Peak Oil- what it is and how it will impact your life

Actually watching BP in the Gulf, and I assume you are referring to the Macondo oil platform disaster, serves to strengthen the peak oil scenario, not disprove it. No one would have been drilling in that deep of water, spending over a million dollars a day, if there were plenty of oil.
Peak oil is NOT about running out of oil. It is about running out of CHEAP oil. The low hanging fruit has already been picked, we are having to climb higher and higher to get at the rest. And yes new fracking techniques are rendering great results and boosting our output but with increased output comes increased consumption and serves to extend the plateau a little bit longer. All of the dire peak oil predictions will come to pass, the only question is, as always, when? It certainly would have been in our (baby boomer) generation if it hadn't been for this recent rise in production. It allows us to tap into heretofore unreachable zones, but it is much more expensive and time consuming and the latest data is showing that these fracked zones deplete at a much, very much, faster rate than conventionally produced zones. So only time will tell, but this upswing could be just a short term rise and the crash afterwards would be more drastic. Or it could continue for decades. Only time will tell but when consumption is greater than production the resource being consumed will eventually run out.

 

It's still heavily taxed, and controlled by a cartel --which makes the "peak oil" theory a reality in some ways, even though it is taking more technology, energy and time to get the crude out of the ground. Take a look at Chavez (now dead) and Venezuela if anybody questions the strong arm of the political quagmire and corporate syndicate and what they are willing to do to control oil.

 

Yes, it is like money, control it and you control the world.

 

Peak oil isn't about running out, it is about having less, and the pain associated with using less. For some folks this pain might be substantial (F350 to haul those thoroughbreds to the races for example) and for others, much less so (suburbanite taking light rail to downtown office for work, and home, bicycling to grocer, movies, dentist and schools).[/quote]

I am a proponent of realistic conservation methods and use of smarter fuels. However, solar panels aren't going to truck our produce and goods around the country. But some common sense things we could do, that would help us to conserve this recent up tick in our production is to immediately mandate that all fleet vehicles be converted over to natural gas. All taxi's, buses, local and state vehicles. This would not only reduce exhaust emissions and provide cleaner air to breathe but switch our dependence on oil to the much more plentiful resource of natural gas.
I lived in Cairo for several years and the air was horrid, you could literally see what you were breathing most days. But then I had the chance to visit New Delhi, India a few years ago, a city of near comparable size and population as Cairo and they had the clearest air of any major city I have ever been in. The difference is they forbid any vehicle in the city limits that runs on petrol. Only NG vehicles are allowed and every filling station supplies NG. If a third world country can be smart in their fuel usage why can't we?

 

Peak Oil Date has changed, some, mostly due to the New Finds, in the West USA, and Canada, as well as the Off Shore finds in the Eastern Med, around Cuba, and in Southeast Asia.

 

I spent all morning going back and reading over this thread from the beginning. I didn't make any predictions myself, I'm only posting stories and articles from other sources. But it is amazing how much of those early posts have come about. I think you are confusing the media hype of the recent rise in US production with global peak. As in all things I have to always warn people not to read too much into it. Following is a recent article on the new "boom".

Dream of U.S. Oil Independence Slams Against Shale Costs
By Asjylyn Loder Feb 27, 2014

The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.
Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.

Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years.
“We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.

Drillers are pushing to maintain the pace of the unprecedented 39 percent gain in U.S. oil production since the end of 2011. Yet achieving U.S. energy self-sufficiency depends on easy credit and oil prices high enough to cover well costs. Even with crude above $100 a barrel, shale producers are spending money faster than they make it.

Companies are showing the strain. Chesapeake Energy Corp., the Oklahoma City-based company founded by Aubrey McClendon, reported profit yesterday that missed analysts’ forecasts by the widest margin in almost two years. Shares declined 4.9 percent. Fort Worth, Texas-based Range Resources Corp. fell 2.3 percent after announcing Feb. 25 that fourth-quarter profit dropped 47 percent. QEP Resources Inc., a Denver-based driller, slid 10 percent after fourth-quarter earnings reported Feb. 25 fell short of analysts’ predictions.

The U.S. oil industry must sprint simply to stay in place. U.S. drillers are expected to spend more than $2.8 trillion by 2035 even though production will peak a decade earlier, the IEA said. The Middle East will spend less than a third of that for three times more crude.

Shale wells can vary in price. Chesapeake will spend an average of $6.4 million each this year, according an investor presentation last updated yesterday. Houston-based Goodrich Petroleum Corp. will spend up to $13 million on some of its wells, Robert Turnham, president and chief operating officer, said in a Feb. 20 earnings call.

The boom’s boosters have given rise to the misconception that wringing oil and gas from shale can be easily replicated throughout the country, Patzek said. That isn’t the case, he said. Every rock is different. The Bakken shale, along with the neighboring Three Forks formation, covers an area larger than France, according to the IEA. An oil-bearing formation that’s 400 feet (122 meters) thick in one spot may taper off to nothing just a mile away, Patzek said. What works for one well may yield little in a neighboring county.

The output of shale wells drops faster, too, falling by 60 to 70 percent in the first year alone, according to Austin, Texas-based Drillinginfo Inc. Traditional wells take two years to fall by about 55 percent before flattening out. That forces companies to keep drilling new wells to make up for lost productivity.

“You keep having to drill more and you keep having to spend more,” said Mark Young, an analyst with London-based Evaluate Energy, which tracks production and its costs.


