Tuesday, March 13, 2012

3. PEAK OIL - YEAR 2012


3.1 Economics alone should drive countries away from crude oil
3.2 Has the United States beaten peak oil? 
3.3 Peak oil debate
3.4 Intellectual honesty    
3.5 Tight oil production
3.6 Leaders gain votes, wealth, and power 
3.7 Peak oil spells disaster
3.8 Seven Myths Used to Debunk Peak Oil, Debunked
3.9 The promise of energy independence
3.10 Critique of George Monibot's recent article on Peak Oil
3.11 World GDP & world oil production growth rates have been tightly coupled for decades
3.12 Peak oil idea has gone up in flames?
3.13 America's search for energy independence
3.14 James Howard Kunstler: Peak oil, peak bullshit
3.15 How Cuba survived Peak Oil

3.16 Peak oil group presses EIA to temper optimistic crude outlook
3.17 Is peak oil over

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3.1 Economics alone should drive countries away from crude oil  (6/2/2012)

In the latest issue of Nature, two scientists take peak oil head-on, analyzing crude oil production over the past several decades and conjecturing where it is headed. And the top line? Worldwide oil production is in decline, and commonly cited replacements — new oil sources, coal, natural gas, and tar sands — won’t be able to make up the difference.

... The authors hope that the analysis will finally redirect the imperative to move away from fossil fuels. The debate over climate change and global warming has stagnated the urgency for the use and discovery of novel energy sources, the authors add, but “emphasizing the short-term economic imperative from oil prices must be enough to push governments into action now.”

Let’s hope that those governments have a full subscription to Nature so they can read the analysis.

3.2 Has the United States beaten peak oil?  (18/2/2012)  
.. What’s more, there are a lot of assumptions in Citigroup’s analysis that are far from certain. Take the decline rate. Conventional oil fields typically see a drop in output of about a 5 percent to 8 percent rate per year. But, as some companies working in the Bakken field in North Dakota are now discovering, shale oil can dwindle far more rapidly than that. One oil executive tells Foreign Policy’s Steve LeVine that oil wells in the Bakken field can decline by more than 90 percent in the first year, leveling off at 8 percent per year thereafter. Once a well dries up, the company has to move over to a nearby spot in the field. That’s a lot of new drilling. And all that drilling is pricey. Which means, the executive notes, that if the price of oil were to suddenly drop, a lot of companies could quickly go bust and production could dry up in short order.
The other thing to note here is that greater oil independence is no guarantee that the United States will be immune from world events. As my colleague Steve Mufson observes, the United States now imports 15 percent less oil than it did in 2005. Yet prices remain sky-high — in part due to global factors like Chinese demand and tensions with Iran. Indeed, the$326.5 billion that the United States paid for foreign crude in 2011 was its second-highest total ever — just slightly less than in 2008. Granted, that import bill would have been evenlarger without the shale boom, but it’s a handy reminder that “oil independence” isn’t the same thing as cheap gasoline.
3.3 Peak oil debate  (19/2/2012)   
What happens when “drill baby drill” meets peak oil prognostication? An audience found out firsthand this week, when two power policy pugilists faced off at the University of Wisconsin.
In one corner was Texas’ own Dr. Tad Patzek, incoming president of the Association of the Study of Peak Oil, and Chair of UT’s Department of Petroleum & Geosystems Engineering. In the other corner, former CEO of Shell Oil Company and domestic drilling proponent John Hofmeister.

3.4 Intellectual honesty  (21/2/2012)    
I maybe be drawing too long a bow with this allusion (I was initially trained as in anthropology), but readers may recall that cargo cults sprang up in the Pacific during and immediately after WW2 when technologically naive communities experienced a rapid influx of industrial goods, including cans of petrol and kero, often dropped from the air or unloaded from planes and ships.
 .. This is the sort of culture that I reckon most of use have been born into and inherited. An ignorant, energy-centric consumption-based cult of hope and blind acceptance of the horn of plenty. It doesnt really matter whether the tenets of your faith in the future involve oil, gas, uranium or unobtanium or whether you even think about such issues at all the principle remains the same. A blind (or at best incoherent) belief that technology and economics the twin vehicles supplying us with the symbols of our wealth will continue to bring new stuff from over the horizon for ever.
 .. The scale of thought involved also seems to make it very difficult for many of us to appreciate what a proper analysis of peak oil and gas requires in terms of imagination, adherence to the public interest and intellectual honesty. Which is probably why, when faced with factual arguments, so many detractors of any Peak Oil (PO) discussion descend into negative personal comment. It's pure defensive reaction against something they simply can’t stand to think about!


