PEAK OIL AND THE PEAK OIL AND THE FATE OF HUMANITYFATE OF HUMANITY

Chapter 2 –The Important Question: Chapter 2 –The Important Question: When Will Oil Production Peak?When Will Oil Production Peak?

Robert Bériault

PEAK OIL AND THE PEAK OIL AND THE FATE OF HUMANITYFATE OF HUMANITY

Chapter 2 –The Important Question: Chapter 2 –The Important Question: When Will Oil Production Peak?When Will Oil Production Peak?

Robert Bériault

Wow! I can see that this stuff is really

indispensable! Where does it come from?

Oil originates from the decomposition of microorganisms that got buried under geologic formations in the sea millions of years ago.

In some cases the sea retreated, which explains why oil is also found on land.

home.att.net/ ~cat6a/fuels-IV.htm.

You mean that it’s not

continuously being made?

That’s right. Mother Nature took millions of years to generate the oil.

She made it once.

She won’t be making a second batch.

Well, how much oil do

you have down there?

Before the first oil well was dug in Pennsylvania in 1859 Mother Nature had made about two trillion barrels of oil and scattered it unevenly around the world.

By 2004 we’ve used up about 0.9 trillion. In other words we’re near the half-way point.

“Hubbert's Peak: The Impending World Oil Shortage”, Kenneth S. Deffeyes

So when do you figure you’ll run

out?

An oil well isn’t like a car’s gas tank.

With a car you can drive at any speed and you run out of gas all of a sudden.

That’s because your tank is a hollow cavity. The gasoline fills the bottom of the tank and there’s nothing preventing it from being pumped out.

But an oil well isn’t a hollow cavity. It’s a large deposit of

stones or sandstone sandwiched between two layers of impervious rock. The hollow spaces between the stones or sand are filled with thick and viscous oil.

A pipe is lowered into the mixture of oil and stones or sand and the oil is slowly pumped up. It takes time for oil to ooze

from zones of high concentration to the zone of low concentration near the pipe.

Click

In order to extract the oil from an oil field, a large number of wells are drilled.

With a car you can simply step on the accelerator to increase the flow rate of gasoline.

If you try to pump the contents of an oil field too fast, you can permanently impede its ability to produce oil in the future.

An oil field empties rapidly at

the start and yields lots of oil.

Then the flow slows down gradually.

Towards the end the flow eases to a

trickle.

An oil field yields its contents more and more slowly over the

years, something like this.

Mid point

2nd half

When you plot the production of an aggregate of oil fields you get roughly what is called a bell curve

Top of the curve

1st half

So to answer your question, we will never actually run out. There will always be oil left in some nook or cranny where it will be uneconomical to extract.

Click

Well, what’s the worry then?

So what’s the

problem then?

The problem is that we will soon reach the point where we can’t pump out enough to keep up with demand.

…and from then on, oil production

will decline year after year…

…that’s whatpetroleum experts refer to as the oil peak or peak oil.

http://www.oilcrisis.com/

Remember that we’ve used up almost half of the world’soil. When we reach the half-way point on a bell curve, we

embark upon the decline.

When will that be?

Oh gee! When will that be?

We don’t know for sure. But there are seven pieces of evidence that lead us to believe that the oil peak might come soon.

Evidence 1.Evidence 1.

The Hubbert The Hubbert PeakPeak

To forecast oil peak for the whole world,

petroleum experts used a method developed by oil geologistDr. M. King

Hubbert

The Hubbert Peak

In 1956 Hubbert, using mathematical models, predicted that the US lower 48 states would peak in 1970

http://www.hubbertpeak.com/hubbert/

The Hubbert Peak

At that time the US was the world’s largest petroleum producer!

He was laughed at…

The Hubbert Peak

But it turned out he was right!!!

And now oil geologists think we’re close to the Hubbert Peak for the world…

We’ve used up almost half of the world’s oil.

http://www.oilcrisis.com/

Evidence 2.Evidence 2.

Before looking at predictions

lets consider a logical condition…

Before lookingat predictions

for the whole world,

If you want to extract (produce) oil, you’ve got to

find (discover) it first, right?

Oil discoveries in the US peaked- then 40 years later production peaked

Adapted from Collin Campbell, University of Clausthal Conference, Dec 2000

The US lower 48 states

If the world follows the US pattern:

Adapted from: Richard C. Duncan and Walter Youngquist

…the world would peak soon

It’s inevitable that sooner or later the peak of discoveries will be

followed by a peak in production.

It’s inevitable that sooner or later the peak of discoveries will be

followed by a peak in production.

Evidence 3.Evidence 3.

There Are No More Giant Oil Fields to Be Discovered

• In spite of advanced exploration technology we are finding smaller and smaller oil fields

Hold it!What do youmean by a

giant oil field

Any field that has more than 500 million barrels is deemed to be a giant.

Prudhoe Bay production plant, pipelines, roads, flaring

www.arcticgems.org

This chart of giant oil field discoveries proves the point, doesn’t it?

Simmons Company International

Since 2003 no giant fields have been found

…for each barrel of oil that is being discovered

We’re consuming 4

barrels…

“The Party’s Over”, Richard Heinberg

Yeah!• If you take $4 out of

your bank account for every $1 you put in, how long will it take before the creditors come after you?

Evidence 4.Evidence 4.

Energy Return On Energy Invested

It refers to the ratio of:

The amountof energy spent on getting the

fuel:

exploration, drilling,

pumping, transportation and refining

The amount of energy in the

fuel:

Either gasoline, diesel,

kerosene, etc.

