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Page added on July 7, 2016

Death Of Peak Oil Is Not Exaggerated

Energy: A recent report by an energy consultancy suggests that the U.S. now has oil reserves bigger than Saudi Arabia’s. Believe it or not, that might be a huge understatement.

The Rystad Energy consultancy’s latest estimates for U.S. oil reserves says the U.S. may have as many as 264 billion barrels of the crude stuff, compared to Saudi Arabia’s 212 billion barrels and the world’s total of 2 trillion barrels.

“At current production rates,” notes Reason’s Ronald Bailey, “this is enough oil to supply the world for 70 years.”

He’s right. And that’s great news. But it’s even better than that, in fact.

As we have noted on these pages many times before, the amount of oil and gas reserves in the U.S. just keeps growing, thanks to huge advances in technology. Bailey quotes from ExxonMobil’s “The Outlook for Energy” for 2016: “Technology is not just expanding our daily oil production; it also continues to increase the amount of oil and liquid fuels we can count on for the future.”

Fracking and highly sophisticated computerized geological survey software are just two advances that have boosted the amount of recoverable reserves. The U.S., as it turns out, doesn’t just have more oil than Saudi Arabia — it may have more oil than the rest of the world combined.

Recall that in March 2012, with prices above $100 a barrel, President Obama confidently told the American people in a radio address: “We can’t just drill our way to lower gas prices.” In other comments at the time, he repeatedly cited a faulty, misleading statistic: that the reason the U.S. can’t drill its way out of its energy woes was because we had “just 2% of the world’s reserves.”

Yet, what was truly funny about Obama’s statement — made with all the self-assurance of someone who didn’t know what he was talking about — was that the Government Accountability Office completely contradicted it a mere two months later. Turns out, Obama was wrong on all counts.

Anu Mittal, GAO director of natural resources and environment, in May 2012 told a stunned Congress that just one U.S. energy region — the Green River Formation, which stretches across parts of Wyoming, Utah and Colorado — contained an “amount (of oil) about equal to the entire world’s proven oil reserves.” With oil prices near $100 a barrel at the time, it was hard to believe.

Dubbed our Persia on the Plains, the Green River Formation is estimated to have four times the proven reserves of Saudi Arabia, Mittal testified. While the formation’s total reserves are 3 trillion barrels, even at the then-high prices for oil, recoverable reserves were about half that: 1.5 trillion barrels.

Now, four years later, oil prices are down more than half — in part, because global demand is much weaker than expected, but also because the U.S. fracking and petro-technology boom has created nothing less than an energy revolution. Rest assured: While much of the oil that the U.S. has underground is not recoverable under current market conditions, it will be there when we need it.

And it’s also important to remember that 72% of the Green River Formation and much of the rest of our country’s oil reserves lie under federal lands. So it will take a president and a Congress willing to “drill, baby, drill” to keep us supplied with energy for centuries to come.

As for “peak oil” proponents and their political pals who scared Americans and influenced U.S. energy policy for years with tales of vanishing supplies and soaring energy prices, it’s time to buy a new fright mask. This one doesn’t work anymore.

investors.com

12 Comments on "Death Of Peak Oil Is Not Exaggerated"

dissident on Thu, 7th Jul 2016 6:51 pm

Gotta pump them, then dump them.

shortonoil on Thu, 7th Jul 2016 8:17 pm

Prices are now down 55% from their 2013 peak, and the profit margin on gross sales for producers was not 55% when prices were at $100. It was more like 8%. Now who exactly is going to be paying to extract this this vast supply of oil?

Chevron’s profits were down 90% last year. Venezuela, with the largest oil resource on the planet can’t afford toilet paper; the oil king, Saudi Arabia is borrowing money and selling off its oil industry, while Fort MacMurray is looking like a parking lot for a local lawn sale. 300 US Shale producers are slated to go bankrupt in 2016.

And… the price is headed down!

http://www.zerohedge.com/news/2016-07-07/crude-tumbles-inventory-draw-disappoints-despite-production-plunge

http://www.thehillsgroup.org/depletion2_022.htm

The oil age is ending, and if they can’t see that – they are as blind as a bat!

eugene on Thu, 7th Jul 2016 9:06 pm

I think the source says it all: investors.com

Rick Bronson on Thu, 7th Jul 2016 9:15 pm

As per the weekly production report, US oil production has gone down by 194,000 b/d from 8.622 million b/d to 8.428 million b/d.

Is it because of the fast depletion in shale oil.

