Peak oil denial

Just as climate change attracts furious denials, so does peak oil - as the comments on my recent, evidently somewhat contentious, post indicate. "Running out? We're swimming in the stuff!" the deniers say cheerfully.

Their most common argument is this: that higher oil prices will make it more affordable to drill less accessible deposits, so there’s no problem after all. But energy isn’t like other commodities. At some stage it will take more than a barrel of oil's worth of energy to drill for a barrel of oil, so the job won’t be worth doing however high the oil price - not in my back garden or underneath the ocean or in Canada's tar sands. (See this explanation of Energy Returned on Energy Invested.)

Another argument is to say that people have wrongly predicted a peak in the past. But quite obviously, since oil supplies are finite, there will be a peak eventually. Just because previous predictions were premature does not mean the latest ones are too.

Then there's the suggestion that we have vast proven reserves to fall back on. In 2004, BP’s Lord Browne proclaimed, “We have to demonstrate that there has been no shortage of oil, and that there is no shortage of oil, and that there never need be a shortage… there is no reason why there should be any shortfall in the foreseeable future.”

But it rather depends how far ahead you are foreseeing.

The former oil industry geologist Jeremy Leggett has shown in his book, Half Gone, that the annual BP Statistical Review of World Energy relies substantially on third-party material; and states, in small print, that the figures shown do not necessarily meet US Securities and Exchange Commission definitions and guidelines for determining proved reserves. “They don’t even believe the figures they are publishing!” writes Leggett. “And this is an energy bible used by researchers the world over."

As for Opec countries, Leggett points out that the size of their stated reserves has remained the same each year for a decade - indicating that the amount they have discovered each year has precisely matched the amount they produced over that period. You don’t need a PhD in maths to think this extraordinarily implausible.

The known facts are these: the amount of oil discovered each year has been shrinking for four decades. The last time we discovered more oil than we consumed was 25 years ago; today, for every barrel we discover annually, we consume three. Production is already in terminal decline in 60 of the world’s 98 oil-producing countries, maybe more.

The world’s two largest oilfields, which once contained more than 80bn barrels each, were discovered in 1938 and 1948. Since then, discoveries have been tiny by comparison, and rare. In 2000 there were 16 discoveries of 500m barrels or bigger. In 2001 there were nine. In 2002 there were just two and in 2003 there were none.

Whatever the oil companies say about plentiful reserves, it’s notable that they’re investing little in new tankers or other infrastructure. When former Shell executives, and American energy secretaries start addressing the annual conference of the Association for the Study of Peak Oil, that itself is a rather doomy signal.

When I first heard of peak oil, more than two years ago, I wondered why the government was doing nothing to raise the issue. In the new film A Crude Awakening, Dr Colin Campbell offers an answer: “There is little hope of politicians taking the lead. It’s much easier for them to react to crisis when it happens.”

Although government, and the national political leaders, have ignored the coming problem, backbench MPs and peers have started working together to promote discussion.

John Hemming, the Lib Dem MP for Birmingham Yardley and a physicist by training, chairs the all party parliamentary committee on peak oil and gas. In July last year, Hemming called on the government to review its policies in the light of The International Energy Agency shifting its prediction as to when oil production will peak – from 2030 to just five years from now.

On behalf of the government, the then-chief scientist Sir David King responded. “I am personally not convinced that focusing on the “peak oil” concept is the most helpful approach. The challenge I believe lies in framing policies and in advancing the technologies that will enable the fossil fuel resources to be utilised effectively, economically and sustainably.”

But how can fossil fuels, by definition a finite resource, be used “sustainably”. You either use them, or you don’t.

“I thanked him for his written response,” Hemming tells me. “It was a load of bollocks but I thanked him."

I recently decided to phone the Bank of England, the Treasury, various government departments, the Confederation of British Industry, the Association of British Insurers and oil companies to ask if they had any policies in place to deal with peak oil.

The answer, in several instances: “How do you spell that?”

The Treasury referred me to the Department for Business, Enterprise and Regulatory Reform (“This is not a treasury matter.”) DEBERR said it predicts no problems “for the foreseeable future”. Ultimately, a spokesman said, the world may never run out of oil because “new forms of energy may come through to fuel transportation and so on”. (He didn’t elaborate.) The Bank of England politely explained that they have no policy. The CBI mused that the issue fell between its economics team and another covering business and the environment. The ABI sent me a report it had commissioned on the long-term global impacts of climate change: this didn’t mention the word “oil” anywhere.

One oil company was willing to talk to me but only on a totally off-the-record basis. This nervous precaution is telling, particularly since what I was told was freely available on the internet. 

