Peak Oil is You
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Page added on March 15, 2012
Peak oil is real and will stunt any economic recovery
During the last century, society squandered 500 million years of captured sunlight on drag races, traffic jams, private jets and overheated office buildings – warns campaign group
Oil company cheerleaders proclaiming huge supplies of oil are dead wrong. Peak oil is as real as rain, and it is here now. Not 2050. Not 2020. Now. Oil production has been flat since 2005. This is not by choice. The producers cannot increase production because new fields cannot keep pace with declining production from old fields. The plateau is the top of the global depletion curve. Furthermore, this end of energy growth only accounts for volume. Energy quality and net-energy are falling like stones as environmental devastation increases. Every producing oil field on earth is in decline, unless it is brand new, and peak discoveries are well behind us. Meanwhile, the aggregate decline rate appears to be about 5 per cent per year. To maintain world production, we would need to bring a new Saudi Arabia – equivalent to three billion barrels annually – into full production every three years. There exists on earth not one single promising field that remotely approaches those requirements.
(The oil plateau: The calm before the decline. Reference: The Oil Drum.)
When you read or hear about “10 billion barrels” of oil discovered somewhere, here is how to think about that – a third of that is probably not recoverable or entirely illusory. The recoverable portion will require a billion barrels of oil equivalent energy to produce; in the tar sands it would take three billion barrels. What is left, about five or six billion barrels, equates to about a two-month supply for humanity. Two months. We will not “run out of oil” because, simply, we will never get it all. What petroleum geologists point out is that all oil fields have a production curve, a peak and a decline. Therefore, the earth’s total supply has a peak and decline.
But that is not all, the volume decline includes a decline in quality and net energy. As oil fields reach old age, energy returned on energy invested plummets and production costs soar for a lower quality product. Over the last century, oil producers have high-graded earth’s energy storehouse, and the best net-energy reserves disappeared 70 years ago. Oil in its heyday – the 1930 and 1940s – produced 100:1 net-energy, a hundred barrels out for one barrel of energy invested. Today, oil fields range from 20:1 to 10:1. The United States average is 11:1. We are now digging into the 3:1 net-energy tar sands. Energy expert Howard Odum warned of the net energy curve in the 1970s and geologist Marion King Hubbert graphed the oil decline in the 1950s.
(Peak discoveries occurred 50 years ago. Reference: Exxon Mobile, from The Oil Drum.)
Charles Hall, at the State University of New York, has calculated that it is not possible to run our complex civilisation on a net-energy below about 6:1 – because society needs that reserve energy to run its transportation, agriculture, health systems and so forth. The tar sands 3:1 net energy is simply pathetic. A salmon does better chasing herring. An Amish farmer gets 10:1 net energy with hand tools. I suspect most of the industry cheerleaders talking about “giant discoveries” and “energy gluts” know this. Still, they spin every new oil discovery as an arrival in the Promised Land, pump stock plays and promote their industry. In our world, that is legal. But it is not really honest. In April 2011, chief economist of the International Energy Agency Fatih Birol revealed what the industry knows: “We think that the crude oil production has already peaked, in 2006.”
And since the population is growing, peak oil per capita occurred in 1979. We have now reached the absolute peak. Without increasing energy sources, we cannot increase economic activity. We can print money and harvest the earth’s assets and make it look like growth – for a while – but the piper will be paid. Nature shall not be mocked. In 2008, when the economy appeared to be roaring and traders pitched mortgage-backed securities on unsuspecting clients, energy production had ceased growing. As a result, the oil price almost tripled from $50 per barrel to $147. This equated to a $3 trillion increase to the world’s annual energy bill, which sucked discretionary income from every other market and helped crash the global economy.
When the economy collapsed, oil prices fell. But as economies recover even slightly, the price will rise again since supply is restrained. Blaming the US President Barack Obama for rising energy prices is another con job. Blame nature. She just cannot make more of the stuff fast enough. During the last century, society burned the best half of recoverable hydrocarbons that represented 500 million years of captured sunlight; a one-time storehouse of high quality, concentrated energy. We squandered it on drag races, traffic jams, private jets and overheated office buildings. We burned this valuable asset and called it “income.” If you did that in your home, you would go bankrupt. Peak oil is real. The consequences – at best – will be a slowly scaled-down industrial civilisation. If we continue to ignore these facts, the consequences will be far worse. Nature just is not sentimental.
14 Comments on "Peak oil is real and will stunt any economic recovery"
BillT on Thu, 15th Mar 2012 12:25 pm
WOW! This is the best and most concise article on the situation we are in that I have ever read. No hard to understand graphs or equations, just plain words. When the Amish farmers (we have a lot in Pennsylvania) are more energy efficient than our oil wells, we know it is over. They grow great crops with teams of horses and no electric or phones in their homes. Imagine how much less we would need to earn if we had no electric bill, no appliances to buy and replace every few years? Just efficient wood stoves and lanterns of yesteryear that lasted for generations. Horse and buggies and no cars. Canning and drying our food and producing all of it ourselves. Think about it. That could be the life of 2100, if our grand kids are lucky enough to have a world to live in.
Charlie Bucket on Thu, 15th Mar 2012 1:10 pm
I concur with BillT, great article!
