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Peak Oil Matters

A fresh perspective on the concept of peak oil and the challenges we face


Archive for June, 2012

Who knew that Peak Oil, a matter with the potential for so many adverse consequences, could be solved for so easily?!

[A]s Donald Boudreaux, an economics professor at George Mason University, explained a couple of years ago, running out of oil ‘is not as much a question of physics as it is one of economics. And economics assures us that we will never run out of oil.’
Yes, never: ‘My colleague Russ Roberts explains why in his book The Invisible Heart. Imagine, Russ says, a room full of pistachio nuts. You love pistachios and can eat all that you wish as long as you throw each empty shell back into the room whenever you eat a nut. You might suppose that you’ll eventually devour all of the nuts in the room. Their number, after all, is finite. But…the more you eat…the more difficult it becomes to find uneaten nuts among the increasing number of empty shells. Eventually, it will not be worth the time and effort required to search amidst the empty shells for the relatively few remaining nuts. You’ll voluntarily leave uneaten pistachios in the room.’
What will you do then? Go find another source of energy, of course. Just as we will with oil. [1]

Even if we accept the geological conventional wisdom, then there’s still no cause for panic. Prices will rise, yes, so people will go off and do other things. Either use something else instead of oil (that ever cheaper shale gas for example) or simply doing things that require less energy. [2]

So there! Problems solved. Just go out and find some new energy sources. No fuss, no muss. And if that doesn’t work as quickly and as easily as it sounds, then just go off and do different things. The bonus third option: just use something else instead of oil.

And all this time many of us have been urging others to plan and prepare for a lengthy and challenging transition….What a waste!

Hey! Perhaps someone should clue in the oil companies and related entities, too. Instead of all this deep-water drilling and tar sands strip-mining and freezing asses off in the Arctic, just tell them to go find another energy source. This week would be a good time: we can then use the upcoming weekend to transition away from crude oil and into that other energy source.

If weekend plans have already been made and can’t be changed, then we can ask airlines and transportation companies, commuters, industry in general—all of us, actually—to either go off and do different things, or use something else instead of oil.

Come next Monday, we can just continue on with business as usual and life as we know it. Damn, that was easy!

Might not be a bad idea to do different things to solve our economic challenges while we’re at it. Certainly we can put a damn speedy halt to climate change if we all just do different things and start using something else instead of oil. If we’re all taking those solutions to heart by early next week, we’ll have no more climate issues to worry about. Fantastic! Golf game, here I come….

No reason why we can’t give up a weekend to take care of all of that, right? Hell, we might be able to do all of this on Saturday and give ourselves a relaxing Sunday to get used to doing different things with another energy source while requiring less oil.

For all those reality-and-fact-based worriers, take a breath … and just start doing things that require less energy, okay? I’m sure you can all find an hour or two this week or on Saturday to go off and do different things so that by Monday, you won’t even notice any changes.

I have to take some time to re-think as well. A few months back, I offered this:

Anyone looking out their window and/or taking a quick peek at all the gizmos and gadgets inside would have to be completely delusional in failing to realize that almost everything we have, own, use, depend on is in some measure large or small a product of fossil fuel.
Just how much effort, time, money, planning, trial-and-erroring, marketing, producing, implementing, and transitioning to something other than fossil fuel dependency do these deniers think might be involved in swapping out this way of living for a non-fossil fuel existence?

And now I find out that the answer involves nothing more than choosing one of three very simple, obvious solutions: Just go out and find some new energy sources; go off and do different things, or just use something else instead of oil.

Next post: Time Travel in Three Simple Steps.

[NOTE]: I’ll be sharing a terrific article on Monday, written by Tim Stevenson. We’re taking some time next week for a family vacation. Back on July 9. Happy 4th!


[1]; Why We’ll Never Run Out of Oil by A. Barton Hinkle – 06.01.12
[2]; Can we please just declare the end of ‘peak oil’ and start worrying about something important? by Tim Worstall – 05.16.12

An observation worth noting … and pondering, from Richard Heinberg:

Energy literacy arms us with the intellectual tools to ask the right questions: What is the energy density of these new fossil fuel resources? How much energy will have to be invested to produce each energy unit of synthetic crude oil from oil shale, or electricity from thin-film solar panels? How quickly can these energy sources be brought online, and at what rate can they realistically deliver energy to consumers? When we do ask such questions, the situation suddenly looks very different. We realize that the new fossil fuels are actually third-rate energy sources that require immense and risky investments and may never be produced at a significant scale. We find that renewable energy technologies face their own serious constraints in energy and materials needs, and that transitioning to a majority-renewable energy economy would require a phenomenal re-tooling of our energy and transportation infrastructure. [1]