But a BP spokesman scoffed: "Why should we have a policy on peak oil? Peak Oil is just a brand, a consultancy, a bunch of academics going round making money selling books and talking at conferences.”

I didn’t find this convincing, but to be sure I decided to find out how much money the retired geologists and economists and others in Aspo are paid. I learned that one of the best-known individuals in Aspo recently accepted just £200 for a speech. Is that a lot? Brendan Barns, of the leading public speaking agency Speakers for Business, says £200 would not cover most people’s travel expenses. “It’s a paltry amount. What would you get from any professional, a lawyer or an accountant, for £200? Nothing. For BP to say they’re doing this for the money is laughable.”

BP, by contrast, makes billions of pounds in profits each year. It’s not hard to see which side has the greater financial stake in this argument.

Comments

[Paul Newbold]

Darren, the EWG report www.energywatchgroup.org/fileadmin/global/pdf/EWG_Oil_Exec_Summary_10-2007.pdf claims that peak oil is happening now (I really, really, hope they're wrong!).
All of the discoveries you've listed over the last 8 years add up to about 1 years current consumption (about 30 billion barrels pa).

My main concern is that there seems to be little sense of urgency in the govt to do something about the possibility asap. They're even considering expanding Heathrow when there's a real possibility that soaring av fuel prices will kill demand before it's finished.
The resources thus proposed should be diverted to any of the possibilities I mentioned in my 1st post at the foot of this page (ASAP).

[Darren]

The point regarding the discovery of oil would lead you to believe that no large oilfields have been discovered since 2003, and indeed, that the discoveries have been all but tiny since 1948, is slightly misleading. While it is obviously true to say that discoveries are smaller and rarer by comparison with the middle half of the last century, there have been many large oilfields found since 2000. A 5 minute search will find the following and many more:

Kazakhstan, 2000 - 12bn barrels; Ghana, 2007 - 600m; US Gulf, 2006 - several bn; Brazil, 2005 - 700m; Brazil, 2007 - 12bn.

Large gas discoveries have also taken place. It's interesting to note too that oil production in Africa is set to increase until after 2020. (EWG, Crude Oil, The Supply Outlook, October 2007).

Also, in response to some calls for covering the country in large swathes of wind farms - don't you think it's about time we started thinking local to act global? Renewable energy creation is ultimately more beneficial if done on an individual property or estate level. We don't need to put more of our countryside out of bounds by erecting windfarms everywhere, some are needed certainly. But they are not a panacea.

[Martin]

Stan wrote:

"The manufacture of plastic parts rather than metal parts also provides fossil fuel energy savings.
All this results in sustainable use of a finite resource."

You have a very strange definition of the word sustainable.Think about it for a second. Usage of a finite resource is never sustainable in the true sense of the word that it can be sustained indefinitely.

[peter]

Peak oil or not is not the problem, the oil isnt ours meaning the Wests. Its mainly owned by states that have only so-so relationships with us and they are not obligated by any treaty to sell us their oil. If the owners of the oil decide not to sell today but only at $140 for example then that very act will ensure that they get their price in the not too distant future. Unless u need the cash there is no good reason to sell oil, its on a par with what brown did with our gold. What would happen if oil producers priced their product in grams of weapons grade plutonium?What if Russia gives oil producers in the mideast nuclear energy and then uses its influence to get them to cut supplies to the west whilst Russia simultaneously does likewise?

[Andrew]

Oil runs out not when the last drop is brought to the surface.

Oil runs out when it's just too expensive to use because of it's scarcity.

[Tariq Ahmad]

I am a petroleum engineer. I do believe that there is a finite amount of oil. However we have only produced less than 20% of the oil the oil fields that have been discovered. We obviously can produce a lot more than that, so this peak oil thing is only convincing if we believe that we cannot increase the recovery from exisiting fields.

As time goes by we have shown that the peak oil keeps on getting postponed when I was in high school in Colorado, in 1977 my class mates told me that being a petroleum engineer would be a waste of time as we wont have any oil, but surely we are producing a lot more oil today than in 1977!

[Paul Newbold]

Mr. R. L. Hails: What you describe (I am not familiar with the details) doesn't look junk science, but rather an hypothesis (mercury released from coal may cause neurological defects?) that was disproved by the factors you state. Unless you are hypothesising the factors to challenge the studies?

Incidentally, I'm not afraid of UFOs, of goblins or demons, but I'm seriously concerned with the way that commodity prices are heading strongly upwards (coal, oil, copper. etc.). Someone is putting their money where there mouth is as far as supply and demand are concerned.

