Debunking Peak Oil Theory, by CERA
By Vladimir Comments (28) / Email this page » / Leave a comment »
This article, Peak Oil Theory Could Distort Energy Policy and Debate, appears in the February 2007 issue of The Journal of Petroleum Technology, a publication of the Society of Petroleum Engineers. It just showed up in my inbox this morning.
The Article is written by Peter M. Jackson of Cambridge Energy Research Associates, the energy think tank chaired by Daniel Yergin (author of the excellent book on the history of the oil industry, "The Prize"). CERA takes the anti-Matt Simmons position, forecasting no imminent peak, and a market-driven supply growth at least until 2030.
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Personally, I think there are good points on both sides. Peak Oil theory fails to take into account the market-driven growth of the ultimate resource base by conversion of "near-oil" products such as bitumen and kerogen into the functional equivalent of "conventional" oil.
On the other hand, I'm not convinced that the future of supply growth looks as rosy in reality as CERA represents. Matt Simmons would point out that something like 90% of the world's reserves are in (and owned by) countries with zero transparency, and very little motivation not to lie about their reserves. In his book, Twilight in the Desert, he documents the Saudis' challenge to just maintain current rates.
I think the most realistic scenario is somewhere in between the two - maybe a curve that looks kind of like the blue dashed curve in the graph below (i.e., CERA's "Conventional Oil Only" case). Total global production has been hovering around 85 million barrels per day for a couple of years, two years of very strong prices. We're just not seeing the "breakout" to the high side as CERA suggests. Drilling and producing infrastructure is old, older fields are rapidly declining, and new production capacity will be expensive, dependent on new technologies, and slow to come on line.
You're forgetting the time factor for getting a lot of these fields up and running. Gas reached $3 in the summer and is now hovering at just above $2, so oil companies know we want/need more. But it takes years to fully develop an oil field. We may see increases in production yet!
"In matters of style, swim with the current; in matters of principle, stand like a rock."
--Thomas Jefferson
I will note that Mineral Oil is just such an equivalent for whale oil.
Gasoline is just an unwanted byproduct.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
[Please forgive me] And it's not to take anything away from the gravity of this issue, but every time I see the term "whale oil" anywhere, anytime, I think of one of my favorite movies and wish I was in Sweethaven.
But isn't real whale oil also a food delicacy? I forget. Can't we make it synthetically by this time?
I understand in restaurants there you can go in pick out your frolicking whale and get it cooked to spec.
Couldn't resist. It probably is a delicacy but we have synthetic vanilla and all the food snobs insist on natural.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
We do a pretty good job making synthetic diamond-like substances out of silicon carbide, but I suppose there are still people who want to advance the "peak diamond" theory in a similar fashion. But really, if we do a little creative shifting, we can transition away from oil as easily as we can from diamonds to moissanite, I think. And real, truly full-bodied synthetic diamonds are only a few years away. I guess I just don't believe the hype.
The GIA grades them on the same scale as natural diamonds since 1/1/07
http://www.gia.edu/
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
That diamonds are, more less, a non-exhaustible resource and certainly not a critical resource that drives our economy and way of life.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
As to non critical. I am willing to bet you aren't in any of the engineering disciplines otherwise you wouldnt be saying that.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
How are diamonds critical to our society?
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
http://www.amnh.org/exhibitions/diamonds/shape.html
But a few highlights
cutting tools
drilling tools
grinding tools
surgical blades
optics
high temperature electronics
They are the hardest natural material after all
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
So you think our society would come to a screeching halt without diamonds?
Lots of other really hard materials out there.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
If there were no diamonds we would find other ways to drill through really hard things.
You know this is a reach, Vlad.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
Diamond is probably a poor choice to make your point. Its hardness and nearly perfect crystal structure make it unique, such that the only real substitute is synthetic diamond. And, according to Joliphant's MoNH link, GE & deBeers manufacture 80 tons of synthetic diamond a year, so, yeah, it's used in plenty of critical industrial applications. If forced to make do with a substitute, some of those applications would become impossible, while others would just become more costly.
On the other hand, whale oil (for example, as a lubricant in time pieces), has been completely replaced by a superior synthetic product.
A little compassion for those that share the road with me when I try to drive without them would be in order. They are used to grind and cut glass. (Oddly enough diamonds are the only things that will) I know the sight of aged conservatives trying to drive without our eyeglasses would amuse you, but think of the children we would be running down with our SUVS.
As to finding other ways to drill etc yes probably so there are theoretical substances harder than diamond. Nobody has made them to my knowledge but they are theoretically possible.
On the original topic though you are making the point you can find substitutes or replace. You don't just run out.
The same with oil its just a matter of at what price.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
On numerous occasions I realize we will eventually find alternative options.
But the transition could be devastating.
The transition from diamonds to some other item would not be devastating
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
I see liberals have no sympathy for blind conservatives.
Well I will get in my car and drive in my differently abled fashion and try not to run anyone down.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
You're being obtuse.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
Its not often that I can take the liberal position to make a conservative point.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
But you are making your point based on wholly absurd assumptions.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
??? My assumptions are no more absurd than cogressional policy. Especially our current tax policy. It certainly is no worse than the usual for the children or the poor can't take it arguments.
But seeing as you have conceded the point that there will be a transition to alternates. Lets examine the situation. As the price of oil rises, the desire to rapidly transition will increase. We are allready providing a subsidy to alternate energy sources (including conservation). How much more should we do to ease a transition that will take care of itself over time ?
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
I never said that there WOULDN'T be a transition to alternatives so saying I conceded anything on that point is misleading.
As the price of oil rises there will be more and more pressure to find alternatives. HOWEVER there will ALSO be pressure from those who benefit from high oil costs NOT to find alternatives. And before you label me as a conspiracy monger, this is how controlled markets operate.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
Anyone have an update on the abiotic theory of oil?
...but I don't know that it matters much, if the rate of recharge of reservoirs is much less than the rate at which we're depleting reserves.
Not sure I like their conclusions if only because it seems to admit that oil will eventually decline but they choose to forecast it to a sufficiently far enough time out that people won't worry about it at all.
And while I certainly agree that technology will expand the total global oil reserves beyond current projections I also believe that we are underestimating future demand. If India and China continue to experience solid economic growth their oil demands will increase well beyond the linear rates that seem to be predicted by many.
IOW, I suspect that the geometric increase in demand will offset technological improvements in oil recovery and processing.
FTR, I do not think we need to make knee jerk decisions to implement harsh policies to move us off of oil dependency. But I do think it is time for us to start planning properly. Put nuclear power back on table. Create incentives/disincentives to get consumers to be more fuel efficient, not just with their cars but with their home use.
There are those who look at things the way they are, and ask why ... I dream of things that never were and ask why not. - Robert Kennedy
as your society can afford. A lot of easily mined oil is off limits right now because of environmental regulation. A year or two of $3.50/ Gallon gas would pressure that regulation and make its supporters have to start justifying why elderly poor people from Detroit or Chicago should go without heat in February.
A truly accurate projection fo supply should find a methodology to estimate the regulation-accessible supply versus the geological supply of petro chemicals.
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