More than two years ago, I noted this [modified slightly here]:

When you stop for a moment and consider all the highways, the aqueducts, the power and electric grid systems (poles, wires, etc.), the schools, the hospitals, the bridges, the sewers, the farms, the waste treatment facilities and all the other components of our infrastructure, the amount of fossil fuels needed to design, build, repair, maintain, and renovate all of those elements are beyond staggering! Dealing with the impending reality that the fossil fuels which served at the heart of our infrastructure will no longer be [as readily] available [and affordable]—thus requiring that the repairs, maintenance, renovations, re-design, delivery, and functioning of these complex components will necessitate something other than fossil fuels—means that the transition over to alternative energy sources or brand new design features will take years (read: decades.) We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is.
Our great dilemma then rears its head: We do not yet have the alternatives energies in place to effect an orderly and efficient transition. It’s going to take many, many years, much trial and error, and incredible amounts of research, design, production, and delivery implementation in order to achieve seamless transitions away from fossil fuels—assuming those efforts to identify efficient alternative energies prove successful! What are we supposed to do once the existing fossil fuel resources are not so plentiful ever again? [2]

[1]; What We’re For: MuseLetter #234 / November 2011 by Richard Heinberg
[2]; Peak Oil & Infrastructure: More To Discuss Part II

My daughter was injured in a biking accident last week, which will necessitate surgery this week [and even more of my primitive ‘round-the-clock nursing skills].

Assuming all goes well, posting will likely resume sometime next week.


NOTE: In an effort to provide another platform for at least some of the insightful and important work being done by many others hoping to make our planet and its citizens a bit safer, healthier, and better-informed about matters affecting us all, from time to time I’ll turn blog space here on Peak Oil Matters over to guests.

Tam Hunt is an attorney specializing in renewable energy law. He is the owner of Community Renewable Solutions LLC, a consulting firm based in Santa Barbara, California.

Tam recently offered another informative essay on the reality of Peak Oil, touching on the too-infrequently discussed topic of net oil exports—specifically those from Saudi Arabia.

I first mentioned this topic here, and followed up with a two-part series on the subject (here and here). Tam’s recent article: “The Saudi Oil Problem” is a terrific, informative, and clearly-explained addition to this overlooked subject. More information is always a good thing, and Tam offers us all a typically well-written account.

I’m delighted to share it here—it’s a great read. My thanks to Tam for giving me permission to post it. Enjoy!


We’re worried about economic growth, or the lack thereof, presidential elections, and why Europe can’t get its act together. But the big daddy of issues is global net oil exports.

Saudi Arabia is once again the biggest producer of oil in the world, surpassing Russia to regain its title. Saudi Arabia also happens to be one of the most repressive and undemocratic regimes in the world. The Economist magazine ranked Saudi Arabia 161st out of 167 countries in its most recent Democracy Index.

The Saudis have massive economic and demographic problems to deal with, including a pending peak and rapid decline in oil exports. You heard right: Saudi Arabia, the world’s largest producer of oil, is facing a peak in its oil exports and a rapid decline thereafter.

There are solutions, however, to these very large problems, which I’ll discuss further below.

Saudi Arabia’s national oil company, Saudi Aramco, pumped about 11.5 million barrels per day for the last year, up from about 9.5 million in early 2009. The Saudis are pumping more oil now than they have in decades, along with the rest of OPEC, which is at a 23-year high for combined oil production.

Russia held the top spot for oil production for a couple of years, but Saudi Arabia has come roaring back since 2010. The U.S. is a distant third place with about 6 million barrels per day.

Net oil exports, are, however, a very different picture. The U.S. is famously the world’s biggest importer of oil. While our production of oil has taken an unusual upward tick in the last couple of years, spurred by record high prices, and our consumption of oil has declined even further due to increased energy efficiency, conservation and a still-struggling economy, we still import about half of the oil we consume: a massive 9 million barrels of oil per day.

Saudi Arabia exports about 8 million barrels per day (‘mbpd’ from now on), with Russia not too far behind at about 7 mbpd.

So far, this is all fairly familiar data. However, what is not well known is the degree to which Saudi Arabia’s massive oil exports are threatened by its demographics and a probable decline in its aging supergiant oil fields.

