Peak Oil at 2014?

BluePlanet

In a finding that may speed efforts to conserve oil and intensify the search for alternative fuel sources, scientists in Kuwait predict that world conventional crude oil production will peak in 2014 — almost a decade earlier than some other predictions. Their study is in ACS' Energy & Fuels, a bi-monthly journal.

http://www.eurekalert.org/pub_releases/2010-03/acs-wco031010.php

Their paper is here:
http://pubs.acs.org/stoken/presspac/presspac/full/10.1021/ef901240p?cookieSet=1

Apparently they have tweaked the Hubbert method to factor in:

individual, widely-varying, country-specific items such as changing technology and politics. To address these criticisms, the researchers modified the Hubbert model to calculate oil production trends that also include individual variations from country to country, and then applied it to the 47 largest oil producing countries in the world

Anyway, sounds interesting. Doubtless it's impossible to accurately calculate the peak, but it is surprising to hear this coming from Kuwait.

I like their comment here:

“ It is well-known that the ultimate oil recovery of any field in the world is only determined when the production management decides to abandon the field for good. This does not occur until the projected oil revenues fall below expected costs and human ingenuity is unable to reverse this relationship.”

BluePlanet

BluePlanet wrote: »

Their paper is here:
http://pubs.acs.org/stoken/presspac/presspac/full/10.1021/ef901240p?cookieSet=1

That link doesn't work, it doesn't allow direct access, This does.



I suspect that the current downturn will knock the peak back a year or so.

I think it's fair to say that we are already past peak "easy to extract" oil. It won't be too long before previously abandoned fields are reopened as the technology to extract has improved as well as the selling price being high enough to make them viable.

brendansmith

This is quite worrying, a good documentary on this is 'A crude awakening'.

I still think that an alternative fuel will be invented before we get in trouble though. What o ye think on this subject?

silverharp

ultimately life will go on even if international travel or high milage driving becomes unaffordable. In many ways it will be a benefit, higher demand for locally produced food, the end of the 3000 mile caesar salad. In the medium term at least its only really a transportation issue.
Assuming it hinders growth to some extent it might have interesting financial effects, how can pension funds grow at 8% a year if the underlying economy cant create more "global consumers"

brendansmith

brendansmith wrote: »

This is quite worrying, a good documentary on this is 'A crude awakening'.

I still think that an alternative fuel will be invented before we get in trouble though. What o ye think on this subject?

I've watched a number of these "peak oil" documentaries over the years and apart from the date of the "peak" changing, they all basically say the same thing. One day soom demand will exceed supply, this may already be happening!

China and India have been very active in securing deals for future oil supplies from many of the smaller oil producing countries.

As for the future, we could end up like post USSR Cuba, the Soviet oil supply was cut and the country has "regressed" to a semi-agricultural base with peasant farmers using hand tools.

http://video.google.com/googleplayer.swf?docid=-1721584909067928384&hl

Silverharp2

Silverharp2 wrote: »

ultimately life will go on even if international travel or high milage driving becomes unaffordable. In many ways it will be a benefit, higher demand for locally produced food, the end of the 3000 mile caesar salad. In the medium term at least its only really a transportation issue.
Assuming it hinders growth to some extent it might have interesting financial effects, how can pension funds grow at 8% a year if the underlying economy cant create more "global consumers"

Hopefully. I'll be retired before this particular chicken comes home to roost, the days of long commutes are numbered. 20-30 years time I reckon cars will only be for the rich.
The world would have to go with a "local first" model of production, rather than the cheapest, preferably before being forced to when the price of oil skyrockets and makes transportation too expensive.

In reality, consumerism will be curtailled simply because one of the raw materials will eventually become very expensive, many of the more frivolous oil-based products (McDonalds toys for example) will simply disappear, many other products will be kept for longer - they'd need to be better made first of course.

Surprisingly, Ireland would be slightly better placed than other Northern European countries to revert to a semi-agricultural existance because of the large number of one-off houses in the country relative to the rest of Europe.

