Shah of Iran.

Iraq's production remains a million barrels below its peak before the Iraq-Iran War.

http://www.wtrg.com/prices.htm

 

[nismaratwork]

How is that going to work? Wars create disruption of oil production, and disruption is precisely what the economy cannot afford. Especially if Saudi cannot crank up production to make up shortfalls, as seems to be the case.

Consider the history of these kinds of events.

Key point, "If we have to have...", and the justification being that as chaos and disruption is already spreading...

I admit, there was also an element of death's head humor. With Libya becoming a slaughterhouse and the rest joining in... let's face it, it's raining **** and is unlikely to stop.

Then... Iran... do you believe that they'll be allowed to build a nuclear weapon? The latest worm did some damage, but the best I've heard is a year. Maybe this is the kind of change we need, which may not be the change we want.

My point: If the region has to explode, better conventional than nuclear, and better now than in 15 years when China is feeling more adventurous.

 

[apeiron]

My point: If the region has to explode, better conventional than nuclear, and better now than in 15 years when China is feeling more adventurous.

I was thinking that the clever approach from the US POV was to stage these things. If it takes about a decade to invade, regime change, get the oil pumping at maximum rate, then you want to take an Iran or Iraq off-line in a managed fashion. In timely fashion so it keeps the production curves smooth as far into the future as possible.

And you don't really care who runs these countries - hard men or democracies - so long as those in charge are incentivised to stay focused on maximum oil production.

Worrying about a nuclear Iran seems a bogeyman issue. What kind of arsenal could they end up with - compared to a thermonuclear Israel with multiple delivery platforms for instance?

But an Iran without the infrastructure to efficiently export all its oil in the not too distant future? That really does not bear thinking about in geopolitical circles. Whether you are US, China, or whoever is in charge by 2020.

 

[nismaratwork]

I was thinking that the clever approach from the US POV was to stage these things. If it takes about a decade to invade, regime change, get the oil pumping at maximum rate, then you want to take an Iran or Iraq off-line in a managed fashion. In timely fashion so it keeps the production curves smooth as far into the future as possible.

And you don't really care who runs these countries - hard men or democracies - so long as those in charge are incentivised to stay focused on maximum oil production.

Worrying about a nuclear Iran seems a bogeyman issue. What kind of arsenal could they end up with - compared to a thermonuclear Israel with multiple delivery platforms for instance?

But an Iran without the infrastructure to efficiently export all its oil in the not too distant future? That really does not bear thinking about in geopolitical circles. Whether you are US, China, or whoever is in charge by 2020.

True, but here a disaster is, and we have to consider how best to capitalize on the situation. I would say that the major issue of a nuclear Iran is two-fold:
1.) Israel is unlikely to allow that, and Iran is too unstable historically.
2.) A nuclear Iran, like NK, suddenly can turn to shoring up its power, free in the knowledge that nobody wants to start a war with a nuclear power.

To be blunt, what's coming, is coming, and we can't stop it. We can however, try to sieze key assets and hope for a cold-war a la a divided Germany.

edit: Besides, you want impetus to develop other fuels and technologies? Widespread poverty, chaos and death should be a strong impetus. Personally, I think we're getting a preview of things to come, something Kissinger knew could only be delayed.

 

[apeiron]

Something new to worry about - thermodynamic limits to the wind that can be sucked out of the atmosphere.

http://www.newscientist.com/article...th's-energy-balance.html?full=true&print=true

The numbers still sound dubious and better modelling will follow. But it is interesting to think of the feedback effects that could result from draining energy from normal air or tidal flows. Every action has its consequences.

 

[Proton Soup]

Something new to worry about - thermodynamic limits to the wind that can be sucked out of the atmosphere.

http://www.newscientist.com/article...th's-energy-balance.html?full=true&print=true

The numbers still sound dubious and better modelling will follow. But it is interesting to think of the feedback effects that could result from draining energy from normal air or tidal flows. Every action has its consequences.

New Scientist has always been horrible. sure, removing energy from the wind and moving it somewhere else will change the ecosystem. so does removing energy from rivers. then they want to make the point that the sun is the ideal source (in the linked article from that page). but the variation in solar energy creates wind, too.

http://www.newscientist.com/article...-our-only-truly-renewable-energy-source.html"

oh noes! moving solar energy to a different location will change weather patterns, too!

