Slashdot Mirror
Report Blasts "Peak Oil" Theory
Rei writes "Today, the Cambridge Energy Research Associates released a report dismissing the Peak Oil theory, suggesting that world oil production will continue to increase for the next 24 years, and then only level into a plateau. The report, which suggests that world reserves are enough to last 122 years at our current rate of consumption, also blasts Peak Oil theorists for repeatedly making unscientific predictions and then shifting them whenever their predictions fail to materialize."
H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated, David J. O'Reilly, Chairman & CEO, Chevron Corporation
John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure, John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities
Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation
Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company
Daniel Yergin, CERA Chairman
H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated
David J. O'Reilly, Chairman & CEO, Chevron Corporation, John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure
John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities
Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation, Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company, Daniel Yergin, CERA ChairmanH.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007)
David Crane, President & CEO, NRG Energy, Incorporated David J. O'Reilly, Chairman & CEO, Chevron Corporation John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructur John W. Rowe, Chairman, President & CEO, Exelon Corporation
Charles W. Shivery, Chairman, President & CEO, Northeast Utilities Neil H. Smith, CEO, InterGen Jeff Sterba, Chairman, President & CEO, PNM Resources Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation
Jake S. Ulrich, Executive Director, Centrica plc Don Voelte, Managing Director & CEO, Woodside Energy Ltd. Theo H. Walthie, Business Group President, Dow Chemical Company
Daniel Yergin, CERA Chairman
I'm detecting an air of possible bias there. Not just is there no-one on the speaker list with an environmentalist bent, but most of the speakers apart from those employed by CERA are heads/employees of major oil/chemical companies.
No, Peak Oil has never predicted that we'd "run out".
They predict that the demand will outstrip the supply of cheap oil, forcing us to shift to more expensive supplies and creating shortages that drive the price beyond a reasonable means. They draw a standard set of supply and demand curves, and show where they cross. What's most interesting to me is that it's not the supply curve that's the issue -- it's the demand curve.
And they're less worried about cars than they are about what that steep rise in prices will do to all manufacturing and industry in the west.
"CERA was acquired by IHS Energy in 2004. . . . Some of the company's largest clients include international energy companies, governments, utilities, and financial institutions."
http://www.answers.com/topic/cambridge-energy-rese arch-associates
"IHS is one of the leading global providers of critical technical information, decision-support tools, and related services to customers in the energy, defense, aerospace, construction, electronics, and automotive industries. We have developed a comprehensive collection of technical information that is highly relevant to the industries we serve ."
http://www.ihs.com/About-IHS/
Make love, not reality television.
And, if our demand for oil increases?
Production will cope. It's in the report.
Oh, I see. They assume our demand for oil will never increase. The developing world's demand for oil will never increase. China's demand for oil will never increase.
No, they don't assume that. You're conflating their position. They make two seperate points:
1. That if our consumption levels remain flat, there's 122 years of conventional reserves left. They make this point for illustrative purposes to counter the 'peak oil' argument.
2. That consumption will rise (the "Asian Phoenix" scenario) but that total oil output (conventional and unconventional ; tar sands, new extraction techniques, etc) will rise to cope.
They're not idiots.
Huh? Hubbert's peak said that production in the UNITED STATES would peak in the 1970's, and decline thereafter. And he was right(he said global peak would come about 50 years after the peak in the US). Outside of Alaska and the Gulf of Mexico there aren't very many huge oil producers in the United States anymore.
There used to be a lot more, but they ran out of oil. In fact, take a look around Western PA to see what devastation running out of oil can wrought on communities. Oil City is an aptly named example.
Monstar L
Even this report is rather pessimistic.
Technologies that exist and are already economical at current oil prices:
* Coal liquifaction (we have several hundred years of coal in the US alone)
* Thermal depolymerization (~$70/barrel from almost any organic waste).