How would pension funds operate in a world without oil driven growth! Will it go back to buying gold and sticking it under the bed! :eek:

jinghong

Deleted User wrote: »

How would pension funds operate in a world without oil driven growth! Will it go back to buying gold and sticking it under the bed! :eek:

I've quit my pension. Not due to retire for another 25 years, I think the tax benefits now are outweighed by the risks of lack of control and currency collapse brought about by post peak oil society.

on your suggestion regarding peak oil getting pushed back because of the current recession: it may have actually have been brought forward. For instance the low EROI canadian tar sands (5.8) would have more difficulty getting finance by more risk averse investors now than a few years ago. Oil=energy=ability to do work=gdp. Less oil reduces gdp which reduces investment further. with current depletion rates of up to 10mbd and production at 84mbd, investment is needed badly, but is worringly lacking. This self reinforcing situation means more oil stays in the ground ad infinitum. Bad for renewables also obviously

Deleted User

Deleted User wrote: »

That link doesn't work, it doesn't allow direct access, This does.



I suspect that the current downturn will knock the peak back a year or so.

I think it's fair to say that we are already past peak "easy to extract" oil. It won't be too long before previously abandoned fields are reopened as the technology to extract has improved as well as the selling price being high enough to make them viable.

Hmmm, since I last looked at that report it has changed to subscription only!
There was a chart showing the peak in production in 2015.

https://www.youtube.com/watch?v=gflv7j15fgc

Richard Heinberg, the Senior Fellow-in-Residence of the Post Carbon Institute is widely regarded as one of the worlds foremost Peak Oil educators.

Heinberg was in Edmonton on Feb. 11th, 2010 as part of the City of Edmonton's 'The Way We Green' Distinguished Speaker Series. The Way We Green is Edmontons environmental strategic plan -- a blueprint for being the nation's leader in setting the highest standards of environmental preservation and sustainability.

Heinberg spoke on the subject of Peak Oil and Economic Transition, asking how much Oil did you use today? Are We Running Out? What does this mean for the things we do, the food we eat, the places we go? Heinberg challenged the audience to think the unthinkable, exposing the tenuousness of our current way of life while offering a vision for a truly sustainable future

The University of Albertas Environmental Research and Studies Centre was host to Richard Heinberg later in the evening at the Myer Horowtiz Theatre for a repeat lecture and continued on societys future relationship with energy.

Having watched the whole series, it's a very sobering thought that he believes that peak oil is with us now, based on the recent price instabalities and the fact that the middle east has not continued increasing output.

With so many focused on the economic downturn, peak oil is likely to creap up and be an even bigger shock to them.

With some countries still experiencing rapid growth, China and India for example, the other side of the available supply curve could be very steep indeed!

Gekko

I spoke with a world-renowned British energy economist recently who said that Peak Oil is nonsense.

You have Iraq, Iran, Brazil, the Falklands, oil underneath Russia and the Arctic, plus his argument was that current oil wells such as the big one in Saudi are still not even 50% depleted.

He was of the view that there was a very good chance that Chinese economic growth will slow at some point, EU and US recession will also slow consumption.

Meanwhile, production of electric cars, buses, trains and trucks will ramp up as the infrastructure gets built and since this uses up the most oil, we will avoid a peak leaving it available for aircraft fuel for example.

Meanwhile technology to exploit massive reserves of shale gas have very recently advanced, and now the US has massive amounts of that to meet its power needs. This in turn will see gas prices come down - not good for Russia - and if there is a Chinese slow down, we could see gas and oil prices fall.

I'm not sure whether it was optimism on his part, but it's certainly an interesting point of view.

silverharp

Gekko wrote: »

I spoke with a world-renowned British energy economist recently who said that Peak Oil is nonsense.

You have Iraq, Iran, Brazil, the Falklands, oil underneath Russia and the Arctic, plus his argument was that current oil wells such as the big one in Saudi are still not even 50% depleted.

He was of the view that there was a very good chance that Chinese economic growth will slow at some point, EU and US recession will also slow consumption.

Meanwhile, production of electric cars, buses, trains and trucks will ramp up as the infrastructure gets built and since this uses up the most oil, we will avoid a peak leaving it available for aircraft fuel for example.

