Peak Oil is You
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Page added on January 12, 2014
So much for “peak oil”
The Romans named the first month of the year after the double-headed god Janus, the symbol of thresholds and transitions.
He reminds us how life often involves choices between opposites. Janus stands at January’s doorway looking at both 2013 and the New Year.
One Janus-like debate in the energy sector revolves around the world’s oil and gas supply. Views are always vacillating between “there’s not enough” and “there’s more than enough”.
This point would be trivial were it not for a recent dramatic shift towards the first view. Until the middle of the last decade, the popular view was that production of “non-renewable” energy resources was peaking. In a sense, this was Janus showing his pessimistic face.
Alan Greenspan captured this sense of pessimism in 2003 saying “today’s tight natural gas markets have been a long time in coming, and futures prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon.”
In 2007, the influential Financial Times predicted: “World will face oil crunch in five years – IEA says supply falling faster than expected.”
Yet just as the energy future was looking particularly bleak, an energy revolution was being triggered by radical innovation in drilling and completion technologies. You might say, Janus presented his other, optimistic face. The long term decline in oil and gas production was reversed and North America was put on the path toward energy self-sufficiency.
How this switch happened is straight forward enough. Energy shortages inflate prices that, in turn, incent smart people to find new resources and innovate ways to wrest more hydrocarbons from mature plays. North America’s is now awash in “technology oil and gas.”
Just how this technological revolution has led to energy abundance was powerfully driven home by a November study released by the National Energy Board in cooperation with the B.C. Oil & Gas Commission, the Alberta Energy Regulator and the B.C. Ministry of Natural Gas Development. It put the reserve potential of the Montney gas basin alone at 449 trillion cubic feet of natural gas, enough to supply Canada’s needs for the next 145 years.
There are, of course, many examples of how the revolution is playing out in the oil sands. For instance, companies are now advancing variant forms of steam-assisted gravity drainage to extremely challenging bitumen-soaked sandstones and previously inaccessible carbonate formations. Unlocking the Grosmont carbonates alone, with its
estimated 447 billion barrels in place, would have a major impact not only on the Canadian but also the global crude oil supply picture.
Double-headed and double-visioned, Janus would see both the advantages and disadvantages inherent in any situation. The flip-side of the energy revolution is the simmering public concern about climate change.
Churchill said, “The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity.” Savvy companies are integrating their economic and environmental values into one perspective. My prediction is that we’ll see huge progress in this area in 2014. Next January I’ll twist my head around to see how far we’ve come.
15 Comments on "So much for “peak oil”"
Meld on Sun, 12th Jan 2014 9:20 am
What?
Arthur on Sun, 12th Jan 2014 9:48 am
a November study released by the National Energy Board in cooperation with the B.C. Oil & Gas Commission, the Alberta Energy Regulator and the B.C. Ministry of Natural Gas Development. It put the reserve potential of the Montney gas basin alone at 449 trillion cubic feet of natural gas, enough to supply Canada’s needs for the next 145 years.
If this is true, than peakoil.com should reconsider it’s own existence, BillT can come home and I am out of here, as I don’t expect to become 200 years old.lol
Whatever the truth of ‘145 years worth of Canadian gas’, one thing is certain: ASPO2000 was dead wrong. With a little of bad luck this could kill the emerging global renewable energy industry if carbon prices sink too low.
Beery on Sun, 12th Jan 2014 10:19 am
Another article from the usual suspects – the idiot brigade who think that oil and gas resources are going to keep flowing forever. Why do we even bother to comment on such lunacy?
DC on Sun, 12th Jan 2014 10:51 am
You know, all the ‘real’ oil is pretty much gone in Alberta. Its just diffuse, low-net energy tar-sands and fraking is all thats left now. Consider that Alberta has been in the oil business for less than a century and managed to pump out all the ‘real’ oil in rather short order. Mostly in the last 50 years really. With demand on the rise everywhere, Alberta does not have 150 years left. I dont really know what Albertans will be doing 150 years from now, but I really doubt the O+G industry will be much of a part of it.