A new report from the U.K.’s Chatham House (PDF) examines this problem in detail. They conclude that Saudi Arabia’s oil exports will peak around 2020 and, under current policies, decline to zero by 2038. You read that right: decline to zero. This decline will occur due to the dramatic growth in consumption by Saudi Arabia’s rapidly growing population and increases in per capita energy consumption. Saudi domestic consumption of oil is growing at about 7 percent per year, which leads to a doubling of consumption in just ten years.
Figure 1. Saudi Arabia’s oil balance under “business as usual” projections

(Source: Chatham House)

Now, 2038 is a long time away, under normal circumstances. But oil politics operates in decadal timespans, not normal timespans. 2038 is, in oil terms, not that far away, so if Chatham House’s projections are accurate, we’ve got a major problem on our hands.

What will the world do if fully 10 percent of global oil production, and 20 percent of global net oil exports, is consumed by the Saudis rather than exported?

Saudi Arabia’s governmental revenue will come under extreme pressure if net oil exports decline. The Saudis rely on oil revenue for fully 80 percent of their budget. Many things will have to give if oil exports do dry up. Net oil exports declined fairly dramatically from 2005 to 2010, as Figure 1 shows, but have risen back in the last couple of years. Chatham projects net exports will rise to about 9 mbpd by 2020, and then start a precipitous decline as the Saudis’ demographic time bomb explodes.

Figure 2. Saudi Arabia’s fiscal deficit projections under “business as usual”

(Source: Chatham House)

The global oil exports problem

Saudi Arabia’s problem is not, of course, unique to Saudi Arabia. It is a global problem that afflicts many countries. Jeffrey Brown and Samuel Foucher have developed an “Export Land Model” to predict how the global net oil export situation will unfold in coming years. They found that the top five exporters of oil (Saudi Arabia, Russia, Iran, United Arab Emirates and Norway) decline from about 24 mbpd in 2008 to about 7.5 in 2020 and go to almost zero by 2030. Global net oil exports are about 40 mbpd, so these producers account for more than half of the global export market.

These net oil export projection declines are due to the demographic explosion that the Chatham House report focuses but also to declines in oil production in these countries. Chatham House chose not to discuss the role of declining oil production, choosing instead to believe Saudi projections of steady oil production, but this is a real and extremely serious corollary to the demographic explosion. It’s also the reason why Brown and Foucher project Saudi Arabia and other oil exporters going to zero faster than the Chatham House report. Figure 3 illustrates (with generic numbers) how these two trends work together to cause net oil exports to decline very quickly. Figure 4 shows the result of Brown and Foucher’s modeling for the top five producers.

Figure 3. Brown and Foucher’s Export Land Model

Figure 4. Brown and Foucher’s 2008 projections for the top five global exporters of oil

This data should provoke a “holy crap” moment in all readers. It’s a very big deal.

Currently, we’re far more worried about economic growth, or the lack thereof, presidential elections and why Europe can’t get its act together. These are all important issues. But the big daddy of issues is this one: global net oil exports.

I’ve written about these issues before, in the last go-round of record high oil prices in 2008. This time around, four years later, we’re seeing much the same phenomena unfolding. We’ve just been through yet another super price spike, which hurt Europe more than us because they hit new record highs for oil prices, whereas we in the U.S. didn’t see prices as high as we did in 2008.

Europe is now being pushed back into recession in part because of the new record high prices (every recession in the last 30 or more years has been preceded by an oil price spike). And we are now seeing oil prices decline again (oil is currently about $83 per barrel for U.S. WTI crude and just under a $100 for European Brent crude, down from the recent peaks of $112 and $127, respectively) rather quickly as European growth stalls, U.S. growth struggles and oil storage numbers reach recent highs here in the U.S.

A recent article extends the original Export Land Model, shedding additional light on this singularly important issue and providing strong support for Brown and Foucher’s initial projections.

The Saudi solar solution

There are solutions. I’ve written recently about the tremendous growth in renewable energy around the world and similarly positive trends in energy efficiency and conservation. The picture is far less rosy, however, when we look at transportation fuel as opposed to electricity. There are some similar positive themes in transportation energy, but there are also major problems in shifting away from petroleum as our key transportation fuel because we’re so dependent on oil for transportation. Simply put, this is a many-decades-long process at best.

What we really need is a World War II-level effort to rapidly and massively save energy in all sectors through improved energy efficiency and conservation, and to shift away from oil and coal in transportation and the generation of power.

The Saudis seem to be recognizing the severity of the problems they’re facing. They recently announced a massive renewable energy initiative, designed to bring 54 gigawatts of mostly solar and wind power on-line within 20 years. This will make up about one-third of total electricity consumption at that time, up from almost zero renewables on-line today. This growth will be achieved with a type of feed-in tariff, which guarantees eligible power producers a contract at a long-term fixed rate. Feed-in tariffs are responsible for the large majority of solar and wind capacity installed around the world today.

