Home » Posts tagged 'peak oil' (Page 11)

Tag Archives: peak oil

The world is heading towards a rapid disintegration of its economic and financial system due to a “Thermodynamic oil collapse.” I spoke with Dr. Louis Arnoux of nGeni, about the details of the thermodynamics of oil depletion and its impact on the global economy.

Unfortunately, the world is completely in the dark about this energy information and its dire implications to global economic trade and finance, in a relatively short period of time. I would like to emphasize that this Thermodynamic Oil Collapse Video is the most important interview I have ever done.

During the interview, Louis Arnoux discusses the dynamics of the “Thermodynamic oil decline” using six slides, including one on his nGeni technology towards the end of the interview. The information in this interview is so important, Louis needed to take the extra time to explain these concepts in detail.

In the beginning of the interview, Louis describes the significance of the first chart showing how the world’s fuel gauge is now “Running On Empty.”

Dr. Louis Arnoux presents his views concerning the depletion of oil reserves, that is, how to best assess depletion, what stage the depletion is at and what this means in financial and economic terms. This is based on his own research and on that of Bedford Hill and his Hill’s Group team that he has scrutinised in depth. Dr Arnoux is now part of a team of researchers who have recently refined the Hill’s Group work.

They are presently preparing a paper to be published in a peer reviewed scientific journal that will present their thermodynamic analysis of the oil industry, the Hill’s Group Etp model, how this model enables assessing the depletion status of the global oil reserves, and the high fit of their analysis with empirical data.

…click on the above link to read the rest of the article…

Peak Oil & System Justification: Avoidance

October 16, 2016

Peak Oil & System Justification: Avoidance

080411-042

The researchers found that being intolerant of ambiguity is associated with such conservative characteristics as unwavering certainty and strong loyalty to particular people and positions.
Conservatives don’t feel the need to jump through complex, intellectual hoops in order to understand or justify some of their positions. They are more comfortable seeing and stating things in black and white.…

THE DRAWBACKS OF AVOIDANCE

As much as those on the Right seek to avoid ambiguity, nuance, and examination of the various complexities of most significant social, political, and economic issues, the resistance to acknowledging the potentially drastic impacts and implications of a peak in oil production and climate change cannot be fairly or honestly explained in a sentence or two. Our 21st Century planet is not exactly a black and white/either-or/yes-no world.

Of course, that immediately presents a bit of a challenge. Being pre-disposed to ignoring or dismissing any set of facts which create cognitive dissonance [or stimulate the fear they are actually trying to avoid], may offer some comfort, but….For those ensconced inside their denial bubbles, choosing to ignore the very information they’ll need to manage the conditions which arouse those very fears is a curious approach.

The conservative inclination to “cut to the chase” in decision-making and policy-making is a time-saver, to be sure! But once we get beyond kindergarten or first grade problem-solving, avoiding the complexities of modern society’s greatest challenges [with the myriad perspectives, differences, needs, purposes, and expectations which contribute to both the challenges and the solutions] by cutting to the chase is at its very best intellectually lazy. Actually, it’s counterproductive in the extreme.

…click on the above link to read the rest of the article…

Peak Oil; Climate Change; & System Justification Pt 10

October 1, 2016

Peak Oil; Climate Change; & System Justification Pt 10

100_0020

Shaping our identity in large part by the groups we align ourselves with for emotional, psychological, cultural, and political reasons are powerful anchors—individually and collectively. All of us are much more inclined to seek out information and assurances which bolster who we believe ourselves to be rather than contemplate facts or assessments casting doubt about our choices and conclusions.

GROUP INFLUENCE

The more solidly anchored one might be in the identity of their chosen group(s), the less likely it is that information contradicting “group-think” will be received well, or at all. Human nature being what it is, we’re all psychologically inclined to seek out and accept information which supports our beliefs and values, and thus much less inclined to consider data which casts doubts on what we’ve come to believe.

