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A near-perfect example in the continuing line of cherry-picked, mostly fact- and context-free Happy Talk about U.S. oil production came courtesy of this Tyler Crowe article several months ago. (The title “America Has Saved the World From a Global Oil Crisis” is just a bonus … aren’t we wonderful all the time!)
continue reading…

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We don’t like bad news, particularly when it has very long term implications. Individually and collectively we tend to slip into denial mode, focus on diversions, become numbed to the reality of the situation, cling to anyone willing to assure us it just ain’t so, that things are going to get better. You can’t live your life in crisis mode. continue reading…

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We don’t like bad news, particularly when it has very long term implications. Individually and collectively we tend to slip into denial mode, focus on diversions, become numbed to the reality of the situation, cling to anyone willing to assure us it just ain’t so, that things are going to get better. You can’t live your life in crisis mode. continue reading…

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Peak oil deniers always talk about reserves, not production rates, for the same reason a squid squirts ink when it is threatened. Either they haven’t the foggiest idea what ‘peak oil’ means, nor a grip on production data (let alone the key production/reserves ratios). . . or clouding the issue, and painting peak oil analysts as Chicken Littles, is their explicit intent. After a decade of observing this behavior, particularly in publications which should know better, I’m now inclined toward the latter view. [1]

It’s just not that difficult to understand!

The latest in the seemingly never-ending efforts of some to confuse the public about the state of our fossil fuel supplies comes courtesy of this Reuters article entitled “Peak oil and other fallacies.” [Quotes taken from that article unless noted.]

Why?

Despite repeated efforts by those of us whose reliance on facts—the appealing ones and the disturbing ones—guide our efforts, the author is yet another in a long line of commentators who seem to think that just offering large numbers about resources and/or reserves puts an end to all this talk about peak oil. (The other part of this disingenuous approach of using cherry-picked information is the failure to mention anything at all about some of those annoying facts which tell a decidedly different story about the actual production from those reserves.)

In the most recent case, horizontal drilling and hydraulic fracturing have resulted in a big upward revision in reserves and ultimately recoverable resources. The shale revolution has already doubled estimates of global gas resources and will probably have the same impact on the oil industry.
Peak oilers emphasise the total amount of oil and gas below ground is fixed. While that is true in a fundamental sense, the volume of hydrocarbons is so vast it will last for centuries.

Given how often the same term is used, it’s safe to say that “vast” is the go-to word of choice for those who find difficulty dealing with Peak Oil facts. It’s safe, impressive, and entirely unquantifiable. But perhaps I’m being unkind. If you can’t rely on estimates that will probably double, then what can we rely on?

In fact, reserves/production ratios have actually been rising strongly in recent years as the industry adds new reserves faster than it depletes old ones. Buoyant oil prices and strong corporate cash flows have certainly sharpened the incentive to do more exploration activity….
Proved reserves have continued to rise steadily over the last 30 years, even as record amounts of oil have been produced from new and existing fields. Proved reserves hit a record 1.65 trillion barrels at the end of 2011, up from just 683 billion barrels in 1980, according to the BP ‘Statistical Review of World Energy’….
High prices and the continuing lack of access to the major Middle Eastern fields have encouraged oil companies to turn to other areas to add reserves: shale, deepwater and the Arctic. Recent exploration and production activity has begun to add reserves much faster in other areas, especially North America, Latin America and Africa.

Not one single word in the entire Reuters article to explain the difference between and significance of the terms “reserves” and “resources.” I wonder why?

Not one single word in the entire Reuters article to explain anything at all about whether or not reserves/resources can actually be extracted. I wonder why? Until they are produced, they’re just fancy—empty—numbers.

Not one single word in the entire Reuters article about the rapid depletion rates of tight oil reserves now being produced. No mention about the inferior quality, and no mention about the greater expenditures of energy to acquire the newer sources, either. I wonder why?

Not one single word in the entire Reuters article about depletion rates of existing crude oil fields. I wonder why?

Not one single word in the entire Reuters article to explain that until current production rates exceed current depletion rates, Happy Talk about “vast” anything is more nonsense. I wonder why?

Not one single word in the entire Reuters article to explain anything at all about the “record 1.65 trillion barrels.” Every fact-free commentary about the “myth” of Peak Oil which alludes to the trillion-plus resources total neglects to mention the annoying fact that at least 1 trillion barrels of that total are the estimated amounts of oil shale. The same oil shale which has not yet been successfully produced commercially despite more than a century’s worth of efforts. The same shale oil which isn’t really oil at all, but rather, a pre-cursor called kerogen which requires an astonishing input of energy to convert it into something approximating crude oil’s density and efficiency. [Kurt Cobb has a nice summary here.] Oil shale is every bit as beneficial to us right now as is oil inside of Neptune.

The number attached to the reserves total and/or the resources total don’t matter at all—at all—if they cannot be produced economically. As I noted previously [echoed by many others much more knowledgeable than me]:

‘Reserves’ do not equal available supply; not by a long shot. Quintuple the proved reserves figures if it floats your boat, but what might arguably be buried beneath the Earth’s surface offers exactly zero assurance it will in fact be produced economically, practically, or efficiently….And let’s not forget amid all of this great news the fact that we have been using for decades is being drawn down each and every day, and so much of what will be produced going forward will first have to match depletion rates before we marvel at their substitute potential … while billions around the world strive to improve their conditions … using more of the energy resources still available but depleting by the day.

And as Chris Nelder offered in that same article of his referenced above:

It is not about oil reserves (oil that has been proved to exist and to be producible at a profit), or resources (oil that may exist in the ground, irrespective of its potential to be produced profitably). Those quantities do play a role in estimating the peak, but do not determine it in any way….
[I]f you’re not talking about data on oil production rates, or the general topic of reaching the peak rate, then you’re not talking about peak oil.