At the same time, the Saudis need to focus on energy efficiency and conservation. Saudis consume the most oil per capita of any major economy in the world. I have considerable faith that, as government revenues shrink from declining net oil exports, the Saudis will find economically compelling incentives and/or mandates to reduce domestic consumption of oil.


The problem of “peak oil exports” is the even more scary sibling to “peak oil.” Peak oil is, by itself, a massive problem, but peak oil exports highlight the problem even further, particularly for major oil importers like the U.S., Japan, China and Western Europe. The Saudis and other nations experiencing a demographic explosion will suffer greatly from reduced revenue from oil exports, but they will at least have the energy resources to maintain their economies. Countries that are net importers of oil will suffer in their own way, primarily from much higher prices for oil and possible shortages of oil as demand far outstrips supply.

As the world’s biggest importer of oil, by far, the problem of peak oil exports highlights the need for the U.S. to get off oil as quickly as possible.

The package of solutions to achieve this shift away from oil must include major and ongoing investments in energy efficiency and renewables. Energy efficiency is steadily improving with new technologies and higher fuel prices. Similarly, conservation (behavior change, as opposed to technological improvements that foster energy efficiency) will occur automatically with higher prices.

We also need to ensure that the exponential growth in renewable energy over the last decade continues. Luckily, the cost of renewables has plummeted in recent years, so this transformation away from fossil fuels can be done cost-effectively when it comes to electricity.

Transforming our transportation energy sector is far less easy, however. Conservation through carpooling, better mass transit and low-tech solutions like bikes and walking, will be major parts of the solution. Smaller vehicles, higher mileage vehicles, hybrid cars and electric cars must lead the way in terms of new technologies. Electrification of transportation, while still fairly expensive with today’s technology, is still the most promising long-term solution, because electric vehicles offer a readily available technology for entirely eliminating dependence on oil.



An interesting news item on needed energy supplies crossed my desk a few weeks back.

In a report on the recent Offshore Technology Conference in Houston, conference participants explained that: “The global energy industry will have to continue to find ever cheaper energy supplies faster than ever before to keep up with rising energy demand amid a continued dependence on oil and natural gas….”

The article indicated that even though the participants expect energy demand to increase by 50% in the next two decades, they see no change in the amount of oil and gas which will be required to power that increasing demand.

Ali Mosheri, Chevron’s president of Latin America and Africa, is quoted as stating: “Demand for oil and gas will undoubtedly grow. There is no substitute for it right now, not for the next 50 years.” The article goes on to state that “newer, complementary energy sources” won’t meet increasing demand.

So that’s it?

No planning, no concerns, no considerations for what might happen should the Magic Technology Fairy come up short in production? Good to be optimistic….

“‘Increased energy demand would require some 30 million b/d of additional oil production capacity to come onstream by the year 2020. The following decade, at least another 25 million b/d of oil production capacity would have to be commissioned to offset declining output as well as meet rising demand’, Mosheri estimated.” HELLO!

Instead of a full-speed ahead approach to extract every last drop of a finite resource, or expending untold billions of dollars and countless man hours of effort scrambling to make up for the ongoing depletion of conventional resources, shouldn’t we at least hope that some of those bright minds might reflect on a need for different plans—starting right about now?

I’m all for human ingenuity and progress and technology, but given the immense need for conventional energy sources which are unfortunately finite, at what point do leaders collectively recognize what’s at stake and lead the way to the years-long transition away from fossil fuels? It’s all fine and well that we gazillions of barrels of kerogen and bazillion barrels of Canadian tar sands and/or shale oil, but extraction of those inferior energy resources carries a hefty price tag—and not just on the corporate ledger. Is the mad dash to extract and produce as much as we can without considering cost or consequences really the wisest course of action?

Just in case the Magic Technology Fairy and/or the wonders of free market capitalism or the awesome capacity of human ingenuity come up a bit short in supplying this anticipated increase in demand, wouldn’t a healthy effort at coming up with a Plan B seem at least prudent?

We are at a key turning moment in history. The actions that we will soon decide to take will be determined by the beliefs we hold. At a time like this, holding the wrong set of beliefs can destroy your wealth, sap your joy, and even prove to be life-shortening. [1]

Sober thoughts, but ones we need to not only contemplate with more vigor than we have so far (leaders in both industry and government have fallen woefully short of the mark in their truth-telling responsibilities), so too must we start planning—a theme I’ve raise more frequently in recent months.

