Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on January 26, 2019

Bookmark and Share

Peak Oil Theory’s No Good Terrible Very Bad Week

General Ideas

Just when you thought continued belief in any of the various brands of “Peak Oil” theory could hardly become less sustainable, you get a week like this one. No matter whether you come at Peak Oil from the supply side or the demand side, several events this week would have had to put you in a definitively sour mood.

Starting off this “No Good Terrible Very Bad” week for the Peak Oilers, UN International Energy Agency (IEA) Executive Director Fatih Birol debunked a popular piece of the demand side of the theory.  Speaking to the World Economic Forum in Davos, Switzerland on January 22, Birol told the delegates that “To say that the electric car is the end of oil is definitely misleading.” Oh.

Birol expanded on that theme by adding emphatically that “Cars are not the driver of oil demand growth. Full stop.” Birol made things even more problematic for those who wish to dramatically accelerate the displacement of internal combustion cars with EVs via massive subsidies for environmental reasons by pointing to the fact that EVs in fact do little to reduce emissions, pointing to the fact that most of the electricity globally is still generated using coal and other fossil fuels. “Where does the electricity come from, to say that electric cars are a solution to our climate change problem? It is not,” he said.

The second major theme of Birol’s remarks also no doubt left Peak Oilers crestfallen, as he revealed that the IEA’s projection for 2019 crude oil demand growth remains a robust 1.3 million barrels of oil per day despite a slowing global economy. (Note:  The report itself has the estimate for 2019 at an even more robust 1.4 million bopd, so Birol may have misspoken.)

This represents a double whammy for the demand side of Peak Oil theory, since the theory always assumes that demand for crude oil can be reduced by slowing economic growth. Indeed, many of the adherents to this demand-side theory actively advocate for governments to pursue policies that would intentionally slow or eliminate economic growth.

Simply put: If the data and projections that Birol rolled out at Davos are accurate, then the often absurdly-aggressive projections of global demand for crude oil reaching its “peak” within a handful of years will have the revised.

But the capper of the week hit hard at the handful of die-hards who still cling bitterly to the belief that the world is running out of oil, and that global production either already has or soon will reach its “peak” and begin a gradual decline. This supply side of Peak Oil theory been repeatedly debunked in its various iterations since it first began to come up in the late 1800s.

This side of the theory was rendered pretty much moot with the advent of the shale era, which led its former advocates at places like the anti-fossil fuel Post-Carbon Institute to switch sides, and turn to demand-side advocacy instead. But for those hardy supply-side advocates still out there, January 24 went south in a hurry with the release of a new report from independent research firm Rystad Energy.

In this new report’s base case, Rystad projects that the United States industry is poise to produce more than 24 million barrels of total petroleum liquids (crude oil, condensate and natural gas liquids) per day by the year 2025. If Rystad’s projection comes to fruition, U.S. total liquids production would surpass that of Saudi Arabia and Russia combined in that year.

For context, and to understand the scale of the shale revolution in the U.S., the country’s total liquids output as recently as 2008 was around seven million bopd. Barely a decade later, that number has jumped to roughly 15 million bopd. A jump of another nine million bopd in the next six years, as Rystad projects, almost defies belief.

Until, that is, one considers that the domestic oil and gas industry increased U.S. crude oil production alone by two million barrels per day from October 2017 through September 2018. So, a rise of nine million bopd in total liquids production over six years suddenly doesn’t seem so unbelievable after all.

If supply-side Peak Oil theory was on life support before, Rystad’s new data should kill it dead, although it will almost certainly pop up once again somewhere down the road. If history tells us anything about Peak Oil theory, it is that there will always be another set of opportunists ready to promote it in some form for their own purposes.

Forbes



23 Comments on "Peak Oil Theory’s No Good Terrible Very Bad Week"

  1. Sissyfuss on Sat, 26th Jan 2019 10:09 am 

    Forbes cares. About money.

  2. Nostradamus on Sat, 26th Jan 2019 10:12 am 

    One thing is for sure. Peak Bullshit from Cornucopians will never be reached.

  3. Cloggie on Sat, 26th Jan 2019 10:34 am 

    Click-bang, that was the mobster who just shot himself.

    Seriously, the real problem is not society running out of oil, but how to get society to abandon the slurry.

    One thing is for sure. Peak Bullshit from Cornucopians will never be reached.

    By mathematical definition, peak anything will always be reached, even if the world blows up. In fact, many peak’s will be reached IF the world blows up.

    Second law of Confucius.

