Peak Oil Scare Fades as Shale, Deepwater Wells Gush Crude

[Schadenfreude]

Bloomberg

Peak Oil Scare Fades as Shale, Deepwater Wells Gush Crude

When Daniel Lacalle, in his early 20s, took a job with Spanish oil company Repsol YPF SA in 1991, friends chided him for entering a field with no future. "They all said, 'Why do you want to do that? Don't you know only 20 years of oil is left in the whole world?'" he recalls.

Two decades and four energy crises later, the U.S. Geological Survey estimates that more than 2 trillion barrels of untouched crude is still locked in the ground, enough to last more than 70 years at current rates of consumption. Technological advances enable companies to image, drill and shatter subterranean rocks with precision never dreamed of in decades past. Trillions of barrels of petroleum previously thought unreachable or nonexistent have been identified, mapped and in many cases bought and sold during the past half decade, from the boggy wastes of northern Alberta, to the arid mountain valleys of Patagonia, to Africa's Rift Valley.

"Betting against human ingenuity has been a mistake," says Lacalle, who today helps oversee $1.3 billion as a portfolio manager at Ecofin Ltd. in London. "The resource base is absolutely enormous, so much so that we will not run out of oil in my lifetime, your lifetime, our children's lifetimes or our grandchildren's lifetimes."

Yup. Betting against human ingenuity is always a big mistake.

[Corella]

to some extend yes, coming along with the danger of a steeper slope a bit later

[kiwichick]

no more oil being made or coal or nat gas

peak oil is the point where the production begins it's decline to zero

conventional oil is already past peak

and of course every day the mature fields are further depleted

[davep]

"The resource base is absolutely enormous, so much so that we will not run out of oil in my lifetime, your lifetime, our children's lifetimes or our grandchildren's lifetimes."

He obviously has no idea what he's talking about. It's not about running out, it's about decreasing global production levels. We may never actually run out of the stuff.

[Cloud9]

Then why is gas $3.60 at the pump?

[diemos]

Yup. Betting against human ingenuity is always a big mistake.

Why should we care about this stuff when we already have the E-cat?

[Pops]

Pretty interesting article. Sub-salt oil is huge and we've just begun looking for it, fracking is also a big deal especially for oil field service companies. But like I've said a dozen times,

"Yet to find must be found somewhere..."

The real argument for peak oil is exactly the one made in the article to dismiss peak oil: the only new oil we're finding is six miles down, six times as expensive to extract or isn't even oil at all.

But the old familiar straw-man beaten about the head in the story is that PO means we're running out of oil, which of course is not and has never been the "Peak Oil Scare" - although it's the favorite distraction set forth as argument.

Almost eight years ago in 2004 I wrote the primer in the sidebar under "What is PO?"

... any finite resource, (including oil), will have a beginning, middle, and an end of production, and at some point it will reach a level of maximum output...

... suffice to say that oil becomes more difficult and expensive to extract as a field ages past the mid-point of its life.

Peak = top/high point/maximum "production".

Peak = transitioning from easy to difficult oil.

Kerogen mining, down-hole nukes, deepwater adventures and who knows what other tactic will be tried, that's always been the thinking. No one doubts oil will be around a long time, that's never been in question. Oil is worth a whole lot more than we pay now and we'll willingly pay a whole lot more for it in the future. The length of the tail has nothing to do with the effects of passing peak.

Here are some things predicted about peak oil, I've checked off the ones that look pretty obvious right now.

√ Declining conventional production
√ Declining exports
√ Record high prices
√ Demand destruction
√ Expensive substitutes
√ Resource war
√ Resource nationalization
_ $500 oil

Daniel Yergin's forecasts

__ Between 2004 and 2010, capacity [could grow] from 85 million barrels per day to 101 million barrels a day
__ [2006] oil and natural gas liquids capacity could increase as much as 25% by 2015
__$35/bbl forever

[Beery1]

Yup. Betting against human ingenuity is always a big mistake.

Which is, I'm sure, exactly what the tribal elders of Easter Island said, just as they hit 'peak trees'.

All we have to do, to see who's right, is wait. It cannot be long now before the penny drops for even the most corny cornucopian. Then I'll sit back and enjoy all the backpedaling and denial. I'll make a point to tune in to whatever channel that's covering Daniel Yergin - that should be good for a few laughs.

[Keith_McClary]

Daniel Yergin's forecasts

There's a good one in the article:

in a November 2006 study ... Yergin ... forecast a 50 percent increase in global crude output by 2030, to 130 million barrels a day. Six years later, production has risen nearly 5 percent, just shy of 90 million barrels a day

5% in 6 years, 45% in the remaining 18 years.

[babystrangeloop]

Would you take a job as a "peak oil is a myth" news writer?

[SeaGypsy]

The best liar is one who knows the exact truth about the lie.
What's the best offer going? I haven't seen any pundit jobs going and I have looked. It seems the big investors rely on their in house economists, who do tend to be blindsided by fundamental resource economics. On the other hand denialist jobs tend to be for PR grads and political spin doctors.

[Cloud9]

Got to get through the election cycle. We can't talk about unsustainable. We might wake up the electoriate.

[ian807]

There's been a number of these "Peak oil fears fade because of increased production" stories making the rounds on the mainstream media.

