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Remember Peak Oil? It Never Went Away

Remember Peak Oil? It Never Went Away thumbnail

Remember peak oil? We recently wrote that it’s back but according to one of the original “peak oilers,” Richard Heinberg, author of the 2005 Peak Oiler classic “The Party’s Over, Peak Oil Is Back,” it never really went away.

According to the analysis done in the ’50s by geophysicist King Hubbert, peak oil was supposed to be happening about now, when production of oil would reach its maximum rate and then start its inexorable decline. In her excellent post—”What is Peak Oil? Have we Reached It?“—Katherine Gallagher described what might happen as peak oil bites:

“A drop in oil supply would lead to a spike in oil and fuel prices, which would affect everything from the agriculture industry to the transportation industry to the technology industry. The consequences could be as serious as widespread famine as food supplies dwindle or a mass exodus from metropolitan areas as the oil supply drops. At its worst, peak oil could lead to massive public unrest, geopolitical upheaval, and the unraveling of the fabric of the global economy.”

hubbert's peak
Balfour & Associates

We previously showed this dire rendering of Hubbert’s Peak from 2005, which puts us in the middle of confusion and heading into a period of chaos followed by collapse. It didn’t quite happen this way, thanks to hydraulic fracturing (fracking) and other unconventional oil sources like the Alberta oil sands. But according to Heinberg, author of the 2005 Peak Oiler classic “The Party’s Over, Peak Oil Is Back,” in fact, it never really went away.

In Resilience, Heinberg noted that fracking may have sent production soaring but the wells declined rapidly, and the boom was financed with cheap money. But it did let us worry about other things, like climate change. If there was any discussion of peak oil, it was a worry about peak demand rather than supply, where nobody wants the stuff because we have electrified everything.

But the European energy crisis caused by Russia’s war on Ukraine has put the supply question back on the table. Heinberg reminds us of the key points about our dependence on energy:

  • Energy is the basis of all aspects of human society.
  • Fossil fuels enabled a dramatic expansion of energy usable by humanity, in turn enabling unprecedented growth in the human population, economic activity, and material consumption.

This is ground covered by Vaclav Smil in his book “Energy and Civilization: A History,” writing: “To talk about energy and the economy is a tautology: every economic activity is fundamentally nothing but a conversion of one kind of energy to another, and monies are just a convenient (and often rather unrepresentative) proxy for valuing the energy flows. “

Smil also introduced us to the economist and physicist Robert Ayres, who wrote that fossil fuels didn’t enable the economy; they are the economy. “The economic system is essentially a system for extracting, processing and transforming energy as resources into energy embodied in products and services.”

Or, as I interpreted it in my book, “Living the 1.5 Degree Lifestyle“: “The purpose of the economy is to turn energy into stuff.” Following those trains of thought, one concludes that with no oil we have no economy.

Heinberg then pointed to new research and concludes that we passed peak conventional oil in 2005 and that “tight” oil from shale and fracking, along with unconventional sources like tar sands and extra-heavy oil, are not far behind. Will this lead to chaos and collapse, or can we have gradual and smooth decarbonization of our economies?

“That depends partly on whether countries dramatically reduce fossil fuel usage in order to stave off catastrophic climate change. If the world gets serious about limiting global warming, then the downside of the curve can be made steeper through policies like carbon taxes. Keeping most of the remaining oil in the ground will be a task of urgency and complexity, one that cannot be accomplished under a business-as-usual growth economy.”

But as Heinberg concluded, these measures will not be enough to dig us out of our coming crises. “Keeping the situation from devolving further will take more than just another fracking revolution, which bought us an extra decade of business-as-usual,” he said.

In what sounds like me calling for sufficiency—or what others call degrowth—he concluded:

“This time, we’re going to have to start coming to terms with nature’s limits. That means shared sacrifice, cooperation, and belt tightening. It also means reckoning with our definitions of prosperity and progress, and getting down to the work of reconfiguring an economy that has become accustomed to (and all too comfortable with) fossil-fueled growth.”

