Is the Peak Oil Theory Valid? 26 comments
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First, a definition. If you're Paris Hilton, go here for your explanation, otherwise ...
The peak oil theory does not necessarily say that the world is running out of oil. That's actually an unstated fact. After all, nobody is actually making more.
What peak oil actually suggests is much simpler: At some point, global oil production will reach a peak, and then begin to decline. At that point, oil will become more expensive, because it will become increasingly expensive to discover and extract what oil there is left. As oil becomes more expensive, demand will go down. We'll never actually use the last drop of oil because it will be too expensive to buy.
According to peak oil theorists, the U.S. experienced its own peak in oil production in the 1970s. Globally, the estimates of when we reach peak oil production range from yesterday to 20 years to 50 years or more - take your pick.
New Resources Harder To Find, Harder To Tap
New crude oil discoveries are not coming fast and furious, though Brazil has had some luck in this area lately. Just last week, Brazil announced a major find 155 miles off the coast of Sao Paulo, near the Tupi oil field that was discovered in 2006. Petroleo Brasileiro SA (Petrobras) isn't discussing exactly how big they think the discovery is, but the Wall Street Journal reports that Petrobras is planning to lease another 40 deep-sea oil rigs in 2017 - this after it already has 80% of the world's deep-sea drilling vessels under lease.
New supply coming on line in Brazil is exciting news for the U.S. because more oil close to home would decrease our reliance on oil from the Middle East. Most likely, that oil instead would go to China and India.
But here's the problem - the technology, equipment and good old-fashioned know-how aren't necessarily up to the challenge these deep oil rigs require. Salt water corrosion, high oil temperatures, huge pressure changes and the depth of the drilling all pose problems the oil companies have to solve for those fields to be viable. And solving those will be higher-cost propositions. So, far from defeating the peak oil theory, these new and challenging finds in some ways support it.
Looking Forward
The Peak Oil theorists got a shot in the arm last week when the venerable International Energy Agency seemed to jump on board the Peak Oil theory. Here's what our Wall Street Journal said:
For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently. Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.
For a committed peakist, this was a big deal. A flat-out acknowledgment from one of the former skeptics that oil production is not guaranteed to continue to grow.
The International Energy Agency will be releasing a report in November that will, for the first time, evaluate the health of 400 of the largest oil fields in the world. Delving deep into the supply side of things is a departure from the IEA, which typically focuses on forecasting demand, assuming that OPEC countries will make up for any supply shortfall. By introducing a supply review, IEA seems to be raising the possibility that OPEC may not be able to meet that demand after all.
Of course, the fact that the IEA is focusing on supply is a natural signal (or plea) for OPEC to increase output. Considering that they already are pumping an extra 300,000 barrels a day and there has been no effect on crude prices, such a petition may fall on deaf ears. Additionally, the OPEC Secretary General Abdullah al-Badri seemed to refute the fears fanned by the Wall Street Journal's article in a report by Reuters saying "he was not worried about reports of faster-than-expected depletion in the world's biggest oil fields."
Mature Oil
Oil fields have a life span - in their youth they are plump, full and eager to please. But as they age, they become temperamental and stingy, the crazy Uncle Bob of the global energy supply. There is a natural rate of decline in production. Just what that rate of decline is can be a closely held secret, which makes finding information that much more fun. If you look through the U.S. Energy Information Administration's country reports, you can find depletion rates for some countries' resources. A few high spots:
- In 2004, 20% of Russia's oil came from oil fields that were over 80% depleted. The post-peak fields are estimated to be declining between 1-5% per year.
- Iran's rate of decline is estimated to be 8% for onshore wells and 10% for offshore wells.
- Though the EIA has no hard facts for China, they do report that China's fields are mature and production is peaking.
- In Saudi Arabia, Aramco states that the total average depletion for its oil fields is 29%. The largest Saudi field, Abqaiq, peaked in the ‘70s and is 74% depleted.
A more extensive report on 811 of the world's largest oil fields earlier this year by Cambridge Energy Research Associates put the average depletion rate at 4.5% a year. Even though that is lower than many peak oil theorists, it is still a whole lot of oil to make up each year through new fields or better extraction techniques.
Given how hard it can be to get good data, it will be interesting to see the IEA's report in November. Especially since it looks like China, Venezuela and Iran aren't cooperating, and getting specific field information from Saudi Arabia is next to impossible. One thing that might make IEA's analysts' jobs easier would be if China accepts the U.S.' invitation to join the IEA - but don't hold your breath. To do so, China would need to become a member of OECD - an organization whose members have open market economies and are committed to democratic pluralism.
And The Price Goes On
One thing is for sure: If the IEA report comes out in November with even worse news than the market is expecting, this curve will get a lot steeper and cries of "The Sky is Falling" will be heard loudly throughout the market.
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Assuming you know how to logically work within a quantitative model.
