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A Case Study of Fossil-Fuel Depletion

A Case Study of Fossil-Fuel Depletion

A few months ago I received an intriguing email from researcher and activist Regan Boychuk. For the past 15 years, Boychuk has been studying the oil-and-gas industry in Alberta (Canada) and he wanted to know if I would join his project. I immediately said yes.

Some backstory. You can think of Alberta as the Texas of Canada. Alberta is endowed with a vast trove of oil that it has been exploiting for the past 75 years. And like Texas, Alberta’s politics are dominated by the oil industry.

Oh, and Alberta is where I grew up.

Back to Regan Boychuk’s work. Boychuk has a vision for an Alberta in which the oil industry goes extinct by being forced to clean up its own mess. As it stands, Alberta has about 300,000 oil-and-gas wells waiting to be cleaned up at the oil companies’ expense. The problem is that oil companies are not forced to save for the clean-up expense, and accounting tricks allow them to make the clean-up liability look negligible in their corporate accounts.1 It’s an open secret (implicitly endorsed by the Alberta government) that defunct wells will never be cleaned up. If they were, the oil industry would go bankrupt.

And that’s exactly what Boychuk wants. His dream is to kill 3 birds with one stone:

  1. Show that the oil-and-gas industry is insolvent;
  2. Clean up every well in Alberta;
  3. Fund full employment and a transition to a sustainable Alberta economy.

To hasten this big-picture goal, Boychuk asked me to help by estimating production curves for every oil-and-gas well in Alberta. After much head scratching and many lines of code, that’s what I’ve done.

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

Ilaria Perissi explains why mousetraps are like oil wells and why the mousetrap experiment describes the Hubbert curve of oil extraction

Ilaria Perissi explains why mousetraps are like oil wells and why the mousetrap experiment describes the Hubbert curve of oil extraction

https://photos.google.com/share/AF1QipP85oId2rjjNujQlqY4GM44Hjuu9_WWmiFmg24wfx4pL8vT3_pYdyy3Utl-0x1kJw/photo/AF1QipOwGJoFJG-J8mDS4k9265aJQSXzW9iRGFQQQeWf?key=aVJ5V25GSkFLZ0g3dHFrSG1lUFJpTzdVQ0l5Q0FB

 

A new blog dedicated to the Seneca Effect

A new blog dedicated to the Seneca Effect

 
The Seneca Trap is a repository of the posts dedicated to the “Seneca Effect” that appeared, and will appear, on “Cassandra’s Legacy

The idea of collapse is bad enough for most people when it deals with the running out of mineral resources along the symmetrical “bell shaped” Hubbert curve. But there is an extra dimension to collapse: it is the “Seneca Effect” (or “Seneca Trap”, or also “Seneca Cliff”) that notes how, most often, when things start going bad, they go bad fast – even very fast.

So,  a few years ago I started mulling over this idea, also as the result of a question that Dmitry Orlov had posed to me. I also remembered something that the ancient Roman Philosopher Seneca had written and that a friend of mine (Luca Mercalli) had pointed out to me. The result was the “Seneca Collapse model,” one of a series that I call “mind sized” simple models.

The basic idea of the Seneca Model, as I implemented it, is that a complex system, such as a whole civilization, does not collapse just because it runs out of resources, but also because of side effects related to the consumption of these resources, effects that we would call today “pollution”. Trapped in between depletion and pollution, the system collapses even faster. This is why I call the effect also the “Seneca Trap”.

After I had developed that first model, I discovered that the phenomenon may be more complex and that there are many real-world systems that can be considered as affected by the Seneca Trap. It can be applied, in particular, to fisheries. On the whole, it is a fascinating subject that I am still exploring.
…click on the above link to read the rest of the article…

Despite Cheap Gas, Coming Back to Peak Oil [Infographic]

Despite Cheap Gas, Coming Back to Peak Oil [Infographic]

Yesterday, in Virginia, I filled up my gas tank for $2.75 a gallon.

At that price, even old peak oilers like my wife and I hardly think about poor old King Hubbard’s theory much these days.

And though gas has been cheap in the U.S. for the last six months or more, I still think Hubbard was right that global oil production naturally has a point of peak production.

I used to think that the peak of world oil production already came in 2006. But with the rise of fracking and other extreme fossil fuels, now I’m not so sure.

Could the oil peak come a decade or more in the future as the optimists mentioned in the infographic below predict?