Meanwhile technology to exploit massive reserves of shale gas have very recently advanced, and now the US has massive amounts of that to meet its power needs. This in turn will see gas prices come down - not good for Russia - and if there is a Chinese slow down, we could see gas and oil prices fall.

I'm not sure whether it was optimism on his part, but it's certainly an interesting point of view.

you lost me at economist:D . its debatable if some of those reserves can actually be recovered. I do agree that an economic slow down which will go on for the next decade will give some breathing space. I dont have the number in my head but something like half the oil comes from 40 to 50 oil fields. It will be hard to replace the elephant oil fields as they go into decline. The main question is does it matter?

Gekko

Gekko wrote: »

I spoke with a world-renowned British energy economist recently who said that Peak Oil is nonsense.

You have Iraq, Iran, Brazil, the Falklands, oil underneath Russia and the Arctic, plus his argument was that current oil wells such as the big one in Saudi are still not even 50% depleted.

He was of the view that there was a very good chance that Chinese economic growth will slow at some point, EU and US recession will also slow consumption.

Meanwhile, production of electric cars, buses, trains and trucks will ramp up as the infrastructure gets built and since this uses up the most oil, we will avoid a peak leaving it available for aircraft fuel for example.

Meanwhile technology to exploit massive reserves of shale gas have very recently advanced, and now the US has massive amounts of that to meet its power needs. This in turn will see gas prices come down - not good for Russia - and if there is a Chinese slow down, we could see gas and oil prices fall.

I'm not sure whether it was optimism on his part, but it's certainly an interesting point of view.

He is correct in stating that the Saudi oil fields are 60% full and that there are many smaller fields that will or may come on-line in the near future thus causing production to continue increasing the the next 15-20 years or so.

The issue is the fact that consumption is increasing faster than production and the "peak" will occur when consumption catches and then tries to overtake production, which is impossible!

It's the rapid expansion of China and India that will determine when this crossover willl be attempted, the oil price is likely to rise and some poorer countries will be forced to reduce consumption thus delaying the "peak" for a short while. Then when the peak is reached again, China will start offloading it's "dollar mountain" to secure oil ahead of other nations causing a rapid rise in oil prices, now the shit hits the fan!

Oil prices are likely to skyrocket, forcing most countries to cut back their consumption, which of course delays the peak again, but the percentages of oil consumption between the nations is shifting east!

When the real peak is finally reached, China will have moved up the league of consumers and is likely to be in a better shape to buy oil than the west.

The real worry is the down side of the peak oil slope it could be quite rapid as all the easy to get oil has already been taken.

The "cost" of extracting oil now is rapidly increasing, for example in the early days of oil exploitation, it would only need one barrel in about one hundred extracted to run the oil extraction, refining, transportation system that goes with producing 99 barrels of finished product.

Now it takes about 30 barrels to extract the same 100 of oil, so only 70 barrels of finished product is made.

Why! Because the early oil fields were cheap and easy to work, then you have the likes of the north sea, much harder to work, now you have Alaska and deep sea drilling etc, all of these recent fields require huge energy inputs to get at the oil. Oil shale is even worse!

Electric transport will still need a source of power to charge it up,

This video (1 of 3) explains it well, part of a series explaining the connection between peak oil, the economy and the environment.

https://www.youtube.com/watch?v=cwNgNyiXPLk

maninasia

Silverharp2 wrote: »

ultimately life will go on even if international travel or high milage driving becomes unaffordable. In many ways it will be a benefit, higher demand for locally produced food, the end of the 3000 mile caesar salad. In the medium term at least its only really a transportation issue.
Assuming it hinders growth to some extent it might have interesting financial effects, how can pension funds grow at 8% a year if the underlying economy cant create more "global consumers"

It's a massive food security issue, fertilisers are needed worldwide to keep output high, oil is used to harvest and transport efficiently also, many billions live close to the breadline. The food crisis of 2008 has shown how quickly this could happen.

http://www.coastalpoint.com/content/rising_fertilizer_costs_reveal_another_side_oil_market

maninasia

Gekko wrote: »

I spoke with a world-renowned British energy economist recently who said that Peak Oil is nonsense.

