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Peak Oil Consensus 1998: Lesson for ‘Settled’ Climate Science

Public Policy

In “World Oil Crunch Looming?” Kerr surveys the experts to, find, indeed, that a major crunch might be looming, if not imminent. Consensus science it appeared to me with each person interviewed in lockstep agreement.

Even those who believe there’s plenty of oil left in the ground to meet rising demand are warning that the final crisis could come uncomfortably soon,” the summary header reads, indicating a

The entire article is worth re-reading to see how the author, who is also the global warming writer for Science (the flagship publication of the American Association for the Advancement of Science), is ‘drinking his own whiskey’ and ‘smoking his own dope.’ He selects all those who agree with him for information and quotations and pretends, a la postmodernism, that critics are not worth consulting, much less believing.

Breathing a sigh of relief as the price of gasoline plummets toward $2 a gallon and maybe beyond? Thinking $100-a-barrel oil was just a passing inconvenience? Think again.

The fall in oil prices will likely be short-lived, say those in the know. Although price spikes and drops may recur for years, says economist Fatih Birol, “we think the era of cheap oil is over.” He and colleagues at the Paris-based International Energy Agency (IEA) just released their World Energy Outlook 2008. IEA analysts see enough oil still in the ground to satisfy ever-rising demand for decades to come—assuming the price continues to rise. But they aren’t at all sure that the Middle Eastern government-owned oil companies sitting on most of the remaining oil will be pumping it fast enough a decade or two from now to meet the unbridled demands of the rest of world.

Already, countries outside oil-rich OPEC (the Organization of the Petroleum Exporting Countries) seem unable to increase production further, even with the enticement of high prices. IEA’s World Energy Outlook sees that plateau of non-OPEC oil production continuing, putting the burden on a reluctant OPEC to make up the shortfall, if it can.

“It’s getting harder and harder to find an optimist” on the outlook for the world oil supply, says Beijing-based petroleum analyst Michael Rodgers of PFC Energy, a consulting company. Indeed, the IEA report as well as one coming from the U.S. Department of Energy’s Energy Information Administration (EIA, confusingly enough) see hints that the world’s oil production could plateau sometime about 2030 if the demand for oil continues to rise. Unless oil-consuming countries enact crash programs to slash demand, analysts say, 2030 could bring on a permanent global oil crunch that will make the recent squeeze look like a picnic.

It took 140 years for the world to consume its first trillion barrels of oil, notes oil information analyst Richard Nehring of Nehring Associates in Colorado Springs, Colorado. Now, if long-running trends continue, the world will demand its next trillion barrels within just 30 years. Some oil analysts working from their best estimate of how much oil remains in the ground—dubbed “peakists”—see world production reaching its limits in the next few years or a decade and then declining.

Signs of strain may already be emerging. Outside OPEC, oil production has not risen since 2004, even as prices soared. IEA sees no recovery in this non-OPEC production from conventional oil fields. Moreover, it projects that the plateau in conventional oil will turn into a decrease beginning in the middle of the next decade, accelerating through to 2030. Only the growth of production from expensive unconventional sources, such as mining tarry sands in Canada, will keep total non-OPEC production from falling during the next 20 years, according to IEA.

“Non-OPEC conventional production is definitely at a peak or plateau,” says Rodgers. “That’s starting to make people nervous. It’s not what even pessimistic people anticipated.” Three years ago, analysts in and out of the industry predicted that projects under way or planned would dramatically boost world production during the second half of the decade, sending prices back down (Science, 18 November 2005, p. 1106). Only in the 2010s would non-OPEC producers—who had boosted their output 35% in 25 years—falter and level off their production, analysts thought. That predicted plateau may be here already. “Despite all the work,” says Rodgers, “we can’t grow non-OPEC.”

That sinking feeling

A big part of any problem with slaking the world’s thirst for oil, according to IEA’s report (www.iea.org/Textbase/npsum/WEO2008SUM.pdf), is the rapid decline of production from fields past their prime. Any new field produces increasing volumes of oil each year as more and more wells are drilled, but production eventually peaks and, in time, begins to decline. IEA studied 800 fields around the world that had already passed their peak production to see how fast they are declining—a rather rapid 6.7% decline per year, it turns out. And that rate could increase to 8.6% by 2030, IEA says, as the industry turns more and more from waning giant onshore fields to smaller fields and offshore fields, both of which decline faster after peaking.

