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Looking Back 10 Years After Peak Oil

27 Oct 2015   Peak Oil

All views expressed here are those of Verwimp Bruno and do not necessarily represent those of Ron Patterson. 1. INTRODUCTION Peak Oil is the moment in time when, on a global scale, the maximum rate of oil production is reached. The moment after which oil production, by nature, must decline forever. Since Earth is a closed system, next to this production (supply) event, there must be an equal demand event: Peak Oil Consumption. Since there are no substantial above ground deposits, Peak Oil Production and Peak Oil Consumption must coincide. The world consists of a lot of different countries, some of which are already far beyond peak oil production That leads to the assumption the world as a whole reaches peak oil production. On the demand side, it is worth looking, because different countries have different economies, different degrees of development, and so on, if, while some countries still […]

Peak Oil Info-Graphic

24 Oct 2015   Peak Oil

Have we peaked? Interesting info graphic put together by Chiltern Thrust Bore LTD. 2 Comments on "Peak Oil Info-Graphic" GregT on Sat, 24th Oct 2015 2:57 am “Peak oil is a concept that was originally devised by M King Hubbert in the 1950s. The basic concept is that once oil production reaches it’s maximum output, a sharp decline will follow causing huge economic problems.” No need to worry folks, no huge economic problems in the foreseeable future. Everything is A OK. Now back to your regularly scheduled programming, and don’t forget that consumption is the key to prosperity.

Peak Oil Has Officially Peaked

23 Oct 2015   Peak Oil

The idea that we will use up all of the earth’s oil has just gone from extreme to ludicrous. According to a new report by BP plc (BP) , the oil game has significantly changed over the last few years. What you thought you knew about how the oil industry works is wrong. But that doesn’t mean we are in any worse shape than before. However, if you are even thinking about getting into today’s incredibly low-priced oil company’s stocks, you need to pay attention. BP’s report, titled "New Economics of Oil," lays out why conventional thinking about oil production and prices is all wrong. For starters, the "Beverly Hillbillies" idea of get-rich-quick oil finds is over. Oil is not something that is found in huge quantities that can be traditionally drilled for decades anymore. Geologists have gotten darn good at finding the big fields, leaving new ones in […]

Saudi Arabia oil reserves reach record level

21 Oct 2015   Peak Oil

In late summer 2015, commercial oil reserves of Saudi Arabia reached 326.6 million barrels, thus setting a new record for the world’s largest oil supplier since 2002. Thus, the level of oil reserves in July amounted to 320.2 million barrels, while oil exports fell from 7.28 million barrels per day in July to 7 million barrels a day in August, Bloomberg says. According to expert Mohamed Ramadi, a decline in oil exports from Saudi Arabia reflects the realities of present-day market. Oil production in Saudi Arabia declined from 10.36 million barrels per day in July to 10.27 million barrels a day in August , Pravda.Ru reports with reference to RIA Novosti. In September, Saudi Arabia reported the production of 10.23 million barrels a day. In June, the country reached its peak in oil production since 1980 with 10.56 million barrels a day. pravda.ru

Daniel Yergin: Where’s all the stimulus from the 50% drop in oil prices?

21 Oct 2015   Peak Oil

The fall in oil prices heralds a momentous shift in world energy markets from the BRIC era of emerging markets (Brazil, Russia, India and China) to the Shale Era. An oil tanker sits anchored off the Fos-Lavera oil hub near Marseille, France, Oct. 15. © Reuters Yet there are two continuing puzzles about the price collapse. First, the 50% fall in prices has not been the global economic stimulus that might have been expected. So far, at least, it has not been a Fourth Arrow for the world economy. Is this telling us something about deeper troubles ahead for the world economy? The second puzzle concerns geopolitics. The oil market is usually very sensitive to geopolitics. Geopolitical risk is high now: The Middle East is in crisis. The West’s relations with Russia are the worst they have been since the end of the Cold War; the stand-off in Syria […]

Occidental Petroleum Corporation and the Reminder That Timing and Location Are Everything

19 Oct 2015   Peak Oil

Source: Hess Corp. It was roughly one year ago when reports surfaced that Occidental Petroleum Corporation ( NYSE:OXY ) was seeking a buyer for its Bakken Shale assets. At that time, Wall Street pegged the value of those assets at as much as $3 billion. However, one year later, those same assets are reportedly being unloaded for a mere $500 million. What’s important to understand about that price is the fact that it is not the result of a fire sale by a company in desperate need for cash — Occidental is doing just fine — nor is it due to a huge disconnect in the M&A market. Instead, the low reported sales price boils down to two things: poor timing and a less-than-ideal location. Once upon a time When Occidental Petroleum first put its North Dakota oil assets on the market, it was right around what, in hindsight, […]

