Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.
http://www.eia.doe.gov/conference/2009/session3/Sweetnam.pdf
What
does it imply? The supply of the world's most essential energy source is going
off a cliff. Not in the distant future, but in a year and a half.
Production of all liquid fuels, including oil, will drop within 20 years to
half what it is today. And the difference needs to be made up with
"unidentified projects," which one of the world's leading petroleum
geologists says is just a "euphemism for rank shortage," and the
world's foremost oil industry banker says is "faith based."
This
graph was prepared for a DOE meeting in spring, 2009. Take a good look at what
it says, assuming it to be correct:
1`.
Conventional oil will be almost all gone in 20 years, and there is nothing
known to replace it.
2.. Production of petroleum from existing conventional sources has been dropping
at a rate slightly over 4% per year for at least a year and will continue to do
so for the indefinite future.
3. The graph implies that we are past the peak of production and that there
are750 billion barrels of conventional oil left (the areas under the
"conventional" portion of the graph, extrapolated to the right as an
exponent ional). Assuming that the remaining reserves were 900
billion or more at the halfway point, then we are at least 150 billion barrels,
or 5 years, past the midpoint.
4. Total petroleum production from all presently known sources, conventional
and unconventional, will remain "flat" at approximately 83 mbpd for
the next two years and then will proceed to drop for the foreseeable future, at
first slowly but by 4% per year after 2015.
5. Demand will begin to outstrip supply in 2012, and will already be 10 million
barrels per day above supply in only five years. The United States Joint
Forces Command concurs with these specific findings. http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf
, at 31. 10 million bpd is equivalent to
half the United States' entire consumption. To make up the difference, the
world would have to find another Saudi Arabia and get it into full production
in five years, an impossibility. See The Oil Drum, http://www.theoildrum.com/node/5154
5. The production from presently existing conventional sources will
plummet from its present 81 mbpd to 30 mbpd by 2030, a 63% drop in a 20-year
period.
6. Meeting demand requires discovering, developing, and bringing to full
production 60mbpd (105-45) of "unidentified projects" in the 18-year
period of 2012-2030 and approximately 25 mbpd of such projects by 2020, on the
basis of a very conservative estimate of only 1% annual growth in demand.
The independent Oxford Institute of Energy Studies has estimated a possible
development of 6.5mbpd of such projects, including the Canadian tar sands,
implying a deficit of 18-19 mbpd as compared to demand, and an approximate 14
mbpd drop in total liquid fuels production relative to 2012, a 16% drop in 8
years.
7. The curve is virtually identical to one produced by geologists Colin
Campbell and Jean Laherrere and published in "The End of Cheap
Oil," in Scientific American, March, 1998, twelve years ago. They
projected that production of petroleum from conventional sources would drop
from 74 mbpd in 2003 (as compared to 84 mbpd in 2008 in the DOE graph) and drop
to 39 mbpd by 2030 (as compared to 39 mbpd by 2030 in the DOE graph!).http://www.jala.com/energy1.php
. Campbell and Laherrere predicted a 2003 "peak," and the above graph
implies a 'peak" (not necessarily the actual peak, but the midpointr of
production of 2005 or before.
So here we are, if the graph is right, on the edge of a precipice, with no
prior warning from either the industry, which knows what it possesses, or
the collective governments, which ostensibly protect the public interest.
As Colin Campbell, a research geologist who has worked for many large oil
companies and studied oil depletion extensively (http://www.peakoil.net/about-aspo/dr-colin-campbell) says, "The
warning signals have been flying for a long time. They have been plain to see,
but the world turned a blind eye, and failed to read the message." http://www.greatchange.org/ov-campbell,outlook.html The world was completely transformed by oil for
the duration of the twentieth century, but if the graph is right, within 20
years it will be virtually gone but our dependence upon it will not.