You have Iraq, Iran, Brazil, the Falklands, oil underneath Russia and the Arctic, plus his argument was that current oil wells such as the big one in Saudi are still not even 50% depleted.

He was of the view that there was a very good chance that Chinese economic growth will slow at some point, EU and US recession will also slow consumption.

Meanwhile, production of electric cars, buses, trains and trucks will ramp up as the infrastructure gets built and since this uses up the most oil, we will avoid a peak leaving it available for aircraft fuel for example.

Meanwhile technology to exploit massive reserves of shale gas have very recently advanced, and now the US has massive amounts of that to meet its power needs. This in turn will see gas prices come down - not good for Russia - and if there is a Chinese slow down, we could see gas and oil prices fall.

I'm not sure whether it was optimism on his part, but it's certainly an interesting point of view.

These are good points, especially regarding natural gas recovery from shale. However many of those oil fields are in strategically risky and volatile areas that could spark new wars. The Artic, Russia, Falklands etc. are also in difficult to extract places.
The big question is whether consumption remains below supply. I also agree that China might be in a for a slowdown soon, but long term trends point strongly to oil demand increasing worldwide.
Electricity for cars is an unknown quantity at present, even with increase in renewables they only account for 3-10% of electrical power in most countries, what will power the cars, coal? Ihave heard oil burnt in power stations is not more efficient than oil burnt in car engines when taking into account transmission losses and other factors. Maybe natural gas can play a key role here.
It's probable peak oil is a 'slow burning ' problem. We could be eclipsed by issues related to global warming before it really seriously disrupts society.

maninasia

maninasia wrote: »

It's probable peak oil is a 'slow burning ' problem. We could be eclipsed by issues related to global warming before it really seriously disrupts society.

I think that global warming climate change is an overstated issue, otherwise extreme weather events would have been more prevelant!

Peak oil on the other hand as you correctly put it will be a slow burner, but when the general public notice it it will be too late. The signs are becoming clearer that the "peak" is near, prices of raw materials of all types has risen quite steeply in the past year, rapidly reaching their 2005 peaks but oil has already exceed its 2005 and is steadily increasing. At the same time consumption in the west is actually falling, due to the use of more efficient cars, boilers etc. China and India are taking up the slack and increasing their consumption rapidly pushing up demand.

Oil producers seem unwilling (or unable) to increase production to maintain price stability.

Recent increases in fuel taxes are speeding up the downturn, but many are now starting to feel the pain of increased energy costs. This recent increase in oil costs hasn't yet fed into the consumer goods market, later this year or next, Chinese goods will jump in price, easily 20 - 30%.

The chinese are already reserving oil stocks for themselves by trading directly with oil producers, this will mean there will be less for the west! The oil price shock in 2008 was just a taste of the potential future price shocks that will be in the pipeline over the next decade.

Capt'n Midnight

Deleted User wrote: »

I think that global warming climate change is an overstated issue, otherwise extreme weather events would have been more prevelant!
...
Peak oil on the other hand as you correctly put it will be a slow burner, but when the general public notice it it will be too late.
...
Oil producers seem unwilling (or unable) to increase production to maintain price stability.

This winter we've had floods and the longest cold spell for ages but people can argue about that for ages.


Peak Oil prices have more to do with speculators than with supply. Higher prices will make other supplies more economical so peak oil will get pushed back a little further. The downside is that far more CO2 will be released as more of the energy is used to retrieve it. IIRC some figures are as high as 30% of the energy.

If only we could store sunlight in cucumbers ...

Capt'n Midnight

Capt'n Midnight wrote: »

The downside is that far more CO2 will be released as more of the energy is used to retrieve it. IIRC some figures are as high as 30% of the energy.

...

One of the videos I linked to further up explains that some of the newer fields require huge up front investment before a single barrel is produced, oil sands need something like one barrel of oil consumed to produce two barrels of extracted oil.

