Peak Oil Matters

[NOTE: Back in April, I followed-up on a series of posts which I first began nearly a year ago and last discussed back in April ([links below*). In that series, I’ve discussed the apparently limitless ability of too many to either ignore facts about oil production entirely, or who instead resort to efforts where disingenuous arguments and/or half-truths serve as sole support for their positions. The net effect is that these attempts do little more than confuse their followers, who likely do not have the time, interest, or inclination to explore the truths on their own (perfectly understandable ... life tends to interfere with lots of options). This post is another follow-up.]

Another in a seeming endless list of far-Right websites recently posted their own take on what the writers called the “farce” of Peak Oil. That they later cheerfully admitted to being believers of the wacky notion of “abiotic oil” (the long-ago discredited notion offered by Russians some fifty plus years ago and heralded by apparently one academic here in the U.S. that oil essentially replenishes itself underground—perhaps via the Petroleum Fairy) is in and of itself the only reason needed to place them in the “loon” category of deniers.

Nonetheless, I found another example of the Right’s also seemingly endless capacity to twist facts into some delusional substantiation of the nuttiest perspectives, one which they no doubt hope readers will not contemplate at all. This website recently offered their take on an article by a Venezuela-based New York Times journalist—the paper’s Andean bureau chief. Raymond Learsy from the Huffington Post—whose opinion pieces will never find their way into the “open-minded” indices—not only echoed those same claims, but introduced us to the concept of “an amplitude of oil” … much more impressive than the increasingly boring “vast” or “massive” quantities, doncha think?

For reasons entirely unclear, the opinions offered were premised on the inane and entirely fact-free determination that the publication of this single article about oil exploration and production represented a dramatic reversal of “editorial policy” on the part of the Times, which has now apparently joined the club of Peak Oil deniers by virtue of this one article. Somehow, the discussion of efforts being undertaken in South America morphed into a final debunking of the “farce” of Peak Oil by a full leap into nonsense—while attributing an incredible amount of journalistic power to a gentleman in Caracas. Cool, huh? “Well, gee, if the Times is now disputing Peak Oil, then of course….” Nice try!

That the article made no attempt to debunk Peak Oil does not matter in a world where facts are only useful when convenient to an otherwise entirely dumb argument. Apparently, the mere fact that exploration is taking place is in and of itself another sufficient reason to completely discredit Peak Oil. This approach does simplify the entire concept of thinking!

Sad to sad, this is not a tactic unique to these two authors.

The Times article begins as follows, (as does the DailyBell piece):

“Brazil has begun building its first nuclear submarine to protect its vast, new offshore oil discoveries. Colombia’s oil  production is climbing so fast that it is closing in on Algeria’s and could hit Libya’s prewar levels in a few years. ExxonMobil is striking new deals in Argentina, which recently heralded its biggest oil discovery since the 1980s.”

A couple of questions jumped out at me as soon as I read that. What does it mean that Columbia “is closing in on” Algeria? Does spending an amplitude of money by “striking new deals” mean that Peak Oil is indeed a “farce?” Kinda think it proves no such thing. That oil companies are now spending so much more in so many more difficult to reach places suggests at a minimum an alternative, common sense explanation. Like basic math, facts, truth, reality, and science, however, this concept seems elusive still to too many. But if reasoned and fact-based opinion is not your thing, then that argument works!

Although facts can be so damned annoying when reality is not a concern, I nonetheless spent nearly thirty seconds on the internet to find the Energy Information Agency’s list of the top oil producers in the world. (Yes, I rested after locating an answer. Whew!)

Let me modify that introductory paragraph by inserting some [bracketed] facts and added bold/italic emphasis to lend some relevance to the article’s opening statements:

“Brazil has begun building its first nuclear submarine to protect its vast (there’s that word again!), new offshore oil discoveries. Colombia’s oil production [currently ranked 29^th in the world] is climbing so fast (Wow!) that it is closing in on (look out!) Algeria’s [ranked 15^th in the world at a whopping, vast, massive, amplitude-iful two whole million barrels of oil per day,  meaning that it could soon supply approximately 1/40^th of the world’s daily production ... pass out the smelling salts, Mildred!] and could hit Libya’s [# 17] prewar levels in a few years (which of course is easily quantified as maybe, possibly, potentially happening … uh, um, in a few years). ExxonMobil is striking new deals in Argentina [# 24], which recently heralded its biggest oil discovery since the 1980s [which, according to a Bloomberg article, is the equivalent of about 150 million barrels of shale oil ].”

Two comments on that last point. Shale oil is a wee bit different than your conventional, drill-a-hole-in-the-ground-and-out-it-comes oil. (See here and here, just for the hell of it—not the final and definitive take on shale exploration, but not to be ignored or dismissed, either.)

World production is somewhere around 85 million barrels of oil per day, so “about 150 million barrels” of an inferior substitute is in the neighborhood of not quite two entire days’ worth of annual production (“annual” is 365 days for those interested in facts. Two days is thus less than 365—if you use Planet Earth’s version of math—and by an amplitude of days.)

But if that’s not enough to convince you, the DailyBell also indicated that “One of the Forbes brothers (of magazine fame) was quoted some months ago as saying the US itself, even in the lower 48, might contain enough oil (not to mention coal and natural gas) to provide for its needs for the next 1,000 years. And that’s with the current technology.” Wow! One entire Forbes brother! Who needs proof when a Forbes brother (“of magazine fame” which is almost identical to being a petroleum expert), says we have enough fossil fuels to last a bazillion years?

