Peak Oil

Parent Cafe
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<h2>Peak Oil is a very serious matter as roughly 40% of our energy comes from it and NG, which come from the same fields, represents more than 20% of our energy. We’ve seen the kind of effects that a single dropoff in production with Katrina, but peak oil would represent a terminal decline, where oil production can not increase without damaging fields for future use and expending more energy than received. I think this should be discussed or, in the least, you should be informed as to its existence. </h2>

<p>What is peak oil?</p>

<p>Peak oil theory states: that any finite resource, (including oil), will have a beginning, middle, and an end of production, and at some point it will reach a level of maximum output</p>

<p>Oil production typically follows a bell shaped curve when charted on a graph, with the peak of production occurring when approximately half of the oil has been extracted. With some exceptions, this holds true for a single well, a whole field, an entire region, and presumably the world. The underlying reasons are many and beyond the scope of this primer, suffice to say that oil becomes more difficult and expensive to extract as a field ages past the mid-point of its life. </p>

<p>In the US for example, oil production grew steadily until 1970 and declined thereafter, regardless of market price or improved technologies.</p>

<p>In 1956 M. King Hubbert, a geologist for Shell Oil, predicted the peaking of US Oil production would occur in the late 1960’s. </p>

<p>Although derided by most in the industry he was correct. He was the first to assert that oil discovery, and therefore production, would follow a bell shaped curve over its life. After his success in forecasting the US peak, this analysis became known as the Hubbert’s Peak.</p>

<p>The amount of oil discovered in the US has dropped since the late 1930s.
40 years later, US oil production had peaked, and has fallen ever since.
World discovery of oil peaked in the 1960s, and has declined since then. If the 40 year cycle seen in the US holds true for world oil production, that puts global peak oil production, right about now; after which oil becomes less available, and more expensive.</p>

<p>Today we consume around 4 times as much oil as we discover. </p>

<h2>If we apply Hubbert’s Peak to world oil production we estimate that approximately half of all oil that will be recovered, has been recovered, and oil production may reach a peak in the near future, or perhaps already has.</h2>

<p>source: peakoil.com</p>

<p>40% of our energy needs come from oil and an additional 25% come from NG which comes from the same fields (mostly) as oil. Both of these fossil fuels are close to hitting their peaks within a few years, if not already at their peaks. Decline of conventional oil production will be 2%, citing extremely conservative sources. But the more realistic would be greather than 3%, meaning oil production would be cut in half within roughly 20 years, during which time, demand will have risen by 50%, creating a major gap in the supply/demand market. </p>

<p>US oil discovery peaked in the late 1930’s.
US oil production (48) peaked in 1970 and is down almost 50% since then.<br>
World oil discovery peaked in the 1960’s.
World oil production will peak and more likely sooner rather than later (world oil production hasn’t increased in roughly a year).</p>

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<p>Meanwhile, there are some VERY rich people getting VERY much richer in Texas, and in Iran, and in Saudi Arabia. Brothers under the skin. ;)</p>

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<p>Also remember that we are not allowed to explore for oil off the coasts of California and Florida due to environmental concerns, so there is probably oil there that has not been discovered or drilled.</p>

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<p>Those are insignificant amounts of oil there. The technically recoverable reserves off of Florida, California and in/off of Alaska are about 50 billion barrels, which the world used in less than two years. But most of that oil is not recoverable, leaving us with less than a year of oil.</p>

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<p><a href=“http://www.reason.com/0605/fe.rb.peak.shtml[/url]”>http://www.reason.com/0605/fe.rb.peak.shtml&lt;/a&gt;&lt;/p&gt;

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<p>Environmentalist nuts have been preaching oil/food/water/gold/silver/zinc etc etc will all be out in the next 10 years, 20 years, 30 years…for the last 50 years. Peak oil is just another of those fearmonging speculation. Mekrob you are either trying to scare these people or you have no clue what you’re talking about. Getting objective information from a site called ‘peak oil’ is trying to get objective truth about Christianity from the Vatican.</p>

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<p>Right, peak, bell curve, etc, but…!</p>

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<p>and more good news!</p>

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<p>Puhllleeeze.</p>

<p>We’re not running out of oil.</p>

<p>We might be running out of cheap oil.</p>

<p>There’s more oil in Canada in oil shale and oil sands than in all of Saudi Arabia. But that boom won’t happen until oil is over $100 bbl.</p>

<p>The problem is that the same people who are screaming ‘peak oil’ now are the same ones who demanded nuclear energy plants be halted 20+ years ago. Look no further than the nearest mirror for someone to blame.</p>

<p>We should be investing heavily in small, modular, pebble-bed (safe) nuclear power. (which is what the Chinese are doing.)</p>

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<p>If I may add to that, the same characters don’t want us to drill in Alaska to save an elk or two.</p>

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<p>cover story on NYTimes Sunday magazine… several months ago.</p>

