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But what about peak oil?

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

But what about peak oil?

Unread postby Pops » Mon 16 Jul 2018, 21:37:57

But what about peak oil?

So after a decade and a half Exploring Hydrocarbon Depletion where are we? We’ve been down every side road. Imagine all the energy used tapping into this site in the last 14 years! Coulda made lots of bitcoin!

When is peak and how will it affect me?


My WAG, to borrow a phrase, is you're soaking in it.

Not sure if it’s truncated, shark-finned, or merely obscured by politics and techno-econo gyrations but we didn’t come out of the last crunch with a bunch more big reservoirs as I think usually happens, we came out with essentially a secondary recovery technique being used as the primary. Either Rock here might agree we didn’t come out with discoveries, we came out with reserve growth.

Hubbert guessed tech would improve, but didn’t think it would be fast enough to increase the peak or move it substantially, but that it would perhaps slow the rate of decline post peak. I’m thinking that is where we are, it’s just that this particular tech worked exceptionally well and super fast. It is skewing the peak that might well have happened without LTO.

The bad part of LTO is it lowered the price of oil right at the time the price signal was affecting consumption, alternatives, lifestyle, and how we thought about oil. But now, after a couple of years of low prices, major automakers are canceling cars! Ford will only make the Mustang and trucks/SUVs on truck chassis of various sizes. The US will be the largest oil exporter! Woot!

The worst thing about LTO is it is actually encouraging us to burn the remaining C+C as fast as possible, faster than if high price had continued and forced us to conserve. Mark one down for the Shark.

Politics will get screwier before we get the Peter Principle President out the door, until then who knows what is going to happen. Currently we’re all paying a Stick-it-to-Obama Iran premium when we fill up, could be lots more of that. I’d give a new Muslim war somewhere in the sand about an even chance–all he’s waiting for is the excuse (at least we know it won’t be with russia).

But the economy is heating up, especially with the corporate person and give-the-rich-a-hand (out) tax break. We all know 3 things precede a recession: overvalued stocks, inflation and high oil price. So a recession is likely fairly soon, says me, and with recession comes easing on oil markets so at least another cycle of oil price at these levels.

Lots of unknowns, political uncertainties, economic inevitabilities, tech Eurekas! and maybe hidden gems like Alaska and the North sea were in the day. But somewhere up this road there is the hard place where geology becomes apparent, in maybe the next 5 years we just might see over the edge and need to drop down a gear or three.

Any guesses?

Image
http://crudeoilpeak.info/latest-graphs
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Re: But what about peak oil?

Unread postby Cog » Mon 16 Jul 2018, 21:43:15

The hate is going to eat you up Pops. Best pace yourself. Six years is a long time.
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Re: But what about peak oil?

Unread postby Plantagenet » Tue 17 Jul 2018, 16:29:57

Pops wrote:somewhere up this road there is the hard place where geology becomes apparent, in maybe the next 5 years we just might see over the edge and need to drop down a gear or three.

Any guesses?

Image
http://crudeoilpeak.info/latest-graphs


Conventional oil has been on a bumpy plateau since 2005, gaining only about 2 million bbls a day in the last 13 years. The big gain of about 5 million bbls per day has come in US LTO.

When you look at US LTO production, the only place where oil production is still growing is in the Permian basin.....and even there growth is stalled just now due to maxing out the available pipelines.

Since the bulk of global oil supply is coming from decades-old conventional fields that are mostly pumped out, and production growth from US TOS is reaching its limits, either some new source of oil will have to be found in the next few years or global production will peak.

Its unfortunate that M. King Hubbert and Colin Campbell etc. all made erroneous predictions about the date of peak oil. The failure of their models and predictions has somewhat discredited the whole idea of peak oil. But that doesn't change the fact that at some point the world will hit global peak oil....and it may come in the next few years, as the Permian peaks.

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Re: But what about peak oil?

Unread postby Pops » Tue 17 Jul 2018, 16:56:14

I believe much of the conventional increase was in Iraq and RU over the last decade. Both "political" in nature, as their production was constrained for reasons not geologic then brought back in the 00s. Something we've talked about here but for whatever reason I guess not easily quantified those kinds of factors don't get incorporated.

Ditto now with Venezuela crashing, they have the largest reserves in the world but ...

Image


Russia was written off, Iraq pooh-poohed, tar-sands discounted and the Bakken of course.

Gotta learn from your mistakes.
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Re: But what about peak oil?