Instead, we have
- zero time to plan how to replace cars in our
lives
- zero time
to plan how to manufacture and install millions of furnaces to replace
home oil furnaces, and zero time toproduce the infrastructure necessary to
carry out that task
- zero time
to retool suburbia so it can function without gasoline
- zero time
to plan for replacement of the largest military establishment in history,
almost completely dependent upon oil
- zero time
to plan to support nine billion peolple without the "green
revolution," a creation of the age of oil
- zero time
to plan to replace oil as an essential fuel in electricity production
- zero time
to plan for preserving millions of miles of roads without asphalt.
- zero time
to plan for the replacement of oil in its essential role in EVERY
industry.
- zero time
to plan for replacement of oil in its exclusive role of transporting
people, agricultural produce, manufactured goods. In a world without
oil that appears only twenty years away, there will be no oil-burning
ships transporting US grain to other countries, there will be no
oil-burning airlines linking the world's major cities, there will be no
oil-burning ships transporting Chinese manufactured goods to the billions
now dependent on them.
- zero time
to plan for the survival of the billions of new people expected by 2050 in
the aftermath of ":peak everything."
- zero
capital, because of failing banks ansd public and private debt, to address
these issues.
Why zero time?
Because if we at any time use more oil than allowed by the
graph, we will have even less later..
Because we are already committed to supporting 2.5 billion
more people on what we have.
Because every day we continue upward in our oil consmption,
even though we continue to have more people who need it and billions who
deserve to rise from abject poverty, we are making the future supply shortage
worse.
If you believe the graph, demand will outstrip supply
starting at the end of 2011, and severely outstrip supply in five years.
What are we going to do, and how are we going to do it? We have no time
to decide.
IS THE GRAPH RIGHT?
It is very unlikely that things can be better than the graph indicates.
Why?
- The great majority of authorities believe
there is little more than 1 trillion barrels of conventional oil left.
You can make a simple calculation from that: At the present rate of 30
billion barrels per year, 82 million barrels per day, it will all be gone
in 33 years, and consumption has been rapidly increasing, not decreasing,
so if anything it will all be gone sooner...
- A closer
look at the graph reveals that it was drawn on the assumption that the
world's existing conventional fields contain only 750,000 barrels at this
time, enough to keep us going only 25 years.
- The graph
assumes a decline rate of 4% per year. As long as the estimates of
remaining reserves are right, that can't be far off. In fact, 4% is
a relatively low decline rate compared to what has been observed in oil
fields generally. Hold on, it's going to be a fast ride down!
- The major
oil companies, which presumably know better than we do how much oil is in
their possession, "conspicuously fail to invest in new refining
capacity, which would surely be needed if production were set to
rise.'" Campbell, http://www.greatchange.org/ov-campbell,outlook.html
. The excess of refining capacity over demand remained close
to 10 million bpd during the nineties, but dropped to almost nothing in
the last decade as a result of failure to build new capacity. http://www.imf.org/external/pubs/ft/weo/2006/01/chp1pdf/fig1_21.pdf
. The United States Joint Forces Command has also reported the
failure of the oil industry to invest in the refining capacity necessary
to permit expanded production, and that "Even were a concerted effort
begun today to repair that shortage, it would be ten years before
production could catch up with expected demand." "Joint
Operating Environment 2010," at 26. http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf
- The most
frequiently discussed significant source of unexploited petroleum is the
tar sands of Alberta, Canada. Because a high percentage of the
energy value of the tar sands has to be expended in their extraction, the
reported quantity of reserves is misleading, and two independent
researchers have estimated respectively that production from the tar sands
by 2020 may be expected of 3.3 million bpd and 4 million bpd.