I think we're approaching the point where the extraction costs are going to be very "visible" in the price of oil.

Peak "cheap" oil has already passed!

Another potential oilfield bites the dust!

http://news.bbc.co.uk/2/hi/business/8592734.stm

Falkland Islands oil disappoints for Desire Petroleum

Desire's oil platform was moved from Scotland to the Falklands in February
Shares in Desire Petroleum have almost halved after the oil explorer said a well being drilled off the Falkland Islands may not be economically viable.

No doubt Argentina will go quiet about their soverenty claim!

YFlyer

there is a heck of alot of Heavy Oil, Oil Sands and Oil Shale still about. just that it will be more expensive to refine.

YFlyer

YFlyer wrote: »

there is a heck of alot of Heavy Oil, Oil Sands and Oil Shale still about. just that it will be more expensive to refine.

Precisly! That's why we are past peak "cheap" oil!

maninasia

People should READ before they post instead of kneejerking all over the internet!

maninasia

maninasia wrote: »

People should READ before they post instead of kneejerking all over the internet!

In a stock market announcement, Desire said that initial results from the Liz 14/19-1 well, in the North Falkland basin, showed that the quantities of oil may be small and of poor quality.


However, the company said it would release a more detailed statement on the drilling later in the week. It is possible that Desire will need to drill deeper to find better quantities of oil and gas.
Until further tests are carried out "it will not be possible to determine the significance of the hydrocarbons encountered and whether the well will need to be drilled deeper, suspended for testing or plugged and abandoned," the company said.

My point still stands, there was hope of a significant oil find that was economically viable, considering the difficult operating conditions.

maninasia

I was talking about the other feller...as he obviously hadn't read any of the thread and understood we are talking about the end of cheap oil, not the end of oil!

Capt'n Midnight

If you look at the index linked price of oil it's still not as bad as the 70's
also the price at the pump is very high relative to the price per barrel due to lots of profit taking

cba doing it but I suspect that if we could go back to the lower margins of the past then the price we in EU are paying for at the pump would translate to a barrel price that would mean lots of alternative technoligies would be viable

The pump price in EU is higher than in the US and our economies still function, so there is plenty of scope for adsorbing more expensive oil without a 1973 again.

IMHO the main threat to cheap oil at present are the speculators and middlemen , but just like the way the government raise the price of cigarettes , they are getting us used to dearer oil gradually without convincing most people to give them up

Yes, prices were higher in the 70-80s adjusted for inflation.
http://www.inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

The recent tax hikes have made recent rises much more painful, with our oil dependant culture suffering more than most!

Speculators got it wrong a couple of years ago, but jacked up prices to a silly level and temporarily killing demand at the same time.

jinghong

Peak Oil prices have more to do with speculators than with supply.

Increased speculation is an issue in itself but is a result of scarcer overground reserves, caused ultimately by increased supply demand ratio

Higher prices will make other supplies more economical so peak oil will get pushed back a little further. The downside is that far more CO2 will be released as more of the energy is used to retrieve it. IIRC some figures are as high as 30% of the energy.

Contrary to popular opinion, increased oil prices will not make other supplies more economical. Apart from the fact they are already being ulitized, which is reason enough in itself, higher oil prices damage economies and purchasing power, reducing investment in further energy supplies increasing the effective cost of energy: If 1 unit of energy cost me 1€ this year, and the same next year, I can ill afford to pay it if my paycheck has decreased. Furthermore banks and investors demand higher returns on risk equity in times when there is less money in circulation, also decreasing investment in alternative energy and nuclear: Just like a telephone waiting queue where the waiting time gets long, people jump on and off erratically as they decide if its worth waiting or not, massively fluctuating energy prices are bad for investment as if oil plummets due to deepening recission of some other reason, they become unable to sell energy, and a project that is amortized over decades defaults if it fails to sell energy for even a small portion of that time, despite the fact it may be able to produce cheaper energy more profitably here and now.
Other problems also arise, such as hoarding of energy supplies, as well as being a problem in itself, can cause currencies of the energy consumers to weaken, thus reducing their energy buying power. Notwithstanding all of this, despite the fact that other supplies are getting more rare also: peak coal and gas are within the 20 year radar, there is no good substitution for oil in terms of portability and flexibility, as the Germans found out in WW11, having failed to secure caspian sea reserves, they found that the CTL (coal to liquid) program barely had a positive EROI. They had abundant coal but no oil, and that didn't help with war efforts
The end result is a situation that feeds on itself, like a feeding frenzied shark eating its own entrails, with the result that fractured economic systems are unable to make the best use of available capital, causing more oil to be left in the ground prematurely; so peak oil is brought forward , not delayed, not because of reduced consumption, but as a symptom of it.