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<p>“Environmentalist nuts have been preaching oil/food/water/gold/silver/zinc etc etc will all be out in the next 10 years, 20 years, 30 years…for the last 50 years. Peak oil is just another of those fearmonging speculation.”</p>

<p>"Puhllleeeze.</p>

<p>We’re not running out of oil."</p>

<p>Let me make it clear. We are not running out of oil. Never and nowhere have I said that we are or even coming close to. Nobody that believes in peak oil thinks so either. In fact, the main belief of peak oil is that we won’t run out of producable oil for at least another 150 years. So much for the ‘running out’ crowd, huh? Instead, we’re a little less than half way through, far from complete depletion of usable reserves. This is about peak oil, the absolute highest in production. </p>

<p>“There’s more oil in Canada in oil shale and oil sands than in all of Saudi Arabia. But that boom won’t happen until oil is over $100 bbl.”</p>

<p>Wrong. There is little oil in Canada. What they do have though is plenty of bitumen, a very very thick oil like substance, that when heated produces oil (sorry, that’s a bad description). What we’re doing to make this oil is ridiculously idiotic. We’re taking NG, which doesn’t have the best availability in the long term in NA, and water and turning it into oil. Bascially we’re doing reverse alchemy: gold -> lead; which really isn’t that smart if you think about it. </p>

<p>And TH21, if you go to peakoil.com, you’ll meet plenty of people who advocate mass nuclear power. Very few think that it’s a even a slightly bad idea. They mostly embrace it. </p>

<p>wicked, Kern oil field has nothing to do with this. That is natural in EVERY field because of tight regulations by the SEC in reported proven reserves. But that doesn’t chance the fact that Peak Oil is a ‘production’ issue, not a reserves issue. You can have all the money in the world, but if you can’t get it out like with shale or tar sands, then it does you no good. You only care about what is being produced. US production has been declining for more than 35 years straight. </p>

<p>As far as CERA is concerned, you should probably note very carefully when they say we have the potential to increase that much. They fail to take into account natural disasters, typical setbacks, wars, political instability, sabatoge, terrorism and little interest. </p>

<p>The thought that we’ll actually see a 17.7 mpd increase in production in the next 4 years (citing a different report) is laughable considering that 9 mpd is expected from OPEC, where they are claiming they are tapped out.</p>

<p>They expect Russia and the Caspian to increase by 7.5 mpd in the next four years as well, but Russia and Putin have little desire to sell their oil to fuel our SUV’s for so cheap when they can save their oil and make even more money. They’ve been hampering infrastructure for years. They have the ability to produce the oil and NG, but no way or desire to transport it. </p>

<p>CERA even expects non-FSU non-OPEC oil production to increase within the next 4 years. Funny, because we haven’t increased in almost 10 years. :)</p>

<p>“Undulating plateau”. Hmm…so we have some flat-earth economists I see. </p>

<p>You can be blind to the upcoming oil crisis or not. That choice is up to you. The natural peak won’t occur for probably a few years, unconventional will push it back a few more. But then again, we don’t rely on nature. Instead, we’re going to be driven by politics which aren’t going to be in favor of selling off their natural resources for a fraction of their worth.</p>

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<p>It doesn’t make sense that the second half will last 150 years when the first half, with much lower worldwide demand, went faster than that.</p>

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<p>This is an ironic thread. Several years ago I started investing in Canroys (Canadian royal oil trusts) such as PTF and ERF. They pay very high dividends and have had fantastic price appreciation. The money i’ve made from them (plus copper stocks like PCU and NTO) are paying for my son’s tuition! Again oil won’t ever run out but it will become more and more expensive and therefore its very nice to own some. I think everyone, especially environmentalists, will eventually reach the conclusion that nuclear is the way to go.</p>

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<p>SBmom “It doesn’t make sense that the second half will last 150 years when the first half, with much lower worldwide demand, went faster than that.”</p>

<p>No, the oil age has lasted 150 years. The first oil well was drilled in 1859 in Pennsylvania by Colonel Drake. And the second half equals the first half because it follows a bell curve. When you hit the peak, you’re only half way done. There is still half more left, but you cover the same distance. Demand won’t change anything. Geology will dictate the limits at which production can occur, not demand.</p>

<p>robert, I don’t see how this is ironic.</p>

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<p>I though peak was the point from which production began to contract instead of expand, but also essentially the ‘midpoint’ of total supply?</p>

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<p>Exactly. Production begins to decrease, thus stretching out the time that it takes to deplete the reserves.</p>

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<p>Mekrob - I meant it is ironic that “peak oil” is helping pay my son’s way through college. (We are at collegeconfidential)</p>

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<p>But if it is the midpoint and the last 20% is going to be pretty much unextractable, and consumption is up, then explain how the “2nd half of the world’s tank” lasts the same 150 years :confused:</p>

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<p>Consumption is not up. You can’t consume what you can’t produce and after peak oil, production goes down. Thus, consumption (but not demand) goes down. The 20% (actually much higher) that is not extractable is not figured into reserves, and thus doesn’t matter for peak oil or the second half.</p>