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PEAK OIL AND THE FATE OF HUMANITY Chapter 2 –The Important Question: When Will Oil Production Peak? Robert Bériault PEAK OIL AND THE FATE OF HUMANITY Chapter.

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Presentation on theme: "PEAK OIL AND THE FATE OF HUMANITY Chapter 2 –The Important Question: When Will Oil Production Peak? Robert Bériault PEAK OIL AND THE FATE OF HUMANITY Chapter."— Presentation transcript:

1 PEAK OIL AND THE FATE OF HUMANITY Chapter 2 –The Important Question: When Will Oil Production Peak? Robert Bériault PEAK OIL AND THE FATE OF HUMANITY Chapter 2 –The Important Question: When Will Oil Production Peak? Robert Bériault

2 Wow! I can see that this stuff is really indispensable! Where does it come from?

3 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. ~cat6a/ ~cat6a/fuels-IV.htm.

4 You mean that its not continuously being made?

5 Thats right. Mother Nature took millions of years to generate the oil. She made it once. She wont be making a second batch.

6 Well, how much oil do you have down there?

7 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 weve used up about 0.9 trillion. In other words were near the half-way point. Hubbert's Peak: The Impending World Oil Shortage, Kenneth S. Deffeyes

8 So when do you figure youll run out?

9 An oil well isnt like a cars gas tank. With a car you can drive at any speed and you run out of gas all of a sudden. Thats because your tank is a hollow cavity. The gasoline fills the bottom of the tank and theres nothing preventing it from being pumped out.

10 But an oil well isnt a hollow cavity. Its 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. It takes time for oil to ooze from zones of high concentration to the zone of low concentration near the pipe. Click

11 In order to extract the oil from an oil field, a large number of wells are drilled.

12 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.

13 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. An oil field yields its contents more and more slowly over the years, something like this.

14 Mid point 2 nd half When you plot the production of an aggregate of oil fields you get roughly what is called a bell curve Top of the curve 1 st half

15 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

16 Well, whats the worry then? So whats the problem then?

17 The problem is that we will soon reach the point where we cant pump out enough to keep up with demand.

18 …and from then on, oil production will decline year after year… …thats what petroleum experts refer to as the oil peak or peak oil. Remember that weve used up almost half of the worlds oil. When we reach the half-way point on a bell curve, we embark upon the decline.

19 When will that be? Oh gee! When will that be?

20 We dont know for sure. But there are seven pieces of evidence that lead us to believe that the oil peak might come soon.

21 Evidence 1.

22 The Hubbert Peak To forecast oil peak for the whole world, petroleum experts used a method developed by oil geologist Dr. M. King Hubbert

23 The Hubbert Peak In 1956 Hubbert, using mathematical models, predicted that the US lower 48 states would peak in 1970

24 The Hubbert Peak At that time the US was the worlds largest petroleum producer! He was laughed at…

25 The Hubbert Peak But it turned out he was right!!!

26 And now oil geologists think were close to the Hubbert Peak for the world… Weve used up almost half of the worlds oil.

27 Evidence 2.

28 Before looking at predictions lets consider a logical condition… Before looking at predictions for the whole world,

29 If you want to extract (produce) oil, youve got to find (discover) it first, right ?

30 Oil discoveries in the US peaked - then 40 years later production peaked Adapted from Collin Campbell, University of Clausthal Conference, Dec 2000 The US lower 48 states

31 If the world follows the US pattern: Adapted from: Richard C. Duncan and Walter Youngquist … the world would peak soon

32 Its inevitable that sooner or later the peak of discoveries will be followed by a peak in production.

33 Evidence 3.

34 There Are No More Giant Oil Fields to Be Discovered In spite of advanced exploration technology we are finding smaller and smaller oil fields

35 Hold it! What do you mean by a giant oil field

36 Any field that has more than 500 million barrels is deemed to be a giant. Prudhoe Bay production plant, pipelines, roads, flaring

37 This chart of giant oil field discoveries proves the point, doesnt it? Simmons Company International Since 2003 no giant fields have been found

38 …for each barrel of oil that is being discovered Were consuming 4 barrels… The Partys Over, Richard Heinberg

39 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?

