Category:

Peak Oil: Ignoring Other Considerations

Peak Oil is You Gail Tverberg shares some of the most insightful observations about the connection between economic growth and energy. In an article posted at her website several weeks, she raised issues which are too often shunted aside in the primary debate of  “not enough” versus “all we need” fossil fuel supplies in the years to come. They’re too important to continuously skip past. I’d like to focus on just a couple of the (as usual) excellent points she raised. We do not have an alternate fuel supply that will allow the economy to continue to grow, regardless of fossil fuel consumption. The published reserves include large amounts of oil in the ground that are not of the very cheap to extract type. Extracting such oil will be impossible if oil prices are very low, or if credit availability is lacking. It is tempting for observers to look […]

Posted On : Published By : ASPO-USA
Category:

Just How Good Are The EIA’s Predictions?

Folks here know that I like to post charts created from oil production data. But there has been a dearth of data lately. But not to worry, the data should start coming fast and furious later this week.  However in the meantime I decided post a little about what the EIA expects in the future. They published the below comments and chart April 7, 2014. Bold mine. Petroleum & Other Liquids In the Annual Energy Outlook 2014 (AEO2014) Reference case, crude oil* production rises from 6.5 million barrels per day (MMbbl/d) in 2012 to 9.6 MMbbl/d before 2020, a production level not seen since 1970. Tight oil production growth accounts for 81% of this increase, and sees its share of national crude oil production grow from 35% in 2012 to 50% in 2019. In the High Oil and Gas case, U.S. crude oil production reaches 11.3 MMbbl/d in 2019 and reaches 13.3 […]

Posted On : Published By : Tom Whipple
Category:

Excessive consumption

Just 80% of global private consumption is snapped up by 20% of the world population living in the richest countries, which is “left overs” for 80% of the population (5.6 billion people), residing in poorer countries and in the process of development, with only 20% of world production. Only the U.S., with 4.5% of the world population consumes 40% of all available resources. Large-scale consumption is synonymous with degradation of natural ecosystems; more physical production is the result, clear and evident, more pollution, more waste (disposal) and less preserved environment, compromising greatly in the quality of life for all. Not coincidentally, etymologically the word “consume” means “exhausted”. While the richest exaggerate consumption, the poorest suffer the consequences of close environmental imbalance. Over the past 30 years, global consumption of goods grew at an annual average of 2.3%; in some East Asian countries this rate exceeds the threshold of 6%. […]

Posted On : Published By : Tom Whipple
Category:

Will Rising Oil Output Bring Down Prices?

  It’s all about supply and demand—the first, last, and everything for estimating the projected path of prices. Geopolitics can and does intrude, of course. This is oil, after all. But the raw numbers of economics have the last word eventually—even for the world’s most valuable commodity. The price of  Crude Oil has been trending higher this year, but three key events on the supply side will create new headwinds for the bulls. In particular, expectations for higher output in three crucial oil-producing nations: Iraq, Iran, and the US. The catalysts for increased supply are different for each country, but the expected results will be the same: more oil. Say bye-bye to the peak-oil narrative, at least for now. Global production, by the way, has already been bumping up against all-time highs recently, based on the Energy Information Administration’s latest data through October 2013. Total world output of crude […]

Posted On : Published By : ASPO-USA
Category:

On oil-water nexus

In addition to the conventional energy market issues, mainly oil, related to price and production, the industry seems to be gearing for a new worry — how to handle the oil-water nexus. A recent UN Water Day has a very simple message to deliver: Water needs energy and energy needs water. The interdependencies between the two is strengthened and consolidated by the day. After all some 90 percent of power generation is water-intensive. Using various parameters to look into the crystal ball, the world seems to be heading toward increasing its energy consumption by more than a third in only two decades. Such increase requires an additional increase of 85 percent of water consumption according the consumers’ watch dog, the Paris-based International Energy Agency (IEA). With such increase comes completion for supplies as the world population will top 9 billion people, who need an additional 50 percent in agricultural […]

Posted On : Published By : ASPO-USA
Category:

