Peak Oil Matters

Ten months ago, I offered this observation:

This is the reality: we’re NOT running out of oil, and we won’t for several more decades. But that is not the point and never is when discussing peak oil. Peak oil is about the rate of production, the quality of oil, the ease of access, refinement, availability, and affordability. Each of these production elements are now more challenging to meet, and is now happening when worldwide demand is ratcheting up. Finding fewer and smaller fields that consistently fail to keep up with depletion rates, producing less oil, often inferior in quality, more slowly, at greater expense, with much more effort required to satisfy increasing demand (just for starters) is not a recipe for success, profitability, and availability. And it’s not going to get any better. The steady march down the back slope of oil production is soon upon us, and very little that we produce, use, or depend on will remain unaffected by that truth.

Reality can be incredibly inconvenient, but we do ourselves no favors now, short-term, and especially long-term by either falling for the fact-free, feel-good nonsense offered by too many; deluding ourselves into thinking “someone else” is working on this and so we need not be concerned; or perhaps worst of all: simply refusing to educate ourselves about what we’ll soon enough be facing.

With that in mind, I thought it might be best to offer up some inconvenient truths about our fossil fuel supplies we would all do well to keep in mind. How we respond to the realities at hand is absolutely critical to the different future we’ll find ourselves in before too long. Preparation is a good thing; knowledge even better.

A little more than a year ago, Jeffrey Rubin offered commentary on the International Energy Agency’s then-current World Energy Outlook. His sobering take:

Output from currently producing fields is projected to fall precipitously, looking ironically like the steeply declining trajectory of peak oil’s Hubbert curve. (I say ironically because the IEA has historically denied the existence of peak oil.) 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. especially since almost none of it is cheap or easy….

Take that in for a moment. Those projections offer comfort about the future availability of high-quality crude oil only if Major Denial is your standard MO and/or happy, fact-free optimism is your preferred glide path through life.

With all indicators suggesting that we reached Peak Oil production rates more than five years ago (see this as just one observation on the issue), how we pull ourselves out of these difficult economic conditions and restore ourselves onto the path of continuing growth (along with those same expectations from several billion other inhabitants on the planet) demands some consideration from all of us.

If that didn’t get your attention, how about this:

In the 2011 World Energy Outlook by the IEA the Production of Crude Oil from the oil fields that produce oil in 2010 in expected to drop by over Two-Thirds by 2035. Quote: ‘We project that crude oil production from fields that were producing in 2010 will drop from 69mb/to 22mb/d by 2025 – a fall of over two-thirds’. But the IEA still expects the crude world production to remain at 67,9 mb/d per day 2035 from Crude Oil Yet to be found and Yet to be developed (WEO 2011: 122-123)….
The World’s Largest Oil Fields play a very important part for supplying the world’s energy demand. The Top Ten Fields produced 14,26 mb/d; around 20% of the World’s Total Oil Production. If the next ten fields were added the figure was around 25%. In total there was around 70.000 Oil Fields producing oil in 2007 and 20 of these fields produced a fifth of all the oil (WEO 2008: 225-226).
Another fact also stands out very clear; none of these fields has been discovered recently; the ones that was discovered the latest was discovered in 1982 and 1985. Only two of these fields hadn’t reached their Peak in production in 2007; the rest where on decline. During the summer of 2011 there were big headlines concerning an unusually big oil find outside the coast of Norway that is expected being able to produce up to 500-1200 million barrels of oil. Ghawar with its production of 5 million barrels of oil per day produces this amount of oil in 100-210 days. The trends of smaller and smaller findings are something often stressed by researchers within the Peak Oil movement; smaller and smaller fields of oil are being discovered even though the technological tool available to search for new fields constantly develops. [1]

This author’s conclusion states an obvious and painful truth: “[W]e will either have to be very lucky in our explorations or find an enormous amount of small fields.”

Despite putting their best foot forward, those in denial about Peak Oil, who laud the potentials of the tar sands and shale oil (and even those advocating the very necessary focus on alternative sources of non-fossil fuel resources) are unable to come up with any scenarios where production of these unconventional and alternative reserves make up what will be lost over these next few decades from the conventional oil fields we’ve long depended upon.

Denial remains an option, but its utility diminishes by the day. We need to be better.

If subtlety is not your thing, Henry Blodget offers us a more direct assessment:

Oil is at $100 not because of some world war or supply shock or other Black Swan, but because the world’s emerging economies are demanding more oil while the world’s oil producers are producing pretty much the same amount of it….
We’re highly dependent on a finite fuel source controlled by crazy people who hate us
We’ve done next to nothing about this problem for four decades
In some places, this inaction on our part would be referred to as insanity. Or at least gross stupidity.
In other places, it would just be called denial. [2]

And in a recent post by Brad Plumer, more sobering assessments were offered for those still struggling with facts and reality:

Most of the older, easier-to-drill oil fields appear to be running near full capacity, while newer supplies often prove costly and difficult to drill….
But here’s another way to look at it. As a chart from ExxonMobil’s new 2012 Outlook for Energy (via Gregor McDonald) shows, the vast bulk of our oil comes from those older, easier-to-drill fields, with more recently discovered supplies playing a smaller and smaller role:
As ExxonMobil details in its report more than 95 percent of today’s oil comes from fields discovered before 2000. About 75 percent comes from pre-1980 discoveries. While many massive, older fields can keep gushing for decades — Saudi Arabia’s Ghawar field, first tapped in 1951, still hums along at 5 million barrels per day — they seem to be dwindling overall. As Exxon’s chart shows, reserves discovered in the 1960s and before maxed out around 1980 (even as oil companies are trying to recover additional oil from older wells with better technology). What’s more, it seems to be getting tougher to squeeze oil out of newer finds. [3]

This is what confronts us: do we choose to spin it so it sounds better, or do we accept it and then work collectively to meet the challenge?

