Peak Oil at 2014?

Capt'n Midnight

Eoghan Barra wrote: »

It now appears that we won't be running out of fossil fuels for a long time yet (http://www.monbiot.com/2012/07/02/false-summit/).

...
Perhaps we need to begin to open our minds to ideas that were once anathema - especially if reliable science suggests that there are no real drawbacks?

There is no question that there is plenty of oil in the ground. The first 1/3rd is easy after that the problem is the cost of extraction.

Peak oil means peak CHEAP oil.

The peak price for oil is about four times it's current price. Because that's the price point where it's cheaper to make it using renewables (hydrogen / oil from algae etc. ) than extract it from the ground.

Considering the massive amounts of energy used in recovering fossil fuel , up to 1/3rd of the original energy is lost during extraction and refining and transport it's likely that if the fossil fuel companies had to pay a market rate for the fuel they waste they'd use a lot more renewables.


Nuclear is interesting as peak uranium is also on the Horizon. The limiting factor here again it the amount of energy you need to recover it from increasingly poor ores, especially the granite ones because it's hard rock. Almost all of the energy comes from fossil fuel. Add to this the fossil fuel needed for decomissioning / waste repositories and it's fairly clear that significant expansion of nuclear will increase the demand for fossil fuel.

Nuclear power is not an alternative to fossil fuel over the full lifetime, it's just a way of getting more energy from fossil fuel now at the cost of having to provide more at end of life.

It's a battery, not an alternative power source.

Renewables on the other can extend fossil fuel. Gas has more or less replaced OIL in power stations world wide. So there is more oil for other uses.

https://www.youtube.com/watch?v=Zjo4bZApIFg

Waestrel

Different take on things, peak oil is here, but, dont worry about it.

http://www.singularity2050.com/2011/07/the-end-of-petrotyranny.html

Capt'n Midnight

cba looking up better figures https://en.wikipedia.org/wiki/World_economy

Global GDP $59.38 trillion

Oil – consumption: 80,100,000 bbl/d ( x 365 x $100/bbl (say) = $2.92 trillion )

Oil accounts for 4.9% of global GDP, up from 3% of US GDP being used for energy back in the 1960's



Free oil won't make everything that much cheaper

BryanF

Capt'n Midnight wrote: »

cba looking up better figures https://en.wikipedia.org/wiki/World_economy

Global GDP $59.38 trillion

Oil – consumption: 80,100,000 bbl/d ( x 365 x $100/bbl (say) = $2.92 trillion )

Oil accounts for 4.9% of global GDP, up from 3% of US GDP being used for energy back in the 1960's



Free oil won't make everything that much cheaper

how is that figure assessed? surely the amount of products, processes etc that are derived from petroleum makes any notional global gdp figure much higher than this.. btw Im not disagreeing with previous peak oil post. I do wonder is a fresh media approach or a new term required, one that asks what are the ramifications of extracting the lesser grades of oil/gas. keeping a main stream media presence seems to be necessary in any forum discussion dedicated to Sustainability & Environmental Issues

http://www.rigzone.com/news/oil_gas/a/129736/Russia_Grabs_China_Oil_And_Gas_Export_Deals/?all=HG2
Russian energy companies signed a slew of deals with China on Tuesday, seeking to lock in sales to fund costly production and pipeline projects that will direct exports away from Europe to Asia.

The agreements, announced during a visit by Prime Minister Dmitry Medvedev to Beijing, brought Igor Sechin, chief executive of state oil major Rosneft, closer to his goal of exporting more than 1 million barrels per day (bpd) of oil to China.

Independent gas producer Novatek secured a long-term contract to supply liquefied natural gas, ahead of the expected lifting of state-controlled Gazprom’s export monopoly on LNG exports next year.

Gazprom, the world’s largest gas company, made modest progress on Tuesday towards supplying pipeline gas to China but – after years of talks – will fail to seal a deal before its Russian rivals can compete for exports.

