Category: Peak Oil

Life often presents us with paradoxes, but seldom so blatant or consequential as the following. Read this sentence slowly: Today it is especially difficult for most people to understand our perilous global energy situation, precisely because it has never been more important to do so. Got that? No? Okay, let me explain. I must begin by briefly retracing developments in a seemingly unrelated field—climate science. But a funny thing happened along the way. Clearly, if the climate is changing rapidly and dramatically as a result of human action, and if climate change (of the scale and speed that’s anticipated) is likely to undermine ecosystems and economies, then it stands to reason that humans should stop emitting so much CO2. In practical effect, this would mean dramatically reducing our burning of fossil fuels—the main drivers of economic growth since the beginning of the Industrial Revolution. From a policy standpoint, climate […]

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It is ironic that, just as we are finally saying goodnight and farewell to Peak Oil theory, scientists are poised to bring unlimited quantities of the finest sweet crude oil to market, courtesy of algae and sunlight. Moreover, the algae route to creating oil is said to generate 95% fewer greenhouse gasses than the conventional route of drilling for oil , so, even if climate change activists would rather that we stopped using oil altogether, “green oil” goes a long way towards meeting most of their objections. The technology is not new. Research has been going on for at least the last 30 years, but for much of that time, scientists found that they were having to put more energy into the process to grow the algae and extract the oil, than was contained in the oil – not exactly a winning proposition. […]

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Figure 1 A recent post at Peak Oil Barrel by Jean Laherrere suggested an ultimate recoverable resource(URR) for the North Dakota Bakken/Three Forks of about 2.5 Gb based on Hubbert Linearization.  This conflicts with a recent (April 2013) USGS mean (F50) estimate of 8.4 Gb.  I decided to update my scenarios based on the range of USGS estimates from F95=6 Gb to F5=11.3 Gb for the North Dakota(ND) Bakken/ Three Forks.  Note that at year end 2011 there were 2.6 Gb of crude proven reserves in ND and at the end of 2007 about 0.5 Gb, I will assume all of this reserve increase came from the Bakken/ Three Forks, so 2.1 Gb of proven reserves added to 0.35 Gb of oil produced from the Bakken/ Three Forks gives us 2.45 Gb for a minimum URR.  The Hubbert Linearization points to about 0.05 Gb of undiscovered oil whereas the USGS […]

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Page added on February 8, 2014   “To me at least the connection is clear and statistically certain… far more certain than anything I ever see in the stock market or the economy.” That’s Jeremy Grantham, the highly-regarded co-founder of the $117 billion investment fund GMO, who predicted both the dot com crash of the late 1990s and the subprime meltdown a few years later. Above is an accompanying chart included in his  latest investment letter . Rather than pushing an investment idea here, he’s convinced there’s a causal link between a surge in earthquakes measuring above 3 on the richter scale in the US and the boom in  hydraulic fracturing  (“fracking”), the controversial drilling technique used to extract oil and gas from shale rock. His overall skepticism about fracking informs Grantham’s broader, bearish thesis about oil prices. In the investment letter he questions whether “this year’s $650 billion spent looking […]

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Page added on February 8, 2014 Climate change is the reality we are living in. It is not going away; it has been clearly established as a fact, IOMCO — or immediately obvious to the most casual observer. The weather is simply becoming more extreme. More tornados, more flooding, more drought, stronger hurricanes and other extreme weather events are only the tip of the iceberg. Climate change is not something that you can change overnight. It has taken a few hundred years for man to have the negative impact that it has on the climate; even if we stopped burning all fossil fuels tomorrow, it would take hundreds more to reverse the trend. We hit the big time lottery when we discovered oil and gas. It was like we stumbled upon a treasure chest with millions of years of stored energy and just like some lottery winners, we became […]

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Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

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Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

Click here to view full article at www.smartplanet.com

Jeremy Grantham, whose GMO LLC investment firm manages $117 billion in assets, says the Great American Shale Boom is a dangerous waste of time and money. Grantham, who started his career as an economist at Shell, recently contemplated attending an anti-Keystone Pipeline demonstration in front of the White House.  In his new letter to clients , Grantham explains why any country, from the U.S. to China, still going down the path of developing fossil fuels is walking into a trap.  First, he argues we are overstating the benefits of switching to natural gas: “Fracking gas,” like all natural gas, is basically methane. Methane unfortunately is an even more potent greenhouse gas than CO2: at an interval of 100 years it is now estimated to be 32 times as bad, and at 20 years to be 72 times worse! If it leaks from well head to […]

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Page added on February 6, 2014 How long can economic growth continue in a finite world? This is the question the 1972 book The Limits to Growth by Donella Meadows and others sought to answer. The computer models that the team of researchers produced strongly suggested that the world economy would collapse sometime in the first half of the 21st century. I have been researching what the real situation is with respect to resource limits since 2005. The conclusion I am reaching is that the team of 1972 researchers were indeed correct. In fact, the promised collapse is practically right around the corner, beginning in the next year or two. In fact, many aspects of the collapse appear already to be taking place, such as the 2008-2009 Great Recession and the collapse of the economies of many smaller countries such as Greece and Spain. How could collapse be so […]

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CAPEX, AGAIN   [T]he 2013 WEO has the oil industry’s upstream capex [see this and this ] rising by nearly 180 per cent since 2000, but the global oil supply (adjusted for energy content) by only 14 per cent. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy. [1] I pretend no expertise whatsoever in any and all economic matters … never have. But I understand just enough to realize that those numbers (from that excellent article by energy analyst Mark Lewis) suggest that the oil industry isn’t getting anywhere near its expected “bang for the buck.” And since those increased investments are made possible courtesy of the […]

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