 

[apeiron]

New Scientist has always been horrible.

Hey, I used to write for them! (But I did stop largely because they really did become tabloid sensationalist.)

sure, removing energy from the wind and moving it somewhere else will change the ecosystem. so does removing energy from rivers.

Yes, too true. The hydro dam revolution is now running into problems 30 or 40 years down the road because dams silt up and become unusable. They also do so much damage to ecology of river mouths that there are big costs to fisheries and biodiversity that have to be factored into the financial equation.

Again, every action has consequences and we haven't been putting enough effort into the science of modelling that.

We can make the machines, but are less good at modelling the world in which they then exist.

 

[mheslep]

Anyone see the fine 2007 Daniel Day-Lewis film http://www.imdb.com/title/tt0469494/" , comes an essay:

http://online.wsj.com/article/SB10001424053111904060604576572552998674340.html"

...This is actually the fifth time in modern history that we've seen widespread fear that the world was running out of oil. The first was in the 1880s, when production was concentrated in Pennsylvania and it was said that no oil would be found west of the Mississippi. Then oil was found in Texas and Oklahoma. Similar fears emerged after the two world wars. And in the 1970s, it was said that the world was going to fall off the "oil mountain." But since 1978, world oil output has increased by 30%...

Yergin has a sequel out on energy titled http://online.wsj.com/article/SB100...6569020549199248.html?KEYWORDS=DANIEL+YERGIN", so expect more public visibility soon from him such as this essay.

 

[CAC1001]

I would disagree with him in his claim about technologies like wind power broadening our energy base. Otherwise, I hope he is correct. In the comments section, there are some people really tearing him up though.

 

[mheslep]

I would disagree with him in his claim about technologies like wind power broadening our energy base. Otherwise, I hope he is correct. In the comments section, there are some people really tearing him up though.

Which comments? Hayward's review of Quest, or Yergin's There Will Be Oil?

 

[CAC1001]

Which comments? Hayward's review of Quest, or Yergin's There Will Be Oil?

Yergin's There Will Be Oil.

 

[DoggerDan]

http://online.wsj.com/article/SB10001424053111904060604576572552998674340.html"

The definitive difference, of course, is that the previous scares were based on not knowing the other reserves existed (a thing of the 1880s past) or not having the technology to get to it. Modern technology can get to only so much, and that's really not much at all. The rest is just way out of reach.

Unless we invent transporter technology, but by then our need of oil will also be a thing of the past.

No. There will not "always be oil."

 

[CAC1001]

The definitive difference, of course, is that the previous scares were based on not knowing the other reserves existed (a thing of the 1880s past) or not having the technology to get to it. Modern technology can get to only so much, and that's really not much at all. The rest is just way out of reach.

Unless we invent transporter technology, but by then our need of oil will also be a thing of the past.

No. There will not "always be oil."

Well it depends on economics and technological innovation. Everyone knows that oil is in a finite supply, but if technological advancements occur that reduce the amount of oil required, then that can lengthen out the existing supply.

 

[mheslep]

The definitive difference, of course, is that the previous scares were based on not knowing the other reserves existed (a thing of the 1880s past) or not having the technology to get to it.

That is the similarity, not the difference. There always have been reserves, somewhere, that are unknown; this is also the case now.

No. There will not "always be oil."

Of course there will be oil in the ground, for millennia, somewhere. It is likely that oil won't always be useful compared to other sources of energy, or the price of obtaining oil will be to high, or the cost to the environment of obtaining oil and using it will be to high, etc.

 

[DoggerDan]

That is the similarity, not the difference. There always have been reserves, somewhere, that are unknown; this is also the case now.

No, that's the difference. In 1880, Pennsylvanians thought they'd hit a localized gold mine of oil, but were largely unaware of reserves elsewhere. The difference is that today, we know where the reserves are located.

I don't think you're using the term "reserves" correctly: "The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is only this producible fraction that is considered to be reserves." http://en.wikipedia.org/wiki/Oil_reserves

As technology improves, we will have greater access to what's currently in the "oil in place" folder. When that happens, that oil will be moved from that folder to the "oil reserves" folder.

The problem remains that we know about far more oil than we're able to tap given both current and foreseen technology. Hence my comment about developing a Star Trek like transporter to get it from there to here.

