Peak Oil is You
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Page added on November 21, 2016
T. Boone Pickens Was Wrong About Peak Oil, Non-Expert Joe Kernen Was Right
A recent piece on Forbes.com featured an interview with a fund manager Bruce Pile pointing out that Joe Kernen’s claim that T. Boone Pickens incorrectly predicted peak oil, resulting in an angry outburst from Pickens who proclaimed, “I’m the expert!” He insisted that the peak had occurred in 2005, but only shale had ‘saved’ us. Pile then makes the argument that the net energy from shale oil (energy return on energy invested, or EREOI) is much lower than for ‘conventional’ oil, indicating that we have moved into an era of difficult-to-produce oil.
Both parts of the argument are incorrect, however, and while Pickens knows a lot about energy (as he often reminds us), much of it is wrong. For instance, in his infamous Playboy interview, he argued that discoveries haven’t been replacing production for many years, demonstrating that he didn’t know the global reserve situation (see below) or understand that discovery amounts were constantly being revised, mostly upwards. The revisions plus discoveries have been offsetting production for decades–most of the industry’s history, in fact.
World Oil Reserves, bln barrels. Excludes US, Middle East, Canadian oil sands and Orinoco heavy oil. Source: BP Statistical Review.
And the idea that “conventional oil” peaked in 2005 is fallacious, in effect no more than a semantic point. First, there is the presumption that a peak cannot be reversed, which is widely held by peak oil advocates but wrong. Many countries have seen a peak, decline, and new peak in production, as has the world more generally. With the return of Iran and Iraq to the world market, a lot more conventional oil is entering the market, for example, and countries from Colombia to Russia have confounded peak oil theorists by setting new records when they were supposedly in terminal decline.
The claim that “conventional oil” has peaked was apparently initiated by Matthew Simmons, who first noted that crude plus condensate appeared to have peaked in May 2005. It had also peaked in March 1998 and November 2000, among other times (see figure below), and he never explained why that most recent peak could not be reversed as the others were. Nor why he was excluding NGLs from his observation, something the industry rarely did.
Source: Energy Information Administration
Although Colin Campbell, the founder of the Association for the Study of Peak Oil, often contended he was only considering ‘conventional’ oil (with his own unique definition), the impact of a peak in, for example, non-polar oil was never explained in any detail. Mainly, excluding natural gas liquids (NGLs) from the data allows peak oil advocates to claim a peak in the remaining subset, except that the rise of light tight oil (shale oil) meant that they had to extend the excluded oil to include high-quality oil produced from new types of reservoirs.
Why exclude NGLs from petroleum? Supposedly because the chemical nature is different from crude, and the energy content lower, it should be considered separately. And, as some put it, “you don’t put NGLs into your car.” Which ignores the fact that you don’t put crude into your car either, and NGLs are used as refinery inputs, plus substituting for oil products in petrochemical plants, as well as used for heating (propane).
Nor has there been a sudden surge of NGLs at the expense of crude. Production has increased more steadily than for crude because much of it comes from natural gas wells, and gas production has been robust in recent years. But as the figure below shows, there is no reason to believe that crude production is suffering due to the industry shifting to gas production.
Petroleum Production by Category
Source: Energy Information Administration
And ultimately, if the production of “conventional” oil has peaked, yet the industry is suffering a glut, doesn’t that suggest that the problem is only semantic and not operational? Claims that new production is “difficult” and that the energy return on energy investment is reaching dangerously low levels are not borne out by the data and will be addressed in a future post.
18 Comments on "T. Boone Pickens Was Wrong About Peak Oil, Non-Expert Joe Kernen Was Right"
HARM on Mon, 21st Nov 2016 12:24 pm
The crown jewel of this pro-FF screed for me:
“For instance, in his infamous Playboy interview, he argued that discoveries haven’t been replacing production for many years, demonstrating that he didn’t know the global reserve situation (see below) or understand that discovery amounts were constantly being revised, mostly upwards.”