3.5 Tight oil production  (26/2/2012)

It tells the real story of tight oil production beautifully. Each well produces a mere 150 barrels or so per day on average, and like shale gas wells, their output declines rapidly after initial production. As LeVine learned from a Bakken executive, the decline rate can be over 90 percent in the first year, then gradually tapers off. After seven or eight years, wells will have produced over 60 percent of their recoverable reserves. Therefore, you have to keep drilling like hell just to maintain production, and drill even more to increase it. Per LeVine’s source, “if the rate of drilling stays constant for a long time, the growth rate of field production will decrease, then plateau, then begin to drop.” But at around $7 million per well, these wells are not cheap.
As Laherrère’s chart shows, it takes about 1,200 wells to increase production by 150 thousand barrels a day on the Bakken tight oil treadmill. Compare that to the deepwater Gulf of Mexico, where a single gusher can produce 250 thousand barrels per day. By this metric it would take another 16,000 Bakken wells to achieve Citigroup’s projection of an additional 2 mbpd from shale oil, or five times the existing 3,200 Bakken wells.

3.6 Leaders gain votes, wealth, and power ...  (26/2/2012) 
Finally, Congressman Roscoe Bartlett told us that there was no solution, and he was angry that we’d blown 25 years even though the government knew peak was coming. His plan was to relentlessly reduce our energy demand by 5% per year, to stay under the depletion rate of declining oil. But not efficiency — that doesn’t work due to Jevons paradox.
The only solution that would mitigate suffering is to mandate that women bear only one child. Fat chance of that ever happening when even birth control is controversial, and Catholics are outraged that all health care plans are now required to cover the cost of birth control pills. Congressman Bartlett, in a small group discussion after his talk, told us that population was the main problem, but that he and other politicians didn’t dare mention it. He said that exponential growth would undo any reduction in demand we could make, and gave this example: if we have 250 years left of reserves in coal, and we turn to coal to replace oil, increasing our use by 2% a year — a very modest rate of growth considering what a huge amount is needed to replace oil — then the reserve would only last 85 years. If we liquefy it, then it would only last 50 years, because it takes a lot of energy to do that.
Bartlett was speaking about 250 years of coal reserves back in 2005. Now we know that the global energy from coal may have peaked last year, in 2011 (Patzek) or will soon in 2015 (Zittel). Other estimates range as far as 2029 to 2043. Heinberg and Fridley say that “we believe that it is unlikely that world energy supplies can continue to meet projected demand beyond 2020.” (Heinberg).
6) Political (and religious) leaders gain votes, wealth, and power by telling people what they want to hear. Several politicians have told me privately that people like to hear good news and that politicians who bring bad news don’t get re-elected. “Don’t worry, be happy” is a vote getter. Carrying capacity, exponential growth, die-off, extinction, population control — these are not ideas that get leaders elected.

3.7 Peak oil spells disaster  (17/4/2012)

 "Currently governments, economists, industry, investors and the community are all turning a blind eye to the probability of serious oil shortages and ongoing oil scarcity within a few years.
Mr Robinson likened the situation of oil shortages to Noah's Ark and said planning has to occur now "before the flood because you can't build an ark under water".
"We need to be planning for sudden fuel shortages and for the permanent fuel shortages which will happen once peak oil arrives," he said.
"Farmers need to think how a rise in fuel costs and fuel shortages resulting from a world oil shortage may affect their businesses and the decisions they make."
 

3.8 Seven Myths Used to Debunk Peak Oil, Debunked  (6/5/2012)

After denial, acceptance
You have to give the deniers credit for being so tenacious about drumming up new magical thinking on how to outsmart Mother Nature. But in the end, their denial, especially as the lackeys of industry with their plutocratic ties to government, puts us at risk in terms of smart transitions to other ways to live and do business.
At some point, the “peak oil debate” needs to go the way of the phony “global warming debate.” Into the dustbin of history, where it belongs, so the rest of us can get on with civilization 2.0.