[Andrew]

I'm no scientist, and I know there are alternative cleaner fuels out there to use. But the daily experience is of the rapidly increasing cost at the fuel pumps, for motorists, and the haulage industry. Leaving aside Peak Oil considerations, and rear view mirror audits of Barels of Oil produced yearly. The pace and scale of oil price inflation is soon going to catch us all out.

The ramifications of these punitive increases will soon be directly impacting on our current western way of life, affecting how, and where we work, how we heat our homes, etc. Inflationary pressures on tranportation costs, and oil based products, which is practically everything that is transported, will have immediate effects, this is the clear and present danger and we are all going to have to deal with it shortly. Some of these effects may actually improve our way of life, and should improve the environment, ie. less air miles travelled, as produce is grown transported and sold locally. It may help our own struggling farmers to compete against international producers. Housing, workplaces, and shops may have to be reconfigured allowing for the fact that people will not be able to travel too far.

A second consideration being that any new technologies and transport infrastructure based upon them could take years and considerable planning and organisation to roll out, and judging by the glib dismissive comments by the main players mentioned in the above article, can we expect the dynamism and urgency required to undertake the task.

What we need NOW is focussed joined up thinking, by apolitical bodies, scientists and economists to address this problem.

[Mr. R. L. Hails Sr. P. E.]

After forty years of energy engineering, I have come to except, but not accept hogwash, as writings on most energy subjects. Example: It has been illegal, in the US, for two generations, to explore Alaska for oil. Ergo no one knows what recoverable oil stocks exist. The peak may be a plateau. Example: the scientific studies damning mercury from coal plants are based on fish harvested from the Faroe Islands, and Seychelles Islands. The former is volcanic, the latter is not. Fish uptake is an order of magnitude larger in these fishing cultures than in ours. Subtle dose related effects in 7 year olds were found in the Faroe population, no effect was found in among Seychelles people. Mercury is expelled from volcanoes, enters the food chain via aquatic vents, and is concentrated in higher predator fish flesh. There is nothing, other than junk science, tying coal combustion to real health problems involving mercury. People who fear this claptrap, should fear UFOs.

[Rod Rainey]

The solution is simple - stop breeding. If all women were compulsorily sterilised after one baby, the world's population would drop by a factor of 10 this century. We would then have enough of everything to go round.

The pharmaceutical industry could surely come up with the technology, if asked.

[Paul Newbold]

To Alastair Carnegie: I have checked out "Gull Island" North West coast of Alaska. The only references I found to supposed huge reserves were in conspiracy theorist, and creationist websites.

Do you have any reliable data or references from scientists and/or oil companies etc?

[Thomas]

Try to visualize the world 500 years from now vs the world 500 years ago. Even if the human race has developed "free" energy & solved many biological puzzles, we as a species will not survive long term. Sure, we may extend ourselves for another 1,000 years, 10,000, or possibly even a million .
But ten million years from now, when the planet is still only middle age, there won't be a trace of us, not even as usable "biomass".

[Stan Coveney]

“But how can fossil fuels, by definition a finite resource, be used “sustainably (sic)”. You either use them, or you don’t. “

“I thanked him for his written response,” Hemming tells me. “It was a load of bollocks but I thanked him."

Obviously Mr Hemming had not bothered to think or to think clearly about sustainability of fossil fuels. Just about everything we manufacture uses oil. Most common are the plastics many of which can be recycled. Plastics used in place of steel and other metals in vehicle manufacture reduce weight with the effect that vehicles use less fuel to propel them. The manufacture of plastic parts rather than metal parts also provides fossil fuel energy savings.
All this results in sustainable use of a finite resource.
Who knows maybe hydrogen fuel for vehicles and other technologies not yet created may make the use of oil unnecessary before supplies are exhausted.

I believe that Sir David King’s response to Mr Hemming was entirely reasonable and appropriate. But I guess most eco-warriors would be sneer at any response that did not fit with their gleefully apocalyptic vision for our world.

[Ben]

I agree with the comment on 'Peak Population'.

That will be the real killer.

[Chris Coles]

If one of the near earth asteroids hits the planet, the shock wave might very well close off every drill hole in the oil industry and then we would have none. On the other hand, if we go on burning hydrocarbons by the GT, the temperature of the planet will continue to rise accordingly. (See Scientific American February 2008 for the report about ice that just might slide suddenly into the oceans to give an instant sea level rise of between 20 and 170 metres).

