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Page added on March 14, 2014
Peak Oil: Problem, Not Solution
An observation worth noting … and pondering, from Knovel Corp:
Fossil fuels will continue to dominate the energy sector for the foreseeable future, after a report issued by the World Energy Council made it clear that fears expressed in respect of so-called ‘peak oil’ were unlikely to be realized within the next forty years at least.
Following the recent World Energy Congress in Daegu, Korea, Christoph Frei, Secretary General of the WEC said that the chances of the world running out of oil were slim, citing the fact that global reserves of the engineering resource were 25 percent higher than in 1993 while production has increased by 20 percent.
While the main thrust of the article does point to the importance of developing greater energy efficiencies and finding ways to introduce more renewable/alternative energy source into the grid, the casual dismissal of peak oil concerns while touting fossil fuels’ continuing dominance is a problem, not a solution.
While it’s now standard fare for those who deny the significance of fossil fuel supply constraints to backhand the notion of “running out of oil,” it’s ironic that the deniers are the only ones relying on that straw man argument. Those of us who advocate for greater awareness about the challenges of peak oil never express that concern.
More expensive; harder to find and extract; inferior efficiencies; rapid depletion rates; investment concerns; geopolitical considerations … those are the important issues when discussing peak oil. That “vast” resources exist around the world is fine if the only point in dispute is existing resources versus no more resources.
But to merely state resource or reserve totals as the definitive answer to energy supply issue is at very best misleading. The numbers don’t matter if the technology and economics don’t work.
Until we recognize the significance of rates of production and the impact of continued high prices, these incidental talking points will remain secondary, and the public will continue to be denied the information we’ll all need to plan for and adapt to the realities and facts about energy supply. Continued reliance on fossil fuels while relegating development of alternative sources to the sidelines is the problem.
Not running out is not the issue. Affording what we need, when we need it, in sufficient quantity, and of a quality necessary to maintain status quo if not expand the opportunities for growth and progress are much more important considerations. Those are the talking points those in the know need to start discussing in public.
27 Comments on "Peak Oil: Problem, Not Solution"
PapaSmurf on Fri, 14th Mar 2014 11:59 pm
Actually, the author of the report is correct. There is no near term issue. But we do have longer term issues. What is that longer term? Maybe 15 years? 25? 40?
Only the twits on this website and a few other doomer websites think that we have a near term (5 years or less) issue.
So in the mean time, shut the fuck up and buy an EV and some solar panels.
J-Gav on Sat, 15th Mar 2014 12:03 am
“40 years or so” my royal red ass! Turcotte is right to point out the folly of such notions. An energy crunch of some, as yet undetermined, magnitude will be coming along well before that.
rockman on Sat, 15th Mar 2014 12:29 am
Papa – Just to confirm your position: “There is no near term issue.” So the price of oil increasing over 300% in less than a decade isn’t an “issue” or isn’t near term? I estimate that the global oil consumers have paid at least $10 trillion more for oil since prices have risen then if they were still paying the price just 10 years ago. I agree with you…I think: PO isn’t about “running out of oil” nor is it about some date when the world will never produce oil at that rate again. IMHO it’s about the impact on the economies/people of the impact of higher oil prices as a result of the change in the demand/supply relationship. That situation I consider not just near term but recent history. And yes…a very big issue IMHO.
I’m not a doomer at all. Me and mine are doing just fine these days. Everyone else? Not my responsibility or problem.
Boat on Sat, 15th Mar 2014 1:09 am
http://social.cummins.com/cummins-peterbilt-supertruck-passes-important-milestone/
An 75% improvement in mph for semis is a start in the right direction.
Makati1 on Sat, 15th Mar 2014 1:53 am
The global financial system is going to take down big oil. It is also going to take down the Western lifestyle and all of it’s wannabees when it crashes.
When? Maybe tomorrow. Maybe next year. More than 5 years? I doubt that very much. In fact, it is long overdue and it is only the on-going currency wars that keep it from being obvious to the sheeple. Peak oil? Better to ask about peak civilization. There will be billions of barrels of oil still in the ground when the game ends and there it will stay.
Dave Thompson on Sat, 15th Mar 2014 2:03 am
“Only the twits on this website” Well said PAPA SMURF on this website by YOU.
Matthew R. Carroll, Ph.D. on Sat, 15th Mar 2014 2:25 am
Folks,
Hope y’all will enjoy this. Please go to the links below and look at the graphs. The most devastating is the relationship between % oil Growth and % GDP growth. It is very obvious that: “The game is over!”
