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[The Department of Energy (DOE) asked Robert Hirsch to come up with a peak oil risk management and mitigation plan which was published in 2005. Nothing happened, so in 2007 the Government Accountability Office asked Congress to prepare for Peak oil because of the many risks that could suddenly force a sudden and steep decline of oil in addition to geological depletion. The GAO states that “according to DOE, there is no formal strategy for coordinating and prioritizing federal efforts dealing with peak oil issues, either within DOE or between DOE and other key agencies. While the consequences of a peak would be felt globally, the U.S., as the largest consumer of oil and one of the nations most heavily dependent on oil for transportation, may be particularly vulnerable. Therefore, to better prepare the United States for a peak and decline in oil production, we are recommending that the Secretary of Energy take the lead, in coordination with other relevant federal agencies, to establish a peak oil strategy. ”

[It is easy to forget with the low oil prices we have today that Peak Oil hasn’t gone away. Low prices are actually alarming, it means that drilling and future exploration are stopping, setting us up for an even more dramatic oil shock in the future. Peak oil forces a shrinkage in economies, yet our system is predicated on endless growth of credit and debt paid back in an ever growing economy. Shrinkage is highly deflationary. Credit disappears, oil companies can’t borrow to drill, and customers are so poor that oil at any price is too expensive, and demand drops. The underlying biophysical reality is that the energy returned on invested is too low to run civilization.

Alice Friedemann at www.energyskeptic.com]

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

Peak Oil: Just A Distraction Pt 1

February 9, 2016

Peak Oil: Just A Distraction Pt 1

GHB100315F

Remember, peaking in production, by definition, means that you have plenty of oil left. It has nothing to do with running out.…[T]he only people who ever use the phrase ‘running out of oil’ are people who either don’t understand Peak Oil, or people trying to mislead an audience about Peak Oil. Because again, if you can successfully mislead an audience and frame the argument as ‘No more oil’ vs ‘We still have oil’ – you again set yourself up for an easy debate victory. [1]

The reality—difficult as acceptance of it appears to be for some—is that by whatever phraseology one prefers, readily available and affordable conventional crude oil is no longer readily available and affordable—from the production standpoint. The energy source of choice for decades is no longer as abundant and accessible as it once was [temporary “glut” duly acknowledged], and the fossil fuel industry has had no choice in recent years but to look elsewhere and at other and inferior supply sources. To the credit of industry efforts and technological prowess, recent years [at least until recent months] have seen an uptick in production from the shale formations here in the United States.

Yet that short-lived benefit highlights another failing of right-wing philosophy in the face of Peak Oil: Yes, we’ll need all of the marvels of “human ingenuity” and great technological inventions. But those factors alone are not the solution.

Conventional crude oil’s rate of production peaked a decade ago. Finite resources drawn down daily beyond that point possess no magic qualities. Continuing to draw them down means there will be less the next day and then even less the day after.

We’re not running out. There is a lot of fossil fuel left underground. But now it’s more difficult to extract. It costs more to do so.

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

Understanding peak oil theory, 2007 U.S. House hearing

February 5, 2016

Understanding peak oil theory, 2007 U.S. House hearing

House 109-41. December 7, 2005. Understanding the Peak Oil theory. U.S. House of Representatives.

[What follows are excerpts from the 95 page transcript of this hearing, the only one about peak oil and the possibility that peak production may happen soon. And also the only hearing where most of the speakers explaining peak oil, including Representative Roscoe Bartlett, were scientists. From now on think-tank experts and CEO’s of large companies, not scientists, promise peak oil production is decades away and that the U.S. has 100 years of energy independence. Has Congress only invited bureaucrats rather than scientists and engineers since 2005 so that after the next energy crisis they can say they knew nothing? Though of course they know we’re in deep trouble — see the March 7, 2006 “Energy Independence” Senate hearing. Alice Friedemann www.energyskeptic.com ]

RALPH M. HALL, TEXAS. We are having this hearing today to learn more about peak oil theory, to hear different opinions, and to learn what we can do about it, if anything. While some theorists believe that we have reached our peak, the point at which the rate of world oil production cannot increase at any time, there are others that tell us that we are not going to peak any time soon, and others who still believe oil is continuously being created and will therefore never peak. We have not been ignoring a possible peak in oil production and this energy bill that was signed into law in August had provisions that address oil usage by promoting conservation and conventional and unconventional production. Whether or not we are reaching our peak, it seems responsible to continue in the vain we are going in by continuing to work on ways to conserve energy while increasing our domestic supply of oil and using research to develop substitutes for conventional oil.

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

Whatever Happened to Peak Oil?

