Peak Oil is You
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Page added on March 2, 2017
No Peak Oil For America Or The World
Oil is more plentiful than you can imagine. And we keep figuring out easier and more economical ways to get it out of the ground.
In 1938, the famous geologist M. King Hubbert came up with the concept of peak oil, which is defined as having extracted half of the recoverable, conventional oil reserves. After that, oil production declines and cannot keep up with growing demand as the population continues to rise.
We used to think about Peak Oil like this – the reserves are finite, we know where they are and how long they will last, and we will start running out soon. But with recent technological innovations, we keep finding new oil deposits that are now recoverable and a peak won’t happen for a century or more. Source: Association for the Study of Peak Oil & Gas (ASPO)
In Hubbert’s time, most of the conventional oil reserves had already been discovered. Hubbert went on to predict that U.S. production would peak in 1969, and it did appear to peak in 1970. World reserves were supposed to peak around 2010 (see figure).
However, about 20 years ago, the industry really leapt forward on the technologies to find oil and to extract it. Particularly fracking.
This changed everything.
BP’s Spencer Dale summed it up nicely, “For every barrel of oil consumed over the past 35 years, two new barrels have been discovered.” And this shows no sign of slowing down any time soon. Peak oil has probably moved out a hundred years or more.
While we talk about decreasing our fossil fuel use, it’s easy to forget that humans find it really hard not to use what they have a lot of. And we have a lot of oil. And gas. And coal. In fact, the United States has more oil, gas and coal together than any other country in the world.
Fossil fuels are deposits of hydrocarbon materials in the earth. The conventional types are petroleum or crude oil, coal and natural gas. These deposits form from the organic materials in bodies of long-dead organisms trapped in accumulating sediments, and buried for geologic time.
For petroleum, these were primarily marine organisms such as plankton deposited over the last 600 million years, although most of the petroleum left formed between 65 and 2 million years ago.
For coal, it was plant material primarily from forests deposited during the Carboniferous between 350 and 270 million years ago before microbes had developed that could breakdown lignin, the real hard parts of wood.
Fossil fuels form when these organic materials are heated and pressed as they are buried deper in the Earth. Natural gas consists of the volatile components coming off of petroleum, mainly methane (CH4) but also some ethane, propane and butane. Conventional oil and gas are rarely found at the original site of formation. Coal does not migrated from its original site of deposition.
Because petroleum and gas are fluid and less dense than rock, both migrate laterally and vertically through more permeable rocks until they are trapped beneath dense impermeable rocks that have been folded or faulted into an advantageous shape for trapping. Petroleum and gas are extracted from these conventional traps, or reservoirs, through wells drilled from the surface.
However, unconventional deposits are primarily those where the oil and gas could not migrate to conventional traps, but are stuck in the very tight and tiny pores and fractures in these tight rocks, mainly shales and tight sandstones, or are not very fluid like heavy oils and tars. The ability to seriously exploit these unconventional reserves did not exist practically before 2000.
Think of conventional versus unconventional oil like jelly donuts versus tiramisu (see figure). Drilling into conventional sources is like sticking a straw in a jelly donut – the petroleum is trapped in a large single formation that just flows out under pressure.
Drilling into conventional sources is like sticking a straw in a jelly donut – the petroleum is trapped in a large single formation that just flows out under pressure. Drilling into unconventional sources like oil and gas shale is quite different, more like tiramisu – the petroleum is in many layers that have to be individually tapped using horizontal drilling and fracking methods to open up the rock. Source: Jim Scherrer
Drilling into unconventional sources like oil and gas shale is quite different, more like tiramisu – the petroleum is in many layers that have to be individually tapped using horizontal drilling and fracking methods to open up the rock.
Saudi Arabia has a bunch of really big jelly donuts. The United States has lots of tiramisu, plus some pretty good jelly donuts as well. But we keep finding more tiramisu.