Simple choice … monumental ramifications.

Sources:

[1] http://www.americanpreppersnetwork.com/2011/12/peak-oil-and-our-mental-models.html; Peak Oil and Our Mental Models – The WikiLeaks Cable and The Worlds Largest Oil Fields, from  http://sibitotique.blogspot.com – 12.15.11
[2] http://www.businessinsider.com/middle-eastern-oil-addiction-2011-12; It’s 2012–It’s Just Absurd That We’re Still Addicted To Middle-Eastern Oil by Henry Blodget, 12.28.11
[3] http://www.washingtonpost.com/blogs/ezra-klein/post/most-of-the-worlds-oil-comes-from-aging-fields/2011/12/13/gIQAaM6CsO_blog.html?wprss=ezra-klein; Oil’s getting harder and harder to come by – Brad Plumer, 12.13.11

In two posts (here and here) written several months ago, I discussed once again the unfortunate truth that there remains a determined effort by some to either completely discount the reality of declining oil production, or who skate along the edges of truth by resorting to combinations of disingenuous arguments or incomplete facts.

Three articles in particular from the past week or so jumped out as more evidence that this disinformation campaign continues. One was a piece originally from a right-wing website with its irony-rich title of American Thinker; another, a predictably one-sided article from the Wall Street Journal, and the third an op-ed from U.S. Republican Senator Lisa Murkowski of Alaska.

In a post I wrote last October, I suggested it was important that we continue to call out those in the media, industry, or government whose preferred truth-telling strategies are to … not be entirely truthful.

While very few of them enter into the Senator Jon Kyl fact-free world of blatant lies, I remain puzzled by their continuing unwillingness and/or inability to deal with the facts. It seems entirely logical that if one is attempting to come up with solutions of any kind to deal with specific challenges or problems, it’s much easier to fashion effective approaches if you aren’t making stuff up in the first instance!

The American Thinker author set out to extol us all on the virtues of “recent advances in oil-extraction technologies such as fracking (the high-pressure injection of sand, water, and small amounts of chemicals into rock or other formation to loosen up the oil and separate it from the surrounding rock).” The fact that a new report came out at the same time indicating that carcinogens have been used as part of this wondrous fracking technology never made it into this body of work. But one man’s “large quantities of carcinogens” is probably another’s “small amounts.” As long as it doesn’t affect him personally, does it really matter?

The moratoriums which several states have imposed on fracking until its environmental consequences can be more fully explored (to say nothing of potential earthquake-causing effects some are now worried about) likewise seem to have escaped this author’s attention. Damned facts….But, hey, what are a few silly carcinogens, water-table contaminations, and earthquakes when you’re discussing profits, right?

This author then touted the magic of Canadian tar sands. Correctly stating that Canada is now our biggest supplier of oil, the author then proceeded to misstate by a mere 40% or so the amount of oil we use each day (“eleven million barrels” when in fact we use closer to nineteen million … that’s Jon Kyl-fact territory). He then ramped up by castigating those who oppose a new pipeline project which “would have the capacity to give us yet another 1.1 million barrels a day from our kindly cousins in the Great White North.” Wow! Now I can buy a Hummer!

His objection is straight-forward: “The environmentalist beef with the project is that the oil the Canadians will ship through the pipeline is be extracted from the reserves in their vast ranges of tar sands. These reserves are huge — on the order of 175 billion barrels of oil, which makes for more than two-thirds of Saudi Arabia’s proven reserves. But the environmentalists fear that the after-products of the tar sand oil extraction will harm the environment.”

Nice to just glide over the facts … all of them, about how tar sands production takes place, or the actual environmental degradation which results from production; the immense demands on two other finite resources—natural gas and water—required in the process; the costs, effort, and/or time involved in extracting oil from the tar sands; the fact that production rates aren’t all that impressive—certainly much less than what had originally been envisioned, or the poisonous tailing ponds left behind.

For some reason, the following is expected to be reassuring: “However, it is both presumptuous and silly for American environmentalists to oppose this joint project to ship Canadian oil. First, it is not as if Canada were a corrupt, third-world dictatorship where the leaders are willing to despoil their own country for some low-end cash. The Canadians have a fine record on environmental protection (as good as our own, in fact. And they have gotten the extraction process for tar-sand oil very ecologically safe. Over 80% of the water used in the extraction process is recycled, and the ‘trailing ponds’ [sic] (which contain the remains of the extraction process) are being planted over with trees and shrubbery.” I guess the birds which otherwise die when they land in the ponds will now have a place to roost, until the trees die.