Seriously? This is what passes for an intelligent contribution to our understanding of a not-easily-understood challenge everyone will be affected by (yes, even the far Right)? To what end? When do we reach Peak Nonsense?

Consistently missing from all of these supposed rebuttals to the validity of Peak Oil are two more of those pesky mathematical facts. First up: Oil fields deplete as oil is extracted. (I know! Amazing concept, isn’t it?) The consensus offered by those in the know suggest that the depletion rates of existing oil fields is anywhere from 4% to 7% per year. Ballpark, this means that any and all new discoveries must first produce about 4 – 5 million barrels of oil per day just to keep pace with depletion.

Another argument frequently advanced (as was the case in the Daniel Yergin Wall Street Journal article which prompted these posts) is that U.S. oil production has increased in recent years, from which we’re apparently expected to deduce as another refutation of Peak Oil. American production peaked four decades ago. That production has increased in the last couple of years (and not by any amplitude, by the way, although noteworthy nonetheless) should be understood in the appropriate, fact-based context. We’re nowhere near the production level which peaked some forty years ago. Good that more is being produced (although it should be noted that we’re not producing much more of the conventional oil … most of the increases are due to production of the more costly and difficult unconventional sources). Still have a long way to go….

Let’s say you were an unmarried single for a decade. From 1990 – 1999 you earned a bit more each and every year, topping out at $100,000 in 1999. Now we turn the corner into 2000, and you’re married! Unfortunately, your income has dropped to $60,000. Five years later, you’ve also got two new mouths to feed, a mortgage, a couple of car and credit card bills, and assorted other expenses unknown to you in the decade before. But let’s inject a ray of sunshine in this example and say that in the last five years, your income increased to $65,000 per year (but baby # 3 has arrived, along with a bigger mortgage and some unanticipated medical expenses tossed in for good measure). Problems solved? Income has increased, so what’s the beef? You’re making more recently than you did just a few years ago, so what exactly is your problem?

Peak oil is kinda like that in its simplest, simplest form.

I’ll let you ponder that. More still to come.

* http://peakoilmatters.com/2010/10/18/more-on-the-message/

http://peakoilmatters.com/2010/11/22/still-dealing-with-peak-oil-denying-nonsense/

http://peakoilmatters.com/2010/12/20/the-stubbornness-of-denial/

http://peakoilmatters.com/2011/02/03/the-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/02/10/more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/04/27/even-more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/09/26/still-more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil-pt-1/

