Peak Oil - the coming catastrophe

[wjfox]

Well, it's official. Even the International Energy Agency (IEA) - which has been notoriously optimistic in the past - now admits that Peak Oil is a reality.

Furthermore, they actually go as far as saying that Peak Oil has already happened - in 2006:

Oil demand (excluding biofuels) continues to grow steadily in the New Policies Scenario, reaching

about 99 million barrels per day by 2035 ? 15 mb/d up on 2009. All of the net growth comes from

non-OECD countries, almost half from China alone; demand in the OECD falls by over 6 mb/d. Global

oil production reaches 96 mb/d, the balance of 3 mb/d coming from processing gains. Crude oil

output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains

its all time peak of 70 mb/d reached in 2006.

Their latest report can be found here and includes possibly the scariest graph I've ever seen.

Just look how rapidly oil production is going to decline. We're already on the downslope. Where do they expect to find all this new oil? Canada's tar sands won't save us. Neither will the Arctic, which has an estimated 90bn barrels (only about 3 years' worth of global oil demand). Nuclear, solar and wind are unlikely to save us. Fusion power is decades away.

There's the added issue of population growth, and the huge increase in demand from China and India, which are becoming industrialised at a phenomenal rate.

Our whole society, all the technology and everything we take for granted - cars, planes, computers, heating, lighting and electrical equipment, food and clean water - depends on a cheap and abundant supply of oil... a resource that's now in terminal decline.

More analysis of the coming catastrophe here: http://www.theoildrum.com/node/7102

http://www.futuretimeline.net/subject/images/peak-oil-timeline.jpg

Another point to bear in mind:

http://www.guardian.co.uk/business/2008/dec/15/oil-peak-energy-iea

In the report on peak oil commissioned by the US department of energy, the oil analyst Robert L Hirsch concluded that "without timely mitigation, the economic, social and political costs" of world oil supplies peaking "will be unprecedented". He went on to explain what "timely mitigation" meant. Even a worldwide emergency response "10 years before world oil peaking", he wrote, would leave "a liquid-fuels shortfall roughly a decade after the time that oil would have peaked". To avoid global economic collapse, we need to begin "a mitigation crash programme 20 years before peaking". If Hirsch is right, and if oil supplies peak before 2028, we're in deep doodah.

[womanofdulwich]

i dont understand the "crude oil fields yet to be found " bit- how can this be quantified??

[oilworker]

i dont understand the "crude oil fields yet to be found " bit- how can this be quantified??""

It can't be - by its very nature it's an estimate based on historical data and projections. It's not as scary as it all sounds - we are massively reliant on oil and gas only because it is relatively cheap compared to wind/nuclear/bio-fuels atc. Once O&G starts to run out this will no longer be the case and much more effort (specifically nuclear) by the energy companies will be put into these than is currently.(Otherwise they will all go out of business). I'm just glad I work in a sector where the commodities we deal in are becoming more and more precious!

[Loz]

I remember being told there was leas than 20 years oil left... about 35 years ago.

The human race is reliant on energy, not oil and gas.

[Townleygreen]

I've been worried about this for years.

The Oil Drum website is very scary in places.

It makes me rather regret having children (only in a sense, you know what I mean), thinking of how hard things will be for them.

I fear we are in for some very difficult times. Just imagine what will happen to the stock markets when they realise that cheap energy has gone for ever?

Cheap energy underpins our whole civilisation.

Jared Diamond's book "Collapse" looks at historical examples of civilisations that ran out of resources.

It wasn't pretty either.

[HAL9000]

The inclusion of "crude oil fields yet to be found" avoids a graph that plunges precipitously towards a cataclysmic future far too close for comfort.

I strongly suspect that most, if not all, of the middle-eastern oil producers have been exaggerating and over-estimating their oil reserves for decades in order to retain the political and military support of the western powers.

If those reserves were to be properly quantified, the effect on western economies would dwarf the financial crisis of 2008, in my view. Interesting times lie ahread.

[DJKillaQueen]

Well there is still plenty of coal to burn. Environmentally bad yes, but there's enough there to keep the generators going for a while.

[Magpie]

Well Peak oil may not be as bad as you think - higher oil prices should provide incentives for more rapid development of alternative technologies.

[david_carnell]

Try heating your house or cooking with incentives.

[Loz]

You probably don't heat your house or cook with oil, anyway.

[DaveR]

It's easy to miss this bit, which is pretty important:

"demand in the OECD falls by over 6 mb/d"

So that's over a billion people (and rising), representing essentially the entire developed world, reducing their dependence on oil, and the level of reduction is not insignificant - 6% of total global demand. To me that suggests that the situation is serious but not necessarily catastrophic, because at least some of the means of reducing demand for oil are already known and in play.

[Brendan]

Loz Wrote:

-------------------------------------------------------

> You probably don't heat your house or cook with

> oil, anyway.

No the impact will be on transport. Try doing just about anything in the modern world that isn?t reliant on roads, rail, air travel.

Unless you?re talking about olive oil which I do cook with.

[david_carnell]

Loz Wrote:

-------------------------------------------------------

> You probably don't heat your house or cook with

> oil, anyway.