February 3, 2016

Whatever Happened to Peak Oil?

A few months from now, this blog will complete its tenth year of more-or-less-weekly publication. In words the Grateful Dead made famous, it’s been a long strange trip: much longer and stranger than I had any reason to expect, certainly, when I typed up that first essay and got it posted on what was still, to me, the alien landscape of the blogosphere.

Over the years since that first tentative post, the conversations here have strayed into some remarkably odd territory: the history of apocalyptic ideas, the nature of magic, the horror fiction of H.P. Lovecraft, and a good deal more. All through its vagaries, though, this blog’s central focus remains what it has been since shortly after its 2006 launch: the difficult but necessary task of facing up to the end of the arrival of hard limits to growth, and the collapse of all those fantasies of perpetual progress that so many people today still use to keep themselves from thinking about the future ahead of us.

That said, my longtime readers may be wondering about the relative absence in recent posts of one of the core themes of this blog’s earlier days. Yes, that would be peak oil.

For those who’ve come to this blog recently, it maybe helpful to point out that this simple phrase refers to a complicated concatenation of ideas. First, despite claims made by rap musician BoB and the few other flat-earthers out there, I think most of us are aware that the Earth is a sphere a little more than 7900 miles across. That means, among many other things, that the Earth contains a finite amount of petroleum—and this in turn means that each barrel of petroleum that gets pumped out of the ground brings us closer to the point at which there’s no more left.

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

Peak Oil: One-Sentence Problem-Solving

February 2, 2016

Peak Oil: One-Sentence Problem-Solving

As is still the case—unfortunately, for all of us—there remains a sizeable number of individuals, organizations, and other associations determined at all costs [literally] to preserve the primacy of fossil fuels to power us into the future. Facts: good when they can be massaged to fit the partial-truth narrative required to breathe life into an industry unwilling to bend to the realities of geology, economics, and … well, reality. Facts: not good when they address the broad range of issues and concerns best left neglected to further that Abundance-No Worries narrative.

One-sentence talking points seem to be the ideal. No concerns about having to delve into the complexities of ideologically-troublesome issues, for one thing. Summary statements suggest there are no worries, for another.

As for the harm caused by failing to properly inform those relying upon the assessments of those others presumed to know? Who has the time to explain all those facts and details and what-nots?

According to the U.S. Energy Information Administration, in 1998, when the article was written, global oil production was 75.7 million bbl/day. In 2014 it was 93.2, and our problem is too much oil.
It’s useful to remember such things when the ‘experts’ grandly tell us what’s going to happen. [1]

With the world awash in oil and prices falling toward $26 a barrel, Iran is set to add to the oversupply now that international sanctions have been eased.
It’s as if the whole world were conspiring to bury the tattered remains of the ‘peak oil’ thesis, so popular a few years ago. [2]

Economics and I have a gentlemen’s agreement: the less I discuss, the better. Notwithstanding, I do understand that when prices are as other-worldly low as they are now, few in the oil industry are eager to venture out and invest in production efforts they can ill-afford.

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

Collapse Of Shale Gas Production Has Begun

January 31, 2016

Collapse Of Shale Gas Production Has Begun

This is a guest post by Steve St. Angelo of SRSroccoReport.Com. All opinions expressed in this post are his and do not necessarily reflect those of Ron Patterson.

The U.S. Empire is in serious trouble as the collapse of its domestic shale gas production has begun. This is just another nail in a series of nails that have been driven into the U.S. Empire coffin.

Unfortunately, most investors don’t pay attention to what is taking place in the U.S. Energy Industry. Without energy, the U.S. economy would grind to a halt. All the trillions of Dollars in financial assets mean nothing without oil, natural gas or coal. Energy drives the economy and finance steers it. As I stated several times before, the financial industry is driving us over the cliff.

The Great U.S. Shale Gas Boom Is Likely Over For Good

Very few Americans noticed that the top four shale gas fields combined production peaked back in July 2015. Total shale gas production from the Barnett, Eagle Ford, Haynesville and Marcellus peaked at 27.9 billion cubic feet per day (Bcf/d) in July and fell to 26.7 Bcf/d by December 2015:

Steve 1

As we can see from the chart, the Barnett and Haynesville peaked four years ago at the end of 2011. Here are the production profiles for each shale gas field:

Steve 2

According to the U.S. Energy Information Agency (EIA), the Barnett shale gas production peaked on November 2011 and is down 32% from its high. The Barnett produced a record 5 Bcf/d of shale gas in 2011 and is currently producing only 3.4 Bcf/d. Furthermore, the drilling rig count in the Barnett is down a stunning 84% in over the past year.