Not one single word in the entire Reuters article about production rates, either. I wonder why?

That information is not exactly a state secret, so why is it that none of those details found their  way into the article? What’s the point of making half-baked arguments? Who benefits?

Chris Martenson nails it:

So shale oil discoveries may be massive in terms of the total number of barrels of oil–but what they lack are high and sustained flow rates. And there’s a lot of confusion out there in the press right now, with several analysts that should know better, waving their hands at increasing reserves and then making the utterly wrong conclusion that peak oil is a defunct theory.
Now, to illustrate this, imagine we just found a trillion barrels 40,000 feet down. Yeah, that would awesome, right? No more peak oil, at least for a long time, right? Well, what if due to technological considerations, we could only get a few wells installed, and the max flow rate we could get from that reservoir was 100,000 barrels per day. Oh, that’s it? Well, that’s nice, but it doesn’t really help the overall situation, where we’re experiencing roughly 4,000,000 barrels per day,per year declines in existing conventional crude oil fields. That is, reservoir size and flow rates were well-correlated several decades ago, because the stuff just flowed out of the ground so easily, but now that we have to drill tens of thousands of feet to achieve a single well flow rate on the order of 100 barrels per day/per well in the shale plays, or we even have to scoop up tarry sand in giant machines and then power wash the bitumen off of it, oil just don’t quite flow quite like it used to.
There’s a new relationship between reserves and flow rates, and it’s a fraction of the old rate. And it’s an entirely new world, and this has been missed by the less insightful analysts and commentators out there. [2]

And then there’s this curious comment from the Reuters article:

Once reserves are understood to be a created inventory, not a natural endowment, several other fallacies about the outlook for the oil industry explode.

So if reserves are “a created inventory, not a natural endowment,” then what exactly is the point? Why stop at a few hundred billion barrels of “created inventory?” If the argument isn’t intended to communicate factual information designed to help readers understand, then don’t be so chintzy with the numbers. Six quadrillion barrels of “created inventory” … that’s impressive! (That would be enough to supply us all for almost two million years, by the way.)

The author then goes on to argue that a related “fallacy” about peak oil “is that oil will become ever more expensive in future as reserves run out and oil production shifts to ever more marginal and expensive fields.”

I will be the very first person to admit that my understanding of economics is marginal at best. Simple concepts for many; not so simple for my tiny brain. Having said that, doesn’t basic supply and demand inform us that if the supply of something diminishes (and/or is more costly to provide) and demand persists or even increases, the price will go up? When you include the added comment that peak oil “also assumes new oil is much harder to find and develop than the reserves it replaces,” I’m left with a giant WTF!?

The primary reason we’re seeing a rise in production is because oil prices are high enough to justify the expenditures by the oil industry. Tight oil is not a recent discovery; it only became feasible to produce when prices rose. (High prices aren’t exactly a good thing for consumers.) See how long production continues at its current pace if benchmark oil prices decline. One need only look at gas production in the past year as Exhibit A.

And the reason oil companies are attempting to extract oil from the Arctic, or relying on fracking, or looking miles below the oceans, are because oil today “is much harder to find and develop than the reserves it replaces!” Sorry, but … Duh!

But I’ll end this by actually agreeing with at least one part of this author’s commentary: It is time for analysts and policymakers to concentrate on real problems.

Peak Oil is one of the big ones—assuming facts matter, that is.

~ My Photo: Morro Bay, CA – 02.13.07

Sources:

[1] http://www.smartplanet.com/blog/energy-futurist/the-politics-of-peak-oil/326; The politics of peak oil by Chris Nelder – 02.01.12
[2] http://oilprice.com/Interviews/Dont-Fall-for-the-Shale-Boom-Hype-Chris-Martenson-Interview.html; Don’t Fall for the Shale Boom Hype – Chris Martenson Interview by James Stafford – 12.18.12

Yet another in the seemingly endless string of cherry-picked story lines attempting to put to rest the “theory” of Peak Oil has found its way onto the internet, completely unremarkable in the talking points offered, which I’ll get to. What was most striking was not so much the uniform lack of understanding on the part of all but a handful of commenters.

The blatant, racist stupidity of several caught me completely by surprise. I didn’t think that offensive nonsense had found its way into the Peak Oil conversation, but Racist Ignorance is alive and well in this arena, unfortunately. But any forum will do, I guess….And the relevance of that conversation to Peak Oil is … what?) In this day and age, that moronic tripe still flourishes … amazing! (And of course, the continuing nonsense about the fascist-socialist-Kenyan-Muslim President out to destroy America hasn’t abated any, judging by some of the other comments.) Ironic that those who lament and fear what this nation is coming to fail to appreciate the fact that the paranoid garbage they parrot is a primary cause and symptom. Each and all of us need to be better than this. We’ll need no less in the years to come.

I probably should not be as stunned (and dismayed) as I was, given the nonsense that passes for mush of the political discourse today, but it is striking to see how many people seem utterly incapable of stepping back and considering a bit of reality, even if it is at the expense of a carefully-tended, fear-based ideology. The commentary tarnished my optimism, but only temporarily. Best not to give that ignorance any more attention….

A sampling of what that article had to offer, beginning with the almost-obligatory snarky comment passing for relevance to the discussion [my bold/italic]:

‘With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,‘ [President Obama] said. ‘Not when we consume 20% of the world’s oil.’
The claim makes it appear as though the U.S. is an oil-barren nation, perpetually dependent on foreign oil and high prices unless we can cut our own use and develop alternative energy sources like algae.

Nice touch … bona fides duly established. But just in case there’s doubt, we start with the magic words [my bold/italic] from Page One of the Deniers’ Playbook [see this]:

[F]ar from being oil-poor, the country is awash in vast quantities — enough to meet all the country’s oil needs for hundreds of years.