I won’t quibble with Canada’s environmental efforts in general. Canadian environmental standards are indeed quite admirable. And it will be a while before I completely grasp how Canada’s not being a “corrupt, third-world dictatorship” is relevant to consequences already on record. But to lump what happens in and around the tar sands regions of Alberta with the country’s entire enviro protection record is a disingenuous-at-best attempt to skate past the facts about higher cancer rates, afore-mentioned poisonings of water fowl, the water contamination, etc. I guess in a fact-free world, those are all “ecologically safe” outcomes.

Besides, we have good news according to the writer: “[T]hese tar sands are already laden with petrochemicals to begin with!”

And to end his argument on a high note, the writer claims that the “green dreamers” who stand in the way of all the jobs created and taxes to be paid if the pipeline project were to go through (as opposed to alternative energy research and production, which I guess must result from job-free invisible gnomes and benevolent, tax-exempt industries) are nothing more than environmental crazies who “oppose all sources of energy known to work, and they support only sources of energy proven to be inefficient.”

Yep! That’s us, all right. We love to spend all our time and money on things we know just won’t work at all because … because we’re … ah, you know, “green dreamers.” Yikes!

The Wall Street Journal article highlighted an interview with John Watson, Chevron’s CEO. The reporter wasted little time in blaming President Obama for following in the footsteps of his predecessors by “peddling an America free of fossil fuels” and “closing off more acreage to drilling, pouring money into green energy, pushing new oil company taxes, instituting anticarbon regulations,” asserting that “America is going backward on affordable energy.” The advantage of two-week-long visionary thinking….

Mr. Watson boasted of an unnamed Chevron oil field in the Bakersfield, California area which at one time was providing “only 10 or 20” barrels of oil for “every 100 barrels of oil ‘in place,’” and “thanks to a new technology called steam flooding, Chevron is now getting 70 to 80 barrels.” I’m guessing he was referring to the Kern River oil field, which as of a few years ago had an estimated reserve of approximately 475 million barrels of oil, and has been producing for more than one hundred years!

Unfortunately, the math portion of the explanation was omitted. World-wide, oil demand is about 85 million barrels per day. About 18 or 19 million of that is here in the U.S. Quick math: That field has about a 5 or 6 day world-wide supply, or less than a month’s supply if we kept it all to ourselves. No mention of how quickly Chevron can drain the field. Probably not an inexpensive undertaking, either. Facts! Who needs ‘em? (See this Oil Drum article for more information.)

The WSJ piece then proclaimed the wondrous fact that “Over the past 30 years, even as ‘peak oil’ was a trendy theme, the world’s proven reserves of oil and natural gas increased 130%, to 2.5 trillion barrels.” Space limitations probably prevented the writer or Mr. Watson from explaining anything about costs, efforts, time factors for production, ease of access, or the fact that for several decades now, we’ve been using several times more oil each year than is being discovered.

“Mr. Watson has little time for the Beltway fiction that America will soon be able to do without, or nearly without, fossil fuels. Yes, ‘we need all forms of energy.’ But the world consumes 250 million barrels of energy equivalent today, only a ‘tiny fraction of which’ is wind and solar—and even those ‘are not affordable at scale,’ he says.” I can only assume space limitations once again prevented the author or Mr. Watson from explaining just why that is. It would take a few extra paragraphs to explain how diligently the oil industry has fought attempts to devote investment dollars into alternative energy research or just how much they contribute to campaign coffers to ensure Big Oil occupies a large place on political radar screens and subsidy legislation.

“Bottom line: ‘We’re going to need oil and gas and coal for a long time if America wants to keep the lights on.’” Not exactly a solution, but if the nation’s leaders refuse to commit the resources needed to transition away from a declining, finite supply of fossil fuel, then Mr. Watson is correct in a perverse, lack-of-vision kinda way.

“As for soaring oil prices, Mr. Watson blames growing demand, tighter supply, Mideast uncertainty and inflation.” Hmmm … “growing demand, tighter supply?” Why, that sounds like signs of Peak Oil!

“That pretty much sums up the broader choice America faces on energy policy. It can listen to the Washington siren song on alternative energy, pouring scarce dollars into green subsidies, driving up the cost of energy, and driving out U.S. manufacturing and jobs. Or it can embrace our own fossil fuel resources, which are cheap and plentiful.”

“Cheap and plentiful?” Really? I suppose on a fact-free planet that’s true. And like the American Thinker above, it would appear that a massive expansion of research and production into alternative sources of energy would also presumably occur only as a result of job-free efforts by invisible gnomes and benevolent, tax-exempt industries. Geez! Just curious, but why haven’t these “cheap and plentiful” supplies been produced already, inexpensively and quickly (even during Republican administrations)?

“What I see are people who want affordable energy,” says Mr. Watson. “They want strong environmental standards—they want a lot of things—but first and foremost they want affordable energy. And if you want affordable energy, you want oil, gas and coal.”

By all means, let’s continue to ignore Peak Oil and do absolutely nothing to plan for alternatives. Affordable Energy No Matter What The Cost! would make a fine bumper sticker! We’re entitled to what we want because we’re exceptional. Let’s not forget that. Besides, if we’re lucky, we’ll pass that problem on to our children when they’re older, and then they can ignore it, too. Sounds like a plan!

And as for the good Senator from Alaska, (the senior Republican on the Senate Energy and Natural Resources Committee, no less), her Washington Post op-ed last week titled, “Setting the record straight on America’s oil,” should more accurately have been sub-titled: “Is Not Something I’m Prepared To Do.”