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 fourth and final in a subset of posts (see the first one here) in a new PeakOilMatters series (which began 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.]

~~~

I’ll admit that my last few posts have been decidedly more political than has been the norm. I think it’s been fairly obvious on which side of the divide my ideology and political sensibilities reside, but in view of the work I’ve been doing with the concept of Peak Oil, I firmly believe that the challenges we’ll be faced with necessitate a much more active involvement by government. Consistent with that viewpoint is my equally firm belief that the budget cuts being envisioned by the GOP are without doubt the worst approach to our long term hopes and prospects—recognizing that added spending and deficit increases are not exactly a fiscal panacea in their own right. Easy decisions would have been made months ago.

This series on A New Direction is designed to explain the evolution of thought and my contribution to the dialogue and the planning I’ve been consistently urging. It was necessary to articulate at least some of the foundational assessments I’m relying upon to explore this New Direction.

As I’ve stated in other posts, we must begin having serious adult conversations that deal with facts. Turning science and geology and related evidence-based fields of study into ideologies is absurd! Oil is a finite resource. We’ve been using a lot of it for a lot of decades. Our own national production levels peaked forty years ago, and the U.S. is by no means unique in that regard. Oil shale and tar sand productions will never replace the quality of crude oil we’ve been using for more than a hundred years. Oil production is becoming more challenging by the day: more expensive, more time-consuming, more difficult to locate and produce, and usually results in lesser quality finds and more rapidly-declining fields.

Those are some of the primary relevant facts. Not philosophy, not a guess, not a hope. Those are the realities that Planet Earth is dealing with in 2011 and for the remainder of fossil fuel’s lifespan. To pretend or wish or hope otherwise is a fool’s pursuit.

The hard truth is that we must—individually and as a nation—accept that we cannot go back to “the good old days.” Despite the inclination of some to assess that observation negatively, it is not defeatist nor does it represent a condemnation of America and/or American ingenuity and that magic word of the day: America’s exceptionalism. This is instead an acceptance of the reality that change happens and that great change is soon in the offing for all of us.

It may not only be entirely un-dramatic at first, changes resulting from declining oil production may be barely noticeable for an extended period of time aside from the rather steady uptick of prices at your local gas station. Adapting to change and leading others into a future no longer able to rely on fossil fuels is of ultimately greater benefit than resistance to change or an insistence on the shortsighted strategy of putting things off until “later.” It is simply absurd to think that encouraging greater problems in the future, requiring far more extensive and expensive adaptations with far fewer resources at the ready—all in the face of increasing demand for what does remain—is actually a strategy to be considered.

As I have alluded to quite often, a major challenge I and peers face in trying to persuade … well, everyone … that the problem of Peak Oil is already upon us, that the decades-long transitions needed cannot be postponed any longer, and that only a truly national effort regardless of ideology is our only legitimate recourse, is that right now this effort is all the more difficult because (like global warming in most instances) Peak Oil is not really impacting each and every one us in a visible, obvious or tangible manner all the time. Those few cents’ increases now and then at the local gas station are at least so far not really such a big problem. We’re like the proverbial frogs in the simmering pot of hot water: the relentless march to that point of no return is a slow and barely perceptible one. By the time the water in the Peak Oil pot boils, we’re “cooked”….

We would do well to do all that we can to find and implement a different approach. The challenge is (painfully) obvious:

“‘There’s a reality out there people don’t want to recognize,’ concludes [Robert Kaufmann, director of the Center for Energy and Environmental Studies at Boston University]. ‘Clearly technology has improved. Oil prices are higher. We deregulated the industry. We’ve done almost everything. There are a few areas offshore that are closed off. It’s not going to make a difference. “‘The sooner people realize that and stop dreaming about energy independence or one huge undiscovered field that’s going to solve all our problems, the better off we’ll be.’” [1]

“There are a lot of things that we could do in terms of rebuilding our cities and our transportation system, and so forth. The problem is that that all takes time, and by the way, it takes liquid transportation fuel to build things and move things around. It’s going to take a tremendous effort and a tremendous amount of money and a tremendous amount of time to cut back on the suburbs and to move people closer in or to reconfigure the suburbs into business centers and then connect by, say, electric transportation of some sort. All of those things are possible. I would not have any doubts that longer term, that’s what will happen in the United States and elsewhere in the world. But those things take time, take money, and simply cannot be done overnight.” [2]

Adding emphasis to those observations is a recent, terrific piece by Fabius Maximus (here), whose pointed observations need to be understood—more accurately, accepted—as the truths with which we must contend:

“Optimists about energy give glowing forecasts of new technologies, often with wildly underestimated estimates of when these can generate substantial fractions of our energy. In the real world technologies take decades to evolve from the laboratory to commercialization. And then building new energy sources on a large scale takes decades.”

Wishful thinking that the alternative technologies now considered as our best hopes (wind, solar, oil shale, etc) will in fact be scaled up to the same levels and quality and quantity and availability as are current fossil fuels just in the nick of time aren’t even in the same ballpark as wishful thinking. We are woefully underinvested—financially, technologically, and philosophically. The GOP’s aims to reduce investments in research to even lower levels borders on the insane in light of these factors.

Fabius Maximus’s post offered a very sobering take on the evolution of idea to full-scale production and usage by referencing the ubiquitous microwave oven. This now so-common-we-don’t-even-think-about-it appliance began its commercial life in 1947 as a 750 pound behemoth about the size of a refrigerator, and took nearly four more decades before finding its way into even 25% of U.S. households. Anyone want to hazard a guess as to how long it’s going to take before fully commercially viable alternative energy sources find their way into hundreds of millions of automobiles and trucks and machinery and infrastructure support? I’m also thinking we’re looking at more than a few thousand dollars worth of investment, and probably more than a handful of hours and workers … ya think?