And then more selective facts, without context or even a bit of accompanying, vital information to educate and inform. Only a handful of knowledgeable commenters bothered to discuss the claims and provide missing context, given that most of them were much too focused on slamming the aforementioned socialist-Muslim yadda, yadda, yadda. How does perpetuating ignorance and/or lack of understanding help in any way?

A sampling [my bold/italic]:

At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered, according to the government’s Bureau of Ocean Energy Management.

About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.

Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope, says the U.S. Geological Survey.

Up to 12 billion barrels in ANWR, according to the USGS.

As much as 19 billion barrels in the Utah tar sands, according to the Bureau of Land Management.

Then, there’s the massive Green River Formation in Wyoming, which according to the USGS contains a stunning 1.4 trillion barrels of oil shale — a type of oil released from sedimentary rock after it’s heated.

When you include oil shale, the U.S. has 1.4 trillion barrels of technically recoverable oil, according to the Institute for Energy Research, enough to meet all U.S. oil needs for about the next 200 years, without any imports.

For starters, Chris Nelder recently offered a healthy dose of reality about shale.

Even those with no knowledge about oil production whatsoever might find some reasonable answers to these questions: How difficult might it be to find, extract, and then produce oil from near the North Pole? Think there might be an issue or two? Perhaps some weather concerns? Maybe just a bit more expensive? More difficult? Riskier? Might take a while, too.

As for “a type of oil released from sedimentary rock after it’s heated”: kerogen is not exactly the same thing as the oil we’ve all seen gushing from wells. Despite several decades of effort, it’s still not a commercially feasible enterprise. And the “after it’s heated” part is just a bit more complicated that the author bothers to explain. [See this, for example.] But inconvenient facts just get in the way….

Perhaps as remarkable as anything, however, was this statement by the author, which almost all of his commenters failed to mention or apparently even notice:

To be sure, energy companies couldn’t profitably recover all this oil — even at today’s prices — and what they could wouldn’t make it to market for years.

See … that’s kinda the whole problem with being “awash” in “vast” quantities….A bazillion barrels of anything buried underground, or in the Arctic, or otherwise not extracted by conventional means will stay right there if there’s no profit to be made. High prices might of course make some companies willing to go for it, but what wasn’t mentioned is the fact that high costs on their end means higher prices for us consumers (even the ignorant, racist ones). That’s not a good thing, and thus not especially helpful.

Telling someone that within walking distance of their home are millions and millions of dollars in local banks is all fine and well. But if that someone can’t get any of it, the amounts stop being impressive fairly quickly. Vast quantities of inferior, unconventional oil tucked away for many more decades is not any different. Impressive totals, but mostly useless to us. Those kinds of added facts would be ever-so-helpful to the many who clearly do not yet appreciate the challenges of Peak Oil.

And not making it “to market for years” … that’s kinda problematic, too. See, shocking as it is, conventional fields—the ones we’ve been tapping into for decades now—are depleting. Every day. They’re not limitless. Worldwide demand is increasing. More of those conventional crude supplies are also being kept by the producers to satisfy demands in their own countries. More for them, less for us. Easy math!

As I and others in the know point out day after day: the United States uses in the neighborhood of 18 million barrels of oil per day, about half of which we still import. Getting all of these inferior, unconventional supplies (and shale, tar sands, etc. are most definitely not the same as conventional crude) to a point where they will meet just our demands, let alone contribute to world supply, is decades away at best, if ever. And all the while, worldwide demand is still increasing and existing fields are still depleting.

These magical supplies Mr. Merline speaks of are harder to get to (thus more expensive); they require more refining (thus more expensive); their rate of production is much less than the ever-dwindling supplies of conventional crude; the energy efficiency quality is not the same; and in general, much more time, effort, expense, and risk is required to produce what’s left. This is good news?