Companies have boosted well productivity and will continue to whittle down the break-even price, he said. While the boom could survive a brief dip in oil prices, a long slump could slow drilling and cause production to fall swiftly, Maugeri said.

Even with crude prices above $100 a barrel, U.S. independent producers will spend $1.50 drilling this year for every dollar they get back from selling oil and gas and will carry debt that is twice as much as annual earnings, said Ryan Oatman, an energy analyst with SunTrust Robinson Humphrey Inc., an investment bank in Houston.

By contrast, the net debt of Exxon Mobil Corp., the world’s largest energy explorer by market value, is less than half of the cash earned from operations last year. The company will spend 68 cents for every dollar it gets back this year, according to company records and analyst forecasts compiled by Bloomberg.

So far, oil prices have been high enough to keep investors interested in the potential profits to be made in shale, Oatman said.

“There is a point at which investors become worried about debt levels and how that spending is going to be financed,” Oatman said. “How do you accelerate and drill without making investors worried about the balance sheet? That’s the key tension in this industry.”


I have been warning people since this thread started about pinning your hopes on "new" finds and "new" technologies. Yes we have seen an upswing in domestic production but it is not sustainable and only a peak in the plateau that we are on. It does not mean that the peak oil crisis is over, it does not mean that peak oil has not, or will not happen. If you read back over all these posts you will see that all of the predictions and models include a 4-7 year plateau period. We don't reach peak and immediately fall off a cliff. And all of the models state that new discoveries and enhanced recovery methods could postpone the decline by a few years.
Also you have to put things in perspective. We are not talking about just the production in our country. We are talking about world oil production. Yes US production rose in the last few years, but world production continued to decline. While world consumption continued to rise.
So to put it in perspective, US production declined about 5 million barrels per day from it's all time peak in 1970 of nearly 10 mbd, to an all time low in 2008 of just under 5 mbd. From 2010 to 2013 as the result of frenzied drilling activity and enhanced recovery methods it rose back 1.4 mpd, to the level we were at in 1988 of 6.4 mbd. But in 1988 our domestic consumption was about 15 million barrels a day. In 2013 it was almost 19 mbd. So we are consuming 4 MILLION barrels a day more than we were then and we are producing the same amount. That's not such a "great" accomplishment after all.

 

I copied some things I found interesting from these posts over the years. (All italics and highlights are mine)