Being actively critical of something one is dependent on is thought to be psychologically uncomfortable, and therefore avoided in favor of increased perceptions of legitimacy, trust, and desirability. System justification theory posits that people are motivated to justify and legitimize the status quo and the system in which one lives. Many mechanisms for this motive have been proposed and studied, including threats to the system, decreases in personal control, feelings of restricted exit, and feelings of dependence on the system. In such situations, instead of becoming increasingly critical of a system that one is dependent on, which would cause considerable dissonance and psychological discomfort, people have been shown to become increasingly motivated to justify and legitimize that system (citations in original quote).

So the message that our technological prowess is a direct contributor to the problems of a warming planet, and/or that for all of our ingenuity and technological advances industry will not overcome the realities of drawing down a finite resource, is especially troubling to a conservative mindset firmly convinced that our market system can solve any problem.

…click on the above link to read the rest of the article…

Mexico, China and Beyond

September 25, 2016

Mexico, China and Beyond

Ron Patterson’s post asking if China’s oil production has peaked reminded me of Mexico
which also produces mainly from supergiant fields. Mexico’s oil production peaked in 2004 and has averaged a 3.5 percent per annum decline rate since, with a peak yearly decline rate of 9 percent in 2008. China’s oil production has fallen 10% from its peak in 2015. Part of that is oil price-related as the Daqing oil field has an operating cost of $46 per barrel and could reverse as the oil price rises. The comparison of China and Mexico with a projection to 2023 is shown in the following figure:

da-1

The production histories tracked each other from 1965 until they parted ways in 2005. Themainstay of Mexican production had been the Cantarell field as shown by this graph from The Economist with data up to 2011:

da-2

Cantarell production had been pumped up with nitrogen injection until sudden collapse in2005. Part of the decline from Cantarell was offset by increased production from Ku-Maloob-Zaap. Mexico is now producing slightly more oil than it consumes. In the absence of successful privately funded oil exploration from here, Mexico will become an importer of both oil and food.

A good description of the Chinese oil production industry is provided by a paper by Aleklett, from the University of Uppsala, et al from 2010 using data up to 2007. One field, Daqing discovered in 1959, had been producing about a million barrels per day for close to 30 years:

da-3

Table 2 from that paper is reproduced following. It shows that only one of the Chinese giant oilfields would not have entered decline by 2015:

da-4

…click on the above link to read the rest of the article…

Peak Oil; Climate Change; & System Justification Pt 8

September 17, 2016

Peak Oil; Climate Change; & System Justification Pt 8

IMGP0789

Of course it’s threatening to think that our lifestyles, systems of governing, and capitalist processes themselves may all face drastic changes in the not-too-distant future because of the facts and reality of Peak Oil and climate change! I’m certainly notthe poster-child for Peak Oil advocacy and lifestyles. I have a very nice, capitalist, well-to-do lifestyle. To hell with all of you, I don’t want MY life to change!

STATING THE OBVIOUS

I’ve noted this on several occasions: I’m willing to wager that almost all those urging greater awareness of the oil production/energy supply challenges we’ll be facing soon enough would be delighted to be proven wrong. None of us are eagerly—or in any other manner—awaiting the onset of the inevitable magnitude of personal, economic, commercial, and cultural changes which our beliefs about peak oil suggest. Being wrong about this would be ideal, but we—I—have serious doubts about that outcome being the likeliest.

There’s too large a group of ardent and well-financed others well aware of the inherent limitations finite resources carry. They more than most appreciate how widespread will be the impact of a diminishing energy supply colliding with increasing demand and a growing worldwide population. They also understand—as do those opposing/denying the facts of climate change—the costs and consequences to their own organizations once their Business As Usual practices succumb to the production facts of these finite resources.

What worries us: the problems will be of such scope and impact and complexity that we strongly believe in a need for planning to take place now—by all of us, both Left and Right—and we’re not seeing enough honest, intelligent, rational analysis from those whose contributions will be every bit as important and meaningful. The ideology sponsoring practical and effective adaptations and solutions won’t matter to us if they work.