there is a heck of alot of Heavy Oil, Oil Sands and Oil Shale still about. just that it will be more expensive to refine.

This is a good example. With pitiful EROI, is questionable if the canadian tar sands would have been developed at all if we were begining now.

A quick video that appears to explain government policy on peak oil quite well!

Or should I say how most of the western worlds population are approaching the issue.

jinghong

260k views and counting..Help this video go viral..

Link for your facebook mates..
http://www.youtube.com/watch?v=vAPf9V3_li0

jinghong

jinghong wrote: »

260k views and counting..Help this video go viral..

Link for your facebook mates..
http://www.youtube.com/watch?v=vAPf9V3_li0

A bit sensationalist tbh.

The explanation of why peak oil is happening was a bit flawed. It's really down to when demand overtakes supply (China's demand is repidly rising), rather than when supply peaks.

There is a currently an oil supply/demand plateau, world oil consumption has been almost level since 2005, but the west's portion has shrunk by about 5% as a result of the recession, China has taken up the slack and has increased it's share. If this "plateau" is the peak, then there will be no economic "recovery", growth is not possible without additional fuel input.

It should be possible to continue living a fairly "normal" life for at least a decade after PO if simple steps are taken to reduce wasteful use of oil-based products.

The rise in fuel prices will make that decision for us anyway, as will the cost of oil based products which will also rise significantly, thus reducing demand. Fuel poverty will soon be a very serious issue for many commuters in lower paid jobs and no alternative transport.

It will be several years before oil supplies become sufficiently depleted to affect basic food, power etc but it will be more expensive. Those Kenyan beans freshly flown in to M&S will soon be a thing of the past!

The US will suffer the effects sooner and harder as their lifestyle is more oil dependant.

Capt'n Midnight

http://environment.nationalgeographic.com/environment/global-warming/end-cheap-oil/

Weighing in at 1,250 pounds (567 kilograms), Marina Wilson's champion steer Grandview Rebel is ready for auction at a county fair in Maryland. Raising this steer has taken an agricultural investment equal to 283 gallons (1,071 liters) of oil, represented here by the red drums. That includes everything from fertilizers on cornfields to the diesel that runs machinery on the farm. Overall, it takes three-quarters of a gallon of oil to produce a pound of beef.

Overall, it takes 6 1/4 litres of oil to produce a kilo of beef in the US.

Here the energy inputs are far lower since we use grass.

But it shows how oil is being squandered

Capt'n Midnight

Capt'n Midnight wrote: »

But it shows how oil is being squandered

It also shows just how much supplies could dwindle by before the doomsday scenario of people being stranded in suburbs and starving, as in cutting out the wasteful uses to provide supplies for the more important things.

It will be a long, slow transition forced by high prices killing demand for produce manufactured using large quantities of oil.

Unfortunately, for the west the real issue is the fact that every time we make a saving in consumption, the Chinese will take up the slack in supply.

http://www.guardian.co.uk/business/2010/jan/08/china-us-car-sales-overtakes

China overtakes US as world's biggest car market• 13.5m vehicles sold in China in 2009, 10.4m in US
• China sees 45% growth in car industry year-on-year

http://news.yahoo.com/s/nm/20100413/bs_nm/us_iea_3

Quote:

World oil demand to hit record high this year: IEA

LONDON (Reuters) – Global oil demand will hit a record high this year, the International Energy Agency (IEA) said on Tuesday, revising up consumption estimates as the world economy recovers from recession.