December 2, 2003
Oil itself won't disappear, but extracting what remains is becoming ever more difficult and expensive. The discovery of new reserves peaked in the 1960s. Every year we use four times as much oil as we find. All the big strikes appear to have been made long ago: the 400m barrels in the new North Sea field would have been considered piffling in the 1970s. Our future supplies depend on the discovery of small new deposits and the better exploitation of big old ones. No one with expertise in the field is in any doubt that the global production of oil will peak before long.
The only question is how long. The most optimistic projections are the ones produced by the US department of energy, which claims that this will not take place until 2037. But the US energy information agency has admitted that the government's figures have been fudged: it has based its projections for oil supply on the projections for oil demand, perhaps in order not to sow panic in the financial markets.
Other analysts are less sanguine. The petroleum geologist Colin Campbell calculates that global extraction will peak before 2010. Even if the optimists are correct, we will be scraping the oil barrel within the lifetimes of most of those who are middle-aged today.
The supply of oil will decline, but global demand will not. Today we will burn 76m barrels; (today in 2014 we are at 87mbd)by 2020 we will be using 112m barrels a day, after which projected demand accelerates. If supply declines and demand grows, we soon encounter something with which the people of the advanced industrial economies are unfamiliar: shortage. The price of oil will go through the roof.
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2005
A few weeks ago, the price of oil ratcheted above fifty-five dollars a barrel, which is about twenty dollars a barrel more than a year ago. The next day, the oil story was buried on page six of the New York Times business section. Apparently, the price of oil is not considered significant news, even when it goes up five bucks a barrel in the span of ten days.
Most immediately we face the end of the cheap-fossil-fuel era. It is no exaggeration to state that reliable supplies of cheap oil and natural gas underlie everything we identify as the necessities of modern life -- not to mention all of its comforts and luxuries: central heating, air conditioning, cars, airplanes, electric lights, inexpensive clothing, recorded music, movies, hip-replacement surgery, national defense -- you name it.
The few Americans who are even aware that there is a gathering global-energy predicament usually misunderstand the core of the argument. That argument states that we don't have to run out of oil to start having severe problems with industrial civilization and its dependent systems. We only have to slip over the all-time production peak and begin a slide down the arc of steady depletion.
The term "global oil-production peak" means that a turning point will come when the world produces the most oil it will ever produce in a given year and, after that (some time after that, not immediately. There is a long plateau period), yearly production will inexorably decline. It is usually represented graphically in a bell curve. The peak is the top of the curve, the halfway point of the world's all-time total endowment, meaning half the world's oil will be left. That seems like a lot of oil, and it is, but there's a big catch: It's the half that is much more difficult to extract, far more costly to get, of much poorer quality and located mostly in places where the people hate us. A substantial amount of it will never be extracted.
The United States passed its own oil peak -- about 11 million barrels a day -- in 1970, and since then production has dropped steadily. In 2004 it ran just above 5 million barrels a day. That means we have to import about two-thirds of our oil, and the ratio will continue to worsen.
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Last 8 Years' Oil Production
According to both BP and ASPO figures, oil production has been fairly flat for the last eight years. The slight rise last year is mainly explained by oil coming on from the former Soviet union"" after years of under-production. This is only a short-term benefit and evidence suggests that we are at the plateau rather than a peak, and that there is little more to come.
As the years go by, the plateau will begin to drop and a permanent decline will become clear. Oil companies and governments will pass it off as a short term ‘blip’, assuring everyone that there is plenty of oil and production will begin to rise soon.
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August-2005
Oil once again hits an all time high.Has anyone noticed that these "All time highs" are coming closer and closer together.
Another point.When analysts talk about all this reserve capacity that "Technology" will allow us to recover,what they are saying is, what oil is left is going to be much harder to extract.Ergo much more expensive.
Peak oil is not about running out of oil.There is a lot of recoverable oil left.It is about running out of "Cheap Oil".We will be producing oil for the rest of our lifetimes,but how much will it cost?
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2005 Houston Chronicle
THE July-August edition of Alcalde, the magazine for University of Texas at Austin alumni, contains an article about peak oil — the moment when global oil production will crest and then decline. According to the article, "How Long Do We Have," the year U.S. oil production peaked, 1971, was accurately predicted by a Shell Oil geophysicist in 1956. The same formula puts peak global production in this decade or the next.
Many predictions about a shortage of oil have come and gone, always superseded by new technology and newly discovered reserves. However, economic catastrophe need not wait until we run out of oil, or even for production to peak. As the experience inflicted by Hurricane Katrina merely hints, there is no margin in today's energy markets. Disruption of markets, shortages and steep price increases require only for demand to slightly exceed supply.
Natural gas pipelines are slowly returning to normal, but the supply of crude and refined products is strained. Katrina forced the temporary halt of oil and gas production in a region that supplies a quarter of the nation's domestic supply. It knocked out or reduced capacity in 10 refineries. Terminals for imported oil were shut, reducing the ability to replace lost sources of supply.
It will take weeks to repair refineries and distribution networks. Many firms lost offshore rigs and platforms, reducing current production and the ability to explore for and replace proven reserves.
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Published September 6, 2005 by the Boston Globe
Experts disagree on when the world's oil will start to run out, when production will reach its peak and start its downward slide. But they do know that demand is rising extraordinarily quickly. In 2002 the world consumed 79 billion barrels of oil each day. In 2003 the figure had risen to 82.5. Last year it was 84.5 -- much of due to China's industrial revolution.(2013 it was 87 mbd)
An ad paid for by Chevron, America's second biggest oil company, says: ''It took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30." This is all the more startling when some experts hold that there are only about 1 trillion barrels of oil left in the ground. Chevron's chairman David O'Reilly says, ''Some say that in 20 years the world will consume 40 percent more oil than it does today. At the same time, many of the world's oil and gas fields are maturing." For ''maturing" read running out, and predictions of $100 a barrel and more in the not too distant future are becoming common.
Unlike the oil crisis of 1973, the current rise in prices is not coming as a result of war or boycott. It is coming because of high demand and not enough supply, a delicate balance which a hurricane can too easily upset. And although the world's economy has survived petroleum price increases remarkably well so far, this is now beginning to show the inevitable strain.
Some hope that new oil fields will be found, but I was surprised to read in The New York Times that a US Department of Energy report earlier this year had said that such discoveries have been ''disappointing," and that if ''recent trends hold, there is little reason to expect that exploration success will dramatically improve in the future. . .