The decline rate “is a major challenge in itself,” says Birol. “We have found that if we want to stand still—that is, continue producing 85 million barrels per day—for the next 22 years, we need new production of 45 million barrels per day to compensate for the decline. That means four Saudi Arabias.” Add on a demand increase of the sort seen the past couple of decades—equivalent to another two Saudi Arabias—and the world will have to work that much harder to meet rising demand, Birol says.

Even given the extra effort, IEA in its “reference scenario” of future world oil production (see figure) has the world production of conventional crude leveling off early in the next decade. Only a considerable increase in unconventional oil and natural-gas liquids—an oil-like byproduct of natural-gas extraction—keeps world production rising to 2030. With non-OPEC conventional production in this scenario leveling out and then falling, “this time [the effort] needs to come from the national oil companies,” says Birol.

Those are the government-owned companies with the biggest reserves of oil in the ground, principally the OPEC countries of the Middle East. “This aspect is more uncertain,” Birol adds. In the past, IEA and its U.S. equivalent, EIA, have assumed that OPEC could and would make up for any shortfall in non-OPEC production. But this year, IEA’s World Energy Outlook warns that although there’s enough oil in the ground to meet growing demand through 2030, there “remains a real risk” that oil companies—OPEC’s in particular—will soon fail to invest enough in exploration and production efforts. That could precipitate a calamitous oil crunch as early as the middle of the next decade, the report says. “There can be no guarantee that [oil resources] will be exploited quickly enough” to meet expected demand, the report says.

Less encouraging still

In its first look ever beyond 2030, the U.S. EIA is finding even less support for a rosy oil scenario than IEA is. Its report is yet to be released, but EIA’s Glen Sweetnam of the Washington, D.C., offices outlined preliminary results at an EIA conference in April (www.eia.doe.gov/conf_pdfs/Monday/Sweetnam_eia.pdf). Moving beyond their usual approach of simply depending on OPEC to make up any shortfall, EIA analysts considered four factors that bear on how much oil of all sorts—conventional, natural gas liquids, and unconventional—gets produced: demand (high, intermediate, and low scenarios), how much oil was in the ground to start, what fraction of that oil will ever be extracted (some always remains no matter how great the effort), and OPEC’s willingness and ability to respond to increasing demand.

Things look fine right through the rest of the century if, starting now, the whole world severely curbs its appetite for oil, the EIA analysis suggests. In this low-demand scenario, the lingering demand for oil could be met even if the nondemand factors were unfavorable.

Still on the optimistic side, if demand were to continue rising as before and level off starting in 2030—say, in response to crash programs to increase efficiency and develop alternatives—demand could be met into the second half of the century even if a single factor were unfavorable, with one exception. If OPEC does not increase its production beyond its current 34 million barrels per day, world production will plateau within a few years, reminiscent of the potential crisis IEA sees in the middle of the next decade. Most ominously, EIA’s high-demand scenario—higher demand to 2030, then business-as-usual increases in demand thereafter—“may be difficult to meet even with favorable supply assumptions,” said Sweetnam. Unbridled consumption does not seem to be an option.

A hard place

The energy agencies “have done a good job of describing the fix we’re in,” says energy analyst David Greene of Oak Ridge National Laboratory in Knoxville, Tennessee. “They’re recognizing that the non-OPEC world won’t be able to increase production much if at all. The IEA correctly points out the massive investment required” to meet any increase in demand. In fact, it’s not clear to Greene or other analysts that OPEC has any intention of upping production to keep the price of oil relatively low, which would not be in its self-interest. Better to keep more oil in the ground, pinching supply, and sell that oil later at a higher price. And some OPEC countries, such as Iran and Iraq, may not be capable of making the required investment, even though they have the oil.

The United States can help itself, Greene notes, but it’s going to be tough. Insulating the economy from the worst oil price effects “takes a long time, 10 to 15 years. You have to do just about everything you can think of,” from further improving the efficiency of cars and light trucks to bringing on biofuels to producing more oil in the United States. “You have to have a comprehensive structure and a measurable goal. We don’t have that now. I just hope the Obama Administration doesn’t look at the [current] price of oil and shove the problem to the back burner.”