The Senator expressed her concerns about “some of the information presented about America’s energy potential. Left unchallenged, it will contribute to a mistaken belief that increased domestic production is not truly possible.” I’m not sure who might be making such claims, but … okay!

“The president said this month that ‘even if we doubled the amount of oil that we produced, we’d still be short by a factor of five.’ That’s simply incorrect. Doubling our production would trim imports nearly in half. Boosting production by a factor of five is not currently feasible, but if it were, it would make the United States the world’s largest producer.” And that’s relevant why? How? The United States peaked in oil production four decades ago. We now produce only about half of what we did at the peak. So arguing over the possibility of becoming the world’s largest producer is beyond meaningless. (But a good sound bite if you’re not paying attention!)

“Perhaps most misleading is his claim — also made by others — that the United States has ‘about 2, maybe 3 percent of the world’s proven oil reserves; we use 25 percent of the world’s oil.’ That line is crafted to make the audience think that America is both running out of oil and using oil at an unsustainable rate.”

Um … well, we’re not “running out of oil” (which Peak Oil proponents allegedly make all the time if you listen to the Right, a charge repeated by the Senator. They’re correct only if by “all the time” one actually means “never, at least by any credible authority on the topic”). But the “unsustainable rate” part … that’s actually a problem, and one that is only going to get worse as long as our national strategy is predicated on ignoring it.

Andrew Restuccia was nice enough to take some time after that op-ed came out to do some of that … whatchacallit? Fact-checking?

For starters, he addressed the Senator’s “2, maybe 3 percent” factoid:
“The EIA [Energy Information Administration] says the United States has 20.7 billion barrels of proven oil reserves as of 2009, the year with the most up-to-date data available….U.S. proven reserves are significantly smaller than countries like Canada (178.1 billion barrels), Venezuela (99.4 billion barrels), Saudi Arabia (266.7 billion barrels), United Arab Emirates (97.8 billion barrels) and Libya (43.7 billion barrels).
“Overall, based on those numbers, the United States has about 2 percent of the world’s proved oil reserves.”

Facts 1; Sen. Murkowski: 0

Next up, the Senator’s assertion of a “misleading claim” that “we use 25 percent of the world’s oil”:
“The United States consumes massive amounts of oil. The EIA says the United States consumed 18,771,400 barrels of oil per day in 2009. That’s higher than any other country in the world….
“In total, the United States consumed 6.85 billion barrels of oil in 2009 and 6.99 billion barrels of oil in 2010. That’s about one-fourth of the world’s oil.”

I hate math, but I believe that “one-fourth” would be within the margin of error for someone claiming “25 percent.”

Facts 2; Sen. Murkowski: 0

Moving on, the Senator then makes this claim: “Right now, America has an estimated 22.3 billion barrels of oil reserves. But that’s hardly the whole story. A recent Congressional Research Service report that I commissioned with Sen. Jim Inhofe of Oklahoma found that the United States’ recoverable oil resources are estimated at 157 billion barrels. That is seven times as much as our reserves and doesn’t even include the roughly 900 billion barrels of unconventional oil resources nearing commercialization.”

As an aside, relying on Sen, Inhofe for an impartial and fair assessment of any energy matter not entitled “Big Oil” is a lot like relying on Rush Limbaugh to deliver impartial and fair assessments about opposing political viewpoints … not gonna happen. Having said that, the report she mentions states the following:

“U.S. proved reserves of oil total 19.1 billion barrels, reserves of natural gas total 244.7 trillion cubic feet, and natural gas liquids reserves of 9.3 billion barrels. Undiscovered technically recoverable oil [my emphasis] in the United States is 145.5 billion barrels….[That’s later defined as follows]:
“Undiscovered technically recoverable resources (UTRR). Oil and gas that may be produced as a consequence of natural pressure, artificial lift, pressure maintenance, or other secondary recovery methods, but without any consideration of economic viability. They are primarily located outside of known fields.” [1]

“Undiscovered” resources….Seriously? And “nearing commercialization” is as unspecific as one can get. What does that mean?

“Our consumption levels may seem high, but in fact they’re directly proportionate to America’s share of the global, petroleum-based economy.” That’s actually a big problem, Senator. Declining supply, increasing world-wide demand, and our insistence on getting whatever we want, when we want it, and at an “affordable” price goes to the heart of Peak Oil’s challenges.

Another frequent argument made by the Right is that increasing domestic oil production and “estimated X millions of barrels of oil” here compares favorably to Persian Gulf imports. The Senator tossed in her two cents: “Relying on reserves to depict America’s oil excludes all of the lands that have never been explored. My home state of Alaska, for example, holds an estimated 40 billion barrels of oil — the equivalent of more than 60 years’ worth of imports from the Persian Gulf.” That’s fine as far as it goes, if “estimated” is acceptable. For those who aren’t paying attention or don’t understand where we get all of our nearly 12 million barrels of imported oil each day, mentioning domestic potential in the same sentence as “Persian Gulf” sounds like the answer to all our fossil fuel prayers.

Mr. Restuccia pointed out more of those damned facts:

“The U.S. imported 11.7 billion barrels of petroleum a day in 2009, which comes to about 51 percent of the petroleum used in the United States. As of 2009, the country got 21 percent of its oil from Canada, 10 percent from Mexico, 9 percent each from Venezuela and Saudi Arabia and 7 percent from Nigeria.”

