2012 Medium term oil report here for free
You can get the 2013 if you like , it is 240 Euros
I’m not new to the issue.
I will have to get to the rest of your post later due to time constraints, but we are getting somewhere with this comment. I point out that ‘peak oil’ is not a catastrophic looming crisis because alternatives can pick up the slack and more. You disagree, which is fine, but you cite an article from 2008. I said before that the solar industry especially is changing very quickly, and that if you haven’t been paying attention, you may have missed the latest. Well, if you are getting you information from 2008, I am on to you. Solar economics have changed dramatically since 2008. Even that chart is a little old- in many locations, solar has crossed into the ‘coal/ natural gas band’.
From what I read, this confirms what they mentioned in 2010, i.e., a 9-pct increase in total oil and gas production for the next two decades, and that’s assuming that crude oil production flat lines indefinitely. Meanwhile, demand has to go up 2 pct a year to maintain economic growth, the equivalent of one Saudi Arabia every seven years. Factor in a growing global middle class (up to 50 pct of the world’s population by the end of the same period), and one SA in three to four years will be needed.
My understanding is that for the first more wells have to be dug each time to maintain the same production level, and for the second capital expenditures are rising. More details are given in the Kopits lecture.
In the end, things will look fine only when oil price drops to around $30 a barrel while crude oil production keeps rising. Otherwise, the claim that peak oil did not take place or will not take place for a long time remains questionable.
Emphasis now on Manifa is proof of peak oil.
From what I read, two-thirds of oil-producing countries have reached or have gone past peak.
According to the lecture linked earlier, there is a lot of capital available, especially given tremendous amounts of credit created to quell the 2008 crash. The problem is that capital expenditures are going up because there’s no more “easy oil,” which is part of the issue of peak oil.
Global spare capacity might be more helpful:
I think global oil consumption has not been flat:
(Reposted:)
In some regions, demand destruction took place because of economic crisis.
Costs have also not gone down. More details are given in the lecture shared earlier.
Peak oil should be seen in light of increasing demand, production that cannot meet it, and the use of other sources of energy.
Don’t look at dollars but at energy returns.
More details on the matter can be found here:
Also, from 2013:
Finally, don’t forget to look at expected energy return in light of expected demand. In this case, a return of 40 for countries like the U.S.
And that’s to meet the energy demands of only a fraction of the world’s population. Even more will be needed to meet a growing global middle class:
(Reposted:)
Likely the energy and resource requirements needed to meet that (which is expected as a global capitalist economy needs more goods produced to keep the value of more credit created by profit and returns on investment propped up) is equivalent to one Saudi Arabia every three to four years:
(Reposted:)
Can solar and others scale to meet that demand? According to the IEA:
(Reposted:)
http://www.worldenergyoutlook.org/publications/weo-2010/
We will need to replace at least 70 pct of oil demand increase each year with renewable energy to keep the economy going. Factor in a growing global middle class, and even more will be needed.
And that’s assuming that oil companies will produce crude oil at maximum depletion rates (i.e., with declining profits or even losses) for the next two decades.
Finally, these measures will require extensive cooperation and coordination between governments, something that is not taking place and that has not taken place for decades.
If peak should be seen in the light of rising demand, a supply that cannot meet it and the use of other resources, the IEA medium term report shows ( see numbers posted) rising demand, rising production with an increasing excess capacity and a reducing price. By your metric, of rising demand and a supply that cannot meet it that indicates peak oil, we don’t have that situation ( unless you wish to debate the IEAs methodologies, , if so bring details).
Old fields decline, new fields are found, production efficiencies increase with application of new technologies, so past data points of old fields declining is great, but the production forecast appear to be outstripping demand.
I am using tapatalk , so I am not very good at quoting with it so apologies for the cut and past without quote tags
“My understanding is that for the first more wells have to be dug each time to maintain the same production level, and for the second capital expenditures are rising. More details are given in the Kopits lecture.”
