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

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In a recent post (here), I discussed the unfortunate practice by Peak Oil dissenters of cherry-picking facts to suit their skewed perspectives on the reality of oil production, conveniently neglecting to provide readers with the relevant background information needed to properly understand the issue at hand. An equally discouraging exercise is their use of vague, impressive-sounding but ultimately meaningless words and phrases to try and bolster their side of the argument. Perhaps they count on apathy or ignorance on the part of their readers, but regardless of the rationale, it does little to help. (Why do they insist on doing this? The Boston Globe published an interesting piece on Sunday that may provide answers.)

A recent and particularly egregious example can be found here. Feel free to read this glowing exhortation about the bazillion years of oil we have at our beck and call via oil shale. The author of that snarky piece excels at long division, but note the complete failure to mention even a single fact as to what is actually required to produce the oil shale this writer so ardently touted. Why let the truth get in the way of nonsense? (Hard to be kind to this narrow-minded wing-nuttery, so this is the best I can do.)

Just for the heck of it, take a peek at these prior posts (here and here) offering information about what is involved in mining oil shale and how utterly ineffectual efforts have been for most of the past few decades.

Facts are indeed an annoying intrusion into the puzzling reality of some.

This past weekend I came across yet another article where the full range of information was conveniently omitted. When you write a piece like this offering up at best fuzzy details and are hoping/praying/counting on your readership being uninformed and thus reliant on whatever details you do or do not provide, I can only assume there is some benefit to be derived. Engaging in open and honest debate, however, would not appear to be on that list. If all the facts aren’t on the table, then what does that suggest about the argument being made?

“Resources in the ground are clearly abundant. Canadian Association of Petroleum Producers Vice President Greg Stringham, pointing to the 175 billion barrels recoverable from the Canadian oil sands, says, ‘It won’t be a lack of resources that causes a shift away from oil. There’s lots of oil.’ The United States Geological Survey recently updated their estimates for recoverable oil from Venezuela’s Orinoco Belt to 513 billion bbl. Compare this to BP’s estimate of some 1200 billion bbl of global conventional oil reserves. Some shale formations, such as the US’s Bakken and Eagle Ford, contain substantial amounts of oil and natural gas liquids too, a form of unconventional oil which has emerged from nowhere in the past few years.

“Traditional onshore light crude, though often inaccessible to the international oil companies, remains plentiful too.”

(My bold italics were added for emphasis)

I’ve already acknowledged, as have many other Peak Oil advocates, that there are indeed hundreds of billions of barrels of oil in the ground. We’re not running out of oil. Those are not facts in dispute, unless you are arguing whose estimates are correct. But as is frustratingly obvious yet again, this Oil Council article fails to make mention of a single fact about the difficulties, costs, environmental degradation, time factors, or energy expenditures incurred in producing these resources. Uninformed readers are left with the impression that a shovel and sturdy straw are pretty much all that’s needed to extract this “plentiful”, “clearly abundant” oil from underground. (How many barrels are in a “plentiful”?)

Hello?!

The simple truth is that there is a big difference between what’s in the ground and what’s feasible or even possible to get out of the ground (or in deep water). So just tossing out large numbers or unquantifiable phrases like “substantial amounts” without a corresponding explanation that these tidbits don’t necessarily mean that we can actually extract or produce them is misleading. I always find it very difficult to understand the purpose or intent of such efforts, and remain dismayed that the fear of engaging in honest debate trumps the importance and necessity of having that honest discussion, regardless of outcome. Aren’t we all better served when we can deal with full truths rather half-ones, painful though it may be? What is gained otherwise?

If facts are wrong—mine included—then they’re wrong, and we are all better off knowing that and moving forward with better information. I wish it could be that simple….

“Kuwait and Abu Dhabi recently updated ambitious plans for production gains.”

And…? They can “update” their “ambitious plans” until pigs fly, but what does any of that prove? That’s a solution?

Likewise, cornucopian arguments proffered by this article about the “technical potential” of Iraq’s oil fields are pointless! What’s involved in realizing this “technical potential”? How many years? How much money? What are the complex political factors to be addressed? What other resources will be needed? How much energy will have to be invested in order to extract all this potential? When all is said and done, how much production can realistically be expected?