200 years of coal? Forget that! It’s too deep to get to economically! Those companies are losing money already. Listen to Leslie Glustrom at: http://www.youtube.com/watch?v=E8ttzkGLC1Y!
Gas? What a farce? No! What a lie! Are they trying to lure in the last few suckers, (investors), to rip them off? They have to know that they are lying. They have access to the information below and much, much more.
They are going to ship gas to Europe? You’ve got to be kidding me. At what price? Oh! That’s it! They can make more money that way! And, jack up prices here! Wow! What a way to go.
Down,for how many Americans. How many will freeze? How many will starve?
Remember Ireland during the Famines when the English, (British), were taking the food out of the country at gun point while millions of people who grew it were forced to starve to death. Vote no to any and all pipelines for export. Vote no to any Liquefied Natural Gas, (LNG), plants for export. Pass Legislation banning the export of any more of our coal.
Peak Oil, Peak Gas & Peak Coal
Peak Oil
http://theottawawewant.wikia.com/wiki/File:Gap_between_production_and_discovery_of_oil_1930-2050.jpg
Current World Oil Situation, (Subtract the red area under the black line from the green area above the black line. This is the amount of oil remaining. The slide down the right hand side of the production bell curve may be steep.)
http://earlywarn.blogspot.com/
Oil Supply Update, MONDAY, DECEMBER 23, 2013
http://earlywarn.blogspot.com/2013/04/monthly-oil-supply-update.html
EARLY WARNING, RATIONAL ANALYSIS OF GLOBAL CIVILIZATIONAL RISK
“ . . . added to this is a green line (C&C (EIA)), which shows just the ‘Crude & Condensate’ numbers from the EIA. This eliminates biofuels, natural gas liquids, and refinery gains from the picture, and is a more purist definition of oil.”
http://online.wsj.com/news/interactive/BIGBETS0129?ref=SB10001424052702303277704579348332283819314
http://peakoil.com/production/big-oil-companies-struggle-to-justify-soaring-project-costs
http://ourfiniteworld.com/2014/02/25/beginning-of-the-end-oil-companies-cut-back-on-spending/
http://peakoil.com/consumption/beginning-of-the-end-oil-companies-cut-back-on-spending-2
http://ourfiniteworld.com/2012/07/13/plan-for-lower-growth-in-real-gdp-going-forward/
Our Finite World, Evidence that Oil Limits are Leading to Declining Economic Growth, 7/13/`12
Peak Gas
http://commons.wikimedia.org/wiki/File:US_Natural_Gas_Marketed_Production.PNG
http://fivestates.com/reversal-of-fortune/
Reversal of Fortune, April 27, 2012
http://peakoil.com/geology/fracking-in-the-barnett-shale-around-dallas-fort-worth-a-city-of-1-million
http://www.theoildrum.com/story/2006/11/27/61031/618
Natural Gas: How big is the problem?
Luis de Sousa; December 5, 2006
“Chesapeake Energy has not only reduced drilling, but sold off hundreds of millions of dollars’ worth of assets to cover unsustainable debt loads. BP has been forced to write off nearly two billion dollars in assets. Rex Tillerson, the CEO of ExxonMobil, told the Council on Foreign Relations in New York City in June 2012, “We’re losing our shirts [on shale gas production]. We’re making no money. It’s all in the red.”
“In a New York Times investigative article (“After the Boom in Natural Gas,” October 20, 2012), Clifford Krauss and Eric Lipton wrote, “Like the recent credit bubble, the boom and bust in gas were driven in large part by tens of billions of dollars in creative financing engineered by investment banks like Goldman Sachs, Barclays and Jefferies & Company.” The article details how this “creative financing” forced drillers to keep drilling even when each new well represented a financial loss.30”
(Emphasis added.)
( Richard Heinberg, SNAKE OIL: Chapter 5 – The Economics of Fracking: Who Benefits?,
“ . . . energy giant Royal Dutch Shell shocked Wall Street by taking a whopping $2 billion write-down in the value of its North American shale assets.” (Emphasis added.)
Philly.com, Pa. fracking boom goes bust, September 12, 2013, WILL BUNCH, Daily News Staff Writer bunchw@phillynews.com, 215-854-2957
http://articles.philly.com/2013-09-12/news/41974274_1_fracking-boom-penn-state-marcellus-center-marcellus-shale
“North American oil and gas deals, including shale assets, plunged 52 percent to $26 billion in the first six months from $54 billion in the year-ago period, according to data compiled by Bloomberg. During the drilling frenzy of 2009 through 2012, energy companies spent more than $461 billion buying North American oil and gas properties, the data show.” (Emphasis added.)