Oil unlikely to ever be fully exploited because of climate concerns – BP

15 Oct 2015   Peak Oil

BP’s chief economist says that burning existing fossil fuel reserves would not be consistent with limiting global warming to 2C, as governments have pledged to do. Photograph: Ben Stansall/AFP/Getty Images The world’s oil resources are unlikely to ever be fully exploited, BP has admitted, due to international concern about climate change. The statement, by the group’s chief economist, is the clearest acknowledgement yet by a major fossil fuel company that some coal, oil and gas will have to remain in the ground if dangerous global warming is to be avoided. “Oil is not likely to be exhausted,” said Spencer Dale in a speech in London . Dale, who chief economist at the Bank of England until 2014, said: “What has changed in recent years is the growing recognition [of] concerns about carbon emissions and climate change.” Scientists have warned that most existing fossil fuel reserves must stay in the […]

Peak oil round up

12 Oct 2015   Peak Oil

2015 Could Be The Year Of Peak Oil … I am now more convinced than ever that 2015 will see the peak in world crude oil production. I have very closely studied the charts of every producing nation and my prognosis is based on that study. I see many nations in steep decline and most every other nation peaking now, or in the last couple of years, or very near their peak today. These include the world’s three largest producers, Russia, Saudi Arabia and the USA. Oil Mountain (Image: D. Bacon/Shutterstock/Economist) China Peak Oil: 2015 Is the Year Domestic production looks set to peak, with some profound implications for the world market. Intense focus on the North American shale boom, Saudi Arabia, and ISIS obscures an important emerging energy trend: China’s oil production is peaking. This has profound implications for the world oil market, because China is not just […]

Forget Peak Oil – It’s All About Peak Population Growth

9 Oct 2015   Peak Oil

Summary Global annual population growth peaked in 1988 and is decelerating. Global annual population growth is estimated to be back to 1950 levels by 2050 but the bulk of "growth" will be among 65+ year olds living longer…not greater births. Substituting lower interest rates and encouraging more debt for declining population growth (consumption) was and is a tragic error by our central bankers. The idea that global population growth will perpetually drive increasing demand for food, natural resources, real estate, consumer goods, and global trade is a common theme. This idea of ever greater demand drives most investors thinking and actions. The premise the world currently operates under is that demand (consumption) will grow driven by population increases coupled with wage increases and be magnified by access to credit. The resultant growth will allow rapidly growing debt to be serviced / paid by even more rapidly growing global trade. […]

Shell’s Alaskan oil plan makes long-term sense amid questions over shale’s longevity

3 Oct 2015   Peak Oil

Shell announced this week that it was abandoning efforts to develop oil from the Alaska’s outer continental shelf (OCS). The company had drilled a well in the Burger prospect in the Chukchi Sea this past summer, but the results were disappointing. Although the company found hydrocarbons, the flows were insufficient to warrant further exploration. With that, Shell decided to suspend activities in Alaskan waters indefinitely. Shell had such high hopes. If all went well, it would have produced an average of 650,000 barrels of oil for 35 years from the OCS. From 2025 until 2060, the OCS would power Alaska’s economy and contribute up to 10 per cent of domestic US oil production. The project, which we estimated would cost more than US$300 billion in total, would have represented the largest infrastructure project in the United States in the next 15 years. There was no more visionary initiative anywhere […]

We’re a Long Way From ‘Peak Car’

3 Oct 2015   Peak Oil

Many environmentalists hope, and oil producers worry, that we’re entering a post-car era spearheaded by tech-savvy, bike-path-loving, urban-dwelling, Uber-using millennials—leaving behind generations of automobile owners whose thirst for gasoline seemed limitless. “Millennials have been reluctant to buy items such as cars,” a Goldman Sachs GS 1.30 % analysis concludes, turning to “what’s being called a ‘sharing economy.’ ” David Metz, former chief scientist at England’s Department of Transport, claims that the growth of Uber and its competitors guarantees a decline in automobile and fuel use. Thomas Frey, the DaVinci Institute senior futurist, says that “wealthy economies have already hit peak car.” The idea may seem plausible given recent history: tepid new-car sales, fewer miles driven per capita and shrinking gasoline use. In reality, it’s poppycock: The car habits of young adults ages 18-33 simply reflected a lack of jobs and money. Now J.D. Power finds that millennials are the […]

Peak oil remains an issue

2 Oct 2015   Peak Oil

Living Renewable Energy By Robert and Sonia Vogl President and Vice President Illinois Renewable Energy Association We were both surprised and pleased that Chris Schneider of Honda Motorwerks in LaCrosse returned to being an important presence at the annual Renewable Energy and Sustainability Fair. He is a long-standing advocate of hybrid electric vehicles and always provides an up to date presentation on progress in providing cleaner transportation options. His presence supplements the fine presentations by Tom Brunka on electric vehicle conversions, Allen Penticoff on sustainable cars of the future and Jeff Green on amazing batteries in our future. Schneider acknowledged that low gasoline prices are negatively impacting the sales of hybrid and electric vehicles but believes as many others do that low gasoline prices may not last very much longer. He did point out the existence of impressive savings on used electric vehicles. Brunka took advantage of the low […]