In other words, potential domestic supply measured against the Gulf is less impressive as soon as it becomes clear that the Persian Gulf isn’t exactly a huge supplier of oil for us (not that 9 percent isn’t a good chunk of our imports, but when one is left to think that Persian Gulf oil is the majority source of oil, it loses a lot of its effectiveness as a talking point).

Facts 3; Sen. Murkowski: 0

It’s also worth noting that the Senator of course neglected to mention any facts about how we increase our domestic production: what’s involved, how much it will cost, how long it will take, environmental concerns….It’s the by-now familiar tactic of the Right: make pronouncements which sound good and hope no one is going to ask for explanations.

Echoing a point made by many others (including a report from the Bush Administration), Mr. Restuccia sticks another pin in the balloon about the impact of increased domestic production:

“Even a dramatic expansion of domestic oil and gas drilling will have little effect on oil and gas prices, as they are largely set on world markets.
“Here’s EIA Administrator Richard Newell, in written testimony delivered to the House Natural Resources Committee March 17:
“‘Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements.’”

Game. Set. Match: Facts.

Perhaps we need to start having different kinds of discussions … the kind where facts are important, where leaders are willing to be honest, and where we are ready to deal with the truths about fossil fuels.

Sources:

[1] Report for Congress: Prepared for Members and Committees of Congress – U.S. Fossil Fuel Resources: Terminology, Reporting, and Summary by Gene Whitney, Section Research Manager; Carl E. Behrens, Specialist in Energy Policy; Carol Glover, Information Research Specialist – November 30, 2010.

[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….

Sigh….

This is my last planned post of 2010, and it was not my intention to discuss more curious examples of the phenomenon of ignoring facts. Like those who deny global warming amid an avalanche of evidence, the stubborn resistance to peak oil remains just as … well, stubborn. (When our military is worried, we should be, too.)

In a recent post, I suggested that calling out the nonsense from those who deny that we will soon confront the effects of declining oil supplies must continue. Those of us who seek only to inform others have an obligation to share what we know: that we have some energy-related issues on the near-horizon that will require a great deal more effort and innovation than we’re prepared for (to put it mildly). To that end, I also posted these two essays (here and here) as example of what we must continue to do, and why.

This is not to say I/we should engage ourselves in endless games of ping-pong with those for whom facts remain just another issue to ignore. Arguing nonsense for reasons that remain entirely unclear to me is a curious phenomenon of our political and energy discourses. The International Energy Agency has now issued its stamp of acknowledgment that we actually passed peak production in oil back in 2006. Given that, one would think that since one of this planet’s most important energy and oil production organizations is now on board, perhaps the deniers might consider devoting their considerable efforts to helping us figure out what comes next instead of engaging in cherry-picking and smokescreening.

Disingenuous arguments seem to serve no legitimate purpose if one assumes that sharing information is designed to … inform! And denying peak oil does not imbue anyone with Peak Oil-impervious safety shields; deniers will be obliged to endure the same consequences as the rest of us.

Robin Mills enjoys some measure of prominence in the peak oil world. A published author (The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming), and energy economist, Mr. Mills recently posted an article in The National, a major English language publication in the Middle East. In it, Mr. Mills again disputes that we are in a world where oil production has now reached its zenith, and argues instead that peak demand will prove to be more of an energy issue in the years to come.

Taking the same tiresome tack that others have, Mr. Mills makes note of the fact that past forecasts of peak oil have been wrong, and so therefore current predictions (citing Sir Richard Branson’s position, for one) are likewise just more doom-and-gloom foolishness. Curiously however, he cites Shell geologist M. King Hubbard’s 1956 prediction that peak would be reached around the year 2000. For someone making that kind of prediction almost half a century in advance, turns out he was pretty close, so I’m not sure why anyone would still be scoffing at that prediction given what has now been confirmed by the IEA! Mr. Mills fails to note that Dr. Hubbard also predicted U.S. peak production would occur in 1970. Bingo!

Mills then states:

“But the current generation of doomsayers, often not oil professionals, have neither addressed reasons for so many incorrect predictions of apocalypse, nor explained why this time their warnings are any more credible.”

Seriously? I’m pretty much a nobody in the Peak Oil world (definitely not an oil professional, duly acknowledged) yet I’ve managed to come up with a pretty fair amount of information supporting the facts of and about our looming oil crisis—easily obtainable, by the way, (and from quite legitimate sources)—and I’ve got about 80 blog posts behind this one to provide some of that credibility he finds lacking … damned facts screwing things up again! Sprinkled amid my “Daily Review” blogroll on the home page are some other quite serious and credible authorities on the subject, if my work won’t suffice. It’s not a difficult undertaking to find the facts.

For some reason, the “giant” oil finds in recent years off the coast of Brazil appear to be one of the Holy Grails of peak oil denial. Mills cites “5 billion barrels or more of reserves” in the Tupi field, at just $14.00 per barrel (his statement) as evidence of “easy oil”, which at this point is neither here nor there. Most of what’s being explored or produced is by no definition “easy”, so claims about a field that’s easily accessible and inexpensive to produce is not the be all and end all. Oh, and by the way, Tupi lies more than a mile below the ocean surface, and then another 3 miles or so below sand, rocks, and salt deposits. Piece of cake! This is where oil exploration is taking place. Easy? Seriously?