(An aside: Andrew McKillop, writing on Sunday about the Gulf of Mexico oil spill, noted (here) that BP’s Macondo field, thought to contain somewhere in the vicinity of 300 million barrels of oil—three or four days’ worth, by the way—could realistically have been expected to extract no more than 50 million barrels, and over 15 years or more. These are the types of facts we need to be dealing with and explaining to others instead of pretending that all will be well because we still have “lots” of oil left.)

And touting the 21 billion barrels of oil Iran has produced in the past dozen years sounds terrific up until the moment you realize that’s about 7 months’ worth of supply. Probably want to hold off rushing out the door to buy that soon-to-be-extinct Hummer you’ve always dreamed of….

“Kazakhstan’s long-delayed Kashagan field will finally come onstream around 2013 and yield more than 1 million bbl per day.”

Pulling out my trusty calculator, I conclude that 1 million barrels per day times 365 days in a year means that the Kashagan field will yield about 365 million barrels per year, or … Gasp! almost five day’s worth of oil! Hallelujah! Our prayers have at last been answered! Wow, that was close! I thought we all might actually have to start giving up things and changing lifestyles, but oh, no! Just a handful of these producing oil fields could get us enough oil to last until … uh, uh, a few weeks.

These resources and finds are surely better than a stick in the eye, but really? This is what’s being touted as the answer to Peak Oil’s discouraging message and worrisome impact? Oil production is on the decline, and these feverish efforts to paint a rosy picture help no one prepare for and plan the changes societies will need to implement. Whatever transitions away from fossil fuels we can collectively fashion will carry their own hardships. Let’s not make it worse by avoidance.

I understand that no one really wants to have to deal with the problems and challenges of declining oil production. Sure as hell I don’t! There is nothing even remotely enjoyable to contemplate about the onset of Peak Oil and its impact on my own pleasant, suburban multi-car, two-home lifestyle. Millions and millions of others who understand the implications and consequences will be/are just as dismayed for their own reasons—selfish or otherwise.

Making do with less is not anyone’s idea of progress or pursuit of the great American Dream. I understand the instinct to avoid, deny, or just pretend otherwise. The problem is that those strategies are not only not going to work, they will ultimately make things worse for all of us. They may serve some weirdly narcissistic, narrow-minded short term interests, but we are all in this together—deniers, too. Their magical thinking won’t prevent Peak Oil from impacting their lifestyles and businesses. Unless you have managed to carve out a lifestyle entirely independent of fossil fuels, either by avoiding personal use of it or avoiding goods and services that require it, Peak Oil is going to affect you, and perhaps quite dramatically.

Let’s not wait until we’re all in full-fledged panic mode over what is happening when supply can no longer match demand. It’s not that far away … and much too soon for us to avoid all the nasty consequences Peak Oil is going to impose on us. Disingenuous “information” is thus not at all helpful unless perpetuating a lack of understanding and awareness are the objectives.

If this deliberate obfuscation of facts and the true import of Peak Oil’s impact is the best that the deniers can offer, doesn’t it contain at least a seed of suggestion that perhaps we all ought to be thinking a bit more seriously about what needs to be done? We’re years behind as it is. As painful as it will be to confront the possibilities of having to make do with less for many years to come, having some say in how we collectively prepare for and deal with the impact of declining oil production seems a better long-term option.

Relying on these half-baked missives of optimism is an exercise in foolishness none of us can afford

A recent New York Times article described an upcoming BP effort (the same BP of Gulf of Mexico fame) to proceed with plans to drill for oil in a previously-identified oil field three miles off the coast of Alaska, in the Beaufort Sea. While the article nicely details some of the now-expected shenanigans which provided the necessary “authorizations” for BP to drill (not the least of which is the fact that back in 2007, BP apparently drafted its own environmental review, which the Bush Administration was all-too-content to accept), what struck me as most noteworthy was the following:

“BP is moving ahead with a controversial and potentially record-setting project to drill two miles under the sea and then six to eight miles horizontally to reach what is believed to be a 100-million-barrel reservoir of oil under federal waters.”

Let’s think about this for a moment.

BP is planning to drill two miles beneath the sea—in the barely hospitable Arctic region, mind you—and then another 6 to 8 miles horizontally (still in the Arctic), so they can gain access to a 100-million-barrel reservoir of oil. Let those details sink in.

