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Despite Cheap Gas, Coming Back to Peak Oil

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 […]

Posted On : Published By : Tom Whipple
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The Case For Peak Oil

JODI World C+C The Texas RRC Production Data is out. There appear to be no big surprises this month. All RRC data is through September but the EIA data is only through August. Note: For all those not familiar with the Texas Railroad Commission data it is always incomplete. That is the reason for the drooping data lines you see in the charts. The EIA data is what they believe the final estimate will be. Texas C+C Final month production was just a little higher in September than August. That usually indicates a small uptick in production. But the data is so incomplete it is hard to tell. Bakken & North Dakota OPEC 12 was down 256,000 bpd in October. BH Total World

Posted On : Published By : Tom Whipple
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An “oil theologist” is needed to interpret the given resources and reserves in World Energy Outlook 2015

This year’s big news regarding the reporting of oil reserves in World Energy Outlook 2015 is that this annual report now discusses “resources that are technically possible to produce” and what proportion of these are proven reserves. When I was working on Chapter 17, The Peak of the Oil Age for my new book a few weeks ago I discussed the difference between technically producible resources and reserves. To support that discussion I made a figure explaining how different types of crude oil are classified. All the oil formed millions of years ago is termed, “Total Petroleum Initially in Place (PIIP). We have now found most of the world’s producible oil but there are still some oilfields yet to be discovered. (Details on this will be found in the book.) Of all the oil that we have already found there is some that cannot technically be produced, i.e. is […]

Posted On : Published By : Tom Whipple
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It’s Too Early to Assume Peak Oil Demand

“I believe we may not see $100 (oil) ever again,” said Vitol’s Ian Taylor last week in London. His rationale for making such a prediction is the belief that global oil demand will peak in the medium term. “I have begun feeling that… we are coming to peak demand towards 2030,” said Taylor, the CEO of the world’s largest oil trader, as quoted by Reuters. Peak demand is the point at which the world’s oil demand stops growing for good—current global oil demand is 93 million barrels per day, with most estimates expecting that figure to grow to over 100 million barrels per day within the next five to ten years. His comments come at a very curious time, given the current oil market situation, with prices in the $40-$50 range, U.S. consumption back on the rise, emerging markets seeing rapid economic development, and petroleum still making up more […]

Posted On : Published By : Tom Whipple
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Oil Megaprojects Won’t Stay On The Shelf For Long

One casualty of the oil price downturn could be the megaproject. For years, as conventional oil reserves depleted and became increasingly hard to find, oil companies ventured into far-flung locales to find new sources of production. Extracting oil from these frontier areas required more advanced technology and a lot more capital: Ultra deepwater, Arctic offshore, heavy oil sands, and increasingly, the Lower Tertiary. Often these megaprojects projects were only the purview of the largest oil companies, as smaller players did not have the resources – financial or technological – to make them work. Meanwhile, smaller drillers, at least in North America, turned to shale, which required less upfront cash and could be turned around on a quick timetable. The collapse of oil prices, however, could kill off the megaproject. The oil majors are scrambling to cut costs, and large-scale projects with high costs and long time-horizons are not making […]

Posted On : Published By : Tom Whipple
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‘Peak demand’ means world may never see oil at $100 a barrel again

Just as the energy industry has brushed aside concerns that the world could run out of oil, industry executives now say they believe it is demand, rather than supply, that is nearing its apex. In 1985, Ian Taylor, today the chief executive of the world’s largest oil trader Vitol, was part of a team at Royal Dutch Shell that forecast oil prices would rise five fold to $125 a barrel in 2015 as global reserves were expected to become more scarce. Now he says it is unlikely to ever reach those levels again. Oil today stands at around $50 a barrel, having more than halved since June 2014 after global supplies dramatically rose due in large part to the U.S. shale oil boom but also due to the unlocking of huge offshore reserves in Brazil, Africa and Asia. "We all talk about ‘peak supply’ and maybe with shale that […]

Posted On : Published By : Tom Whipple