And in a world that uses 30 billion barrels of oil per year, one 5 billion barrel field is …. well, pretty ho-hum. Better than a stick in the eye, but this is supposed to serve as a prime argument for the deniers? Really?

He then adds:

“Meanwhile, new technology and investment-friendly policies in mature oil producers such as Oman and Colombia have reversed apparently terminal decline.”

I guess this is also supposed to throw a cold, wet blanket over the arguments (and facts) favoring Peak Oil, but seriously … Oman and Columbia? It took close to 60 seconds for me to Google the oil production levels of those two countries, and according to our own Energy Information Administration (U.S. Department of Energy), Oman produced just over 800,000 barrels of oil per day last year (approx 300 million barrels in 2009). Columbia managed about 250 million barrels in 2009.

On a planet that uses approximately 80 million barrels of oil per day, Oman and Columbia provided Planet Earth with about a week’s worth of oil. Hallelujah! Our oil problems are over! (As an aside, a day or two after Mr. Mills’s article, this piece indicated that Oman is expected to reach 1 million barrels of oil per day in production by 2015. Good to know that in about 4 years, we’ll add to our annual supply almost enough oil to get us through one late lunch.)

Forgive me, but I can’t find much solace in Oman’s and Columbia’s efforts. This doesn’t help (in a story about enhanced oil recovery efforts in the Middle East):

“[T]he International Energy Agency estimates that oil production from currently exploited sites will decline by  two-thirds by 2030. This means that nearly 50 million barrels of oil production per day will need to be made up for….” [1]

Nor does this:

“…conventional oil reserves are being depleted throughout the world at twice the rate of their replacement, historically slow annual capacity declines from major oil fields are being replaced by rapid declines from significantly smaller new developments, and finally marginal new reserves such as arctic and deep water oil accumulations require inordinate new technology advancements and massive funding in order to be brought on-stream in adequate volumes as affordable costs.” [2]

Not to pick on Mills too much longer, but his article also suggests that “Unconventional oil output, such as that from fractured shale rocks in the US and the sticky bitumen from Canada’s famous oil sands, inches up remorselessly. Frontier exploration has uncovered large fields in Africa and holds promise in new areas, such as Greenland.” Like most others who tout shale and the environmentally destructive tar sands of Canada as yet another grand solution, no mention is made of what is required to extract, refine, and produce these inferior quality fossil fuel substitutes. That information tends to diminish the appeal of unconventional resources. But why let facts get in the way?

How many barrels of oil can we expect from a “holds promise”? Perhaps it’s just me, but I’m not finding a happy place thinking about oil goop inching up “remorselessly.”

Also worth noting that the now infamous WikiLeaks scandal disclosed some comments from government officials about those tar sands:

“[T]he Obama administration is aware of how destructive tar sands oil is — and plans on moving ahead with the pipeline that will pump it across the US regardless.

“The cable makes it clear that both Canada and the United States are aware of the dreadful impact of the Alberta tar sands — roundly dubbed the ‘most destructive project on earth’. Yet, the public statements from both parties differ significantly from the private cables.” [3]

Oops!

And as the final coup de grace to Sir Richard Branson’s concerns about an imminent “oil crunch”, Mills asserts that there are “credible scenarios for significant growth in supply.” Probably ran out of space before he could explain anything about what that means, but “credible scenarios” sure sound good to me! There are also credible scenarios for my finding buried treasure in my back yard, but I’m not at liberty to explain.

Another recent blog post offered this:

“Must be time to update my semi-regular ‘peak oil is stupid’ rant.  So here goes…

“I don’t care when oil (OR COAL) peaks, I care when we run out, which we won’t because, as production declines, prices WILL rise. As prices rise, people WILL figure out alternatives. They might not be happy alternatives. They might not be as productive alternatives. They might not support the same lifestyle to which we are accustomed. But there WILL be alternatives, forced by higher prices–and no other mechanism is that powerful.” [4]

Having read a fair amount on this subject over the past couple of years, I’m all for easy, simple, obvious, quick, inexpensive solutions that will allow me and everyone else to get our financial feet back underneath us and then proceed merrily along without worrying about energy or lifestyles or where I live or how I live or what I drive or what I own or what I use or anything else in my life that is impacted in some manner by oil. (Come to think of it, that would cover just about everything, but let’s not worry about that now.)

This cornucopian view that somehow, magic technology is somehow going to ride to the rescue and supplant the oil-based energy needed for production, delivery, and consumption of goods (i.e., almost everything we use) with some other alternative just because the price of oil has risen too high is an exercise in hope which at my most optimistic I cannot fathom! (In the interests of accuracy and fairness, and since I am entirely unfamiliar with that author, who prefaced his comments by stating that it was time for some “snark”, he may have been yanking his readers’ chains. However, his statement relying on pricing as the trigger to implement a non-existent Plan B for energy supplies is a common argument by those who think that basic market and economic fundamentals are going to save the day.)