[NOTE: This is the latest installment in a new PeakOilMatters series (which started here). It’s about finding a new and better vision to get to, through, and beyond Peak Oil and its widespread impact on what we produce, how we produce, and how we live. We won’t be falling off a cliff tomorrow, and the full brunt of Peak Oil’s effects won’t be experienced all at once, either. Gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt.
Gradually, but inexorably, changes will be in the offing, however. We need to come to a better understanding of this, and start preparing ourselves now for the lengthy transition and just as lengthy ongoing impact of Peak Oil on all of us. Many issues must of necessity be considered, and I hope to make a contribution to the public dialogue we need to have. I hope you’ll find these objectives enjoyable as well as beneficial. We have more of a voice than we think we do. Finding that voice just might be our best hope.]

~~~

(This is a continuation of last week’s post discussing a recent essay by Joel Kotkin urging more domestic fossil fuel production. The last quote of his cited in that post is repeated here:)

“Shale oil deposits in the northern Great Plains, Texas, California and Colorado could yield more oil annually by 2015 than the Gulf of Mexico. Within 10 years, these finds have the potential to reduce U.S. oil imports by more than half.”

“Gail The Actuary” recently posted a very informative piece, and actually addressed this very point, (a follow-up to her discussion in that post of claims—echoed by Kotkin—that the oil shale fields in the U.S. could produce as many as 2 million additional barrels of oil per day by 2015).  She offered several observations which seem to counter those could yields and have potentials:

“I am suspicious that quite a bit of the 2 million barrels a day of additional production by 2015 that is being forecast is not really oil. Instead, I expect it will be natural gas liquids. This currently represents about half of the ‘miscellaneous’ layer [in a chart found in her post]. Natural gas liquids (NGLs) include propane, butane, and other gasses (sic)….
“An increase in NGLs would be of lesser benefit than oil, because it is not directly substitutable for oil, and is a cheaper product. Initially, it would mostly make home heating for those using propane cheaper, but then tend to drive NGL developers out of the market. Unless NGLs can cheaply be converted to higher priced oil products (and refinery capacity can be added quickly to accomplish this), it would seem like a drop in prices would quickly put an end to the NGL ramp-up….
“US oil imports have declined about 25% in the five years since 2005. In the next ten years, I would expect oil imports to continue to decline, regardless of what we do, because the amount of oil on the world market will continue to drop, and oil importers will tend more and more to be in recession. It is not clear how much US oil imports will drop, but a 50% drop in the next 10 years would not seem all that unlikely, regardless of what we what we produce, because of oil exporting countries will tend to consume more, and more countries will shift from being exporters to importers. We are currently importing 9.4 million barrels a day, so a reduction by half by 2020 would be a reduction of 4.7 million barrels a day.” [1]

It’s all fine and well to talk about the “potential” for this or that increase in production. But if it is not placed in the real-world context of increasing demand, depleting oil fields, harder-to-find-and-produce newer resources (meaning more energy being used to produce lesser amounts of inferior quality supplies), and the often-overlooked factor that many oil-exporting nations are now keeping for their own use more of their production totals, then the “potentials” lose much of their luster. Just keeping up with depletion rates still represents a net loss in production if demand is increasing and imports are being curtailed for any or all of the reasons just cited.

And let’s also remember that all of these “new,” more expensive, energy-intensive and time-consuming efforts are taking place because there’s no place else to go. Because these enhanced efforts are more costly, energy prices have to remain high for producers to justify the time, expense, investments (financial, manpower, asset-acquisition), and efforts needed to extract these often inferior oil resources. There is a point when it is no longer economically feasible to invest in production given those limitations and challenges. Higher energy prices are generally not looked upon favorably by consumers. Producers need consumers before they make their investments. Consumers cutting back = less justification for investments, and it’s easy to figure out what happens then.

Gail also comments on the claims that there could be a two-million barrel per day increase in production from the oil shale deposits (something she states “would be a tall order”) by offering some well-reasoned considerations:

“There are several reasons why the hoped for increase might not be realized, however. These include:
“Inadequate infrastructure. One question is whether inadequate infrastructure will prove to be a roadblock to meeting ambitious production goals in five to 10 years….
“Inadequate price. What tends to happen when there isn’t adequate transportation for the oil is the selling price of the oil tends to be depressed, relative to other types….
“It is easy for operators to assume that the price differential will get better, and also that the prices of other types of oil will continue to rise. But all of these things are by no means certain. High oil prices tend to send the economy into recession, so world prices may not rise as much as hoped–they may oscillate instead, rising, then putting the economy into recession and falling again. Also the differential of North Dakota types of crude to Brent may stay low for an extended period, if infrastructure issues cannot be worked out.
“Optimism before drilling. There are many unknowns before drilling including how quickly oil production from individual wells will decline, how long wells will prove to be economic, what proportion of wells will have high production, and the level of oil and gas prices in the future. It is natural for those who are trying to get others to invest in these ventures to base their assumptions on an optimistic view of the future. If experience with shale gas in Texas is any clue, once realities start setting in, the level of drilling may decline, and overall production, after an initial run-up, may decline. If this happens, it will be very difficult to meet the ambitious goals presented….
“If overall production is to be increases by 2 million barrels a day by 2015, it will be necessary to overcome these declines, as well as add 2 million barrels a day of new production. What happens is that each year, more and more oil fields and oil wells within oil fields become non-economic. These are closed. Also, what is extracted is an oil-water mix, and the proportion of oil tends to fall over time. This means that if a given volume of oil-water mix is processed from a well, each year the well will yield less oil and more water.”

Not quite a guarantee, is it?

Mr. Kotkin then turns to natural gas, with all the by-now usual qualifiers and non-specific “statements” which one assumes should be taken as fact (bold/italic mine).

Even more promising, from the environmental standpoint, are huge natural gas finds. Discoveries in Texas, Arkansas and Pennsylvania could satisfy 100 years of use at current demand levels….
“Natural gas is already muscling out coal as the primary source for new power plants. It can also be converted into transportation fuel, particularly for buses, trucks and taxis.”

What if demand doesn’t stay the same? (Probably a damn good bet that it won’t). Then what? How does transportation fuel conversion take place? How long does it take? How expensive is the process? How efficient? How easy is it to do? How much more gas would be consumed by those converted vehicles, and thus how much less would be available for all other consumption?

And while he’s correct in stating that domestic energy production creates the “potential” (that word again) for “hundreds of thousands of jobs”, wouldn’t a national effort to devote our research efforts, skills, manpower, and resources into alternative sources of energy (which will surely outlast declining supplies of fossil fuels) offer the “potential” for just as many jobs, if not many more—given how much of our infrastructure and industrial/transportation foundation will have to change to accommodate new energy sources?

Reasonable questions all, I’d like to think, but no answers at all in Mr. Kotkin’s article.

