1. Other entities Public “majors” Public “majors” ExxonMobil (2 nd to Apple), Chevron, BP, Shell, ConocoPhillips, Total ExxonMobil (2 nd to Apple), Chevron, BP, Shell, ConocoPhillips, Total Downstream Downstream 720 refineries, in US designed as $ losers 720 refineries, in US designed as $ losers Most new are in ME & Asia, 3-5 yr build +$5 billion each Most new are in ME & Asia, 3-5 yr build +$5 billion each US imports 8.3 of 14.8 Mb/day US imports 8.3 of 14.8 Mb/day Strategic reserves Strategic reserves All OECD nations have multi-wk supply of crude oil US = 44 days of imports 2 wks of gasoline, jet fuel, etc in pipelines

2. Oil flow Who uses it? Who has oil? = # of supertankers What limits the flow? According to MBAs …

3. Inefficient use Investment bubblers & Cartels Investment bubblers & Cartels Extreme weather damage Extreme weather damage No new US refineries (NIMBY) No new US refineries (NIMBY) … Above ground factors

4. US oil production Horiz. drilling

5. Oil reservoir factors Discovery (seismic, 2D 3D/4D Discovery (seismic, 2D 3D/4D Off-shore drill rigs, complex & one-shot, so very expensive & limited

6. Declining N. Sea oil extraction State of art reservoir management to maximize total oil production

7. Projection based on past experience NOCs limit exports to maintain domestic supply & extend duration of “petrowealth” NOCs limit exports to maintain domestic supply & extend duration of “petrowealth” Financial constraints on new reservoir development Financial constraints on new reservoir development Water & electricity availability Water & electricity availability 1990 2003 EXPORT LAND MODEL

8. … According to “Peak Oilers” Global per capita power declining (flat energy supply consumed by growing # of users) ERoEI declining because we drain large concentrated reservoirs, but new finds are mostly smaller/deeper Larger effort/energy use for new reservoirs Larger effort/energy use for new reservoirs More waste pollution refining lower-grade fuels More waste pollution refining lower-grade fuels Rusting infrastructure & aging workforce, petroleum no longer seen as “sexy” Rusting infrastructure & aging workforce, petroleum no longer seen as “sexy” Innovations are now complex “one-off”, not breakthroughs w/ wide application Innovations are now complex “one-off”, not breakthroughs w/ wide application

9. So many constraints! Can we estimate when world flow will decline? Mistaken calls have been made before Is there any science to Peak Oil?

10. Hubbert’s “curve fitting” Plot (annual extraction) / (total extracted to date) vs. total extracted to date. Plot starts at (1 st year,1 st year), over time drops to (ultimate recoverable, 0) After “noisy” start, curve settles to straight line, so perhaps can extrapolate to predict ultimate (total) recoverable resource (URR) in future Stepping back halfway approximates year extraction starts to decline (= peak) Shows that Texas has extracted 90% of all its recoverable oil 1970

11. US-48 & Saudi oil histories URR

12. Applied to World Oil Liquids Supply

13. Peak oil “rolloff timing FACT: Too few large- volume projects underway to overcome post-2013 depletion FACT: Too few large- volume projects underway to overcome post-2013 depletion FACT: New projects tap non-conventional oils, costly & difficult, deliver smaller flowsafter delays FACT: New projects tap non-conventional oils, costly & difficult, deliver smaller flows after delays Tar sands

14. FACT: crude oil production has not increased for 5.5 yrs despite high prices until 2 yrs ago Simplest explanation: Oil flow will no longer grow Will “tar sands” help?

15. Is there a physical model of oil depletion? Yes! First simplification: separate discovery from extraction BUT BUT Hubbert “analysis” is only curve fitting, no predictive power, only appeal to precedent. Not science!