In last Monday’s post, I provided a very short list of goods that are in some manner dependent on fossil fuels for their very existence. There are thousands more, and there are almost no aspects of our infrastructure (roads, bridges, train tracks, water and sewer pipes, power lines, etc.) that are not likewise dependent on fossil fuels for their production, delivery, use, or maintenance. We’re talking about years’ or decades’ worth of design and testing and marketing and feasibility studies and modifications and re-design and on and on and on, and for the simple expediency of higher oil prices we’ll just instantly transform everything over to some as-yet-undefined-and-untested-and-even-unknown “alternative”? Seriously? We’re just going to “figure out alternatives” just like that? Might there be a bump or two along the way? I’m thinkin’ that’s gonna be at least a couple weeks o’ work. Ya think?

“[T]he cold, hard, inconvenient truth is that trillions of dollars have been invested in the existing energy infrastructure, which provides consumers with electricity, gasoline, jet fuel, and myriad other commodities. Changing that infrastructure—nearly all of which has been built upon fossil fuels—to a system based on renewable and alternative energy will take decades.” [5]

A fact or two that just might be worth contemplating … if you happen to be one of those people for whom facts matter, that is.

NOTE: With the holidays upon us, this will be my last planned post until the first week of January. Happy holidays to all!

Sources:

[1] http://www.nytimes.com/2010/12/09/business/global/09iht-m09boil.html; As Days of Easy Oil Fade in Middle East, Firms Turn to Newer Techniques By SARA HAMDAN

[2] http://www.emirates247.com/news/region/saudi-oil-analyst-disputes-high-supply-theory-2010-11-10-1.315931; Saudi oil analyst disputes high supply theory

[3] http://peakoil.com/publicpolicy/wikileaks-reveals-hushed-concern-over-tar-sands-oil-in-us-state-dept/; Wikileaks Reveals Hushed Concern Over Tar Sands Oil in US State Dept.

[4] http://www.env-econ.net/2010/12/peak-coaler-just-doesnt-have-the-same-ring-but-i-bet-it-raises-the-same-vitriol-for-stupid-economist.html ‘Peak Coaler’ just doesn’t have the same ring, but I bet it raises the same vitriol toward stupid economists by Tim Haab

[5]: From the book Gusher of Lies: The Dangerous Delusions of Energy Independence by Robert Bryce (p.44); publisher: PublicAffairs (Perseus Books Group)

As has been reported on a number of other Peak Oil-related websites, the International Energy Agency, in its World Energy Outlook 2010, has finally come around to admitting what many have been stating for some time: Peak Oil is no longer a challenge to be faced in the distant (or even not-so-distant) future. The IEA has now gone on record as stating that world conventional oil production will never match or exceed the approximately 70 million barrels per day produced back in 2006.

Uh-oh!

So while that reality hits us, let’s consider another of those damned facts about oil production and usage:

“If you sort all of the countries by per capita daily oil consumption and start from the lowest consuming countries, you need to sum up the consumption of nearly 100 countries to match the daily oil consumption in the U.S. Among these countries are China and India.
“Altogether the citizens of the U.S. consume the same amount of oil as 4.8 billion people elsewhere.” [1]

Houston, we have a problem. Notwithstanding any sense of entitlement, or the false bravado of assured technological solutions just in the nick of time, our use of oil and its innumerable by-products (forget for a moment—but only for a moment—the demand and usage of every other nation) is going to smack head-first into a wall of declining supply and/or more expensive but still-declining supply. And it’s not going to get any better.

I don’t like it; I assume readers here do not like it; and I’m fairly certain that few individual or business consumers will appreciate or enjoy learning this. There’s no place to look around for any immediate solutions because there aren’t any! Changes won’t necessarily occur tomorrow or next week or next month, but the painful and unpleasant truth is that we’re not going to have available to us the same amounts of readily-available oil supplies at the same relatively low prices we’ve enjoyed for decades. Not gonna happen. That means adaptations, adjustments, and yes, even sacrifices beginning soon enough, with no end in sight. That’s a problem we’re almost completely unprepared to deal with or correct.

We’re all in this together, and we’re going to have to put our thinking caps on and start figuring out what we’ll need to do individually and as a nation to transition away from oil. The optimist in me still thinks opportunities abound, but the clock is definitely ticking.

We’ll still have a number of decades to make a complete transition away from oil as the power source. But the problem is that we’ll be making this monumental transition away from oil at a time when the supply is diminishing, world-wide demand is increasing, costs are on the rise, production and refining become more difficult (and of course more expensive), and it’s going to take much longer to bring that fossil fuel resource to market. That’s just for starters.

We use oil for just about everything produced, transported, and consumed. We’re now going to have to start figuring out many new ways to try and maintain some semblance of a “normal” industrial economy as well as a personal lifestyle using new forms of energy to power just about everything we rely on oil to do for us now. That’s also not gonna happen … certainly not to the extent, with the ease, at the low costs, or with the same quality and quantity we’ve come to expect.

Plans are in order—lots of plans. This is no quick-fix modern day dilemma, and it is most definitely not a challenge that we can rely on the “market” to solve on its own. What remains just as doubtful is the ability of our national government to lead the way, and that’s a problem. I’m not sure right now that Congress could easily, quickly, or even by majority vote declare December 25 as Christmas Day. Certainly they couldn’t do so if President Obama offered that up. This is not encouraging, and it’s even less so when we have a more-than-insignificant number of “leaders” who cannot seem to accept anything that even remotely resembles scientific fact.