…click on the above link to read the rest of the article…

China’s oil peak 45 years after the US peak

September 10, 2016

China’s oil peak 45 years after the US peak

Empty_roads_Hangzhou_G20

Fig 1: Oil crisis in China like in 2005? No. By order: Free roads for G20 in Hangzhou

https://www.theguardian.com/world/2016/aug/31/china-hangzhou-propaganda-facelift-g20-summit

Strategically published only days before the G20 summit the Wall Street Journal had an article on peak oil in China:

China’s Decline in Oil Production Echoes Globally

25/8/2016

chinapeakoil

Fig 2: A flat production peak in China
http://www.wsj.com/articles/chinas-decline-in-oil-production-echoes-globally-1472122393

It hasn’t echoed during the G20 summit.

If China is at peak oil now, then China is where the US was in 1970, 45 years ago. Let’s first have a look at what happened in the US. We limit ourselves to 30 years because 2000 was the last “normal year” before 9/11 and the Iraq war.

US_30_years_after_1970_peak

Fig 3: the first 30 years after the US oil peak

When US oil production peaked in 1970, US oil net imports were 3.4 mb/d. 30 years, 2 oil crises and 1 Desert Storm later the US imported 12 mb/d, a total of 85 Gb during that period.

Of course it is nearly impossible to compare the US and China. The IEA has a table on Chinese oil demand in its World Energy Outlook WEO 2015:

US_China_oil_demand_to_2040_WEO_2015

Fig 4: Oil demand table in the IEA World Energy Outlook 2015

http://www.worldenergyoutlook.org/weo2015/

Note the opposing trends for the US and China:

Comparison_US_China_oil_consumption_200-2040_WEO2015

Let’s put the Chinese consumption into a graph, together with an assumed production profile, (similar to Fig 3):

China_oil_production_consumption_2010_to_2045

Fig 5: China’s oil imports for several scenarios

We assume that Chinese decline after peak production will follow the US pattern. On the consumption side the dashed line is the New Policies Scenario in the IEA WEO 2015, the thin straight line a 1.5% growth scenario starting with 2016. The IEA also assumes a CAAGR of 1.5% but applies it to a lower consumption level in 2014, explaining the difference in the later years.

For orientation and comparison, the dotted line shows the US consumption path shifted by 45 years to the Chinese consumption level in the production peak year 2015.

…click on the above link to read the rest of the article…

Welcome to the Age of Crappy Oil

September 10, 2016

Welcome to the Age of Crappy Oil

It’s been a while since we’ve heard about peak oi l—the point at which we use up half the world’s reserves and see production terminally decline—but it’s happening. And yet, we still have enough oil left to burn our way to climate catastrophe.

In a paper released at the end of July, Sir David King, the British Foreign Office’s Special Representative on Climate Change, and his co-author, Oliver Inderwildi of Oxford University’s Smith School of Enterprise and the Environment, refute what they call “a common misperception about peak oil”: that fossil fuels are growing scarce.

Rather, they argue, peak oil means it’s getting more difficult and costly to get oil out of the ground—and there’s less of the cheaper, easy oil available.

The age of easy oil is over

Plummeting oil prices in the wake of the US shale boom have led many to dismiss peak oil as little more than a doom-mongering myth.

In his study published in the peer-reviewed journal, Frontiers in Energy, King agrees with critics that the planet is swimming in oil. But he warns that peak oil proponents are still right to warn of oil’s growing economic and environmental costs:

Haliburton fracturing operation. Image: Joshua Doubek/Wikipedia

“We are not running out of oil, but we have reached a plateau in easy, inexpensive conventional oil production, which will be followed by a fall in production…Novel unconventional oil reserves are abundant, but are more costly to produce, provide less net energy and cause more GHG [greenhouse gas] emissions.”

Up until 2005, economic growth was enabled by exponentially rising production of cheap conventional oil. But since then, conventional production has stopped rising. To keep the economy chugging along we’ve started using more expensive forms of unconventional oil—which are worse for the environment, and require more energy just to get out the ground and become usable.

…click on the above link to read the rest of the article…

Peak oil by any other name is still peak oil

September 10, 2016

Peak oil by any other name is still peak oil

One of the most compelling charts I have ever seen is the “Growing Gap” chart that used to appear in every ASPO Newsletter. This is the one from the last ASPO Newsletter, written by Colin Campbell and published in April 2009.