Of course there will be oil in the ground, for millennia, somewhere. It is likely that oil won't always be useful compared to other sources of energy, or the price of obtaining oil will be to high, or the cost to the environment of obtaining oil and using it will be to high, etc.

Right now it's both a cost and a technology problem. In the 1950s, we simply could NOT get to the Moon. That required technological refinements which cost buku bucks. Even today, however, cost remains a massive barrier, as it will with most of the oil in place.

 

[mheslep]

No, that's the difference. In 1880, Pennsylvanians thought they'd hit a localized gold mine of oil, but were largely unaware of reserves elsewhere. The difference is that today, we know where the reserves are located.

...

Until 2007, nobody had any idea there might be 1.8B bbls off the coast of Guiana, as http://www.bloomberg.com/news/2011-09-09/tullow-oil-makes-oil-discovery-offshore-french-guiana.html"

Geologists believe that when the Atlantic Ocean started opening between South America and Africa, organic sediment resulted in hydrocarbon deposits known as the Late Cretaceous turbidite sands. They haven’t been drilled to date because they are less visible than other types of deposits and drilling at such depths has only recently become viable.

Until a couple years ago, nobody expected large amounts of oil off Brazil. Until last year, nobody thought there was any oil in Israeli med. waters. Until several years ago, nobody though natural gas locked in shale was economically retrievable. On and on.

 

[DoggerDan]

The message you have entered is too short. Please lengthen your message to at least 4 characters.

Really? Look below:

Until 2007, nobody had any idea there might be 1.8B bbls off the coast of Guiana, as http://www.bloomberg.com/news/2011-09-09/tullow-oil-makes-oil-discovery-offshore-french-guiana.html"

Putting that into perspective, there are 1,324x10^9 bbl in all reserves. Compare that to the "find" of Guiana. Be careful to ensure you match the decimal places, and you'll find Guiana is but a drop in a billion-drop bucket.

Which brings back my point: Why is it the media is so easily duped when it comes to basic scientific concepts?

Despicable! And grossely wastefuly of US taxpayer resources.

...
...
omically retrievable. On and on.

 

[Chi Meson]

"1.8 billion" sounds like a lot until you realize that the US burns 20 million of them a day.

So Guyana gives our oil dependency another 3 months of life.

 

[mheslep]

Another example showing knowledge of reserves then, knowledge of reserves now:
OPEC 1980 (410B bbls), OPEC 2009 (1137B bbls)
http://en.wikipedia.org/wiki/File:OPEC_declared_reserves_1980-now_BP.svg
Nobody today knows where the all the future oil is either, but the trend for the moment is up.

 

[edpell]

The amount of oil that can be extracted depends on how much you are willing to pay for a barrel. At $20 per barrel the remaining amount is small. At $300 per barrel there is a lot of oil still remaining. How many buyer are there are $300 per barrel? ($10 per gallon for gas or home heating) The biggest know reserve is the Orrinoco tar sands in Venezuela at 600 billion barrels, 20 years world supply. Second Canadian tar sands at 300 billion barrels, 10 years world supply.

 

[DoggerDan]

Another example showing knowledge of reserves then, knowledge of reserves now:
OPEC 1980 (410B bbls), OPEC 2009 (1137B bbls)
http://en.wikipedia.org/wiki/File:OPEC_declared_reserves_1980-now_BP.svg
Nobody today knows where the all the future oil is either, but the trend for the moment is up.

You are again confusing the difference between "reserves" and "oil in place." Reserves refers to only the portion of the oil in place which we have the current knowledge technology to extract. Thus, you could have 1T bbls of oil in place, half of which is recoverable i.e. reserves. If you invent a way to get out another 200B bbls, your reserves increase to 700B bbls, all without finding a single additional drop of oil.

"The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is only this producible fraction that is considered to be reserves." From: http://en.wikipedia.org/wiki/Oil_reserves

The amount of oil that can be extracted depends on how much you are willing to pay for a barrel.

It depends on two things, actually. The first is technology. If you don't have the technology to get to it, you can pay all the money in the world and you will still be unable to get to it.

If you can get to it, then recovery price comes into play.

 

[mheslep]

You are again confusing the difference between "reserves" and "oil in place." Reserves refers to only the portion of the oil in place which we have the current knowledge technology to extract. Thus, you could have 1T bbls of oil in place, half of which is recoverable i.e. reserves. If you invent a way to get out another 200B bbls, your reserves increase to 700B bbls, all without finding a single additional drop of oil...