Steve 3

The Haynesville was the second to peak on Jan 2012 at 7.2 Bcf/d per day and is currently producing 3.6 Bcf/d. This was a huge 50% decline from its peak.

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

ANOTHER NAIL IN THE U.S. EMPIRE COFFIN: Collapse Of Shale Gas Production Has Begun

January 30, 2016

ANOTHER NAIL IN THE U.S. EMPIRE COFFIN: Collapse Of Shale Gas Production Has Begun

The U.S. Empire is in serious trouble as the collapse of its domestic shale gas production has begun. This is just another nail in a series of nails that have been driven into the U.S. Empire coffin.

The Great U.S. Shale Gas Boom Is Likely Over For Good

Top-U.S.-Shale-Gas-Fields-Production

As we can see from the chart, the Barnett and Haynesville peaked four years ago at the end of 2011. Here are the production profiles for each shale gas field:

Barnett-Shale-Gas-Field

Haynesville-Shale-Gas-Field

The Haynesville was the second to peak on Jan 2012 at 7.2 Bcf/d per day and is currently producing 3.6 Bcf/d. This was a huge 50% decline from its peak. Not only is the drilling rig count in the Haynesville down 57% in a year, it fell another five rigs this past week. There are only 18 drilling rigs currently working in the Haynesville.

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

The U.S. Military on Peak Oil and Climate Change

January 26, 2016

The U.S. Military on Peak Oil and Climate Change

CNA. May 2009. Powering America’s Defense: Energy and the Risks to National Security. Center for Naval Analyses. 74 pages.

The destabilizing nature of increasingly scarce energy resources, the impacts of rising energy demand, and the impacts of climate change all are likely to increasingly drive military missions in this century.

GENERAL CHARLES F. “CHUCK” WALD, USAF (RET.) Former Deputy Commander, Headquarters U.S. European Command (USEUCOM); Chairman, CNA MAB

Retired Air Force General Chuck Wald wants to see major changes in how America produces and uses energy. He wants carbon emissions reduced to help stave off the destabilizing effects of climate change.

“We’ve always had to deal with unpredictable and diverse threats,” Gen. Wald said. “They’ve always been hard to judge, hard to gauge. Things that may seem innocuous become important. Things that seem small become big. Things that are far away can be felt close to home. Take the pirates off the African coast. To me, it’s surprising that pirates, today, would cause so much havoc. It’s a threat that comes out of nowhere, and it becomes a dangerous situation.

“I think climate change will give us more of these threats that come out of nowhere. It will be harder to predict them. A stable global climate is what shaped our civilizations. An unstable climate, which is what we’re creating now with global warming, will make for unstable civilizations. It will involve more surprises. It will involve more people needing to move or make huge changes in their lives. It pushes us into a period of nonlinear change. That is hugely destabilizing.

“Our hands are tied in many cases because we need something that others have. We need their oil.

He gives another reason for major changes in our energy policy: He wants to reduce the pressure on our military.

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

Peak Oil: Stark Realities

January 26, 2016

Peak Oil: Stark Realities

We face a choice going forward. There’s a kind of false dichotomy, a false choice that we’re being presented between policies on the left or policies on the right. It’s not left or right, it’s forward or backward. It’s a choice between investing in the future, leaving a better future for the next generation just like parents and grandparents did for us, or ignoring these hard choices and sentencing the next generation to a lower standard of living, to fewer opportunities, and a future that we could do better by. [1]

~ ~ ~

Like so much of our public discourses these days—notably surrounding the [sadly] too-comical Presidential races—truth, context, relevance, facts, integrity, and their related concepts have given way to the damaging urgency of adhering to ideology. Consequences are rendered irrelevant.

The discussions about climate change and the future of fossil fuel production have been among the noteworthy casualties of our polarized approach to governance and problem-solving. Like the other disputes light on facts in favor of extra doses of partisanship, in time the consequences will be anything but irrelevant. Recriminations, justifiable though they may be, will help none of us as we deal with the harsh realities we’ve ignored in favor of scoring points for our side.

Covering as many bases as possible, a predominantly fact-free article [except for the obligatory cherry-picking] in the irony-rich online American Thinker ventured first into the obligatory right-wing climate change doubting nonsense [citing one whole “Climate Statistics Prof” before veering off into a reference about “a well-loved and respected doctor” who was “expelled from an important medical center” because of “legitimate evidence-based concerns” regarding the center’s “decision to endorse the homosexual lifestyle,” then on to a “highly qualified scientist in California” fired because he “found scientific evidence that questioned a dogma of evolutionary thought,” and “so many other cases,” before readers were finally ushered into an equally fact-free but statement-rich denunciation of “settled science.”