Claire Thompson, Fracking frenzy slows as oil and gas assets plummet in price, 20 Aug 2013
http://grist.org/news/fracking-frenzy-slows-as-oil-and-gas-assets-plummet/
“Free cash flow of Continental Resources, a big player in the Bakken, has dropped from a loss of ($430M) to a loss of ($2.4B) since 2010. And Continental is not the only one. Devon Energy’s free cash flow has dropped from ($1.2B) to a significant ($3.5B) over the same time frame. Range Resources, who are drilling primarily in the Marcellus, booked a negative free cash flow of ($556M) in 2010 and this has deteriorated to ($1.0B). Kodiak Oil and Gas, another Bakken player, had negative free cash flow in 2010 of ($170M). It has now deteriorated to ($1.0B). Chesapeake is interesting because its free cash flow for 2012 ($3.3B) is now roughly equivalent to its level in 2010, ($3.4B). But over the last two years Chesapeake has liquidated approximately $13 billion in assets with no commensurate gain to free cash flow. Management still needs to move outside the company to generate cash to continue operations. And yet, shareholders have had their underlying assets disappear to the tune of $13B to pay down debt.”
(Emphasis added.)
JOHN WARD, ANALYSIS: How Fracking hype disguises the sector’s dangerous financial losses to date, AUGUST 21, 2013, (Quote from Energy Policy Forum),
EROI for U.S. Oil and Gas Discovery and Production
http://deepresource.wordpress.com/2012/10/08/eroi-for-u-s-oil-and-gas-discovery-and-production/
EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007.
Peak Coal
http://newenergynews.blogspot.com/2010/09/quick-news-9-13-peak-coal-prop-23-is.html
New Energy News, September 13, 2010: PEAK COAL, Mining the Truth on Coal Supplies
Mason Inman, September 8, 2010 (National Geographic)
“[A global coal production forecast with multi-Hubbert cycle analysis], led by Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin…predicts that by mid-century, the world’s coal mining will supply only half as much energy as today.”
Figure ES-4: US Coal Production 2002-2012
Data from EIA Annual Coal Reports http://www.eia.gov/coal/data.cfm
The United States is Likely Past Peak Coal Production
“While no one knows what the future will bring, the United States appears to be past “peak coal” with coal production falling off significantly since the apparent peak in US production in 2008. In addition, all of the top 16 coal producing states appear to be past peak—even the large coal-producing western states of Wyoming and Montana.”
http://cleanenergyaction.files.wordpress.com/2013/10/warning-faulty-reporting-us-coal-reserves.pdf
US Coal Companies are Experiencing Serious Financial Distress and an Uncertain Future
Top US coal companies are in serious financial distress, with many coal companies reporting large losses in the last several years. Many US coal companies are carrying large amounts of debt that greatly exceed their market value and are paying interest rates in excess of 6%. (See Part 5)
– The legendary investor Warren Buffett, has written off over $1.3 billion in investment in the heavily coal-dependent Energy Future Holdings of Texas. _ AES Eastern lost several hundred million
dollars when two New York coal plants went bankrupt and were sold to bond holders for $240 million while their original cost was approximately $550 million.
_ The decision by First Energy to idle the huge Sammis coal plant in Ohio after investing over $1.8 billion in pollution upgrades.
_ The decision by Energy Capital Partners to close the 1500 MW Brayton Point coal plant in Massachusetts despite a recent investment of over $1 billion on upgrades.
_ The decision by Xcel Energy to invest approximately $1 billion in a new coal plant in Pueblo, Colorado that was intended to operate until 2069 without first assessing long term coal supplies and which could become a stranded asset long before 2069.
http://cleanenergyaction.files.wordpress.com/2013/10/warning-faulty-reporting-us-coal-reserves.pdf
WARNING: FAULTY REPORTING OF US COAL RESERVES – Why Reports of a “200 Year Supply” of Cheap US Coal Are Faulty and The Imperative of Repowering the United States
A Report by Clean Energy Action, Leslie Glustrom, Director of Research and Policy, October 2013
(Emphasis added.)
red on Sat, 15th Mar 2014 3:19 am
absolutely ridiculous, as said an unimaginable magnitude of crisis is on the way soon..
paulo1 on Sat, 15th Mar 2014 5:05 am
No sense in rising to the bait of ignorant trolls. It is best to ignore him.