Since then, more than seven years have passed, and peak oil has disappeared from the mainstream press headlines–almost. On August 29, Bloomberg published a story alerting to the fact that conventional oil discovery has reached a 70-year low. It published a very interesting chart, using data provided by Wood Mackenzie, the oil consulting firm, to show that fact. Unlike the ASPO chart, Bloomberg’s chart only goes back to 1947, the year before Ghawar was discovered.

I thought I would reproduce the “Growing Gap” chart using Wood Mackenzie’s data.

Neither Wood Mackenzie nor Bloomberg make public the data behind the chart, but I used a digitization program, WebPlotDigitizer, to extract data from the chart. The results are not perfect, of course, but give a good enough estimate. One must keep in mind that discovery data are not precise and may have a significant margin of error.

In order to obtain conventional oil production, I subtracted US tight oil production and Canadian tar sands productionfrom the EIA’s global crude plus condensate number. I know I must also subtract the extra-heavy production from the Orinoco Belt, but it is hard to find data for it. In any case, this is a very good estimate. According to data gathered byJean Laherrère, the Orinoco extra-heavy production is only around 1 Mb/d today.

The following chart shows the digitized Wood Mackenzie conventional discovery data and the production data described above. According to the data, since 1980, when the gap between production and discovery began to appear, humanity has extracted about 47 percent more conventional oil than it has discovered.

…click on the above link to read the rest of the article…

An Updated Version of the “Peak Oil” Story

August 16, 2016

An Updated Version of the “Peak Oil” Story

The Peak Oil story got some things right. Back in 1998, Colin Campbell and Jean Laherrère wrote an article published in Scientific American called, “The End of Cheap Oil.” In it they said:

Our analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand.

There is no single definition for conventional oil. According to one view, conventional oil is oil that can be extracted by conventional methods. Another holds it to be oil that can be extracted inexpensively. Other authors list specific types of oil that require specialized techniques, such as very heavy oil and oil from shale formations, that are considered unconventional.

Figure 1 shows the growth in unconventional oil supply for three parts of the world:

Oil from shale formations in the US.
Oil from the Oil Sands in Canada.
Oil characterized as unconventional in China, in a recent academic paper of which I was a co-author. (Temporarily available for free here.)

Figure 1. Approximate unconventional oil production in the United States, Canada, and China. US amounts estimated from EIA data; Canadian amounts from CAPP. Oil prices are yearly average Brent oil prices in $2015, from BP 2016 Statistical Review of World Energy.

Oil prices in 1998, which is when the above quote was written, were very low, averaging $12.72 per barrel in money of the day–equivalent to $18.49 per barrel in 2015 dollars. From the view of the authors, even today’s oil prices in the low $40s per barrel would be quite high. Since the above chart shows only yearly average prices, it doesn’t really show how high prices rose in 2008, or how low they fell that same year. But even when oil prices fell very low in December 2008, they remained well above $18.49 per barrel.

…click on the above link to read the rest of the article…

M. King Hubbert and the future of peak oil

July 17, 2016

M. King Hubbert and the future of peak oil

Almost synonymous with the term “peak oil” is M. King Hubbert, perhaps the foremost geophysicist of the 20th century, who first theorized about the eventual decline of oil production in the 1930s. His life has now been chronicled by science writer Mason Inman in a new biography entitled The Oracle of Oil.

Depending upon whom you speak with, peak oil is either a catastrophe waiting to happen or a far-off concern that has already been solved or will be soon. Frequently, peak oil is referred to as a myth. What you rarely hear is that peak oil is an empirical fact having already occurred in dozens of countries.

The term “peak oil” simply means that crude oil production for any field, region or country eventually reaches a peak or plateau from which it inexorably declines. Because the amount of oil in the Earth’s crust is finite, it is logical to assume that one day peak oil production will occur worldwide. The concern is that we as a global society are so accustomed to rising oil production that we have built an entire world around that assumption. Will we be ready when oil production begins to decline?