Consequently, the likelihood of the tar sands making a significant
contribution to the world's petroleum demand in the foreseeable future is
low.Phil Hart and Chris Skrebowski, "Peak oil: A detailed and
transparent analysis," http://www.energybulletin.net/node/30537
·
The shortfall, labelled
"unidentified projects," that needs to be filled in 20 years is an
unprecedented 60 million barrels per day, equivalent to 3/4 of today's total
production. We have never in history done anything comparable to
that. Although there are large deposits of
"unconventional" oil such as the Canadian tar sands, most are making
only slow progress at development and consume as much or more energy in
their production as they can generate. The independent Oxford Institute of
Energy Studies has estimated a possibe development of 6.5mbpd of such projects,
when we'll need more than that every two years just to keep our
place. So the likelihood of anything at all making a significant dent in
the shortfall is small. Indeed, the "unidentified
projects" can be perceived as just a "euphemism for rank
shortage" (Campbell http://www.greatchange.org/ov-campbell,outlook.html)
The United States Joint Forces Command has come to the similar conclusion: that
of all potential future energy sources, "None of these provide much reason
for optimism," http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf
Petroleum industry investment banker Matt Simmons calls them
"faith-based." http://www.simmonsco-intl.com/files/Northern%20Trust%20Bank.pdf
at 4
- The
"Hubbert Peak" theory of oil field depreciation, which predicted
the peak and subsequent demise of the US oil inudtry 15 years in advance
and within 2 years of its occurence http://www.hubbertpeak.com/hubbert/1956/1956.pdf
, says that with normal production methods, a country reaches peak
production in its oil fields when they are 50% depleted, with the
production curve being bell-shaped. The peak can be postponed with
innovative extraction techniques, but this only causes subsequent more
rapid decline of the deposits and total extraction if anything
decreasing. The world reached the midpoint of its reserves in
the last decade, so the 2005 "peak" implied by the above graph
is very close to what would be expected.
- Astonishingly,
Dr. Hubbert in the same 1956 paper predicted, based upon records of only
90 billion barrels of oil having been recovered worldwide, that the
peak of world petroleum production would be approximately the year 2000;
this apparently quite accurate prediction by Hubbert has largely been
forgotten. http://www.hubbertpeak.com/hubbert/1956/1956.pdf
. One is tempted to ask why, if one man could predict the timing of
the peak 44 years before it occurred, the United States Department of
Energy is incapable of recognizing it after it occurred.
- There's a
common feeling that just becase we don't know where the oil is, doesn't
mean the Mother Lode isn't right around the corner. But if you've looked
everywhere, the chances are a lot slimmer. The lag time between
discovery and bringing to full production of a field is 30-40 years, which
means that even the virtually impossible discovery of another Saudi Arabia
would barely change the graph above, of production between now and 2030.
But no such discoveries are left to be made. The rate of discovery
of new conventional oil has been steadily dropping now for FORTY years
despite ever-more searching with ever-more-sophisticated technology. There
have been two pivotal events: the peak of discovery around 1968, and the
day in 1981` when discovery of new oil deposits no longer kept up
with production. There is nothing complicated about
this. As Campbell says, the warning sign there for anyone to see
"simply
recognized two undeniable facts:
- You have to find oil before you can produce it
- Production
has to mirror discovery after a time lag
"Discovery reached a peak in the 1960s -
despite all the technology we hear so much about, and a worldwide search for
the best prospects. It should surprise no one that the corresponding peak of
production is now upon us." Indeed, Campbell's second point means
that the inevitable peaking of oil production in the early 21st
century, should have been clear for all to see since the peaking of
discovery in the late sixties.
Campbell does not stand alone. As the US Joint
Forces Command observes, "The discovery rate for new oil and gas fields
over the last two decades (with the possible exception of Brazil) provides
little reason for optimism that future efforts will find major new
fields." "Joint Operating Environment 2010," at 31.
- Saudi
Arabia's largest field, the Ghawar, is now in decline and it appears that
the country has nothing to offset that decline. That has
led many to conclude that "Peak Oil is a Done Deal."
(Dave Cohen, ASPO/USA Energy Bulletin, July 16, 2008. http://www.energybulletin.net/node/45940
)
IF IT'S A "DONE DEAL," WHY DID IT TAKE UNTIL THE LAST MINUTE
TO GET HERE?