$4 Gasoline By May 2016

2 Oct 2015   Peak Oil

Summary Expect higher gasoline and oil prices in 200 days. US Peak Oil from Fracking was in July 2015. US Oil Production down 474,000 barrels per day since July 2015. Watch EIA TWIP Report to understand oil inventories. “Glut” of oil to deplete in 200 days. Two forces, acting in opposite directions, will soon align to cause gasoline and oil prices to ratchet much higher. Those two forces can be easily tracked by watching EIA’s “ This Week in Petroleum ” or TWIP. The two forces are: US crude oil domestic production. US crude oil stocks The current TWIP reports a 474,000 barrel per day decrease in US oil production since July 2015. (click to enlarge) seeking alpha 2 Comments on "$4 Gasoline By May 2016" makati1 on Wed, 30th Sep 2015 10:31 pm “Two forces, acting in opposite directions, will soon align to cause gasoline and oil prices […]

The collapse of Saudi Arabia is inevitable

30 Sep 2015   Saudi Arabia

On Tuesday 22 September, Middle East Eye broke the story of a senior member of the Saudi royal family calling for a “change” in leadership to fend off the kingdom’s collapse. In a letter circulated among Saudi princes, its author, a grandson of the late King Abdulaziz Ibn Saud, blamed incumbent King Salman for creating unprecedented problems that endangered the monarchy’s continued survival. “We will not be able to stop the draining of money, the political adolescence, and the military risks unless we change the methods of decision making, even if that implied changing the king himself,” warned the letter. Whether or not an internal royal coup is round the corner – and informed observers think such a prospect “fanciful” – the letter’s analysis of Saudi Arabia’s dire predicament is startlingly accurate. Like many countries in the region before it, Saudi Arabia is on the brink of a perfect […]

Anticosti Island: Environmental groups call for BAPE review of shale-gas drilling

28 Sep 2015   Peak Oil

Quebec environmental groups are calling on the government to publish the results of 2015 drilling for shale gas on Anticosti Island and to hold an environmental review. (Radio-Canada) The Quebec government is not being straightforward about the data it has on shale-gas exploration on Anticosti Island, a coalition of environmental and citizens’ groups said Friday. The coalition is asking the Liberal government to order environmental review hearings through its provincial assessment agency, known as the BAPE, and to publish the results of its drilling activities on Anticosti. The director of Nature-Québec, Christian Simard, said there are eleven sites where drilling has been completed over the past two years. Simard said in 2014, the findings were published on the government’s website, however, this year’s findings have yet to be made public. "It is time to have an assessment, and to make it public — to open a debate," he said. […]

OPPENHEIMER: Goldman was wrong about $200 oil, and it’ll also be wrong about $20 oil

26 Sep 2015   Prices

Oppenheimer issued a note Thursday arguing that oil is looking for a “new normal” price around $65 to $75 a barrel. But on the way to making its point, the firm also took a shot at Goldman Sachs’ history of getting calls on the price of oil wrong. On Thursday, Oppenheimer wrote (emphasis ours): We dismiss the $20 oil scenario, as we dismissed the $200 oil view in 2008 — both came from the same source. We think oil prices will remain lower for longer, until the objectives behind the collapse are met, and we don’t see this happening any time soon. We think the market is still searching for the new normal, which is not $50 and is not $100 either, but more likely in the $65-$75 range. That “same source” is Goldman Sachs. Earlier this month, oil analysts at Goldman Sachs said that in a worst-case scenario, […]

Shale Oil and the 2014-15 Price Collapse

26 Sep 2015   Peak Oil

Art Berman is out with a new deck: “ The North American Unconventional Revolution & The 2014-2015 Oil Price Collapse ” (pdf) and it’s a great review of US shale, Saudi/OPEC response, and the great price fall over the past year. As always, Art is out to tell you some facts you don’t often see in the headlines: The story of the price collapse is pretty simple: It’s Chinese demand fall + US oil production growth + response of Saudi oil production growth. That’s pretty much it. Lower demand and production gains leading to surplus and lower prices. The heroic tales of rig productivity and drilling efficiency gains are what oil companies have to tell investors to show a brave face. Dig a little deeper to realize – what should be obvious to everyone – that companies are getting killed at these low prices. But future higher oil prices […]

Oil Prices – What Does “Lower For Longer” Actually Mean?