In the 1970s, reducing energy consumption was all about energy independence from foreign sources. In the 2000s, it was about peak oil. From the 2010s to the present, it has been about climate change. Throw in new research on particulate pollution and we have the new four horsemen of the apocalypse: war, climate change, peak oil, and cancer.

It seems we now have four good reasons for doing something about fossil fuels. Perhaps this time, we will.

– Treehugger

7 Comments on "Remember Peak Oil? It Never Went Away"

  1. Dredd on Mon, 14th Nov 2022 7:45 am 

    As with peak oil:

    “Teleology is like a mistress to the biologist; he dare not be seen with her in public but cannot live without her.” —J. B. S. Haldane

    (Quantum Biology – 16)

  2. CK_ on Tue, 15th Nov 2022 8:36 am 

    Climate change is real, of course. Global warming might even be real- but who says it has anything to do with CO2? CO2 hysteria is political cover for Peak Oil. That’s how the PTB justified alternative energy investment without admitting Peak Oil is real.

  3. Dredd on Wed, 16th Nov 2022 4:41 pm 

    ‘The world should be worried’: Saudi Aramco — the world’s largest oil producer — has issued a dire warning over ‘extremely low’ capacity.

    Who to believe?

  4. slope game on Fri, 18th Nov 2022 4:10 am 

    Heinberg then pointed to new research that says we passed peak conventional oil in 2005 and that “tight” oil from shale and fracking, as well as unconventional sources like tar sands and extra-heavy oil, are not far behind.

  5. FamousDrScanlon on Fri, 18th Nov 2022 6:37 pm 

    2005 was the year the industry, including the regulators, changed the definition of CRUDE OIL to include the contents of your BIC lighter & other flammable horse piss.

    All American hype to ensnare fracking investors & wave that dumb flag while loudly bragging –
    ‘US is energy independent – FUCK YEAH!!’, which was a lie (75% of US bragging, in whole or part, is BS, but the insecure need their deceptions.)

    How changing the definition of oil has deceived both policymakers and the public

    “Everyone knows that world oil production has been running between 88 and 89 million barrels per day (mbpd) this year because government, industry and media sources tell us so. As it turns out, what everyone knows is wrong.

    It’s wrong not because the range quoted above can’t be found in official sources. It’s wrong because the numbers include things which are not oil such as natural gas plant liquids and biofuels. If you strip these other things out, then world oil production has been running around 75 mbpd this year.”

    “…..because those liquids are misleadingly lumped in with oil supplies, people have been mistakenly given the impression that world oil production continues to grow. Not true! What’s growing is a category called “total liquids” which encompasses oil, natural gas plant liquids, biofuels and some other minor fuels. Total liquids are growing only because of large gains in natural gas plant liquids and minor gains in biofuels. And, this is why it is so important to understand what natural gas plant liquids are.”

    “They claim that these other liquids are essentially interchangeable with oil.”

    “In a recent report the U.S. Energy Information Administration put it this way: “The term ‘liquid fuels’ encompasses petroleum and petroleum products and close substitutes, including crude oil, lease condensate, natural gas plant liquids, biofuels, coal-to-liquids, gas-to-liquids, and refinery processing gains.” Let’s see why the “close substitutes” assumption is demonstrably false when it comes to most natural gas plant liquids and decidedly disingenuous when it comes to biofuels.”

    Kurt Cobb is a true gentleman & would never call this what it is – a criminal, environmental & political conspiracy perpetrated by a bunch of yellow bellied cock suckers. A few years into their conspiracy, Aubrey McClendon, the CEO of the biggest fracking company, Chesapeake Energy had the guilts so bad he committed suicide. What he deserved, along with many others, was serious prison time & his family assets stripped – it’s never too late.

    Strip out all those ‘not crude oil’ liquids and you can make an argument for 2005 or another date earlier than 2018 being peak oil.

    Since certain oil matters effect national security, those greedy lying conspirators are guilty of treason. They are all big boys who know oil is part of national security, yet choose to lie, putting their greed over America’s national security. That’s treason & Aubrey McClendon knew it & was so ashamed he killed himself…and also because Chesapeake Energy was losing a few billion a year, which made Aubrey an unsuccessful broke ass traitor.