  4. bob on Sat, 26th Jan 2019 10:37 am 

    It’s always good to hear from the ultra-rich yuppy spawn that are destroying our planet and don’t give a damn.

  5. I AM THE MOB on Sat, 26th Jan 2019 11:54 am 

    CLogg

    University of California: Environmental Science & Technology (Malyshkina 2010)

    1. It Will Take 131 Years to Replace Oil with Alternatives

    2. World oil production will peak between 2010-2030

    3. World proven oil reserves gone by 2041

    https://www.scribd.com/document/394656677/Future-Sustainability-Forecasting-by-Exchange-Markets-Basic-Theory-and-an-Application-Malyshkina-2010

    A global energy assessment (Jefferson 2016)

    An extensive new scientific analysis conducted by the Former Chief Economist Michael Jefferson at Royal Dutch Shell published in Wiley Interdisciplinary Reviews titled “A Global Energy Assessment 2016” : says “that proved conventional oil reserves as detailed in oil industry sources are likely “overstated” by half.” & “punt bluntly,the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 876 billion barrels. Thus, despite the fall in crude oil prices from a peak in June 2014, after that of July 2008, the “peak oil” issue remains with us.”

    The World in the 21st Century is faced with huge challenges that go far beyond, but importantly include, energy challenges on the supply, access, and use sides. So severe are these challenges, mainly arising from the demands of a rapidly increasing human population on the Earth’s limited resources, that the future existence of large numbers of people may be threatened with extinction. In that sense, we may be observing the twilight of the Anthropocene (Human) Age.
    https://www.scribd.com/document/394043449/A-Global-Energy-Assessment-Jefferson-2015

    Projection of world fossil fuels by country (Mohr, 2015) Fuel

    Over 900 different regions and subfuel situations were modeled using three URR scenarios of Low, High, and Best Guess. All three scenarios indicate that the consistent strong growth in world fossil fuel production is likely to cease after 2025. The Low and Best Guess scenarios are projected to peak before 2025 and decline thereafter. The High scenario is anticipated to have a strong growth to 2025 before stagnating in production for 50 years and thereafter declining.
    https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015

    IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
    https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790

    There will be an oil shortage in the 2020’s, Goldman Sachs says
    https://www.cnbc.com/2018/11/09/goldman-sachs-there-will-be-an-oil-shortage-in-the-2020s.html

    Wood Mackenzie warns of oil and gas supply crunch
    https://www.ft.com/content/a1eb0e58-d7a4-11e8-ab8e-6be0dcf18713

    Imminent peak oil could burst US, global economic bubble – study
    https://www.theguardian.com/environment/earth-insight/2013/nov/19/peak-oil-economicgrowth

    German Military (leaked) Peak Oil study: oil is used in the production of 95% of all industrial goods, so a shortage of oil would collapse the world economy & world governments
    https://www.scribd.com/document/387459134/german

  6. Cloggie on Sat, 26th Jan 2019 11:57 am 

    What?! Those are fascinating links, mobster, I have never seen before. Why bringing them up at this late hour?!

  7. Outcast_Searcher on Sat, 26th Jan 2019 12:05 pm 

    The one thing completely unsurprising here is the unending braying by the peakers continues unabated, despite any and all evidence against them.

    The most surprising and good news is the extent to which projected NGL’s will increase the capability to produce oil by 2025.

    Whether we get to 24ish MM bopd in 2025 or only well in that direction, the constant FUD by short term peakers that the world will end any time now due to lack of oil is very clearly complete nonsense.

    The biggest big picture problem from this news is that oil prices are likely to remain relatively low on average over time — making the need for a significant CO2 tax on transport fuels all the more important. Otherwise, most people won’t be incented to switch to BEV’s until they are significantly cheaper, due to gasoline and diesel prices staying low.

  8. Outcast_Searcher on Sat, 26th Jan 2019 12:09 pm 

    I AM THE MOB, the markets (current and futures oil markets) say you’re wrong. I’ll take the collective intelligence of the markets, coupled with the very bad track record of the peakers, and say price will take care of short term shortages. Your FUD that we’re doomed due to lack of oil just carries no weight beyond the scope of ourfits like zerobrains (which is almost always wrong, which should be a hint to people who use their brains).

  9. Outcast_Searcher on Sat, 26th Jan 2019 12:15 pm 

    Forbes — maybe one reason people who follow markets are unwilling to subscribe is how terrible the lack of proof reading and writing is in articles like the one above.

