Is Peak Oil Real?
For years now, the idea of ‘peak oil’ has been hotly contested and constantly debated. The validity of its existence and possible seriousness has also been captured in various studies and discussions.
Peak oil is recognized as the point in time in which the earth’s maximum rate of global petroleum extracted is reached. Theoretically, after this point is reached, the rate of production enters a serious decline which will ultimately impact countries in many ways from economical and social standpoints.
This theory is centered around observations made on the production rates of individual oil rates coupled with the production rate of a field of related oil rates.
The important thing to keep in mind when considering this matter is that the total production rate from an oil field is technically supposed to grow exponentially over time. Then, at a certain point, that growth will top out – and begin to decline. There are a number of theories on how quickly the decline would occur. However, the fact that there would be a decline is irrefutable.
Originally, the theories behind peak oil were created and modeled by M. King Hubbert. It was Hubbert who accurately predicted that U.S. oil production would peak between 1965 and 1970. As per the Hubbert model, a production rate of limited resource comes shortly after the symmetrical logistic distribution curve based on various limits of market pressures.
The predications for what the negative effects of an oil peak would entail actually vary from expert to expert. Some suggest that if political and economic changes occur simply in response to high prices and shortages as opposed to the threat of a peak, then the ultimate economic damage that happens will depend on how much oil imports will decline after the peak.
Many of the more optimistic predictions regarding when there will be a global decline in oil -- or the general point of global peak production -- are around the year 2020 or later. Further, it is assumed that by this time alternatives will be able to compensate for any losses that may occur, and as a result, there won’t be any major implications coming of the peak.
The negative predictions regarding peak oil, however, note that the peak has either already occurred or is right around the corner. According to the International Energy Agency (IEA), production of conventional crude oil actually peaked around 2006.
Regardless of where you come down when it comes to whether or not peak oil is “real” though, the steps that the U.S. and other countries are taking as they apply to alternative energy sources and back-up plans should go a long way in easing the possibly disastrous effect of running out oil.
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POST #1)
ERoEI is " energy returned on energy invested." That’s the ratio between how much energy you spend on an energy harvesting project vs. how much energy you get from it.
Back in the “wild cat” era in the early days of the oil business, hitting a "gusher" meant you tapped into an underground oil deposit that contained the following 5 characteristics. The deposit was: 1) found under dry land, 2) close to the surface, 3) liquid in form, 4) mega-sized (contained millions of barrels), and 5) supercharged with a pocket of natural gas. We call such oil deposits “traditional” deposits. (SIDE NOTE: A gas pocket is quite desirable but also very dangerous since it could explode, as was the case with last year’s BP rig in the Gulf of Mexico. The gas in that deposit is also why that well kept gushing for months.)
When an old-time wild catter hit a gusher, it instantly gushed to the surface for him due to the natural gas, thus doing all the work for him, presenting no initial need for a mechanical pump. With no need for a pump, he didn’t (at first) need to INVEST ANY ENERGY in his well. He could easily harvest 100 barrels per day while only investing little more than 1 barrel per day in running a small generator to keep some lights on and operate a company vehicle. So his ERoEI on that well was 100:1 (“one-hundred to one”). Even people not good in math can see the beauty in that. A gusher at 100:1 was how you became a millionaire overnight.
As a well ages, it eventually starts losing its own pumping ability. Then you at last have to bring in that mechanical pump. But even then, the ratio stays profitable for years. The ratio slips slowly, down from 100:1 to 50:1 (fifty to one). You can keep coasting downhill for years, watching the well get older and more sluggish. It’ll stay profitable all the way down at 20:1 (twenty to one). But you won’t have to give up completely until somewhere down at 7:1 (seven to one). At that point the amount of energy you’re feeding the project is no longer worth it. There’s still oil down there but no one wants to bother now. So you pack up your equipment and try to find ANOTHER gusher that can again give you that beautiful ratio of 100:1.