“What we really need is a new system that will work for the long-term. But such a system is so far away from us now, it is hard to even think about how it would work, and how we would get from our current system to the new system….

“We clearly will eventually need a new plan, but we haven’t even given a thought to what it might be. It is relatively easy to come up with a proposed component of the plan, but even this may not work out in practice.” [3]

The scope of our needed individual, community, regional, state, and federal economic, industrial, and political contributions are so vast as to appear entirely inconceivable. We can’t get our leaders to agree that the sky is blue, and we’re asking—demanding, actually—that they set aside grievances and ideologies and constituencies and put together a comprehensive vision for re-structuring just about every facet of our industrial and personal lifestyles to accommodate the changes declining oil production will impose. What brave soul wants to jump into that pool head-first?

The truth is that we don’t have much of a choice now, and even less of an option later on. Compounding the efforts, costs, time, difficulties, varieties, and planning by waiting for some undefined future date is every bit as narrow-minded, shortsighted, and purely insane as curtailing the investment needed now to begin the entire process of transitioning everything away from fossil fuel dependency.

There is no comfort in recognizing that we’re not “running out” of oil for many more decades. (We’re not.)

There is no oil faucet turned on and locked to “full” for these next few decades. The flow is going to continue its inexorable slow down while the number of glasses fighting to be filled increases exponentially. There is no way to make the math work (unless of course you subscribe to the nutty legislative efforts of two congressmen mentioned in the above-referenced first post of this Clueless Is Not A Strategy mini-series, and even their ludicrous flights into delusional problem-solving might not be enough.)

“Clearly, then a considered and gradual transition is likely to be less costly, but this does not avoid the problem that we might be eating into the world’s endowment of fossil fuels at a rate that could ultimately prevent the smooth transition to a sustainable way of producing and using energy. The fact that the entire global system relies on plentiful and cheap energy for food production and almost every other form of economic activity, coupled with the fact that global GDP growth requires exponential growth in energy consumption means that we have a moral and pressing need to resolve this situation, both for our own benefit, but also that for future generations.” [4]

Tick-tock.

[A NOTE to my readers: I’m traveling from this Saturday through most of next week, and expect that I will post just once during that time. I should be back to the usual two per week posting schedule beginning on March 14th]

Sources:

[1] http://www.peterdizikes.com/articles/2008/08/myths_of_oil.php; ALASKA HAS MORE OIL THAN THE MIDDLE EAST? By Peter Dizikes [Salon.com] – Aug. 18, 2008

[2] http://globalpublicmedia.com/transcripts/2459; Robert Hirsch on peak oil mitigation (transcript) – Transcribed by Miranda Huey. NOTE: this link, via The Energy Bulletin, may no longer be valid.

[3] http://oilprice.com/Energy/Crude-Oil/What-Can-we-do-Now-About-Peak-Oil.html; What Can we do Now About Peak Oil? by Gail Tverberg – December 29, 2010

[4] http://www.ifandp.com/article/009633.html; Is time running out? by Dr Samuel Fenwick – February 14, 2011

The Global Climate Change, Human Security & Democracy Project from the University of California (Santa Barbara) has issued a report (PDF here) discussing the problems awaiting us at the convergence of peak oil, energy decline, and global warming.

The report offered a concise summary of the current state of our oil supply considerations:

* Peak oil is happening now.
* The era of cheap and abundant oil is over.
* Global conventional oil production likely peaked around 2005 – 2008 or will peak by 2011.
* Global oil reserve discoveries peaked in the 1960’s.
* New oil discoveries have been declining since then, and the new discoveries have been smaller and in harder to access areas (e.g., smaller deepwater reserves).
* Huge investments are required to explore for and develop more reserves, mainly to offset decline at existing fields. [And it should be noted that given the world-wide recession, investments in oil exploration and production have been significantly curtailed in the last few years – my comment]
* An additional 64 mbpd of gross capacity – the equivalent of six times that of Saudi Arabia today – needs to be brought on stream between 2007 – 2030 to supply projected business as usual demand.
* Since mid-2004, the global oil production plateau has remained within a 4% fluctuation band, which indicates that new production has only been able to offset the decline in existing production.
* The global oil production rate will likely decline by 4 – 10.5% or more per year.
* Substantial shortfalls in the global oil supply will likely occur sometime between 2010 – 2015

Yet in the face of even more facts about the reality of declining oil production and availability, more nonsense—written by Clifford Krauss and published in the New York Times, no less!—denying the reality of our predicament has surfaced. (Stuart Staniford also had a very nice and well-reasoned article challenging the statements found in that NYT piece. I’m taking the opportunity to expand on his thoughts.) *

As I’ll demonstrate below, this at-best-misleading NYT article is yet another in a seemingly limitless supply of carefully-worded challenges to the facts and realities of our political, energy, and climate environments—challenges which upon even casual examination completely fall apart. Facts remain stubbornly annoying….

Regular readers of this blog may recall a post last month wherein I discussed the curious methods by which the factually-challenged attempt to persuade others. This New York Times article is a perfect Exhibit A. I’m not picking on Mr. Krauss for any personal reasons; it’s just that his article is such a perfect example of the peak oil-and-global-warming-denying-Obama-misrepresenting nonsense that litters public discourse. I remain ever-hopeful that at some point, the majority will begin to see that producing fact-free, one-sided arguments (or arguments laden with misrepresentations at the very least) are probably not as convincing as the authors might wish. As I’ve stated before, if you cannot rely on the truth and facts to make your case, what kind of a case do you have to begin with? (And what is one’s motivation in attempting to do so?)