Andrew McKay writes Southern Limits, a blog on resource limits, energy, environment, peak oil and peak everything from a New Zealand perspective
 

3.9 The promise of energy independence  (10/5/2012)

First, I want to dispense with the obvious. When the oil and gas industry speaks of energy independence for America, here is what it does NOT mean. The industry is certainly not referring to expanding renewable energy sources. Nor is the industry referring to the possibility that Americans could become vastly more efficient in their energy use and thus reduce their dependence on imported energy. The industry is emphatically not suggesting that Americans curtail their use of energy in any way, for example, by driving less and bicycling more. No, none of these possible paths to energy independence are on the minds of oil and gas executives.

http://oilprice.com/Energy/Energy-General/How-the-Oil-Industry-has-Deceived-the-US-with-the-Promise-of-Energy-Independence.html
3.10 Critique of George Monibot's recent article on Peak Oil (5/7/2012)

Monbiot is correct that there has been a small increase in oil production in the United States in recent years. But can that continue, as he infers? Gas-industry whistleblower Art Berman describes how the shale gas gold-rush of recent years, now extending into shale oil, may well be a giant ponzi scheme: decline rates in wells are unexpectedly fast, meaning more and more have to be drilled at ever more expense, meaning ever more money has to be borrowed against cash flows from production that fall ever further behind. He looks at the resulting disaster in the balance sheets of oil and gas companies, and expects the bankruptcies to start any time soon. John Dizard has also warned of this particular bubble, in the Financial Times.
http://www.guardian.co.uk/environment/blog/2012/jul/04/monbiot-wrong-peak-oil?newsfeed=true



3.11 World GDP & world oil production growth rates have been tightly coupled for decades (11/7/2012)

You should seriously consider your personal circumstances, develop a plan and take action. Will you take action or wait?
http://www.businessinsider.com/robert-hirsch-plateau-oil-peak-oil-2012-7?op=1


3.12 Peak oil idea has gone up in flames? (13/11/2012)

But the truly global implications of the International Energy Agency's flagship report for 2012 lie elsewhere, in the quietly devastating statement that no more than one-third of already proven reserves offossil fuels can be burned by 2050 if the world is to prevent global warming exceeding the danger point of 2C. This means nothing less than leaving most of the world's coal, oil and gas in the ground or facing a destabilised climate, with its supercharged heatwaves, floods and storms.
What follows from this is that the idea of peak oil has gone up in flames. We do not have too little fossil fuel, we have far too much. It also follows directly that the world's stock markets are sitting on toxic levels of subprime coal and gas, a giant carbon bubble ready to explode.
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The idea that Peak Oil has gone up in flames can apply only assuming that nations worldwide act to contain global warming. Otherwise, both Peak Oil and Global Warming will approach us with the speed of an express train. 
Selvaraj


3.13 America's search for energy independence (18/11/2012)

In recent months, however, thanks to an all out drilling effort, the oil coming out of the fracked fields in North Dakota and Texas has been on the order of 950,000 b/d and has been increasing at the rate of about 350,000 barrels a day (b/d) each year. This has pushed up U.S. domestic oil production to the highest level in nearly 30 years – no wonder the press is bursting with optimism for America’s future.
The true story, however, is not as good as it seems. North Dakota currently has some 4,500 producing wells pumping out an average of only 144 barrels a day per well. A good conventional well will produce 3-5,000 b/d and those big deep water platforms are designed to produce 100-200,000 b/d from multiple well holes. To produce the 8 million additional b/d that the U.S. would need to obtain “energy independence” it would take 60,000 wells pumping out 144 b/d. These and the 6,000 or so fracked wells we already have would have to be redrilled every 3 or 4 years to maintain production. This is clearly impossible as the best prospects have already been drilled and from here on we are likely to see less productive tight (fracked) oil wells.
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The world's leading power thinks only of itself. Which country is going to lead the world?
Selvaraj


3.14 James Howard Kunstler: Peak oil, peak bullshit (25/11/2012)

It’s been clear for a while that authorities in many realms of endeavor – politics, economics, business, media – are very eager to sustain the illusion 
that we can keep our way of life chugging along. But under the management of these elites, the divorce between truth and reality is nearly complete.

