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Peak oil debate

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Peak oil debate

Unread postby aspera » Tue 13 Nov 2018, 02:45:14

Bardi, U. (2019) Peak oil, 20 years later: Failed prediction or useful insight?, Energy Research & Social Science, 48, 257–261.

A B S T R A C T
20 years ago, in 1998, Scientific American published a paper by Colin J. Campbell and Jean H. Laherrère titled “The End of Cheap Oil” [1], starting a debate on oil depletion continuing to the present day. It was the return of a viewpoint on oil depletion which had been proposed more than 40 years before by Marion King Hubbert [2] and, in later years, largely forgotten. In their paper, Campbell and Laherrère updated Hubbert’s model with new reserve estimates and proposed that the world’s crude oil production would peak around 2004–2005, and then start an irreversible decline. Shortly afterward, Colin Campbell proposed the term “peak oil” for the highest global oil production level. The term was to become popular over the following decade, generating a true movement of ideas sometimes called the “peak oil movement.” Today, these predictions turn out to have been only partially correct, mainly because the role of “non-conventional” oil was underestimated. The peak oil movement seems to have faded away, while the concept seems to have disappeared from the debate and to be commonly described has having been “wrong.” The present paper reviews the cycle of the peak oil movement, examining how the peak oil concept was understood with the public and the decision makers and what caused its diffusion and its demise, at least up to the present time.

https://www-sciencedirect-com.proxy.lib ... 9618303207

Quote, Pp. 260 (emphasis added) - ...it must also be said that the weakness of the theory ceased to exist when it was understood that the bell shaped curve is just a simplified version of the general theory of mineral depletion [33] based on the concepts developed first by J. Forrester [34] and by the authors of the 1972 “Limits to Growth” report [35] (For a modern version of these models, see the recently developed MEDEAS model at http://www.medeas.eu).

In short, the basis of the bell shaped curve is in the decline in the net energy of extraction, a concept often expressed in terms of “Energy Return On Energy Invested” (EROI or EROEI) [36,37]. So, the peak oil idea was based on solid theoretical foundations. The quote “when I have new data, I change my interpretation, what do you do, sir?” is attributed to John Maynard Keynes and one wonders why it was not applied to the peak oil theory. With new data input on the consistency of the non-conventional oil resources, the theory could still provide useful information on the future of fossil fuels, but this was not done. Instead, most commentators preferring to engage in an activity that we could define as “Hubbertbashing.”
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Re: Peak oil debate

Unread postby Revi » Wed 05 Dec 2018, 10:27:56

I don't know where we're at, but this article by Ugo Bardi seems to say that we are at the peak of diesel production:
https://www.resilience.org/stories/2018 ... g-for-you/
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Re: Peak oil debate

Unread postby Plantagenet » Wed 05 Dec 2018, 16:22:17

Revi wrote:.....this article by Ugo Bardi seems to say that we are at the peak of diesel production:
https://www.resilience.org/stories/2018 ... g-for-you/


Makes sense to me.

Diesel is made partly from heavy, conventional oil. If conventional oil has peaked then diesel has peaked. You can't make diesel just from the lighter oil that comes from tight oil shale.

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Re: Peak oil debate

Unread postby rockdoc123 » Wed 05 Dec 2018, 17:10:20

Diesel is made partly from heavy, conventional oil. If conventional oil has peaked then diesel has peaked. You can't make diesel just from the lighter oil that comes from tight oil shale.


According to the McKinsey oil assay library the average LTO in the states will yield 10% by volume of Diesel under the distillation process. That is the same yield of diesel as WTI, Arab Light and just above Maya blend at 8%. Bonny Light, on the other hand has a higher yield of diesel at 15%.

The issue really is not the oil type but the setup of the various refineries. In the US the refineries are tooled for crudes that will generate higher gasoline output and less diesel given the main demand they see is gasoline. In Europe, the refineries are setup more for diesel than gasoline. In order to generate significantly more diesel the refineries that are currently geared towards gasoline will have to be retooled which requires enough economic incentive for the owners to do so.
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Re: Peak oil debate

Unread postby Outcast_Searcher » Wed 05 Dec 2018, 17:40:43

rockdoc123 wrote:The issue really is not the oil type but the setup of the various refineries. In the US the refineries are tooled for crudes that will generate higher gasoline output and less diesel given the main demand they see is gasoline. In Europe, the refineries are setup more for diesel than gasoline. In order to generate significantly more diesel the refineries that are currently geared towards gasoline will have to be retooled which requires enough economic incentive for the owners to do so.

Exactly. And when the decision rests with economic incentive, clearly it's a matter of CHOICE. If the need (demand) is great enough, more diesel will be produced, over time.