I also recently explained my position (here) that it is important that we immediately challenge misrepresentations, lies, or disingenuous half-truths as and when they appear (a full-time job, to be sure). It’s my belief that much of the right-wing nonsense issuing from the media and politicians is done under the explicit assumption (hope?) that the readers/listeners have neither the time nor the inclination nor the means nor the ability to appreciate or learn the facts. Their reliance on “leaders” to provide information is thus an essential part of the strategy to hide the truth.

To what end?

After mentioning the state of oil supply back in 2008, author Krauss then states:

“But no sooner did the demand-and-supply equation shift out of kilter than it swung back into something more palatable and familiar. Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia.”

“Giant oil fields”? The world currently uses approximately 30 billion barrels of oil per year. The “giant” oil fields (and Krauss is not the first to offer this statement as the be-all and end-all of our oil supply worries) are estimated to contain, respectively 8 billion barrels and 40 billion barrels according to a 2007 source. Not much has been written about this larger field since then, although another decent-sized field of about 15 billion barrels may be in the works.) Of course, no mention is made of the feasibility of producing every last drop, the at least multi-year time frame, and/or the costs or efforts needed to produce these deep-water fields. Why explain when an impressive-sounding statement will hopefully be enough?

Deep-water fields aren’t like the truly giant fields of old: one does not dig a hole and wait for the hundreds of billions of barrels of oil to gush out as some did decades ago. Deep-water implies … well, deep water, as in beneath the deep water (deep as in many thousands of feet deep.) No engineering degree required to realize that just might pose a problem or two. As Mr. Krauss himself stated later in the article:

“Exploration and drilling below 10,000 feet of water and through miles of hard rock, thick salt and tightly packed sands required the development of supercomputers and three-dimensional imaging and equipment that could withstand the heat and pressures common at such depths, as well as submarine robots to make repairs.”

Sounds like just a wee bit of extra effort and cost. But let’s be optimistic! Perhaps we have discovered another 18 months or so worth of oil in Brazil—assuming of course demand does not increase. Ooops! Seems we have an issue with that. As Krauss then explained:

“The International Energy Agency, the Paris-based organization that advises industrialized countries, projected this month that global energy demand would increase by an astounding 36 percent between 2008 and 2035.”

A 36% increase in demand can certainly be fairly described as “astounding.” But in a world where supply is in fact declining, (or at best, has plateaued) “astounding” increases aren’t exactly a good thing. Increasing demand and declining (or flat) supply creates a second-grade level math problem. If you want more but keep getting less to provide that want, then … um, ah … how does that work? “Demand” something all you want, but if it’s not feasible to produce or supply then “demand” is gonna run into real-world problems. (I’d like to demand that our daughters’ college tuitions be eliminated, I’d like to demand a new BMW every couple of months, and I’d like to demand a million dollars to be deposited into my savings account by Christmas—and I’m going to continue to demand it. Not too difficult to see where that goes.)

As Stuart Saniford sagely pointed out in his critique of the one-sided Krauss article, Mr. Krauss relied on CERA and oil company executives as his sole sources. Now there’s a fine bit of objectivity! (CERA, an energy consulting firm, is routinely castigated by many peak oil proponents far more knowledgeable than me for their errant projections.) For example, Krauss quoted James Burkhard, a managing director of IHS CERA:

“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.”

That’s quite true. The problem is that this is not a solution. It is instead a very clear statement about the problems we face in a world of declining fossil fuel supply: we do not have in place adequate substitutes. That’s more of the same kind of math problem I discussed above. The world wants more energy, we’re finding and producing less of what is needed, and the few substitutes in place aren’t anywhere near enough to make up the shortfall, so … what is the solution?

It’s not going to get any better. We’re simply not finding enough oil to make up the natural decline found in existing fields, let alone finding enough to match increasing demand. More bad math.

Krauss then adds:

“Yet, the outlook, based on long-term trends barely visible five years ago, now appears to promise large supplies of oil and gas from multiple new sources for decades into the future.”

Based on what information? No source is cited (damned facts just get in the way, anyhow). And “appears to promise” means what? A typical empty phrase that means absolutely nothing! Here are some more examples from this same article:

“The same high prices that inspired dire fear in the first place helped to resolve them. High oil and gas prices produced a wave of investment and drilling, and technological innovation has unlocked oceans of new resources. Oil and gas from ocean bottoms, the Arctic and shale rock fields are quickly replacing tired fields in places like Mexico, Alaska and the North Sea.”

“As IHS CERA and other oil analysts see it, new oil is going to come from both conventional and unconventional sources — from anticipated expansions of fields in Iraq and Saudi Arabia and from a continued expansion of deepwater drilling off Africa and Brazil, in the Gulf of Mexico and across the Arctic, where hopes are high in the oil world, although little exploration has yet been done.”

“Oceans of new resources” sounds impressive, except that it is impossible to measure, and as one might customarily think about the size of your run-of-the-mill “oceans”, that’s about as gigantic an exaggeration as the English language allows! And note the reference to finding these fossil fuels “from ocean bottoms” and in “the Arctic.” (Where, he adds, “little exploration has yet been done.” But then again, “hopes are high.” Hooray! That solves everything!)

Not a word about what all exploration or production involves, how long discovery and production might take, or how much it costs—among other annoying pieces of information that just might provide more clarity and perspective. And more aspects of Oil Production 101 that require very little engineering expertise. Getting anything from the bottom of the oceans or from the Arctic is not “easy” by any definition of easy. But why let an explanation get in the way? Let’s just hope that “oceans of new resources” is enough to satisfy the vast majority of casual readers.

And there’s more!

“No matter what finally plays out, energy experts expect there will be plenty, perhaps even an abundance, of oil and gas.”

How many new barrels of oil in a “plenty” and how many additional barrels than a “plenty” is a “perhaps even an abundance”?