Master Resource



23 Comments on "Peak Oil Consensus 1998: Lesson for ‘Settled’ Climate Science"

  1. makati1 on Thu, 29th Sep 2016 7:39 am 

    More bullshit from the “Hopeium” factory.

    The Age of Petroleum is over. The pains we are experiencing are only going to get worse as systems collapse and the life we all know evaporates into history.

  2. forbin on Thu, 29th Sep 2016 8:21 am 

    “You have to have a comprehensive structure and a measurable goal. We don’t have that now”

    exactly

    Forbin

  3. Davy on Thu, 29th Sep 2016 8:30 am 

    One problem I have with these analysis is the lack of focus on economic decay and multiple other contingent factors. If we have economic demand destruction in action there may be enough oil in a declining economic future. This will be a period of ample supply but with unhealthy economic conditions. That appears to be what we have. We mistake small oil demand increases with economic growth. More people driving is not necessarily more productive economic growth.

    I see oil decline rate and economic deflation in step currently. This is ever so subtle and easy to miss with all the market activity. The global economy and social system is exceedingly complex and beyond any one analysis. A holistic view of where we are going is very difficult to see. It is very hard to step out of the status quo and look in. One needs to take multiple individual views and combine them in a general analysis. The agendas and the marketing need to be digested or removed. If you view all these different trends together in a systematic way that accounts for the interconnectedness of civilization you then can determine an overall trend.

    If we look at energy, climate, and the economy together in a mutual relationship the trend is negative. If one uses their imagination and common sense it is easy to see how this is a dangerous and destructive trend. Many forces are at work and few if any are positive. Time is a very difficult variable. How much time do we have and then there is time value. We live in the short term and can imagine away a bad future.

    We seem to be on a plateau of civilization. We appear to be at an in an inflection zone. We are no longer completely in what we all once knew and we are not yet into the brave (as in scary) new world we partially see and can only imagine at this point. The economy, oil industry, and environment are not healthy. It is my view we are going to see demand destruction along with supply destruction allowing an economic period of stagnation and deflation. Depletion is not going to be the deciding factor until further down the road. The economy is nearing the end of central bank guidance. Socially and politically we are now in a period of decay. Technology and efficiency are not going to power through this decline. They will be available for mass consumption to maintain a smoke screen of optimism. Wealth transfer and corruption will maintain power centers.

    It appears to me we can coast along in this arrangement unless a black swan event or human error disturbs this trend. The reality is this is a very dangerous period of denial, deception, and apathy. It is a period requiring leadership that would apply great action in the face of a building storm of dangers. Instead we have a continued effort to maintain the unsustainable. We still may have a chance if the right crisis develops. In crisis there is change. That is a sad commentary on modern man that it is only crisis that may save him.

  4. rockman on Thu, 29th Sep 2016 9:22 am 

    “I just hope the Obama Administration doesn’t look at the [current] price of oil and shove the problem to the back burner.” Had much of that hope delivered. US oil and NG production increased during most of the POTUS’s term, significantly increased leading of western govt coal leases, coal exports increases including his recommendation to fast track expansion of Texas coal export terminals as well as approving the building of new west coast coal export terminals, oil sands imports have dramatically increased as he pledged full support for pipeline expansions that alleviated the choke point at Cushing, offering to lease over 140 million sacred of offshore acreage and, as of last January, removing the official ban on the export of US oil as well as making no effort to restrict the current export of refinery products made from 1 BILLION BBL OF OIL per year.

    To be honest one could not have expected greater fossil fuel support from a R POTUS. LOL.

  5. onlooker on Thu, 29th Sep 2016 9:36 am 

    To me a financial crisis seems to be the most probable initial catalyst that in turn would set in motion cascading failures on multiple fronts throughout worldwide civilization given hoe interconnected the world Economy has become

  6. Apneaman on Thu, 29th Sep 2016 10:22 am 

    Oh great — scientists just confirmed a key new source of greenhouse gases

    “The new paper, slated to be published next week in BioScience, confirms a significant volume of greenhouse gas emissions coming from a little-considered place: Man-made reservoirs, held behind some 1 million dams around the world and created for the purposes of electricity generation, irrigation, and other human needs. In the study, 10 authors from U.S., Canadian, Chinese, Brazilian, and Dutch universities and institutions have synthesized a considerable body of prior research on the subject to conclude that these reservoirs may be emitting just shy of a gigaton, or billion tons, of annual carbon dioxide equivalents. That would mean they contributed 1.3 percent of the global total.”