As I noted in a prior post, as did Kurt Cobb (here), one of the exasperating features of peak oil reporting is the oversight/failure/neglect to explain some of the most salient facts about reservoirs being sought or tapped for oil production. This otherwise very informative NYT article is guilty of the same.

If BP is 100% successful at this Liberty Field, and they produced all 100 million barrels by breakfast next Monday, we will have found enough oil to get the planet through an early lunch on Tuesday – a grand total of about 28 HOURS. Not 28 days, not 28 weeks, not 28 months, not 28 years … 28 hours, give or take.

If we wanted to be really selfish and share none of it on the open market, then it would get the United States through most of next week’s work week. Period. We wouldn’t have enough left to get us into the weekend.

Hello?!

One hundred million suddenly seems like a pretty measly amount. Worse when you consider the what and the where and the how of this specific drilling venture. Let’s not forget that production from this field won’t be a cozy 2 or 3 week endeavor. If history is any guide, it will be years before any sizeable yields are on the books. As it stands, by 2013 the expectation is 40,000 barrels per day. Wheeee! (I’m guessing this is going to be a wee bit costly, given that the land rig alone cost BP a tidy $200 million. Pretty sure those are the kinds of costs oil companies like to pass on at the pump.)

These are the options big oil corporations are left with. Yet there remains a loud chorus of ardent knuckleheads who talk all kinds of nonsense about how much oil is left for us to use for the next umpteen decades so doncha worry and how Peak Oil proponents are some fringe group of crazed pessimists the rest of us would do well to just ignore; or they prefer the magic of economics and price points and inflation and consumers’ price tolerances and all that other information (or worse, the magic of as-yet undiscovered technologies riding to the rescue) that doesn’t have any impact whatsoever on how much oil actually remains reasonably accessible for our use in the normal course of our days.

By all means keep on denying the many signs (facts) of Peak Oil if that floats your boat. Won’t get you much, but why accept responsibility for doing something about a challenge if we can either pass that on to someone else or just remain blissfully ignorant and just keep a-hopin’ and a-prayin’. You betcha!

Those of us who recognize the sheer folly of placing our future economic well-being on a wing and a prayer owe it to themselves and others to begin working and planning together so that we offer ourselves the best possible chances of avoiding the very consequences that pinning our hopes on magic technology and pure denial will lead to.

We have better choices, and we are free to make better decisions, painful though some of them may surely be. Better to have a say than not.

NOTE: Starting a long weekend with family obligations thrown in as of Wednesday, so I may post once more this week and will then likely be off until the middle of next week. Enjoy the holiday!

“How horrendous, how destructive, and how ultimately-suicidal does the evidence have to be before we all agree that the age of cheap oil is over?” – Charles Cresson Wood [1]

“When are we going to stop behaving so stupidly?” – Bob Herbert [2]

“It’s time we moved on to something else, or this is going to kill us.” – Craig Severance [3]

“The Deepwater Horizon disaster reminds us that, of all non-renewable resources, oil best deserves to be thought of as the Achilles heel of modern society. Without cheap oil, our industrial food system—from tractor to supermarket—shifts from feast to famine mode; our entire transportation system sputters to a halt. We even depend on oil to fuel the trains, ships, and trucks that haul the coal that supplies half our electricity. We make our computers from oil-derived plastics. Without oil, our whole societal ball of yarn begins to unravel.

“But the era of cheap, easy petroleum is over; we are paying steadily more and more for what we put in our gas tanks—more not just in dollars, but in lives and health, in a failed foreign policy that spawns foreign wars and military occupations, and in the lost integrity of the biological systems that sustain life on this planet.

“The only solution is to do proactively, and sooner, what we will end up doing anyway as a result of resource depletion and economic, environmental, and military ruin: end our dependence on the stuff. Everybody knows we must do this.” – Richard Heinberg [4]

The hope is that more of us are starting to understand the implications, given the attention lavished on the Deepwater Horizon spill. The question remains: what are we going to do? Nodding our heads in agreement that we’re about to face enormous challenges to preserving our ways of life and industry won’t cut it. The truth is harsher: life as we’ve known it is going to change. How—and how much—are yet to be determined.

We’re already well past the point where we should have acknowledged the problems of declining oil production. Denial, or ignorance, or just waiting until some kind of magical solution comes along are beyond counter-productive at this point. Now we have to start the lengthy, complex, sacrifice-is-necessary process of restructuring the way we live, work, and produce. Plans have not yet been formulated, so we’re already behind.