Despite yet another seemingly optimistic observation such as this one:

THE reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy. [2]

another recent headline, courtesy of Steve LeVine (Foreign Policy), is a more realistic, fact-based  truth, and one whose implications many more of us need to understand: “The age of irrational petro-exuberance.”

The reasoning is fairly straightforward, nicely summarized first by Jesse Parent, and then by Tom Murphy:

[T]here is an inherent cut-off point approaching – and it is very different from the shocks, jolts, and other experiences that formed our current national paradigm of energy and gas prices.
That is the point that I feel needs to be stressed, and it’s lack of emphasis, in my opinion, is the substantial failure of our energy education. Until this realization is made commonplace, the hardships we will endure (are enduring) won’t make sense, and the obstacles in the way of a logistically sustainable future will not have proper context. The world as we know it was built via cheap, easily transportable, and highly dependable fuel, and that fuel is essentially non-renewable in supply. At present, there is no substitute for fossil fuels in this way, as per the actual capacity to supply us with the energy we need to live in the society we do….
Discerning who is to blame for a substantial failure in energy education may not be as important as accepting the responsibility to educate ourselves….
[T]he broader, inherently global context of America’s energy situation needs its own special attention. Transitioning from a culture of blame and neglect to sober understanding and responsibility is likely not something that can come from an administration, particularly given the current political climate. An understanding that sustainability is not merely some matter of environmental concern, but an imperative of cold facts and impersonal logistics, is necessary. It will take courage and intellectual rigor to move past the conveniences of political rhetoric, finger pointing, and the     overshadowing of vital energy issues by more accessible (but more tangential) news trends, but doing so is part of accepting the responsibility that enables choosing the best future – for our country and our planet. [3]

[O]ur reaction to a diminishing flow of fossil fuel energy in the short-term will determine whether we transition to a sustainable but technological existence or allow ourselves to collapse. One stumbling block in particular has me worried. I call it The Energy Trap.
In brief, the idea is that once we enter a decline phase in fossil fuel availability—first in petroleum—our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here’s the rub. The construction of that shiny new infrastructure requires not just money, but…energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term—effectively steepening the decline—for a long-term energy plan? It’s a trap!…
The only way out of the political trap is for a substantial fraction of our population to understand the dimensions of the problem: to understand that we’ve been spoiled by the surplus energy available through fossil fuels, and that we will have to make decade-level sacrifices to put ourselves on a new track. The only way to accomplish this is through sober education, which is what Do the Math is all about. It’s a trap! Spread the word! [4]

It would be far better, less stressful, and certainly a more optimistic approach if we could just forget any talk about Peak Oil (climate change, too) and proceed to a return to full “prosperity” and near-unlimited growth prospects just as soon as we possibly can. Doing so would require that we embrace the most wildly-exuberant statements about our “massive” and “vast” domestic supplies of shale oil, Canadian tar sands, and the gazillion barrels of oil shale just waiting to be plucked from beneath the surface. We could also learn to flap our arms at the right angle and speed and thus learn to fly.

Those two options are unfortunately required to abide by the rules of reality, and reality tells us neither is a viable option.

[Of course, as was reported by Kate Sheppard here, we could just emulate what a number of nitwit North Carolina legislators are attempting to do by essentially declaring sea level rises to be against the law: we could pass our own legislation mandating that any and all vastly massive resources/reserves/supplies be extractable immediately, inexpensively, and easily … or else!]

Facts continue to annoy, ruining all the “good” reasons arguing against the validity of Peak Oil (as if there weren’t enough already.)

The hard truth is that there are no good fuel substitutes anymore. Throughout human history, we have always been able to find not just a substitute fuel, but a better one: a cheaper, denser, more abundant one. That is simply no longer the case. One may hope for some miraculous technological breakthrough, and one may simply have faith that the invisible hand will solve our problems, but such thin threads are hardly a reasonable basis for policymaking and forecasting. [5]

We assume that the next 50 years will be like the last 50 in terms of energy availability, when the data clearly show that it will not. We assume that if oil runs short, we’ll find a substitute, not comprehending that the substitutes have much poorer quality, far lower production rates, and lower energy content. We assume that societal surpluses, like health care, or one person per car, or a complex society sporting ten times the retail space per capita of Europe, are normal. They are not. They are artifacts of an age when energy was insanely cheap. [6]