Davey, Hermann, MO on Sun, 12th Jan 2014 11:49 am
The more I hear about the end of peak oil the more I know the idea of peak oil is gaining significant ground. Just like the stages of death. Eventually the concept will have widespread acceptance and the whole issue of a debate will be past tense. Yet, the peak oil systematic risk implication may never be fully understood
rockman on Sun, 12th Jan 2014 2:34 pm
“In 2007, the influential Financial Times predicted: “World will face oil crunch in five years”. Sounds like they nailed it pretty good IMHO. I suppose it depends on how one defines “crunch”. The world is spending $2 trillion MORE for oil now than not too long ago. Sounds crunchy to me. Multiple military conflicts going on in the major oil exporting region on the planet…more crunchy. And global coal consumption, especially in the top expanding economy (China), increasing…crunch…crunch. More future oil production continuing to be removed from the market place Vis ELM, in-ground reserve acquisition, long term purchase contracts and refinery JV’s…CRUNCH.
All sounds very crunchy to these old ears that have listened closely to the oil patch for the last 39 years. It doesn’t sound like the rustling of leaves in a gentle wind.
And Arthur: you seem like a clever guy. But for the love of Dog please don’t mix NG up with oil. We’re about PO here…not PNG. There’s a reason there’s no peaknaturalgas.com: we’re not there…yet.
Arthur on Sun, 12th Jan 2014 3:14 pm
But for the love of Dog please don’t mix NG up with oil. We’re about PO here…not PNG. There’s a reason there’s no peaknaturalgas.com: we’re not there…yet.
OK, OK, ASPO was about oil, but since oil and NG can replace each other in most cases (heating, cooking, driving), it does not make a difference, which one runs out first (oil). Ten years ago ASPO, Heinberg, Campbell, etc., were warning that industrial society could come to an end soon and that big chances on the ‘fossil front’ were to be expected between 2010-2020.
That position is now untenable, regardless if the Canadians have 30 or 150 years worth of NG.
Northwest Resident on Sun, 12th Jan 2014 4:20 pm
“oil and NG can replace each other in most cases (heating, cooking, driving)”
Heating and cooking, sure. Driving?! Hey, why not? All we have to do is invest a few trillion $$ or more worldwide into infrastructure required to deliver natural gas to drivers, then require automobile owners to pay up to either buy a new vehicle (throwing their old useless one in the dump at total loss — or will it be a government/taxpayer buyback?) or purchase that expensive gas-to-NG conversion kit. And of course all of the automobile manufacturers should have no problem converting their assembly lines to make cars that run on natural gas. All this, to burn through remaining reserves of natural gas that will last us how far into the future — ten years or so? Great plan!
robertinget on Sun, 12th Jan 2014 5:11 pm
Dear Fellow Northwest Resident:
I’m old enough to recall driving my diesel PU in Western Oregon always requiring two full five gallon jerry cans of fuel. Today, diesel is available in every town big enough to have a “gas” station. What’s missing in RURAL areas
is piped in natural gas ubiquitous in EVERY American city. If a refinery product PROPANE, did not exist our unnamed NW Resident might have a point. I’m certain NWR is aware, propane tanks, AKA “Yard-Bombs” are ubiquitous in rural America. Today every Wal-Mart or hardware store sells five gallon trade in empty propane bottle for full.
If you have a sec, let’s follow gasoline
from REFINERY to NWR’s gas station.
A journey of pipeline or rail to storage to trucking from one retail outlet to another.
Natural gas OTOH, most likely is already available within yards from Existing gas pumps. While NG requires cleaning, dewatering, no complicated, energy intensive, (NG is used to refine crude), refinery process is involved. No special double walled spill proof underground storage needed.
While it’s true NG and propane require different ‘jets’ this should not be a problem not already worked out by twenty or more nations already using CNG powered transportation.
In Central America EVERY major auto and truck manufacturer sells every sort of diesel powered vehicle imaginable.
So it will soon be with gas in spite no need for home heating.
