Peak Oil Denial: From WAY Out in Left Field

We don’t like bad news, particularly when it has very long term implications. Individually and collectively we tend to slip into denial mode, focus on diversions, become numbed to the reality of the situation, cling to anyone willing to assure us it just ain’t so, that things are going to get better. You can’t live your life in crisis mode.
We have, in recent decades, turned this into a political institution; the denial industry. The primary objective of the denial industry is not clarity but rather to create confusion and conflict in the minds of the public by creating the impression that there are legitimate differences of opinion between experts and scientists. It is a strategy honed and perfected around the issue of smoking, a strategy they have continued to use, often with the same players, on issue after issue and now dominating the debate over global warming and peak oil.
But it is a generational culture shift that has facilitated the success of the denial industry. With the growth in accessible information through the media, the internet, cell phones and more, people have abandoned seeking answers to their questions through independent thought and instead turn to various media for those answers. They have abdicated to others the right to tell them how and what they should think, to define truth. It has been a key part of the technological dumbing down of society, nowhere more obviously than in North America. [1]

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Credit where credit is due: if you are going to go out on a limb with as wild-ass a prediction as is possible, then it appears that a recent report authored by Lux Research analysts is hanging by a fingernail at the far end of a VERY long limb. [NOTE: I have not read this report, which appears to be either behind a pay wall or available to clients only, so my comments are based solely on other accounts and thus should be viewed accordingly.]

Here’s a good summary of the key findings in that report from EPIC (Energy Policy Information Center):

Heavy oil and oil sands contain 3 trillion BOE (barrels of oil equivalent)—over three times all oil consumed to date. Reserves of this nature are in effect “degraded” oil which once resembled light-sweet but has degraded over time from exposure to microbes, water, or air. Current methods to make it extractable focus on steam and thermal injection.
Oil shale adds another 2.8-3.3 trillion BOE to the mix—yet only 2 percent are actually technically recoverable using current methods (such as pyrolysis and hydrogenation).
Low-permeability rock contains over one trillion BOE—this category encompasses the Eagle Ford, Bakken, and Utica formations in the U.S.
Shale gas is currently estimated at 1.3 billion BOE (or 7,299 trillion cubic feet) worldwide, but many are in arid regions, making waterless fracking the real future for the still-emerging technology.
Coalbed methane adds 215 million BOE, but this is only convertible to liquids through the cost-intensive Fischer-Tropsch processes, and is reasonably insignificant in a 10 trillion barrel world.
Our math brings the total to slightly below Lux’s stated 10.2 trillion barrels, but it’s a lot of oil either way. [2]

In a world where oil demand ranges from (or is predicted to increase to) 85 million or so barrels per day to as much as 110 million barrels down the road, basic math tells us that 10.2 trillion barrels is gonna last us a good long while … couple years at least, I’d say.

 

IF ONLY

 

As I and peers much more knowledgeable than me have pointed out repeatedly, the recent upswing in production from tight oil reserves is happening because fossil fuel prices are high. We pay more money for what we need so the oil industry has more of our money to explore and extract/produce these more costly, harder-to-find-and-get-at, less energy-efficient supplies, and presto! We have oil production increases.

EPIC summed that up nicely:

None of the methods necessary to tap these resources are even remotely feasible if oil prices dip below $100/barrel globally.

Oops. That might be a problem if we lowly consumers decide that we won’t (or cannot) keep paying higher prices. We buy less of what we need so the oil industry has less of our money to explore and extract/produce these more costly, harder-to-find-and get-at, less energy-efficient supplies, and presto! We have oil production decreases. Basic math….

On the other hand, as EPIC stated just as nicely:

But there are possibilities for currently speculative technologies to become economical with certain improvements.

So if some trial balloons kicking around in the minds of some engineers and scientists might someday prove to be financially viable if certain investments pan out and if possible funds are provided and then perhaps dedicated to speculation as opposed to other priorities, then as long as the Magic Technology Fairy steers experts into making “certain improvements” as yet unnamed but possibly having the potential to perhaps prove meaningful at some undetermined date … we have nothing to be concerned about. (Is next month too soon to expect this?)

What should we do in the interim?

I’ll have a few more thoughts on this report next week.

~ My Photo: Monterey Plaza Hotel in Monterey, CA – on/about 09.01.04

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