Yes, the Bakken could produce as much as 2 million barrels per day (bpd) up from roughly 500 thousand bpd, maybe as much as 3 million bpd, but the US imports roughly 8 million bpd today under even severe economic conditions, and as much as 10 million bpd under happier economic conditions.
The Bakken and other shale plays are simply not going to replace all of that — ever. Note, too, the slope of the line before the ‘Bakken bump,’ and observe that whatever gains are realized from shale oil will be fighting depletion losses from the rest of the tired fields under production. [7]

It turns out, however, that what most environmentalists know about the future supply of natural gas and other fossil fuels is based more on industry hype than on actual data….: There is increasing evidence that no fossil fuel will continue to see its rate of production climb significantly in the decades ahead and so none of them is a viable ‘bridge fuel,’ not natural gas, not oil, not coal. This means that global society must leap over fossil fuels and move directly to renewables as quickly as possible. In advanced economies this leap must be combined with a program of radical reductions in energy use, reductions which are achievable using known technologies and practices….
When the petroleum glut long predicted by the optimists failed to appear, they started lumping in ethanol, biodiesel and natural gas liquids with petroleum and calling them all ‘oil.’ These other products are useful, but they are not as energy-rich, versatile or easily transported as oil. Our current infrastructure is heavily dependent on oil inputs with no real substitutes available in the quantities required….
The hydrocarbons locked in the tar sands and the Orinoco oil belt in Venezuela aren’t what we call oil and must be heavily processed at high cost using enormous amounts of energy. As for the oil shale in the America West, the amount of commercially produced oil we are currently getting from that oil shale is zero. No one has figured out how to extract it profitably. Partly this is because oil shale contains no oil. Instead, it contains a hydrocarbon-rich waxy substance called kerogen which must be heavily processed to turn it into oil….
The hard-to-get oil resources are large, but they take a long time to develop and require strenuous, expensive and energy-intensive methods to extract. All this, when combined with the relentless depletion of existing fields, spells little or no growth in the worldwide rate of oil production in the coming years…..[8]

It would appear that we have what some might consider to be a “predicament”. Others might prefer a more basic “Oh, Sh*t!”

Pretending these factors don’t exist, aren’t relevant, or can simply be set aside by some combination of free-market wonders, the Technology Fairy, and good ol’-fashioned human ingenuity has a very tiny place in the important conversations we all need to start engaging in.

However we transition our society, lifestyles, industry, and transportation (for starters) away from the inexorable decline of crude oil supply and the inadequate replacement of same by renewables and/or shale-tar sand substitutes, the time factor, complexity, and disruptions to our preferred Business-As-Usual approach is going to call for a much greater level of serious debate with and contribution from … everyone.

We can make it worse by pretending and/or ignoring and/or doing nothing until there’s a “better time” for experts to take care of this for us. That is an option. It sucks, but it’s an option.

More information—admittedly—unpleasant, is better than not knowing. Football and hockey players in particular will tell you that being blind-sided is never fun. It’s no different when discussing our future and our future well-being.

I’ll have some more thoughts, along with observations from others, as this series continues.


[1]; Dangerous Ideas by Chris Martenson – 02.22.12
[2]; Fuel to Burn: Now What? by JAD MOOED – 04.10.12
[3]; A Substantial Failure’ Of Energy Education by Jesse Parent – 03.23.12
[4]; The Energy Trap by Tom Murphy – 10.18.11
[5]; Our energy future: Golden Age or Stone Age? by Chris Nelder – 10.26.11
[6]; When should we pursue energy transition? by Chris Nelder – 11.02.11
[7] Chris Martenson
[8]; Fossil Fuels vs. Renewables: The Key Argument That Environmentalists are Missing by Kurt Cobb – 01.23.12

I’m passing along some useful/informative Peak Oil-related articles of note [and some political ones, too, which in one way or another will have considerable bearing on what we do and don’t do as Peak Oil makes its presence felt], all of which crossed my desk during the prior month … in case you missed them!


Thomas E. Mann and Norman J. Ornstein
Let’s just say it: The Republicans are the problem


Chris Nelder
Fuel to Byrne


Richard Heinberg
Top 11 FAQs


Kurt Cobb
The Oil Industry’s Deceitful Promise of American Energy Independence


Bruce Bartlett
America’s Return to Political Polarization


Robert Reich
The Answer Isn’t Socialism; It’s Capitalism that Better Spreads the Benefits of the Productivity Revolution


David Frum
Fear fueling Republican extremism


James Gustave Speth
America the Possible: A Manifesto, Part I
From decline to rebirth


James Gustave Speth
America the Possible: A Manifesto, Part II
A new politics for a new dream


Michael Lind
Why do conservatives hate freedom? The movement’s opposition to gay rights is just the latest move in its history of opposing personal liberties


Thomas E. Mann and Norman J. Ornstein
Want to end partisan politics? Here’s what won’t work — and what will.