    https://www.washingtonpost.com/news/energy-environment/wp/2016/09/28/scientists-just-found-yet-another-way-that-humans-are-creating-greenhouse-gases/?utm_term=.c006164575d9

    Category:Dams under construction

    https://en.wikipedia.org/wiki/Category:Dams_under_construction

  7. Apneaman on Thu, 29th Sep 2016 10:33 am 

    So this is what passes for logic? Because some analysts (and 10,000 amateurs) who predicted peak conventional, and were right, but greatly underestimated unconventional extraction and especially fracking, that some how leads to the conclusion/implication that climate science is wrong? Pray tell O logic masters want to expand on that explanation? Thing is this kind of retard logic works…..on retards which the majority of humans are.

  8. shortonoil on Thu, 29th Sep 2016 12:34 pm 

    Another example of the linear thinking that is so pervasive in the oil industry. They all seem to be riding the same horse in the race. The IEA is saying that demand will be increasing even though there is absolutely no indication that there is anywhere near enough economy to provide for that increase. Price will be going up as supply becomes limited even though there is no indication that demand will not being falling as fast as supply is decreasing. In that case no price increase would occur. It seems that they have all bought the same one trick pony.

    We are presently going into the third year of no price recovery, and elevated inventories. Producers are not replacing their reserves, and profits all across the industry have collapsed. Producers have cut their capital investments to the bone, and are squeezing their sub contractors to death in an attempt to survive. The extraction portion of the industry has seen its revenue decline by 55%, or $1.9 trillion per year. The industry is gasping like a fish tossed up onto the beach, and they still want to sell their magical “when the price improves” story. We hate to inform them but they will all be very dead before that story comes true.

    The price of oil will not be making a magical come back. The value of a barrel of oil to the economy is declining. That is the one piece of the puzzle that they forgot to put into their supply/ demand outlook. They are attempting to put together a jig saw puzzle with a couple of pieces missing. Is it any wonder that they have to rely on hope, and conjecture to to view the final picture?

    The price decline occurred right on schedule: that is, if one was looking at the right schedule.

    http://www.thehillsgroup.org/depletion2_022.htm

    Petroleum’s ability to power the economy is declining. That should be no surprise as soil losses it ability to support crops, and aquifers lose their ability to provide water. It is called depletion, and with petroleum it has almost come to its conclusion. That pony has almost run the race.

    http://www.thehillsgroup.org/

  9. Dredd on Thu, 29th Sep 2016 12:34 pm 

    The military juice keeps flowing as the only way to drown the peace.

    So does the other stuff (Typhoon Triplets For Taiwan).

  10. CAM on Thu, 29th Sep 2016 12:36 pm 

    The biggest problem with both the IEA and the EIA is their belief that all of the petroleum reserves that oil companies and countries have claimed, actually do exist. And further, believe can be exploited economically. Recent history suggests that this is very fanciful thinking.

  11. Elmer on Thu, 29th Sep 2016 12:41 pm 

    Ap,
    Logic was abandoned in our modern societies many years ago. We are now living in Fantasyland…on many levels. When you can live your life in Fantasyland, without any major repercussions (so far!), why bother wasting time with logic and its often inconvenient truths? We have grown mentally soft. Our Fantasyland trip has been enabled by television, fundamentalist religion, corporate power, general apathy, and dumbed-down politics. Millions of people spend hours a day immersed in fantasy….fictional television shows, Fox News… ad nauseam. That’s going to have a serious impact on how society functions.
    The study of logic/critical thinking should be one of the highest priorities in all levels of education. Sadly, it is virtually non-existent. Misplaced priorities. The money-oriented power structure doesn’t see any benefit in it for them. Same goes with environmental studies since it really is our most fundamental component of civilization/life (for example, you can have an environment without economics but you can’t have economics without an environment). Formal education is pretty limited when exposure to these 2 most fundamental components of what would create a successful and sustainable civilization are swept under the rug. I can’t see us moving forward in any meaningful way on addressing the components of energy/environmental/societal collapse unless critical thinking and environmental studies are elevated to the same importance in our educational systems as reading, writing and arithmetic. Maybe from the ashes?

