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Page added on October 26, 2015

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Looking Back 10 Years After Peak Oil

Looking Back 10 Years After Peak Oil thumbnail

All views expressed here are those of Verwimp Bruno and do not necessarily represent those of Ron Patterson.

1. INTRODUCTION

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 experience significant growth in oil consumption, some countries are already well beyond Peak Oil Consumption by now.

2. PRODUCTION vs CONSUMPTION

The production history of crude oil is well documented. For all relevant OPEC and NON-OPEC countries the data are gathered by Peakoilbarrel.com here, OPEC Charts, and here, Non-OPEC Charts, respectively. It is clear some countries have reached peak oil production long time ago. For readers of this blog, familiar with these data, this is no surprise. Still world oil production is growing, because some countries make up for the countries that are losing production. Many readers of Peakoilbarrel.com wonder when the exact moment will be when global oil production will have reached that ultimate peak. But how relevant is that moment? Will it bring doom, gloom, the end of motoring, plastics and tooth paste. It might be more interesting to know whether your country is before, beyond or at Peak Oil Consumption right now. And what about coal and natural gas?

3. THE BELL-SHAPED CURVE

Finite resources tend to be exploited as fast as possible, resulting in an ever increasing “production” (“mining” is the more correct term), until a limit is reached, after which production declines. The result is the bell-shaped curve M. K. Hubbert showed the world in A.D. 1956:

Bell Curve

We all know this curve did not materialize exactly this way. The peak was set at 13billion barrels per year, while the world produces some 32 billion barrels per year now. Nevertheless that production must decline sooner or later. Oil is still a finite resource.

In A.D. 1972 researchers from M.I.T. wrote Limits to Growth, Report to the Club of Rome. They analyzed the word as a whole and took different parameters into consideration: Finite resources, finite absorbing capacity of the world’s ecosystems (climate!) and human population. The standard run of their model looked like this:

Figure 35

In this graph resources are depictured as an inverse cumulative function, starting at 100% in the upper left corner and ending at near zero in the bottom right corner. When that graph wouldn’t have been cumulative, it would have been a bell-shaped curve. The ‘industrial output per capita’ curve reflects the use of resources and is indeed bell-shaped. The graph with the ‘S’-dots, indicates services per capita. That graph goes higher than industrial output, and starts to decline later. The contemporary deindustrialization of the USA and Europe, and their growing service economies are in line with the standard run of the World Model.

In june 2015 the leaders of the G7 gathered in Schloss Elmau, Germany, for their annual Summit. Afterwards the Leadersʼ Declaration was released. A chapter is dedicated to climate change. The leaders say: “Mindful of this goal (to hold the increase in global average temperature below 2 °C. ) … we emphasize that deep cuts in global greenhouse gas emissions are required with a decarbonisation of the global economy over the course of this century. Accordingly… we support … the upper end of the latest IPCC recommendation of 40 to 70% reductions by 2050 compared to 2010 … .

When the evolution of the energy consumption of the world, of which nowadays approximately 85% consists of greenhouse gas generating fossil fuels, is extrapolated to the end of the century, when a fixed point of nearly 0% fossil fuels at A.D. 2100 and a fixed point of “40 to 70% reduction by A.D. 2050”, say 50% reduction, is set, when the current growth in use of fossil fuels is gradually turned in an as moderate as possible decrease, meeting the two fixed points, when the evolution of nuclear, solar, wind, hydro and biomass is counted in in an optimistic way, the future looks like this diagram:

World Energy Consumption

The G7, from a climate change point of view, Hubbert from a finite resources point of view and the Club of Rome from a combined point of view, they all predict roughly the same bell-shaped curve. So the bell- shaped curve is going to be it. Notice there is no significant distinction between oil, coal and gas.

4. AVAILABILITY AND AFFORDABILITY OF ENERGY AS A LIMIT

Different countries in the world have different economies, different degrees of development, different GDP/capita ratio and so on. But if the world as a whole is projected to walk along this bell-shaped trajectory, it is reasonable to hypothesize every country on itself will follow that trajectory sooner or later. Recent data until A.D. 2014, collected by BP, seem to already give evidence of this hypothesis.

World Consumption

World energy consumption equals 500 exajoules per year. The curve shows growth. So availability is not yet a problem.

FSU Consumption

The former Soviet Union consumes a little less than 40 exajoules. That is 8% of the global consumption and about 25% lower than their peak in 2009. It is clear the Former Soviet Union might never again reach the >50 exajoules they used to consume.

