Transcript WELCOME TO THE POWERPOINT BOOK: PEAK OIL

PEAK OIL AND THE
FATE OF HUMANITY
Chapter 2 –The Important Question: When
Will Oil Production Peak?
Robert Bériault
Wow! I can see
that this stuff
is really
indispensable!
Where does it
come from?
Oil originates from the decomposition of
microorganisms that got buried under geologic
formations in the sea millions of years ago.
In some cases
the sea retreated,
which explains
why oil is also
found on land.
home.att.net/ ~cat6a/fuels-IV.htm.
You mean that
it’s not
continuously being
made?
That’s right.
Mother Nature
took millions of
years to generate
the oil.
She made it once.
She won’t be
making a second
batch.
Well, how much
oil do you have
down there?
Before the first oil well
was dug in Pennsylvania
in 1859 Mother Nature
had made about two
trillion barrels of oil and
scattered it unevenly
around the world.
By 2004 we’ve used up
about 0.9 trillion. In
other words we’re near
the half-way point.
“Hubbert's Peak: The Impending World Oil Shortage”, Kenneth S. Deffeyes
So when do
you figure
you’ll run
out?
An oil well isn’t like a car’s gas tank.
 With a car you can drive at
any speed and you run out
of gas all of a sudden.
 That’s because your tank is
a hollow cavity. The
gasoline fills the bottom of
the tank and there’s
nothing preventing it from
being pumped out.
But an oil well isn’t a hollow cavity.
 It’s a large deposit of stones
or sandstone sandwiched
between two layers of
impervious rock. The hollow
spaces between the stones or
sand are filled with thick and
viscous oil.
 A pipe is lowered into the
mixture of oil and stones or
sand and the oil is slowly
pumped up.
Click
It takes time for oil to ooze from
zones of high concentration to the
zone of low concentration near the
pipe.
In order to extract the oil from an oil
field, a large number of wells are drilled.
With a car you can simply step on the
accelerator to increase the flow rate of
gasoline.
If you try to pump the contents of an
oil field too fast, you can permanently
impede its ability to produce oil in the
future.
An oil field yields its contents
more and more slowly over the
years, something like this.
An oil field empties
rapidly at the start
and yields lots of oil.
Then the flow
slows down
gradually.
Towards the end
the flow eases to
a trickle.
When you plot the production of an aggregate of oil
fields you get roughly what is called a bell curve
Mid point
1st half
Top of the curve
2nd half
So to answer your question, we will never actually
run out. There will always be oil left in some nook or
cranny where it will be uneconomical to extract.
Click
Well, what’s the worry then?
So what’s
the problem
then?
The problem is that we will soon reach the
point where we can’t pump out enough to keep
up with demand.
…that’s what
petroleum
experts refer to
as the oil peak
or peak oil.
…and from then on, oil production will
decline year after year…
Remember that we’ve used up almost half of the world’s
oil. When we reach the half-way point on a bell curve, we
embark upon the decline.
http://www.oilcrisis.com/
When will that be?
Oh gee!
When will
that be?
We don’t know for sure.
But there are seven pieces
of evidence that lead us to
believe that the oil peak
might come soon.
Evidence 1.
The Hubbert Peak
To forecast oil peak for
the whole world,
petroleum experts used a
method developed by
oil geologist
Dr. M. King Hubbert
The Hubbert Peak
In 1956 Hubbert, using mathematical models,
predicted that the US lower 48 states would
peak in 1970
http://www.hubbertpeak.com/hubbert/
The Hubbert Peak
At that time the US
was the world’s largest
petroleum producer!
He was laughed at…
The Hubbert Peak
But it
turned
out he
was
right!!!
And now oil geologists think we’re close to
the Hubbert Peak for the world…
We’ve used up
almost half of
the world’s oil.
http://www.oilcrisis.com/
Evidence 2.
Before
looking
at
Before
looking
atpredictions
predictions
for the whole world,
lets consider a logical condition…
If you want to extract
oil, you’ve got to
find
(discover)
(produce)
it first, right
?
Oil discoveries in the US peaked
- then 40 years later production peaked
The US lower 48 states
Adapted from Collin Campbell, University of Clausthal Conference, Dec 2000
If the world follows the US pattern:
…the world would peak soon
Adapted from: Richard C. Duncan and Walter Youngquist
It’s inevitable that sooner or
later the peak of discoveries
will be followed by a peak in
production.
Evidence 3.
There Are No More Giant Oil Fields
to Be Discovered
• In spite of
advanced
exploration
technology we are
finding smaller and
smaller oil fields
Hold it!
What do you
mean by a
giant oil field
Any field that has more than
500 million barrels is deemed
to be a giant.
Prudhoe Bay production plant, pipelines, roads, flaring
www.arcticgems.org
This chart of giant oil field discoveries
proves the point, doesn’t it?
Since 2003
no giant
fields have
been found
Simmons Company International
We’re
consuming 4
barrels…
“The Party’s Over”, Richard Heinberg
…for each
barrel of oil
that is being
discovered
Yeah!
• If you take $4 out of your
bank account for every $1
you put in, how long will
it take before the
creditors come after you?
Evidence 4.
Energy Return
On Energy Invested (EROEI)
It refers to the ratio of:
The amount
of energy spent on
getting the fuel:
The amount of
energy in the
fuel:
Either gasoline,
diesel,
kerosene, etc.
“The Party’s Over”, Richard Heinberg
AND
exploration,
drilling, pumping,
transportation and
refining
Energy Return On Energy Invested
is diminishing as we resort to going after
the hard-to-get oil:
 Before 1950 it was about 100 to 1
 In the 1970s it was down to 30 to 1
 Now (2005) it’s about 10 to 1
 The Tar Sands have an EROEI of about 4 to 1
“The Party’s Over”, Richard Heinberg
A dropping EROEI
is a sure sign of a
coming decline
Evidence 5.