There’s also the inconvenient reality that the U.S. is a natural gas importer. We do not produce enough of it to satisfy our needs as is. We turn to Canada as our primary benefactor, but as its demands for natural gas increase (it’s also used in significant quantities just to assist in the production of that country’s tar sands), the less natural gas there is to satisfy Canadian—and American—demand. At some point, the math is not going to work.

Facts….

Gail the Actuary conveniently offered a wealth of information in another recent post that sheds a bit more light on those magical “huge natural gas finds” Mr. Kotkin finds so appealing. (The title of the post: “Don’t count on natural gas to solve US energy problems” offers a clue or two.)

“[N]atural gas is only about one-fourth of US fossil fuel use, so it would be very difficult to ramp it up enough to meet all of these needs.
“One issue is whether a rise in shale gas will mostly offset other reductions in natural gas supply. In Annual Energy Outlook 2011, EIA forecasts that shale gas production will increase from 23% of US natural gas production in 2010 to 46% of US natural gas production by 2035, but that these increases will mostly offset decreases elsewhere. Even with this huge increase in shale gas production, the EIA only sees US natural gas production increasing by an average of 0.8% per year between 2011 and 2035, and US natural gas consumption increasing by an average of 0.6% per year per year to 2035–not enough to make a very big dent in our overall energy needs.”

Thud.

Shale gas production, which is being touted as a door-opener for increasing natural gas production, has its own set of risks and problems. Water pollution from the fracking process employed to produce the resource, earthquakes (no joke; see this), apparently rapid decline in production levels, and the fact that shale gas is not profitable at current low prices are just a few of the negatives. Not much incentive for producers there….

Gail touched on the shale gas issues in her post, suggesting for one thing that increasing the percentage of shale gas in the overall total of gas production “will mostly offset decreases elsewhere.” And natural gas’s lower prices will have less appeal as prices rise—surely an inevitability as demand and production costs increase. Then what?

As for Mr. Kotkin’s “100 years” claim, Gail offers more of those damned facts in rebuttal (citing, as she did with all of her other facts, charts and other sources of official information and statistics. Don’t you just hate that? See this article, also.)

“US current consumption is about 24 trillion cubic feet a year. If we divide the ‘U. S. Future Supply’ of 2,074.1 TCF by 24, we get 86 years, which is the source of the statement that 100 years of natural gas supply is available. But it is not at all clear how much of this is economically extractable with technology that we have now, or will be able to develop in the future. If we exclude speculative resources, we are down to 61 years, assuming no growth in natural gas consumption. If natural gas use rises, we would exhaust those resources much sooner.
‘If we exclude both Speculative Resources’ and ‘Possible Resources,’ then the number of years at current consumption falls to 29 (but much shorter, if production ramps up sharply). The shale gas portion of this is about a third of the total, or approximately 10 years, at current consumption levels.”

Thud, again.

Mr. Kotkin does acknowledge the legitimacy of environmental concerns arising from oil and gas production as they compare to the risks now quite evident to all in the wake of the disasters in Japan:

“But compared with the existential threat of nuclear radiation, even potential oil spills and damage to water supplies from fracking shale might be regarded as tolerable risks for which we have considerable experience and technology managing with enhanced regulation.”

Permit me to introduce you to the right-wing of our federal government and the big money interests which largely dictates its agenda. “Enhanced regulation?” Seriously? From this narrow-minded, shortsighted group of legislators beholden to corporate America? This same group of “leaders” who by all indications have little regard for what their own (non-wealthy) constituents are calling on them to do? I’m not sure that relying on them for “enhanced regulation” is likely going to meet with much success, although there is no question that is absolutely necessary.

“The record shows that without effective government oversight, the offshore oil and gas industry will not adequately reduce the risk of accidents, nor prepare effectively to respond in emergencies.” [2]

Credit where credit is due however. Mr. Kotkin does add:

“Republicans, too, need to give up their ‘bests’— including the notion that no policy is always the best, usually a convenient cover for the narrow interests of large energy corporations. Allowing private corporations to unilaterally determine our energy policy makes little sense. After all, most of our key competitors — China, Brazil and India — approach energy not as an ideological hobby horse but as a national priority.”

He concludes with these observations:

“The time has come for both political parties to give up their ‘best’ energy options for the good. A green economy that produces millions of new jobs is a laudable goal. But the renewable sector cannot develop rapidly without massive expenditures of scarce public dollars. To fully develop these technologies, we need lots of money and time….
“It’s time to demand that our deluded, and self-interested, political class develops an energy policy based not ideology but on how to best guarantee prosperity for future generations of Americans.”

Drilling for more oil, or pursuing questionable practices to release shale and natural gas are fraught with their own set of risks and consequences. In truth, there are no energy policies that won’t require significant compromise, sacrifice, and expense. Weighing the advantages and disadvantages, together with the benefits and rewards is no easy, quick, or guaranteed strategy. If we wait until everyone is on board we’ll be having this same conversation 500 years from now.

But to insist that our energy policy must be to keep devoting “scarce public dollars” (and scare private ones, too) to resources on a steady path of decline, guaranteeing only more difficulties and hardships down the road, is an energy policy to nowhere. There’s no doubt that we have enough fossil fuel resources to last a good number of years (given oil depletion and increasing demand, the math makes the exact date irrelevant, and I’m not a seer). But they are resources harder to come by, more costly, and well on their way to soon being insufficient to meet the many legitimate demands and needs of an over-populated world. What’s the advantage in spending “money and time” on endeavors that will lead to a gigantic energy dead-end? How much more trouble should we be looking to create for ourselves?

Our priority—our focus—must turn away from fossil fuels now, while we still have enough available to help ease us into the process of transitioning away from those very resources. That is a task of unimaginable complexity and effort. Waiting for a better day is not a choice. That day has passed. Let’s not let too many more slide by in foolish pursuits.

Sources:

[1] http://ourfiniteworld.com/2011/02/14/is-shale-oil-the-answer-to-peak-oil/; Is “shale oil” the answer to “peak oil”? by Gail Tverberg – February 14, 2011
[2] http://www.infrastructureusa.org/deep-water-the-gulf-oil-disaster-and-the-future-of-offshore-drilling/; DEEP WATER: The Gulf Oil Disaster and the Future of Offshore Drilling – January 10, 2011

[NOTE: This is the latest installment in a new PeakOilMatters series (which started here). It’s about finding a new and better vision to get to, through, and beyond Peak Oil and its widespread impact on what we produce, how we produce, and how we live. We won’t be falling off a cliff tomorrow, and the full brunt of Peak Oil’s effects won’t be experienced all at once, either. Gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt.
Gradually, but inexorably, changes will be in the offing, however. We need to come to a better understanding of this, and start preparing ourselves now for the lengthy transition and just as lengthy ongoing impact of Peak Oil on all of us. Many issues must of necessity be considered, and I hope to make a contribution to the public dialogue we need to have. I hope you’ll find these objectives enjoyable as well as beneficial. We have more of a voice than we think we do. Finding that voice just might be our best hope.]