40 Evidence 4.

41 Energy Return On Energy Invested It refers to the ratio of: The amount of energy spent on getting the fuel: exploration, drilling, pumping, transportation and refining The amount of energy in the fuel: Either gasoline, diesel, kerosene, etc. AND (EROEI) The Partys Over, Richard Heinberg

42 Energy Return On Energy Invested Before 1950 it was about 100 to 1 In the 1970s it was down to 30 to 1 Now (2005) its about 10 to 1 The Tar Sands have an EROEI of about 4 to 1 The Partys Over, Richard Heinberg is diminishing as we resort to going after the hard-to-get oil:

43 A dropping EROEI is a sure sign of a coming decline

44 Evidence 5.

45 Its Getting a Lot More Expensive to Produce Oil Adapted from The Partys Over We have to drill deeper – up to three miles deep! Were exploring the far corners of the Earth to find it

46 Exploration doesnt pay anymore In 2003 oil companies spent $8 billion on exploration and discovered $4 billion in new reserves.* * Thomas Homer Dixon and Julio Friedmann, N.Y. Times, 25 Mar 2005 ** John S. Herold consulting firm Since 2000, the cost of finding and developing new sources of oil has risen about 15% annually.

47 Evidence 6.

48 Theres no more spare capacity in the world supply Adapted from The Oil Age is Over, Matt Savinar Spare capacity = how much extra oil can be produced within 30 days notice and maintained for 90 days

49 Turning the valve further open doesnt yield more oil.

50 Evidence 7.

51 Oil Fields are Getting Old and Tired Most of our oil comes from fields that are more than 30 years old The Partys Over, Richard Heinberg

52 Evolutionary psychology and peak oil: A Malthusian inspired "heads up" for humanity. by Dr. Michael E. Mills Dr. Michael E. Mills This graph of the last five years of world production would indicate weve already peaked!

53 Alright then, when is oil going to peak?

54 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)

55 Production quotas are based on Production quotas are based on a countrys reserves, so theres an advantage in exaggerating them

56 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.

57 Oil geologists know they cant rely on the accuracy of those reported reserves. Forgive me for being suspicious!

58 The peak is more imminent than one would think: Many oil geologists have been studying the question. Theres no consensus, but the predictions range from the year 2005 to 2015 Many have a feeling its upon us now

59 China and emerging economies are booming. Thats going to make things worse, will it?

60 Yes, youre right. Chinas demand is precipitating the oil peak Chinas oil consumption increasing 11% per year Worlds 2 nd oil user after US Exxon-Mobil Report, Oct. 2004

61 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

62 With everybody using more oil, look at the demand curve on this graph. The red portion represents the amount that well have to find and drill for DOCUMENTARY "THE END OF SUBURBIA" SHOWING IN OTTAWA Exxon-Mobil Report, Oct. 2004

63 Why should I listen to you? Youre not an expert

64 You dont have to take my word for it. Heres what the experts have to say:

65 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. If it turns out that Saudi Arabia has peaked, then categorically, the world has peaked. After expressing scepticism about Saudis empty reassurances:

66 Les Magoon, an oil geologist and scientist emeritus with the U.S. Geological Survey: JOAN LOWY, Scripps Howard News Service, October 28, 2004 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,"

67 Mike Bowlin, Chairman and CEO, ARCO, 1999; Chairman, American Petroleum Institute: JOAN LOWY, Scripps Howard News Service, October 28, 2004 Weve embarked on the beginning of the last days of the age of oil.

68 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?"

69 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.

70 What does 50 million barrels a day represent?

71 In 1999 the world used 70 million barrels a day. Cheney said that by 2010 we will have to increase that by another 50 million, to 120 million barrels a day!!! Barrels consumed per day 19992010 In October 2007, at a London conference, Christophe de Margerie, the Total CEO, said that ratcheting global production up to even 100 million barrels by 2030 will be "difficult."

72 Saudi saying: My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.

73 And what about natural gas, will it peak one day?

74 In fact, natural gas has already peaked in North America.

75 Canadian Gas Potential Committee, Calgary, Alberta It estimated that production will plateau soon and then start it inexorable decline

76 What about substitutes? Weve got coal, gas, nuclear! -- Find out why these cant replace oil in Chapter 3A. Chapter selection page

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