The idea we need to panic or that more diesel can't be produced is laughable.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Peak oil debate

Unread postby Revi » Thu 06 Dec 2018, 10:02:15

The problem is that we are making less and less of the sweet crude and more and more of either super light, or weird sludge like the tar sands syncrude. The market doesn't want to pay for it. They got about $10 a barrel for the crap they want to push down from Canada, and even Bakken didn't get a good price. The market is beginning to figure out that oil isn't all the same. It only pays full price for the good stuff.

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Re: Peak oil debate

Unread postby rockdoc123 » Thu 06 Dec 2018, 11:32:30

The problem is that we are making less and less of the sweet crude and more and more of either super light, or weird sludge like the tar sands syncrude. The market doesn't want to pay for it. They got about $10 a barrel for the crap they want to push down from Canada, and even Bakken didn't get a good price. The market is beginning to figure out that oil isn't all the same. It only pays full price for the good stuff.


oversimplified I'm afraid and basically incorrect as a result. The main differential currently between Canadian heavier crude and lighter oils in the US has to do with transportation and lack thereof. There is limited egress from Canada to the US, there has been no new pipelines built in a long time and rail can only handle so much due to the availability of railcars. As a consequence lots of production of heavy oil in Canada, not enough upgrading capacity and hence oversupply. As a consequence, the price goes down. If the pipelines were in place to either ship more to the US (which needs this crude for refining) or overseas to Asia the price would be higher because there would be less free supply.

So we have you telling us the heavier crudes are worthless and Shortonbrains telling us the lighter crudes have no value. Strange that these oils were all selling for around $70/bbl not that many weeks ago. :roll:
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Re: Peak oil debate

Unread postby KaiserJeep » Thu 06 Dec 2018, 13:25:05

I read this thread and I just cannot fathom the answer to "the" question. I fully realize the answer is not simple, the question is not easy to answer, and any answer is not without considerable ambibuity, but you guys are experts.

Have we passed the oil peak, or not?
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Re: Peak oil debate

Unread postby Outcast_Searcher » Thu 06 Dec 2018, 20:52:25

KaiserJeep wrote:I read this thread and I just cannot fathom the answer to "the" question. I fully realize the answer is not simple, the question is not easy to answer, and any answer is not without considerable ambibuity, but you guys are experts.

Have we passed the oil peak, or not?

I, for one, have NEVER claimed to be an expert on oil production. I'm a layman who came here to learn more about oil/energy, to help me over time with that segment of my investments.

OTOH, I can read numbers and simple graphs.

Until the global production of refinable crude oil, condensates, etc. -- the stuff that produces things like gasoline and diesel and jet fuel and asphalt, etc. when refined, stops increasing nearly every year global GDP increases -- it is simply LUDICROUS to claim "oil production has peaked", or IMO, "oil production is about to peak".

I don't see how that's unreasonable, but then again, I'm not a Cassandra.

IMO, when we see a 5 year window where each year global oil production is falling while global GDP is rising AND the price of oil is rising (indicating growing demand in the face of current supplies), THEN it will make sense to start investigating whether oil has perhaps peaked, or there are other factors happening.

For example, sometime in the next few decades, I expect EV's to displace the need for most gas and diesel consumption. And oil production may well drop. But when that occurs, the price won't be constantly rising, if it is a "lack of demand" issues instead of a "lack of supply" issue the Cassandras keep wrongly claiming ad nauseum.

So to me, the numbers don't lie, over time. OTOH, I also don't believe the MSM is all a giant conspiracy to hide the truth, like many Cassandras like to claim when their predictions fall flat.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Peak oil debate

Unread postby Revi » Mon 10 Dec 2018, 10:09:52

We'll see. Canada is cutting the amount of syncrude they are producing, the Bakken is falling off, and OPEC is cutting production. That might affect the overall amount produced. I don't know if we're at peak, but it looks like there is a recession coming and that's never good for production either. The price of crude seems to be falling off which means there's less incentive to produce. The price of diesel locally is $3.32, and the price of gasoline is only $2.28. It seems like we have hit peak diesel anyway. Distillates are harder to get than gasoline nowadays. Unless they pull another rabbit out of the hat we may be at peak...
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Re: Peak oil debate

Unread postby Cog » Mon 10 Dec 2018, 10:43:50

If production is being cut to raise price, then we aren't really at peak oil.
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Re: Peak oil debate

Unread postby Tanada » Mon 10 Dec 2018, 11:33:27

Revi wrote:We'll see. Canada is cutting the amount of syncrude they are producing, the Bakken is falling off, and OPEC is cutting production. That might affect the overall amount produced. I don't know if we're at peak, but it looks like there is a recession coming and that's never good for production either. The price of crude seems to be falling off which means there's less incentive to produce. The price of diesel locally is $3.32, and the price of gasoline is only $2.28. It seems like we have hit peak diesel anyway. Distillates are harder to get than gasoline nowadays. Unless they pull another rabbit out of the hat we may be at peak...
https://cassandralegacy.blogspot.com/20 ... u-own.html


To put it politely, no? In September the Bakkan set an all time record of 1,300,661/bbl/d which is the most recent raw stat available. Even if the Bakken is lower in Oct-Dec its not an unusual situation for winter production to be lower than fall production. For example December 2017-March2018 were all lower than November 2017 for that very reason.