~~~

Before I dive into a series of posts discussing general objectives as the next step in this ongoing “New Direction” series (and other issues of note), I thought it might make sense to give us all just a few simple reminders about where we stand with Peak Oil. About a year ago, I posted the first of several pieces discussing some basic facts in support of my position that we’re now in the early stages of irreversible declining oil production. It’s a good starting point, if I do say so myself.

More recently, Sharon Astyk posted a genuinely terrific article (which I blogged about at the time) which offered a refreshing take on the peak-oil-is-here-no-it’s-not debate. If you haven’t read it, I wholeheartedly encourage you to do so in conjunction with this. It is really good and stands up just as well as it did when she wrote it several months ago.

“A major reason for the rising prices and flatlining production is that for ‘the currently producing fields of crude oil, the production will decline,’ [International Energy Agency Chief Economist Fatih} Birol said.
“Today’s active oil fields produce about 70 million barrels per day, but by 2035, he said, ‘they will produce less than 20 million barrels per day of oil.’
“Just to keep crude oil production flat would require much more production from new oil fields—including those discovered but not yet developed, and others still to be discovered.” [1]

This quote follows release of the IEA’s World Energy Outlook 2010, in which the Agency admitted for the first that Peak Oil is in fact here, and has been since 2006. Oops! That report also predicts that almost half of the oil we’ll need by 2030 will have to come from oil fields not yet developed or found! Hello!

And as Jeff Rubin noted in his own review of that IEA report,

“According to the report, by 2035 three quarters of currently operating oil fields won’t be producing anymore. In fact, current fields are only expected to account for less than one fifth of that year’s production.
“That leaves over 80 per cent of the IEA’s 2035 production projection coming from new oil fields, ones that either haven’t yet been developed or haven’t even been discovered. And the contribution from that undiscovered category alone is still far greater than the one from currently producing fields. That’s a tall order for new field discovery.
“Undeveloped or undiscovered oil fields, growth in tar sands production and increased reliance on natural gas liquids account for all the expected growth in world oil production over the next two and a half decades. Curiously absent from this list is any contribution from conventional oil production–you know, the type you can afford to burn in your car, the type the global economy can afford to use to power transoceanic trade?”

None of this is good news, and the contortions one has to perform so as to convince others that there are no oil supply issues on the horizon would seem to be at best pointless. Reliance on unconventional resources such as oil shale, the Canadian tar sands, deep-water wells (anyone remember that little oil spill in the Gulf of Mexico last year?), and other reserves carries its own set of risks and challenges.

None of those alternatives are guaranteed to even replace what’s being lost each year just from normal depletion in existing fields, much less provide more; they are more expensive to locate and produce; the efforts needed to extract and then refine them are significantly greater than traditional oil production; it’s taking longer to bring the final product to market because of the inherent challenges in extracting those unconventional reserves (see this and this, for example); the net energy from those efforts (simplified: what’s left from the energy expended to extract vs. the energy potential gained) is much less; it’s costing so much more to obtain the same quantity and quality of energy efficiency as conventional oil, and there’s that little problem of environmental damage….That’s just for starters.

Let’s not forget that the world-wide recession of recent years has sharply curtailed investment in oil exploration—conventional or otherwise. Oil exploration and production is not a two week start-up to final production undertaking. Delaying needed investments by several years sets the entire industry back by at least that much … and while all of that is happening, demand continues to increase for a supply that simply is not expanding any longer. No matter how one does the math, the results are not good.

It’s become a common refrain that “the days of cheap oil are now behind us.” That does not bode well for countries hoping to regain their economic footing while their citizens clamor for more energy to meet their increasing demands for all kinds of products and services they’ve watched U.S. citizens enjoy for decades. Who wants to tell those several billion people “No”?

It’s also worth noting that recent turmoil in the Middle East has made it quite clear that we are in many respects largely dependent on suppliers who are less than stable or reliable. [Michael Klare recently offered a very informative piece on this topic.] The political calculations and consequences of continuing instability (and hostility to America) are not insignificant. A related consideration which gets too little attention is that oil-exporting nations also have their own citizens’ demands to provide for. Those exporters are not immune to the desires of their own people to improve their living conditions and prospects for prosperity. Who wants to tell those nations “We insist you supply the United States with what we need before you satisfy the requirements or demands of your own people?” Good luck with that!

As the domestic needs of exporting nations increase, the simple math result is that they will this have less oil to export. (A nice summary of the key points is here.) That’s not terribly shocking or difficult to appreciate, but what it means to nations like ours (as it relates to the by-now familiar statistic is that we consume approximately one-fourth of oil supplied each year) is that we’ll be getting less. Our demand for increases matched against less being supplied to us does not lead to good outcomes.

Finally, before this concise summary turns into an epic novel, I’ll direct you to one final article which provides readers with a generous amount of information about oil production and existing oil reserves. Jim Puplava, the author, provides a concise perspective on some key, fundamental aspects about the oil fields we continue to rely on after decades of production. As I touched on in my own above-referenced post, and as Mr. Puplava highlights, we are relying on fewer and fewer giant oil fields whose replacements simply cannot match the quantity and quality of those ever-depleting giants.

It is not a formula that gives optimists much to hang their hats on.