The Paris-based adviser to industrialized economies raised its forecast for world oil demand growth this year to 1.67 million barrels per day (bpd), up 100,000 bpd.

The agency said in its monthly Oil Market Report that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009.

The previous record high for world oil demand was 86.5 million bpd in 2007 before the onset of the global financial crisis and economic slowdown.

"There are signs of oil demand picking up in North America and the Pacific, Asia and the Middle East although consumption in Europe still looks weak," David Fyfe, head of the IEA's Oil Industry and Markets Division, told Reuters.

But the extra demand will largely be met by production from outside the Organization of the Petroleum Exporting Countries.

The IEA raised its forecast for non-OPEC output in 2010 by 220,000 bpd to around 52.0 million bpd due to higher output by OECD countries. Overall, non-OPEC supply is expected to rise by around 500,000 bpd this year.

As a result, the IEA estimated demand this year for OPEC crude and stocks would fall by 200,000 bpd to 29.1 million bpd.

This will test the "peak oil" theory a bit, can supply keep up or will prices continue to rise.

YFlyer

Petrobras could increase production by 6 fold within the next ten years. They have found a number of significant wells with crude having an API of around 28.

http://www.oil-price.net/en/articles/petrobras-discovers-oil-again.php

YFlyer

YFlyer wrote: »

Petrobras could increase production by 6 fold within the next ten years. They have found a number of significant wells with crude having an API of around 28.

http://www.oil-price.net/en/articles/petrobras-discovers-oil-again.php

The recoverable reserves of the accumulations have been put at 65 million barrels

About one days worth!

YFlyer

Yeah it seems small however the Campos Basin has a confirmed reserve of 7.21 Billion barrels of oil.

They are finding new wells all the time. Even in shallow water

OK we're up to 100 days worth now from one field. But this underlines the simple fact that it is being consumed quicker than it is being found.

As I said further up, consumption is still increasing and at some point will outstrip supply and force prices up unless the supply can be increased.



This recent price chart shows demand driving up prices rather than supply increasing to hold prices steady.
As to why, either supply is being withheld to keep prices high or supply can't keep up with demand.

I don't know which it is but either way it's bad news for consumers.

Edit: forgot to add the fact that as oil is priced in US dollars, it looks much worse than it actually is because the value of the dollar is falling rapidly as well, therefore the rise in real terms is only about half the dollar price.

http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply%EF%BB%BF

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

Not new news, but still scary all the same.

zod

Good movie here .. primarily on peak oil

https://www.youtube.com/watch?v=WAyHIOg5aHk

Demand destruction is already well under way here in the west, for all practical purposes we are already experiencing the affects of peak oil.

http://www.energybulletin.net/52667

The peak of oil production is passed



We can no longer afford to sit around discussing whether or not we have passed the peak of oil production. We cannot wait, complacently, for price signals to stimulate the development of alternative sources of energy since oil prices will fluctuate wildly. Every time the economy tries to grow, oil demand will exceed supply, causing the oil price to spike up. This will strangle the economy, reduce oil demand and cause the price to fall. Oil companies cannot invest in the face of these wild fluctuations in price. Most importantly, we must remember that to do anything at all requires energy. So, while oil is still relatively abundant, we must invest as much as we can to develop the energy sources of the future. Once the oil supply starts to decrease significantly, we will be too busy just trying to keep food production and essential services running to have any energy left over for building expensive high-tech alternative energy infrastructure.

The peak of oil production was two years ago. For the sake of my children, and your children, we need to just accept that fact and deal with it. When it comes to investing in energy alternatives, do it now, because it will not be possible later.

