Sunrise092515A

 

 

Sir, Martin Wolf, in ‘Cheap oil puts humanity on a slippery slope’ (December 2) states: ‘The emergence of shale oil underlines what was already fairly clear, namely, that the global supply capacity is not only enormous but expanding. Forget peak oil.’ He is mistaken. Even the International Energy Agency acknowledges that conventional oil production peaked in 2005. Add other sources of liquid production, in particular tight oil (often misleadingly called shale oil) production from the US, and there has been a modest increase since then, giving a kind of ‘undulating plateau’ as Shell would have it. What the burst of unconventional production from the US has done is to mask the underlying reality of peak oil. This will become apparent as the tight oil potential itself proves limited in time. [1]

There are certain realities about the recent spike in U.S. fossil fuel production which can be masked or misrepresented in only so many ways. Tight oil production generated from hydraulic fracturing [fracking] has shown itself to be more expensive and not as energy “dense” or efficient, for starters. [No one can dispute what an impressive effort it proved itself to be in the past few years, of course.]

But current production and cost issues call into question the level of short-term production spikes we might expect from fracking efforts in the next few years. Fracking is a more expensive, time-consuming process. The production rate of fracked wells declines very quickly, so more and more wells must be drilled to keep pace. Prime locations are not infinite, so that limitation must refactored in. It requires high prices in order to supply the needed investment and effort Low prices are good news for consumers, but there’s a price to be paid there, too.

The decline in investment capital and the reduction in prices means the oil industry simply cannot afford to produce as it has been. Not rocket science. As has been duly reported elsewhere, suspension or cancellation of future projects means that in the not-too-distant future, the current oversupply will dwindle and few projects will then be in place to make up for what has been lost. Then the fun begins.

Fracking is not exactly a process which resumes at full speed with the flick of a switch or two. The logistics alone of getting back in place and ready to go all of the equipment and the skilled personnel [assuming they are still in the employ of oil producers—hardly a given in this climate of cutbacks and curtailed production] is not a one-afternoon project.

And while all of this is happening, just as is the case on a daily basis, the conventional crude oil supply continues to be drawn down to meet the needs and demands of fossil fuel consumers across the globe. No one is making any more of it, so even with a decrease in worldwide demand, an already finite resource being tapped on a daily basis to meet current demand will not magically replenish itself. Basic math kicks in.

Assuming the production of tight oil resumes soon enough and at at reasonable levels, the high decline rates characteristic of shale production aren’t going to change. More effort and more production [meaning more expense, among other necessities] will be needed just to keep pace, let alone increase production rates or totals to any great degree. And did we mention that the conventional crude oil supply [still finite] responsible for the technological and industrial marvels of the past century or so, is still being drawn down?

And so on and so on….

No matter what the choice of words or how diligent the spin, the energy supply we’ve all relied upon to conduct our modern lives [almost always without any consideration at all as to how this happened] is no longer what it once was. The sooner we all not only recognize our dependency and the need to make wiser choices about how to proceed into a future with a diminishing supply of our planet’s most astonishing [finite] resource, but the more honest information we receive from those who know, the better our chances of managing a reasonable transition to that different future.

No guarantees, to be sure. But denying the issue exists at all is a tremendous disservice to the public, and that’s the kindest conclusion I can offer.

 

~ My Photo: Gloucester MA Sunrise – 09.25.15

 

Sources:

[1] http://www.ft.com/cms/s/0/e7b10a64-9922-11e5-9228-87e603d47bdc.html; Peak oil is a reality with serious consequences by Nicholas Tobin – 12.03.15

 

We face a choice going forward. There’s a kind of false dichotomy, a false choice that we’re being presented between policies on the left or policies on the right. It’s not left or right, it’s forward or backward. It’s a choice between investing in the future, leaving a better future for the next generation just like parents and grandparents did for us, or ignoring these hard choices and sentencing the next generation to a lower standard of living, to fewer opportunities, and a future that we could do better by. Michael Brownlee

Looking Left and Right:
Inspiring Different Ideas,
Envisioning Better Tomorrows

 

Peak Oil Matters offers observations and insights about the realities of declining fossil fuel production, and its impact on our future well-being

 

* I invite you to enjoy my two books [here and here], and to view my other writings at richardturcotte.com