[Graeme]

Imminent peak oil could burst US, global economic bubble

$this->bbcode_second_pass_quote('', 'A') new multi-disciplinary study led by the University of Maryland calls for immediate action by government, private and commercial sectors to reduce vulnerability to the imminent threat of global peak oil, which could put the entire US economy and other major industrial economies at risk.

The peer-reviewed study contradicts the recent claims within the oil industry that peak oil has been indefinitely offset by shale gas and other unconventional oil and gas resources. A report by the World Energy Council (WEC) last month, for instance, stated that peak oil was unlikely to be realised within the next forty years at least. This is due to global reserves being 25 per cent higher than in 1993. According to the WEC report, 80% of global energy is currently produced by either oil, gas or coal, a situation which is likely to continue for the foreseeable future.

The new University of Maryland study, in contrast, conducts a review of the scientific literature on global oil production and argues that the bulk of independent, credible studies indicate that a "production peak for conventional oil [is] likely before 2030", with a "significant risk" it could occur "before 2020." Unconventional oil such as Canadian tar sands is "unlikely to expand enough to fill the gap", and this also applies to "shale oil and gas." Shale wells, the study argues, "reach their maximum production levels (peaks) much earlier than conventional ones and are therefore difficult to operate profitably."

[Graeme]

Here is link to paper.

[Pops]

I've been saying for a while and Laharrere has been saying since way back that there will be the conventional peak, which we've pretty well passed and there will be other peaks of the various heavy and x-heavy, x-tight, etc somewhere down the line. The problem is the conventional oil peak is now, around the 75mmbopd level and the x-heavy x-deep x-cold etc will not be able to ramp up fast enough to offset conventional decline. They will peak much lower and farther out in the future with a flatter curve than conventional. Those peaks are the little ones in the chart on the right here:

[ROCKMAN]

Pstarr – Amazing isn’t it: even a group that appears to be warning about the FUTURE dangers of PO apparently doesn’t have much of a clue as to what has already happened. Such as “…which could put the entire US economy and other major industrial economies at risk.”. Could put? So having the global oil bill increase from about $950 billion/yr to almost $3 trillion in less than 10 years hasn’t been a problem for the “major industrialized economies”? They might want to chat with the folks with the PIIGS as well as the millions of American that collected unemployment checks for the first time.

And there’s the constant confusion between reserves and production rates: “This is due to global reserves being 25 per cent higher than in 1993”. And then there’s: “Shale wells, the study argues, "reach their maximum production levels (peaks) much earlier than conventional ones and are therefore difficult to operate profitably." I won’t pick on them too much about this because it’s really a rather technical issue. Unconventional wells are no more difficult to “operate profitably” than conventional wells. Both are subject to the same requirement of higher oil prices to justify their development. There’s a reason most of the gain in US oil production has come from the unconventionals: they are the majority of reserves left that are profitable at today’s prices. The oil patch didn't have an hidden inventory of conventional wells that would have been profitable to drill at lower oil prices...we already drilled all those.

As you know I drill for conventional reserves and constantly struggle to find ones that work even at current high prices. Not any less difficult to find profitability…actually more difficult to find them in quantity. Had we not gotten lucky a year ago and signed on to a couple of outside operated JV's that were planning new 3d seismic programs to generate conventional oil prospects my company probably would have been shut down by now. No point in paying me and my cohorts abscene salaries if we aren't drilling enough wells. LOL.

And as you imply they are a tad late to the party. But at least they made finally it.

[Northwest Resident]

What is most interesting to me regarding peak oil and its potential consequences is how the U.S. Military views the subject, and what they are doing to plan for it.

This, from the Guardian in 2010:

$this->bbcode_second_pass_quote('', 'T')he US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

[Pops]

Interestingly, PO.com is blocked on some mil computers.

Just thought I'd throw that out there, LOL

[vision-master]

Waiting to hear from shorty........

[careinke]

Thanks for the link N R. I plan on reading it soon. I wonder if there is an updated version? Keep in mind the military likes to plan for EVERYTHING. It gives them something to deviate from. On the other hand that is why they can respond so quickly when asked.

I know a lot of the bases are trying to become more self sustainable. Joint Base Lewis/McChord up this way is heavily involved in this.

[Northwest Resident]

carinke -- indeed, the military likes to and in fact MUST plan for everything. Within that document, a detailed section even confesses to this fact and describes in detail why they must do so. I learned from this document how much importance the military places on historical events to shape their future planning. There are numerous examples in that document where the prevailing political/military views of the time are described, along with the catastrophic consequences of those incorrect assumptions and views. It seems to me that the military is trying very hard not to get caught in a situation where they are totally unprepared, while admitting at every step that it is simply impossible to make detailed plans for everything that might happen. That being said, they were fairly specific about the 2015 year, and I think with good reason. Finally, another thing I learned when I googled for "U. S. Military plans for peak oil": It appears that this is not the only detailed military document that contemplates having to deal with peak oil AND climate change scenarios in the very near future. It appears that numerous high-ranking military officers are now frequently attending peak oil and climate change conferences, looking to gather as much information as possible. The relevance is, from my point of view, that while the politicians and the financial "geniuses" can and will lie and propagandize and engage in all sorts of tricks to obscure the truth, the military command seems to me to be directly and purposely preparing for some major upheaval due to energy shortfalls and climate change. And, may I say, so should we as private individuals.