Andrew McKay
Drill, Baby, Drill! More drilling doesn’t necessarily mean more oil
Original article:


Michael Foment
Why I Stopped Being a Right-Winger — Modern Conservatism Has Become a Form of Mass Hysteria

At the end of my most recent post covering the recent article by Robin Mills [* all quotes following are from that article unless noted otherwise], I was so excited to share all that good news about Norway’s magnificently massive, vast, incinerate-the-world-several times over find of almost seven (7!!) entire days’ worth of oil that I forgot to mention that this discovery was, as noted here, “the first in more than a decade.” How fantastic and efficient is that? Statoil couldn’t have spent more than a few hundred dollars before discovering such untold riches, right? Gives me the chills….

As the CEO of Statoil (Norway) suggested in that last-cited article, spending several decades in the waters near the Arctic (and as Mr. Mills noted: “after many disappointments”) to find a week’s worth of oil every decade or so certainly proves that “persistence and long-term thinking bear fruit.” Perhaps there’s a different message there?

Continuing on with my examination of Mr. Mills’ effort to put another nail in Peak Oil’s coffin….

I can only assume again that space considerations prevented Mr. Mills from providing us with any statistics about the recent oil finds he touted:

In recent years, several significant new oil plays have emerged: Kurdistan; the West African Transform Margin (Ghana, Liberia, Sierra Leone, etc), its correlative in South America (French Guiana), East Africa (Uganda, Mozambique and now perhaps Kenya, plus major gas in Tanzania), and possibly offshore Sri Lanka and the Falklands.

It goes without saying that nowhere in Mr. Mills’ article did he mention one of the more unpleasant and inconvenient truths about oil production: the depletion of existing conventional fields. All these immensely expensive undertakings to find inferior substitutes in the face of growing demand—substitutes (such as shale oil and the Canadian tar sands) which so far can’t even match depletion rates—and still no acknowledgment of this simple math reality.

I’ll preface the following comments by repeating a disclaimer I’ve offered before: I am not an energy “expert.” I have no professional training, I respect the work and education and talents of those I criticize, and I defer when possible to the fruits of their experience and expertise.

Having said that, perhaps a caveat might be in order as to this spectacular claim:

Adherents of the peak oil theory have often pointed out that since 1980, new finds failed to replace production. Despite this claim, reserves rose every year with the assistance of upgrades and improved recovery in existing fields. But in any case this disappointing exploration trend was reversed in 2010, when some 50 billion barrels of oil were discovered.

My lack of professional training notwithstanding, I do a fair amount of reading on this subject, and have for several years. It’s no exaggeration to say I’ve read at least one thousand reports and articles and PDFs and books on Peak Oil-related topics, so I’m not a complete neophyte. Yet I can honestly say that in the hundreds of articles I’ve read in the past year or two, I’ve yet to see anyone else in any publication anywhere suggest discovery totals even remotely close to that 50 billion barrel figure if what we’re discussing are conventional crude oil finds. [The only “confirmation” I found was from a Peak Oil denier who still holds the title of having written the “Vaguest Attempt To Support An Argument” I’ve come across]:

Many analysts are expecting a lot of new oil supplies from multiple locations around the globe.
Clever technologists are finding ways to make every barrel of oil go that much further. This is true in many ways.…[1]

Yikes! [Worth noting that the “many analysts” cited was actually one finance professional, and the “clever technologists” cited turned out to be one example.]

It’s worth at least a mention that merely stating the total “finds” without the annoying detail that these are primarily deep water finds, shale oil, and assorted other unconventional [lesser energy density, more expensive, etc., etc.) resources is at best disingenuous. The total sounds great—no argument here! But letting readers in on some of those damned facts lessens the impact a wee bit.

Certainly finds off the coast of Brazil in recent years have the potential to more than double the total cited by Mr. Mills, but reserves and “potential” are a far cry from produced supply in hand. Failing to make that distinction, as is too-often the case, leaves the uninformed … still uninformed. That’s not helpful.