European Consumption

Europe minus the Former Soviet Union consumes 60 exajoules per year. That equals 12 % of the world energy consumption. The decline since 2006 is 18%. That is significant and severe.

North America Consumption

North America consumes 110 exajoules per year. That equals 22% of the world energy consumption. The dedline since 2008 is about 5%. That might not be statistically significant. Nevertheless: there has been no more growth since 2000. On the global timescale 15 years is a significant period of time.

All the above summed up, equals 42% of the world energy consumption. Add Japan, Australia and South Africa, with stagnant or declining energy consumption too, and the conclusion is: “Half of the world’s energy production is consumed in countries with declining or stagnant energy consumption. These are all the mature first world economies.

The decline in energy consumption might be caused by local availability issues or affordability issues. Most probable explanation might be: heavy industries have left these countries, the poor and the elderly –groups with less than average energy consumption- are growing groups in these societies.

5. PROJECTIONS

World Consumption

The above graph, in Mtoe, is constructed using Hubbert Linearization.  This technique is unreliable unless the available data suggest the bell-shaped curve has already gone thru its first infliction point, and it gains reliability when the peak is reached or passed.  This means there are enough data for the world, for Eurasia and for North America.  There are not enough data for Asia-Pacific, nor for south and Central America, Africa and the Middle East.  To reduce the mathematical problem to a system of two equations and two unknown variables, South and Central America, Middle East and Africa were grouped and called “Scamea” in the graph.

The sudden drop in 2015 is artificial.   It results from the fact that the latest data points in the linearization of the global data are slightly above the trend line.

The results of this exercise are:

–       Europe and the former Soviet Union (Eurasia), has peaked.

–       North America has peaked.

–       Asia Pacific is peaking as we speak.

–       The group consisting of South and Central America, the Middle East and Africa had a large potential for growing energy consumption.

6. OIL, COAL, GAS

Historical data show the growth in coal, oil and gas consumption vary widely in time and space.  But the decline of coal, oil and gas consumption coincides more or less, especially in times of crisis: Former Soviet Union post 1990 and Europe post 2006.  This supports affordability, rather than availability is the root cause of declining consumption.  This thesis is often proposed by Gail Tverberg.

World Oil

World Natural Gas

World Coal

 

More than half of the world’s oil production is traded on the international markets.   Still Net Export Mathematics, or the Export Land Model, shows severe concern about future oil availability to importing nations.  For gas only a third of the world’s production is traded on the international markets.  For coal it is only a fourth. Applying ELM on coal or gas will paint a grim future for importing countries as well as for countries dependent on the revenue of their exports.

7. CONCLUSIONS

Peak Oil translates into Peak Oil Consumption. Peak Oil Consumption comes with Peak Energy Consumption. Half of the world has passed the point of maximum energy consumption. This point is marked by large scale economic crisis. Asia Pacific is approaching that point now. For energy importing countries with still growing energy consumption Peak Energy Consumption may rather be triggered by coal or gas, since these global markets are tighter than the oil market. Renewables do not play any role.

peak oil barrel



9 Comments on "Looking Back 10 Years After Peak Oil"

  1. Plantagenet on Mon, 26th Oct 2015 7:49 pm 

    If Hubbert predicted global oil production would peak at 13 billion bbls/yr in the year 2000 and the world today in the year 2015 is currently producing 32 bbl bbls/yr then there is a serous problem with Hubbert’s prediction model.

    The general concept of peak oil is right, but problems remain in using it as a predictive tool.

    Cheers!

  2. makati1 on Mon, 26th Oct 2015 7:54 pm 

    Pretty charts signifying little. Trying to predict the future is like reading the entrails of an ox or chicken. Most of these charts are very optimistic.

    I like this honesty: “Renewables do not play any role.”

  3. Truth Has A Liberal Bias on Tue, 27th Oct 2015 12:46 am 

    Renewables that require inputs from metals, plastics and coal/oil/gas aren’t renewables. If you have to dig a mine, crush ore, extract metal, etc etc it’s not renewable.

    http://jayhanson.us/rr-jhanson-16kbps.mp3

    Famine–> Hobbesian Scramble–> Population Bottleneck

    It’s happened before. It’ll happen again.