Production may not have reached its peak, but supply certainly appears to have passed it, they'll be less to go around in the rest of the world now.

http://www.theguardian.com/environment/earth-insight/2014/jan/17/peak-oil-oilandgascompanies
US Army colonel: world is sleepwalking to a global energy crisis
The dialogue opened with a presentation by Mark C. Lewis, former head of energy research at Deutsche Bank's commodities unit, who highlighted three interlinked problems facing the global energy system: "very high decline rates" in global production; "soaring" investment requirements "to find new oil"; and since 2005, "falling exports of crude oil globally."
Lewis told participants that the International Energy Agency's (IEA) own "comprehensive" analysis in its World Energy Outlook of the 1,600 fields providing 70% of today's global oil supply, show "an observed decline rate of 6.2%" - double the IEA's stated estimate of future decline rate out to 2035 of about 3%.
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Looks like the 2014 prediction was about right

Waestrel

is the currenlty low oil prices we see at the pumps today due to the price depressive effect of abundant conventional oil out of the US?

Waestrel

Waestrel wrote: »

is the currenlty low oil prices we see at the pumps today due to the price depressive effect of abundant conventional oil out of the US?

Well, when you consider that oil cost around $25 a barrel a decade ago, calling it cheap is completely wrong, oil has quadrupled in price and the volume extracted has risen by only 10% or so in ten years. Inflation is nowhere near as high for wages & cost of many products so oil has nearly trebled in cost when compared to inflation.

The current price of oil is as high as the market can stand without going into recession, like it has tried to rise several times over the past few years and was immediately followed by a recession.

The extra oil currently produced in the US is just about offsetting the declines elsewhere on the planet, plus the substitution of other fuels (gas & coal) that are avoiding the "oil crunch" that would otherwise have happened by now.

Saudi Arabia is converting their oil fired power stations to gas so that they can maintain exports, oil importing countries are having to improve the efficiency of their oil consuming systems.

Just look at the house BER rating system and car fuel consumption figures to see this in action.

The world is already adapting to a "post peak oil" world, it's just not very noticeable.

Capt'n Midnight

USA drilling costs
http://www.ohio.com/blogs/drilling/ohio-utica-shale-1.291290/nearly-154-billion-spent-on-drilling-46-736-u-s-wells-in-2012-1.454832

WASHINGTON, December 23, 2013 ─ An estimated $153.7 billion was invested in drilling approximately 46,736 oil and natural gas wells in 2012, according to API’s 2012 Joint Association Survey on Drilling Costs. The investment represents a 23.1 percent increase over 2011 levels.
...
The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

Does anyone know if carbon tax has to be paid on fuel consumed during extraction ? Should there be a methane tax to encourage farmers and natural gas companies to reduce the amount they release ?

dolanbaker

dolanbaker wrote:

Looks like they're setting us up for another "energy crunch" soon as they're waiting for the price of oil to rise on the back of limited supply before investing to produce $150 a barrel oil rather than investing now to avoid a shortfall in the near future. Just like in 2005, it took the price spike in 2008 to kick start investment, by which time, the high oil prices had helped to trigger the financial meltdown.

Following on from this http://ourfiniteworld.com/2014/01/29/a-forecast-of-our-energy-future-why-common-solutions-dont-work/

A Forecast of Our Energy Future; Why Common Solutions Don’t Work
Posted on January 29, 2014 by Gail Tverberg

In order to understand what solutions to our energy predicament will or won’t work, it is necessary to understand the true nature of our energy predicament. Most solutions fail because analysts assume that the nature of our energy problem is quite different from what it really is. Analysts assume that our problem is a slowly developing long-term problem, when in fact, it is a problem that is at our door step right now.

The issue we will be encountering could be much better described as “Limits to Growth” than “Peak Oil.” Massive job layoffs will occur, as fuel use declines. Governments will find that their finances are even more pressured than today, with calls for new programs at the time revenue is dropping dramatically. Debt defaults will be a huge problem. International trade will drop, especially to countries with the worst financial problems.

All quite doomerish, but realistic if people are unwilling or unable to pay for expensive energy to maintain their current lifestyles. Essentially, people will alter their lifestyles to fit the energy that they are able to afford. This will create a self reinforcing circle of downward pressure on fuel prices, resulting in the more expensive forms of oil/gas & coal being abandoned due to lack of financial incentives and the supply of all becoming more limited.

Capt'n Midnight

Deleted User wrote: »

Essentially, people will alter their lifestyles to fit the energy that they are able to afford. This will create a self reinforcing circle of downward pressure on fuel prices, resulting in the more expensive forms of oil/gas & coal being abandoned due to lack of financial incentives and the supply of all becoming more limited.

Except that the wealthier can party on as usual.

Vehicle fuel prices in the EU are much higher than prices in the US. So I can't see them making drastic changes in their lifestyle.