I believe that there is a very good chance that someone has already written down how we might get at new sources of energy other than hydrocarbon that will make the debate irrelevant. It is no use worrying about what might happen, when as a species, we have repeatedly suffered major setbacks, (we have not suddenly "arrived" on the planet but have been here for millions of years), and have survived. The most sensible will instead worry about survival in every circumstance. Every, being the watch word.

[Alastair Carnegie]

Check out "Gull Island" North West coast of Alaska. There appear to be more proven reserves of oil up there than in the history of oil exploration. Certainly sufficient for America to be entirely independent of external supplies for another two centuries. The Saudi Arabia Fields are dwarfed by Alaska. The oil is exceptionally high quality as well. sweet low sulphur and a doddle to refine. Now say, after checking out these unequivocal facts, that there is a "Peak Oil Crisis" .

[allen laughen]

The dollar is bollocks, mate...
We, the stupid in the good ol' us of a
are giving the worlds economy a good
"rude pumping" with our incontinence on bad borrowing and loaning policies.
the iraq blood bath is only accelerating
our dollars demise.
I am ready for the not too distant day when it is only good for wiping the ol' bum......

[Bill]

The blogger doesn't understand economics.

Even if it takes 3 barrels-equivalent of natural gas to produce 1 barrel of oil (from oil sands), that is fine as long as the economic value of oil is greater than the value of the natural gas.

In other words, energy ROI doesn't matter, financial ROI does.

And the reason oil production is down globally is the fact that more and more oil is under the control of 3rd world governments, who couldn't care less about maximizing oil production.

E.g. Venezuela's production has dropped because Chavez replaced profesional engineers with his political cronies who know little about pumping oil (he's also looting the oil sector, delaying maintenance and repairs)

Oil production will increase when a right-wing junta deposes him and invites Exxon-Mobil (or BP, or Total) back into the country.

[Mike Donald]

Was it the Times a week or two ago refeerred us to this?

http://www.lifeaftertheoilcrash.net/

This is a website I continually dip (pun) into.

[John Palmer]

Barrel of oil in energy to get a barrel out of the ground would appear to be the limiting factor but in practice oil is so important that any source of energy could be used to get it out of the ground.

Solar power, wind power, wave power, etc could all be used to power the pumps.

Everything from plastics to fertiliser is made from oil. We can't afford to leave it in the ground.

[mike]

I would suggest not going to the oildrum website as I think that if you stare at something really hard for a long time without blinking you dont see too clearly.

All the correct comment about EOR, other brown field development, unconventional oil and demand side responses aside, the unacknowledged elephant in the room remains the likliehood that cheap (<$10/bbl) OPEC reserves are vastly UNDERSTATED as I explained below.

People who stare myopically at the Saudi's oldest and largest oil field forget that vast areas of Saudi, Iraq, Iran and many others remain, in 21st century terms, to all intents and puposes unexplored! And this while the worlds most advanced technology is used to scour the North Sea for 20 million barrel finds that will cost perhaps $20/bbl to produce even through existing rigs and pipes!!!

Iraq's estimated oil reserve's have doubled in the last year (see below). And this is only the very beginning. They will, I expect, increase much more if and when a full and proper exploration programme is undertaken.

The world has plenty of cheap to produce oil (and gas) reserves for the coming decades. Its owners however persue a profoundly mistaken policy of cartel and resource nationalism, which the rulers know is stupid however it is popular and allows them to take their personal desired income so thus it is "best" for them!

Maybe the owners of resources, the people, might realise that a cartel that ends the main market for its product is not in its interests? I think OPEC understands this well, and try's to milk us like a good cow. I hope Iraq's parliament sees sense and passes an oil law that allows the most advanced oil companies fair profits to show what happens when a nations wealth is managed to maximise the cash return to the nation rather than to serve some cretinous ideas of resource nationalism and beggar thyself polices of no profit for anyone else.

Iraqi production zooming through 10 md/b in 2015 would be fine to juxtapose against currently projected Iranian net oil imports.

Buy at the sound of (oil)drums! (err, isnt that cannons? ed)

[Phil Harding]

We have already passed "peak population" - there are some scientists who maintain that the planet cannot feed more than 1 billion without oil and gas to raise food production to its current unsustainable level. Food security is an issue closely related to peak oil and unlimited population growth and the UK, with its growing dependence on imported food, will be increasingly vulnerable as climate change reduces in size the food growing regions of the planet. The longer humanity takes to start to tackle population growth (while moving to a low carbon economy), the more disastrous the consequences. Let's hope it's not too late...