_________________

zod

Fast forward to about 1:50

https://www.youtube.com/watch?v=aiNBCyiB0XA

Talking about 300 dollar barrels of oil on CNBC

Interesting theory on the next phase of "peak oil", as of today it appears to be "following the script".

http://www.oftwominds.com/blogmay10/head-fake05-10.html

In May 2008 I proposed the Oil "Head-Fake" Scenario in which global recession will drive oil demand down even as oil exporters pump their maximum production in a futile attempt to fund their vast welfare states and thus retain their precarious political power.
Oil: One Last Head-Fake? (May 9, 2008) The terrible irony of the head-fake, of course, is that the exporters' mad efforts to pump more oil merely exacerbates the oversupply, further depressing prices, which are set on the margin. As exporters receive fewer dollars for their production, they attempt to compensate by pumping even more oil. Perniciously, this suppresses prices even more, setting up a positive feedback loop which pushed prices into full-blown collapse.

boc123

I'm currently reading Matt Simmons "Twighlight in the Desert". This whole issue to me is the scariest thing going on at the moment. Very surprised that it doesn't receive more mainstream attention.

I suppose it will fairly soon...

coletti

The price of oil is largely based on the perception of availability of supply. It is to be noted that the oil companies make billions of extra dollars when the price is kept high. Literally billions.

Macha

Actually there is evidence that investors are not always to blame for high commodity prices:


http://www.economist.com/node/16432870

According to a poster on "theoildrum" one of the causes of the oil price spike in 2008 was caused by the Chinese bulk buying just before the Olympics to hide problems with local shortages.

As for the main show, current levels of production are likely to continue for another few years (maybe five) before slowly declining.

Consumption is already declining in the west (Ireland has declined 10% since 2006) while China, India and a few other countries continue to increase their consumption.

Peak oil will be the point when their growth is stopped by lack of growing supply, as far as the west is concerned - peak oil has already happened!

The main reason there is no "Mad Max" syndrome is down to the fact that gas has managed to fill the gaps left by oil as well as the demand destruction caused by the export of industry to China (aka the great depression II).

The energy crunch hasn't gone away, it's just been postponed!

maninasia

coletti wrote: »

The price of oil is largely based on the perception of availability of supply. It is to be noted that the oil companies make billions of extra dollars when the price is kept high. Literally billions.

I think you'll find it's the oil producing nations that get the biggest cut.

boc123

brendansmith wrote: »

This is quite worrying, a good documentary on this is 'A crude awakening'.

I still think that an alternative fuel will be invented before we get in trouble though. What o ye think on this subject?

Just watched that documentary, very intersting but also extremly worrying.

I am not sure what alternative fuel will be brought on-line in time. Have been watching a fair bit of Matt Simmons, he is fairly well respected but if his theories come true we are in big trouble. $600 for a barrel of oil, people going back to live in villages, no more air travel, long distance commuting etc.

boc123

boc123 wrote: »

Just watched that documentary, very intersting but also extremly worrying.

I am not sure what alternative fuel will be brought on-line in time. Have been watching a fair bit of Matt Simmons, he is fairly well respected but if his theories come true we are in big trouble. $600 for a barrel of oil, people going back to live in villages, no more air travel, long distance commuting etc.

I wouldn't worry too much about the $600 a barrel oil, the basic laws of supply and demand will keep the price well below that! It simply won't be bought, the economy will collapse before that! (assuming the $600 is in today's dollars)

The western economies have a huge amount of "fat*" that can be used before there is genuine hardship.


*fat: The classic "american lifestyle" will be forced to change, as you say

people going back to live in villages, no more air travel, long distance commuting etc

But, just doing that would delay peak oil for another generation or two.

boc123

Deleted User wrote: »

I wouldn't worry too much about the $600 a barrel oil, the basic laws of supply and demand will keep the price well below that! It simply won't be bought, the economy will collapse before that! (assuming the $600 is in today's dollars)

That wouldn't be great news either though;)


I know what you mean though, big changes ahead either way.
I saw a prime time clip from a few years ago and Eddie Hobbs is on the case so all should be well in the long run

coletti

I'm old enough to remember being told in the 1970 that oil was running out, and that it would all be used up by the year 2000.

We're not at 2010 and, if you talk to the exploration companies, they tell us there is plenty of oil to last a very long time.

It suits them to start scarcity stories as that puts the price up and makes them enormous amounts of profits.

Is "peak oil" the 2010 equivalent of the "oil running out" stories of the 1970's?