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."

Comments

Well, let's take a look at the speakers

[Channard]

who are going to be at their next conference. We have..

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.

Re:OK...

[hitchhikerjim]

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.

Wonder who's putting out this report?

[indytx]

From Answers.com:

"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/

Re:OK...

[antifoidulus]

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.

Re:OK...

[Rei]

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.

Re:Unfullfilled predictions

[JebusIsLord]

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.

Re:Peak oil has nothng to do with the environment

[Mr Z]

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.

Valuable sources for futher reading.

[SlideGuitar]

http://www.energybulletin.net/ and in particular: http://www.energybulletin.net/22442.html

http://www.theoildrum.com/ and in particular: http://www.theoildrum.com/story/2006/11/14/18285/6 47

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/2006/11/2/204936/5 16

http://www.energybulletin.net/22213.html

Re:Slashdot refused to print this story

[A beautiful mind]

According to this:

The OPEC countries decided in 1985 to link their production quotas to their reserves. What then seemed wise provoked important increases of the estimates; in order to increase their production rights. This also permits the obtainment of bigger loans at lesser interest rates. This is a suspected reason for the reserves rise of Iraq in 1983, then at war with Iran.

In fact, Dr. Ali Samsam Bakhtiari, a former senior executive of the National Iranian Oil Company, has stated unequivocally that OPEC's oil reserves (notably Iran's) are grossly overstated. In a recent interview he stated that world oil production is now at its peak and predicted that it will fall 32% by 2020.

The rest of the section is too long to include here, but please read on if you need further proof. The table including the already peaked and peaking countries, the detailed information about how OPEC members inflated their oil numbers, etc. are worth reading.