Tuesday, January 6, 2009

Peak Oil Post #1: Geological Scale

350 is a scary number, but the scarier number than no one knows is 6.7%. That figure is the observed decline rate for oil fields past peak. The "peak" of an oil field, remember, is the moment when the field produces the largest amount of oil that it will produce during its lifetime; after this point, fields begin to decline as it becomes harder and harder to extract the remaining fuel from them. And this ratio is increasing, because off-shore oil rigs tend to decline much faster than on-shore production (some off-shore oil fields decline faster than 10% a year!)

Taking this to account, if we do not discover or develop any new oil or any new alternatives, oil production will decline by 4.5% a year. Combine this with the simple fact that we are on the cusp of reaching the economic "tipping point" for car ownership in China/India. Once China's average per capita income reaches a certain level, HUNDREDS OF MILLIONS of people will want access to automobiles (consider the meteoric rise in automobile ownership seen in the United States as we got richer). Let's use the EIA's (Energy Information Administration, a department of the Department of Energy) projection for world oil demand in 2030: 118 million barrels per day. Currently we are around 85 million barrels per day produced. So current oil production (assuming we don't discover/improve anything) will be.. carry the three... 32 million barrels per day. So, we need to develop new sources of oil that produce the shortfall, which is roughly equivilant of trying to find everything we've found over DECADES of searching in twenty years.

Another way of putting it is to say that we need to put six million addition barrels per day of oil into production EVERY year to avoid crisis. If we wait two years, we need to find 6.5 million barrels per day. SIX MILLION FREAKIN' BARRELS EACH DAY! More than TWO BILLION barrels produced each year. 62 BILLION GALLONS PER YEAR. Study the problem, and nothing seems to be able to describe the scope of the problem.

There are other methods of producing oil, other fuels, yadda yadda yadda, and I will describe them in the future. But my next post will be on the economic implications of shortfalls.

1 comment:

Clifford J. Wirth, Ph.D. said...

The top story of the year is that global crude oil production peaked in 2008.

The media, governments, world leaders, and public should focus on this issue.

Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.

Then in July and August of 2008 while oil prices were still very high, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of "Oil Watch Monthly," December 2008, page 1) http://www.peakoil.nl/wp-content/uploads/2008/12/2008_december_oilwatch_monthly.pdf.

Peak Oil is now.

Credit for accurate Peak Oil predictions (within a few years) goes to the following (projected year for peak given in parentheses):

* Association for the Study of Peak Oil (2007)

* Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008)

* Tony Eriksen, Oil stock analyst and Samuel Foucher, oil analyst (2008)

* Matthew Simmons, Energy investment banker, (2007)

* T. Boone Pickens, Oil and gas investor (2007)

* U.S. Army Corps of Engineers (2005)

* Kenneth S. Deffeyes, Princeton professor and retired shell geologist (2005)

* Sam Sam Bakhtiari, Retired Iranian National Oil Company geologist (2005)

* Chris Skrebowski, Editor of “Petroleum Review” (2010)

* Sadad Al Husseini, former head of production and exploration, Saudi Aramco (2008)

* Energy Watch Group in Germany (2006)

Oil production will now begin to decline terminally.

Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand. OPEC cuts could exacerbate the gap between supply and demand and drive prices even higher.

Independent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.

Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”

"By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."

With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.

It is time to focus on Peak Oil preparation and surviving Peak Oil.