Steve on Sat, 15th Mar 2014 5:51 am
Boat, even better… “While a typical Class 8 tractor operating in the US with an 80,000 pound gross vehicle weight achieves fuel economy in the 5.2 mpg range, the same truck with an ePower system will deliver fuel economy of 10 to 14 mpg, values that crush the DOE’s 2018 SuperTruck target of 6.8 mpg for conventional heavy trucks. It works out to an annual fuel savings of roughly 11,500 gallons per vehicle.”
http://www.altenergystocks.com/archives/2012/12/epowers_series_hybrid_electric_drive_unmatched_fuel_economy_for_heavy_trucks.html
Steve on Sat, 15th Mar 2014 5:59 am
Boat, the supertruck aerodynamics and stuff can be combined with the e-power hybrid system; they are not exclusive. Cummins is working with e-power and supplying the diesel engine component.
Norm on Sat, 15th Mar 2014 6:15 am
I have a nice bridge to sell you.
PapaSmurf on Sat, 15th Mar 2014 7:23 am
Norm, you are an idiot if you don’t see the value in this type of improvement in truck efficiency.
MSN fanboy on Sat, 15th Mar 2014 8:15 am
PapaSmurf is amazing, he really says some interesting things. you should listen to him!
PapaSmurf knows everything!
adamc18 on Sat, 15th Mar 2014 10:06 am
The big question here is that they are missing out on the big picture, just like the stewards carefully aligning the deck chairs on the Titanic. The latest figure that I have seen on the subject is that 63% of humanity’s CO2 emissions have been produced in the last 25 years. The extreme Arctic temperature anomalies and associated global storms, floods and droughts we are now experiencing are a result of earlier emissions – so it seems quite possible that the cause of global collapse will be a result of catastrophic reductions in food production as the planet heats up.
Davy, Hermann, MO on Sat, 15th Mar 2014 11:00 am
Rock said – I’m not a doomer at all. Me and mine are doing just fine these days. Everyone else? Not my responsibility or problem.
Rock, I have to say I am a doomer/collapsnik with some optimism. The optimism is probably wishful sometimes but I do feel there may be some survival luck in the collapse equation. “Now”, this is strictly 10 to 15 years out. I see the confluence of population overshoot and climate instability as key factors that will most like lay waste to whatever social and economic fabric we have in let us say 20 years. I cannot fathom us negotiating that brick wall. The luck will be needed for the financial correction and or energy brick wall and trap. A part of me would like status quo BAU to continue. I have a very good life. I took a buyout of the family business which gives me enough money to pursue my passion of land management and cattle. I could have remained in the family business and remained a 5%’er, not 1%er but plenty. Now I am a 10%er. I get to ride the coat tails of my family with a private jet and houses in the Bahamas as one perk. A part of me has deep reservations about this high energy lifestyle. I have given up on being militant against it. I have decided it will end on its own. If they don’t do it someone else will. I am not going to reject my family. I try to practice relative sacrifice with this in mind. The jet is going to the Bahamas anyway if there is room I jump on. I have it made now and will give up allot when it’s over. So I am a doomer because of the facts not because of the desire. I do have a spiritual love and respect for mother nature and see our rape and pillage as sinful but I also see a self-organizing systematic ecological cycle that is natural. Nature cycles in and out of extinction and evolution. I am pretty sure life will survive this Anthropocene. Will humans survive, 2 to 1 we don’t 100 years down road.
Makati said – The global financial system is going to take down big oil. It is also going to take down the Western lifestyle and all of it’s wannabees when it crashes.
Makati, I agree we are looking at a Ponzi scheme of debt that will end and end badly. Ponzi schemes always end badly and since this is global with our local support system relying on the global supply chain of trade, finance, and organization, we face a dangerous situation. This is again a cyclical human phenomenon. How people here think our economic and social fabric can continue now is beyond me. Even if we did not have the overshoot issues, resource issues, and climate issues societies eventually change to something new. Ours is no different. With the issues we have this change will be a break to a significantly lower standard of living. This break will eliminate the very complex aspects of society which is global trade and finance. It will mean a break probably back to a population level half of today or 1960’s level with a much lower standard of living of maybe 1900. Just speculation on my part. Predictions are useless over 3 to 5 years out but this is not out of the realm of possible.
peakyeast on Sat, 15th Mar 2014 11:49 am
I stand by my original estimate from 1985 that life in 2025 will experience an acceleration in decline in living standards will take place at that time (or before). IOW: The plateau is over. Its now a cliff-hanger story.
rockman on Sat, 15th Mar 2014 12:07 pm
Boat – True. The mileage improvement of all NEW vehicles is important. Unfortunately that has little effect on current fuel consumption as well as some years into the future. The vast majority of vehicles on the road today have much lower mpg ratings. The average mileage of the entire existing fleet has only improved 1 mpg over the last several years. Not per year but in total. Improving future mileage ratings is important but has little impact on the present and near term.