Here Comes $75 Oil

The long-term outlook for global oil prices is lower, perhaps much lower, giving a strong boost to the U.S. economy while potentially crippling the economy of Vladimir Putin’s Russia. Vast new discoveries of oil and natural gas in the U.S. and around the globe could drive the oil price to as low as $75 a barrel over the next five years from a current $100. The demand side, too, will put pressure on the supremacy of petroleum. For the first time in its 150-year history, the internal combustion engine can be run efficiently on alternative fuels from a number of sources, including natural gas. As these alternatives are increasingly introduced, global consumption of oil will slow its growth and flatten out. Barron’s Graphics Citigroup’s head of global commodity research, Edward Morse, believes the combination of flattening consumption and rising production should mean that "the $90-a-barrel floor on the world […]

Posted On : Published By : ASPO-USA
Category:

Peak Oil: No Easy Solutions

Alternative energy depends heavily on engineered equipment and infrastructure for capture or conversion. However, the full supply chain for alternative energy, from raw materials to manufacturing, is still very dependent on fossil fuel energy. [In the end, how can you get rid of fossil fuels when you need them to construct alternative energy resources?]…. The discussion is further complicated by political biases, ignorance of basic science, and a lack of appreciation of the magnitude of the problem facing societies accustomed to inexpensive fossil energy as the era of abundance concludes. [1] I’ve consistently and repeatedly urged a greater awareness of the challenges diminishing supplies of oil and gas will impose upon all is. Political affiliations and stamp-your-feet-and-hold-your-breath resistance to the realities of finite, ever-harder to find and extract fossil fuel resources won’t help anyone. Coupled with that awareness (dependent in no small part on a lot more honesty and […]

Posted On : Published By : ASPO-USA
Category:

Peak Oil: Great Question. The Answer Is _ ?

The real question for the United States is not about optimal trade policy or economic theory, but whether we want to extract the last drops of our oil endowment as quickly as possible by enabling the debt-fueled land rush that has brought us a gratifying, but temporary, bump in production, or whether we want to make it last as long as possible, knowing that two or three decades from now the world will be absolutely desperate for the stuff, with scarce exports and unimaginably high prices. [1] So what will it be? But before the question can be answered meaningfully, information about what’s at stake; where we stand now; what the future energy supplies prospects hold; together with an assortment of related but just as important considerations need to be fully disclosed. And there’s the rub. There are two strong camps with just as strong opinions about energy supplies […]

Posted On : Published By : ASPO-USA
Category:

James Schlesinger on peak oil

In August 2012, I interviewed James Schlesinger over the phone as part of research for my upcoming book, The Oracle of Oil , the first biography of maverick geologist M. King Hubbert. Schlesinger and Hubbert shared a deep interest and concern in the issue of peak oil —specifically, the question of when world oil production might reach an all-time high, and then begin to decline, marking a turning point between an era of plenty to an era of scarcity. During Schlesinger’s time in office as the United States’ first Secretary of Energy—a post President Jimmy Carter created specifically for Schlesinger —he’d spoken about this issue of peak oil. He saw that such a peak of world oil production would have profound effects on the U.S. and the world. (Before becoming Secretary of Energy, Schlesinger had held various positions in the Nixon and Ford Administrations, including Director of Central Intelligence […]

Posted On : Published By : ASPO-USA
Category:

Ex govt adviser: “global market shock” from “oil crash” could hit in 2015

In a new book, former oil geologist and government adviser on renewable energy , Dr. Jeremy Leggett, identifies five "global systemic risks directly connected to energy" which, he says, together "threaten capital markets and hence the global economy" in a way that could trigger a global crash sometime between 2015 and 2020. According to Leggett, a wide range of experts and insiders "from diverse sectors spanning academia, industry, the military and the oil industry itself, including until recently the International Energy Agency or, at least, key individuals or factions therein" are expecting an oil crunch "within a few years," most likely "within a window from 2015 to 2020." Interconnected risks Despite its serious tone, The Energy of Nations: Risk Blindness and the Road to Renaissance , published by the reputable academic publisher Routledge , makes a compelling and ultimately hopeful case for the prospects of transitioning to a clean […]

Posted On : Published By : Tom Whipple