Ummm… pardon me, but discoveries have NOT equaled or exceeded production since at least the 1980s: http://www.testadepibou.com/figuresEN/ProductionEN.jpg
Yes, industry “reserves” estimates have been revised (mostly upward), some of it having to do with better drilling/fracking recovery methods, but mostly it’s industry B.S. and propaganda. And it does not change the fact that new oil discoveries have been lagging consumption for over 3 decades now.
So much for the reality based community.
Bob Inget on Mon, 21st Nov 2016 12:31 pm
So far, shale is more akin to a fourth of July rocket then a paraffin candle.
Automation may prove to lower (drilling) costs as oil prices move higher but no robot will be able
to slow rapid depletion.
In our “post truth” hydrocarbon, internet information based world one needs to watch for three things..
1) Who GAINS from any on line post?
2) What’s the DATE of publications quoted?
3) Inquire of author’s politics.
The above post, just because it was reprinted by a Forbes editor On Line, may reflect Forbes viewpoint but Forbes doesn’t ‘own’ it.
4) don’t be lazy, nothing you read on line should be taken at face value.
(Nome de Plumes or “screen names”, highly suspect)
Mark on Mon, 21st Nov 2016 12:37 pm
The current glut is being drive more by demand depletion as the worlds economies are tanking.
The debt fueled time bomb is about to go off just in time our new president, who’s promised to make “America Great Again”
Kenz300 on Mon, 21st Nov 2016 1:21 pm
There is a big difference in cost of production and EROI between conventional oil and tar sand or shale.
Apneaman on Mon, 21st Nov 2016 1:46 pm
What could be more important than the 900th article on peakoil with t-boone’s name in the title?
Nothing To See Here, Folks, Move On…
“Hmm…
Wasn’t going to mention it because there’s nothing to see here, folks…
…but parts of the Arctic are 36°F and 20°C above normal right now.”
http://www.declineoftheempire.com/2016/11/nothing-to-see-here-folks-move-on.html
Dredd on Mon, 21st Nov 2016 3:30 pm
The truth is always in the trend, not in the minutia (Mega Infrastructure Bill To Make Jobs? – 2).
The minutia militia is always majoring in the minors.
Dredd on Mon, 21st Nov 2016 3:36 pm
“The only way a finite resource such as oil, on a finite planet, can become infinite is through propaganda.” – Dredd
rockman on Mon, 21st Nov 2016 4:30 pm
And again the same point I make over and over again: what difference does the date of PO make. It doesn’t determine the price of oil, the rig count, demand destruction caused by high oil prices, fossil fuel wars in the ME, etc, etc.
So why waste time debating whose prediction of the date of PO was or wasn’t correct?
Apneaman on Mon, 21st Nov 2016 4:39 pm
The cancer industry is taking off the gloves. They will do whatever it takes to ensure that the cancer kills everyone ASAP. The cancer industry acts like it’s a Black Friday sale every day. Like scummy rats fighting over a dead cockroach and the Americans are the worst. Most despicable culture in history.
Dakota Pipeline: Protesters Soaked With Water in Freezing Temperatures
http://www.nbcnews.com/storyline/dakota-pipeline-protests/dakota-pipeline-protesters-authorities-clash-temperatures-drop-n686581
Boat on Mon, 21st Nov 2016 4:50 pm
Rock,
Every time we set a new PO mark it flies in the face of collaspe, demand destruction, economic collaspe among General collaspe, lol. That tends to make the doomer squad shake their Pom poms and rally for some kind of collaspe. What do you expect, there has to be justification for all those 5 gal buckets of dried food sitting around.
Apneaman on Mon, 21st Nov 2016 5:12 pm
Boat, do you know what polar night is? It means there is no Sun 24/7 in the Arctic.
Arctic Ice watch: 4th day in a row of sea ice melt when its supposed to accumulate at this time
http://imgur.com/nvtsJD8
The North Pole is 36 degrees hotter than it should be right now
“Temperatures near the North Pole are an unheard of 36°F (20°C) warmer than average right now, researchers have reported.