Hydraulic fracturing, or fracking, of these rocks has allowed us to recover gas and oil from these tight rocks, and horizontal drilling, as well as drilling many-directional strings from a single well, have allowed pinpoint targeting of these deposits, making recovery economic. If the crude is think and tarry, and won’t flow at all, like the Alberta tar sands, it must be removed by using heat, steam or solvents and mixed with more fluid crude for transport.
Unfortunately, the environmental cost of unconventionals is even greater than for conventional sources.
World oil and gas reserves are estimated in four ways:
1) those that are economically recoverable (this is what is used most often), also known as proven reserves,
2) those that are technically recoverable (we think we could recover these in the future),
3) total or in-place reserves (the total amount of oil and gas we know of but know we can’t get it all out yet), and
4) Unknown reserves (those we do not know about yet, primarily under ice sheets).
We still only use the first two to estimate global oil reserves, and so they keep changing as we develop new technologies and find new unconventional reserves.
Surprisingly, access to so much oil does not mean the price will go down or stay down. The price of oil is political and is set by the big players, particularly by the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, in a way that maximizes profits and controls supply and demand.
Too much oil on the market means the price drops and oil-producing countries don’t make as much money as they want to. Too little oil on the market means the price skyrockets and people begin to use less oil, become more efficient and move towards non-petroleum sources like electric vehicles. Bad for oil-producing countries
So it is a tightrope walk for oil producers.
As you would expect, these new technologies, and the flood of unconventional sources, have caused some political and economic disruptions. Oi prices had been about $100/bbl for several years running up to 2014. But as shale oil began flooding the global market, the price began to fall in 2014. Usually, when that happens, OPEC cuts production to get the prices back up.
Instead, Saudi Arabia initiated an economic oil war against the United States by refusing to cut production in November of 2014. This was an attempt to drive U.S. shale oil producers bankrupt and slow the flow of North American shale oil onto the global market.
In fact, OPEC increased oil production further, which drove oil prices down even more, eventually dropping to about $30/bbl in 2016, a price at which shale producers can’t even break-even.
Initially, this oil war made the U.S. shale oil industry leaner and meaner as the big guys like Exxon bought out the small guys going bankrupt. But eventually, even the big guys had to decrease shale oil production, and even some conventional reserves have been closed down.
So the oil war seems to have worked out for the Saudis and OPEC. According to Chris Helman of Forbes, the Saudi’s tactic has brought a halt to the shale boom and has also potentially scared off a whole generation of exploration into the deepwater and arctic. “75% of America’s drilling rigs are in mothballs and fracking crews have been tossed to the wind.”
Oil prices are back up over $50/bbl and holding steady.
The unconventional oil is still there, it’s just that OPEC will not make it very economic to recover until we really need it.
But certainly, Peak Oil is no longer in sight.
Dr. James Conca is a geochemist, an energy expert, an authority on dirty bombs, a planetary geologist and professional speaker. Follow him on Twitter @jimconca and see his book at Amazon.com
65 Comments on "No Peak Oil For America Or The World"
Cloggie on Fri, 3rd Mar 2017 11:15 am
http://tinyurl.com/z2znop9
joe on Fri, 3rd Mar 2017 11:38 am
Wind/Renewables like tight – oil sits as a small portion atop the massive pile of fossil fuel. Cloggie likes to claim that his windmills can save but they cant, nuclear claims to be the answer but it’s not, the truth is there is no answer. Easy oil is dwindling, Peak Oil is here, the economic cost to society is being written through a $20,000,000,000,000 national debt, impossibly low interest rates and mass poverty resulting in the election of a mashmallow pied-piper. Peak oil is here. There is no escape.
Simon on Fri, 3rd Mar 2017 12:55 pm
Joe, I cant actually wade through the 52 replies (at this time) but having read cloggies alt. related posts, I have never heard him claim that alts can save BAU, we pretty much agree that BAU in its current form will not last its just he does not see us descending rapidly into the dark ages.
Myself, I reckon we will stop at about 1890’s level tech. (trains / boats / some private cars).