(to be continued in next post)
POST #2)
Well, those ratios of 100:1 no longer exist. The classic, traditional "gusher" oil deposits from the wild cat days that were 1) on dry land, 2) close to the surface, 3) liquid, 4) mega-sized, and 5) accompanied by a gas pocket, are a thing of the past. Most remaining deposits in the world possess one or two of those five characteristics. A scant few possess three or four. But there's no such thing anymore as finding a new oil deposit which possesses all five. Those glory days are gone forever. The easy oil is gone forever. So we're now stuck with the sub-par deposits which we’ve known about for decades, and yet which we also snubbed our noses at for decades because they were unattractive to oil experts. (We’ve known about the Bakken Shale Formation since the 1930’s but it was always deemed a fool’s errand to go after it.) Only now are those same oil experts forcing themselves to settle for the poorer quality deposits. They have no choice now. This is what desperation looks like.
Drilling far out in the ocean or deep under the tundra requires huge, expensive, energy -sucking equipment at the front end. Separating individual molecules of oil bound up inside the composition of shale rocks or else saturated in swampy tar pits also requires huge, expensive, energy-sucking equipment at the front end. So these “unconventional” oil projects all suffer from low ERoEI’s at their outsets. That’s why ERoEI is the very heart of the problem. And please understand it’s NOT a question of money. It’s a problem centered upon energy, and the lack of an excess of energy.
The thing to understand about ERoEI is that you need to start from the outset of a well’s lifecycle with the highest possible ERoEI before you go down to your termination point of 7:1. This is why it’s all a question of numbers --numbers which don’t lie, cannot be negotiated, and don’t care about us. And these modern “unconventional” oil projects involving tar sands and oil shales start off with ERoEI’s of around 3:1 (three to one). And it always only goes down from there --never up. This is “energy suicide”. We’re borrowing from Peter to pay Paul, and cutting off the bottom six inches of the blanket in order to sew those same six inches back onto the top. WE’RE USING ENERGY TO GET ENERGY. It’s a loser’s game. This is the direness we face.
This is not merely a “problem.” It is a full blown crisis --one capable of being a civilization-destroyer. When billionaire Richard Rainwater was shown these numbers six years ago, he said: “This is the first scenario I’ve seen where I question the survivability of mankind.” And then when Virgin Airlines CEO Sir Richard Branson was shown these same numbers, he said: “This an emergency far worse than World War I and World War II put together.”
[Sorry it took so long for me to reply, dpclayburn. The web site kept saying my post was too long. Meawhile, I see cam98 did a fine (and more concise) job also explaining ERoEI. (His is more scientific. Mine is more dramatic.) Hopefuly his post and my two-part post can together be a good primer for the ininitiated.]
--It's NOT a matter of merely needing more investment. Here's why ....
... It's possible to make money out of energy . But there is no way in the physical universe you can make energy out of money. It just doesn't happen.
I again want to stress that this is not INITIALLY an economic problem. It's actually a scientific problem that starts out for us off in the realm of physics, and it can be explained via sheer math. However, because of how crucial oil has become to upholding every facet of our entire civilization, it eventually trickles its way sideways out of the science lab and onto the turf of accountants and investment bankers. And so it BECOMES an economic problem further on down the line.
Energy is NOT a commodity like wheat or pork bellies. Energy is a driving force of the universe which we humans have figured out how to exploit to our advantage. Too many people (especially in business and government) merely think of energy in financial terms, and yet they fail again and again to recognize the hard science behind it. They think of energy as something to be bought and sold, swapped and traded, believing you can convert energy into money, and then convert money into energy, back and forth, etc, etc, ad infinitum. While that might work on Wall Street, it doesn’t fly with Mother Nature.
Energy cannot be created, and that is a scientific fact. If you do not like that fact, you can take it up with God and Isaac Newton. In the mean time, no one can MAKE energy. All we can do is find it and exploit it. And no amount of money in the world can change that fact. Our problem today is that finding energy is getting harder and harder. Once we use a portion of energy, it’s gone and we have to find a new portion. And it’s that one pesky detail about having to FIND new sources of energy that’s posing the problem
So, it is true that energy can be used to make money, but it's impossible for money to be used to make energy. So please, if anyone here thinks our energy crisis is a question of needing more investment, you are wrong. It doesn't work that way. Once you can wrap your mind around the principles behind ERoEI, and once you can convince yourself of the utter truth that no amount of money can force the universe to create more energy, THAT is the point where you will see exactly how dire all of this really is.