Also fracking , and the new pipeline from Canada.

Capt'n Midnight

Capt'n Midnight wrote: »

Except that the wealthier can party on as usual.

Vehicle fuel prices in the EU are much higher than prices in the US. So I can't see them making drastic changes in their lifestyle.

Oil's not going to be so scarce as to totally alter our lifestyles, just the lifestyles of the lower income groups.

Capt'n Midnight wrote: »

Also fracking , and the new pipeline from Canada.

This will only really benefit the US, because European oil supplies are declining quite rapidly as the North sea is depleted and we are competing with China & India for the rest.

sawdoubters

there a glut of oil at the moment,its stored on trains,ships,they are building more storage tanks around the world,come back in 2028 and talk to me then


http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10575292/Coming-oil-glut-may-push-global-economy-into-deflation.html

sawdoubters

sawdoubters wrote: »

there a glut of oil at the moment,its stored on trains,ships,they are building more storage tanks around the world,come back in 2028 and talk to me then


http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10575292/Coming-oil-glut-may-push-global-economy-into-deflation.html

From the article...

To avoid confusion, let me be clear that the dangers of dwindling oil supplies in the long-run have not gone away. Easy reserves of crude are being depleted. New fields are more costly. Peak oil may have the last laugh. Yet this should not be confused with the short-term risks of deflationary shock.

I recently attended a Transatlantic Dialogue on Energy Security with senior military officers in London and Washington. The message was that shale will come and go - with US tight gas peaking by 2017 - creating a false sense of security as the deeper strategic threat continues to build. That is broadly my view as well. Much drama can intrude along the way.

We are experiencing a short term "glut" due to the success of the massive investments done in the mid 2000s brought on by the "oil crunch" that drove oil prices through the roof to almost $150 a barrel just before the economic collapse.

We'll talk to you in 2018.

Deleted User

Deleted User wrote: »

Oil's not going to be so scarce as to totally alter our lifestyles, just the lifestyles of the lower income groups.

This will only really benefit the US, because European oil supplies are declining quite rapidly as the North sea is depleted and we are competing with China & India for the rest.

How low income?

Deleted User wrote: »

From the article...



We are experiencing a short term "glut" due to the success of the massive investments done in the mid 2000s brought on by the "oil crunch" that drove oil prices through the roof to almost $150 a barrel just before the economic collapse.

We'll talk to you in 2018.

But the first proper peak didn't come until 2008, which by most definitions is the late 2000s, not the mid-2000s and it came when the economic SHTF was known.

Deleted User

Deleted User wrote: »

How low income?.

Depends on how much of your pay is used just to get to and from work, for some it would be better to take a lower paid job locally than to continue commuting to a job many miles away.

Deleted User wrote: »

But the first proper peak didn't come until 2008, which by most definitions is the late 2000s, not the mid-2000s and it came when the economic SHTF was known.

There was a severe under investment in the 1990s and those in the industry could see that after the oil price trebled in less than five years from $20 a barrel to $60 a barrel by 2006, that there was a serious shortfall coming over the horizon.

http://www.rigzone.com/news/oil_gas/a/131604/Robust_Demand_Tightening_Oil_Market_IEA_Says/?all=HG2
Stronger-than-expected demand has drained oil inventories to the lowest level since 2008, tightening the market and defying predictions of a glut, the West’s energy watchdog said on Thursday.

The International Energy Agency (IEA) said oil inventories in the developed world plummeted by 1.5 million barrels per day (bpd) in the last three months of 2013, the steepest quarterly decline since 1999.

The IEA, which advises most of the largest energy-consuming countries on energy policy, becomes the third major forecaster this week to predict higher oil use as economic growth picks up in Europe and the United States.

“Far from drowning in oil, markets have had to dig deeply into inventories to meet unexpectedly strong demand,” the IEA said in its monthly oil market report.

The IEA raised its forecast for global oil demand growth this year by 50,000 bpd to 1.3 million bpd.

That was boosted by a rebound in demand in North America and Europe after several years of declining consumption.

It will be interesting to see whether supply can be ramped up to meet demand or prices rise to restrict demand.

Waestrel

I read Mike SImmons book "twilight in the desert " recently, he makes a good case that the Saudis themselves are close to peak. If this is the case, since they alone contribute nearly 10% of the worlds oil, surely this is where the collapse starts?