Nony on Fri, 3rd Mar 2017 4:38 pm
Pretty good article actually. OPEC definitely has an impact on price. And shale has limited its impact but not eliminated it. The events (price and volume movements) are pretty clear. This is why I agree with the chief economist at Goldman Sachs and disagree with James Hamilton (who has gone radio silent as his predictions crashed).
As far as the 1938 Hubbard comment, I understand that Hubbert made some predictions far before the 1956 paper. I need to buy the Hubbert biography and check that out. (It could also just be an error, but watch out, not sure it is.)
Oh…and before you kvetch, the bio was written by and admirer of Hubbert, and someone from the political Left.
Anonymous on Fri, 3rd Mar 2017 6:02 pm
Good article, did you like the picture of the jelly donut and cake, just like boatard did? Did it make you want to run out to the nearest dunkin donuts to see if you if there is any oil to be found. Well, cooking oil at any rate.
Jan on Sat, 4th Mar 2017 3:23 am
Cloggie
Why don’t you spend some time reading up on the facts.
Norway pumped hydro contributed only 786 Gwh for the entire year of 2013.
http://euanmearns.com/how-much-wind-and-solar-can-norways-reservoirs-balance/
European consumption is around 303,000,000Gwh so you are not even close.
Also pumped storage can only last a few hours, half a day at most, then the country needs even more power to pump the water back up.
The question that the best engineers are working on is;How to fill the large gaps in electricity that wind and solar leave. They are no nearer with an answer than 10 years ago.
Cloggie on Sat, 4th Mar 2017 3:51 am
Norway pumped hydro contributed only 786 Gwh for the entire year of 2013.
I wasn’t talking about 2013 but about Norwegian potential:
https://deepresource.wordpress.com/2012/10/17/norway-wants-to-become-europes-battery/
The question that the best engineers are working on is;How to fill the large gaps in electricity that wind and solar leave. They are no nearer with an answer than 10 years ago.
The Fraunhofer Institute has the best engineers. Here is their vision:
https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/studie-100-erneuerbare-energien-fuer-strom-und-waerme-in-deutschland.pdf
(page 31 for summary)
They don’t need a Norwegian hydro-storage. 100% renewable energy base is possible for Germany with the same energy consumption as in 2012. Assumption: upgrading all buildings to achieve an heat isolation of 50% as compared to 2012. Buffering of renewable energy via transformation of electricity into methane. Low-grade heat from solar-thermal (190 million m2). PV-solar 1250 million m2. Most on existing rooftops.
In case of merely 70% renewable, no methane buffer is necessary.
100% renewable energy base: it can be done.
Good luck with your plutonium economy.
Antius on Sat, 4th Mar 2017 4:37 am
Here is the quote from Euan Mearns: ‘DGNU should be happy with this result. In its journey through Norway’s reservoirs the wildly erratic wind output shown in Figure 6 has been transformed into baseload generation delivered at a constant 7.9GW for 95% of the time (the lowest output over any one-hour period is 6.5GW). The residual spikes above the 7.9GW line, which presumably would have to be curtailed, make up only 15% of total generation, and interconnector utilization is a respectable 62%.’
So, using the interconnectors, some 7.9GW of baseload wind power can be balanced in this way with a 95% reliability. Impressive, but I am guessing not quite the giant energy battery that Cloggie was hoping for. It would appear to be small compared to average electricity demand in UK, Germany, Netherlands and Denmark.
It is easy to forget that Norway is a country of a little more than 4 million people and its average power output is 11GW. It can clearly only provide a small part of the solution.
Cloggie on Sat, 4th Mar 2017 5:11 am
It is easy to forget that Norway is a country of a little more than 4 million people and its average power output is 11GW. It can clearly only provide a small part of the solution.
The Norwegian output of 11GW is not a measure of the potential. The idea is to build new dams high in the mountains (that are NOT fed by rivers) and pipelines from lower situated reservoirs and use the higher reservoirs behind the dams as buffers.
https://deepresource.wordpress.com/2013/06/26/hydro-power-storage-in-europe/
Potential 18 days EU reserves (not 3 days as I said before from the top of my head).
https://www.greentechmedia.com/articles/read/Norway-Could-Provide-20000-MW-of-Energy-Storage-to-Europe
https://ec.europa.eu/jrc/sites/jrcsh/files/jrc_20130503_assessment_european_phs_potential.pdf
But again, Norway and the rest should be considered and possibly (partially) implemented, but we can always fall back on methane as a storage medium.