The http://en.wikipedia.org/wiki/File:OPEC_declared_reserves_1980-now_BP.svg" is clear; it refers only to reserves: OPEC 1980, 410B bbls; OPEC 2009, 1137B bbls, almost tripling in that time. That much is empirical fact. No doubt part of that increase is due to the inevitable improvements in removal technology, and part is due simply to additional discoveries.

 

[DoggerDan]

The http://en.wikipedia.org/wiki/File:OPEC_declared_reserves_1980-now_BP.svg" is clear; it refers only to reserves: OPEC 1980, 410B bbls; OPEC 2009, 1137B bbls, almost tripling in that time. That much is empirical fact. No doubt part of that increase is due to the inevitable improvements in removal technology, and part is due simply to additional discoveries.

Now you're steaming on a few more boilers. :) <--- am I dating myself? All the jumps are due to locating new reserves. The very slight upwards slope of the lines is due to incremental improvements in technology. The problem is, most new finds are beyond the ability of our technology to extract them, so they add to oil in place, but not reserves. Exceptions in your graph are noted.

To be honest, I don't think removal technology will increase all that much. We had a devil of a time trying to cap the BP leak at Macondo. The fact we can establish a well-head in a mile of water still amazes me, given all the issues involved in just a couple hundred feet of water.

My point is that technology is much more of a factor than cost, but there haven't been quantum improvements in technology in decades. Only incremental ones. Thus, the only reason we haven't pumped more has been cost, as no company will pump the costly oil if they can pump the easy oil.

Without radical technological advances, we can't get to it. Injection of water, natural gas, steam, surfactants, and CO2, the use of submersible pumps, which cover primary (5-15%), secondary (35-45%), and tertiary (40-65%) recovery methods aren't radical, and they've been used for decades. Until you mine the oil-laden rock itself, the rest of the oil is unrecoverable. There it sits. This is why I made that comment about Star Trek transporter technology, because we sure as heck can't start digging mines under a mile of ocean.

Oh, well, if we had Star Trek force fields we could...

No, I'm afraid even the most radical advances in foreseeable technology over the next 100 years will only allow us to get a few more percent out of the mix.

By the way - you like graphs? Here are some interesting ones: http://www.cnn.com/SPECIALS/2010/gulf.coast.oil.spill/interactive/numbers.interactive/index.html

 

[mheslep]

...
To be honest, I don't think removal technology will increase all that much...

Well put your money on the table then. People keep betting against the trend and keep losing.
http://www.nytimes.com/2010/12/28/s...l=1&adxnnlx=1317073238-sZfLE7biv6f3wU4wF1/PIQ

The fact we can establish a well-head in a mile of water still amazes me, given all the issues involved in just a couple hundred feet of water...

That's a common line but it seems myopic to me. Day after day 300 ton aircraft constructed w/ literally millions of parts travel seven miles up in -50C temperatures at 600 miles per hour. Dams hold back cubic miles of water. Professional soccer players have heart transplants and keep playing. Nuclear aircraft carriers displacing 100,000 tons travel the seas at up to thirty knots for twenty years without refueling. This all is now taken for granted, yet come an accident and suddenly drilling a hole in the ocean floor becomes the impossibly risky task without comparison.

 

[DoggerDan]

Me:

The fact we can establish a well-head in a mile of water still amazes me, given all the issues involved in just a couple hundred feet of water...

That's a common line but it seems myopic to me. Day after day 300 ton aircraft constructed w/ literally millions of parts travel seven miles up in -50C temperatures at 600 miles per hour. Dams hold back cubic miles of water. Professional soccer players have heart transplants and keep playing. Nuclear aircraft carriers displacing 100,000 tons travel the seas at up to thirty knots for twenty years without refueling. This all is now taken for granted, yet come an accident and suddenly drilling a hole in the ocean floor becomes the impossibly risky task without comparison.

Myopic?

When aircraft malfunction, they can usually make an emergency landing. If they can't, fatalities rarely involve people who weren't on the passenger list.

When dams burst, there's often warning signs and subsequent evacuations in advance. If not, they might wipe out a relatively (compared to the Gulf of Mexico) valley.