[Terry]

There seems to be a lot of oil companies lining up behind missing the mark for future demand:Total, Cheveron, Conoco-Phillips, Shell, Hess I would think that they would actually have a few petroleum geologist on staff.
These are the same companies many here are counting on to deliver the oceans of oil they are talking about. There will be oil, probably a lot of it, but most won't be able to afford it. Peak Oil production isn't all about reserves but a vast complex of geopolitical, infrastructure, geological complexities violence and wars along with recourse nationalism's and energy returned on energy invested calculations -- oil sure, economically recoverable to make 100 millions barrels per day -now strap your selves in boys were in for one hell of a ride.

[Steve P]

Even if we assume the more pessimistic forecasts of the peak, about 1.5 gigatonnes of oil will be being produced in about 2050. Canadian tar sands and Venezuelan heavy oil can probably be ratcheted up to 0.5-0.75Gt by 2050. Cellulosic biomass (from switchgrass, woody wastes etc NOT maize or other normal starchy foodcrops) could probably be raised to 0.5-0.75GT oil equivalent as well. Some natural gas (depending on total resources which are probably very large if we include unconventional sources) could be directly substituted for oil (as compressed natural gas) or liquefied (to synthetic diesel / kerosene)- lets say 0.25-0.5 GT oil equivalent. So far we have from 2.75 to 3.5 GT oil equivalent of liquid fuels by 2050. How much would we need by then assuming very efficient cars (plug in hybrids with, lets say 60miles elecrical range and 70mpg when operating on fuel- almost certainly achievable by 2035, allowing full penetration by 2050) and planes (100 passenger miles per gallon - 75pmpg is already achievable on a well loaded plane)? We'll assume 9 billion people and 3 billion cars doing 10000 miles each half electrical only (from non oil generated electricity) and each person travelling 2000 miles annually on a plane. These are huge increases on present levels allowing poorer people an increased share of the cake. Do the maths and it comes out at about 1.3-1.4GT. Allowing a billion tonnes of "oil" for chemical feedstocks (partly to make the carbon fibre etc for efficient planes and cars) and another billion tonnes for shipping, other portable uses etc (a generous allowance) we get a demand of something like 3.5 GT. Actual demand might be a bit more or (probably) less at high oil prices. However the gap between production so far and demand is something between 0.75 GT and zero. Lets be pessimistic and assume a gap of 1.0 GT incase some figures are out the wrong way, where would the extra billion tonnes come from? Coal liquefaction is one possibility. It would take about 2.5 billion tonnes of coal to produce 1 billion tonnes (GT) of liquid fuels. This amount of coal could easily be supplied assuming annual production of about 10 billion tonnes (a rough doubling of production) by 2050. This would leave 7.5 billion tonnes for steel, industry and electricity production (all with carbon capture of course to reduce CO2 emissions). All of the above technologies would be easily competitive at $150 per barrell (50% above present levels) especially given over 4 decades of development. All stationary energy uses could be converted to electricity (none of which need be generated from oil or gas by 2050 - coal with carbon capture, nuclear, wind , solar, geothermal, biomass are all possibilities) and some gas. Efficiency could massively cut domestic energy use by 2050 as well. The 2 billion tonnes of oil I've allowed for ships, industry and other portable uses is also generous and might yield a surplus (of liquid fuels or coal not needed for liquefaction). All this infrastructure could be built by 2050 with the right market incentives (eg western governments guaranteeing to keep oil prices high via extra taxation if middle east despots drop the price to massacre market alternatives). I haven't even mentioned other possiblilities quite likely by 2050 such as hydrogen fuel cells using hydrogen derived from natural gas, then biomass then solar etc, or super high capacity fast recharging batteries allowing full electrification of the car fleet. I could go on but my point is basically that conventional oil may (or may not) be about to peak but this need not be a disaster because alternatives exist and can be brought on in time. Incidentally, the growing conventional oil gap between an early peak and 2050 could be bridged by gas to liquids using gas freed up from electricity generation and replacement of inefficient boilers, windows etc, a growing supply of heavy oil and biomass and efficiency all pushed forward by high oil prices. Incidentally the EROEI for tar sands is about 3 (3 units of oil for one of gas and electricity) and cellulosic biomass is potentially even higher (some analyses say 8) so that is not going to be a problem. Extraneous carbon from liquefaction processes (ie that not appearing in the final liquid fuels) could be largely captured for sequestration reducing the potential CO2 problem. The pessimism is probably overdone.

[matt]

"Reserve all hydrocarbon fuel for mobility use, cars, motorcycles, boats and aircraft" - Andrew Fanner... I'll be interested to see how your life without plastic goes! - maybe the green police won't spot you as you'll be wearing too much hemp. ( though guess they'll see you getting out you Hummer..)