And all of this, dear readers, is not going to happen any time soon. But we need to start. The longer we wait, the more problems to be overcome we’ll create. That is not our best strategy. We’re already going to be confronted with far more challenges than the vast majority of us realize or understand. None of us are likely prepared for all the changes and challenges we’ll have to confront.

The tin-foil-hat-is-on-too-tight crowd needs to step aside and acknowledge the reality that the Gulf of Mexico catastrophe (yes, Governor Barbour, that’s what it is) is one more signpost on the long road of oil production problems. Denial has served whatever ignorant and ridiculous purpose it might have been intended for. Now, it’s time for the adults among us to start dealing with the facts and the truths about oil production and fossil fuel availability.

Despite their efforts to disparage those of us convinced of the imminence of Peak Oil by uttering ridiculous claims attributed to us, we’re not going to “run out” of oil. But as I and many others have taken great pains to explain, we are going to start seeing problems with production keeping up with demand, and that diminishes our access and availability to the oil and gas we’ve become all too comfortable expecting. Lulls in the prices or availability of gasoline and oil should not be mistaken for anything other than lulls.

We need to keep in mind that the United States does not live in a vacuum, nor, despite the fervent yet misguided expectations of some, are we “entitled” to our fair share of oil and gas before anyone else. (By some estimates the Chinese will increase their ownership of autos by nearly a half billion in the next decade or so! Where is all that needed extra fossil fuel supposed to come from? And that’s just one growing economy!) Facts are annoying as hell, but there’s no getting around them….

The problems are inexorably going to get worse … not next week or next month, but well before we’ve had time to establish a new infrastructure and new methods of commerce and mass transit. We’ve got years of work ahead of us, and not nearly enough years to put it all in place before the serious problems appear.

We’re all in this together, even the paranoid, card-carrying knuckleheads who insist we have “infinite” supplies of oil (as soon as the words “Zionist cabal” or discussions about long-ago-discredited Russian claims about the origins of fossil fuel appear in a pseudo-argument, you know you’re dealing with someone whose sky is a different color than ours); we all have a stake in the solutions we fashion; and we all bear responsibility for the outcomes. What will we choose?

This is getting serious….

Sources:

[1] http://www.energybulletin.net/52986: The Questions You Ask Create The Future You Manifest; 06/02/2010 by Charles Cresson Wood
[2] http://www.nytimes.com/2010/06/01/opinion/01herbert.html: Our Epic Foolishness
by BOB HERBERT
[3] http://theenergycollective.com/TheEnergyCollective/67007: What Will it Take to End Our Oil Addiction? May 29, 2010 by Craig Severance
[4] http://www.energybulletin.net/node/52971: The End is nigh – Deepwater Horizon and the technology, economics, and environmental Impacts of Resource Depletion; 06/01/2010 by Post Carbon Institute

The environmental tragedy that continues to unfold in the Gulf of Mexico promises unimaginable consequences for years and years to come. It’s well beyond disheartening. Enough others have offered commentary on this that I won’t bore anyone with my own opinions, but it does reveal our basic quandary about energy needs, energy supplies, and our policies going forward: do we pursue more off-shore drilling and production of unconventional sources of oil no matter what the cost, or have we at last come to realize that changes must be made in our pursuit of energy supplies?

Off-shore oil is accounting for more and more of our basic production, but at what price? Is it worth it? Should we be listening to proponents who advocate off-shore/Alaskan/Arctic drilling or is it (past) time for us to seriously commit ourselves to investments and efforts in alternative energy and infrastructure?

“Drilling in Alaska and the Arctic poses, if anything, even more perilous challenges, given the extreme environmental and climatic conditions to be dealt with.  Any drilling rigs deployed offshore in, say, Alaska’s Beaufort or Chukchi Seas must be hardened to withstand collisions with floating sea ice, a perennial danger, and capable of withstanding extreme temperatures and powerful storms.  In addition, in such hard-to-reach locations, BP-style oil spills, whether at sea or on land, will be even more difficult to deal with than in the Gulf.  In any such situation, an uncontrolled oil flow is likely to prove lethal to many species, endangered or otherwise, which have little tolerance for environmental hazards.” [1]

The short-sighted proponents of off-shore/Arctic drilling seem far more concerned with satiating current needs than considering the long-term implications, but as this quote makes clear, there are significant costs and enormous risks involved. Still, I won’t pretend that we can simply ignore off-shore sources. We do need oil … transition away from fossil fuels is not going to happen overnight. No easy answers to be sure; but we need to start looking for them with much greater effort and commitment than we’ve demonstrated to date. It’s already too late in the game. Let’s try not to make it even worse.