"We can wish it, we can dream it, but it will never be,
oil is not renewable, and therefore in time it must be realized that THERE WILL
BE NO OIL." ENO Petroleum Corporation, "Peak Oil - The Global
Oil Crisis," http://www.enopetroleum.com/opecoilreservers.html. It
is hard to conceive of an act or omission causing more pain to more people and
creatures than the failure of "those in charge" to announce with
reasonable forewarning that the oil supply was going to crash. But it is
upon us with no forewarning to the general public at all.
The government planning agencies charged with helping the public survive the
end of oil could not have performed worse than by recognizing peak
oil only after it has happened. Like anthropogenic global warming
("AGW"), "peak oil" has been the subject of decades of
denial. Notwithstanding Hubbert's famous coup in pinpointing the peak of
US oil production through the simple observation that production naturally
peaks when the supply is half gone, few would listen that because the worldwide
supply of conventional oil would reach the halfway point in the first decade of
this century, trouble was right around the corner. The fact is, coming to
that point meant we were in trouble regardless, because the early stages of
development of an oil field (like the early stages of growth of virtually
anything else) follow an exponential growth curve, and the world's
growth addicts love exponential curves, but once you get beyond the halfway
point, it is a mathematical certainty that the longer you attempt to conform
the field to a pattern of exponential growth, the more the end is going to be
precipitous. If you don't decelerate rapidly, that is precisely what has
to happen - the decline after the halfway point can only be more rapid than the
rise beforehand.
What Hubbert observed with respect to the US oil reserves
has an intuitive sense to it - as the amount of oil in the field drops, its
pressure drops, so the flow begins to slow down - the gusher goes down to a
trickle. But if the owner of the field doesn't make full disclosure of
what's there, outsiders can only make educated guesses from general geological
principles and what the owner is selling, as to what the future holds.
And as we all know, full disclosure is not the name of the game in the oil
business.
If the field is just allowed to release its liquid gold at
its natural rate, that's not too bad, because observations like the Hubbert
Peak can be applied. But as technology improves and well pressure can be
jacked up to compensate for declining reserves, (for instance by pumping water
into the wells) the outside observer loses certainty.. There remains
information about the company's reserves, but the accuracy of that information
is seriously open to question. Within OPEC, which allows its members to
market in accordance with the amount of their reserves. Hart, "Introduction
to Peak Oil," www.philhart.com/content/introduction-peak-oil
, there are great temptations to fudge. Outside observers can follow a
country's reports on its reserves, but those reports are highly suspect.
They will remain constant for years while the country is pumping great amounts
of oil without reporting any new discoveries, and indeed they can take sudden
leaps upward also without reports of new discoveries. Such "records"
lead to the inevitable conclusion that many OPEC reserves reports are
fictional. If you would like to see charts of OPEC oil reserves
mysteriously contorting themselves, you are invited to take a look at Hart's
essay. So if you thought the experts had it all in hand and would
reliably warn us when trouble was a'brewin', think again. Not only do
OPEC members have internal business reasons to exaggerate their reserves, but
companies on the public stock market want to satisfy their stockholders of
their long-term viability, and all oil producers want to make their customers
confident that they can rely on oil for the long haul. By concealing
their future from homeowners, oil companies have made trillions for the real
estate business and the banks at the expense of those who chose urban sprawl
over dense "near-in" housing, and the companies themselves will make
trillions in the near future selling to consumers trapped into oil addiction,
who might have sought alternatives more vigorously had they known how close the
crash was.
Matt Simmons, the banker who has spent his
post-Harvard-Business School career advising oil companies and saving as peak
oil advisor to the last Presidential administration and specifically to
President Bush, ought to know. And what he says is that Western oil
companies like ExxonMobil would be strongly opposed to the idea of transparent
data because it would reveal “how crappy and old their fields really are.”
Energy TechStocks.com, "Meeting the Challenge Matt Simmons: Force All Oil
Producers to Give Transparent Data," According to EnergyStocks.com,
Simmons has warned that "the failure of Saudi Arabia and other major oil
producers to provide transparent production data has left the world in a lurch,
unable to know whether it can maintain an adequate supply of oil in the face of
burgeoning demand Such uncertainty has led to indecision about whether the
world should invest the huge sums of money necessary to develop alternative
transportation fuel sources."