Or could the whole thing be some kind of confusing shell game, with financial markets moving petro dollars around in clever ways to make it look like oil hasn’t peaked yet, when, in fact, it has?

Frankly, as a lay observer of the energy economy, such questions are above my pay grade. I’ll leave petroleum geologists and economists to argue about the real oil supply and its likely effect on the economy in the next five, ten or twenty years.

Meanwhile, the infographic below may be good enough for other laypeople to get the basic facts on the peak oil debate.

The image is courtesy of an energy-services company in the U.K. called Chiltern Thrust Bore. I’m not sure what they think of peak oil, but I’m sure they hope to be able to drill and dig for stuff for a while longer.

Whatever the case, their take on peak oil seems to be a accurate summary of Hubbert’s theory and a plausible analysis of what it means for today and the future.

— Erik Curren, Transition Voice


Have Our Oil Reserves Peaked? (Infographic)

 

Peak of Gas Production in the Barnett Shale

Peak of Gas Production in the Barnett Shale

An ocean of ink has already been spilled on pros and cons of using Hubbert curves to model production from a large collection of wells in one or many reservoirs.  In 2010, I published together with my last graduate student in Berkeley, Dr. Greg Croft, a highly cited paperon this subject. I have also commented multiple times in this blog on the different aspects of the Hubbert curve analysis, its limitations, and predictive power.

Since I cannot out-talk or out-convince the numerous critics of this type of analysis, let me give you a simple example of its robustness. This particular story is as follows.  At the end of the year 2010, Greg Fenves, at that time Dean of UT’s Cockrell School of Engineering in Austin, asked me to make a presentation to the School’s Engineering Advisory Board (EAB).  Using the results of our recent paper with Greg Croft, I chose to speak about my new work on unconventional resources in the U.S.  On April 09, 2011, I made the presentation, which was then internally published by the Cockrell School.

The first two Barnett shale plots shown below were based on the Texas Railroad Commission data through October 2010. In the presentation, I called these plots the “high production scenario.”  The Hubbert curve with which I matched the production data ending in October 2010, went right between the two local peaks of the data.  Of course there was an element of luck, helped by two decades of my experience as a reservoir engineer.  Such experience or – for that matter – any other knowledge of reservoir engineering is absent among the economists, political scientists and journalists, who are paid to criticize this type of work.
…click on the above link to read the rest of the article…
 

Peak Oil: Myth Or Coming Reality?

Peak Oil: Myth Or Coming Reality?

In 1956, a geoscientist named M. King Hubbert formulated a theory which suggested that U.S. oil production would eventually reach a point at which the rate of oil production would stop growing. After production hit that peak, it would enter terminal decline. The resulting production profile would resemble a bell curve and the point of maximum production would be identified as Peak Oil, a point of no return.

The original peak oil curve
Image Source: Cornell University

Hubbert first predicted that U.S. oil production would peak in 1970 and then start declining rapidly. His prediction turned out to be partly true, as U.S. crude oil production peaked that same year, not to be eclipsed again until the shale boom began.

Annual crude oil production (in thousands of barrels per year) for entire United States, with contributions from individual regions as indicated.

“The end of the oil age is in sight, if present trends continue production will peak in 1995 — the deadline for alternative forms of energy that must replace petroleum in the sharp drop-off that follows.” This is what Hubbert had to say in 1974, based on 628 billion barrels of proven oil reserves. However, his prediction didn’t turn out to be true, as global oil production continues to surge, thanks to new oilfield discoveries and improved exploration and drilling technology.

 

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

Climate change: can the Seneca effect save us?

Climate change: can the Seneca effect save us?

Nothing we do (or try to do) seems to be able to stop carbon dioxide from accumulating in the atmosphere. And, as a consequence, nothing seems to be able to stop climate change. With the situation getting worse and worse (see here for an example), we are hoping that some kind of international agreement can be reached to limit emissions. But, after many attempts and many failures, can we really expect that next time – miraculously – we could succeed?

Another line of thought, instead, has that depletion will save us. After all, if we run out of oil (and of fossil fuels in general) then we’ll have to stop emitting greenhouse gases. Won’t that solve the problem? In principle, yes, but is it going to happen?