So at what point do our leaders, our citizens, and our business institutions begin to realize that we have to start making drastic changes in our energy usage and supply sources now? There will be hell to pay one way or another, but shouldn’t we seize the opportunities where we can to at least attempt to mitigate the consequences of declining production and supply? The Gulf of Mexico catastrophe ought to teach us something!

Almost everything we do and own has been served by the availability of cheap oil, and that’s just about gone. (Craig Severance recently offered a wonderful summary of the looming Peak Oil predicament. It’s well-worth reading.)

So we have two choices: rush headlong into whatever other sources we can plunder regardless of risk, cost, and environmental degradation so that today’s needs continue to be met no matter what; or we take a step back and plan for the rest of this century and beyond by committing ourselves now to what we’ll eventually have no choice but to do: find alternative means of supplying our economies and industries with the energy they (and we) will need. Years of effort will be needed as is. Delay is not an acceptable strategy.

Clearly this Gulf of Mexico disaster is not likely to be repeated often, but it would be ignorant and incredibly naïve to assume this is the last major oil spill mankind will confront. How much more are we willing to risk in order to fuel our seemingly unquenchable thirst for oil … a thirst that geology will nonetheless end unhappily for us unless we have the foresight and courage to do it ourselves?

I’d rather have a say….

[P.S.: I had hoped to be back to regular postings last week, but alas, more unexpected (and expected) family and household obligations delayed me (as is the case this week: I’m now away/otherwise committed until next Tuesday), but by the time this holiday weekend is over, I’m done with most of that for at least a couple of months, so I’ll plan to resume my regular posts next week.]

Source:

[1] http://www.energybulletin.net/node/52848 : The relentless pursuit of extreme energy – 05/19/2010

An interesting news item this past week concerning Royal Shell’s Athabasca Valley oil sands project. I spoke about the Athabasca tar sands in my January 20 post (here).

As reported by the Financial Times and in its lengthy Q & A session with Royal Dutch Shell chief executive Peter Voser, that company’s planned expansion of its existing tar sands project has been “clearly scaled down.” The previously-planned quintupling of growth (in stages) from the Athabasca project will now proceed “very much slower”.

At current trading prices, the profit margin is apparently too thin for Royal Dutch Shell to proceed. The Times referenced the development project as being a “costly distraction” for Royal Dutch Shell, and an increase to an eventual 255,000 barrels of oil per day is about all that can now be expected, rather than the 770,000 barrels per day originally envisioned by the expansion.

It’s hard to see this as anything but a blow to those who continue to claim that these tar sands and oil shale are the key, great solutions to the continuing decline in the availability of conventional oil resources worldwide. Merely mentioning “trillions of barrels of oil” underground doesn’t get it from there to here for free, or easily, or quickly—if at all.

Sources:

http://www.investorschronicle.co.uk/Companies/ByEvent/TradingNews/Analysis/article/20100127/5c1d623a-0b44-11df-8109-00144f2af8e8/Shell-forced-into-oil-sands-Uturn.jspShell forced into oil sands U-turn. Created: 27 January 2010 Updated: 28 January 2010 Written by: Daniel O’Sullivan

http://blogs.ft.com/energy-source/2010/01/26/shells-ceo-peter-voser-interview-transcript-on-canadas-oil-sands-jobs-acquisitions-us-gas-iraq-nigeria-copenhagen-and-more/  – Shell’s CEO Peter Voser interview transcript: on Canada’s oil sands, jobs, acquisitions, US gas, Iraq, Nigeria, Copenhagen and more.  January 26, 2010 by Ed Crook

Before moving to my next scheduled post (“Shifting Gears”) I thought it worthwhile to offer some commentary on a January 25th news/financial item I came across today (See http://stocks.investopedia.com/stock-analysis/2010/Exxon-Mobil-Rejuvenates-Mature-Oil-Field-XOM0125.aspx  – Exxon Mobil Rejuvenates Mature Oil Field by Eric Fox) regarding Exxon Mobil’s decision to invest some $700 million for an enhanced oil recovery project at the Hawkins Field near Dallas, Texas. It’s been in production for some seventy years, and has produced a reported 800 million barrels of oil over that time.