''The world has never faced a problem like this," the report concluded. ''Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary." Whereas the world's shifts from wood to coal and coal to oil were gradual, ''oil peaking will be abrupt and revolutionary."
Optimists put their faith in extraction technology to save the day, but this can only temporarily slow petroleum's depletion and will do nothing to curb demand -- unless alternative energies are found and conservation implemented.
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January, 2006
History suggests that the first half of the oil age has just closed. It lasted 150 years and saw the rapid global expansion of industry, transport, trade, agriculture and financial capital and allowed huge increases in populations.
Alas, the second half now dawns, and will be marked by the decline of oil and all that depends on it, including financial capital.
The hinge question is whether we have reached what geologists term peak oil — output at the top of the production bell curve after which supply is always falling, together with higher costs of extraction.
Local minds were forced to consider the realities of this during 2005 when the Burgan field, Kuwait’s largest and the world’s second largest, passed its maximum production point.
That’s not to say oil is running out. On the contrary, it seems likely that there is global capacity for many years yet. However, about 944 billion barrels of oil has so far been extracted, some 764 billion remains extractable in known fields, or reserves, and a further 142 billion of reserves are classed as ‘yet-to-find’, meaning oil that is expected to be discovered. If this is so, then the overall oil peak arrives next year.
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What is agreed is that world oil demand is surging. The International Energy Agency, which collates national figures and predicts demand, says developing countries could push demand up to 121 million barrels a day by 2030, and that oil companies and oil-producing nations must spend about US$100 billion a year to develop new supplies to keep pace.
If world demand continues to grow at 2% a year, then almost 160 million barrels a day will need to be extracted in 2035, twice as much as today.
Assurances given recently at the local MEED conference for example, foresee increased oil supply as a result of extra expenditure in lifting capacity.
Meeting the kind of demand above is almost inconceivable. According to industry consultants IHS Energy, around 90% of all known oil reserves are now in production — suggesting that few major discoveries remain to be made.
Shell says its reserves fell last year because it only found enough oil to replace 15% to 25 % of what the company produced. BP told the US stock exchange that it replaced only 89% of its production in 2004.
So if we are at or about to enter peak oil, then global production can be expected to decline steadily at about 2% to 3% a year. Combined with the sort of heady demand outlined above, this can only lead to one thing, strong upward pressure on the spot price.
Despite the assurances from western governments that inventories are sound or a mild winter is expected, this kind of pressure exceeds anything we have experienced so far. The cost of everything from travel, heating, agriculture, trade and plastics rises.
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March 24, 2006
The Paradox of Efficiency
So, the car gets more efficient. Power plants get more efficient. But that does not mean we use less energy!
"Two centuries ago, no engine could surpass 10 percent efficiency. By raising boiler temperatures and pressures, engineers pushed performance to about 20 percent efficiency by the turn of the twentieth century. By mid-century, they were up to about 40 percent. Today, the best thermal plants routinely hit 50 percent efficiency.
"Efficiency gains this large ought to have had a dramatic impact on supply and demand - and they did. The price of transportation and electricity fell steadily. And the total amount of fuel consumed in those sectors rose apace. Efficiency may curtail demand in the short term, for the specific task at hand. But its long-term impact is just the opposite. When steam-powered plants, jet-turbines, car engines, light bulbs, electric motors, air conditioners, and computers were much less efficient than today, they also consumed much less energy. The more efficient they grew, the more of them we built, and the more we used them - and the more energy they consumed overall. Per unit of energy used, the United States produces more than twice as much GDP today as it did in 1950 - and total energy consumption in the Unites States has also risen three-fold."
But how can we continue to consume even more energy? What if China and India and the rests of Asia start to consume as much energy per capita as the US? How can the world survive? Where do we get the fuel?
There is plenty of energy; it is just the price and the means of transport that are the issue:
"Today... humanity consumes 345 Quads per year of fossil fuel - which is widely supposed to be a huge amount of energy. Thus, the inevitable exhaustion of fossil fuels has been vehemently predicted since the 1970's, and somewhat less vehemently since at least the 1880's - just as the inevitable exhaustion of food has been predicted since the 1790's, the time of Malthus. But all such predictions center on what today's technology, driven by today's forms of power, makes reasonably accessible.
"No one seriously disputes that with better technology, and better power, we could retrieve far more. We already know where to find centuries' worth of coal - global deposits hold 200,000 Quads. Oil shale deposits hold 10 million Quad; heavy oils are already being extracted by brute thermal force from the Canadian Athabasca deposits, and bio-engineered bacteria could make the Earth's vast deposits of these oils economically accessible everywhere within a decade or less.
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Minuteman, Sep 10, 2006
It is amusing to me to see these news commentators reporting how the price of oil is dropping and how it is great news. We are down to $65 a barrel and around $2.65 a gallon for gas. This time last year it was dire news that oil had topped $50 a barrel and gas had gone up to over $2 a gallon.
The news of this "major" find in the Gulf Of Mexico has made banner headlines and according to the talking heads is going to reduce our dependence on foriegn oil by half. While it is a significant find you have to look at the big picture. We have known for years that there is significant oil deposits in the deep gulf. But, until the recent rise in oil prices it hasn't been economically feasable to drill for it. And it won't be feasable to produce unless the price stays up or goes higher.
It is the same thing as the "Oil Sands" in Canada, or the "Oil Shale" in the rocky Mountains. It is there, and there is lots of it. But, it is there because it has not been profitable to produce it. Not untill Oil topped $50 a barrel has any of these resources even been considered. And the last two are still not profitable at $50 a barrel. Oil prices and ergo gasoline prices will have to go up much higher to make these sources anywhere near to being an economically feasable endeavor.
Always remember this, We are not running out of oil, we are running out of cheap oil.There is a lot of oil reserves left in the world, but, it is increasingly harder to reach and of a much lesser quality thus more expensive to obtain and to produce.
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2000 was a record year for global production. But it remained flat for the next two years. Then in 2003 just barely surpassed 2000 by 1/2 of 1 percent. 2005 hit the highest peak that we have seen and 2006 is in steep decline. 2007 figures will confirm it. If we continue in the current steep slope, then it will be official.
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2007
Peak Oil can only be viewed in a rearview mirror. Not until the worlds major fields start a sustained decline can we accurately say when exactly we reached peak. I think we are seeing it come into view now.
December 16th 2005. I think this will prove out to be a pretty accurate forecast.