The gist of the debate on the future of fossil fuel production is that, despite the theoretically abundant resources, the production rate is strongly affected by diminishing economic returns generated by depletion. This factor forces the production curve to follow a “bell shaped”, or “Hubbert,” curve that peaks and starts declining much before the resource runs out, physically. In practice, most studies that take into account the diminishing economic returns of productionarrive to the conclusion that the IPCC scenarios often overestimate the amount of fossil carbon that can be burned (see a recent review by Hook et al.). From this, some have arrived to the optimistic conclusion that peak oil will save us from climate change (see this post of mine). But that’s way too simplistic.

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

 

 

Broken Energy Markets and the Downside of Hubbert’s Peak – The Automatic Earth

Broken Energy Markets and the Downside of Hubbert’s Peak – The Automatic Earth.

Euan: A few commenters have mentioned peak oil recently. I am cautious about making forecasts and predictions and prefer instead to observe and document the data as the peak oil story unfolds. I have in fact published a couple of charts recently illustrating aspects of peak oil, one showing a possible peak in the rest of the world that excludes N America and OPEC (Figure 1). The other showing the undulating plateau in conventional crude + condensate that has persisted since 2005 (Figure 2). In my last post on oil price scenarios two of those showed global oil production capacity 1 to 2 Mbpd lower in 2016 than 2014. If that comes to fruition, will we have passed peak oil but does it matter?

Figure 1 Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW production bears the hallmarks of having peaked in the period 2005 to 2010 and this has consequences for oil prices, demand and prosperity in parts of the world, especially the OECD. Most of the growth in oil supply has been in the USA and Canada where the market has been flooded with expensive oil. Data are crude oil + condensate + natural gas liquids (C+C+NGL) and exclude biofuels and refinery gains that are included by the IEA in their total liquids number.

The current “low oil price crisis” is providing a clear and new perspective on the nature of the peak oil problem. If low price does indeed destroy high cost production capacity then this will raise the question if the high cost sources can ever be brought back? IF low price kills the shale industry can it come back from the dead?

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

RESOURCE CRISIS: Seneca cliffs of the third kind: how technological progress can generate a faster collapse

RESOURCE CRISIS: Seneca cliffs of the third kind: how technological progress can generate a faster collapse.

 

The image above (from Wikipedia) shows the collapse of the North Atlantic cod stocks. The fishery disaster of the early 1990s was the result of a combination of greed, incompetence, and government support for both. Unfortunately, it is just one of the many examples of how human beings tend to worsen the problems they try to solve. The philosopher Lucius Anneus Seneca had understood this problem already some 2000 years ago, when he said, “It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.”
 


The collapse of the North Atlantic cod fishery industry gives us a good example of the abrupt collapse in the production of resources – even resources which are theoretically renewable. The shape of the production curve landings shows some similarity with the “Seneca curve“, a general term that I proposed to apply to all cases in which we observe a rapid decline of the production of a non renewable, or slowly renewable, resource. Here is the typical shape of the Seneca Curve:


The similarity with the cod landings curve is only approximate, but clearly, in both cases we have a very rapid decline after a slow growth that, for the cod fishery, had lasted for more than a century. What caused this behavior?

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

RESOURCE CRISIS: Fossil fuels: are we on the edge of the Seneca cliff?

RESOURCE CRISIS: Fossil fuels: are we on the edge of the Seneca cliff?.

It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.” Lucius Anneaus Seneca, Letters to Lucilius, n. 91

This observation by Seneca seems to be valid for many modern cases, including the production of a nonrenewable resource such as crude oil. Are we on the edge of the “Seneca cliff?

It is a well known tenet of people working in system dynamics that there exist plenty of cases of solutions worsening the problem. Often, people appear to be perfectly able to understand what the problem is, but, just as often, they tend to act on it in the wrong way. It is a concept also expressed as “pushing the lever in the wrong direction.”

With fossil fuels, we all understand that we have a depletion problem, but the solution, so far, has been to drill more, to drill deeper, and to keep drilling. Squeezing out some fuel by all possible sources, no matter how difficult and expensive, could offset the decline of conventional fields and keep production growing for the past few years. But is it a real solution? That is, won’t we pay the present growth with a faster decline in the future?

This question can be described in terms of the “Seneca Cliff“, a concept that I proposed a few years ago to describe how the production of a non renewable resource may show a rapid decline after passing its production peak. A behavior that can be shown graphically as follows:

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

Olduvai IV: Courage
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Olduvai II: Exodus
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