“IHS CERA, which monitors oil and gas fields around the world, projects that productive capacity for liquid fuels could rise to [my emphasis] 112 million barrels a day in 2030 (including 2.75 million barrels in biofuels), from 92.6 million barrels a day this year.”

Pigs could fly, too, and perhaps we could find oil in every back yard in America. (My suggestion would be that no one actually relies on that, however, although you never know! It could be true!)

“‘The estimates for how much oil there is in the world continue to increase,’ said William M. Colton, Exxon Mobil’s vice president for corporate strategic planning. ‘There’s enough oil to supply the world’s needs as far as anyone can see.’”

“‘We’ve got a wealth of opportunities to address around the world,’ said [Robert N. Ryan Jr., Chevron’s vice president for global exploration.] ‘We have quite a few deepwater settings all over the world, some of them very new, like the Black Sea. There are Arctic settings. We have efforts under way re-exploring Nigeria, Angola, Australia. The easy stuff has been found, that’s true, but in the end, we still have many basins in the world to explore or to re-explore.’”

Nice objective quotes from major oil company officials as offered by Mr. Krauss, and for balance and objectivity countered by his quotes from ah … um … well, no one, actually. In about .4 seconds, Google could supply a few dozen experts who have a different view. Then again, perhaps Mr. Colton’s viewers can’t see very far….

And as for Chevron’s Mr. Ryan: how many barrels in “quite a few deepwater settings”? Is it more or less than a “plenty”? How many are “many basins” and exactly how barrels of oil in each of those “many basins”? Is a “setting” bigger than a “basin”? And let’s not focus at all on Mr. Ryan’s acknowledgement that “[t]he easy stuff has been found.” Can’t have a good argument of plenty if you have to deal with the truth.

And let’s not forget the magical and wondrous tar sands in Canada. Mr. Krauss didn’t!

“The vast oil sands fields in western Canada, deemed uneconomical by many oil companies as few as 15 years ago, are now as important to global supply growth as the continuing expansions of fields in Saudi Arabia, the current No. 1 producer.”

Unfortunately, this rosy scenario has to stop by and visit reality for a while, and those “vast” oil sands aren’t quite as efficient as this author seems to suggest. The following is one of many statements of fact that put just a slightly different spin on the availability of the “vast” resources in western Canada.

“The problem with unconventional resources seems to be that only a fraction of them are determined to be recoverable.
“Even though unconventional resources seem to be vast, they are estimated to add only approximately 10 million barrels per day to the supply side – in the best case – when taking into account all unconventional sources such as biofuels and oil from coal. For example, The National Energy Board of Canada estimated back in 2006 that the best case for oil sands production in 2015 would be 4.4 million barrels a day while the base case was 3.2 mb/d and the low case only 1.9 mb/d.
“The current production rate of oil is about 84 million barrels a day, so the unconventional resources will not have a major effect in the long run given depleting conventional sources. Also, a major problem with all sources is decreasing EROEI ratio (energy return on energy invested). For oil it used to be 100 a long time ago and now it is somewhere below 20. EROEI for biodiesel is roughly 3 and for ethanol it is not much more than 1. Depending who to believe, EROEI for oil sands is between 2 and 4. Basically anything above 1 makes sense, but because we are used to a high ratio (= cheap energy), we may have a serious problem when the average EROEI of all supplies of oil goes below 5.” [1]

Damned facts!

This article also weighs in on the recent surge in production of natural gas from shale deposits (a completely separate discussion, but I couldn’t let this quote pass).

“Similar advances have made drilling gas and oil from shale possible on a large scale for the first time. Advances in so-called horizontal drilling allow well drillers to steer and carve through hard shale to expose more and hard-to-reach rock, and it also makes possible drilling under city neighborhoods, as in Fort Worth, which happens to sit atop a large gas field.”

Let’s think about this for just a moment: “drilling under city neighborhoods”?! Won’t the Fort Worth residents be delighted! No impact or consequences there, right? Right? Apparently unable to contain his enthusiasm, Mr. Krauss then goes on add:

“Shale drilling is also beginning to produce significant amounts of oil in the United States. The Bakken shale field centered in North Dakota has become the fastest-growing major oil field in the United States, with production rocketing to about 350,000 barrels a day, from 100,000 barrels a day a decade ago. In a recent report, the consultancy firm PFC Energy projected production would climb to 450,000 barrels a day by 2013.”

For a nation that imports close to three-fourths of the nearly 19 million barrels of oil per day, “rocketing” production all the way up to 450,000 barrels a day means we’ve got about ten days worth of oil demand covered each and every year. Fantastic! (And to hell with the rest of the world.) Of course, extracting oil from shale is a piece of cake … dig a few inches, spend a few bucks, coupla hours ‘a work, no environmental consequences, and we’re good!

At the risk of picking on this one author too much, let me close with another eye-opening quote from this fascinating NYT article, this time from Edward L. Morse, the head at commodity research at Credit Suisse, after Mr. Krauss posits the following:

“Add up the shale, the deepwater drilling and Canadian oil sands, says, and what you get is less dependency on OPEC and hostile countries like Venezuela.”

To which Mr. Morse adds:

“When you add it up, you get something that very closely approximates energy independence.”

Seriously? What kind of math is that? I’d like to use it for our investments.

For all those struggling in this economy, let me add this:

“When you add it up, your $400.00 per week salary very closely approximates $4000.00 per week and financial independence.”

Gee, that’s so easy! I love the fact-free world.

* Shortly before posting I came across this solid open letter to the New York Times from David Hughes, offering a very pointed and fact-filled (what a concept!) challenge to Clifford Krauss’s piece. A must read….

[NOTE: With the holiday coming up, this will be my only post this week. Happy Thanksgiving!]

Sources:

[1] http://seekingalpha.com/article/231957-the-end-of-oil-s-golden-age; The End of Oil’s Golden Age

In this post, I’m going to continue with the theme of my most recent entry and provide you with some additional considerations about oil consumption here in the United States. While few of the facts to be cited will surprise anyone very much, I doubt many are considered very often, if at all.  I believe this overview is critical to our understanding of Peak Oil’s importance. We obviously can’t and won’t address fundamental issues of which we remain contentedly unaware.