Just how bad the published
reserve figures for the major oil-producing nations are, has long been
understood. We like to say that what goes up, must come down, but not
OPEC member-nation oil reserves. Their allowed production quotas depend
upon their reserves, so there is a built-in temptation to overstate reserves
and never reflect in reduiced reserve figures, what they have pumped out.
In 1988, the OPEC oil reserves "magically and miraculously increased
twofold," without any corresponding discovery of new fields. The
officially reported reserves follow graphs that would be comical were it not
for the fact that 6.8 billion people, and counting, depend upon the real
numbers. See http://www.enopetroleum.com/opecoilreservers.html
Now we are facing the consequences of the major oil
producers "leaving the world in a lurch": almost complete inability
to cope with the severe difficulties we face in transporting, feeding, housing,
and keeping warm the burgeoning billions of our numbers. It is hard to
conceive of how any private entity could impose so much pain on so many.
It didn't need to be that way. The US Government and its cohorts around the
world could have imposed transparency on the oil companies as to their true
reserves, and we would have had fair warning and the possibiity of
coping. Yes, and the moon could be made of green cheese.
Of course, as noted, it is possible to produce a graph
roughly like the one above with nothing more than production data and reserves
data. The former are public, and the latter are known to a limited
extent. It has been the consensus of decisionmakers for many years that
the world had a total (both produced and still in the ground) of approximately
2 trillion barrels of conventional oil, and as pointed out by Campbell, four
decades of dwindling discoveries have left us with an absolute inability to
increase available reserves in a timely manner to mitigate the looming
shortfall. The two trillion barrel figure was absolutely critical for
doing what planning could be done, but at the beginning of the last decade, the
US broke ranks with the consensus of the rest of the world, declared through
the historically-reliable US Geological Survey (USGS) that world reserves of
conventional oil (both consumed and yet-to-be-consumed) were in fact in the
neighborhood of three trillion barrels rather than two, a claim which if true
immediately provided the world by sleight of hand with an extra
thirty years' supply at present consumption rates. To be sure, USGS
former employees disputed its estimates as relying "heavily on
guesses to calculate new oil discoveries," and on doubling the usual 30
percent recovery rate from reserves "with no technology in mind capable of
doing that." Gordon, "Worries Swelling Over Oil Shortage,"
Energy Bulletin March 20-, 2005. The concerns about overestimation of
discoveries proved correct: they continued on their downward track. This
alone created a discrepancy between the USGS projections and reality of
approximately 900 billion barrels. At the same time, the production data
appeared to peak in 2005, prominent Princeton University petroleum geologist
Kenneth Deffeyes predicted that 2005 was the year, and Simmons
suggested similar concerns. http://www.energybulletin.net/node/4835
and http://www.simmonsco-intl.com/files/Northern%20Trust%20Bank.pdf
(p. 31). Nonetheless, based upon the USGS wishful thinking, during
the Bush Administration, the Department of Energy was forecasting a
"production peak somewhere between 2021 and the start of the next century,
with 2037 the most likely date." http://www.energybulletin.net/node/4835
Not to worry.
With the peak imminent in reality, like the global warming
"scientific skeptics," industry in 2006 came up with a
"theory" published in a non-peer-reviewed report, that "peak
oil" was in its totality a false concept, and that the true behavior of an
oil field or conglomeration thereof was a peak followed by an "undulating
plateau" and then a gentle decline by around 2% per year, years, perhaps decades later. According
to Cambridge Energy Research Associates (CERA), "“It is
likely that the situation will unfold in slow motion and that there are a
number of decades to prepare for the start of the undulating plateau.
This means that there is time to consider the best way to develop viable energy
alternatives that would eventually provide the bulk of our transport energy
needs." www.cera.com/aspx/cda/public1/about/about.aspx Not to
worry.