I’ve raised the following theme in several prior posts, and another nice post earlier this week by Kurt Cobb echoes this theme. (See http://resourceinsights.blogspot.com/2010/01/days-of-world-consumption-warning-label.html – Sunday, January 24, 2010, Days of world consumption: A warning label for oil and gas discoveries):

Those who dispute the concept of Peak Oil by touting “significant” new discoveries of oil or by uttering similar pronouncements about already-discovered resources (such as the tar sands and oil shale) conveniently omit key facts on a regular basis. The years it will likely take to bring these supposed resources to fruition, the hundreds of millions and even ten billions of dollars required to do so, the energy output and effort necessary to successfully produce these finds, and a truthful explanation about what the eventual totals represent are among the more important facts that tend to get glossed over, if they are mentioned at all.

The uninformed reader is thus left thinking that “x” millions of barrels of newly-discovered or additionally-produced oil is a magnificent bit of news that potentially solves all of our future energy needs. Who needs to worry about Peak Oil when XYZ Corp. just discovered 63 million or 300 million or 1.2 billion barrels of oil?!

Today’s referenced article states that “Another cherished myth of the peak oil crowd may have fallen by the wayside, as Exxon Mobil has figured out how to pump another 40 million barrels out of an oil field discovered more than 70 years ago, and at a stunningly low price.”

Just a few pesky facts that perhaps should be considered (they are indeed annoying when you are trying to ignore evidence to make a point!):

(1) No mention is made of how long this will take, but it’s safe to assume it won’t happen quickly. Best guess is at least a year or two (I’m ever the optimist!)

(2) While touting a relatively low cost of $17.50 per barrel, the article does nonetheless speculate that that may not be all: “Of course it’s possible that Exxon Mobil was only disclosing part of its cost. Perhaps this is only the capital cost to construct the pipelines and injection equipment to bring the nitrogen to the field.” Of course!

(3) The articles states that there is another 900 million barrels of oil likely to be recovered “using a future technology.” We’re supposed to just count on this as a given? What future technology? When?

(4) More great news! A company by the name of Rex Energy is injecting “alkaline surfactant polymer” into its mature oil field in the Illinois Basin to produce almost the same amount of oil as Exxon Mobil will extract via similar enhanced techniques at its Hawkins Field. Wow!

(5) If in fact these two companies succeed at producing their respective 40 million or so barrels of oil at breakfast-time tomorrow, it would have ALL been consumed before breakfast the next day!

We’re supposed to be thrilled with this? More than a billion dollars and untold amounts of effort and energy expenditures for this? This is another refutation of Peak Oil?

There is no question that peak oil is a contentious issue among those familiar with the discussions and considerations. Some adamantly deny that we are even close to producing the maximum rates of oil, while others ardently insist we are—or that we have already passed that point.

Let me start with just a few basics, to give you an idea as to why proponents like me think that we’re already at the point (or soon will be) when we have maxed out the rate of oil that is produced on this planet, and are just looking at declining amounts of oil production from here on in.

My next post will weigh in with an initial discussion of the opposing viewpoint.

Keep in mind that this is just a small sampling of facts supporting the imminent challenges of peak oil. Future posts will discuss the evidence in greater detail (but without getting bogged down in the heavy technical aspects. The Oil Drum and Energy Bulletin do a significantly better job at that than I could hope to, and they have access to better sources of expert opinion. See the links for each in my Blogroll.)

What the following facts each and collectively suggest seems fairly evident without the requisite professional expertise, but I’ll leave that to you to decide.