    Hardly Anyone Talks About How Fracking Was an Extraordinary Boondoggle

    July 27, 2022

    “Fracking has been, for nearly all of its history, a money-losing boondoggle, profitable only recently, after being propped up by so much investment from Wall Street and private equity that it resembled less an efficient-markets no-brainer and more a speculative empire of bubbles like Uber and WeWork.”

    “…from 2010 to 2020, U.S. shale lost $300 billion. Previously, from 2002 to 2012, Chesapeake, the industry leader, didn’t report positive cash flow once, ending that period with total losses of some $30 billion,”

    “Between mid-2012 and mid-2017, the 60 biggest fracking companies were losing an average of $9 billion each quarter. From 2006 to 2014, fracking companies lost $80 billion; in 2014, with oil at $100 a barrel, a level that seemed to promise a great cash-out, they lost $20 billion. These losses were mammoth and consistent, adding up to a total that “dwarfs anything in tech/V.C. in that time frame,”

    What happened to all the peak oil denying, fracking cheer leaders who used to strut around here? Hiding in Gail’s skirts.

  6. Michael Lynch (yes that one) on Sat, 19th Nov 2022 9:03 am 

    In all my years of work before 2005, I never heard conventional oil defined to exclude deepwater oil, Arctic oil, or NGLs. Rather, different chemical properties (heavy oil) or production profiles (such as for shale oil) mattered. However, the idea that there was a phase change in 2005 in the industry is incorrect. What has made the difference is the withdrawal of reserves in places like Venezuela and Iraq/Iran (at different times) from the market. The basic arguments for ‘peak oil’ were never valid and advocates are simply seeking rationales for their arguments’ failure. This includes Heinberg whose original book is riddled with errors.

  7. Adam on Mon, 21st Nov 2022 5:53 am 

    I agree that there was no magical phase change in 2005.  “Peak oil” must always be a function of technological capacity, cost of producing what remains underground and the knowledge of both existing reservoirs and those left to still be discovered, all of which are highly interdependent.  As such “peak oil” can never be a fixed point in space or time.  It can only be a snapshot of a specific moment on the trajectory of a continuously moving ball.  Furthermore it makes little difference to the world of energy consumption what gravity of oil is included or not, or whether various gaseous components figure into the total, except for where there are limitations to interchangable use of the total Btu energy produced, due to      factors particular to certain forms of that use, which for a large part are considerably interchangeable. Restricting peak discussions to particular API gravity’s is not very useful, except to restrict the concept of peak oil to something easier to define.  But that also subverts any advantage of calculating what it might be. As much of the USA is now fired by gas, Btu totals seem to be a more descriptive form of what peak oil was supposed to measure, our need to find more sources of Btus. None the less, peak oil is useful to describe the situation for those cases where heat cannot be supplied conveniently to provide energy in other phase states.

    As far as energy independence is concerned, it’s no longer possible.  As we are finding out, shale oil is not very suitable for kerosene and diesel production, which are the products in highest demand today, so counting shale oil means nothing towards the criticality of the situation we find ourselves in at present, as far as supply of those products is concerned and its subsequent impact on self sufficiency.  Yet shale oil still has its usefulness outside of the traditional transportation roles, which are very important in consideration of the “self sufficiency question”.  If the USA, could not produce products from high API feedstocks, that could certainly affect self sufficiency considerations almost as much as a shortage of diesel.  Complete self sufficiency in oil production means nothing, if you must still import baby food from Europe and molybdenum, etc. etc from Africa, etc etc.  But the facts are that the USA is not self sufficient in oil production, because its the wrong oil for meeting all of the requirements the USA needs in its oil supply.  Heavy imported oil needs to be mixed in the USA pot to make enough diesel and kerosene.  Failing that, diesel and kerosene will have to be imported.  Oil Energy dependence on foreign sources is guaranteed until and if a domestic supply of heavy oil reserves are discovered, which appears highly unlikely. 

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