If we are talking shale liquids, cost per well ( hence lift cost ) are falling. Prior to the shale liquids boom, the US land rig fleet was pretty crappy, and the hydraulic fracturing pumping horsepower was limited ( available pumping horse power is how the market availability for equipment for fracing operations is measured). Since '08’we have seen a huge amount of horsepower enter the market and a huge capital expenditure in mew drilling rigs to make the drilling process more efficient. Cost have fallen for shale liquid wellls. Production per well is rising with multistage fracturing sleeves, longer horizontal wells and possible cost effect rotary steerable systems.
The decline curve for a shale well is not well understood. One of the challenges is that we don’t know how much each well drains. We can assume that each well with the fractures drains a large area , there fore we have crappy recovery so have plenty of recourse for enhanced recovery methods. Or we can assume that each well has a small recovery area but is quite efficient in the recovery, so we have lots of in fill drilling options.
Had to send as tapatalk does not like long replies.
The long story short ( and shale oil recovery is a long long story) is that decline rates from shale oil is not well understood, ( other than they decline faster than conventional wells) but there are ways out, mostly of which come down to optimum horizontal well spacing, which require us to have better understanding of fracture propagation and drainage .
As understanding of shale production is improving we are getting as much if not more from replacement well, not less.
As for available capital, the international operating companies have to go to the markets to raise capital, or at least convince the markets that the shareholders that their generated cash is better reinvested in them than any possible other investment, so capital constraint is a very real thing. IOCs could drill a hell of a lot more if they could get their hands on the cash. national operating companies have a similar issue, they are often one of the countries major income sources , so other national priorities may take precedence over more wells. When we see a tightening on supply to demand , more capital,will become available.
As I mentioned in a previous post, the average price of a barrel of oil in 2003 was $27.69. In 2013, the average price of a barrel of was $91.17. Right now today the price of a barrel of oil is $104.30. So let’s round those figures off and say the price of a barrel of oil went from $25 a barrel to $100 a barrel in the last decade.
As an informal survey, post which of the following predictions for future oil prices you agree with.
- Oil will hit $50 a barrel in the next decade.
- Oil will hit $200 a barrel in the next decade.
- Oil will not hit $50 a barrel in the next century.
- Oil will not hit $200 a barrel in the next century.
- Oil will hit both $50 and $200 a barrel in the next decade, in that order.
- Oil will hit both $200 and $50 a barrel in the next decade, in that order.
Personally, I agree with 2 and 3.
Can I pick 5 and 6 , I expect big price surges and falls mostly due to short term production issues ( Russia cutting gas to Ukraine, that kind of thing) . Inflation adjusted prices I expect things to hang around 100. If 5 year predictions are 100+ i expect to see a lot of investment in new capacity, arabian gulf countries will exploit their shale resources, partially for local demand and partially for export, LNG to be used as fracturing fluids, transfer to more nat gas for installed energy generating capacity, that kind of stuff to take the edge off the price rise.
The notion that we must have cheap oil to fuel our global capitalist economy is simply nonsense. Oil prices are triple what they were ten years ago. And the result is…it’s more expensive to fill the tank of your car.
So what? Yes, increasing fuel prices influence every good and service. It costs more to produce products (like, you know, food), and ship them around the world. Except transportation costs are a small fraction of the cost of most goods. We’re shipping raw materials all over the world to transform them into parts which are shipped all over the world and assembled into products which are shipped all over the world. All in a world where oil prices are triple what they were ten years ago.
Peak Oilers back in 2003 seemed to believe that tripling of oil prices would mean the price of everything would triple. Did that happen, here in the future world of 2014? No it didn’t. The world economy is not a simple engine where you pump oil in one end and get economic growth out the other end, and the more oil you pump in the more economic activity you get out the other.