Another interesting statistic I just learned. The US rig count is at it's highest level in decades. An indicator of the frenzied pace of exploration for new energy deposits. But, you would think with the price of oil that they would be drilling oil wells as fast as possible. Nope! 90%, yes 90%, of the rigs drilling in the continental US are drilling for natural gas, not oil. That was surprising to me and I am in the industry. The reason for this could only be that our proven oil reserves are so depleted and are such a finacial gamble to drill for, that the oil companies are drilling for the safer, known gas reserves.
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MEXICO CITY Jan 29, 2007 (From the Wall Street Journal via Dow Jones Newswires)
Daily output at Mexico's biggest oil field tumbled by half a million barrels last year, according to figures released Friday by the Mexican government. The ongoing decline at the Cantarell field could pressure prices on the global oil market, complicate U.S. efforts to diversify its oil imports away from the Middle East, and threaten Mexico's financial stability.
The virtual collapse at Cantarell -- the world's second-biggest oil field in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.
Mexico made up for some of the field's decline. Mexico's overall oil output fell to just below three million barrels a day in December, down from almost 3.4 million barrels at the start of the year. It marked Mexico's lowest rate of oil output since 2000.
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April 24, 2007
Dr. Bakhtiari views the future of worldwide oil extraction in terms of four phases of transition, or, as he puts it, T1, T2, T3, and T4. I described these four phases in greater detail in an article entitled "Peak Oil and Bakhtiari's 4 Phases of Transition."
Bakhtiari stated:
"The four transition periods (T1, T2, T3, and T4) will roughly span the 2006-2020 era. Each transition [will] cover, on average, three-four years...[T]he only transition we can see rather clearly (or rather, we hope to be able to comprehend) is T1. It is clear that T1 will witness the tilting of the 'oil demand' and 'oil supply' scales -- with the former dominant at the onset and the latter commanding toward the close (say, by 2009 or 2010)."
That is, Bakhtiari's view of T1 is that worldwide oil supplies will remain almost constant during this initial phase. New discoveries and production that is now coming on line will just about compensate for the production that is lost due to depletion. But T2, T3, and T4 will be, as Bakhtiari puts it, "more turbulent phases."
The Peak Has Been Reached
According to Dr. Bakhtiari, the world has now reached and passed the point of Peak Oil. Bakhtiari has recently published an essay entitled "The Century of Roots." Bakhtiari has reviewed the available evidence on world oil production and believes that world output peaked absolutely in 2006. Here is what he is saying:
After some 147 years of almost uninterrupted supply growth to a record output of some 81-82 million barrels/day [mb/d] in the summer of 2006, crude oil production has since entered its irreversible decline. This exceptional reversal alters the energy supply equation upon which life on our planet is based. It will come to place pressure upon the use of all other sources of energy -- be it natural gas, coal, nuclear power, and all types of sundry renewables, especially biofuels. It will eventually come to affect everything else under the sun."
Everything else under the sun"? That sounds like quite a lot, but Dr. Bakhtiari has done his background work, to include reviewing numerous models for oil extraction on a worldwide basis. In a paper delivered to an oil conference in Italy in March 2007, he concluded that in 2006, overall depletion subtracted about 3.5 mb/d of oil extraction from the daily global total of oil output (plus or minus 10%), and that a maximum of 2.5 mb/d of "new" oil production came on line, which includes new and expanded oil fields, as well as new projects in the Canadian tar sands areas. Thus, according to Bakhtiari, in 2006, depletion was greater, by more than 1 mb/d, than new discoveries and reserve growth, including oil produced from unconventional sources such as the tar sands.
Dr. Bakhtiari's conclusion, presented to the Italian conference in March, was that "the peak of global oil production has been reached." Bakhtiari now sees the world entering a phase of irreversible decline in daily oil output, moving down from the current 82mb/d toward daily oil extraction of only 55 mb/d by the year 2020. (the recent spike in production levels from enhanced recovery methods raised the daily output to about 87mbd in 2012 and has been pretty stable scince.)
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Published: 23 June 2007
In the past 12 months the global corn price has doubled. The constant aim of agriculture is to produce enough food to carry us over to the next harvest. In six of the past seven years, we have used more grain worldwide than we have produced. As a result world grain reserves - or carryover stocks - have dwindled to 57 days. This is the lowest level of grain reserves in 34 years.
Already there are signs that the food economy is merging with the fuel economy. The ethanol boom has seen sugar prices track oil prices and now the same is set to happen with grain, Mr Brown argues. "As the price of oil climbs so will the price of food," he says. "If oil jumps from $60 a barrel to $80, you can bet that your supermarket bills will also go up."
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Jul 19, 2007
"Global crude oil production is over 1 million barrels per day lower than last year, while demand is over 1 million bpd higher."
The International Energy Agency, adviser to 26 industrial nations, said last week that consumption of energy would outpace new production for the next five years, leading to a supply crunch in 2012.
U.S. oil could rise to $95 a barrel by the end of the year, from just over $75 now, if OPEC does not or cannot raise output to help meet growing demand, Goldman Sachs said.
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July 17, 2007
The media and international affairs experts have been portraying missile defense in Europe and the final status of Kosovo as the two most contentious issues between Russia and the United States, with mutual recriminations over "democracy standards" providing the background for the much anticipated onset of a new Cold War. But while this may well be true for today, the stage has been quietly set for a much more serious confrontation in the non-too-distant future between Russia and the United States – along with Canada, Norway and Denmark.
Russia has recently laid claim to a vast 1,191,000 sq km (460,800 sq miles) chunk of the ice-covered Arctic seabed. The claim is not really about territory, but rather about the huge hydrocarbon reserves that are hidden on the seabed under the Arctic ice cap. These newly discovered energy reserves will play a crucial role in the global energy balance as the existing reserves of oil and gas are depleted over the next 20 years.
Russia has the world's largest gas reserves and is the second largest exporter of oil after Saudi Arabia, but its oil and gas production is slated to decline after 2010 as currently operational reserves dwindle. Russia’s Natural Resources Ministry estimates that the country’s existing oil reserves will be depleted by 2030.
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Jul 31, 2007
Now on to 2015... given a 2% rise per year in world consumption, we will be theoretically consuming about 101 mbpd in 2015. And here's my description of what will happen on the production end... for the next few years or so after 2007, you'll see a slight increase in production. Then you will see a steady decline in production from then on out. After all, there is only so much of the stuff in the ground.
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I expect to see $100-$150 a barrel oil early in 2008 and $4-$6 a gallon gas by summer. If I were a betting man I would wager any amount that we will be seeing fuel rationing before the end of this decade.
(The price of oil reached a record peak of US$145 in July 2008. On December 23, 2008, WTI crude oil spot price fell to US$30.28 a barrel, the lowest since the financial crisis of 2007–2010 began, and traded at between US$35 a barrel and US$82 a barrel in 2009. On 31 January 2011, the Brent price hit $100 a barrel for the first time since October 2008 and it has hovered around the $100 a barrell mark since)
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"An abrupt escalation of oil prices after 2015 as a result of a global supply crisis cannot be ruled out."