CERA faulted the "peak oil" proponents with
failure to take into acount the facts that reserve estimates evolve with time
and that so does the technology used in extracting oil. The criticism
is disingenuous given that the industry refuses to disclose either the
technology it is using at any one time or its true reserves, and the reserve
estimates evolve with time more for political reasons than geological
one.. The facts the proponents of "peak oil" fail to take
into account are facts that the industry will not disclose. As Simmons
has pointed out, "With solid global field-by-field production data, 'Peak
Oil timing could be 'proved'." And, or course, if the
"undulating plateau" theory is correct, all the industry has to do is
to disclose their true facts to prove it, but they won't. Regardless,
average decline rates of an oil supply are dictated by only two numbers: how
fast we are now using the oil, and how much is left. Lower decline rates
now mean higher decline rates later. Those are immutable facts even if
the "undulating plateau" is correct. So to avoid a rapid
decline in available oil, we must discover and bring to production staggeringly
large new supplies, right now today. Nonetheless, the CERA
"theory" has sufficiently intimidated the bureaucrats that
DOE's official position at the moment, as expressed to Le
Monde, notwithstanding the graph, is that we are "entering a
plateau."
petrole.blog.lemonde.fr:80/2010/03/25/washington-considers-a-decline-of-world-oil-production-as-of-2011/
At the same time all of this
was happening, the UN, the US Congress, the Obama Administration and the
oil industry were negotiating over goals for global warming legislation.
Miraculously, although arguably coincidentally, the percentage-reduction goals
agreed to fit quite precisely the percentage reductions in oil consumption that
will be physically forced upon us all if you believe the above graph: an 18%
drop from 2005 by 2020, and an 85% drop from 2005 by 2050. (It is
possible to extrapolate the graph, which assumes exponentially dropping levels
of existing reserves at a 4% per year rate.) This compares to reductions of CO2
emissions 17% from 2005 in 2020 and 80% from 2005 in 2050 in the
bill. So it would appear that the legislative goals have been set,
for whatever reason, so that the oil industry will have to do little if
anything it won't have to do in any event because of dwindling reserves. http://ecoglobe.ch/energy/e/peak9423.htm
. It is hard to see how the negotiators could have come up with such correspondence
if they had not all been aware of the impending crash of production and
the expected decline rate.. Coincidence? Maybe, but somehow it
seems unlikely. Whether or not by intent, the goals fit the needs of the
oil companies rather than the needs calculated by the scientists.
In short, with all the evidence available, it is hard to see
how the industry and the Department of Energy could have failed to see this
coming. Their failure to warn the public, given the consequences, verges on
the criminal. And if somehow they can claim innocence, then we still have
to ask why they did not heed the warning of Matt Simmons, advisor on peak oil
to the Bush administration, as to the importance of transparency. But
they did not, and here we are.
CONCLUSIONS
We are on our own. We are rapidly going to have to deal with less and
less oil, since there has been no forewarning and no planning. It is a
time for communities to prepare for community energy independence, because only
that way will be safe. This means relying on the sun and wind and water
that have always been with us. It means cooperation with each other to
get through seriously difficult times. It means finding alternatives to
oil throughout our lives as quickly as possible - the oil that runs our cars,
the oil that heats our houses, the oil that runs generators for our
electricity, the oil from which chemical fertilizers and insecticides and
plastics and polyester are made, the oil that brings countless manufactured
goods to us from overseas, the oil on which farmers depend for irrigation
pumps, for transporting produce to market, for working the soil to bring us
food. If you believe the graph, it will almost all be gone in 20 years.
And the progressives and Tea-Partyers must remember that the people who brought
this calamity to us are not our friends but are people we trusted and they
trusted, so we must work together to cope with the mess that is upon us,
and "to throw the rascals out.".
The author, Nicholas C. Arguimbau, is an appellate and
environmental lawyer licensed in California and residing in Western
Massachusetts. He may be contacted at [email protected]
.
|
|
By
Nicholas C. Arguimbau
April 23, 2010 "Information Clearing House"
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