We’re going to need a national government with national leaders who can … you know, lead; people who actually understand what is at stake, have some kind of vision for what we need to do now and going forward, are willing to articulate that to the citizenry, can explain what we all have to contribute, and are willing to make the tough choices devoid of ideology. Declining oil production has absolutely nothing to do with conservative or liberal philosophies of governance.

We’ve got an entire industrial and commercial infrastructure that is going to have to be modified, re-built, or in many cases created anew to allow us to move forward with something other than oil to power it. There’s no pretending otherwise, and waiting is simply not an option any more—not that it has been. The Hirsch Report which issued several years ago was quite clear that 20 years of full-out national effort would be needed to effect an orderly and hopefully pain-free transition away from fossil fuels in order to continue to power our economy and support our lifestyles.

If the IEA is finally admitting that peak conventional production happened four year ago, simple math tells us we’re a wee bit late on maximizing opportunities from that 20-year window. Uh-oh, again!

Just to keep things interesting, the transition from an oil-based industrial economy to Whatever-Plan-B-Will-Be will have to be achieved using that same declining measure of supply to design and construct and transport and put into place the infrastructure we’ll need to support and maintain this as yet unidentified and not-planned- for-yet Plan B. We’re talking about using a lot of declining energy supplies that’s a lot more expensive, over the course of a lot of years to put into operation a lot of new industrial and economic and civic foundations to (we hope) enable us to maintain some semblance of growth and prosperity—all while using new energy resources that simply will not be as efficient or inexpensive or dependable as oil has been.

And who does without or with less in order to achieve all of this? “Someone else, of course” is not the answer. We’re all “someone else” now. (As a bonus, extracting this now-more-difficult-to-come-by resource will create even more environmental and other resource-supply difficulties.)

So far, this is not encouraging. Where are the plans? Do our leaders have any courage at all to start dealing with the difficult truths all of us are now going to have to contend with? “Drill, baby, drill” was a poor solution when it was first suggested. Now, it’s just a fantasy. We’re going to need something a bit more intelligent as a solution.

The IEA’s 2010 Outlook states that more than three-quarters of the 2035 production amounts are going to originate from either oil fields that so far have not been developed (including the more costly, less efficient, and less reliable unconventional resources such as the Canadian tar sands), or from fields that haven’t even been discovered yet! Hello! There are a lot of unspoken hopes and wishes and finger-crossings being counted upon. And another bonus: all of this is going to be even more expensive.

What’s even more startling is that the IEA is projecting that by 2035, the conventional oil production we’ve relied on for decades will have decreased from the 2006 peak of 70 million barrels per day to less than 20 million barrels per day. According to my calculations, 20 million is a lot less than 70 million. That is not good math.

These are just some of the facts we have no choice but to deal with. This is not an ideal set of circumstances for us to confront in the midst of our continuing economic woes. But we play the hand we’re dealt, or we fold. Our choice.

First, we need to come to terms with these facts, and that means at a minimum the partisan, fact-free or manufactured-out-of-thin-air political nonsense must end immediately.

From there, we move toward plans and actions. None of the options will be simple, fast, or cheap. Are we willing to bet on human ingenuity and human capital? It won’t be the first time, and there’s no rule that even suggests that change won’t be better for all of us. I’m not willing to relinquish my hold on optimism (though I find myself having to grip a bit harder these days).

The game is different now, the rules are different, and if there is to be any “winning”, it’s going to have to come about with different strategies and lot more playing partners than some would like. But that’s the reality.

“Peak oil and the events associated with it will be an unprecedented discontinuity in human and geologic history. Peak oil crises will soon confront societies with the opportunity to recreate themselves based on their respective needs, culture, resources, and governance responses. Peak oil will require a change of economic and social systems, and will result in a new world order. The sooner people prepare for peak oil and a post-peak oil life, the more they will be able to influence the direction of their opportunities. Nevertheless, there are probably no solutions that do not involve at the very least some major changes in lifestyles. Consequently, peak oil will probably result in some catastrophic upheavals. Peak oil will also present opportunities to address many underlying societal, economic, and environmental problems.” [2]

I’ve ended more than one post to date with this question, and it’s just as vital today as it always has been:

Crisis, or opportunity?

Sources:

[1] http://seekingalpha.com/article/231957-the-end-of-oil-s-golden-age; King Oil – posted Oct 25, 2010
[2] http://www.energybulletin.net/stories/2010-11-21/collapse-nov-21 and http://www.global.ucsb.edu/climateproject/papers/index.html; Peak Energy, Climate Change, and the Collapse of Global Civilization: The Current Peak Oil Crisis by Tariel Mórrígan; Global Climate Change, Human Security & Democracy, Orfalea Center for Global & International Studies, University of California, Santa Barbara

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

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.jsp – Shell 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

As was also reported in today’s Energy Bulletin (see the link in my Blogroll), Canada’s new Energy Minister has indicated a shift in his country’s previous policy advocating essentially unlimited growth in the tar sands projects.

Ron Liepert has stated that Canada

needs to examine ways to moderate the pace of oil sands development … [and he] wants to make sure future oil sands development does not again overstretch the capacity of the province’s infrastructure.

An interesting political development….I’ll keep you posted

You can read the entire article here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/alberta-to-study-pace-of-oil-sands-growth/article1431612/