What’s more is that technology likewise cannot be used to make energy. Technology merely uses the energy that is already there. But it cannot conjure new energy into existence. If you believe it can, then you probably also believe that a cart can be used to conjure a horse into existence. But the sad truth is that a horse is what makes the cart go, otherwise without that horse the cart is worthless collection of wood sitting lifelessly on a prairie, rotting in the elements.
As I said: this is a civilization-destroying crisis here. Richard Rainwater and Sir Richard Branson are probably smarter than all of us (here on this web page) put together. And if the two of them can see the big picture with such clarity, then perhaps we should take some cues from them on how to regard the seriousness of this whole matter.
--It's NOT a matter of merely needing more investment. Here's why ....
... It's possible to make money out of energy . But there is no way in the physical universe you can make energy out of money. It just doesn't happen.
I again want to stress hat this is not INITIALLY an economic problem.
It's actually a scientific problem that starts out for us off in the realm of physics and, and it can be explained via sheer math. However, because of how crucial oil has become to upholding every facet of our entire civilization, it eventually trickles its way sideways out of the science lab and onto the turf of accountants and investment bankers. And so it BECOMES an economic problem further on down the line.
Energy is NOT a commodity like wheat or pork bellies. Energy is a driving force of the universe which we humans have figured out how to exploit to our advantage. Too many people (especially in business and government) merely think of energy in financial terms, and yet they fail again and again to recognize the hard science behind it. They think of energy as something to be bought and sold, swapped and traded, believing you can convert energy into money, and then convert money into energy, back and forth, etc, etc, ad infinitum. While that might work on Wall Street, it doesn’t fly with Mother Nature.
Energy cannot be created, and that is a scientific fact. If you do not like that fact, you can take it up with God and Isaac Newton. In the mean time, no one can MAKE energy. All we can do is find it and exploit it. And no amount of money in the world can change that fact. Our problem today is that finding energy is getting harder and harder. Once we use a portion of energy, it’s gone and we have to find a new portion. And it’s that pesky part about finding new energy that’s posing the problem
So, it is true that energy can be used to make money, but it's impossible for money to be used to make energy. So please, if anyone here thinks our energy crisis is a question of needing more investment, you are wrong. It doesn't work that way. Once you can wrap your mind around the principles behind ERoEI, and once you can convince yourself of the utter truth that no amount of money can force the universe to create more energy, THAT is the point where you will see exactly how dire all of this really is.
As I said: this is a civilization-destroying crisis here. Richard Rainwater and Sir Richard Branson are probably smarter than all of us (here on this web page) put together. And if the two of them can see the big picture with such clarity, then perhaps we should take some cues from them on how to regard the seriousness of this whole matter.
Q. Is Peak Oil real?
A. Yes.
Q. Will it happen in 2020?
A. No. It already happened some time in 2005-2006.
Q. Will bad things come of it?
A. Yes. The financial meltdown of 2008 was the first huge tremor. More economic shakedowns will follow for many years to come.
Q. Is the .position/conclusion of this news piece accurate?
A. No. Not even close. The final paragraph of this news item makes the inaccurate claim that "the steps that the U.S. and other countries are taking as they apply to alternative energy sources and back-up plans should go a long way in easing the possibly disastrous effect of running out oil ." But there are no steps being taken by most of the world (especially the USA), except to burn even more oil. We are heading straight for a non-stop roller coaster ride full of "disastrous effects" from peak oil.
The most crucial thing needed to help a personal of intelligence to understand in this whole problem is the solid math found in the concept of ERoEI. There is no way around the unmerciful reality of ERoEI. So I implore you to read up on it and then tremble with fear at the staggering implications of it. The remaining oil left in the world is a) of the most deplorable quality, and b) trapped in nearly impossible-to-reach places. And so when you combine those two right there, the remaining oil left in the world is the sort that sucks the life out of oil's ERoEI like a relentless vampire. The EroEI of the world's remaining oil will be the undoing of all of modern society. We are going to lose all the comforts and advantages of Western civilization over the course of the next 30 years due to EroEI. And there is absolutely no alternative energy source capable of replacing oil in all its amazing robustness and ease of usability and portability. All other energy sources pale in comparison. So when the global supplies of oil start to grow short in supply (it's already happening) we will have no recourse but to start using less energy. And THAT will be the tipping point in the demise of our whole way of life. And there is no stopping it. We're already there and we're 20 years too late to try and mitigate this.