AND

(EROEI)

“The Party’s Over”, Richard Heinberg

Energy Return On Energy Invested

Before 1950 it was about 100 to 1

In the 1970s it was down to 30 to 1

Now (2005) it’s about 10 to 1

The Tar Sands have an EROEI of about 4 to 1

“The Party’s Over”, Richard Heinberg

is diminishing as we resort to going after the hard-to-get oil:

A dropping EROEI is a sure

sign of a coming decline

Evidence 5.Evidence 5.

It’s Getting a Lot More Expensive to Produce Oil

Adapted from “The Party’s Over”

• We have to drill deeper – up to three miles deep!

• We’re exploring the far corners of the Earth to find it

Exploration doesn’t pay anymore

In 2003 oil companies spent $8 billion on exploration

and discovered $4 billion in new

reserves.*

* Thomas Homer Dixon and Julio Friedmann, N.Y. Times, 25 Mar 2005** John S. Herold consulting firm

Since 2000, the cost of finding and developing new sources of oil has risen about 15% annually.

Evidence 6.Evidence 6.

There’s no more spare capacity in the world supply

Adapted from “The Oil Age is Over”, Matt Savinar

Spare capacity = how much extra oil can be produced

within 30 days notice and

maintained for 90 days 0%

5%

10%

15%

20%

25%

30%

1985 1990 2003 2004

SPARE OIL PRODUCTION CAPACITY

Turning the valve further open doesn’t yield more oil.

Evidence 7.Evidence 7.

Oil Fields are Getting Old and Tired

Most of our oil comes from fields that are more than 30 years

old

“The Party’s Over”, Richard Heinberg

Evolutionary psychology and peak oil: A Malthusian inspired "heads up" for humanity. by Dr. Michael E. Mills 

This graph of the last five years of world production would indicate we’ve already peaked!

Alright then,

when is oil going to peak?

Difficult to Estimate When the Decline Will Start for the Whole World

Because data on OPECreserves are not easy to

ascertain(Organization of Petroleum Exporting

Countries)

Production quotas are based on

Production quotas are based on a country’s

reserves, so there’s an advantage in

exaggerating them

In 1986 and 1987 OPEC countries markedly increased their reserves!

The point of this graphis that they ALL increasedand ALL in the same time period.

Oil geologists know they can’t rely on the

accuracy of those reported reserves.

Forgive me for being

suspicious!

The peak is more imminent than one would think:

Many oil geologists have been studying the question.

There’s no consensus, but

the predictions range from the year 2005 to 2015

Many have a feeling it’s upon us now

China and emerging

economies are booming.

That’s going to make things worse, will it?

Yes, you’re right. China’s demand is precipitating the oil peak

China’s oil consumption increasing 11% per year

World’s 2nd oil user after US

Exxon-Mobil Report, Oct. 2004

Their thirst for oil is exacerbated by their newly found love of the automobile

Chinese consumers are buying 8 million cars a year.

DOCUMENTARY "THE END OF SUBURBIA" SHOWING IN OTTAWA

With everybody using more oil, look at the demand curve on this graph.

The red portion represents the amount that we’ll have to find and drill for

DOCUMENTARY "THE END OF SUBURBIA" SHOWING IN OTTAWA

Exxon-Mobil Report, Oct. 2004

Why should I listen to

you? You’re not an expert

You don’t have to take my word for

it. Here’s what the experts have to

say:

Matthew R. Simmons

Matthew R. Simmons is the Chairman of the world's largest energy investment banking company, Simmons & Co. International. He has spent his life studying the oil industry.

“If it turns out that Saudi Arabia has peaked, then categorically, the world has peaked.”

After expressing scepticism

about Saudi’s empty

reassurances:

Les Magoon, an oil geologist and scientist emeritus with the U.S. Geological Survey:

JOAN LOWY, Scripps Howard News Service, October 28, 2004

“My feeling is this is the beginning of the oil peak and the next administration, whoever it may be, is going to have to deal with this. We're not going to run out of oil, it's just that the demand on a daily basis will far exceed the ability of the world to produce oil so the price is going to go up,"

Mike Bowlin, Chairman and CEO, ARCO, 1999; Chairman, American Petroleum Institute:

JOAN LOWY, Scripps Howard News Service, October 28, 2004

“We’ve embarked on the beginning of the last days of the age of oil.”

James Mulva, CEO of ConocoPhillips Co., the third-largest U.S. oil producer

At a Wall Street conference earlier in November, 2007, acknowledged, "I don't think we are going to see the supply going over 100 million barrels a day ... Where is all that going to come from?"

Vice-President Dick Cheney, when he was Chairman of Halliburton, 1999:

“By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead, along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day.”

What does50 million

barrels a day represent?

In 1999 the world used 70 million barrels a day.

Cheney said that by 2010 we will have to increase that by another 50 million, to 120 million barrels a day!!!

Barrels consumed per day

1999 2010In October 2007, at a London conference, Christophe de Margerie, the Total CEO, said that ratcheting global production up to even 100 million barrels by 2030 will be "difficult."

Saudi saying:

“My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.”

And what about natural gas, will it peak one day?

In fact, natural gas has already peaked in North America.

Canadian Gas Potential Committee, Calgary, Alberta

It estimated that production will plateau soon and then start it inexorable decline

“What about substitutes? We’ve got coal, gas, nuclear!” -- Find out why these can’t replace oil in Chapter 3A.

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