We've yet to loose a nuclear carrier under any circumstances.

When a mile-deep oil well in the gulf blows out, it's difficult to stop. It killed half the life in the Gulf of Mexico.

I don't think my point of view is in any way "myopic."

 

[mheslep]

National Petroleum Institute just released a report stating that North American oil production could be as high as 20 million barrels per day in 2035, in other words 100% of US current consumption, requiring no OPEC imports. This would be accomplished mainly by using hydraulic fracturing techniques to recover oil and expansion of production in the Canadian Oil sands.

http://downloadcenter.connectlive.com/events/npc091511/Resource_Supply-091511.pdf

 

[DrClapeyron]

NGL and lease condensates are not crude oil. Crude oil reserves in the US have dropped from 39 billion barrels in 1970 to 25 billion barrels in 2009. Consequently crude oil production has been dropping just the same. The US produces something like 5.3 million barrels of crude oil per day. The rest of the "oil" or "petroleum liquids" production is from NGL (including refined gases) and lease condensates.

 

[mheslep]

NGL and lease condensates are not crude oil...

Yes, what is the point? Industrial society does not require crude oil, it requires gasoline, Jet-A, diesel, etc that can be made from all sources shown in the figure.

 

[DrClapeyron]

I can say with some certainty that the most recent large reserve increases are due to higher prices. The Venezuelan and Canadian oil sands have been known for decades, unproduced due to cheap oil - until recently.

Reserves are based on price, market and technology constraints. These reserves will change (grow) as price increases, but the OIP need not increase the same and in fact will decrease if no new OIP is found.

Public interest has changed from peak crude oil to peak fossil fuels. This clearly shows that both of these reserves are depleting and peaking at rates which affect everyone. It is no longer the price today people are concerned with but the price 10-20 years from now.

NGL and lease condensates are natural gas production byproducts. Texas' (my home state) last great oil play is in fact an unconventional shale gas play which produces lease condensates (oil) around Gonzales. The Eagle Ford resource is something like 22 trillion cubic feet. By comparison the Marcellus resource is something like 440 trillion cubic feet. Recently the USGS published a study stating they believe the Marcellus resource to be 80% less than 440 trillion cubic feet.

Considerably bigger than the Eagle Ford the Marcellus however does not have an oil window (condensates) like the Eagle Ford, and likely won't produce the same volume of NGL and lease condensates. Can't say much about the Bakken Shale other than it is much like the Eagle Ford because of the wet gas that is found in the formation. These gas plays, I am certain, are produced to provide natural gas to both utility and industrial natural gas power plants.

 

[mheslep]

I can say with some certainty that the most recent large reserve increases are due to higher prices. The Venezuelan and Canadian oil sands have been known for decades, unproduced due to cheap oil - until recently.

...

A similar opinion is held by Harold Hamm, Oklahoma-based founder and CEO of Continental Resources and pioneer of horizontal drilling, in today's WSJ Weekend Interview:

One reason for the renaissance has been OPEC's erosion of market power. "For nearly 50 years in this country nobody looked for oil here and drilling was in steady decline. Every time the domestic industry picked itself up, the Saudis would open the taps and drown us with cheap oil," he recalls. "They had unlimited production capacity, and company after company would go bust."Today OPEC's market share is falling and no longer dictates the world price. This is huge, Mr. Hamm says. "Finally we have an opportunity to go out and explore for oil and drill without fear of price collapse."

http://online.wsj.com/article/SB100...6602524023932438.html?mod=WSJ_Opinion_LEADTop

 

[DrClapeyron]

A similar opinion is held by Harold Hamm, Oklahoma-based founder and CEO of Continental Resources and pioneer of horizontal drilling, in today's WSJ Weekend Interview:

It's not just the OPEC countries losing their edge:

Russian Oil Boom’s End Means Lower Tax That Risks Unrest: Energy

Russia’s 12-year oil boom is nearing its peak, forcing the next president to decide whether to cut taxes and revive production or use the windfall from $100 oil to boost public spending and quell mounting unrest.