USA may be the #1 in oil reserves, but at $50 / barrel, only this much can be produced. Cost of production matters.

https://www.eia.gov/dnav/pet/PET_SUM_SNDW_DCUS_NUS_W.htm

Harquebus on Thu, 7th Jul 2016 10:09 pm

The mask is not peak oil. The mask is the global debt bubble that is hiding peak oil and other depleting resources.

“Although the original authors of The Limits to Growth, led by Donella Meadows, caution against tying their predictions too tightly to a specific year, the actual trends of the past four decades are not far off from the what was predicted by the study’s models. A recent paper examining the original 1972 study goes so far as to say that the study’s predictions are well on course to being borne out.”
“All the while, governments cling to the idea that “green capitalism” will magically pull humanity out of the frying pan.”
“As long as we have an economic system that allows private capital to accumulate without limit on a finite planet, and externalize the costs, in a system that requires endless growth, there is no real prospect of making the drastic changes necessary to head off a very painful future.”
http://energyskeptic.com/2016/limits-to-growth-is-on-schedule-collapse-likely-around-2020/

“Any social system based on the use of non-renewable resources is by definition unsustainable. Non-renewable means it will eventually run out. If you hyper-exploit your non-renewable surroundings, you will deplete them and die.”
“Due to industrial civilization’s insatiable appetite for growth, we have exceeded the planet’s carrying capacity.”
“changing light bulbs, going vegan, shorter showers, recycling, taking public transport — have nothing to do with shifting power away from corporations, or stopping the growth economy that is destroying the planet.”
“Those in power get too many benefits from destroying the planet to allow systematic changes which would reduce their privilege.”
“those in power are killing the planet and they are exploiting the poor”
“We need to fight for what we love, fight harder than we have ever thought we could fight, because the bottom line is that any option in which industrial civilization remains, results in a dead planet.”
http://dgrnewsservice.org/civilization/reasoning-to-resistance/

Dustin Hoffman on Thu, 7th Jul 2016 10:23 pm

But Penzoil is making top grade synthetic, pure motor oil out of natural gas. We got plenty of that, American know how will save the day. (Sarcasm)
That’s what the TVee viewers are shown on commercials…so they are being fed BS.

Yes, we are little children watching Sunday morning kiddie shows

https://m.youtube.com/watch?v=t-wUe5aEwHM

JuanP on Thu, 7th Jul 2016 10:31 pm

“As we have noted on these pages many times before, the amount of oil and gas reserves in the U.S. just keeps growing, thanks to huge advances in technology.” ROFL! Apparently technology now creates oil! If this people were more ignorant or stupid they would eat their own shit! What a bunch of retards! Skipped this one! I suggest you do the same! Marmi will like it, though!

JuanP on Thu, 7th Jul 2016 10:42 pm

“Dubbed our Persia on the Plains, the Green River Formation …” Are these retards implying that Kerogen is oil? I don’t know why I went back. I realized that they said the reserves had increased not the resources, which is not quite as stupid, but still.

Apneaman on Thu, 7th Jul 2016 11:48 pm

Jaun, for years a buddy of mine would email links every time another one of those stories about how there are trillions of barrels of oil (karogen/oil shale/wax) underneath Colorado made the rounds. I tried explaining it to him and sent him the learning materials. He just won’t have it. “They’re just waiting” & “You’ll see” – sure buddy. We went through the same thing with hydrogen fuel cells. Again, I sent him all the documentation (basic stuff) demonstrating they are batteries/converters – not a source. Same thing with the limitations of “alt energy”. He just gets mad and says “I just don’t get it”. They don’t actually want to know, but rather need to believe. Technology is a magic word. Just insert it in any argument and you win by default. I like to point out that the commercial aviation industry had some kick ass technology it used for few decades – the Concord. Except it was really expensive and had to be subsidized the whole time. When France an GB ended the subsidizes it ended the Concord.

Supersonic Airplanes and the Age of Irrational Technology

“The project ultimately cost British and French taxpayers over $1.5 billion even prior to operation by the airlines, which some still consider a drastic underestimate. Capital costs were written off by government subsidies, and elevated national pride justified high taxes. Self-selecting passengers who could afford fares represented operating costs, thus contributing to the illustrious Concorde aura. Still, Concorde’s first six years ran at a loss, launching an initiative to rebrand, introducing a new fare structure. Early on, one-way tickets from JFK to Heathrow were roughly $1,500; by the 2000s, $7,000 was standard, and $10,000 round-trip was a deal.”

http://www.theatlantic.com/technology/archive/2015/07/supersonic-airplanes-concorde/396698/

Sissyfuss on Fri, 8th Jul 2016 12:44 am