So when world petroleum production dipped
slightly in 2006 and again in 2007, this predictably brought the usual Peak-Oil
disciples out of the woodwork. The global oil peak -- first
predicted for the mid-1990s, and many times since -- was finally upon us, they
said. From this moment on, production would steadily fall, culminating in the
end of life as we know it.
But once again, their crystal ball has
failed. Petroleum production for the first quarter of 2008 rose to 74.5M
bbl/day -- 1.2M higher than the 2007 average. Those figures don't take
into account Saudi Arabia's recent pledge to pump another half-million barrels
a day, a promise they've already met by the first 300,000.
Even better, a landmark
study of 800 major oilfields recently performed by Cambridge Energy
Research Associates (CERA) found that the rate of decline averaged only 4.5% --
about half of what was previously thought. That, coupled with new field
development, means the world is on track to be pumping more than 100 million
barrels/day by 2017, according to CERA.
How does Peak Oil get things so wrong? First,
it ignores technological improvements in oil discovery and production. As
science advances, the URR (ultimately recoverable reserves) of existing fields
rise in pace. Thanks to advances in water and CO2 injection, many oilfields
predicted to have been dry a half-century ago are still pumping strong today.
But more importantly, Peak Oil puts the
economic cart before the horse, with the notion that supply is independent of
both price and demand. So much for Economy 101. Higher demand means higher
prices... and higher prices increase supply. There are trillions of barrels in
the ground that can't profitably be pumped at $50/bbl. But at $140, the story
is different. Existing fields are worked harder, unprofitable fields get opened
up, and exploration picks up pace.
Several large new fields have been discovered
in the past decade alone, such as Brazil's Tupi and Kazakhstan's Kashagan --
the latter not much smaller than Saudi Arabia's Gwahar, the largest field in
the world. In fact, since 1965, we've found five new barrels of oil for
every three we've burned. And vast North American deposits of tar sands
and oil shale -- too expensive to process even a decade ago -- are now
beginning to look like a bargain.
Most of the world hasn't even been fully
explored for oil, including vast stretches of land in Russia, the Arctic
and Antarctica, and nearly all the deep sea itself. Some of these
undiscovered fields are in places we can't pump oil -- not with today's
technology. By 2050, though, wells atop the thickest Antarctic ice, or through
five miles of ocean floor will be trivial to implement.
Higher prices have another effect -- they
enable alternatives. At a cost of somewhere around $150/bbl, coal can be
directly transformed into oil -- and the US has the largest coal reserves in
the world, enough for hundreds of years.. At even higher prices, oil can be
synthesized out of nothing but CO2 and water...if one has an abundant supply of
Throughout history, many other resources have
hit production peaks. But the point missed by Peak Oil acolytes is that past
declines -- on everything from whale oil to natural rubber -- were the result
of falling demand. Prices rose until alternatives became cheaper, which reduced
demand...and so production fell.
So yes, oil will one day peak. But it won't
be in our lifetimes, or our even our grandchildren’s. And when it happens, it
won't be an earth-shattering catastrophe, but rather a smooth and natural
progression to better, cheaper alternatives.
quote: However, I also don't think that we really need to be increasing supply at this point. If anything, we should be pushing to decrease our usage of oil. The first few years are going to hurt, but it will make us safer in the long run.
quote: Why not increase supply? Why not allow the market to do its job?
quote: Anyone with even the most basic understanding of how oil and natural gas are produced – and this should include many members of Congress – knows that claims of "idle" leases are a diversionary feint. […] In reality, a lease is simply a block on a map, with no guarantee that it contains any resources. If all of them did, one could simply pay for the lease, haul in equipment and start pumping oil. But that only happens in fiction. And it happens in the minds of those who use the undeveloped-lease argument as a smokescreen to mask their intent to keep America's vast energy resources locked up underground, despite increasingly strong consumer demand for oil and natural gas.For exploration to take place, our companies need access to the areas – offshore and onshore – that we know have the potential to produce the oil and natural gas consumers will need, if ours is to remain a viable economy in an increasingly competitive global marketplace. Today's short-term need was yesterday's long-term opportunity. If Congress had acted on that opportunity years ago, America would not be in the energy bind it finds itself in today
quote: Mr. Cavaney is president and CEO of the American Petroleum Institute, the trade association that represents America's oil and natural gas industry.