My answer to your question is: It depends on the relative size of the installed base IB (Oil in the Earth) AND the rate of production (inputs) compared to rate of depletion (outputs)
The only thing we KNOW is the rate of depletion. We do not know the size of IB, nor do we know the rate of production.
SO = IF IB + (rate of production inputs to IB ) >= outputs
THEN the IB continues to grow OR it depletes are a rate = output - input.
Those are facts Jack! (numbersguy) Your assertions are without merit except you believe them to be true. Tell me how do you know? answer is you do not.
Example IF IB = 10,0000000000000000000 energy units
and input (production) = 1,0000 energy units/year
and output (depletion) = 1,0000 energy units/ year
THEN IB remains a constant.
Stated logically : IF IB is >>>>>&g... than output (depletion)
and if input is approximately identical to output
then the supply is truly infinite (limitless.)
IF IB is >>>>>&g... than depletion
and input is < less than depletion
then the supply is essentially = don't worry about it.
Finding it and getting it out of the ground are other matters entirely. Economics is another matter entirely, BUT REMEMBER oil used to be $10 a bbl it is now 13X that, and technology continues to advance.
Perhaps you believe all that oil in the ground actually came from rotten dinosaur guts? Say it isn't so, there were never that many dinosaurs =all scientists now agree.
You should read up on the current theory of how oil is produced thru natural geological processes. IT is an accepted and logically firm process.
Remember, only 30 years ago NOBODY believed in Continental Drift either -despite the overwhelming evidence right in front of their eyes.
Fortunately YOU do not have to believe in it, for it to be true.
Remain sceptical - its a good thing
I am blown away. With that model you should go short oil
Solar is forever, and free. duh...............
SOALR is FREE!!!!
Trumped by God. (all puns intended).
Just like drilling, Collectors must be produced, installed and supplied to the users. Panel Maintenance costs, power lines, nothing is free.
Permits, environmental concerns, Anyone remember the Snail Darter fiasco?, A lot of land will have to be covered, who knows what kind of disaster awaits the cuddly rattlesnake.
This guy really believes this, without evidence. Then, some other idiot comes to the thick party with this comment "It would be a waist of e-mail space to argue with someone soooooo misinformed and illogical". Its "waste" mate, not "waist". How can you expect anyone to take you or your comments seriously? And, is "soooooo" more adverbial than "so"? I certainly don't get that one.
Solar is bull because its too expensive in terms of capital expenditure and its return is not portable like oil. There is nothing like oil for portability and severability, as in, you don't need a power cord or to be in daytime. It contains more ergs/calories than just about anything for its volume. Unfortunately, it took a few hundred million years to make what we have pissed out in a bare 100 years, and its hitting us in the hip pocket.
Me thinks you've spent too much time on your head, down there down under.
Do you only believe in that which you see? Ever see your parents do it? and yet surely you don't believe your mother gave you a virgin birth do you? Ever see photosyntehsis occuring? Yet surely you believe photosynthesis process exists don't you?
God gave you both eyes and a brain, suggest you use both of them, and not rely merely on your eyes. Ever hear of brain atrophy? maybe that would explain it in your paricular case.
PS its hundreds of millions of years, not Billions (plural)
WoodyB "Oil is from dead dinosaurs theory" was generally accepted as Scientific fact until only last 30-50 years or so. Now, as yourightly say, it is totally discredited.
Continential Drift theory did not gain acceptance until about 30 +/- years ago. One guy may have theorized it in 1912 -BUT - all he got for his trouble was a lot of abuse by neanderthals who disagreed. Much like I received here from some of you.
Oil is still being created today, but in tiny amounts. It's not going to save us.
Your assertion is false AND misstated.
No one knows when oil was "created", no one knows how much was created, no one knows what caused the creation process to begin, or what presumably caused the geological creation process to stop.
Current theory states that the basic geological processes continue unabated, and while the creation process is well described, the pooling process is not, AND there is no Earthly - pun intended - reason for those geological processes to have stopped or to have been limited to your 2 -so called geological periods.
If you know, specifics, please provide. - I'd like to hear it. -documented facts please, not opinions. I assume you do not believe oil is the remnants of long defunct Dinosaurs. =please confirm, thanks.
ALSO no one knows WHERE Oil was created - and therefore cannot know WHEN it was created. We only know WHERE it has "pooled" = where found reserves (fields) currently reside = this is not necessarily where it was formed, only where it ended up.
www.searchanddiscovery...
As you can see, there were two major periods of oil formation, the upper Jurassic (25%) and mid-Cretaceous (29%). (You will see I said MOST oil was created during two periods, not ALL oil.) Oil geologists know where to look for oil based on the age of the rocks present. Just google "Jurassic oil" for example.
Also oil is still being created today. I said that before, so you are not contradicting me. But the rate of creation is far too low to make up for the rate of extraction. That should be obvious, since oil was created over millions of years, yet we have used up a large fraction of known reserves in just 150 years. Here is a link to show oil creation rates cannot match oil production rates:
www.abc.net.au/science...