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

OPEC, except for Iran, Has Peaked

January 20, 2016

OPEC, except for Iran, Has Peaked

The OPEC Monthly Oil Market Report is out. OPEC took a hit in December, down 205,000 barrels per day. After examining the past and present production numbers, I believe that OPEC, except Iran, has peaked. That is, the combined production from all the other OPEC nations, has peaked. And any additional production from Libya is likely to be in tiny increments that won’t make much difference in the big picture. Other OPEC nations may show a slight increase from their current level. But the combined production from all the other 11 OPEC nations, 12 if you count Indonesia, has peaked.

Of course there will be some small increases from the other 11 OPEC countries from time to time but overall, in 2016 and beyond, I believe it will OPEC will be from flat to down, with a greater chance of being down. That is we are at, or near, the peak right now. There might be a slight uptick of their combined production in the coming months but not enough to get excited abut.

All Data in the charts below is through December and is in thousand barrels per day.

OPEC 12

OPEC production, in the chart above does not include Indonesia. OPEC 12 was down 204,000 barrels per day.

Secondary Sources

OPEC uses secondary sources such as Platts and other agencies to report their production numbers. These numbers are pretty accurate and usually have only slight revisions month to month. The biggest changes were from Iraq, Nigeria and Saudi Arabia, all down.

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

2016: Oil Limits and the End of the Debt Supercycle

January 7, 2016

2016: Oil Limits and the End of the Debt Supercycle

What is ahead for 2016? Most people don’t realize how tightly the following are linked:

Growth in debt
Growth in the economy
Growth in cheap-to-extract energy supplies
Inflation in the cost of producing commodities
Growth in asset prices, such as the price of shares of stock and of farmland
Growth in wages of non-elite workers
Population growth

It looks to me as though this linkage is about to cause a very substantial disruption to the economy, as oil limits, as well as other energy limits, cause a rapid shift from the benevolent version of the economic supercycle to the portion of the economic supercycle reflecting contraction. Many people have talked about Peak Oil, the Limits to Growth, and the Debt Supercycle without realizing that the underlying problem is really the same–the fact the we are reaching the limits of a finite world.

There are actually a number of different kinds of limits to a finite world, all leading toward the rising cost of commodity production. I will discuss these in more detail later. In the past, the contraction phase of the supercycle seems to have been caused primarily by too high population relative to resources. This time, depleting fossil fuels–particularly oil–plays a major role. Other limits contributing to the end of the current debt supercycle include rising pollution and depletion of resources other than fossil fuels.

The problem of reaching limits in a finite world manifests itself in an unexpected way: slowing wage growth for non-elite workers. Lower wages mean that these workers become less able to afford the output of the system. These problems first lead to commodity oversupply and very low commodity prices. Eventually these problems lead to falling asset prices and widespread debt defaults.

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

Peak Oil? What Peak Oil?

January 4, 2016

Peak Oil? What Peak Oil?

It is unbelievable how many times I’ve heard people telling me “the US has become self-sufficient in oil production,” a group that includes some respectable members of the EU parliament. This is probably due to the confusion that the media have made on the fact that the US production has recently surpassed the US imports of oil. It is true, but that tells you nothing of how much oil the US still imports. And that is, actually, much more than it was at the time of the oil crisis and domestic consumption is on the increase (as you see in the figure above, from Art Berman’s blog)

This misperception on the actual dependence of the US on imports is probably one of the reasons that led to the recent lifting of the ban on US exports, that dated from the time of the great oil crisis of the 1970s

Art Berman clarifies the situation and wonders why “consumption has increased by one-third and imports have doubled but we no longer need to think strategically about oil supply because production is a little higher?” Here is an excerpt from his post.
____________________________________________
The Crude Oil Export Ban–What, Me Worry About Peak Oil?

Congress ended the U.S. crude oil export ban last week. There is apparently no longer a strategic reason to conserve oil because shale production has made American great again. At least, that’s narrative that reality-averse politicians and their bases prefer.

The 1975 Energy Policy and Conservation Act (EPCA) that banned crude oil export was the closest thing to an energy policy that the United States has ever had. The law was passed after the price of oil increased in one month (January 1974) from $21 to $51 per barrel (2015 dollars) because of the Arab Oil Embargo.
…click on the above link to read the rest of the article…

Doubting The Peak

January 1, 2016

Doubting The Peak

Dennis Coyne, an editor and frequent contributor to this blog, has suggested that we are not at peak oil. He argues that there is likely to be a dip in production starting next year but higher prices will cause things to turn around and we will surpass the 2015 peak by 2019. He commented a few days ago:

If we take some of the larger producers that have been increasing output and compare with the rest of the world(ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4% based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed.