Waestrel

Waestrel wrote: »

I read Mike SImmons book "twilight in the desert " recently, he makes a good case that the Saudis themselves are close to peak. If this is the case, since they alone contribute nearly 10% of the worlds oil, surely this is where the collapse starts?

Not yet, the Saudis are replacing their internal consumption of oil for things like electricity generation to gas to allow them to continue to export oil at current levels for much longer than originally predicted.

With less oil available, everyone has to be smarter with its use.

Waestrel

Deleted User wrote: »

Not yet, the Saudis are replacing their internal consumption of oil for things like electricity generation to gas to allow them to continue to export oil at current levels for much longer than originally predicted.

With less oil available, everyone has to be smarter with its use.

Interesting. Where do you get your sources?

Waestrel

Waestrel wrote: »

Interesting. Where do you get your sources?

Theoildrum.com was the main source of information, but that site is now just an archive
peakoilbarrel.com is a blog from one of the principal contributors to the oil drum.

Then there is peakoil.com, a great site but has a significant number of "doomers" who expect the decline of oil to destroy capitalism etc and some extreme environmentalists who see environmental disaster on the horizon. The site has a lot of very valuable information in between the extreme viewpoints.

carveone

Depends on how much of your pay is used just to get to and from work, for some it would be better to take a lower paid job locally than to continue commuting to a job many miles away.

That's me right now I use about 11% of my net income to get to work. I'd be better off with a lower paid job locally.

Deleted User wrote: »

Theoildrum.com was the main source of information, but that site is now just an archive

I used to read that every so often as it was quite interesting back in the day.

Then there is peakoil.com, a great site but has a significant number of "doomers" who expect the decline of oil to destroy capitalism etc

I think the doomers expect there to be a movie like calamity with war and looting in the streets. Things don't happen that fast (unless you are in Egypt, Syria, Libya etc). On the other hand, I could speculate that peak oil - in the sense of oil export availability, that amount of oil available to an importing country like ours - happened in 2006. As you say - "the Saudis are replacing their internal consumption of oil...". That's happening everywhere. Oil is still plentiful but exporting countries are starting to use more of it themselves.

The price of oil in 1999 was, what, $14/bbl or something. Now it's $100? Some of that is, I think, due to speculative overpricing but IMHO the "fair" price of oil is still $85 or 6x higher. Needless to say, that price causes less people to buy oil and oil scarcity to extend. Which in turn caps the price. So when people start bawling about $150 oil, that's when shorting oil is a possible play

With less oil available, everyone has to be smarter with its use.

That seems to happen by default, without people really commenting on it. My feeling is that smarter use is, well, smarter than attempting to conjure up more energy from places like wind. I expected insulation and home working to have become much more of a feature than it has and I expect a 4 day week to become a feature of the future. You want to hit CO2 emissions? A 4 day week will do that properly Hell, they had a 3 day week in the UK in the 70s at some point (and still had no problem churning out awful cars!)

Frank Lee Midere

[Deleted User] wrote: »

From the article...



We are experiencing a short term "glut" due to the success of the massive investments done in the mid 2000s brought on by the "oil crunch" that drove oil prices through the roof to almost $150 a barrel just before the economic collapse.

We'll talk to you in 2018.

Peak oil is always 4 years away.

Frank Lee Midere

Frank Lee Midere wrote: »

Peak oil is always 4 years away.

We're already at peak!

http://www.platts.com/news-feature/2014/oil/western-oil-production/index
'Big oil' getting smaller as production keeps falling


February 14, 2014 - Richard Swann in London

* Top seven western majors all seeing liquids output fall
* Supermajors' share of global market dropping every year
* BP reports fastest decline of 30% from 2009-13
* Production becoming more evenly split between oil and gas

The biggest western oil companies are continuing to see their oil output decline, despite record investment in recent years spurred by sustained crude prices in excess of $100/barrel, according to data released by the companies.

Furthermore, with total world oil output continuing to rise every year, the western majors are seeing their share of the global market fall even faster, with new volumes coming largely from their rivals in places like Russia and a host of smaller companies at the heart of the shale oil boom in the US.


Combined output of crude and other liquids by the seven biggest western majors -- ExxonMobil, Shell, BP, Chevron, Total, ConocoPhillips and Eni -- amounted to 9.517 million b/d last year, down 2.2% from 2012 and marking the fourth consecutive year of decline.