25 Sep 2015   Peak Oil

The latest catch phrase to enter the lexicon of the oilpatch is “lower for longer.” One assumes it simply means oil prices are down and will stay that way for a long time. The difference between a catch phrase and an essay is the detail for purposes of definition. “Lower” must be oil prices below what they used be, although in fact they are not lower than they have ever been. “Longer” refers to an extended period of time, clearly undefined. “Longer” after the oil price collapse of 1985 was over 15 years. Oil is often treated as something a bit more special than a typical commodity because it is so essential to modern life. But let’s take a simple definition for “commodity”, such as, “any useful or valuable thing…something that is bought and sold”, and when the price of this thing falls to the point that it is […]

Texas Has Seen Peak Oil Production For Now, Gas Production Still Increasing

23 Sep 2015   Peak Oil

The Texas RRC Oil & Gas Production numbers are out. They came out on a weekend this month. All RRC data is through July. The EIA data is through June. Keep in mind that the RRC data is incomplete, that is why the chart lines droop on the end. However the EIA data is from the EIA’s Petroleum Supply Monthly , the data of which the EIA says now comes directly from the states, and reflects the complete best estimate of oil production. (Click to enlarge) According to the EIA data, Texas crude + condensate peaked, so far, in March and declined in April, May and June. However the incomplete data from the RRC shows production likely dropping sharply in April, up in May then flat for June and July. (Click to enlarge) Dr. Dean Fantazzini has an algorithm that uses past and present RRC data and predicts what […]

Peak Oil Has More To Do With Oil Prices Than You May Think

21 Sep 2015   Peak Oil

The Origins of Peak Oil Awareness The scientific study of peak oil began in the 1950′s, when Shell geophysicist M. King Hubbert reported on the evolution of production rates in oil and gas fields. In a 1956 paper Hubbert suggested that oil production in a particular region would approximate a bell curve, increasing exponentially during the early stages of production before eventually slowing, reaching a peak when approximately half of a field had been extracted, and then going into terminal production decline. Hubbert applied his methodology to oil production for the Lower 48 US states and offshore areas. He estimated that the ultimate potential reserve of the Lower 48 US states and offshore areas was 150 billion barrels of oil. Based on that reserve estimate, the 6.6 million barrels per day (bpd) extraction rate in 1955, and the 52.5 billion barrels of oil that had been previously produced in […]

Syria peak oil weakened government’s finances ahead of Arab Spring in 2011

19 Sep 2015   Peak Oil

Fig 1: Refugees walking on Hungarian motorway towards Austria in Sep 2015. [Image via Wikipedia, Creative .20 license.] In May 2013 the Guardian had an article “Peak oil, climate change and pipeline geopolitics driving Syrian conflict” http://www.theguardian.com/environment/earth-insight/2013/may/13/1 In March 2015, a group of researchers led by climatologist Colin Kelley (University of California) published a study in the Proceedings of the National Academy of Sciences with the title “Climate change in the Fertile Crescent and implications of the recent Syrian drought” “Between 2006 and 2009, the people of Syria suffered during the most severe drought that country has experienced since the beginning of its instrumental record. As water became scarce, crops failed and cattle died on a huge scale. As many as 1.5 million Syrians, out of a population of just over 20 million, moved from the countryside to the outskirts of already overflowing cities” In this article we analyse […]

Oil Prices to Fall to $20 Per Barrel?

14 Sep 2015   Prices

Peak oil is soooooo last decade . Goldman Sachs is suggesting that the price of oil could fall as low as $20 per barrel during the next few years. (Grain of salt warning: Keep in mind that back during the last peak oil craze in 2008, Goldman was predicting $200 per barrel oil .) A drop to $20 per barrel would mean that in real dollars the price of oil would be back to its lowest ever 1999 price. So why might crude prices drop to $20 per barrel? Two reasons. First, vast new supplies of petroleum have been accessed by fracking and horizontal drilling. Fracked oil is now swing production that can come quickly online whenever prices to start to rise. And second, oil states like Russia, Nigeria, Venezuela, Iran, and Saudi Arabia must keep pumping even at low prices in order to generate the cash they […]

China’s Worst nightmare–The US Oil Weapon

7 Sep 2015   China

Tingbin Zhang writes: China’s islanding building on the four-mile-long and two-mile-wide Subi Reef in the South China Sea has put The US in a tight spot. To protect its ally from China’s aggression, The US will be left with little choice but to constrain China by military means. However, the US won’t directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1 and no.2 economy the fallen giants. So There is a possibility that The US might use its oil weapon instead to strike at the core of China’s weakness–it’s huge dependence on oil import. At the moment, China imports 55% of its oil, almost half of which sails […]

June oil production ties record peak

17 Aug 2015   Peak Oil

Oil production in June matched its record peak from last year. Oil production in June rose to its highest levels since its record peak late last year, North Dakota regulators said Friday, adding that the current level of production could be maintained for about two years. Preliminary June numbers from the North Dakota Department of Mineral Resources had production at 1,211,178 barrels per day. This was an increase of more than 8,500 daily barrels from the final May tally of 1,202,615 barrels per day. The active rig count in the state was at 74 on Friday. Lynn Helms, director of the Department of Mineral Resources, said production has maintained due to operators primarily drilling in the most productive parts of the oil patch and increasing efficiencies with staff and equipment. Well completions by hydraulic fracturing increased from a final May count of 116 to a preliminary total of 149 […]

