by theluckycountry » Sun 01 Jun 2025, 17:45:58
So This is How the Oil Age Ends
$this->bbcode_second_pass_quote('', 'T')he age of oil ends when new oil becomes too expensive for buyers to buy, and at the same time too costly for producers to extract — not when a suitable replacement is found and deployed at scale. Recent data from S&P Global shows that oil&gas capital investment costs have surged to new heights globally, even as the price of oil has plunged to depths not seen in many years with no demand rise in sight. What follows will be anything but a “sustainable, diversified, and more resilient global energy system” — rather a dislocation lasting decades into the future. Curtain up! The show begins.
It was always predicted this way, by the geologists and the wise economists, not the plethora of doomsayer websites. We've already been through the first stage, the knee-jerk mass money printing to try and save "the system" The BS Alternatives to cover up the reality of the peaking. I sometimes wonder where we'd be today if the world's governments and corporations had have told the truth and steered the nations toward frugality and conservation. But it was never going to happen, not with the entrenched interests. They would never give up their revenue streams.
$this->bbcode_second_pass_quote('', 'O')ver the past two decades the concept of peak oil was dismissed as a fringe, disproved idea. The prodigious amounts of shale oil extracted in America, together with the mountains of tar sands mined in Canada made peak oil supply look like a joke. With the rise of radical climate activism in the 2010's the discussion about oil has thus shifted from its limited availability towards its environmental impact: pollution and climate change. For anyone closely following the topic, however, it was clear that Net Zero and “clean” energy initiatives were nothing but magical thinking. Not only because neither wind, nor solar (or hydro and nuclear for that matter) could possibly be made and built at scale without oil, but because electricity from these technologies are simply no replacement for the black gold. There are thousand good technical reasons why electricity’s share of world energy consumption is between 10 and 15% for decades now… Nevertheless, the public was successfully convinced that one day we will no longer need oil thanks to a rapid deployment of “renewables” and electric vehicles. The concept of peak oil has hence been re-framed once again: this time suggesting “peak demand”. The wee little problem is, that peak oil is not (and never was) about supply nor demand alone.
World peak oil happens when the highest record in global crude oil output is set. It doesn’t mean that we have run out of oil, or that production will fall precipitously the year after. In fact, it’s quite possible that global oil output remains flat for many years to come after such a peak in production is reached, then begin to decline somewhat later on. Peak oil output in and of itself doesn’t tell anything about what happens next, how soon the decline in oil extraction will arrive, how steep the fall in output will be, or when will we fill up our car’s tank the last time in our lives. In fact, world peak oil output has already happened in November 2018, clocking in at 85.5 million barrels pumped daily. (At least when we look at the traditional definition of petroleum, which is crude oil plus condensate. If you happen to believe that natural gas liquids, LNG, refinery gains bio-fuels etc. are also oil and can be added to crude oil figures, then yes we have reached new heights just recently at 103.75 million barrels per day. But more on that later.) In terms of world crude production we only managed to get back to 2015–2016 levels (or around 82 million barrels a day) after the pandemic induced slump, and there is still no substantial growth to be seen on the horizon.
The author uses a latter date for PeakOil than the original geologists peak of 2008 but perhaps he doesn't equate the vast amounts of conventional oil used to extract the unconventional. When oil came in at 50:1 a barrel this could be dismissed, but when you are using two units of oil equivalent to get four out of the ground you really should factor it in. Because while on paper you have have a greater oil total, you have actually have less available to run society than the stated total suggests. This is well explained in this article from the "Journal of Petroleum Technology"
Back to the article.
$this->bbcode_second_pass_quote('', 'B')ehind these production figures lies the stern reality of geology and physics. Peak oil occurs when easily accessible reserves are depleted, and it becomes increasingly difficult and expensive to extract the remaining pockets of oil. This reality is not something we can out-innovate. Sure, we can come up with better and better technologies to access hitherto uneconomic batches of petroleum, improve the efficiency of extraction or find ways to suck out the last drops of existing reserves. But technology also comes with increased complexity: in order to access hitherto inaccessible reserves, wells have to be drilled deeper, the source rock needs to be hydraulically fractured, and more steel pipe, sand, cement and other materials have to be used per well than at any time earlier. And as large pockets of oil and sweet spots (where oil flows the fastest) deplete, we have to go after ever smaller and ever less productive locations — effectively forcing us to multiply our efforts just to remain on the same production level.
Were it not for the increased energy demand of technology, innovation could go on for quite some time. However, as wells go deeper and require more raw materials (with their respective mining, smelting, manufacturing and transportation needs) more and more energy will have to be spent with every round of innovation. And if we consider that each new generation of wells produce less oil compared to the previous generation we realize that we face a predicament with an outcome, not a problem with a solution. This is why half a century ago less than 5% of the energy of a barrel of oil had to be reinvested into exploration and drilling, and why we now have to spend over 15% of the hard earned energy from crude on getting the next barrel. This ever growing energy demand per barrel retrieved has no upper limit and can be expected to increase to as high as 50% by the middle of this century. At least in theory. And this is where everyday practicalities, and economic realities come into the picture.