  • The financial system now runs entirely on accounting fraud.
  • Government runs on the fumes of statistical fraud.
  • The business of oil and gas runs on public relations fraud.
  • And the media runs on the understandable wish of the masses to believe that all the foregoing illusions still work to maintain the familiar comforts of modern life (minus Hostess Ho-Hos and Twinkies, alas).

.. I don’t think the US can make that transition in an orderly way. We’re too stricken with techno-narcissism and grandiosity. What troubles me is how we will greet the epic disappointment that waits for us when we discover that the journey to WalMart is over.
Red Green & Blue (http://s.tt/1upJ5)







3.15 How Cuba survived Peak Oil (7/12/2012)

- Cuba is the first country to face the crisis that we will all face - the peak oil crisis.
- Each person in the US consumes every year 10 barrels of oil (or oil equivalent) for food, 9 barrels for cars and 7 barrels for houses. The major use of fossil fuel is for food production!!
- Before Cuba lost its oil supply, its agriculture was more industrialized than that of any other Latin American country. It's use of chemical fertilizers exceeded that of US. (Even so, with Industrial Agriculture, the Cuban people were poorly fed!!)
- Cuba had to develop urban agriculture, and rediscover organic agriculture in order to survive. Australian permaculture experts helped Cuba to transit from industrial agriculture to sustainable agriculture.
- Cuba found that it takes three to five years to make the soil productive once again, after it has been damaged by industrial agriculture. Today 80% of agriculture in Cuba is organic.
- Cuba has reduced its use of chemical pesticides from 21000 tonnes to 1000 tonnes.
- Over all the economic crisis helped to improve the health of Cubans. 
- Cuba has one advantage. While it has 2% of the population of Latin america, it has 11% of all the scientists. 
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Please note, despite all the hardship Cuba had to face, the life expectancy of a Cuban is 78.3 years, as against 78.2 for USA. (The highest life expectancy is in Japan - 82.7 years. Life expectancy for an Indian is 64.7 years). http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
We can of course continue to copy USA, and wait to be smacked in the face, or we can learn from Cuba.
Engineering institutions in India need to get into the act now and figure out what kind of engineering we will need to face the peak oil crisis - with emphasis on community building, recycling organic waste, water conservation and organic agriculture.
Selvaraj



3.16 Peak oil group presses EIA to temper optimistic crude outlook (27/12/2012)

In a first-ever meeting, peak oil proponents met with the US Energy Information Administration earlier this month to urge the nation's top statistical agency to temper its rosy outlook on future US energy production.

Representatives from The Association for the Study of Peak Oil & Gas USA (ASPO) met for two hours on December 17 with EIA Administrator Adam Sieminski and EIA staff to discuss concerns laid out in an October letter. Specifically, the group wanted to learn more about how EIA compiles the data that leads to its projections of US and international crude output and to offer alternative sources of data and expertise to aid in that effort.

It was the first time the group had ever met with the EIA, ASPO Executive Director Jan Lars Mueller told Platts in a recent interview.

... "The prospect that the United States can be 'energy independent' by increasing North American oil production is overly optimistic and has been grossly overstated," the group wrote. "At the same time, the dangers of rising global demand and declining trends for oil exports on which the United States depends have been understated and overlooked."

... Mueller said his goal in the EIA meeting was to share the resources of the geologists and economists who belong to ASPO and who see a "slowing of growth" in US crude supply in coming years.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7375088






3.17 Is peak oil over (29/12/2012)

Hello John,

Does it not look like a scorched earth policy that the earlier three generations along with the next two should exhaust resources like natural forests, biodiversity and oil on the planet?

What is disturbing is that so far we have not seen the evolution of a science (despite the fanfare of awarding Nobel Prizes) that would address these issues. When I did my engineering 1967-1972 I saw no attempt to teach engineers that we live on a finite planet and that we ought to husband its resources.

We need to have a serious look at our educational system so that 20 years from now we have young people who think differently. Education needs also to be tailored to the environment. In tropical climates it is possible to live with less energy usage, yet we find a high energy lifestyle being promoted all over the planet. 

Regards,
Selvaraj from Trivandrum, India.
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