Makati1 on Sat, 15th Mar 2014 12:25 pm
@rockman, you are so correct. The fleet turnover for motor vehicles is getting longer as people cannot afford to buy as often and now tend to fix and repair until it dies. The age of petroleum will be over long before the next complete turnover ends in 12-15 years. In fact, if you just bought a new car, it is probably the last one you will ever own.
Islandman on Sat, 15th Mar 2014 12:52 pm
Did anyone see this article about shell laying off 30% of work force in USA.. Any comment Rockman
Islandman on Sat, 15th Mar 2014 12:52 pm
fuelfix.com/blog/2014/03/13/shell-makes-cuts-to-american-upstream-no-word-on-houston-impact/
Northwest Resident on Sat, 15th Mar 2014 2:50 pm
NASA: Industrial civilization headed for ‘irreversible collapse’.
The study challenges those who argue that technology will resolve these challenges by increasing efficiency:
“Technological change can raise the efficiency of resource use, but it also tends to raise both per capita resource consumption and the scale of resource extraction, so that, absent policy effects, the increases in consumption often compensate for the increased efficiency of resource use.”
Productivity increases in agriculture and industry over the last two centuries has come from “increased (rather than decreased) resource throughput,” despite dramatic efficiency gains over the same period.
An article from the U.K. Guardian posted at:
http://www.rawstory.com/rs/2014/03/14/nasa-industrial-civilization-headed-for-irreversible-collapse/
What at least one of the obnoxious trolls commenting on this article fail to realize is that oil extraction and delivery is entirely dependent upon the global financial system. And the global financial system is in dire straights, deeply in debt to the tune of many trillions that will never be paid back. The global financial system is skating on very thin ice which is growing thinner each passing day as ever more unsustainable debt is added to the total. The global financial system is on life support, kept operational only by massive infusions of additional debt. The financial system will crash long before we manage to extract any substantial percent of remaining fossil fuels from the ground. The financial and TPTB elites mouthpiece — World Energy Council — saying that “fears expressed in respect of so-called ‘peak oil’ were unlikely to be realized within the next forty years at least” is just more of the lies and B.S. that troll-like individuals and the restive masses suck up like mama’s comforting milk because it is what they want to believe, not because it is based on an objective analysis of the facts.
Boat on Sat, 15th Mar 2014 3:41 pm
Steve, great companion link for improving mph for semi’s. Seems like 5/6 mph is around the norm now and could soon be 10-15 mph range. The life cycle for a semi appears to be less than 20 years. I wonder how many oil wells that would equal down the road.
Arthur on Sat, 15th Mar 2014 4:08 pm
From NRW’s NASA link:
A new study sponsored by NASA’s Goddard Space Flight Center has highlighted the prospect that global industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution.
Don’t jump from the new WTC yet.
Suppressed Germany army report predicts global collapse in ca. 2022:
http://deepresource.wordpress.com/2012/01/26/german-army/
rockman on Sat, 15th Mar 2014 4:50 pm
I-man: Not as significant as the headlines imply. That’s just 30% of a very small group: The size of the workforce in the division would fall from around 1,800 to around 1,400. Shell employs around 92,000 people worldwide, including 31,000 in North America, according to its most recent annual report.
But Shell is going thru a significant change in mindset IMHO. The top dog, with an E&P background, has been replaced by a downstream refining/marketing guy. Despite the fact that they need the upstream to supply them there’s always some level of disdain for our hunter class. We’re just too macho for them IMHO. LOL.
shortonoil on Sat, 15th Mar 2014 5:27 pm
@NWR
“The study challenges those who argue that technology will resolve these challenges by increasing efficiency:”
Almost all technological advancement over the last century has come at the expense of huge energy inputs. Modern agriculture is a good example. When energy itself is the problem, more high energy technology is obviously not going to be the solution.
To clear the air a little, in 2012 the ERoEI, at the well head, for average world conventional crude production was 9.6:1. The theoretical lower limit (the dead state) is 6.9:1. The world will hit that lower limit in 2035, when the average barrel of petroleum produced will have reached the dead state. These values were calculated with functions that are provided in any thermodynamics text. This is all (mostly) standard junior year engineering curriculum. Get a copy of our study if you are the kind of person who likes wading through 57 pages of mathematics. You’ll find the conclusions more than enlightening.
http://www.thehillsgroup.org/
Davy, Hermann, MO on Sun, 16th Mar 2014 11:58 am
SHORT SAID – Almost all technological advancement over the last century has come at the expense of huge energy inputs. Modern agriculture is a good example. When energy itself is the problem, more high energy technology is obviously not going to be the solution.
So true!