Difficult to say if this is just the result of lazy, innumerate editors and journalists copying each other or something coming down from the ownership of the major media outlets to calm fears before an election.

Given the ease with which facts and figures about oil depletion can be googled, I'd have to conclude the latter.

[KingM]

Daniel Yergin's forecasts

There's a good one in the article:

in a November 2006 study ... Yergin ... forecast a 50 percent increase in global crude output by 2030, to 130 million barrels a day. Six years later, production has risen nearly 5 percent, just shy of 90 million barrels a day

5% in 6 years, 45% in the remaining 18 years.

And I take that 5% as a fantastic sign. A sharp peak destroys civilization. A plateau put major strains, but allows for a transition without TEOTWAWKI.

[kublikhan]

Yup. Betting against human ingenuity is always a big mistake.

In the energy sector, human ingenuity is mostly applied to consuming our remaining supplies of fossil fuels faster and faster. Even if you are a hardcore corny surely you can see that is at the very least a, shall we say, misdirection of effort? Fossil fuels are putting record amounts of co2(and other emissions) into the environment. Scientists are warning we need to drastically cut co2 emissions, not increase them. Even if it turns out the resource base of fossil fuels is many times larger than originally thought, we are going to cook the planet burning it all. Where you see human ingenuity, I see someone trying to put out a fire with gasoline. The only ingenuity being applied is switching from a garden hose to a fire hose.

Greenhouse gas emissions increased by a record amount last year, to the highest carbon output in history, putting hopes of holding global warming to safe levels all but out of reach, according to unpublished estimates from the International Energy Agency.

The shock rise means the goal of preventing a temperature rise of more than 2 degrees Celsius – which scientists say is the threshold for potentially "dangerous climate change" – is likely to be just "a nice Utopia", according to Fatih Birol, chief economist of the IEA. It also shows the most serious global recession for 80 years has had only a minimal effect on emissions, contrary to some predictions.

"I am very worried. This is the worst news on emissions," Birol told the Guardian. "It is becoming extremely challenging to remain below 2 degrees. The prospect is getting bleaker. That is what the numbers say."

Yet even now politicians in each of the great powers are eyeing up extraordinary and risky ways to extract the world's last remaining reserves of fossil fuels – even from under the melting ice of the Arctic. You don't put out a fire with gasoline.

Worst ever carbon emissions leave climate on the brink

we’re already seeing widespread climate disruption, but if we want to avoid utter, civilization-shaking disaster, many scientists have pointed to a two-degree rise in global temperatures as the most we could possibly deal with.

If we spew 565 gigatons more carbon into the atmosphere, we’ll quite possibly go right past that reddest of red lines. But the oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons—five times more than we can ever safely burn. It has to stay in the ground.

Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela). If you run an oil company, this sort of write-off is the disastrous future staring you in the face as soon as climate change is taken as seriously as it should be, and that’s far scarier than drought and flood. It’s why you’ll do anything—including fund an endless campaigns of lies—to avoid coming to terms with its reality.

What he and the rest of the energy-industrial elite are denying, in other words, is that the business models at the center of our economy are in the deepest possible conflict with physics and chemistry. The carbon bubble that looms over our world needs to be deflated soon. As with our fiscal crisis, failure to do so will cause enormous pain—pain, in fact, almost beyond imagining. After all, if you think banks are too big to fail, consider the climate as a whole and imagine the nature of the bailout that would face us when that bubble finally bursts.

The Great Carbon Bubble

[mmasters]

There's been a number of these "Peak oil fears fade because of increased production" stories making the rounds on the mainstream media.

Difficult to say if this is just the result of lazy, innumerate editors and journalists copying each other or something coming down from the ownership of the major media outlets to calm fears before an election.

Given the ease with which facts and figures about oil depletion can be googled, I'd have to conclude the latter.

Yep they're being proactive in trying to keep a lid on this thing. Why groups like the CFR exist.

Remember when I worked at one of the big brokerage houses the orders would come down for things like this and people obeyed.

[Outcast_Searcher]

Daniel Yergin's forecasts

There's a good one in the article:

in a November 2006 study ... Yergin ... forecast a 50 percent increase in global crude output by 2030, to 130 million barrels a day. Six years later, production has risen nearly 5 percent, just shy of 90 million barrels a day

5% in 6 years, 45% in the remaining 18 years.

AND - even if you actually got the 50% production increase (at high prices), how would this compare to demand? With Chindia leading the way with the rise of the third world bred middle class, demand might increase 100% or so.

Oh, and by 2030 we should have a LOT more evidence if AGW is a major problem (except to the hard right, of course). If it is certain that massive fossil fuel use is destroying us, what then? Just burn the stuff until everybody dies?

[Pops]

IIRC, the IEA said a few years ago production by 2030 would be 130mbd but has been steadily backtracking till now it's saying maybe 105mbd.

[Keith_McClary]

Seen these graphs of Cornie predictions? :

shrinking_gap.png (16.38 KiB) Viewed 603 times

coal_gap.png (37.74 KiB) Viewed 603 times

(UK Coal)

from Peak Oil/Coal and Uncertainty of Climate Change (Powerpoint )

[pstarr]

fantastic keith!