It is when we become more fully cognizant of just how vital the use of oil is to just about every single one of our economic activities that it also becomes obvious what a powerful and pervasive impact Peak Oil will have on just about everything we do and everything we plan to continue doing. (I’ll be exploring these specific issues in much greater detail in the weeks to come.)

Changes are inevitable … big changes. With no plans in place, those changes are going to be incredibly disruptive. But as I take pains to suggest, so too will these looming changes present us with incredible opportunities….

But as of now, the United States has no plans to deal with Peak Oil.

Understanding where we are is a key step in making plans for where we want to be. Doing what we’ve always done is not going to be a viable option for much longer. We’re bumping up against an immoveable barrier to our continued prosperity unless we summon the individual and collective wisdom, courage, and ingenuity to chart a different course. It is fraught with both uncertainty and unparalleled opportunity.

We may not be prepared to hear this, but there’s no getting around it: it is all up to us. Relying on Someone/Anyone Else is not going to work this time around.

Oil provides energy in ways unlike any other source we have. It is an incredibly powerful and efficient resource. Without it, economic development here and across the planet would have never attained its current levels and scope. According to the U.S. Department of Energy, the United States gets 40 percent of its total energy from oil and another 25% or so from coal and natural gas. Those are much higher percentages than any other nation. We’re wedded to oil like no one else, and the separation will not be easy. But we’re not going to have much of a choice in the not-too-distant future.

This quote (by Michael Brownlee of  Denver’s Boulder County Transition Team), premised on an estimate that our nation uses one cubic mile of oil per year, provides us with a stunning portrayal of just how efficient oil is as compared to other energy sources:

[One cubic mile of oil] “equals the same amount of energy provided by 52 nuclear power plants generating energy being built every year for 50 years or 104 operating coal-fired electrical plants built every year for 50 years or 32,000 wind turbines built every year for 50 years and in continuous operation or 91,250,000 solar panels built every year for 50 years.” [1]

Think about that for a moment. How on earth (literally) do we produce energy sources of those magnitudes to replace this finite resource that has served as the lifeblood of world-wide economic and industrial development for these past 150 years?

There’s no doubt that we must continue development of alternative energy sources such as solar and wind, but the plain truth is that as presently developed they cannot possible duplicate or even remotely approximate the energy derived from oil.

Currently, the oil and gas industry produces between 80 and 90 million barrels of oil per day for worldwide consumption. But every year, anywhere from 4% to 7% of that oil (depending on the source cited) is lost to a simple and undeniable truth about any finite resource: depletion. Simple path math will tell you that if a supply of something is declining naturally and inexorably, then in order to maintain at least the same level of supply, you have to produce more just to stay even.

So far we’ve done a good job of maintaining that steady state, but it’s just not going to last. The many little fields of oil we continue to find, and those not-so-easy, not-so-cheap to find and produce oil sources we discover in the remote corners of the world will not keep pace with increasing demand. The math does not work, and when you consider the ever-increasing world population, the numbers are not comforting to those who continue to hope for business and development and prosperity as usual.

We’re certainly free to remain blissfully unaware or unconcerned, but that’s only going to make the inevitable that much more painful.

A greater truth, and one I don’t believe gets nearly the attention it deserves, is that for all the energy that we could potentially derive from those alternative sources, our entire infrastructure and way of life has been built around the availability of, access to, and use of abundant amounts of relatively inexpensive and just as relatively available oil. That option is running out, as prior posts have tried to make clear.

We have designed our lifestyles, our economic and industrial development, and our communities around cheap, easily-produced oil. Our everyday world is premised on that continuing supply (together with natural gas) to produce and transport food, to fuel our transportation, build and heat or cool our buildings, purify our water, treat our waste, and build, well, just about everything we use. (And a related issue I’m not even touching right now: we have an old infrastructure, one that will not repair or update itself for free.)

No amount of alternative energy sources as presently developed can provide us the same quality and quantity of those basic needs. We may fervently want or hope that the square pegs of alternative energy sources fit neatly into the round holes of continuing-on-with-life-as-we-know-it, but magical thinking inevitably runs into reality.

And the reality is that the foundations of all we do and have and use are built with oil, and when declining supply begins to travel the same road as increasing demand, we’re going to have a monumental problem on our hands, and one that will not be solved in just a few months or a few years. All the legislation and hand-wringing in the world won’t create an entirely new infrastructure reliant on energy sources not named oil in any period of time one would consider “short.”

A more unfortunate truth is that our political and economic system—indeed, our entire societal attitudes about growth, prosperity, and entitlement—are simply not fashioned to deal with what must be done … yet.

Any false hopes that we can instantly create new technologies to effect seamless transition are at their very best hopelessly naïve. Foolish is a better description. So we do have to begin thinking differently, and planning, and then doing.

“[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.” [2]

An inconvenient truth indeed….

Next: The World Of Transportation

Sources

[1]: America’s Perfect Storm: Transition to Survival After Peak Oil Hits – Frosty Wooldridge http://neighbors.denverpost.com/blog.php/2008/11/25/america%E2%80%99s-perfect-storm-transition-to-survival-after-peak-oil-hits/

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

In order for us to begin thinking differently about Peak Oil and its implications, and to begin envisioning what kinds of changes we can make (and will likely have no choice about), we should first understand our oil situation and consumption. This post is an introduction.