" . . . it is very uncertain whether new oil production in the period to 2015 will be enough to compensate for the natural falloff in output from existing oil fields and keep pace with the projected increase in demand."
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Unconventional sources
Unconventional sources, such as heavy crude oil, tar sands, and oil shale are not counted as part of oil reserves. However, oil companies can book them as proven reserves after opening a strip mine or thermal facility for extraction. The three major unconventional oil sources are the extra heavy oil in the Orinoco river of Venezuela, the tar sands in the Western Canada Basin, and the oil shale in the Green River Formation in Colorado, Utah and Wyoming in the United States. It is estimated that these sources account for as much oil as the reserves of the Middle East.
The results of one study suggest that within 15 years all the world’s extra oil supply will likely come from expensive and environmentally damaging unconventional sources. This will mean increasing reliance on these hard-to-develop unconventional sources of energy. Oil extracted from these sources typically contains contaminants such as sulfur, heavy metals and carbon that are energy intensive to extract.
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In State of the World 2005, Worldwatch Institute observes that oil production is in decline in 33 of the 48 largest oil-producing countries. Other countries have also passed their individual oil production peaks.
World oil production growth trends, in the short term, have been flat over the last 18 months. Global production averaged 85.24 mbbl/d in 2006, up 0.76 mbbl/d (0.9%), from 84.48 mbbl/d in 2005. Production in Q2 2007 was 84.90 mbbl/d, down 0.05 mbbl/d (0.1%), from the same period a year earlier. Average yearly gains in world oil production from 1987 to 2005 were 1.2 mbbl/d (1.7%), with yearly gains since 1997 ranging from -1.4 mbbl/d, (-1.9%; 1998-1999) to 3.3 mbbl/d (4.1%; 2003-2004).
Mexico announced that its giant Cantarell Field entered depletion in March, 2006, as did the huge Burgan field in Kuwait in November, 2005. Due to past overproduction, Cantarell is now declining rapidly, at a rate of 13% per year. In April, 2006, a Saudi Aramco spokesman admitted that its mature fields are now declining at a rate of 8% per year, and its composite decline rate of producing fields is about 2%. This information has been used to argue that Ghawar, the largest oil field in the world, has peaked.
Many commentators have pointed to the Jack 2 deep water test well in the Gulf of Mexico, announced September 5, 2006, as evidence that there's no imminent peak in global oil production. The Jack 2 field, however, may have at best the potential to provide only 2 years of U.S. consumption at present levels. Peak oil theory doesn't suggest that there will be no major or minor oil finds in the future, but rather that new discoveries and new production won't be able to offset depletion in other parts of the world. Also, the new fields will be harder to find, harder to get to and harder to extract out the oil. The Jack 2 field, for instance, is more than 20,000 feet under the seafloor in 7,000 feet of water, for a total of 28,000 feet (8.5 kilometers) of pipe.
This increasing investment in harder to reach oil is a sign of oil companies' belief in the end of easy oil: Chuck Masters of the United States Geological Survey says: These unconventional sources are not as efficient to produce however, requiring extra energy to refine, resulting in higher production costs and up to three times more greenhouse gas emissions per barrel (or barrel equivalent), as analyzed by industry sites such as Rigzone.
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Mar 13, 2008
The graph shows the "Peak" of current proven reserves as occuring before 2005 with existing oil capacities, it moves up to 2010 with developement of existing reserves, with an assumption of continued advances and methods, as yet undeveloped, in enhanced recovery methods and unconventional sources ( oil shale and oil sands ) puts it to 2015, then with the addition of the most unknown and unpredictable factor, future new discoveries, has production climbing to 125 million barrels a day by 2030. Of course it fails to mention that the current predictions for consumption rates, barring a massive reduction in demand, will surpass even the most optimistic projections by 2030
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April 11, 2008
Finally I have something positive to post in this thread. Somewhat.
I wanted to jump on this before anyone starts saying "Aha!! This is our salvation. Happy days are here again."
It is good news. it is good for oil drillers, producers, and consumers. But let's don't let the hype get our hopes up too much.
This is a significant discovery and will do a great deal to help lessen our dependance on foriegn oil, BUT, (there's always a BUT) it is being hyped in a lot of the media and being portrayed as something that it is not likely to be.
I'm talking about the Bakken field discovery in South Dakota and Montana. I have been following this for some time and watching to see how it developes. With prices setting records and affecting every sector of our economy people are looking for any hope.
There is a significant amount of recoverable oil in this find but like the much touted Jack wells in th Gulf of Mexico, it is not going to pan out to be the thing that weans us off the Saudi tit or that drives our fuel bills back to 2000 levels.
Well I guess I have been the doomesayer again. I hate to downplay good news like this but I just don't want to see people thinking that this will bring back $2 a gallon gas. It just isn't going to happen. But it may offset $5 a gallon gas for a while.
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Rigzone 4/11/2008
While recent advances in heavy oil recovery have proven useful in bringing the highly viscous liquid to surface, the United States Geological Survey (USGS) estimates of Bakken Formation hydrocarbons released April 10 are being met with a ticker-tape parade, as well as a tad bit of skepticism.
"It's not a silver bullet," said USGS scientist Brenda Pierce, "but it is very substantial."
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Oct 19, 2008
Over the past few weeks, the slide in prices has become more pronounced as the global financial crisis sapped demand for crude oil in the developed countries.
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If you read this entire thread, and follow the links, you would see that the "peak" of world oil production follows a bell curve, the top of which is not an immediate drop in production and ergo increasingly higher oil and gasoline prices. But rather a plateau period of peaks and valleys lasting between 3 to 7 years after the "Peak". This is exactly what we have been seeing for the last couple of years. With the peaks getting increasingly higher and the valleys lasting a shorter period. We have just come from the highest peak we have seen and are now in a valley. Does that mean that "Peak Oil" doesn't exist? Of course not. It exactly fits the Peak Oil model.
There are only two ways to significantly lower the price of oil and therefore gasoline. Either increase production levels or reduce demand. The recent high peak started the demand reduction and would have lowered prices to some extent, as was expected, and predicted by all Peak Oil scenarios. What wasn't expected was the extent of that demand reduction due largely to the recent, unforeseen, worldwide near economic meltdown. A bit of a game changer that.
But the fact is that production levels have not increased. Despite the oft promised, yet unachieved, production increases by Saudi Arabia.
This is very similar to the scenario in the 70's. After Dr. Hubberts Peak Oil model was proven on U.S. domestic production (he nailed it) people started to take it seriously and applied it to world production. The model showed a world peak in the late 90's. But, the unforeseen factor of the OPEC oil embargo, manufactured oil shortages and the resultant forced conservation measures resulted in the peak being delayed. It didn't happen in 1998 like all models forecast. So did that mean that the model was wrong, that peak oil wasn't a real and predictable event? Not at all, unforeseen factors merely delayed the inevitable. A lot of Peak Oil followers believe that we reached that point on Dec. 15th, 2006.