* Bitumen (huge Canadian deposits)
* Ethanol (both corn and sugarcane)
* Biodiesel (soybeans)
Borderline technologies or technologies that exist but require higher oil prices to be cost efficient:
* Cellulose-derived ethanol
* Farmed plankton biodiesel
* Oil shale
* Methane hydrates/clathrates
* Direct Fischer-Tropsh synthesis from any CO (or even CO2, indirectly more lossy), and H2 (which can come from H2O). I.e., as long as there is power (do you see any "peak electricity" theorists out there? Not many), there can be oil (prices vary depending on component sources). As for H2:
** Electrolysis from any electricity source
** Nuclear power thermolysis
** Direct solar H2 production
** Farmed bacterial H2 production
* Direct utilization of H2 (or other fuels produced from common ingredients + "power") in vehicles.
As for those who say, "Well, sure, there are alternatives, but we don't have time to switch," this isn't true either. It takes much less time to bring a new field or plant online than it takes to drain an oilfield. About the worst time to bring an oilfield online is about 10 years, in the case of a remote field in an inhospitable location with no existing infrastructure. Expanding an existing field into less economical deposits can be as little as a year or two.
Peak Oil is a nonsense theory, and deserves to be exposed for what it is. There've been dozens of predictions since Hubbert, and not a one has been correct.
Rock Us, Dukakis.
Good troll.
Disruption of the gulf stream - not predicted to happen just yet, so this prediction hasn't been refuted.
Deep freeze in Europe - same. That's like saying that the theory about the sun gobbling up the earth when it becomes a red giant is wrong because it hasn't happened yet.
Desertification of the US midwest - underway. I live in Alberta (Canada), and we expect to run out of glacial runoff in the next 15-20 years, leaving our river and main source of water bone dry for half the year. On top of that, the climate is getting dryer, and the water shelf is dropping. These are known to most residents here.
US crop failures - we'll see. Technology is improving all the time to offset this. Its happened before, though.
More frequent/severe Atlantic hurricanes (were there any this year?) - Nope, but again they expect a trend towards stronger storms, and last year it was certainly evident.
Inundation of coastal cities - Once again this is something that will happen down the road. No one thought we'd be under water in 2006. And we aren't. So the predictions are correct thus far.
Decline of coral reefs - underway. Most of the reefs affected by El Nino (Belize's great barrier reef in particular) are almost completely dead. Scuba diving was a lot more interesting about 15 years ago.
Disruption of Antarctic ice shelves - underway. There has been massive breakups of ice shelves in the last few years. Actually the predictions were mostly wrong; this is happening faster than we thought.
Pandemic skin cancer outbreaks (remember the ozone crisis?) - are you disputing the ozone hole now? That's a separate issue, but one that governments at least took significant steps towards solving around 15 years ago. The hole is larger this year than ever before, btw.
Jeremy
Well, instead of just saying "tough shit", and giving up, some of us have come up with better metrics to judge what "experts" say. (And given the nature of experthood, we can't evaluate their arguments independently without becoming experts ourselves).
One of the methods people use to evaluate the statements of experts (without becoming experts themselves) is to try to find out if they have an agenda beyond educating people about stuff. If they are paid by some organization, such as the catholic church (the earth is the center of the universe), the tobacco industry (smoking is healthy and makes you look good), the oil industry (burning fossil fuels is a long-term environmentally sustainable practice), or someone else with big money and questionable motives, many people rightfully become skeptical to the statements, even without having become experts enough to evaluate the science behind it themselves.
I'm sorry. The people who are not contributing, are the people who are getting paid to spread misinformation (i.e. lie). The people who try to find out if misinformation is spread, are meta-contributing. You and I are meta-meta-contributing.
Regarding the Antarctic ice sheet: the article was from 2002.
More recently (March 2006): NASA Mission Detects Significant Antarctic Ice Mass Loss. "The researchers found Antarctica's ice sheet decreased by 152 (plus or minus 80) cubic kilometers of ice annually between April 2002 and August 2005."
Personally, what I find most convincing is graphs of current and historical CO2 levels.
The way I see it, whether we suck the world's oil reserves dry quickly or we suck them dry slowly, we're still going to suck them dry. There's more profit associated with large demand than small demand, however. Indeed, for a fixed supply, the price vs. demand curve is anything but linear. Furthermore, the time value of money indicates that a given sum of money is more valuable the sooner you have it. If we proactively shift energy demand away from oil, this lengthens the timespan across which we'll deplete the world's oil reserves. This will reduce demand, reduce average prices, and the money will arrive later (and therefore not be as valuable).