Sources:

[1] http://news.nationalgeographic.com/news/energy/2010/11/101109-peak-oil-iea-world-energy-outlook/; Has The World Already Passed Peak Oil? by Mason Inman – November 9, 2010

I’m well aware that there is an unfortunately successful and all-too-often-employed strategy (lack of integrity aside) used most often in politics but certainly in discussions about Peak Oil and global warming, where the frequent repetition of any combination of lies, half-truths, misstatements, misrepresentations, and disingenuous propositions eventually leads to belief on the part of far too many people.

I’ve mentioned in prior posts (here and here, for example) that I think it’s important to challenge widely-disseminated examples of peak oil denial rather than letting the disingenuous arguments take root. The decline in oil production is a big enough problem as it is; creating doubt for reasons having no discernible value is at best questionable and should not go unchallenged is possible.

To that end, I came across two articles last week that caught my attention. Predictably, the same patterns of “explanations” and offerings cropped up there just as they have in other articles I’ve highlighted before. I guess if you cannot deal with facts, there’s not a whole of room for much creativity when addressing fossil fuel production. I’ll deal with the first article today, and save my discussion for the other one for an upcoming post.

First up is a piece from Jeremy Bowden, whose first paragraph touts one of the more popular terms in denial-land: the finding of “massive” oil fields. Whenever I read that, the antenna goes up and into full lock mode. Usually accompanying glowing exhortations about these magical fields where solutions to all our problems reside are phrases touting the wonder of technology and ingenuity. Bowden does not disappoint.

This article of necessity raises the specter of OPEC’s role in world production: “It is the technical expertise and project management skills of the most dynamic multinational and independent oil companies that hold the key to these new hard-to-get-at reserves, rather than the whims of Arab dictators or the level of OPEC budget deficits.” Always good to have an enemy to whip out at a moment’s notice (not that I’m an OPEC fan, mind you.)

I’m still not entirely clear on why quotes like this are supposed to be persuasive, but they do frequent writings which dispute peak oil:

“James Burkhard, a managing director at energy consultancy IHS CERA, says the recent upstream developments mean oil and gas will continue to be pillars of global energy supply for decades to come. ‘The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years,’ he added.”

He’s absolutely correct. There are no readily available substitutes, but that’s the problem! Saying that oil is currently our one and only is not even a bit helpful. All it does is to emphasize how utterly dependent we are on this finite resource—a resource that by all reasonable indications peaked several years ago and will continue a steady path along a not-always smooth or linear slope of decline … and we are woefully unprepared. (This recent post is only the latest in a lengthy list of concise and easily-understood explanations about Peak Oil.)

So what comfort does it offer us to indicate that all we have is all we have, when more of it is being demanded and less of it is being produced?! That math just doesn’t work.

Bowden also points out that Canadian oil sands now provide us with more oil that does Saudi Arabia. And….?

Saudi supply is being counted out by many other nations whose fossil fuel demands are only increasing; Saudi production is also being increasingly diverted to and for its own uses, and its fields are not immune to the same rates of depletion as are most other older fields, so … what’s the point here? Like most other articles which promote Canadian tar sands as the Great Salvation, no mention whatsoever is made here of the environmental degradation; the poisonous tailing ponds left behind; the immense demands on water; the costs, effort, and/or time involved in extraction, or the fact that production rates aren’t all that spectacular to begin with!

But why deal with any of those facts? They simply get in the way of a good insincere argument. (And Bowden also makes it a point of stating that U.S. oil production increased “for the first time in decades.” Our production peaked more than forty years ago! A slight one year uptick—from shale, which has its own set of environmental, cost, effort, and resource usage issues, also conveniently overlooked—is not exactly encouraging.)

Speaking of U.S. shale production, Bowden points out the following:

“… the Bakken shale field is now the country’s fastest-growing major oil field. Production has reached about 350,000bpd, from 100,000bpd a decade ago. In a recent report, consultancy firm PFC Energy projected production would climb to 450,000bpd by 2013. ‘The technology producing these resources has absolutely made the difference,’ Mr Marvin E Odum, President of Shell Oil, said. ‘It’s the same with the Arctic, with the shale oil, all over the world. Technology is the key.’”

Give or take a bit, the United States uses somewhere in the neighborhood of 7 billion barrels of oil per year … billion with a “b”. I’m definitely not a math whiz, but my trusty calculator tells me that 450,000 barrels per day times 365 days equals an impressive-sounding (approximate) 165 million barrels per year. I’m pretty certain that 165 million is a whole lot less than 7 billion. Rounding up to the approximate 20 million barrels of oil this nation uses each day, that means we’ll soon be producing enough to get us through sometime next week! Fantastic!

Another forty or so examples like that and we’re all set (and to hell with the rest of the world and their needs or demands).

This author also made it a point of using the same vague, subject-to-multiple-interpretations stock language others employ is discussing the magic of potential future technology, including this:

“A recent forecast produced by Shell suggests that Arctic production from North America, Europe, and western Russia – much of which will be deep offshore – could make up a quarter of global production within 20 years, provided that remaining technical, political and environmental challenges are met.” [My emphasis]

“… provided that remaining technical, political and environmental challenges are met”? Seriously? That’s what we’re supposed to derive great—or any—comfort from? And within 20 years? Wow! That’s not asking for too much, is it? A few pesky “technical, political and environmental challenges” met and we’re good to go!

And there’s this:

“Advances in directional drilling allow well operators to steer and carve through hard shale to expose more and hard-to-reach rock, and it also makes possible drilling under cities or into environmentally-sensitive areas….
“Faced with falling reserves and barred from acquiring fresh production in areas such as the Middle East, [nice to just skip past this – my comment] international oil majors began to search for new large deposits in the deep waters of the Gulf of Mexico….Exploration and drilling below 10,000ft of water and through miles of hard rock, thick salt and tightly-packed sands required the development of supercomputers and three-dimensional imaging techniques as well as equipment that could withstand the heat and pressures common at such depths, not to mention submarine robots to make repairs.”