Arthur on Thu, 15th Mar 2012 2:53 pm
Yeah, great article, but in an internet publication, just like peakoil.com.
Still no MSM=politics breakthrough. Nobody wants to bring the bad news.
Democratic Politician: “Well folks, uh… not sure how to put it, but uh… the party is over. In 2-10 years time there will be no cars anymore, industrial society will crash into the wall. Peak Oil is now, Peak Coal is 2025, just like Peak Uranium and Peak Gas. The carrying capacity of this planet for 2050 is estimated to be 2 billion people, so uh… 7 billion people are going to die.
Please vote for me!”
Not going to happen. It makes more electoral sense to promiss that prez Newt will bring gas prices down to 2.50$/gallon.
The future is for the preppers, not the ones who believe politicians. Politicians are busy 24/7 with networking; no time for them to read books, let alone write them.
ken Nohe on Thu, 15th Mar 2012 4:54 pm
I too agree: Concise and clear… but nobody whats to hear such message. “What are you trying to do: switch off the light during a party?”
And if the inertia is indeed already too great; what for? Why worry for what may be ineluctable? Why slow down if the “slack” is to be absorbed by China, India or worse; my neighbor?
Ham on Thu, 15th Mar 2012 6:54 pm
This is the real news: not media kabuki.
SOS on Thu, 15th Mar 2012 11:47 pm
this article is misleading and wrong. It is based on unfounded but highly publicised assumptions. there is far more energy than we need right here if government policies would not interfere with orderly and economical development. Oil/energy rices are high because of government intervention. Orderly development and much lower prices are just around the corner if we have the political will. The switchover to liquid natural gas, an almost unlimited resource here in north america and near all-time price lows is underway in a huge wave of conversions by leading corportations cutting fuel costs by millions of dollars. They are establishing fueling stations across the country. Auto companies are ramping up LNG vehicle porduction, especiallhy pickups and larger delivery type vehicles.
SOS on Thu, 15th Mar 2012 11:50 pm
The people that want to live in a primative condition are welcome to that. Its available right now without changing the lives of anybody else one bit. Most of us, on the other hand, appreciate what we have and want to keep it. We can if we all start to support government policies that promote orderly development of our resources here at home. Imagin how much less we would have to earn if government policies made energy cheaper not rediculously expensive.
Arthur on Fri, 16th Mar 2012 12:57 am
@SOS – that is the libertarian angle, right? But during my student days it did not matter whether I visited the left wing student parties (Demos) or right wing student parties (Corps): when the keg was empty, the party was over. Sure we can postpone the end of the oil age by switching to natural gas. But do you have a source to support your claim of ‘almost unlimited resource’?
BillT on Fri, 16th Mar 2012 2:24 am
SOS is a denier in the closet. Anyone with a rational mind can see the writing on the wall. Nothing is going to save the wasteful society here in the Western countries. Nothing. We will regress back to the mid 1800s life style, if we don’t destroy everything first. And we will do it by 2100 at the latest and maybe by 2050.
There is no fuel source that will endure past 2050. None. All the PV solar, wind, etc will wear out and be unreplaceable in the quantities needed to even supply a small percentage of our energy needs. We are already living on the legacy products of the cheap, plentiful energy of the last century. When they wear out it is over.
Arthur on Fri, 16th Mar 2012 10:30 am
Bill, I think your are too pessimistic about a return to 1850. I think it will be more like 1950: no cars, no air travel, but with electricity. Yesterday in prime time Dutch news. Plans for largescale introduction of PV-systems on the roofs of 2.4 million rented homes (there are 7 millions homes in Holland). With current high prices of energy it already pays off to invest in these systems and many people do. Now the big home corporations want to push through that these systems bevome mandatory. Out of the top of my head, electricity I believe is ca. 10% of the total energy consumption. The car economy is going to crash, but the lights will stay on, at least in the north.
Arthur on Fri, 16th Mar 2012 10:37 am
This is the reference to the plan:
http://nos.nl/artikel/351894-aedes-zonnepanelen-op-huurhuis.html
The google chrome browser can translate.
SOS on Fri, 16th Mar 2012 4:33 pm
The keg is nowhere near empty. North Dakota recoverable reserves are now over 24 Billion Brrls. The first well was in Tioga back in the early 50s. Nobody estimated these huge reserves. The idea we are out is not an idea its missleading and wrong propaganda. Whats really happening is governement intervention causing pull backs in production and rising costs. Gulf Oil production is down 30%. Production on federal lands down almost 20% across the boards. State and private lands have production up almost 20%. There are year over year figures.
Wheeldog on Fri, 16th Mar 2012 4:41 pm
Finally! Someone is writing about “net” and “per capita” oil. The general media is slavishly fixated on gross oil discoveries and production. It is not what we produce – it’s what is left over after subtracting all the costs related to finding, tapping, transporting, refining and marketing are subtracted. From that perspective we are already over the peak hump and beginning the long slide down the other side.
PetroCrash on Wed, 21st Mar 2012 7:56 am
@SOS, you’re completely missing the picture, as easy as it is for anyone to see. No one can help you see it if you don’t want to.