Can’t outrun peak oil

7 Aug 2015   Oil Supply, Peak Oil

On the other hand, domestic oil production has taken a jump in recent years due to fracking, tar sands, deepwater drilling, etc., but oil and other fuels obtained from those sources are actually more expensive and take more energy to get than oil obtained from conventional wells. This is what’s called the EROEI ratio, which stands for “Energy Returned On Energy Invested.” According to data compiled by professor L. David Roper, in the early 20th century, the golden age of North American oil production, the equivalent of one barrel of oil invested yielded as many as 100-200 barrels produced. By 1970, the average EROEI ratio for crude oil had fallen to 30:1 (Saudi oil fields are still producing at this rate). Today, one barrel of oil invested typically gives only 15 barrels in return. New technologies, such as tar sands, have a barely 2:1 ration of energy return on […]

15 Things the World Is Running Out of

7 Aug 2015   Peak Oil

We live in an era of limited resources—peak oil, peak phosphorous, peak everything. With the world population at nearly 7.4 billion and people living increasingly energy-intensive lifestyles, there has never been a more pressing need to conserve natural resources and develop renewable energy sources. A recent report from James Hansen and 16 other leading climate experts found that the international target of limiting global temperatures to a 2°C rise this century will not be nearly enough to prevent catastrophic melting of ice sheets that would raise sea levels much higher and much faster than previously thought possible. To make matters even worse, as 2015 shapes up to be the hottest year on record , scientists warn the world is set to pass the 1°C point this year. The icing on the cake? We won’t even have wine, coffee, tequila or chocolate to cope with runaway climate change .

‘Perfect Storm’ Engulfing Canada’s Economy Perfectly Predictable

4 Aug 2015   Peak Oil

That’s one dark perfect storm. Oil rig photo via Shutterstock. Economists, an irrational tribe of short-sighted mathematicians, are now calling Canada’s declining economic fortunes "a perfect storm." It seems to be the only weather that complex market economies generate these days, or maybe such things are just another face of globalization. In any case, economists now lament that low oil prices have upended the nation’s trade balance: "Canada has posted trade deficits every month this year, and the cumulative 2015 total of $13.6 billion is a record, exceeding the next highest, in 2009, of $2.95 billion." But this unique perfect storm gets darker. China, which Harperites eagerly embraced as the globe’s autocratic growth locomotive , has run out of steam. As the country’s notorious industrial revolution unwinds, China’s stock market has imploded. Communist party cadres are now putting their money in foreign housing markets in places like Vancouver. Throughout […]

Peak oil, Peak gold, Peak everything – coming disaster for everyone

3 Aug 2015   Peak Oil

The global financial and political scene is now undergoing a transition that goes largely unnoticed and escapes general comprehension. Many facts and indicators provide mounting evidence that the status of the US dollar as international reserve currency is being seriously threatened by the BRICS economic block and that alternative arrangements for international trade and commerce, planned two or three years ago, are being systematically implemented via the Asia Infrastructure and Investment Bank and the Shanghai Gold Exchange. It might seem puzzling to some why any change would be necessary. The only logical explanation is that the super-elite group of bankers and royal families that secretly control global affairs have come to realize what’s threatening the world’s future prosperity today. Even though governments are not discussing this, statistics that apply the correct accounting and forecasting methods show that we reached peak oil in 2014. Many industry experts contend that 2015 […]

Why the cash economy in Greece may be ending

17 Jul 2015   Peak Oil

Many believe we have a teetering world economy, even without Greece as an indicator. Now Greece is looming ever larger as a critical if unknown actor. It is mostly considered a bad one, for the entire European, and even the worldwide, financial system and economy. The Greek economy is approaching an almost unprecedented standstill. For clear reasons it probably will never get back to a "normal" or desirable level of consumption. When stepping back from witnessing the daily crisis, it would appear timely to ask what are the real factors in the big picture? Was the crisis brought on just by second-rate policies combined with inefficiency, corruption, and oppression? Or have longer-term characteristics of industrialism and Western Civilization’s relentless, aggressive growth caught up with us to undermine our future as a species? If so, the discussion about what’s wrong and how to deal with it has to change, and […]

Shale Gas Bulldozer Runs Over Pessimists

15 Jul 2015   Shale Gas

“…why do operators keep drilling while their own over-production has depressed the price of natural gas by half of its value?” Art Berman, 2010 Thirty years ago, at an energy conference at M.I.T., I made a presentation about our research on natural gas supply, and opened with a joke. (That is, intentional humor.) The gas industry, I noted, kept saying that prices were too low to cover their costs, while continuing to drill. What could explain this? Management psychology? Animal spirits? Finance theory (option valuations)? No, the explanation was found in “The Journal of Abnormal Psychology.” The joke was much appreciated, except by the natural gas producers in the audience. Now, the same question could be raised. After all, for most of a decade, predictions of a production collapse have floated around the punditsphere, while estimates of the breakeven price have tended to be well above those which have […]