One can pin any number desired on existing or discovered “reserves,” but if it turns out that they cannot be produced economically, they’re nothing more than a fancy number at best. As one journalist discussing Brazil’s offshore finds noted:

But first, they have to get to the oil, which is hundreds of kilometers off the coast and deep underground….
Brazil’s platforms and rigs sit above 2,000 meters of water. The oil is anywhere between 2,000-7,000 meters below the sea bed and to get to it, engineers must drill through clay, then a variety of geographical formations like shale or calcium carbonate, before they hit     a thick later of salt that can be thousands of meters thick.
‘You have to develop new technology,’ says Norman Gall, Executive Director of the Fernand Braudel Institute of World Economy (Instituto Fernand Braudel de Economia Mundial) in São Paulo, and a sub-salt expert. ‘You have to deal with processing the oil at these depths. You have all of these problems. That’s why it’s so expensive.’
Unstable formations
Up to 350 km from the coast, the salt beds in the Santos Basin are beyond the reach of most helicopters so platforms must be built halfway between the coast and oil field. Once there, drillers face huge challenges, Gall wrote earlier this year in Brazil’s Estado de São Paulo newspaper. ‘The salt beds are unstable and can engulf the drill bit and collapse the casing that encloses the drill pipe.’
Underneath the salt, it doesn’t get any easier, according to Van Beek, the Dutch mud engineer. The formations are unstable and the oil is generally mixed with sand….
But at depths like these, the water is close to freezing. ‘The temperature changes the viscosity of the drilling fluid,’ says Van Beek. This, in turn, affects the oil, which is ‘very thick, like a syrup. The way to make it more fluid is by heating it up. They do injection wells. When you produce oil you produce gas. The gas is on top of the oil, so you pump it back in at the bottom of the reservoir and it forces the oil up.’ [2]

Never mind … I was thinking it might be a difficult undertaking, but that sounds like not much more than a few hours of work. My bad! Besides, as Mr. Mills went on to note:

Even if production build-up will probably be slower than expected, the technical and economic barriers are clearly surmountable.

So there! Who cares how the barriers are surmounted … they just will be … somehow … probably….Perhaps one might even wager that “this is true in many ways.”

Mr. Mills went on to detail a number of commercial endeavors being undertaken around the world (e.g., “The world’s first commercial-scale cellulosic biofuel plant” in Italy and “the world’s largest gas-to-liquids (GTL) plant” which Shell Oil opened last year in Qatar.)

No doubt these and similar efforts are not done on a whim. But proof that Peak Oil is a thing of the past? Not even close! The fact that such extraordinary efforts and expenses are even being contemplated suggested that the days of cheap and easily-accessible oil are indeed behind us, a reality which seems to confound Mills and others. Facts can do that to you….

Old onshore fields in the US, such as West Texas’s Permian Basin, have already seen a revival in production. One obvious implication, not yet widely drawn, is that the similar carbonate reservoirs of the Middle East should have vast potential for additional reserves. Formations such as the Mauddud in Kuwait and Iraq, Bangestan in Iran and Jubaila and Hanifa in Saudi Arabia, have been less-exploited to date because of their poorer quality compared to the main producing reservoirs.

“Vast potential,” of course, is equal to … ah, hang on, I had it here just a second ago….Oh yeah, a lot … perhaps.

This is good news?!

Of course, these advances in unconventional oil have not been without problems. Despite improvements in practices, Canada’s oil sands are facing growing environmental opposition. Both the oil sands and coal-to-liquids have unacceptably high carbon footprints in the longer term, unless carbon capture and storage is widely implemented. 
Biofuels have run into trouble over increasing food prices and disturbance to virgin forests, and ‘second-generation’ biofuels from cellulose have made disappointing progress. The US has cut advanced biofuel production targets from 12 million barrels annually to just 0.2 million. Nevertheless, it is clear that unconventional oil in totality can grow fast enough at acceptable costs to reverse declines in conventional production.

“Clear” according to…? How?!

One of reality’s most unfortunate  and damned annoying rules is that Saying it won’t make it so.

And while this observation is certainly a positive step forward:

With the first stirrings of recovery, the US responded to high oil prices with a leap in oil efficiency, which grew by 3.7 percent in 2011. Consumers are buying significantly more efficient vehicles, while driving distances have increased little from the depths of the recession.

The same Saying it won’t make it so rule applies here as well:

With a culture of big cars, limited public transport, minimal dieselisation and cheap natural gas, the US has more room than Europe for further oil savings.

We’ve got a long way to go before the vast majority of Americans understand the need to embrace additional conservation efforts, and that effort isn’t being helped when facts aren’t being communicated.

Optimism has an important role, but so doesn’t the truth—however unpleasant and profit-reducing it might be.


[1]; Is Peak Oil Slipping Backwards to the Year 2060 and Beyond? by Al Fin – 02.02.11
[2]; Brazil’s Oil Frontier: Sub-salt drilling could net billions of barrels by Dom Phillips – 08.23.11