It seems pretty likely that we really are in a period of lower-case peak oil. It isn’t likely that in 2034, 20 years from now, we’ll be producing a lot more oil than we are today, and it’s pretty likely that we’ll be producing less, from all sources. And that’s worrying—why?
Thing is, we use energy in incredibly inefficient ways today. And that’s the GOOD NEWS. Since we use energy inefficiently, we can simply stop wasting so much so foolishly, and get along fine with exactly the same standard of living as before. Yeah, it costs a lot to heat your house when you leave the door open, but it’s a lot cheaper when you shut the door.
Another thing. Yes, liquid hydrocarbons are a pretty good way to power vehicles. A tank of octane has a lot higher energy density than a battery of the same weight, even the exotic super batteries they have nowadays. So? We can make any arbitrary organic molecule we wish as transportation fuel, we just need a source of energy to take arbitrary sources of carbon, hydrogen and oxygen and turn them into arbitrary transportation fuels. This is not magic, this is the sort of thing the Germans did back in the 40s. Yeah, it’s more expensive to use a nuclear power plant to turn recycled newspapers into liquid fuel than it is to pump crude oil out of the gushers of Texas in 1964. So? We’re a lot richer now than we were in 1964, and if we have to pay a higher absolute cost for transportation fuel in 2014 or 2034 than we did in 1964, well, we’ll pay a higher price. We’re already doing so, aren’t we?
The notion that demand for oil will continue to increase while supply continues to fall somehow forgets basic economics 101, which is that supply and demand are not fixed, but depend on price. As prices rise, demand falls. As prices rise, supply increases. Or if supply can’t increase, prices rise even more until demand reaches a new equilibrium. People aren’t going to pay for $100 a gallon gasoline, they’ll sooner drive a crappy electric car that barely has the range to make the daily commute to work and back, and they can’t drive it across country to see the Grand Canyon like they could back in the g9od old days.
Why don’t people drive those electric cars today, even though those cars are available today? Because gasoline does not, today, cost $100 a gallon. And it’s not going to cost $100 a gallon in 2064 (in inflation adjusted dollars that is, who knows what the exchange rate between 2014 dollars and 2064 dollars is going to be–it’s entirely possible that the nominal price of a gallon in 2064 is much more than $100/gallon if we’ve inflated the dollar to 1/20th of its current value).
The point is, an electric car isn’t as good as a gasoline car. But in a world were an electric car is much much cheaper than a gasoline car lots of people are going to choose electric cars even though they’re not as good. And electric cars don’t run on oil. We don’t burn oil to generate electricity, we almost exclusively use hydroelectric, nuclear, and coal topped off with a light dusting of wind and solar and tidal and whatnot.
So there’s your future. The rising global middle class is probably never going to buy gas guzzling 1960s style land yachts. They’ll make do with electric cars and CNG cars and bicycles and telecommuting and mass transit. Sucks to be them. But having to take the subway to work instead of your gas guzzling land yacht isn’t exactly Mad Max style civilizational collapse, is it?
But it may be false optimism to frame it that electric cars will someday be as cheap as gasoline cars. This implies that in the future we’ll still use cars the way we do now, they’ll just be powered by a different energy source.
The price of oil has quadrupled in the last decade. If we could operate an electric car as cheaply now as we could have operated a gasoline car ten years ago, we would have already have substantially switched over to electric cars. But we haven’t - which is the market telling us gasoline cars are still cheaper to operate than electric cars.
So we shouldn’t be thinking that someday electric cars will be as cheap as gasoline cars. We should be thinking that someday gasoline cars will be as expensive as electric cars. Instead of electric cars becoming as common as gasoline cars, we might have gasoline cars becoming as rare as electric cars.
Peak oil is indicated by conventional production not meeting demand and remaining in a 73.4 Mb/d plateau. See the first link I shared in this thread for details.
Also, Hubbert predicted this in 1976 and the IEA confirmed this in 2010. The links are also found in my previous messages.
That’s not what we are seeing, as even the EIA acknowledges otherwise. More details are given in links I shared previously.