  4. Davy on Tue, 27th Oct 2015 6:18 am 

    Ape Man munch on this with your morning joe

    “Persian Gulf may soon be too hot for human life, climate simulation shows”

    https://www.rt.com/news/319806-persian-gulf-uninhabitable-climate/

    “The scientists used climate computer models to come up with the extreme future weather scenarios, which based on current global warming trends, predict summer temperatures of up to 60 degrees Celsius (140 degrees Fahrenheit) in Kuwait City.

    Such temperatures, researchers warn could “become hazardous to human health,” especially for the elderly, as the human body would be incapable of maintaining body temperature.

    READ MORE: Russia gets 20 Vaticans bigger: Nine islands&islets added to the map thanks to global warming

    Research explains that human body could adapt to extreme “dry-bulb” heat through sweating but would struggle if the “wet-bulb” temperature, a combination of heat and humidity, breaches the threshold of +35 degrees Celsius.

    Once high heat and humidity reaches a certain level, “the body is no longer able to cool itself and begins to overheat,” Pal told journalists. Out in the open and without air conditioning, a person could only stay out in the sun for six hours, at most, before their body began shut down.”

  5. Davy on Tue, 27th Oct 2015 6:23 am 

    This is for Mak and his evening beer by the pool

    “Too hot for you? Heat index hits 41 Celsius in Metro Manila

    http://newsinfo.inquirer.net/692803/too-hot-for-you-heat-index-hits-41-celsius-in-metro-manila#ixzz3plZWiTLt

    “The heat index on Thursday reached to a scorching 41 degrees Celsius in Metro Manila, the state weather bureau said.
    Gener Quitlong, weather forecaster of the Philippine Atmospheric Geophysical and Astronomical Services Administration, said by phone that the highest temperature in Metro Manila on Thursday was at 35 degrees Celsius at 1:50 p.m.
    The heat index, which is determined on the combined effects of temperature and humidity, hit 41 degrees Celsius.

  6. shortonoil on Tue, 27th Oct 2015 8:09 am 

    Another attempt that confuses, obfuscates, and disguises what is occurring by assuming that all barrels were created equal, have, and always will have an equal value; and then attempting to count them. The fact that the world’s petroleum production is now worth less than half of what it was worth 18 months ago is considered completely irrelevant?

    “But how relevant is that moment?”

    Peak production will only act as a historic artifact to mark what has already occurred. What is significant is the point when oil can no longer act as the driving agent for world economic growth. It will be the point when the entropic decay of the petroleum production system has rendered it incapable of achieving that goal.

    That point has already been reached. It is now being poignantly demonstrated by the deterioration of every economic indicator available. It has only been through the machinations of Central Bank policies that its effects have been slightly disguised. The Hills Group in their 67 page report, “Depletion: A determination for the world’s petroleum reserve” lays out a detailed analysis as to why the world’s petroleum supply is decaying past the point of being able to power its economic growth.

    Without that needed economic growth monetary systems will implode, world trade will slow, eventually come to a virtual stand still, and economies will revert to some pre-industrial level. Oil is the agent that powers our modern way of life. As the wheels of the modern world slowly grind to a halt, pundits will pontificate, extrapolate, and continue to count barrels waiting for the inevitable Peak. Some may still be counting as they sit in the ruins of a once world wide civilization.

    http://www.thehillsgroup.org/

  7. ghung on Tue, 27th Oct 2015 8:23 am 

    Mak says; ” Trying to predict the future is like reading the entrails of an ox or chicken.”

    Yet you do it constantly Mak. You should write a book; An American Shaman in Manilla😉

  8. apneaman on Tue, 27th Oct 2015 8:54 am 

    Davy, the poles and Greenland are where we see the AGW effects the most. Far away and out of sight of our everyday experience. Twice the rate of warming way up north. Remember basic physics? The heat chases the cold/wants to equalize.

    Greenland Is Melting Away

    http://www.nytimes.com/interactive/2015/10/27/world/greenland-is-melting-away.html?hp&action=click&pgtype=Homepage&module=photo-spot-region&region=top-news&WT.nav=top-news&_r=0

  9. Cloud9 on Tue, 27th Oct 2015 9:25 am 

    Ever since the boys got off the boat in James Town the trend has been toward more growth. Yes, there were several rebellions and panics but the trend has always been toward more growth. The growth going forward is in chaos management and the cannibalization of failed systems. The invasion of Europe and the United States by the Golden Horde is just the first phase of the new trend of mass migrations. As cities and and states continue to fail what is left of the safety nets will fail. The prime real estate is farm land and the new building trend will be mott and baily castles.

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