Northwest Resident on Sun, 12th Jan 2014 5:37 pm
robertinget — No doubt, converting transportation worldwide to run on NG (or propane) is technologically possible, but the investment required is still a prohibitive factor. The entire world economy is heavily leveraged. How will we finance the move to NG? Ask the Fed to just print up another batch of greenbacks? People are out of work everywhere, decreasing earnings, the middle class is under pressure like never before worldwide — and you want them to go get new loans to buy new NG vehicles? And all this just to convert to a fuel that will ultimately run out in the not-too-distant future — that reeks of desperation to keep BAU going for just a little while longer. And let’s not even talk about the destruction of natural habitat and poisoning of the earth that getting all that NG will require. Converting to NG worldwide is a bone-headed idea, the “bright idea” of a fossil-fuel addicted elite who just can’t admit that their ride on fossil fuel energy is coming to an end.
GregT on Sun, 12th Jan 2014 6:10 pm
“It put the reserve potential of the Montney gas basin alone at 449 trillion cubic feet of natural gas, enough to supply Canada’s needs for the next 145 years.”
While perhaps factual, this is a very misleading statement. Considering the fact that two thirds of Canada’s natural gas is currently exported, the one third remaining would supply Canada for less than 50 years, at present rates of consumption. Anyone that believes adding a fleet of some 20 million vehicles to run on natural gas, wouldn’t reduce this time period considerably, seriously needs to give their head a shake.
There’s more, however:
“She (BC premier Christy Clark ) said the additional reserves add more clout to B.C.’s plans to support the development of liquefied natural gas plants in the province’s north, which the premier has heralded as a trillion-dollar industry that could create 100,000 jobs and eventually help pay off the provincial debt.”
“The province wants to see LNG plants built near ports in northwest B.C., where the gas will be super-cooled to a liquid state and loaded onto tankers bound for Asian markets.”
http://www.ctvnews.ca/canada/federal-report-finds-b-c-s-natural-gas-reserves-double-previous-estimates-clark-1.1531618
So you see, there is no talk of actually using this resource for domestic supply, and given that the Chinese market is considerably larger than the Canadian market, this resource will be long gone before 145 years in the future. I suspect that it will be burned as quickly as they can get it out of the ground.
shortonoil on Sun, 12th Jan 2014 7:03 pm
According to the 2000 USGS survey, their optimistic projection (F5) put the world’s crude reserve at 4,200 Gb. Certainly, no need for concern with that kind of stock available; there has got to be centuries of petroleum just waiting around for us to pump out of the ground. There is only one thing lacking in their evaluation: “a fitness for use criteria”. How much of that 4,200 Gb can actually be used? Now, any junior engineering student has got the know-how to figure that question out! Applying some straight forward thermodynamic, and a little math gives one the answer: 1,800 Gb. The same amount that Campbell, and Laherrere have been saying for years!
So, why we are reading the same lame statements of some scientific neanderthals is probably the real question? Yea, yea, there is oodles of crude buried somewhere on the planet; and most of it isn’t worth squat! Next time the announcement comes out, “we found a zillion barrels of oil”, file it under BS, Hype, Ridiculous, “This guy is trying to sell me something?”.
Yea, a little more snake oil to the proletariat!
shortonoil on Sun, 12th Jan 2014 8:24 pm
A little more on snake oil; our commentator said, “447 billion barrels in place”. That is OOIP (original oil in place. “ASSUMING” it is mostly extractable (a BIG A on that one) because it isn’t, for a myriad of reasons too much to go into here; using the best estimates, from the best shale fields in the world gives about 9 Gb of extractable oil. Enough to supply the world for 4.2 months.
If you are buying this, drop me a line. I’ve got some freshly painted bridges for sale!
Harquebus on Sun, 12th Jan 2014 11:13 pm
High energy prices are driving innovation but, they are killing the global economy. Only the well off will be able to afford unconventional oil which will destroy economies of scale.
Makati1 on Mon, 13th Jan 2014 1:07 am
From today’s vantage point, I predict the collapse of the global financial system and a reset without BAU.
The Lords are already in place … but some of the serfs still cannot see their chains.