There are no steps being taken. Our leaders have failed us. This includes not just our government leaders, but even our scientific leaders and our business leaders and even our journalists. They all let us down. All we can do now is prepare for what is coming, and try and adapt and adjust. But it will not be easy, organized, or painless. It will be hard, disorderly, and messy. It will involve mass bankruptcies, the collapse of nations, wars, coups, and even mass deaths.
The best resource I can direct you to if you want to research it further would be a web site called The Oil Drum. Also, check out the writings and podcasts of Chris Martenson.
In closing, remember this one, sole, all-important fact: ERoEI is the key to everything. The entire field of energy is dictated by ERoEI. And right now, the numbers for ERoEI are slipping, slipping slipping into the danger zone all around the world. The party is over and it's time to pay the bill. EroEI is a cruel mistress.
Energy Return on Energy Investment. Why don't you just take a few lines to explain this? This is not a news article it is the opinion of someone that is not fully informed. I think that the 2005-2006 estimate is correct, but it may still be a few years before we know for sure. The Oil Drum is a very good source for information regarding peak oil . I would also recommend learning how to compost, garden, and becoming aware of different methods to store food . No one really knows if this will be a slow grind or a cliff-type event. I personally believe that governments will attempt depopulation through war and famine. But then again opinions are like a$$holes... What we really have is a society with a value system disorder. If we managed our resources smartly we can turn all of this around. Have you looked into the Venus Project's plans for a Resource Based Economy? I know that at first glance it looks a little sci-fi, but please, please, pretty please try and understand how a Resource Based Economy would work.
http://en.wikipedia.org/wiki/EROEI
Energy return vs. energy invested is the Net Energy received from the resource being used. In the early days of the oil age, the ERoEI was over 100 to 1. You would get back 90 units of energy for every unit of energy used to extract the oil. This was when oil was just gushing out of the ground using very low depth drilling techniques.
Today it's less than 20 to 1. Now, we have to go deeper and into tougher to extract locations that use a lot of energy.
Tar sands, which if you believe the hype, is being touted by many as the "saudi arabia" of North America. Those touting it are either uninformed or purposely trying to mislead. Tar sands has an ERoEI of 1.5 to 5 , depending upon who does the calculation.
http://www.theoildrum.com/node/3839
Corn based ethanol has an ERoEI of only 2 to 1. Sugar based ethanol , as used in Brazil, has an ERoEI of 9 to 1. This is why Brazil has been able to become more energy independent switching to ethanol.
http://www.energybulletin.net/node/21064
Regardless, oil will continue to be more scarce and expensive and no matter what we switch to , we will need to conserve it and cut way back on our energy use. This , of course , does not point to a very strong growing economy going forward.
It is 2011 now. The optimistic projections for the date peak oil will occur is sometime in 2020. Is that just the prediction from Shell Oil Company? Our global infrastructure and food security are dependent on petroleum. After the global peak event our planet will not be able to sustain a population of over 7 billion people. Some groups say that technology can extend our oil dependence for another hundred years. Then what? We have the technology to end this insanity now. We don't implement it because it is prohibitively expensive. If we wait until oil is scarce enough for corporations to make a profit off developing alternative energy infrastructure it will be catastrophic. Profits or people? Please visit thezeitgeistmovement.com take the time to learn what we have to say and think it over a while. We cannot expect infinite growth on a finite planet and we cannot place absolute trust in organizations that only exist to make profit.
There will be a peak everything...
Everything non-renewable at least: Oil, Coal, natural gas, uranium... even the meatals used to make batteries.
Anyone reading this will not likely live long enough to see the end of any of these resources... but in a broader historic sense, some generations from now, we will virtually exhaust the planet.
We would have to cover the land mass of the planet with solar cells and wind turbines to replace all the energy we use today from non-renewables. But few really care, since they won't be personally inconvenienced.
Since our rate of oil usage exceeds the rate of oil production (by a significant amount) it is only a question of when the peak occurs, not if the peak occurs.