So then is the current economic chaos fueled demand reduction and resultant drop in oil and gasoline prices "proof" that peak oil isn't real, or that it hasn't occurred? Of course not. It has nothing whatsoever to do with it. We are in a peak and valley plateau period that exactly follows all peak oil scenarios. Can unforeseen factors affect those peaks and valleys? Of course. Those unknown factors can cause the valleys to be lower and the peaks to be higher. Does that alter the fact that world production appears to have peaked and is in a steady decline? Not at all.
Does that mean that other unforeseen factors won't affect prices? No, anything is possible. A worldwide nuclear war would certainly drive down demand and price. But, is it likely? That is the question. Some new discovery of a heretofore unknown reservoir of massive amounts of crude oil would raise production levels and drive the price down. But is it likely? Some new discovery of a cheap and efficient energy source would drive demand down. But is it likely?
Peak Oil is not about prices. It is about production. The peak is not the peak price of gasoline at the pump, it is the peak of oil that we are capable of producing. And nothing that we do, and nothing that is remotely likely to happen, can change that peak.
That peak level of production has occurred in every field in the history of oil production. It has happened in every oil-producing region, every oil-producing nation. And it will happen for world production. Or already has. And there is nothing whatsoever that can change that fact. Unforeseen factors can postpone it, but nothing can prevent it. The following peak and valley plateau will end. Factors may postpone it, but nothing can stop it. Production levels will start on an ever steeper and irreversible decline. Factors may postpone it, but nothing can prevent it.
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The Bakken is a major field but it certainly isn't "light sweet". I have seen reports like the one that Quig posted several times. A lot of times they are from investing firms trying to pump up investors.
Just a couple of points to think on.
These things are usually written by people who have no real understanding of the subject. ie: light sweet.
They tend to think of all oil as the same and we just "have to go get it". Not that simple. The Bakken is a very heavy tarry crude that is very expensive to refine.
The vast sea of oil under the Rockies is not a reservoir but trapped in very non-porous rock. It cannot be conventionly drilled, it has to be mined. Can you imagine the uproar if we decided to start strip mining the Rocky Mountains? Never happen. Maybe someday some new technology will let us produce that oil, but nowhere in the near future.
That is the thing with the Marcellus and the Bakken and the Haynesville shales that are spurring the current drilling activity. New technology and the elevated price of oil and natural gas is allowing us to drill and produce here-to-fore un-productive fields.
These aren't "new" discoveries. We have always known they were there, it just wasn't feasible to obtain. The recent practice of high pressure water fracking is unlocking these tight shales and allowing the trapped oil and gas in them to be produced. But that technology is not cheap and would not be practical if oil was $16 a barrel.
I have said many times and I will reiterate. Peak oil is not about running out of oil. It is about running out of cheap oil.
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2010
A leading world authority has come out and said yes it is confirmed, the peak of world oil production has arrived. We will never produce more oil than we are at this point. We are on the plateau that Hubberts models show as a 4 to 7 year fairly stable period before we start the ever increasing downward slide.
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2010
Well folks, once again we watch the price of crude climb. Setting new highs nearly every day. For months analysts and pundits have been comparing this trend to 2008. But once again we keep hearing the same mantra we heard then. The Saudi's will boost output to keep a lid on the price.
That may have been possible to do in the 80's, even into the 90's, but it never happened in '08 and it isn't going to happen now either.
The day of the mega fields and the ability to simply "ramp up" production to compensate for wild fluctuations in price, to supplement the world supplies lost to unrest in Libya, Egypt etc. are gone.
The fact is that the worlds oilfields are producing at or very near to maximum output now, and still just barely keeping up with ever growing world demand.
The recent worldwide economic downturn, if not intentionally manipulated, certainly was convenient for world oil markets. Demand was quickly out pacing supply and if not for the slowing of demand due to the economic crises, a sort of catching our breath time, catching up time, then there is no telling how high prices would be right now. It is a treadmill that is increasing in speed and we are having to run faster and faster to keep from getting thrown off of it. But we can't keep up that pace forever.
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2011
Once again, peak oil, and the resulting higher prices, is NOT about running out of oil. It is about running out of cheap, easily obtained, easily refined oil. The low hanging fruit has been picked. We must go to more and more extreme measures (i.e., climb higher) to get to the remaining fruit.
For example, paying a drilling contractor a million dollars a day to drill in 5 miles of ocean. We would not be there, not be investing that kind of money, taking that kind of risk, if we could find it anywhere else.
There will be oil for our lifetimes, for our kids lifetimes, and for our grand kids lifetimes. The question is, "How much are you willing to pay for it?"
Without going into ERI and all the technical information (that is to be found in the pages of this thread) let me go through the scenarios.
First, estimated reserves are always on the (wildly)optimistic side plus they are not recoverable amounts only theoretical amounts that may, possibly be there.
The Bakken; A good field and quite a lot of recoverable oil. But it is mainly a gas field and the oil is a side benefit, and the amount of oil has been downgraded several times since the fields discovery. It originally was the next Saudi Arabia. But the facts came to bear and the vast ocean of oil that was originally prophesied never materialized. This is an outcome repeated in nearly every new field ever discovered. The greatest need when a field is discovered is investment so naturally every field is a giant.
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2012
I have to admit that I am surprised that we are approaching the end of 2012 and have not seen some of the more dire predictions beginning to take effect. The discovery of, what would have been only a medium sized if that discovery a few years ago, such as the Bakken and the Marcellus has added to the supply and actually managed to show, for the first time in years, a very slight increase in US production. But the consumption rate of the world has not stopped it's relentless climb. If you go back and read some of the earlier posts and linked articles in this thread you will see where many of the prognosticators added the caveat that any new discoveries would only serve to postpone the inevitable and to extend the plateau period a few years. Most have cited 2015 as the point of no return.
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2013
Peak oil is NOT about running out of oil. It is about running out of CHEAP oil. The low hanging fruit has already been picked, we are having to climb higher and higher to get at the rest. And yes new fracking techniques are rendering great results and boosting our output but with increased output comes increased consumption and serves to extend the plateau a little bit longer. All of the dire peak oil predictions will come to pass, the only question is, as always, when? It certainly would have been in our (baby boomer) generation if it hadn't been for this recent rise in production. It allows us to tap into heretofore unreachable zones, but it is much more expensive and time consuming and the latest data is showing that these fracked zones deplete at a much, very much, faster rate than conventionally produced zones. So only time will tell, but this upswing could be just a short term rise and the crash afterwards would be more drastic. Or it could continue for decades. Only time will tell but when consumption is greater than production the resource being consumed will eventually run out.