Cloggie on Sat, 4th Mar 2017 6:42 am
Just in today, brand new storage method for wind (and solar):
https://deepresource.wordpress.com/2017/03/04/new-wind-power-storage-method/
joe on Sat, 4th Mar 2017 7:14 am
Hubbert believed in allot of things mainly his ideas concern what we now call easy oil. Hubbert didn’t care much about tight oil cause the tech was no good and the analysis tools etc was not good enough. On easy oil Hubbert was spot on, on world easy oil peak theorists are spot on. The real unanswered question now is this, does it matter? We don’t know. Certainly BAU will mean climate destruction and the end of this western version of human life. Can we do away with oil, maybe, can do away with coal and live as we do, no, no way hozay. We live on gas and coal and everything else just is cherries on the top, cars, gucci shoes and Italian leather handbags and all that crap doesn’t happen without the lights on and the hospitals and jails working properly. I keep saying that the west is in peril because of Islam, but that problem would be solved tomorrow if there was no oil for Toyota jeeps and fertiliser for suicide truck bombs. The EU gives so much away in free social welfare that muslims have all this time to hate white Christianity and think of ways to destroy it. Islam in the west suffers greatly from 1st world problems, so it’s men try to atone for lives of luxury by killing and butchering, when all they really have to do is go back to muslim lands and work a feild and feed a poor family, yet they choose violence because they think it’s glorious and God will love them. God will burn them because they chose the easier option of a life of luxury and quick violent death rather than a long life of giving and hardship but proving that people from the west (since they too are westerners now) are not mindless ideologues as easterners assume. Isis and modern islam and 90% of our global so called problems are nothing compared to being hungry or dying of dysentery. People will not give up oil, they do litterally anything to get it and now that it’s getting economically expensive they will put the cost onto the national debt and cut interest rates and keep debasing the value of already fiat currency until the dollar is like those funny African currencies as we just print lots of zeroes after the first digit. By then though the weather will be gone nuts, coastal cities will be building coastal defences to keep out the oceans and food staples will seem like luxury to a falling population unable to take care of the old and sick.
Antius on Sat, 4th Mar 2017 7:24 am
‘Just in today, brand new storage method for wind (and solar):
https://deepresource.wordpress.com/2017/03/04/new-wind-power-storage-method/‘
Underwater CAES isn’t a new idea. The last scheme I saw used butyl rubber balloons and was located offshore.
I wonder if a wind turbine can be made that creates compressed air directly? A directly coupled air compressor may be a lot cheaper than a direct generator as it is a much simpler device.
Cloggie on Sat, 4th Mar 2017 8:15 am
I wonder if a wind turbine can be made that creates compressed air directly?
https://deepresource.wordpress.com/2014/12/10/compressed-air-energy-storage/
Rockman on Sat, 4th Mar 2017 9:26 am
“Cloggie can you tell us how you would fill very large gaps when there is no solar and little wind?” Ohh, ohh my hand is raised…ask me, teacher. LOL.
The same way Texas has: by burning fossil fuels so no problem. By not sitting on our ass waiting for that mythical cheap electricity storage system Texas has built at world class alt energy program. In fact, on a couple of occasions when our fossil fuel burning plants failed us wind power supplied 40% of the demand of the largest electricity consuming state. Saved millions of Texas from sitting in the dark freezing as a polar vortex blew thru knocking out some NG fired power plants.
Texas has never and will never abandon our fossil fuel plants…including the lignite fed. But our alts (especially solar which is now finally coming on strong) decreases our AGW output as well as extending the life of our fossil fuel resources.
John on Sat, 4th Mar 2017 1:45 pm
Anyone still think oil came from plankton or core of earth rotating???