Liquids output from the same group has been falling every year of late, having been as high as 10.865 million b/d in 2009.

As a group, the seven have seen their combined liquids output fall by 1.348 million b/d, or 12.4% over the period from 2009 to 2013.


....




While this group is seeing its production fall, others have clearly been heading in the opposite direction.

The most obvious is Russia's Rosneft, which has grown at breakneck pace in recent years on the back of a debt-funded acquisition spree, including the purchase of former rival TNK-BP.

Rosneft is now the world's biggest publicly listed oil producer with total crude and liquids output of close to 4.2 million b/d.

In other words, Rosneft alone now produces almost as much oil as ExxonMobil, BP and ConocoPhillips combined.

The long term "old reliable's" are in (possibly terminal) decline while the short and sharp frackers are stealing the limelight for a few years, but they too will soon go into decline.......


unless consumers are prepared to pay $2-300 a barrel, then, the next batch of more expensive oil becomes available, fracking in Alaska or in the North sea and the like.

Frank Lee Midere

[Deleted User] wrote: »

We're already at peak!



The long term "old reliable's" are in (possibly terminal) decline while the short and sharp frackers are stealing the limelight for a few years, but they too will soon go into decline.......


unless consumers are prepared to pay $2-300 a barrel, then, the next batch of more expensive oil becomes available, fracking in Alaska or in the North sea and the like.

Or people move from oil to gas, or from oil to liquified coal. At the level of prices you are talking about lots of stuff comes online. In the US while "gas" prices are subject to international prices overall energy prices are collapsing. And there is 100's of years left in some of those fields. Saudi might be worried though.

Frank Lee Midere

Frank Lee Midere wrote: »

Or people move from oil to gas, or from oil to liquified coal. At the level of prices you are talking about lots of stuff comes online. In the US while "gas" prices are subject to international prices overall energy prices are collapsing. And there is 100's of years left in some of those fields. Saudi might be worried though.

If the price of fuel doubles consumption will fall, but at the same time because fuel is vital for economic activity, a recession will follow. As for gas (probably from fracking) in the US it's mainly a by-product of oil production, when the oil fields are fracked out of existence those gas fields will also go. In most parts of the world, fracking won't start until all other alternatives have been exhausted. Given the choice between fracking or freezing, many will choose fracking.

The main reason that gas became cheap in the US was because there was a race to invest in as many wells as possible at a time when gas was expensive and supplies were dwindling, but unfortunately (for investors) they came on stream all at once and had to sell gas below cost to repay their debts incurred during exploration. As it is many went bust!

The Saudi's have nothing to worry about, Chindia & Europe will be customers for a long time to come and will buy all the oil they can supply for as long as possible, the danger is that China is likely to outbid Europe in the future and get a larger percentage of the supply.

It's also important to remember that the other fossil fuels that are replacing oil are finite as well, the UK almost used up most of their coal by the 1980s and abandoned the remainder as it was too expensive to mine. It took about 200 years to exhaust those resources, but if that coal was (by energy output) consumed at the same rate that all the current UK fossil fuels combined, it would probably have been gone in less than 30 years! So there may and indeed are vast quantities of coal in the world, it's just that consumption is increasing at an ever increasing rate to make up for the increasing shortfall in oil which is the preferred fuel.

Frank Lee Midere

Coal is nowhere near exhausted in the UK it was just too expensive relative to oil. And the figures I hear for the US reserves are in the hundreds of years.

There is no point talking about peak oil, it's really peak energy, and that's nowhere near its peak.

Frank Lee Midere

Frank Lee Midere wrote: »

Coal is nowhere near exhausted in the UK it was just too expensive relative to oil. And the figures I hear for the US reserves are in the hundreds of years.

There is no point talking about peak oil, it's really peak energy, and that's nowhere near its peak.

Yep! There's plenty of expensive energy out there, the problem is that we've built an economy on cheap energy and it isn't working very well as the cost of energy continues to rise relative to median incomes.

Waestrel

Frank Lee Midere wrote: »

Coal is nowhere near exhausted in the UK it was just too expensive relative to oil. And the figures I hear for the US reserves are in the hundreds of years.

There is no point talking about peak oil, it's really peak energy, and that's nowhere near its peak.

What it really is, is peak cheap energy. There is plenty of expensive energy out there, hell, you could breed more hamsters and put them in bigger wheels, and get all the power you want, but it wont come cheap, so whats the point?