The information comes from increasing number of wells needed to keep production afloat. More details can be found in links shared earlier.
The problem isn’t the lack of capital but increasing capital expenditures. More details and consequences are explained in the lecture shared previously.
According to the IEA, at best all oil and gas resources worldwide will add only 9 pct to production during the next two decades. Data sets, etc., are presented in the 2010 report.
The catch is that this assumes that crude oil production will flat line during the next two decades. That is highly unlikely.
On top of that, it was shown that demand had been going up by up to 2 pct each year during the past two decades. The reason for that is shown here:
That means we will need the equivalent of one Saudi Arabia every seven years to maintain economic growth, and more given a growing global middle class (two links about that shared earlier).
Obviously, the 9-pct increase, which involves maximum depletion rates, will not cut it, which is why the IEA stresses that governments will need to coordinate and cooperate immediately to replace at least 70 pct of oil demand per annum with renewable energy to deal not only with peak oil but with global warming.
That, too, is probably not possible given decades of competition and fighting between countries, increasing arms production and sales, and a global economy already weakened by increasing credit.
If we look not just at oil but at resources in general, then we are already at overshoot:
That is, current ave. footprint per capita as of 2007 was equivalent to that of Turkey but biocapacity will only allow for a footprint equivalent to that of Cuba.
The implication is that resources even for components, infrastructure, and goods needed for a middle class lifestyle powered by renewable energy will likely not be enough, especially given low energy returns for renewable energy and high energy returns needed for a middle class lifestyle (see the article about EROI for details).
Worse, as that ave. footprint is expected to increase due to greater demands for energy and material resources, biocapacity is expected to drop due to a growing population, environmental damage, and global warming.
On top of that is a lag time needed for the transition to renewable energy:
not to mention an energy trap, i.e., oil needed for the manufacture and delivery of components needed for renewable energy:
https://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/
We should probably look at the energy and resource costs of producing, say, a billion cars, with a quarter of that found in a country like the U.S., which has less than 5 pct of the world’s population.
From there, we consider the point that in a global economy, the current middle class can only get its higher income, returns on investment, etc., by selling to an expanding market, which means a growing global middle class. That is the current global capitalist economy.
In order to sustain that economy, oil demand has to keep rising by around 2 pct each year. As that global middle class grows, then that oil demand has to rise further. And probably not just oil but all sorts of resources, from fresh water to phosphorus, needed for manufacturing and food production.
In light of electric cars, some details are shared here:
Is it possible that the growth of a global middle class will lead to demand for various renewable energy components and infrastructure that may negate savings thanks to the use of renewable energy?
That is, how much energy and resources will be needed to meet a middle class that makes up around 50 pct of the world’s population? (Some details are shared in the BBC article about that.)
I don’t know if there need to be a lot of high-level talks between governments to accomplish this. In fact, just the other day Tesla announced that they are going to be building charging stations across China. It looks like they will build a car factory there as well. The interesting thing is that Tesla’s charging stations are solar-powered, so here we have an example of solar energy directly replacing oil, on a big scale.
China’s government does want this, but it looks like they just approached Tesla directly. Not that anyone has to twist a company’s arm to get them to work in China.
I also want to point out that a middle class car today just isn’t what it has historically been. In the 70s, it wasn’t unusual for a car to get 10 mpg or less. Today, a plug-in hybrid will get you 100 mpg, more than that if you stay in range. The amount of oil an individual needs for transportation is shrinking. For people who can afford an ev, it is vanishing. If the new middle class buys new cars, then up to a point anyway, less oil isn’t a problem. The projections in your cites are from a time when there was simply no choice at all but oil for fuel, and now there is a choice.
Maybe I missed it, but I think you are assuming the wrong EROEI for renewable energy. Where are you getting your information on this? If it is in the article you cite, do you mind posting the relevant quote? I’m really in a hurry these days.