If you find some of the above links too heavy going, there are some good videos here:
www.abc.net.au/science.../
So now I've provided links to back up my claims, perhaps it's time for you to do the same.
And no, oil did not come from dinosaurs.
And I neer said the geological rate of oil production was equal to or greater than the current rate of oil withdrawal. You forget that huge capacitor of previously produced oil that exists, and the size of which we do not know - we only know known resrves, we do not know unknown reserves.
There is a material difference between where something was formed, and where it ends up. We estimate "when" by "where" it ended up, we cannot unequivically state "Where" it was actually formed - or even "how" except to assume Temp,pressure, and an organic base ere all involved.
I don't do research for people who do not pay me, they can find the authoritaqtive sources on their own.
good luck to you, more power to you.
Well it sure sounds like you did. In your original posting you said:
"so long as the current geological rate of petroleum production equals or exceeds the current human rate of petroleum depletion, the Earth will remain a petroleum rich environment."
You are the one making outlandish claims. I'm just repeating what the standard line accepted by petroleum geologists is, and I backed it up with links. Feel free to believe your way-out-there ideas, that's fine, but the fact you failed to provide any evidence to back up any of it speaks volumes.
And you left out the remander of that quote of mine, thereby parsing it and pulling it out of context.
Also the "standard line" accepted by geologists continues to change, these same geologists -well, their grandfathers- purported to subscribe to the "oil from rotten dinosaurs theory"
And as further proof of my contention that we DO NOT KNOW the extent of the installed base of oil, we ONLY know of the found oil, not the unknown oil = SEE the atest discovery of some 500 Billion Barrels of light sweet crude in the Dakotas = the USA !!! Saudi fields have pumped out about 55 Billion barrels since their inception.
NOW will the dildo DIMwit U.S. obstructionist politicians allow us to drill that oil out of the ground- along with ANWR -along with the US coasts offCalifornia, mexico,Fla? the Carolina's? OR WILL the environmentalist wackos find an endangered species of cockroach in the Daktas, and prohibit our drilling out that need light sweet crude.
Oh yeah, we might have a problem getting wildcatters to drill in the Dakotas, because so many of them will be engaged in drillling out the 1TRILLION barrel oil field discoverd off the Coast of Brazil.
There's tons and tons of oil, the world is much larger than we tend to believe it is, and our piddly little efforts as people are but a spit in the ocean when it comes to diggin into and using up natural resources. Its human nature to think our impact is much larger than it actually is. We are like a cockroach floating on its back down the river with a "hard-on" Yelling "Raise the draw bridge, raise the draw bridge"
Next time you purport to quote me, don't parse my words, and don't quote me improperly out of context.
If you believe for a second that we are never going to run out of oil... I have a bridge to sell you. All the arguments aside of how oil came to be in the first place, it isn't being naturally produced in anything near significant quantity. Yes globe it is time to move on from a hydro-carbon based economy. It will be very painful if we don't start now. We should have started 30 years ago.
Dear Pet: Thanks for your insights. I do not have too many insights, so I can not share those with you. But, I am a worry-wort wacko; so let me share a couple of worries with you...
I have a little nephew- about 3 years old. Very intelligent. He has a view on everything. I like being with him- so when I am home (I live in an undeveloped part of the world, where we are still savage enough to have joint families)... yes, so when I am home, I take him on short drives.
Many of these drives are to the ATM (like I said, we are savages, so we do not have too many ATM's, and I need to specifically drive to one of those). My nephew comes to the ATM with me, and sees me withdraw unimaginable amounts of money from that machine.
So, whenever he wants a new toy, he asks me to drive up to the ATM, take money out, and eventually, get him that toy. I am quite a bit of a sucker- therefore, I have, so far, got him all the toys that he has ever wanted.
My fear is that one day, he is going to want the real Airforce One, or the real QE II (we are *not* savage enough, to *not* have international fare on cable TV). I will, of course, tell him that neither I, nor my ATM god, have enough money to meet that kind of a demand. But, guess what, for him, his demands, his desires, are sacrosanct...
...And he is going to accuse me of being a liar; and he is going to feel that I do not love him.
I care about him, deeply, but what will I do then?
Actually, there is a bigger problem. I am just a useless writer- and I have no job. I was merely using up the money that my grandmother left me when she dies four years back. Now, I just have a little house that my same stingy grandma left me; and I get a little rental income from that. But that income is not enough to meet my daily needs; and I am going to find it tough to get him even a rubber ball now. Methinks, I should sell the house... hmmm...
Or perhaps, I should give my Paypal details now, so that some of the folks reading this post might contribute. His demand for the real QE II, (or, for the rubber ball, in the new scenario), like all his previous demands, will then be met...
--
Perhaps, also, you might now have some juicy adjectives for me. Please feel free to share the same. My nephew also is pretty imaginative when he is upset.
Apologies also... :-( ...for the worry-story... I have many nephews, but none that live with me, nor any that can likely demand the QE II from me.