China Peak Oil: 2015 Is the Year

9 Jul 2015   Peak Oil

Image Credit: REUTERS/Stringer Domestic production looks set to peak, with some profound implications for the world market. Intense focus on the North American shale boom, Saudi Arabia, and ISIS obscures an important emerging energy trend: China’s oil production is peaking. This has profound implications for the world oil market, because China is not just a massive importer of crude; it is also among the world’s five largest oil producers , trailing only the U.S., Russia, and Saudi Arabia, and virtually neck-in-neck with Canada. China’s oil industry has delivered impressive oil and gas production growth over the past decade. Yet a range of data and historical analogies increasingly suggest that, at global oil prices between $50-to-$100 per barrel, China’s oil supply capability is plateauing and may peak as soon as this year. Lower or higher prices would accelerate or extend this timing. China’s crude oil output has stagnated for the […]

How Pope Francis’s climate encyclical is liberating the world

26 Jun 2015   Peak Oil

Pope Encyclical Quote In my life there are two things that have the effect of at least somewhat isolating me from others. The first is being a writer on climate change, peak oil, and the economic crises bound up with those modern predicaments. The other is being a Christian environmentalist. In the first case, my essays, as well as my social media presence, fairly well run counter to the whole of my society and culture, even when a few outliers add concurring thoughts to the mix. But in the end, by writing a write a blog about what people shouldn’t do, about the things we should give up and forsake for a concept of the greater good, about the ways our habits imperil the world and especially our children and future generations, I can kind of come off like a scold even in my most mild iteration. Even when […]

Two Billion People Are Running out of Water

19 Jun 2015   Water

Forget about peak oil—we should be worrying about peak water: Groundwater basins that supply 2 billion people are being rapidly depleted , according to a new study. Worse: No one knows how long those reserves will last. A research team led by scientists at the University of California, Irvine, examined the world’s 37 largest aquifers between 2003 and 2013 and found that one-third of them were “stressed,” meaning more water was being removed than replenished, according to one of two studies published Tuesday in the journal Water Resources Research . The eight worst-off aquifers, labeled “overstressed,” had virtually no natural replenishment to offset human consumption. The scientists determined the Northwest Sahara Aquifer System, which supplies water to 60 million people, to be the most overstressed. The Indus Basin aquifer of northwestern India and Pakistan is the second-most overstressed, followed by the Murzuk-Djado Basin in northern Africa. California’s Central Valley […]

Peak Oil: Myth Or Coming Reality?

17 Jun 2015   Peak Oil

In 1956, a geoscientist named M. King Hubbert formulated a theory which suggested that U.S. oil production would eventually reach a point at which the rate of oil production would stop growing. After production hit that peak, it would enter terminal decline. The resulting production profile would resemble a bell curve and the point of maximum production would be identified as Peak Oil, a point of no return. The original peak oil curve Image Source: Cornell University Hubbert first predicted that U.S. oil production would peak in 1970 and then start declining rapidly. His prediction turned out to be partly true, as U.S. crude oil production peaked that same year, not to be eclipsed again until the shale boom began. Annual crude oil production (in thousands of barrels per year) for entire United States, with contributions from individual regions as indicated. “The end of the oil age is in […]

“There Could Be Trouble” As US Fracking Revolution Prepares to Go Global

15 Jun 2015   Shale Oil

A new report showing the U.S. overtaking Russia as the leading producer of oil and gas in the world should put to rest any doubt that the fracking revolution that has occurred in the U.S. is for real, or as BP’s chief economist put it, “profound.” And now with the recent Environmental Protection Agency report on the impacts of fracking on drinking water being touted by the American Petroleum Institute as proof that fracking is safe, the industry’s insatiable greed got another boost. More recently, the Harvard Business School has also joined in the discussion calling for the end of the ban on exporting U.S. crude oil and warning about the implications of missing the “opportunity” offered by fracking. So with all of this momentum, what does ExxonMobil CEO Rex Tillerson think should be next? Less regulation. As previously mentioned on DeSmog , at this year’s CERAweek conference Tillerson […]

BP: Shales Lift U.S. to No. 1 Global NatGas, Oil Producer

15 Jun 2015   Shale Oil

Even with turbulent and unsettled conditions in the global energy markets last year, the U.S. shale industry scaled new heights, lifting the country to No. 1 among global natural gas and oil producers, BP plc reported Wednesday. The oil major’s 64th annual Statistical Review of World Energy , one of the most respected energy forecasts by private or public economists, found that the unconventional growth in North America is surpassing all expectations. Chief economist Spencer Dale discussed the findings during a webcast and highlighted events expected to shape the global energy landscape over the next few decades. In a word, it’s shale — oil and gas. No. 1 is the continuing “shale revolution” in the United States, Dale said. The revised data in this year’s review suggest that the United States overtook Russia in 2013 to become the world’s largest producer of gas and oil. “We are truly witnessing […]