As Vladimir Putin campaigns for a second stint in the Kremlin, the nation’s existing fields are losing pressure and oil companies OAO Rosneft, OAO Lukoil and TNK-BP (BP/) say production taxes give little incentive to invest. Since Putin first became president in 2000, crude output has grown 57 percent to 10 million barrels a day, surpassing Saudi Arabia and flooding the state treasury.

http://webfarm.bloomberg.com/news/2012-02-20/russian-oil-boom-s-end-means-lower-tax-that-risks-unrest-energy.html

Is peak oil now cause for social demonstrations in Russia? I heard rumors that Egypt's net oil exports had been declining fast in the couple years prior to Mumbarak's removal. Decreasing revenues hurting the state coffers?

And how about this publishing by Scientific American (Nature journal reference):

Has Petroleum Production Peaked, Ending the Era of Easy Oil?

A new analysis concludes that easily extracted oil peaked in 2005, suggesting that dirtier fossil fuels will be burned and energy prices will rise

Despite major oil finds off Brazil's coast, new fields in North Dakota and ongoing increases in the conversion of tar sands to oil in Canada, fresh supplies of petroleum are only just enough to offset the production decline from older fields. At best, the world is now living off an oil plateau—roughly 75 million barrels of oil produced each and every day—since at least 2005, according to a new comment published in Nature on January 26. (Scientific American is part of Nature Publishing Group.) That is a year earlier than estimated by the International Energy Agency—an energy cartel for oil consuming nations.

http://www.scientificamerican.com/article.cfm?id=has-peak-oil-already-happened

Maybe some hipocrasy on Bloomberg's part, publishing this after the Nature and Scientific American publications, and published before making claims about Russia's peaking oil production:

Peak Oil Scare Fades as Shale, Deepwater Wells Gush Crude

When Daniel Lacalle, in his early 20s, took a job with Spanish oil company Repsol YPF SA in 1991, friends chided him for entering a field with no future. "They all said, 'Why do you want to do that? Don't you know only 20 years of oil is left in the whole world?'" he recalls.

Two decades and four energy crises later, the U.S. Geological Survey estimates that more than 2 trillion barrels of untouched crude is still locked in the ground, enough to last more than 70 years at current rates of consumption. Technological advances enable companies to image, drill and shatter subterranean rocks with precision never dreamed of in decades past. Trillions of barrels of petroleum previously thought unreachable or nonexistent have been identified, mapped and in many cases bought and sold during the past half decade, from the boggy wastes of northern Alberta, to the arid mountain valleys of Patagonia, to Africa's Rift Valley.

"Betting against human ingenuity has been a mistake," says Lacalle, who today helps oversee $1.3 billion as a portfolio manager at Ecofin Ltd. in London. "The resource base is absolutely enormous, so much so that we will not run out of oil in my lifetime, your lifetime, our children's lifetimes or our grandchildren's lifetimes."

http://www.bloomberg.com/news/2012-02-06/peak-oil-scare-fades-as-shale-deepwater-wells-gush-crude.html

 

[CaptFirePanda]

Predicting when Peak Oil will occur is the greatest downfall of the the theory, imo. There are so many factors that need to be considered and forecasted that arriving at any sort of confident prediction requires a fair amount of naiveté.

The concept itself is quite sound, however, even if we assume vast amounts of untapped resources out there somewhere.

We need to consider the following factors:

1) What has been discovered and exploited to date represents the easiest to find and most accessible resources. Sometimes it was bubbling right up to surface, or leaking from the banks of rivers. Ultimately, it was right there in our own backyards and all we needed to do was sink a well down to begin production;

2) Unconventional sources are becoming a greater part of overall production as we move forward. This is because, our original methods used to recover the hydrocarbons didn't get it all (some fields can have very low recovery factors less than or equal to 5%) or because we've developed technologies that allow us find more remote or more 'nebulous' resources. The rather large numbers associated with some of these resources (especially shale gas) are misleading in that they reference what is in-place and not what is recoverable. There are about 50 kgs of gold in every square kilometre of seawater, but we aren't extracting gold from it any time soon;

3) These new methods (like enhanced oil recovery, hydraulic fracturing, SAGD, etc...) all require advances in techology which, in turn, required increased R&D on the parts of oil and gas companies. Increased R&D is a result of greater cash flows and broadened exploration brought on by price increases;

4) There new methods fundamentally require more energy to undertake. If they didn't, we would have already accessed them. If new methods aren't required and we are producing conventional sources, they are generally more remote and require greater energy to travel to and develop infrastructure for;

5) This greater amount of energy required to produce resources must be coupled by incremental increases in oil/gas prices, otherwise it would not be economic for companies to go after them. Growing demand also puts stresses on production and the only way to produce more, is to drill/discover more. This also requires incremental increases in cost.