Unread postby marmico » Tue 17 Jul 2018, 17:20:28

Gotta learn from your mistakes.


Does it take 8 years?

In 2010 Brandt identified 45 historical models of future oil supply. None have any statistically significant predictive value.

http://www.theoildrum.com/node/6904
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Re: But what about peak oil?

Unread postby Outcast_Searcher » Tue 17 Jul 2018, 18:09:47

marmico wrote:
Gotta learn from your mistakes.


Does it take 8 years?

In 2010 Brandt identified 45 historical models of future oil supply. None have any statistically significant predictive value.

http://www.theoildrum.com/node/6904

Good find.

Seems to bolster the point I was going to make:

I predict that oil supply (following demand) will tend to increase with global GDP for the next decade. Why? The profit motive, same as it ever was. Following economics seems to be a far better prediction model than various geological, geopolical, doom-centric, etc.

The downside to this of course, is it works until it doesn't. (i.e. we finally hit a clearly identifiable peak in oil production). Hopefully green tech and batteries will be far enough along by then to let us gracefully fall back to reserving oil use for things like plastic instead of burning it for energy.

What happens beyond that (when we run out of oil for affordable plastics)? I predict that all the adults reading this board now are dead by then, so worrying about it seems pointless -- unless that's one's favorite hobby. :)
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: But what about peak oil?

Unread postby Pops » Tue 17 Jul 2018, 18:13:40

Why only a decade?
Why not 2, or 10?
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: But what about peak oil?

Unread postby Pops » Tue 17 Jul 2018, 18:49:53

As you say, honestly, optimism only works until it doesn't, just like all the forecasts of peak have failed —because we haven't peaked. Not sure repeating those mantra is any better than repeating whatever peaker's koan.

What I'm trying to do is introduce back into the discussion all the above ground factors that influence production and peak rather than just repeat the mantras over and over. For example, if USSR hadn't of collapsed in the '90s, cutting production, RU may not have been been able to offset the N Sea decline in the 00s because they'd already burned through the upside.

Let's say you're a lumberman, doesn't matter how much profit there is once you've cut down so much timber you can't maintain production. You can switch to grubbing brush but it ain't like the big wood, sorta-speak...

PS, meant to add a picture this shows OPEC and RU
Image
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: But what about peak oil?

Unread postby Pops » Tue 17 Jul 2018, 19:24:25

I forgot that site P, cool
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: But what about peak oil?

Unread postby GoghGoner » Wed 18 Jul 2018, 05:41:52

Too bad those charts haven't been updated for 2018 for the data browser. Anyway, got to look at the BP Statistical Energy Review of 2018 which the source of the data for the browser -- they are using a 3% decline rate to model future production. Right now, we are looking at >50% decline rates in the shale regions so I wonder what the real decline rate is for the globe now.

I often think about the demand increase we are seeing now because of cheaper prices. One of the obvious reasons for low prices is cheap interest rates. Oh well, since gas prices have gone up 35% in the last year, I have already switched out vehicles to save some gas money -- I suppose the herd isn't too far behind me.
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Re: But what about peak oil?

Unread postby Pops » Wed 18 Jul 2018, 09:39:28

POB does have good info, pretty intent on calling peak tho which was the fault with oildrum I think. If Matt Simmons had stuck with "only see po in the rearview" he'd have had a better legacy, lol. Dennis seems less intent on naming the day and hour.

The big fault seems ignoring above ground in the day to day. For example, is Venezuela's problem political or geological or economic or all three? Can they do anything? Will they?

Big driver of price atm is Iran sanctions. We know Iran is totally political and the price runup is trumps responsibility. OTOH, a trade war would at least bring prices down...

IEA says if political shortages happen, spare capacity will be low and of course spare capacity is the main driver of price.
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Re: But what about peak oil?

Unread postby rockdoc123 » Wed 18 Jul 2018, 10:06:39

All of OPEC (save Iraq and perhaps SA?) is in decline.


Not according to the BP latest data (which is probably more reliable than anything else out there) a full 10 of the 15 OPEC countries show no declines, most have steadily increased after the recession/sanctions/wars, some of plateaued for various reasons. The others largely have endemic problems such as civil war in Libya, terrorism in Nigeria, complete political collapse in Venezuela. These countries are not suffering from a lack of reserves or resources but rather structural impediments to increasing production that are not permanent features.