Do not give in to cherry picking the data to get the answer you want.
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Re: Peak oil debate

Unread postby Pops » Mon 10 Dec 2018, 12:49:19

In the OP the high school kid was going to debate the fuel of the future and his choice was RE. The attack he anticipated was that RE was too expensive. I don't remember if he ever let us know how the debate went but 15 years later he turns out to be correct, the cost of utility scale wind/solar is below the operating cost of coal and even gas.

My optimistic guess was we would be on the plateau by now but I was not optimistic enough to think we'd be where we are with RE.
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Re: Peak oil debate

Unread postby Revi » Mon 10 Dec 2018, 14:52:54

When we fall off the plateau we will know it. I give it to around 2020 before we fall hard. Right now things are teetering a bit, but the really steep downslope has a while before it's felt. They are switching to something closer to diesel for the world's shipping fleet on Jan. 1st, 2020, so that will put more pressure on the already tight distillates market. This next year is going to be interesting.

https://gcaptain.com/opinion-sulfur-cap ... oil-shock/
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Re: Peak oil debate

Unread postby Pops » Mon 10 Dec 2018, 15:16:57

This is interesting from Matt @ crudeoilpeak.info
Basically the world outside America & Iraq is teetering on the plateau

Image
This is a cumulative curve of Fig 2 with changes in ascending order (from negative to positive). On the left, declining production from group A adds up to -9 mb/d (column at Ecuador). Then moving to the right, countries with growing production reduce the cumulative (still negative) until the system is in balance (column at Canada). Only Iraq and the US provide for growth.
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Re: Peak oil debate

Unread postby marmico » Mon 10 Dec 2018, 15:57:24

What a goofy chart! Cumulative country by country declines from Mexico to Egypt/Chad and then cumulative country by country increases from Egypt/Chad to the US. So Egypt/Chad must be the key. The countries to the left of Egypt/Chad declined and the countries to the right of Egypt/Chad increased.

Bottom line, overall production declined 9 million barrels per day from Mexico to Egypt/Chad and rose 17 million barrels per day from Egypt/Chad to the US, both between 2005 and 2018.
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Re: Peak oil debate

Unread postby Pops » Mon 10 Dec 2018, 21:46:01

Here is the bar chart of the same numbers

Image
I think the first plot illustrates better the tenuous balance of declining vs increasing producers. J6p I'd bet believes there are no decliners, that all producers are increasing and the US just more than most.
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Re: Peak oil debate

Unread postby marmico » Tue 11 Dec 2018, 04:11:27

That is a better chart. But there should be a line showing the cumulative increase of 8 mb/d (green bars minus red bars) since 2005. J6P only cares about the price of gasoline. Less than 0.1% of J6P's are engaged with the numerics and ramifications of peak oil.

There is something to be said about the wisdom of J6P (the law of large numbers).
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Re: Peak oil debate

Unread postby Revi » Tue 11 Dec 2018, 10:58:11

Right now gas is at $2.28, and diesel is $3.32. That means that there is no benefit to having a diesel car. Heating oil is at $3.10 as well. It's going to be a more expensive winter for most people around here. We are experiencing the same thing that caused the French riots, but it's slower here. (And we may not be as revolutionary here either)
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Re: Peak oil debate

Unread postby Tanada » Tue 11 Dec 2018, 11:34:26

Pops wrote:Here is the bar chart of the same numbers

Image
I think the first plot illustrates better the tenuous balance of declining vs increasing producers. J6p I'd bet believes there are no decliners, that all producers are increasing and the US just more than most.


While I understand the message of the first chart, that declines on one side have offset increases for almost all countries on the other side, I think the second chart is a lot better for Joe6P. After all Joe is tired of being lied to by the regular sources and when he sees that first chart but hears that all those right hand countries increased production he can get angry because he doesn't see it that way.

Suggestion, if you want to use the stats to demonstrate the problem I think you could do that quite cleverly by matching the small decline countries with the small gain countries interspersing them from left to right. Above the bars you can put a horizontal line showing net change in world oil supply and it will make the classic 'hockey stick' where Canada, Iraq and USA cancel out the last of the declines and start growing world supply. Actually IIRC things you have said in the past maybe Canada and Iraq would also be cancelled out as well as part of USA. I would do it myself but I stink on ice when it comes to graphing anything, especially on a computer.
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