If the Peak Oil proponents are correct, we are in for a rude awakening in the near or immediate future (as measured against our ability to transition effortlessly to new energy sources).  Many of us won’t understand why. I’d like to help.

At first glance, addressing the potential fuel/oil replacement problems will appear to be quite daunting. A second glance will suggest that we have incredible opportunities to effect changes that could carry us for decades to come into a safer, cleaner, prosperous future.

At the risk of excess hyperbole, we may very well be at the dawn of a potentially new industrial and economic revolution, if we all understand what’s involved and what’s at stake….I won’t even pretend that this will be easy. It won’t be. But we own the choices. We can prepare, or we can ignore and keep our fingers and toes crossed that some way and some how, we’re going to find the tens of millions of barrels of oil everyone is going to need each and every day, and that we will continue to find those same/increasing amounts … well, forever. I’m an optimist, but not that much.

For those of us more familiar with peak oil statistics, this is a popular one: The United States represents approximately 4% of the world’s population, yet it consumes more than a quarter of the world’s oil each year. (By way of comparison, Europe’s population is nearly 50% greater than ours, yet it uses less than half of the oil we do.)

We own more than a quarter of a billion 2-axle vehicles, and have approximately 200 million drivers. For those of us near large cities, most days it seems as though all 200 million drivers are parked on the same highways as we are.

Two-thirds of the nearly seven billion barrels of oil we use each year is used by those same quarter of a billion cars, trucks, and vans. That’s more than any other nation’s total usage! Almost 90% of America’s workforce uses those cars and trucks to get to work. Our gas mileage standards are remarkably poor for a nation such as ours, and so we waste a tremendous amount of oil and gas. (One estimate suggests that lost productivity and wasted fuel caused by traffic congestion in the U.S. costs us more than $80 billion per year. And German auto mileage standards, for example, are nearly twice as high as ours.) This is not good math.

Another estimate suggests that the 20 million or so barrels of oil we use each day translates into 10,000 barrels of oil per second!  (I won’t do the math to verify it, but feel free to do so on your own.)

About 60% of our oil is now imported, to the tune of hundreds of billions of dollars each year. Those numbers will only increase as time passes. Fifteen years from now, it’s expected that we’ll be importing close to 75% of the oil we need. Some suggest the amount will be much higher. Other nations (notably China and India) are increasing their oil consumption exponentially. At some point limited supply will crash headfirst into increasing worldwide demand as more and more nations seek to improve their standards and emulate our way of life. What happens then?

Our military alone uses close to half a million barrels of oil each and every day. Its entire infrastructure has been built on the foundation of readily-available oil. Limit oil’s availability or supply and what happens to our military operations, our national and international commitments, and the protection of oil transport from the Middle East?

Fortunately, we’re already seeing signs that the military leadership understands this. The rest of us ought to start doing so as well. As I try to emphasize, this is either a disaster in the making or an incredible opportunity. I am an optimist on that score.

We’re sending hundreds of billions of our dollars to Saudi Arabia, Russia, Venezuela, and many other nations each year—dollars we no doubt could find good use for here in the United States. We do so in part because our oil peaked in production about 40 years ago. (Even Prudhoe Bay in Alaska, our largest oil field, is now at about one-fifth of its peak production.) We are still finding oil, as the there’s-more-than-enough-oil optimists like to point out in their snarky criticisms of peak oil proponents. We’re just not finding enough, and that hasn’t changed for decades. We’re using more and finding less, and third-grade arithmetic will tell you that that is not a good outcome.

For all the talk of  the “massive” amounts of oil offshore and in Alaska and the “obvious” need for us to just “drill, baby, drill”, we’re several decades away from full production in those regions, and the amounts anticipated will wind up meeting far less than even 5% of our needs. None of it will come cheaply. Drilling in the Arctic is a wee bit more challenging than punching a hole in the ground in Texas, and one does not require an engineering degree to understand that. The “drill, baby, drill” crowd never gets around to spelling any of that out for us. Magical thinking is nice, as is a denial of pesky truths, but on the planet we occupy, it’s a fairly useless exercise.

Data from the Energy Information Agency as of 2007 indicates that our “proven” reserves of conventional oil are about 21 billion barrels. That’s about a 3 year supply for us. More bad math.

One-third of those reserves are “light sweet crude,” which is considered the easy, good stuff. The rest is the not-so-easy and not-so-good stuff … the kind of oil that isn’t produced or refined very efficiently, or inexpensively. Few of our refineries can convert that heavy crude oil into gasoline. None of this is good news.

Opportunity….

There just aren’t any more places on this planet where we can find bottomless pools of oil flowing freely, easily, and inexpensively. That’s certainly true here in the U.S. We’re tapped out. It’s starting to take a lot more effort, many more years, and a lot more money to find and produce what was once so readily available. We’re paying for that, too. Even more bad math.

Cantarell in Mexico has long been considered of the supergiant oil fields on the planet. As recently as 2004 it was producing about 2.5 million barrels a day of oil, and about half of that was shipped here. Production has fallen off a cliff since then, and in 2 – 3 years, it’s expected that production will have declined by close to 80%. Aside from the enormous financial, political, and social problems that will create for our neighbor south of the border (Cantarell was the major source of income to the Mexican government), this also poses a dilemma for us. Where and how do we make up that shortfall?

None of these statistics are especially pleasant to consider. Potential bad news rarely is. But if we understand our situation, if we understand our needs, if we understand that we must individually and collectively begin making better choices and devoting our incredible talents to creating and implementing new means of energy production while revising and improving how we use energy, the bumps in the road we’re destined to confront might be a bit smoother. And in these times, that may not be such a bad option.

Next: More Considerations About American Oil Consumption

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sources

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