The Arctic is currently in the midst of polar night, where the Sun hardly ever rises. Usually, it’s the time when things get really cold and vast, thick ice sheets form for the winter.”
http://www.sciencealert.com/the-north-pole-is-36-degrees-hotter-than-it-should-be-right-now
How much energy is there in the Arctic to be melting sea ice and seeing those crazy temperature departures at this time of the year? More than a barrel counting simpleton like you could ever hope to understand. Nor do you seem to grasp the consequences as a whole. Why would you? It’s physics, chemistry and biologly not barrel counting 101.
Do you actually believe that a few more barrels makes one fucking bit of difference?
I guess if one can not handle reality then pick out one convenient security blanket metric and pretend that it’s all that matters.
Collapse of their pathetic toxic civilization is the least of the humans worries. Humans have survived civilizational collapses before.
They have never been in a mass extinction event before and this will be their one and only.
Love is fleeting, Extinction is forever.
Apneaman on Mon, 21st Nov 2016 5:18 pm
Hey boat, how come all the other civilizations collapsed when they did not have any barrel counts to blame it on?
Zero barrels to create their civilizations and zero barrels to blame the collapse their civilizations on.
Boat, maybe, just maybe the world is a little more complicated than your preferred Google searches have lead you to believe?
Get a library card, turn your computer off, start reading 4-5 hours a day and come back in 5 years and we’ll have a big boy conversation.
Boat on Mon, 21st Nov 2016 5:29 pm
Did they have stock markets? I have a sore arm slapping my back for not listening to doomer investment advice. Thank god Google provides me with real world information. No clue what you read but it isn working.
Apneaman on Mon, 21st Nov 2016 5:44 pm
Boat, the 6th mass extinction is underway, the artic is melting down, America had 12 billion dollar plus AGW jacked weather disasters so far this year (averaged 2 per year 25 years ago). there are major regions of the US in sever drought and the SE is still burning down, many regions are not recovered from the many Rain Bombs earlier this year (2 in Houston) and your comeback is your “claimed” successful investment strategy? If you are so successful why do you need to live in a housefull of other people? Why are you still working on the tools, at 60 years old, for your whopping 30K a year? Why do you constantly go on about cheap gas -price a big personal concern for you? You don’t sound like a stock market winner to me. More like a wannabe bullshitter. Keep counting your barrels retard I’m sure they will make the ever growing global ecological disaster go away.
‘Unprecedented’: More than 100 million trees dead in California
“California’s lingering drought has pushed the number of dead trees across the state past 100 million, an ecological event experts are calling dangerous and unprecedented in underlining the heightened risk of wildfires fueled by bone-dry forests.
In its latest aerial survey released Friday, the U.S. Forest Service said 62 million trees have died this year in California, bringing the six-year total to more than 102 million.
Scientists blame five-plus years of drought on the increasing tree deaths — tree “fatalities” increased by 100 percent in 2016 — but the rate of their demise has been much faster than expected, increasing the risk of ecologically damaging erosion and wildfires even bigger than the largest blazes the state’s seen this year.”
http://www.sfgate.com/news/article/Unprecedented-More-than-100-million-trees-10624642.php
Apneaman on Mon, 21st Nov 2016 5:51 pm
Yes it was
Matthew May Be 13th Billion-Dollar Weather Disaster to Hit U.S. in 2016; Economic Damage Nears $6 Billion
https://weather.com/news/news/matthew-billion-dollar-weather-disaster
Apneaman on Mon, 21st Nov 2016 6:06 pm
Wildfires continue to rage in western NC; no rain in the forecast
http://wncn.com/2016/11/20/another-large-wildfire-breaks-out-in-nc-mountains/
makati1 on Mon, 21st Nov 2016 6:25 pm
Ap, I suspect some of the less sharp people here know, somewhere in their convoluted brain, that we are doomed as a species and the end is fast approaching. It has them scared shitless. They want to ignore it but, like moths to a flame, they are drawn to sites like this one so they can argue against it. Or maybe, it really is pure ignorance?
Civilizations come and go. Extinction is forever.
jazz on Wed, 23rd Nov 2016 7:00 am
This author has been useless for years and seems to believe 1 oil is plentyful 2) if there’s less ot it everything will be fine and therefore we shouldn’t change anything. Ignore his articles as muych as you can !