[John_A]

$this->bbcode_second_pass_quote('Graeme', '[')b]Imminent peak oil could burst US, global economic bubble

$this->bbcode_second_pass_quote('', 'A') new multi-disciplinary study led by the University of Maryland calls for immediate action by government, private and commercial sectors to reduce vulnerability to the imminent threat of global peak oil, which could put the entire US economy and other major industrial economies at risk.

The peer-reviewed study contradicts the recent claims within the oil industry that peak oil has been indefinitely offset by shale gas and other unconventional oil and gas resources. A report by the World Energy Council (WEC) last month, for instance, stated that peak oil was unlikely to be realised within the next forty years at least. This is due to global reserves being 25 per cent higher than in 1993. According to the WEC report, 80% of global energy is currently produced by either oil, gas or coal, a situation which is likely to continue for the foreseeable future.

The new University of Maryland study, in contrast, conducts a review of the scientific literature on global oil production and argues that the bulk of independent, credible studies indicate that a "production peak for conventional oil [is] likely before 2030", with a "significant risk" it could occur "before 2020." Unconventional oil such as Canadian tar sands is "unlikely to expand enough to fill the gap", and this also applies to "shale oil and gas." Shale wells, the study argues, "reach their maximum production levels (peaks) much earlier than conventional ones and are therefore difficult to operate profitably."

[vision-master]

Why ain't gas $1 gal now, if production has been increasing - shorty.

[BobInget]

I always get a good laugh when a decent oil find is announced. Such a rush to buy stock in a group of companies who will not see revenues for years, even decades (from this particular discovery). Investors soon forget new discoveries concentrating on month to month earnings from legacy wells. Investors will more often punish
oil companies for spending too much developing, even improving
newer, as yet unproductive positions.
When oil prices fell in 2008, so called energy experts figuring oil was finished, fled in droves. Naturally, new projects were put on hold to enable companies to carry on and stay in business. Many who over
reached, paid dearly for property that was no longer profitable, did go under or suffered terrible losses of personal and momentum.

More evidence, if we needed it, years of affordable petroleum are past.. Or, are they? Because American oil and gas men are a tough,
dedicated, entirely vertically directed, (to rest oil and gas from its hiding places) these optimistic fellows never believed 'peak oil' at least on their chosen properties.
Along comes supercomputers, 3/D 'look down' technology. A few American oil men recognized these tools at once because they had been dreaming of just such magic for years. For the first time
drillers could steer the bit from the surface like a remote controlled
drone.

If you believe like the Broadway play, "Oklahoma" staged in the 19th century, "They've gone about as far as they can go in Kansas City"
Then rest on your old beliefs, in comfort.

[John_A]

$this->bbcode_second_pass_quote('vision-master', 'W')hy ain't gas $1 gal now, if production has been increasing - shorty.

[John_A]

$this->bbcode_second_pass_quote('BobInget', ' ')
When oil prices fell in 2008, so called energy experts figuring oil was finished, fled in droves. Naturally, new projects were put on hold to enable companies to carry on and stay in business. Many who over
reached, paid dearly for property that was no longer profitable, did go under or suffered terrible losses of personal and momentum.

[copious.abundance]

All I can say is, LOL!!

[ROCKMAN]

C-a: Actually that looked like a very valid projection based upon the assumption of oil less than $50/bbl as it was priced at the time. Just as valid as current projections based upon $100/bbl oil. Again no one's projection of future oil production rate is complete unless the price assumption is included. If not included every prediction, be it increasing or decreasing, isn't worth a crap. The validity of all projections is based upon being able to accurately predict oil prices 10+ years out. So far I don't recall anyone being worth a crap at doing so consistently for the last 38 years I've been working in the oil patch. Hell...if someone could consistently predict oil prices just 6 months in advance they would be worth $100+ million in less than two years by playing the futures market. Any ass (including the Rickman) can predict future oil prices (and thus production rates) if they don't have anything to loose if they are wrong. As they say: no guts...no glory.

Curious: how many folks here actually risk their own hard earned $'s betting on oil future prices? The Rockman? Hell no...I ain't got the guts. LOL.

[Tanada]

$this->bbcode_second_pass_quote('John_A', '')$this->bbcode_second_pass_quote('vision-master', 'W')hy ain't gas $1 gal now, if production has been increasing - shorty.

[americandream]

Wrong. America (and its parent, the UK) won the Cold War and invented China out of its Maoist agrarian base. It was and is Amercan and British capitalists who fund China's manufacturing, it is America and Britain which remain the conduits though which global commodities are priced.

Think of China as a large offshore British and American factory and you will understand why the power dynamic appears skewed. This is the case with Africa, the rest of Asia, Russia, non-Anglo-Saxon Europe...the world in fact bar a few wild cars like Zimbabwe and Cuba.

American and British capitalists have the world by the balls. The sun has not set on Victoria's empire.




$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('John_A', '')$this->bbcode_second_pass_quote('vision-master', 'W')hy ain't gas $1 gal now, if production has been increasing - shorty.