It’s Getting a Lot More Expensive to
Produce Oil
• We’re exploring the
far corners of the
Earth to find it
• We have to drill
deeper – up to
three miles deep!
Adapted from “The Party’s Over”
Exploration doesn’t pay anymore
In 2003 oil companies
spent $8 billion on
exploration and
discovered $4 billion
in new reserves.*
Since 2000, the cost
of finding and
developing new
sources of oil has
risen about 15%
annually.
* Thomas Homer Dixon and Julio Friedmann, N.Y. Times, 25 Mar 2005
** John S. Herold consulting firm
Evidence 6.
There’s no more spare capacity in
the world supply
30%
Spare capacity =
how much extra
oil can be
produced within
30 days notice
and maintained
for 90 days
25%
20%
SPARE OIL
PRODUCTION
15%
CAPACITY
10%
5%
0%
1985
Adapted from “The Oil Age is Over”, Matt Savinar
1990
2003
2004
Turning the
valve further
open doesn’t
yield more oil.
Evidence 7.
Oil Fields are Getting Old and Tired
Most of our oil comes
from fields that are
more than 30 years old
“The Party’s Over”, Richard Heinberg
This graph of the last
five years of world
production would
indicate we’ve already
peaked!
Evolutionary psychology and peak oil: A Malthusian inspired "heads up" for humanity.
by Dr. Michael E. Mills
Alright then,
when is oil
going to
peak?
Difficult to Estimate When the Decline Will Start
for the Whole World
Because data on OPEC
reserves are not easy to
ascertain
(Organization of Petroleum Exporting Countries)
Production quotas are
Production
basedquotas
on a are
country’s
based
reserves,
soonthere’s an
advantage in
exaggerating them
In 1986 and 1987 OPEC countries markedly
increased their reserves!
The point of this graph
is that they ALL increased
and ALL in the same
time period.
Forgive me for
being suspicious!
Oil geologists know they
can’t rely on the accuracy
of those reported
reserves.
The peak is more imminent than one
would think:
 Many oil geologists have been
studying the question.
 There’s no consensus, but the
predictions range from the year
2005 to 2015
 Many have a feeling it’s upon
us now
China and
emerging
economies are
booming.
That’s going to
make things
worse, will it?
Yes, you’re right. China’s demand is
precipitating the oil peak
China’s oil consumption
increasing 11% per year
World’s 2nd oil user after
US
Exxon-Mobil Report, Oct. 2004
Their thirst for oil is exacerbated by their newly
found love of the automobile
Chinese consumers
are buying 8 million
cars a year.
DOCUMENTARY
"THE END OF
SUBURBIA"
SHOWING IN
OTTAWA
With everybody using more oil, look at the
demand curve on this graph.
The red portion
represents the
amount that
we’ll have to
find and drill for
Exxon-Mobil Report, Oct. 2004
DOCUMENTARY
"THE END OF
SUBURBIA"
SHOWING IN
OTTAWA
Why should I
listen to you?
You’re not an
expert
You don’t have to
take my word for it.
Here’s what the
experts have to say:
Matthew R. Simmons
Matthew R. Simmons is the Chairman of the world's largest energy
investment banking company, Simmons & Co. International. He
has spent his life studying the oil industry.
After expressing
scepticism about
Saudi’s empty
reassurances:
“If it turns out that Saudi
Arabia has peaked, then
categorically, the world has
peaked.”
Les Magoon, an oil geologist and
scientist emeritus with the U.S.
Geological Survey:
“My feeling is this is the beginning
of the oil peak and the next
administration, whoever it may be,
is going to have to deal with this.
We're not going to run out of oil, it's
just that the demand on a daily
basis will far exceed the ability of
the world to produce oil so the price
is going to go up,"
JOAN LOWY, Scripps Howard News Service, October 28, 2004
Mike Bowlin, Chairman and CEO, ARCO,
1999; Chairman, American Petroleum
Institute:
“We’ve embarked on the
beginning of the last days of the
age of oil.”
JOAN LOWY, Scripps Howard News Service, October 28, 2004
James Mulva, CEO of ConocoPhillips Co.,
the third-largest U.S. oil producer
At a Wall Street conference
earlier in November, 2007,
acknowledged, "I don't think we
are going to see the supply
going over 100 million barrels a
day ... Where is all that going to
come from?"
Vice-President Dick Cheney, when he
was Chairman of Halliburton, 1999:
“By some estimates there will be an
average of two per cent annual growth
in global oil demand over the years
ahead, along with conservatively a
three per cent natural decline in
production from existing reserves. That
means by 2010 we will need on the
order of an additional fifty million
barrels a day.”
What does
50 million
barrels a day
represent?
In 1999 the world
used 70 million
barrels a day.
Barrels consumed per day
Cheney said that
by 2010 we will
have to increase
that by another 50
million, to 120
million barrels a
day!!!
In October 2007, at a London conference, Christophe de
1999
2010
Margerie, the Total CEO, said that ratcheting global
production up to even 100 million barrels by 2030 will be
"difficult."
Saudi saying:
“My father rode a camel.
I drive a car.
My son flies a jet airplane.
His son will ride a camel.”
And what about
natural gas, will it
peak one day?
In fact, natural gas
has already peaked
in North America.
It estimated that production will plateau soon and
then start it inexorable decline
Canadian Gas Potential Committee, Calgary, Alberta
“What about substitutes? We’ve got coal,
gas, nuclear!” -- Find out why these can’t
replace oil in Chapter 3A.
Chapter
selection page