One possible scenario is that output is flat for the Big 8 in 2016 so that World C+C output falls by 485 kb/d in 2016 (average output for the year compared to the 2015 average). Over the 2009 to Jun 2015 period the Big 8 increased output at about 1300 kb/d per year, if we assume this rate slows to half the previous rate to a 650 kb/d per year increase (1.4%/year), then the peak is surpassed in 4 years in 2019. On a per country basis this would be a little more than a 80 kb/d increase in average annual output for each of these countries, though I doubt it would be divided equally.

So I have taken close look Dennis’s “Big 8” countries as well as “The Rest of the World”, and looked at their JODI data charts. The last data point is October 2015.

First, the rest of the world.

Dennis's Rest of the World

This is the world less Brazil, Canada, China, Iraq, Iran, Russia, Saudi Arabia and the USA. As a group they peaked in October 2004 and have been in decline ever since.

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

Where actually is that much-hyped global oil glut?

December 29, 2015

Where actually is that much-hyped global oil glut?

The media is full with news that there is a global oil glut.

There are now more than 3bn barrels of excess oil in the world
13/11/2015
http://www.telegraph.co.uk/finance/oilprices/11993687/There-are-now-more-than-3bn-barrels-of-excess-oil-in-the-world.html

Record oil glut stands at 3bn barrels
13/11/2015
http://www.bbc.com/news/business-34808487

It was parroted by the Australian public broadcaster ABC TV, using this (unsuitable) opportunity to take a swipe at peak oil:

Peak oil losing credibility as renewables shift accelerates
24/12/2015
“With the world awash with too much crude oil at the moment, the fear of an economic catastrophe when fossil fuels start running out is quietly fading in the background.”
http://www.abc.net.au/news/2015-12-24/peak-oil-losing-credibility-as-shift-to-renewables-accelerates/7052196

These stories go back to the IEA’s Monthly Oil Market Report (OMR), November 2015 which reads:

“Stockpiles of oil at a record 3 billion barrels are providing world markets with a degree of comfort. This massive cushion has inflated even as the global oil market adjusts to $50/bbl oil.”
https://www.iea.org/oilmarketreport/reports/2015/1115/

So how much is 3 bn barrels?

Let’s have a look at the statistics in the latest IEA OMR of December 2015. It’s only about OECD stocks, not the whole world.

Fig 1: OECD total oil stocks

https://www.iea.org/media/omrreports/fullissues/2015-12-11.pdf

We see that oil stocks in the period 2009 (light blue line) to 2013 (dotted line) varied between 2,6 bn and 2.8 bn barrels along with seasonal changes. The average stocks for this time of the year is 2.7 bn barrels. We can consider this range as the result of normal operating conditions allowing for accidents, refinery maintenance, transport disruptions, strikes etc but also demand side changes from a weak economy (2009) to high oil prices (2013).

Therefore, that magic glut is 3 bn – 2.7 bn = 300 million barrels or roughly 10% of the average. The long term trend of OECD stocks is shown in the next graph:

Fig 2: OECD stock changes since 1988

In 1988, average stocks were 2.5 bn barrels One can put many trend lines into Fig 2, depending on which period one selects and which exceptional events are excluded.

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

The Crude Oil Export Ban–What, Me Worry About Peak Oil?

December 28, 2015

The Crude Oil Export Ban–What, Me Worry About Peak Oil?

The EPCA not only banned the export of crude oil but also established the Strategic Petroleum Reserve. Both measures were intended to keep more oil at home in order to make the U.S. less dependent on imported oil. A 55 mile-per-hour national speed limit was established to force conservation, and the International Energy Agency (IEA) was founded to better monitor and predict global oil supply and demand trends.

Above all, the export ban acknowledged that declining domestic supply and increased imports had made the country vulnerable to economic disruption. Its repeal last week suggests that there is no longer any risk associated with dependence on foreign oil.

What, Me Worry?

The tight oil revolution has returned U.S. crude oil production almost to its 1970 peak of 10 million barrels per day (mmbpd) and imports have been falling for the last decade (Figure 1).

Figure 1. U.S. crude oil production, net imports and consumption. Source: EIA and Labyrinth Consulting Services, Inc.
(Click image to enlarge)

But today, the U.S. imports twice as much oil (97%) as in 1974! In 2015, the U.S. imported 6.8 mmbpd of crude oil (net) compared to only 3.5 mmbpd at the time of the Arab Oil Embargo (Table 1).

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

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