Others have also pointed out these types of impressive displays of innovation and truly astounding technology. But why is this a good thing? That anyone has to go to these lengths and expenses and risks to find oil shouldn’t require any advanced technical degrees to understand that we’ve got some problems!

It would be nice if even some of the energy and effort expended in trying to prop up the dismal truths of oil production could instead be directed to conveying a more accurate and complete picture of what we face now and will have no choice but to deal with in the years to come. That might be a bit more helpful.

There’s always hope….

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

The potential of more than 2.5 trillion barrels of synthetic crude oil from oil shale is nothing short of fantastic! (Nearly two-thirds of that amount is located principally in the Bakken Formation of North Dakota, Montana and Saskatchewan; and the larger Green River Formation of Colorado, Wyoming and Utah.) With annual worldwide oil consumption of approximately 30 billion barrels of oil, it would seem that oil shale’s astonishing numbers drive yet another nail in the coffin of Peak Oil theory.

A couple of trillion barrels of oil from shale formations will hold us in good stead for more than a few lifetimes! (In a report issued several years ago, the RAND Corporation estimated that the Green River Formation alone could provide a quarter of this country’s current oil needs for 400 years! Amazing! [1]) It’s every bit as awe-inspiring a number as are the potential tar sands resources in Alberta.

Of course, there are two sides to every story, and like the tar sands of Alberta, there’s an enormous gap between what may rest beneath the ground and what we’ll be able to extract, refine, and eventually use over the course of many, many decades. Like its unconventional oil companion to the north, oil shale is not likely to be the solution to our energy concerns in the next several decades. If it ever is, it may be too late in any event.

Geologists and the United States Geological Survey estimate there are approximately 4.3 billion barrels of technologically recoverable oil in the Bakken region. We may possess the capabilities of extracting that much oil, but the costs going in and the consequences of attempting to extract and produce oil from shale are different matters entirely, so what may be “technologically recoverable” is by no means the same as “economically feasible.” And let’s also take note that 4.3 billion barrels of oil is about 7 or 8 months’ worth of oil consumption here in America, and the best hope is that all of that would be extracted over the course of no more than twenty years. Not particularly impressive.

The other formations appear to hold not much more promise, although the more optimistic estimates suggest we might see as much as 130 billion barrels of oil from them … eventually. (One expert directly involved with Shell Oil’s production efforts suggested back in 2005 that by 2030 we might see 5 million barrels per day from the formations out West. [2] Five million bpd doesn’t mean all that much now; it will mean much less a couple of decades into the future.)

Oil shale is, as acclaimed energy expert Chris Nelder has stated: “the oil of the future … and it always will be.”

The truth is that after nearly fifty years of attempts to develop oil shale into a satisfactory oil substitute, only a few hundred million barrels of oil have been produced, if that. In other words, we’ve probably managed to supply about a week’s worth of worldwide oil demand as a result of all that effort and money over nearly half a century. Trillions of barrels of oil! stops sounding so impressive when reality intrudes.

A recent and significant increase in production (see a detailed explanation here: http://www.theoildrum.com/node/5928#moreThe Bakken Shale – Has it Moved the Oil Needle? by Gail the Actuary, November 2, 2009) does not change the basic fact that no company has yet made the full-scale commercial production of oil shale economically feasible—with no guarantees that we’ll ever see that outcome. The research and testing of commercial capabilities are not adequate to the task after decades of effort, nor do we have in place the proper facilities that would be needed to handle production demands. They won’t pop out of the ground fully-formed any time soon.

Best estimates are that establishing those essential commercial components is at least another decade away. By then we’ll be well on our way to decreasing supply trying to match increasing demand. That’s bad math.

Part of the reason is that like tar sands, oil shale is not easily extracted. Oil shale is not oil. It’s kerogen, a solid, not-yet-fully matured version of the fossil fuel. More specifically, it’s the organic matter within the oil shale, and in order for the oil to flow free of the shale and be pumped to the surface, it must be heated to more than 700 degrees for a couple of years (while surrounded by a three-foot wall of ice)! This is the “in situ” procedure. The other primary means of obtaining kerogen (usually buried thousands of feet below ground, by the way) is the “retorting” procedure: mining the oil shale and then heating the kerogen above-ground.

Either option represents the investment of a LOT of energy. It’s also important to appreciate that oil derived from kerogen requires further refining before it can be used for transportation purposes … more effort and expense after extraction.

And I won’t touch on the significant amounts of water required to help extract oil shale (and in regions of this country where water is a limited resource to begin with) nor am I discussing in this post the environmental degradation and pollution that results from mining this resource. I also omit any discussion about the impact of such massive undertakings on the local communities involved. I can omit discussion here, but we cannot ignore those considerations.

These pesky little details seem to get overlooked by those who dispute Peak Oil’s imminent approach.

At what point do we decide that the tens and hundreds of billions of dollars we seemingly have at the ready to invest in oil-related energy exploration and production ought to be devoted to resources not quite so limiting? Like the oil from tar sands, oil from oil shale is not anywhere near as productive or efficient an energy source as conventional crude oil … not even close, actually.

We’re just postponing the inevitable, and it seems we should be seriously considering alternatives (not that they are a panacea, either, since we need a lot of oil to research, extract, produce, process, and transport almost every other form of energy). They will at the very least represent a much better long-term solution than oil, shale, and tar. How difficult do we want to make the transition away from oil-based energy?

We have some choices to consider….

Next: Shifting Gears

Sources:

[1] Oil Shale Development in the United States: Prospects and Policy Issues by James T. Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine; Copyright 2005 RAND Corporation, Santa Monica, CA
[2] http://www.theoildrum.com/story/2005/11/12/0150/4833