    Using the wrong word frequently, and then not even bothering to read the damn thing over and check for errors a 5th grader should catch and correct is NOT impressive. If your authors don’t have the time to make the effort to use roughly correct grammar and wording, what does that say about their effort to get the story is right by cross checking sources, etc?

    But don’t worry too much, since other financial publications like “The WSJ” are generally just as bad, so I no longer subscribe to them either.

  10. I AM THE MOB on Sat, 26th Jan 2019 2:13 pm 

    Outcast

    Time makes more converts than reason..

    -Thomas Paine

  11. I AM THE MOB on Sat, 26th Jan 2019 2:17 pm 

    Outcast

    University of California: Environmental Science & Technology (Malyshkina 2010)

    1. It Will Take 131 Years to Replace Oil with Alternatives

    2. World oil production will peak between 2010-2030

    3. World proven oil reserves gone by 2041

    https://www.scribd.com/document/394656677/Future-Sustainability-Forecasting-by-Exchange-Markets-Basic-Theory-and-an-Application-Malyshkina-2010

    A global energy assessment (Jefferson 2016)

    An extensive new scientific analysis conducted by the Former Chief Economist Michael Jefferson at Royal Dutch Shell published in Wiley Interdisciplinary Reviews titled “A Global Energy Assessment 2016” : says “that proved conventional oil reserves as detailed in oil industry sources are likely “overstated” by half.” & “punt bluntly,the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 876 billion barrels. Thus, despite the fall in crude oil prices from a peak in June 2014, after that of July 2008, the “peak oil” issue remains with us.”

    The World in the 21st Century is faced with huge challenges that go far beyond, but importantly include, energy challenges on the supply, access, and use sides. So severe are these challenges, mainly arising from the demands of a rapidly increasing human population on the Earth’s limited resources, that the future existence of large numbers of people may be threatened with extinction. In that sense, we may be observing the twilight of the Anthropocene (Human) Age.
    https://www.scribd.com/document/394043449/A-Global-Energy-Assessment-Jefferson-2015

    Projection of world fossil fuels by country (Mohr, 2015) Fuel

    Over 900 different regions and subfuel situations were modeled using three URR scenarios of Low, High, and Best Guess. All three scenarios indicate that the consistent strong growth in world fossil fuel production is likely to cease after 2025. The Low and Best Guess scenarios are projected to peak before 2025 and decline thereafter. The High scenario is anticipated to have a strong growth to 2025 before stagnating in production for 50 years and thereafter declining.
    https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015

    IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
    https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790

    There will be an oil shortage in the 2020’s, Goldman Sachs says
    https://www.cnbc.com/2018/11/09/goldman-sachs-there-will-be-an-oil-shortage-in-the-2020s.html

    Wood Mackenzie warns of oil and gas supply crunch
    https://www.ft.com/content/a1eb0e58-d7a4-11e8-ab8e-6be0dcf18713

    Imminent peak oil could burst US, global economic bubble – study
    https://www.theguardian.com/environment/earth-insight/2013/nov/19/peak-oil-economicgrowth

    German Military (leaked) Peak Oil study: oil is used in the production of 95% of all industrial goods, so a shortage of oil would collapse the world economy & world governments
    https://www.scribd.com/document/387459134/german

    Now go back to forum where you can censor folks like me..You book burner!

  12. twocats on Sat, 26th Jan 2019 6:06 pm 

    so this article takes a completely bogus theory of Peak Demand that was originally used to combat Peak Oil Theory, and then calls that theory Peak Oil.

    And counter-arguments on the actual Peak Oil side. The Rystad 24 mbpd study – a number so outrageous its hard to even know where to start.

    collapse is literally all around us at this point – but keep denying. life is better that way.

  13. Free Speech Message Board on Mon, 28th Jan 2019 3:26 am 

    Does anyone get the feeling that if the elites decreed that everyone must have their thumbs amputated, Americans would agree that the law makes sense and must be obeyed?

  14. Michael Lynch on Mon, 28th Jan 2019 3:59 am 

    And this idiot weighs in: https://www.masterresource.org/greenpeace/greenpeace-goes-peak-oil/

  15. Davy on Mon, 28th Jan 2019 5:40 am 

    “Conclusion Peak Oil articles have become very rare these days. But when they appear, they are worth examining to see how the facts are distorted and errant theories are given new hope. Such is the state of Greenpeace “scholarship” where it seems that the Peak Oil choir, out of songs, needs anything to sing. I’ll let you know when this dead horse tries to run again.”