6) At some point, the energy required to access and produce new resources will begin to conflict with the value of the energy extracted. I'm sure we could send out deeper and deeper oil rigs, or (perhaps) drill through the Antarctic ice sheet to access possible resources there, or microfracture the entire Bakken/Duvernay to produce all of the gas captured in the unforgiving shales. This, however, comes at greater and greater cost.

7) So, with the need to expend more energy to find and produce more hydrocarbons while dealing with ever increasing demand we are running into an inevitable breaking point (aka Peak Oil). When this will happen exactly, is next to impossible to predict. Will it happen in our lifetime? Maybe. Will it happen in our children's lifetimes? More likely.

The question arises: Can we change policies and regulations quickly enough to allow for the development of other energy sources to a degree that they can replace hydrocarbons? Maybe. I am pessimistic about this because we will also be faced with many other challenges in the coming decades and they will all be of very significant proportions. Assembling vast amounts of wind farms, hydroelectric dams, nuclear power plants, etc... will become increasingly more difficult if/when crude prices rise and supply dwindles. What kind of pressures will this put on the agricultural industry which relies heavily on hydrocarbons?

Even with another 50 -100 years, we're going to be challenged.

 

[mheslep]

4) There new methods fundamentally require more energy to undertake. If they didn't, we would have already accessed them. If new methods aren't required and we are producing conventional sources, they are generally more remote and require greater energy to travel to and develop infrastructure for;

While possibly true I don't think it is fundamentally true that new(er) methods must use more energy, just because they have not been used before. There are several other possibilities. It may well be that the new(er) methods such as frac jobs are simply more expensive (for now) than traditional methods. It may be that the technology was not available. Continental's CEO Hamm, per the interview above, suggests the reason is that the investment in unconventional drilling in the US was too risky given the Saudis could in the past had the ability turn on the taps and bankrupt everyone with expensive rigs, and now the Saudis are maxed out (maybe).

Calculating the energy use of frac drilling of oil/gas may not be as straightforward as it seems. Most observers seem to concentrate on how much energy it takes to drill one frac well, which by itself is clearly more than a traditional vertical well. However, I've yet to see consideration of various other factors: with vertical drilling the oil/gas and narrow bores if the well missed by 10 feet that was as dry a hole as if one missed by a mile. A dry hole, and there were many, was utterly wasted drilling energy. With shale geology it appears to me the oil is almost always found given the virtually wide bore, if more difficult to extract. So dry holes may be very rare, eliminating setup and take-down, transport from here to there, etc. This is all supposition; I have not seen data to back it up.

 

[CaptFirePanda]

While possibly true I don't think it fundamentally true that new(er) methods must use more energy, just because they have not been used before. There are several other possibilities. It may well be that the new(er) methods such as frac jobs are simply more expensive (for now) than traditional methods. It may be that the technology was not available. Continental's CEO Hamm per the interview above suggests the reason is that the investment in unconventional drilling in the US was too risky given the Saudis could in the past had the ability turn on the taps and bankrupt everyone with expensive rigs, and now the Saudis are maxed out (maybe).

Hydraulic fracturing is more expensive now because it requires more energy. The permeability of these shales and tight plays is significantly lower than conventional pools. That cannot be altered by technology unless energy is added into the equation. We can, of course, reduce the overall amount of energy added, but it will still be more than that of conventional sources. You can't (as far as I know) transcend the basic laws of nature with current or foreseeable technology.

Like I said, new technology requires energy (in this case, it is often in the form of currency) and is only applied when and if it is economically feasible. Increased hydrocarbon prices are what makes new technologies economically feasible. Like I've mentioned previously, these increased prices may be the result of market speculation, but long term trends are the result of requiring more and more unconventional sources to meet demands.

The oil sands, for instance, were identified more than 200 years ago and they've been commercially developed for almost 100 years. They haven't become a viable source of crude until just recently, however. So, why leave a vast amount of potential fuel in the ground for so long? Well, because the economicsand technology weren't there first of all. Then, once the technology became available, the economics still weren't there. It wasn't until about 2003 that production reached levels of real significance.

