Peak Oil Matters

I’d like to shift gears just a bit in these next few posts and discuss some “behavioral” perspectives and considerations related to how we’ll need to deal with Peak Oil—a follow-up to one of my initial posts (here).

First up: Just a few of the things we know for certain about oil production, taken from an earlier post (here):

• 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. In 2009 we were 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] China and India, among others, are making their ambitions clear.
• 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]
• To offset depletion in existing oil fields, Fatih Birol of the International Energy Agency has stated that we will need the capacity equivalent of four new Saudi Arabias by 2030 to counter that decline, just to keep up with existing demand [5].

Given that we’re not finding any truly gigantic new oil fields, and unconventional resources (here) and (here) aren’t exactly a solution, we have some supply and production issues to contend with.

Our infrastructure (roads, bridges, train tracks, water and sewer pipes, power lines, etc.) does not exist in current form without the ready availability of inexpensive oil. Indeed, our modern society was created and is sustained in large part because we have that readily available, inexpensive oil.

We’re perfectly free to ignore these facts entirely (this is not exactly an ideal time to be spelling out more potential economic and societal woes). In the alternative, we can choose absolute panic over these conditions; or, we can decide to dwell in the vast middle ground where we acknowledge these facts and plan intelligently and carefully as we work to rebuild our economic ways of life.

We have choices now … more than we’ll likely have when Peak Oil is upon us in full force. Do we seize the opportunities now, or do we wait with fingers crossed?

To rely on “the sentimental belief that the things we fear will never really happen.” [6] is not much of a plan.

Hoping that Peak Oil’s onset and its unfolding impact will take a lot longer than we think may be someone’s strategy, but it cannot be ours.

What we do have to consider is this: In light of current and projected oil production factors, what happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? And how will we respond when decisions are taken out of our hands?

The truth is that this is not going to happen “soon.” But it will happen soon enough … later this year? 2012? 2015? 2020? Depending on the source, those are all reasonable estimates as to when we are going to begin to feel the irreversible and powerful impact of Peak Oil on our everyday lives. If you’re a betting person, perhaps you’ll take the long view and decide we’re 8 – 10 years away, so why worry now?

Peak Oil is not an event that’s just going to show up one morning several months or years down the road. We’ll soon start seeing signs that increasing demand is crashing against the wall of declining availability. Prices will rise, for one, and the effects and consequences will ripple through our economy, just as oil and gasoline price hikes have always done. Perhaps we won’t feel the real first bite for some time after prices begin to climb, but it won’t take long for the effects to begin filtering through our economy and our ways of life. Things are going to change long before we reach the stage where Peak Oil is clearly recognized as drastically affecting almost … well, everything!

Technological advancement is a wonderful attribute, and a hallmark of our nation’s prosperity and greatness. But blind reliance that somehow, some way, and at some point we’ll just find the “right” solutions is placing the livelihood and well-being of hundreds of millions of people on a wing and a prayer. I’m already on record as being a proponent of optimism over pessimism, but reality often dictates that we anchor our plans on what is now the truth rather than what we’d like or hope it to be at some undefined point in the future.

Finding the right technologies or alternative energy sources that could be implemented everywhere, efficiently, effectively, and quickly enough to mitigate any decline prompted by Peak Oil would be a magnificent statement about our ingenuity and creativity. But right now, that belongs in the “miracle” category and we cannot afford to place our hopes on Divine Intervention.

If we don’t start planning several years ago, we’re going to eventually have some problems. Trouble is, we don’t seem to be in much of a hurry to get anything done right now, either. That must change. We must change.

We can choose to fear what Peak Oil may do to our society and our ways of life. That’s certainly an option. But so too do we have the choice to view the challenges of Peak Oil as opportunities to fashion new successes for ourselves, new definitions of prosperity, new ideals of community, and new ways of projecting humanity into a future of hope and progress. The definitions and examples will indeed be different than those crafted as a result of the many benefits of readily available crude oil and its countless products, but there is no reason to lament that those descriptions will be less worthy or satisfying. We own that choice, too.

While we may fervently wish for a return to “things as they were not too long ago” and/or “business as usual,” the stern truth is that those options are no longer available to us. This Great Recession has compounded the difficulties of ever hoping to return to what we had perceived as a “normal” state of economic and civic affairs. Peak Oil will drive home that message for those who choose not to acknowledge it now. Adapt we must, and the sooner we begin the less imposing adaptation will be. No guarantees of course; but doing nothing guarantees an eventual measure of hardship we should not have to face.

But that is only a harsh sentence imposed on our society if we choose to treat it as such. Change will not be easy, given the magnitude of what we will all have to accept and undertake (see this and this post also) . But we do own the choice of taking a longer-term view of our individual and collective futures and deciding that it will be one of hope, fulfillment, and prosperity—different though the definitions may be. It’s up our leaders, and it’s up to us working in tandem with them. Lots of choices….

I’m going to devote the next few posts to discussing this in greater detail. Awareness and understanding of why we must begin planning now—and why we need to develop different attitudes and beliefs about Peak Oil’s arrival—will go a long way to determining how well we negotiate the challenging journey through Peak Oil’s unending influence on life as we know it, and business as usual.

Next: Part II

Sources

[1]: http://www.canada.com/story+glimpse+future+chapters/1333692/story.html ; The oil story and a glimpse at future chapters – 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] Peak Oil News (http://www.aspo-usa.com/) November 12, 2008, citing:  WORLD NEEDS FOUR NEW SAUDI ARABIAS, WARNS IEA  – Robin Pagnamenta Energy and Environment Editor; The (London) Times November 12, 2008 http://www.timesonline.co.uk/tol/news/
[6] Admiral Hyman G. Rickover, courtesy of http://www.dallasnews.com/sharedcontent/dws/dn/opinion/points/stories/DN-dreher_17edi.ART.State.Edition1.adb331.html – Rod Dreher: Peak oil is coming, and we’re unready; August 17, 2008

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/