To shed some light on that and other questions author Inman takes us from Hubbert’s early days at the University of Chicago to his famous speech in 1956 (in which he predicted a peak in U.S. crude oil production no later than 1970) to his days in Washington, D.C. working for the U.S. Geological Survey and his fights there concerning the timing of a U.S. oil production peak.

In the course of the story Inman puts to rest misconceptions about Hubbert and about peak oil. First and foremost, peak does NOT mean running out. As explained above it means the trend of rising oil production reverses into a decline.

…click on the above link to read the rest of the article…

Peak Oil; Climate Change; & System Justification Pt 1

July 17, 2016

Peak Oil; Climate Change; & System Justification Pt 1

20160624_214542

Research has powerfully illustrated that a lack of knowledge in domains such as energy and the environment can lead to bad decisions and erroneous beliefs that hinder a society’s ability to create change in domains that require it

KNOWLEDGE & UNDERSTANDING

Rather self-evident, isn’t it? Certainly that observation is not limited to energy and environment, but the more complex the challenge, coupled with the greater potential impact, the more critical it becomes to understand the issues—all of them—and the range of consequences should there be a failure to respond appropriately.

There are reasons and explanations as to why the general population—and those leaning Right in particular—choose to deny, avoid, or ignore matters of great import and impact. That the justifications, rationales, and innate strategies used might be understandable should not be the end of the discussion. Self-awareness and introspection carry their own set of benefits.

This new Friday series, extending well into the latter part of 2016, will examine the concept of System Justification * and the role in plays in generating continued opposition and denial of the facts and implications of both a peak in the rate of oil production, and climate change. Facts won’t go away, and denial is not a shield, but there are well-defined patterns and behaviors which provide a foundation for the tactics employed to sow doubt and preserve the comforts of the known and familiar.

While the benefits are clear and gratifying today, the ongoing failure to move beyond the emotional and psychological comforts afforded by system justifications is not without its costs and consequences. A greater appreciation for not just the facts of peak oil and climate change, but an understanding as well of how we respond to them, why, and what happens if we fail examine other approaches is arguably of more enduring benefit.

…click on the above link to read the rest of the article…

Peak Oil in Asia and oil import trends (part 2)

June 26, 2016

Peak Oil in Asia and oil import trends (part 2)

We pick up the question from part 1:

Asia_oil_production_consumption_2005-2015_fill_in-2035

Fig 11: Homework for governments

Let’s have a look where all the net imports into Asia have come from in the past:

Asia_net_imports_2001-2015

Fig 12: Asia net imports – overview

BP’s data on inter area oil movements start in 2001. Oil imports from the Middle East increased from 11.5 mb/d in 2001 to 15.5 mb/d in 2015 or 4 mb/d. This is an amazing “performance “ because Middle East exports to all countries increased only by 0.8 mb/d (crude) and 0.7 mb/d (products) in 15 years!

World_crude_oil_exports_2001-2015

Fig 13: World’s crude oil exports

Global crude oil exports in 2015 were not higher than in 2007. Canadian exports (dirty tar sands mainly to the US) increased by 1.9 mb/d since 2001.

Middle East exports to Asia

Fig 14: Middle East oil exports share to Asia

Asia’s share of Middle East exports has increased from 60% in 2001 to 75% in 2015. Let’s have a look to which countries/regions these Middle East exports go:

Middle_East_oil_exports_by_destination_2001-2015

Fig 15 Middle East oil exports by destination

In the above graph we stack Asian countries on top of other countries which shows that Asia took away Middle East exports from the US and Europe which are in decline.

So how would that continue into the future? Let’s do a very simplified trend analysis without regard to oil prices, the type of oil, oil reserves and geo-political events and assuming no declining oil production in Asia.

…click on the above link to read the rest of the article…

Peak Oil in Asia (part 1)

June 23, 2016

Peak Oil in Asia (part 1)

According to data recently published in BP’s 2016 Statistical Review Asian oil production remained at around 8.3 mb/d for 4 years now.