Peak Oilists are the new Flat Earthers

15 Jun 2015   Peak Oil

Apparently it is necessary to point out that Peak Oil doctrine is still wrong. Ronald Bailey explains Hubbert’s Peak Refuted: Peak Oil Theory Still Wrong . He points out an author who has written multiple books defending Peak Oil. I just checked Amazon and can find four books from the mentioned author, written in 2001, 2005, 2008, and 2010. All are selling well. Not great, but okay. I’m astounded that so many people still believe that foolishness. Article gives some info I’ve not seen before: As I have explained earlier geologist M. King Hubbert famously predicted in 1956 that U.S. domestic oil production in the lower 48 states would peak around 1970 and begin to decline. In 1969 Hubbert predicted that world oil production would peak around 2000. Yes. The ol’ gig of my precisely calculated, ironclad calculation of the date of disaster is totally wrong so I will […]

Retreat of ‘peak oil’: supply, demand unexpectedly expand global surplus

The recent meeting of OPEC provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand. Goldstein rightly cautions, however, that no one knows where prices will settle. Oil’s dramatic price changes seem baffling. In mid-2014, crude prices averaged around $100 a barrel; now, they’re gyrating between $50 and $60. Over the same period, U.S. gasoline prices have dipped from more than $3.50 a gallon to around $2.50. With the world economy slowly recovering, why have prices collapsed? The standard explanation comes in two parts. First, oil demand is what economists call price inelastic. Slight changes in supply and demand can produce large price swings. People and businesses need fuel. If oil […]

Delayed gratification for OPEC, more pain for investors

9 Jun 2015   Peak Oil

Delayed gratification is said to be a sign of maturity. By that standard OPEC at age 55 demonstrated its maturity this week as it left oil production quotas for its members unchanged . It did so in the face of oil prices that are about 40 percent lower than they were at this time last year , delaying once again a return to the $100-per-barrel prices seen during the past four years. Why OPEC members chose to leave their oil output unchanged is no mystery . The explicit purpose for keeping oil prices depressed is to close down U.S. oil production from deep shale deposits–production that soared when oil hovered around $100 a barrel, but which is largely uneconomic at current prices. That production was starting to threaten OPEC’s market share. If OPEC were to cut its oil production now and drive prices back up, it would only lead […]

Exxon at the crossroads: buy a rival or shrink

8 Jun 2015   Peak Oil

But the company’s focus on cash distributions to shareholders, and the fact that its oil and gas production is lower now than immediately after Exxon bought Mobil back in 1999, certainly look like evidence that it has given up on long-term revenue growth. Exxon is the world’s largest listed energy group, and like all big international oil companies it is facing structural challenges that make it difficult for it to grow. Stability while throwing off a lot of cash may be the best they can do. Critical strategic question Rex Tillerson, now in his tenth year as chief executive, faces a critical strategic question. Does Exxon accept that fate, curbing capital spending and returning cash to investors whenever possible? Or does it attempt to break out by making a large acquisition ? The decline in Exxon’s number of shares outstanding has been dramatic. In 1999, the newly merged company […]

Is Peak Oil Behind Economic Disintegration?

2 Jun 2015   Peak Oil

Something is wrong with the economy. No kidding, you might reply, but what is the underlying cause? Is it Peak Oil? Or is capitalism just a system that doesn’t work and is destined to failure? Are we just stuck with inevitable deterioration in living standards for the majority, or is there at least theoretically something we can do about it? Would political decisions help or are we just doomed to watch the disintegration of civilization as the oil runs out? In an interview a few weeks back with Tom O’Brien of the From Alpha to Omega podcast , KMO asked him about the predictions of Peak Oil collapse and why they seem to have not come to pass the way some people thought they would: Tom O’Brien: “Think if we lived in Syria or Egypt. We might think [about] things slightly differently. I don’t know about yourself KMO, but […]

World Exports versus Consumption, The ELM

25 May 2015   Oil Supply

The EIA has updated their International Energy Statistics  with annual production numbers through 2014 and export data through 2012. Sometimes these stats can be confusing as they include several types of production and exports. But for production I use only “Crude plus Condensate” and for exports I used “Crude Oil Exports” which I assume includes condensate as well. Also the export data is not exact, just close, because some importers are also exporters. For instance in 2001 the US exported 59,000 barrels per day. In 2012 the US exported 629,000 barrels per day. The exporting of condensate is allowed in the US and since the Shale boom condensate exports have increased quite dramatically because Light Tight Oil is rather top heavy with condensate. To get exports versus consumption for exporting nations I simply subtracted their exports from their production. The difference was what they consumed. Similar data can be […]