Economics was the limiting factor and when the supply/demand requirements were met, the oil sands were produced. This supply/demand is driven by the fact that consumption is catching up (if not surpassing) production and this is happening because of the energy required to produce the same amounts of hydrocarbons now is greater than the energy required 20 years ago.

Calculating the energy use of frac drilling of oil/gas may not be as straightforward as it seems. Most observers seem to concentrate on how much energy it takes to drill one frac well, which by itself is clearly more than a traditional vertical well. However, I've yet to see consideration of various other factors: with vertical drilling the oil/gas and narrow bores if the well missed by 10 feet that was as dry a hole as if one missed by a mile. A dry hole, and there were many, was utterly wasted drilling energy. With shale geology it appears to me the oil is almost always found given the virtually wide bore, if more difficult to extract. So dry holes may be very rare, eliminating setup and take-down, transport from here to there, etc. This is all supposition; I have not seen data to back it up.

Actually, the size of the well bores has very little to do with recovery of the resource. With unconventional resources, horizontal drilling from well pads is the new status quo. The horizontal holes can be as long as 3500m and run as deep as a couple thousand meters. From these pads, the often drill several holes in various directions (in plan view, they would look like spiders, in a sense). The reasoning behind this is that the gas within the shales is so finely disseminated that it is being treated as a statistical play (eg. there's going to be gas in there, so the more you drill it and fracture it, the greater your chances are for production). Typically, these wells produce at very high rates initially and then drop off quickly. Thus, more pads and more horizontal wells must be drilled.

They definitely do have a much better success rate based on the simple fact that the gas is pervasive. But it isn't a simple one to one comparison (simply based on the intensity of unconventional drilling).

 

[mheslep]

The question arises: Can we change policies and regulations quickly enough to allow for the development of other energy sources to a degree that they can replace hydrocarbons? Maybe. I am pessimistic about this because we will also be faced with many other challenges in the coming decades and they will all be of very significant proportions. Assembling vast amounts of wind farms, hydroelectric dams, nuclear power plants, etc... will become increasingly more difficult if/when crude prices rise and supply dwindles. What kind of pressures will this put on the agricultural industry which relies heavily on hydrocarbons?

Even with another 50 -100 years, we're going to be challenged...

Yes the issue you describe, sometimes called the energy trap, after a close look gives me little concern. I find that the US economy has i) an enormous amount of energy consumption slack in it that is ignored, and likewise ii) has an enormous capability to produce alternatives.

For case i), reference the 1979/Iranian oil crisis. US energy use per capita had been continually increasing every year as far back as the data shows. In 1978 it was at its all time high, and by 1983 after the crisis had dropped 14%. Yet during that same 5 year period GDP rose 32% (not inflation corrected). Here's another narrower example. A US family summer vacation might be 1000 miles round trip, consuming 5GJ (5e9 Joule) in the average 25 mpg car. This source claims the construction of http://world-nuclear.org/info/inf11.html, so that if 100 million families decided to forego a single summer vacation (gasp!) twenty new nuclear power plants could be built from the energy savings. If all those skipped family vacations were air travel, 2 people one flight, then 340 nuclear plants could be built.

For case ii), the ability to quickly produce alternatives, look at ethanol. Yes corn ethanol is a poor energy crop, is a dumb subsidy, using up arable land, etc, but this is beside the immediate point, which in this case is volume. US ethanol production, going from almost nothing a decade ago, is now one million barrels per day, and it would be greater if not for the 10% blend limit imposed by the EPA that has leveled off production. For comparison the US produces almost six million bbls / day of crude oil (and rising).

 

[mheslep]

...
Actually, the size of the well bores has very little to do with recovery of the resource.

By virtual bore diameter, I refer to the reach of the created fissures shown in this illustration:

http://assets.nybooks.com/media/photo/2012/02/15/mckibben_2-030812_jpg_630x511_crop_q85.jpg

This increases the explored volume well beyond the bit diameter and thus the odds of success.

Typically, these wells produce at very high rates initially and then drop off quickly.

Last I looked, yes hydro frac gas drops initially in the first months and then stabilizes to a slow decrease. Is that your understanding?

They definitely do have a much better success rate based on the simple fact that the gas is pervasive. But it isn't a simple one to one comparison (simply based on the intensity of unconventional drilling).

I don't follow the last sentence. Can you please explain further?