quote: For oil companies, vast holdings of federal oil and gas leases, even if undeveloped, show up in their financial records as assets that help attract investors.“Absolutely,” said Mark Burford, director of investor relations for Tom Brown Inc., a Denver-based independent oil company. Tom Brown has more than 850,000 acres of federal land under lease, but just 22 percent is listed as producing, according to BLM records.“In our investor presentations, we talk about the very large inventory of drilling locations on our acres that are prospective, and a lot of that would still be undeveloped,” Burford said. “But based on our knowledge of the producing areas and the formations, that acreage is very prospective and very likely to work out as far as becoming producing.”
quote: You should really think before you post...
quote: Now, most rational people would agree that when the government leases something (be it land, frequency ranges, etc) and the 'thing' being leased is not used for the intended purpose, then the lease is broken.
quote: New leases mean additional drilling, plain and simple.
quote: Yes, not every lease sold results in a well, especially not within 5 years or less. Some leases are bought by smaller companies who then have to obtain additional financing. Others are for areas that aren't profitable to drill yet, but are expected to be soon, if prices rise or technology advances.
quote: New leases might mean new wells after a few years, if companies receive financing.
quote: Among other things, the Democrats called for the government to own refineries so it could better control the flow of the oil supply.
quote: Some politician in the news said about oil recently that, "We can't solve the supply problem by increasing production".
quote: I see a likely scenario is that if they realize they can make the same amount of profits, while selling less, they would be inclined to do it.
quote: past declines -- on everything from whale oil to natural rubber -- were the result of falling demand.
quote: By 2050, though, wells atop the thickest Antarctic ice, or through five miles of ocean floor will be trivial to implement.
quote: For a lot of people $4.00/gallon is too much, $5 is out of reach, $6 is a death sentence.
quote: I'm sure lawyers for all those oil men who lost value would love to sue the asses off whoever artificailly restricted their market.
quote: TextIndeed, perhaps we could start extracting and refining fats from fat people. Make a new law, and pay them some monthly compensation. Whales might be even cheaper, and they harvest from the sea. It's possible you know. High enough prices would make it viable. Your laws to protect their rights are just artificial. Oh sorry, I forgot, we actually just have slumping demand for oil, so I guess we don't need to after all.
quote: Restrictive drilling regulations do not remove the environmental impact of drilling, it shifts it.
quote: There's no permanent environmental damage.
quote: What price? You drill a hole, pump the oil out, then plug it up. There's no permanent environmental damage.
quote: Look at pictures of the North Slope/prudhoe Bay drilling operations in Alaska, and how even these supposedly "clean" drilling operations, pollute many square miles with leaked oil...
quote: OK then, dump a pound of botulinum (powdered or sprayed, no matter) into the sky, maybe out of an airplane or in an explosion. What's the total damage? Sure it's gonna be short term nasty, and then it's over.Now let's substitute uranium or plutonium. Apparently you weren't living in the huge area affected (still) by Chernobyl.
quote: I propose that it is entirely possible that we might develope workable small scale fusion power, and/or many other possible alternatives, for less than it will cost us to "trivially" drill through Antarctica. All with less environmental damage, and while maintaining some oil reserves for the unforseeable future.
quote: Can you actually argue me Ringold?
quote: debate it like adults, and propose solutions.
quote: The author of this thread is beasically considers Peak Oil to be "liberal" myth
quote: and refuses to consider that there my be some practical limits on extracting a finite natural resource.
quote: How does the Volt fit in to your world view?
quote: "...who back in 1956 correctly predicted that the U.S. would hit its production peak by 1970...he estimated that world production could hit its peak at "about half a century" (2006)..."
quote: But "Peak Oil" is still a fraud.
quote: Lastly, the only folks I see standing in the way of drilling in ANWR are the Alaskans?
quote: what's behind the drive to deceive?
quote: Petroleum production for the first quarter of 2008 rose to 74.5M bbl/day -- 1.2M higher than the 2007 average
quote: You're looking at different data.
quote: ECON101 supply demand curves say we should be seeing about 5 million additional barrels.
quote: Maybe even harnessing the energy that's already floating around in our solar system and on the planet?
quote: I've seen some reports that say ...
quote: ... everything and anything that you could possibly want to hear. A good question is often "who's selling?" The oil industry certainly doesn't want you to bother planning for an oil free future.
quote: Some of these will demand an energy input in form of natural Gas to drive the oil out of the sands of similar amount as the energy gained from the oil extracted...
quote: Within a few decades, the U.S. will lack car, truck, air, and rail transportation, as well as mechanized farming, adequate food and water supplies, electric power, sanitation, home heating, hospital care, and government services
quote: Sticking to oil is like saying we should use coal until every last gram of it has been mined and consumed.