Unless you have an aga!

What I really meant was the oil-fuelled power stations (of which England has 7) that then provide the electricity to heat or cook with.

[Jeremy]

But that goes back to what Magpie was saying... eventually the remaining oil will be so deep in the ground, or so far offshore, that electric/hydrogen powered vehicles, renewable energy, etc will all start looking a lot more cost effective.

It's a shame that the major investment in these technologies will be reactive rather than preemptive.

[Brendan]

As an aside a country like the UK, still essentially a maritime nation in that it relies on imports to feed itself, is particularly vulnerable to an international oil shortage.

[SeanMacGabhann]

Amen

But what surprises me most is the hostility to any plans to develop these technologies

?waste of money?

?will never provide enough?

?just go nuclear?

Nuclear is an answer btw. Just not the right one IMO and whatever warnings were flagged up about financial systems in the last 10 years (only to be poo-poo?d) will be as nothing compared to when nuclear is more fully deployed and goes tits up

[Jeremy]

I also think that from an economic perspective, this country is really missing a trick by not getting ahead on renewable energy technologies. We're in the perfect position... a fairly wealthy country with strong engineering expertise, large energy companies, plenty of coastline, etc.

[louisiana]

DJKillaQueen Wrote:

-------------------------------------------------------

> Well there is still plenty of coal to burn.

> Environmentally bad yes, but there's enough there

> to keep the generators going for a while.

There is some coal to burn.... which will become economic to dig out when oil reaches maybe 3x/4x/5x or more than it's current price?

In other words - the IEA's new position as of this year - is yes, energy, but at a price.

Providing infrastructure to cater for mass change to alternative energy sources will also be expensive.

Unfortunately, right now there doesn't seem to be a lot of money kicking around for major trans-national infrastructure changes.

[louisiana]

DaveR Wrote:

-------------------------------------------------------

> It's easy to miss this bit, which is pretty

> important:

>

> "demand in the OECD falls by over 6 mb/d"

>

> So that's over a billion people (and rising),

> representing essentially the entire developed

> world, reducing their dependence on oil, and the

> level of reduction is not insignificant - 6% of

> total global demand. To me that suggests that the

> situation is serious but not necessarily

> catastrophic, because at least some of the means

> of reducing demand for oil are already known and

> in play.

That's just a scenario. We can all come up with scenarios. But this scenario would need to play out or else...

[louisiana]

Brendan Wrote:

-------------------------------------------------------

> Loz Wrote:

> --------------------------------------------------

> -----

> > You probably don't heat your house or cook with

> > oil, anyway.

>

>

> No the impact will be on transport. Try doing just

> about anything in the modern world that isn?t

> reliant on roads, rail, air travel.

>

> Unless you?re talking about olive oil which I do

> cook with.

Yup, Brendan, huge impact on transport, especially air transport (we have yet to invent the commercial wind-power aeroplane!), but also on a host of products such as a wide range of petrochemicals

http://en.wikipedia.org/wiki/Petrochemicals

Also consider the impact on, say, farming, where every step in the process is highly dependent on oil and gas. Farming today is one-man-and-his-barrel-of-oil-in-many-guises.

[DaveR]

The whole report is a scenario, and one of the elements is an assumption that oil demand from the OECD will fall. I'm assuming that the basis for that assumption is as strong as the other underlying assumptions (otherwise it wouldn't be in the report), and it suggests that this:

"It's a shame that the major investment in these technologies will be reactive rather than preemptive"

may not be entirely accurate. Apart from anything else, I wouldn't expect big oil companies to sit around like turkeys waiting for Christmas.

BP

It may be tempting to dismiss this, but if BP see a future profit in wind power or biofuels they will want to be in a position to exploit it. It's not as attractive a message as 'everybody get together to save the planet' but it's more dependable.

[louisiana]

I wrote articles interviewing BP head honchos about alternative energy investment and developments back in the late 90s. Yes, they are certainly doing something, but it's fairly small beer compared to total development spend (4% now? I not up to date with the figures) and has been downgraded a few times. Under Hayward, there were some who saw BP's more recent moves as pulling back from alternative.

[louisiana]

DaveR Wrote:

-------------------------------------------------------

> The whole report is a scenario, and one of the

> elements is an assumption that oil demand from the

> OECD will fall. I'm assuming that the basis for

> that assumption is as strong as the other

> underlying assumptions (otherwise it wouldn't be

> in the report),

The basis is promises made by governments. They've taken all the measures promised and their impacts, added them together etc.

(That's certainly a sounder way than the method the IEA used for calculating oil reserves for the Outlook up to 2008: finger in the air.)

Colin Campbell (who has advised the IEA on reserves) provides some insight into how these things get put together in a letter he wrote to the Guardian a while back:

http://aspoireland.org/2009/11/20/ieawhistleblowerresponse/

[mockney piers]

What happened to that solar farm in the sahara, sounded cool to me.

[wjfox]

Townleygreen Wrote:

-------------------------------------------------------

> I've been worried about this for years.

>

> The Oil Drum website is very scary in places.

>

Indeed...

http://www.theoildrum.com/node/6924

Long article, but well worth reading.