  12. onlooker on Thu, 29th Sep 2016 12:57 pm 

    Great comment Elmer. While the elite power structure deserves much blame in all this, the masses do also. The level of ignorance, apathy and complacency demonstrated by the masses is a sad testament to our limitations as human beings

  13. Plantagenet on Thu, 29th Sep 2016 1:18 pm 

    Yes, the Obama administration successfully dealt with the peak of conventional oil production by allowing the production of millions of bbls of shale oil in the USA each day, and by facilitating iranian oil exports, putting several more million bbls of oil onto the world market each day. However, this success in dealing with peak oil has made the global warming problem much worse.

    Cheers!

  14. Apneaman on Thu, 29th Sep 2016 1:55 pm 

    Elmer, agree entirely. Isn’t to be human to be born and live one’s entire life in Fantasyland? Life is filled with an infinite variety of human fantasy and bullshit dating as far back to the very first writings and we know it was going on a lot longer than that. Probably since the human brain took the great cognitive leap 70,000 – 100,000 years ago. That’s when the complexity and art (abstract thinking) starts to show up in the archaeological record. Who knows why it happened? Maybe the universe want complexity to increase and biological evolution is but one means. God, money, spirits, economics, nation states, ghosts, aliens, science, culture, fairies, elves, Voldemort & Sauron, Kings & Queens, the Bible & Koran, fashion, art and on and on. All of these things we made up. If we did not exist neither would they. It’s not like we dug them out of the earth when we showed up, but the earth and the oil, coal, gas, trees and other life was here regardless of us. Hell is math even real or just another tool we made up to measure shit? “Homo storyteller” (no not cloggie) is what the humans are. I find Ernest Becker’s denial of death theory and the continuation of his work, Terror Management Theory, to have the best explanatory power as to why the humans need their stories. The price of being alive and conscience is knowing that one day you will die and this causes a lifelong state of anxiety. The balm is much of the bullshit we conjure up. AKA, Fantasyland/culture/gods/worldviews. We just happened to be born in a time and place where Fantasyland is global, at the height of absurdity and all of us are on the last ride – The DoomOWhirl

    Terror management theory

    https://en.wikipedia.org/wiki/Terror_management_theory

    Sheldon Solomon: The Worm at the Core

    “Death has been a prevailing cultural theme throughout history and, according to psychology professor Sheldon Solomon, an inherent fear of death powers every action people take–from the cars we drive and the relationships we choose, to artistic expression and even grand foreign policies. He’ll break down the many ways death is “the worm at the core” which drives daily actions, and explain why it’s necessary to overcome this nagging fear. For Solomon, creativity, courage, and compassion are key factors to tackling the persistent–and often overwhelming–knowledge of death at our backs.”

    https://www.youtube.com/watch?v=xioCMK_YO90

    Hope you keep commenting Elmer.

  15. JGav on Thu, 29th Sep 2016 4:56 pm 

    Yes Apnea and yes Elmer,

    Though logic and rationality by themselves, as essential as they are, will never be enough to sate humanity’s hunger for feeling wanted in the universe. Which is why we’re still dealing with religions, cults and clubs of various descriptions etc. The simple fact that the universe doesn’t give a good g-d%§m about what happens to humans is likely to be eluded in the name of ‘Hope,’ ‘Prayers’ and ‘Fantasy-land’ for some time to come.

  16. southwestpa on Fri, 30th Sep 2016 10:49 am 

    Most of this article (all but the first three paragraphs) dates from 2008. The title is more than a bit confusing. See original article at “Master Resource” for a better formatted version.

    Not that it makes much difference to the big picture…

  17. Apneaman on Fri, 30th Sep 2016 10:14 pm 

    Rift Speeds Up Across Antarctic Ice Shelf

    “To the surprise of scientists, satellite images revealed that the fissure had grown by about 13 miles over just a few months — much faster than its previous pace.”

    http://www.climatecentral.org/news/rift-speeds-up-across-antarctic-ice-shelf-20752

  18. makati1 on Fri, 30th Sep 2016 10:55 pm 

    I wonder how much ice will melt before the land lifting up, starts one of the 40+ volcanoes located there? Also, the added weight on the oceans is pushing the sea bed down. That too will eventually open up some new or old volcanoes or cause some horrendous earthquakes. Maybe in unsuspecting locations.