Asia_oil_production_1965-2015

Fig 1: Asian oil production

We see the dominance of China (52% of total). The peak for all other Asian countries together was already in 2000, 15 years ago, followed by decline of around 0.9% pa which has now accumulated to around 600 kb/d (equivalent to 60% of Australia’s consumption). Since 2000, China was able to offset this decline and grow the Asian system but this has stalled now as confirmed by the latest data from the National Bureau of Statistics in China.

China_crude_oil_production_Jun2013-May2016

Fig 2: China crude oil production

Data are from here: http://data.stats.gov.cn/english/easyquery.htm?cn=A01

No matter how this Asian production plateau evolves it is dwarfed by ever rising Asian consumption. Let’s have a look at net oil imports country by country, alphabetically:

Australia_oil_production_vs_consumption_1965-2015

Fig 3: Australia’s oil balance

…click on the above link to read the rest of the article…

Global Energy Advisory June 17th 2016

June 18, 2016

Peak Oil: Are We Not Better Than This? Pt 11

LB031316A

Entrenched as each side is in what seems an endless and ever-disheartening conflict between conservatives and progressives, finding seams to broaden discussions is no easy task. Cocooned as each partisan is in the selective comfort of peer perspectives and beliefs, suspicion and ridicule are the easier guidelines to follow.

But at what cost to all of us, if not today, then soon enough? Has there been a collective, irrevocable determination by all that the political and ideological wars will continue until … well, when?

THE LEFT-RIGHT VIEW OF SCIENCE

Progressives consider the statements and rationales offered by most public leaders on the Right with a mixture of disdain, astonishment, and ridicule. Conservatives view every action and proposal from the Left with a blend of deep suspicion as to motivations and objectives. That few take the time to contemplate what’s actually being presented—and of greater importance: why—is doing nothing but perpetuating and deepening the distrust and animosity. Probably not the ideal outcome….

Few of us doubt the conclusions presented by professional engineers when they direct that construction of buildings or other structures must meet certain criteria. While second opinions are not uncommon, most of us accept the medical findings from doctors and dentists without doubting their competency or motivations. We trust airline pilots to fly planes more so than we would an investment banker, just as we would trust the latter to properly handle major financial endeavors more so than we would the owner of a chain of hair salons.

Yet the findings of climate scientists worldwide, or the concerns offered by those who examine the range of factors in the field of energy exploration and production are held to different standards. Unanimity and perfection are the requirements to be met before a sizeable portion of the populace will even consider the issues they raise. All or nothing seems to be the not-entirely-unspoken rule.

…click on the above link to read the rest of the article…

Demand destruction and peak oil

June 5, 2016

Demand destruction and peak oil

Roger Baker is a transportation and energy reform advocate based in Austin, Texas. Long time member of ASPO, we actually met at one of the first ASPO conferences, the one held in Pisa, in 2006. Here he discusses the current situation with crude oil and the global economy.

We are fully under the influence of petroleum demand destruction. The global oil market can’t function without real oil production price discovery, which doesn’t exist in the currently deflationary global economy, which forces indebted producers to sell far below cost.

Both supply and demand seem to cyclic in nature and we are not finished with the supply destruction phase, which can only be revived through a globally realistic oil trading price, which nobody knows. This is an unknown until demand destruction also runs its course. The global demand in the oil supply-demand balance that sets the global oil price cannot be known until we can understand where the global economy is headed. The global material economy seems to be contracting as the Baltic dry index, trucking, and railroad profitability seem to affirm, even ignoring oil prices and Chinese economy.

The reality is probably that a falling EROEI and the end to cheap oil after ~2005 made our finance capital investment growth less profitable. But this fundamental shift has been hidden through easy central bank credit and fiat currency generated on demand to pay interest on a growing mountain of unpayable debt, with a shift of debt from private hands to public, such as away from Wall Street toward Fed and US Treasury obligations. Now we see the world’s major central banks each independently creating their own fiat currencies to preserve a trading advantage, led by the dollar as the world’s standard reserve currency.

…click on the above link to read the rest of the article…

Tag Archives: peak oil

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Middle East exports to Asia

Post navigation

Latest Posts