    Mike, you are correct with the traditional peaker talk that was proffered just a few years ago. I was one of them and one of the early ones. This crowd really fell on their faces. Very few legitimate ones are left. For the most part they retired or drifted into other niches. We have our own board dummy, MOB, that doesn’t understand PO. He spams articles daily like that proves peak oil doom.

    PO is one of several dynamics of systematic decline and is not dead. It is part of a process that is pressuring our civilization. We are near boundaries of destructive change on multiple levels and these forces are converging in negative feedback loops. This change could be very destructive but the system is so complex it is difficult for science to understand it fully. Where the traditional peak oil story fails is when it is taken out of this context and only look at in an energy point of view. Peak oil dynamics when combined with economic decline, climate disruption, and other resource depletion issues takes on a new and dangerous role. It is fossil fuels that powers us through planetary and civilization size problems. It will be the lack of them that will likely help bring us down.

    Fossil fuels are declining in net energy ever so slowly when we need them to be gaining. The fossil fuel affordability because of economic issues could be the biggest peak oil dynamics but this will not be seen until the economy drops enough to cause visible peak demand. Supply because of geologic reasons is less of a factor today because of technology but still significant since the world requires growing supply. We are a growth based civilization that appears to be unable to degrowth. What will likely most affect peak supply is peak economy. It is unclear when peak economy will hit and what kind of decline ensues but this is a finite planet. Renewables are coming on strong but still need to go much further before we can claim to be out of the woods. I doubt renewables have what it takes because population is too large, technology lacking, and behavior is not up to intermittency/demand management. I hope I am wrong. Renewables are a “good” factor in peak demand but I am afraid not enough.

    My deep doom of a few years ago was based on the traditional peak oil and the thought that the new normal of economic repression and easing would destroy the world economy. These forces have not gone away. They are proceeding at a different rate than I assumed back in my peaker days. This decline process could go on for years so you may have the opportunity to crow and strut for a while longer. Time is not on your side and the struggle against entropy never stops for our civilization. Mike, you are just another academic extremist pushing your position for personal reasons. Your paycheck depends on your position I am assuming. I could be wrong but that is my feeling. I really don’t know you and all the academic accomplishments you offer do not impress me. Academia and science has been corrupted and are now part of the problem. If you were to say peak oil is still alive I would have more respect for you but you don’t. You claim it is beaten so you are as bad as the gentleman you attacked in the article.

  16. Davy on Mon, 28th Jan 2019 5:46 am 

    Oops, sorry everyone for plugging up the board with another one of my word salad essays. Normal people take a shit when they get up in the morning. For me it comes out of the other end. Y’all can think of it as verbal diarrhea.

  17. JuanP identity theft on Mon, 28th Jan 2019 5:59 am 

    Davy on Mon, 28th Jan 2019 5:46 am

  18. Davy on Mon, 28th Jan 2019 6:01 am 

    At least you are not making all the awful noise you did yesterday, juanpee brain. That was very poor behavior for everyone including your so called friends. I wonder why the site owners don’t kick you off.

  19. peakyeast on Tue, 29th Jan 2019 4:19 am 

    A lot of people obviously still hasnt understood the nature of exponential growth.

    Besides we had peak conventional oil in 2005. What people are doing is comparing apples to oranges and convinced that they are the same.

    And there is a huge difference between BO and BOe which is how they get the “oil” graph to keep rising – besides the double counting of biofuels.

  20. Michael Lynch on Thu, 31st Jan 2019 7:03 am 

    Davy, I take your point but would respond that, in theory, net energy has been declining for a long time and there is no reason to think it’s becoming a factor now (or soon). As Adelman pointed out in 1986, its a constant struggle between depletion and progress, which seems to largely offset over time.

  21. Davy on Thu, 31st Jan 2019 7:18 am 

    Mike, thanks for the reply. I am not only focused on “primary” energy issues so I see the dynamics of peak oil a little differently with different time frames. I admire you and others who stuck to your guns with the shale revolution. I was caught with my pants down with that. I felt between the huge expense of obtaining the resource during a time of massive artificial easing and rate repression shale was going to be a quick one hit wonder. I was wrong but I still feel shale is problematic longer term mainly because of an economic situation I see as decline and decay.

  22. Michael Lynch on Fri, 1st Feb 2019 1:22 pm 

    Davy, I would suggest the book “The Wizard and the Prophet” by Charles Mann. Very interesting on the split between optimists and pessimists.

  23. Davy on Fri, 1st Feb 2019 1:39 pm 

    Thanks, Mike, I will check out the book. I am on the fence so it will be nice to see how others relate to this position.

Leave a Reply

Your email address will not be published. Required fields are marked *