    I think Mother Nature has some surprises in store for us Hairy Apes.

  19. Apneaman on Sat, 1st Oct 2016 12:58 am 

    Rainbombs Keep Falling On Their Heads

    Flash Flood Emergency in North Carolina

    Road closures, water rescues, and school delays have become the norm in North Carolina for the past month. It all started with Julia. Parts of North Carolina saw up to 10-17″ of rainfall as the tropical system lingered along the Atlantic coast. A stalled out front continued to bring scattered storms across the state, saturating the ground.”

    http://www.weathernationtv.com/news/flash-flood-emergency-north-carolina/

    Flash flood in Ontario strands motorists, swamps basements

    https://www.theweathernetwork.com/news/articles/flash-flood-in-ontario-strands-motorists-swamps-basements/72755

    Detroit Flooding: Motor City Under Water

    http://www.weathernationtv.com/news/detroit-flooding-motor-city-water/

    Kinda makes me want to breakout in a song………

    Rain Bombs keep falling on their heads
    And just like the denier whose stories
    Are to-tal-ly spoon fed
    Nothing seems to fit
    Those rainbombs
    Are falling on their heads
    They keep falling.

    So I just did me some
    Yelling at the dumb
    And I said I didn’t like the way
    Their brains have all gone numb
    Sleeping on the job
    Those rainbombs
    Are falling on their head
    They keep fallin’

    But there’s one thing I know
    The storms Gaia sends to meet them
    Will defeat them, it won’t be long
    Till doomyness
    Steps up to greet them

    Rainbombs keep falling on their heads
    And that surely means their eyes
    Will soon be turnin red
    Crying’s all that’s left ’cause,
    They’re never gonna stop the rain
    By denying,
    Because you see
    Nobody rides for free

    It won’t be long
    Till doomyness
    Steps up to greet them

    Rainbombs keep falling on their heads
    And that surely means their eyes
    Will soon be turnin red
    Crying’s all that’s left ’cause,
    They’re never gonna stop the rain
    By denying,
    Because you see, ’cause nobody rides for free

    -Weird Ape Doomovic

    https://www.youtube.com/watch?v=OT1HCQcSHW0

  20. makati1 on Sat, 1st Oct 2016 1:09 am 

    Have they started building an Ark? Anyone know what a cubit is? lol

    Good one Ap! Very good!

  21. peakyeast on Sat, 1st Oct 2016 5:27 am 

    With unconventional resources we wont need 4 saudi arabias to make up for the decline. But maybe 6 or 8 saudi arabias.

    Never mind the pollution and destruction from extracting those 6 to 8 saudi arabias.

  22. Davy on Sat, 1st Oct 2016 7:20 am 

    I always hear we need 4 new KSA’s of oil but the reality is we need 4 more USA’s. The reason I say this is the USA E&P is the future with very small incremental production from dispersed plays and fields. It is unconventional and natural gas liquids. It is secondary recovery and very expensive deep water and fracking. It is legacy fields giving up their last drops. With the US it is about lots of oil but marginally economic oil. This is the future. We are not going to have new Saudi giant fields except in Iraq maybe. The rest of the world will be scavenging for the last of the economic sources all the while the global economy is in deflation and the ability of oil E&P declines. We are on a declining energy gradient with our heads up our asses gleefully thinking our technology and magic markets are going to save us. The reality is very different. Growth of consumption and population is almost to the brick wall. When it hits that brick wall it will smash through it and drop into the abyss of collapse.

  23. Apneaman on Sat, 1st Oct 2016 10:49 am 

    Melting permafrost, just like the settled science predicted – only it’s happening decades earlier than predicted.

    Vanishing Arctic: how warming climate leaves remote permafrost islands on the precipice

    Across the Russian polar regions, these eye-catching pictures show how thawing soil leads to territories being washed away

    http://siberiantimes.com/other/others/news/n0753-vanishing-arctic-how-warming-climate-leaves-remote-permafrost-islands-on-the-precipice/

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