Peak Resource Constraints Threaten Product Supply

21 May 2015   Peak Oil

We have for years been hearing about the potential for ‘peak oil’ and more recently about ‘peak metals’ but for the first time, several peer reviewed articles are warning us other peak resource constraints are threatening several key areas of product supply, including food. Peak oil has been discussed for a number of years, but its timing has been pushed out into the future by the emergence of high environmental impact mining techniques like shale oil, oil sands and fracking of natural gas (also used as an oil substitute) across the world. This change in timing is particularly notable in the US, where for the first time in many decades the nation is not dependent on imported supplies of fossil fuels. Coming at a time when OPEC is trying to retain some control of world markets, this has resulted in a massive price drop that is not truly related […]

The Death of the Green Energy Movement

11 May 2015   Peak Oil

The green energy movement in America is dead. May it rest in peace. No, a majority of American energy over the next 20 years is not going to come from windmills and solar panels. One important lesson to be learned from the green energy fad’s rapid and expensive demise is that central planning doesn’t work. What crushed green energy was the boom in shale oil and gas along with the steep decline in the price of fossil fuel that few saw coming just a few years ago. A new International Energy Agency report concedes that green energy is in fast retreat and is getting crushed by “the recent drop in fossil fuel prices.” It finds that the huge price advantage for oil and natural gas means “fossil plants still dominate recent (electric power) capacity additions.” This wasn’t supposed to happen. Most of the government experts–and many private investors too–bought […]

The “Upside Down” Peak Oil Story

9 May 2015   Peak Oil

The Wall Street Journal recently ran an article called, Glut of Capital and Labor Challenge Policy Makers: Global oversupply extends beyond commodities , elevating deflation risk. To me, this is a very serious issue, quite likely signaling that we are reaching what has been called Limits to Growth , a situation modeled in 1972 in a book by that name. What happens is that economic growth eventually runs into limits. Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand . Common workers can no longer afford to buy the goods and services that the economy produces, because of inadequate wage growth. The price of all commodities drops, because of lower demand by workers. Furthermore, investors can no longer […]

‘Beyond petroleum’ – fracking’s collapse heralds the arrival of peak oil

8 May 2015   Peak Oil

This is the cleft stick within today’s global energy supply: too little ‘cheap energy’ to enable economic growth, too low a return on capital to allow investment in higher production. A few weeks ago tremors rocked the world of ‘fracking’ in the USA – though few heard them. The US Energy Information Agency (USEIA) had issued its latest Monthly Drilling Report and the news was not good. It wasn’t simply the economic failure of fracking (covered in The Ecologist last December ) and the subsequent collapse in drilling ( covered in January ). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact: “EIA’s most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions… The DPR estimates include the first projected declines in crude oil […]

The Return Of Peak Oil – Worrying Signs From US And Russia

8 May 2015   Peak Oil

Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time. World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014. And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline. The above chart is EIA data; however, the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day. In the last decade it has been two of the […]

Why the World’s Appetite for Oil Will Peak Soon

8 May 2015   Peak Oil

The result, in my opinion, is as startling as it is world-changing: Global oil demand will peak within the next two decades. A less potent weapon The geopolitical and economic implications of peaking demand will be huge. The fall in the importance of Saudi Arabia is already palpable, with all the major powers from the U.S. to China more willing to accommodate Saudi archrival Iran. In addition, Russia’s ability to use oil as a weapon will wane, as will the economic leverage of the Organization of the Petroleum Exporting Countries. As economic growth becomes increasingly disconnected from oil, world powers will likely shift their attention to other increasingly scarce resources that will be equally critical to economic well-being, such as food, water and minerals. A greater interest in Africa, for example, is already starting to emerge. For sure, peak demand is far from how the oil patch sees things. […]

The Return Of Peak Oil – Worrying Signs From U.S. And Russia

7 May 2015   Peak Oil

Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time. World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014. And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline. The above chart is EIA data; however, the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day. In the last decade it has been two of the […]

Beneath Antarctica, a wonderland of oil awaits

6 May 2015   China

A report in The New York Times published on Monday revealed that the Chinese are aggressively engaged in securing the country’s energy future overseas. The People’s Republic is courting Latin American governments, securing its ties to African strongmen, is building up a military presence in the South China Sea, and has sent hundreds of advisors to the Caribbean; all in pursuit of energy security. One of the PRC’s latest targets is the frozen continent of Antarctica, where an international accord reached in 1959 prohibits mining and military activity. “But [Chinese President Xi Jinping’s visit to a south Australian port last autumn] was another sign that China is positioning itself to take advantage of the continent’s resource potential when the treaty expires in 2048,” The Times reported, “or in the event that it is ripped up before, Chinese and Australian experts say.” And the stakes are high for China and […]