 

It's perhaps worth the note that Hubbard's original thinking was based on a more or less "pure" bell shaped curve that in reality isn't pure. Each of the discoveries of greater than anticipated reserves has distorted the curve significantly in terms of duration. Whether or not the world has actually hit the peak will remain unknown until it's pretty clearly in the rear view mirror, and even then less than certain subject to more discoveries. The dislocations due to price (real and inflated) also have to be normalized out of the equations. What is certain is that the bell shape will be (is!!) distorted into a tail leading into the future as a chi distribution (picture a bell curve with one end very much longer than the other.)

We must also take care that fuel reserves are not assumed to be all oil. Each advance in the use of other energy sources will influence the oil only curves. For example, consider the immense quantities of natural gas that are only now becoming economically recoverable, both from a technology standpoint and as driven by oil alone prices (and the aversion to more use of coal.) Each of these other influences will serve to extend the tail on the oil alone curves.

I don't think that Hubbard considered tar sands and shale oil in his doomsday predictions, recovery wasn't economically possible back then. Both of those sources are marginally recoverable now due to the price climb of more readily recovered and refined crudes (think light sweet) so the tail gets longer. He didn't put a whole lot of thinking into substitutes for oil, either (think natural gas, cleaner coals, solar and the other marginal energy sources.)

It is of academic interest only if some sharp young economics student would try to develop an overall set of curves integrating all known energy sources and see what the curve would look like. Betcha it would extend out well over 200 years at known use rates. Plenty of time to get some of the marginal sources into the fold if at all possible. (Which is a certainty, if the wallet can stand the strain.)