Thus, oil companies have strong economic reasons for wanting to keep demand high. They want to maximize their total profit.
Peak oil and alternative energy proponents seek to move energy demand away from oil, either by increasing efficiency or by drawing energy from other sources. Either approach reduces the demand for oil, which is what the petroleum industry wants to avoid.
Program Intellivision!
The Hirsch Report is full of gems, including clarification of exactly what "peak oil" means:
... have caused CERA to revise the ... The downward revisions
"It is important to recognize that oil production peaking is not 'running
out.' Peaking is a reservoir's maximum oil production rate, which typically occurs
after roughly half of the recoverable oil in a reservoir has been produced. In
many ways, what is likely to happen on a world scale is similar to what happens
to individual reservoirs, because world production is the sum total of production
from many different reservoirs."
And some information on CERA's past record:
"In 2001 Cambridge Energy Research Associates (CERA) stated 'The
rebound in North American gas supply has begun and is expected to be
maintained at least through 2005. In total, we expect a combination of US
lower-48 activity, growth in Canadian supply, and growth in LNG imports to
add 8.95 Bcf per day of production by 2005.'"
In 2005 CERA "now finds that 'The North American natural gas market is set for the
longest period of sustained high prices in its history, even adjusting for
inflation. Disappointing drilling results
outlook for North American supply downward
represent additional disappointing supply news, painting a more constrained
picture for continental supply. Gas production in the United States (excluding
Alaska) now appears to be in permanent decline, and modest gains in
Canadian supply will not overcome the US downturn.'"
For all the thoughful, deeply informed people who have dismissed peak oil with the claim that "the stupid enviros can never get it right, Club of Rome, blah blah blah...", I strongly suggest looking for the beam in your own eye before complaining about the mote in ours.
Peak oil theory is based on a very simple idea: the best first order measure of future oil supply using any technology at any price is the amount of oil still in the ground, and that amount can be estimated based on the amount already extracted. If this theory is true, then we expect the current production rate (P) divided by the cummulative production (Q) to be a straight line when plotted against the cummulative production.
It is an undisputed although often ignored fact P/Q vs Q is a straight line to a good approximation over the past fifty years, both in the continental United States and worldwide. It does not deviate in war or peace, in recession or oil crisis, by more than a small amount. The deviations are significant, but the undoubted fact remains that to first order we have an exceptionally good model for world oil production that is consistent with the past half century of extraction data.
If you want to deny peak oil, you have to claim either:
a) There is some other factor that dominates the first-order term in world oil production
or
b) The higher-order terms are at some point going to dominate.
Of the two, the latter is clearly the only really plausible move, and it is not really denying peak oil but rather accepting that economies will adapt to the very real fact of peak oil.
Oil sands, coal derviatives and non-geologic sources may both become significant factors at some future price with some additional technologies. My own favourite is algal biodeisel, which seems like just about the perfect source of liquid fuels, as it is essentially solar->liquid hydrocarbon conversion at very high efficiency. But there is very little investment going into it for some reason.
Blasphemy is a human right. Blasphemophobia kills.
http://www.energybulletin.net/ and in particular: http://www.energybulletin.net/22442.html
6 47
5 16
http://www.theoildrum.com/ and in particular: http://www.theoildrum.com/story/2006/11/14/18285/
Whether we will ever exceed current production levels is an entirely open and empirical question. Even if we do, that doesn't prove that "Peak Oil" is "wrong"... just that we haven't hit it yet. The evidence I read suggests we're approaching the top.
Read this too:
http://www.theoildrum.com/story/2006/11/2/204936/
http://www.energybulletin.net/22213.html
The lack of new refineries has nothing to do with peak oil or a bunch of oil companies conspiring to rip you off. Instead, it has everything to do with the fact that, thanks to environmentalists (specifically, their lawyers) and government regulation, it's been nearly impossible to get this sort of thing approved in the last few decades. Oh well.
It takes a man to suffer ignorance and smile
Be yourself no matter what they say