  • Just 20 years ago, 15 oilfields were able to supply at least one million barrels of oil per day (the world now uses approximately 85 mbpd). Now there are only 4 such fields. [1]
  • The world began using more oil than it was finding nearly thirty years ago. Nothing has changed since. This year we are on pace to discover nearly 20 billion barrels of oil. Sounds great up until the moment you learn that the world uses approximately 30 billion barrels per year, and that roughly 80% of the Earth’s population is just starting to use energy as we do. [2] Make no mistake: they will be looking to use more.  (Think China and India, for starters.)
  • A substantial majority of petroleum geologists agree that about 90% of all the conventional, recoverable oil on the planet has now been located. [3] Most of the Earth’s favorable geological formations conducive to oil formation have been identified.
  • Here in the United States, we reached peak oil production almost forty years ago, at about 9.5 million barrels per day. We’re down to about 5 million now. We’re not alone.
  • One third of global oil supply comes from 20 large fields—all discovered more than thirty years ago. Production rates for each of those 20 fields have now peaked. [4]
  • The International Energy Agency [IEA] is an organization which serves as an energy policy advisor to its 28 member countries, including the U.S. Its recent studies prove that the oil produced from 580 of the largest 800 fields is declining [5]
  • The largest oil field in the world is Ghawar in Saudi Arabia. It was discovered in 1948 and reached its peak production rate of 5.6 million barrels per day in 1980. It now produces 5 million barrels per day [6], and when oil prices shot through the roof last year, at a price nearing $150 per barrel, Saudi production levels did not increase.  (What greater incentive to get more oil out of the ground than such sky-high prices, especially when you can produce it as  inexpensively as the Saudis? That didn’t happen because it couldn’t.)
  • Back in the 1960s, more than 25 giant and super-giant fields were discovered. Super-giants are identified as those with “5 billion barrels of initial proven and probable reserves.” (The number is 500 million for “giant” fields). [7] By contrast, super-giant Ghawar had tens of billions of barrels of proven and probable reserves. Impressive, certainly, but the number of such finds has declined steadily over these past 40-plus years.
  • We’re at a grand total of two such discoveries so far this decade (although none come close to matching Ghawar).

It’s probably safe to assume that the intensive and technologically-advanced explorations in these last few decades have not been designed to hunt for tiny fields. The giant/super-giant fields aren’t being found because there aren’t any. 8-10 billion barrel fields are now being touted as the “huge” finds of our time, and we’re not discovering nearly enough of them.

This does not mean we’re running out of oil next Tuesday, or next month, next year, or maybe even five years from now. “Running out” is not what Peak Oil is all about. Peak oil is about the rates of oil production, and declining rates mean declining supplies at a time when demand is and will be increasing significantly in certain parts of the world.

If the facts stated above are true, then waiting until it’s too late to do anything probably isn’t the best strategy.

Many developing nations feel entitled to seek levels of prosperity once enjoyed almost exclusively by Americans. By what right can we deny them? “We’re Americans so we get to do anything we want first” isn’t likely to get us very far in this day and age, much as some wish it were otherwise.

China, India, and other rapidly-developing economies are not going to sit on their collective hands while the United States and others make certain they are taken care of first.

What this does mean is that we are now on a slippery slope. Competition for diminishing supplies in the next few decades will become our reality as the demand for oil in the developing nations increases.

It’s important that we understand what this means, and how it will affect each and every one of us in our daily lives. Changes are in the offing.

I’ve designed this blog to help readers understand what those changes will be, what they mean, and how we turn a potential catastrophe into opportunities to revitalize our economies, our industries, and our way of life.

It will be a crisis only if we let it be, and that will happen because we all decide to … wait until some undefined “later” to start doing something/anything.

We’ll never be able to restructure our petroleum-based economies overnight, and without some planning now, attempting that is precisely what we’ll be faced with.

That approach won’t work, so let’s find better ways.
 
Next: What the opponents of peak oil have to say

Sources

[1]: http://www.canada.com/story+glimpse+future+chapters/1333692/story.html; The oil story and a glimpse at future chapters -  By Ray Grigg, Courier-Islander February 27, 2009
[2] http://www.oildecline.com/
[3] ibid
[4] Earth Policy Institute: Is World Oil Production Peaking? Lester R. Brown www.earthpolicy.org/Updates/2007/Update67_data2.htm
[5] http://www.energybulletin.net/node/48582; The IEA warns of shortages – “The next oil crisis is coming” by Michael Kläsgen
[6] http://seekingalpha.com/article/130145-200-oil-is-coming-while-we-waste-a-perfectly-good-crisis-part-2
[7] Running Faster To Stand Still – By: John Kemp http://blogs.reuters.com/great-debate/2008/11/24/running-faster-to-stand-still/