Image

The big fault seems ignoring above ground in the day to day. For example, is Venezuela's problem political or geological or economic or all three? Can they do anything? Will they?


this is the timing issue I pointed to about a decade ago on this site when SA was forced to up their game as a consequence of rapidly increasing global demand. If anyone actually bothered to read Hubbert's various papers (rather than summarizing someone else who summarized someone else who also didn't read them) what you would find is his consideration is that there is no political or financial impediments to production. Fields are produced as fast as they can be to maximize profits and hence the bell shape. In reality, of course, economics and politics come into play so most fields were never produced flat out, they were managed for various reasons, some regulatory and other economic. The effect of regulatory changes is particularly apparent in the North Sea production history, the second peak a consequence of changes the gov't made to oil and gas regulations and hence improved profitability for operators. So it isn't so much about what resources countries have but the ability to bring them on stream at the right time which is all to do about politics, economics, war etc.

IEA says if political shortages happen, spare capacity will be low and of course spare capacity is the main driver of price.


this is where many get confused. There is the "spare capacity" we normally talk about with respect to OPEC which is defined as the amount of oil that can be brought onstream in 90 days with minimal expenditure and work. What IEA is referring to is that if, for instance, further sanctions on Iran were to occur then someone in the system has to step up production to bridge the gap created by lost supply. For the time those sanctions exist that does impact spare capacity but can be a moving target as we have seen recently with Libya bringing some of it's capacity back on stream. I don't think anybody currently really understands what total spare capacity might look like if there were no wars, sanctions or financial/political crises in oil-producing countries.
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Re: But what about peak oil?

Unread postby Pops » Wed 18 Jul 2018, 10:31:27

rockdoc123 wrote: In reality, of course, economics and politics come into play so most fields were never produced flat out, they were managed for various reasons, some regulatory and other economic.

... So it isn't so much about what resources countries have but the ability to bring them on stream at the right time which is all to do about politics, economics, war etc.

Very good.

I don't think anybody currently really understands what total spare capacity might look like if there were no wars, sanctions or financial/political crises in oil-producing countries.


Yes, this is what finally dawned on me. Of all the plots I've posted, none capture those factors except maybe the ones that imagine increasing oscillation between prices too low and too high.
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Re: But what about peak oil?

Unread postby Outcast_Searcher » Wed 18 Jul 2018, 11:36:09

Pops wrote:Why only a decade?
Why not 2, or 10?

Good question, and I should have explained. My bad.

I think the whole EV (of various flavors) and battery and green energy thing will start to make a meaningful difference. I think that will likely happen in less than two decades.

So beyond one decade (it could easily be 15 years, I'm using very round numbers and gut feel more than math here), I'm believing in EV's of all stripes causing demand destruction -- so I'm not confident the DEMAND for oil globally will continue to grow (regardless of oil resource levels, and how oil extraction technology advances).

To me, that's consistent with the idea that in 3 decades EV's will be quite dominant in private transportation, and within 5 decades, ICE's for private transportation will be rare things indeed.

Unlike many on this site, I'll freely admit I could easily be wrong -- and if I am wrong, I'll freely admit I WAS wrong. :)
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: But what about peak oil?

Unread postby asg70 » Wed 18 Jul 2018, 12:03:13

If we want to project out another 20 years I find it hard to believe this site will still be here in this form for people to take a bow or eat crow over their predictions.

I'm actually quite shocked it's still here in much the same flavor it's been since it started after over a decade.

I mean, some of the endless prediction-as-sport gets silly if you're gonna be a head in a jar ala Futurama to witness whether it panned out as planned or not.

Image

If doom is THAT far off, it's probably not worth investing a lot of mental cycles towards it and just get on with life.

HALL OF SHAME:
-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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Re: But what about peak oil?

Unread postby Pops » Wed 18 Jul 2018, 12:28:59

Outcast_Searcher wrote:I think the whole EV (of various flavors) and battery and green energy thing will start to make a meaningful difference. I think that will likely happen in less than two decades.

I hope you're right. Progress on CAFE, EVs, renewables, CO2 and even the steady high price of oil had me feeling much more optimistic for a while. I bug out from the bugout in fact. It appeared there was a big change from the early 00s.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: But what about peak oil?

Unread postby Outcast_Searcher » Wed 18 Jul 2018, 14:00:25

asg70 wrote:I mean, some of the endless prediction-as-sport gets silly if you're gonna be a head in a jar ala Futurama to witness whether it panned out as planned or not.

Given all the ways people choose to spend their free time, I'm not going to apoligize for some predicton-as-sport, as long as I don't take myself very seriously.

Hell, when watching GOLF is a thing...
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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