Peak Oil – Myth or Reality?
Is the world running out of oil or are are we entering a future with a glut of the stuff? And what are the environmental consequences if we are? This is the question raised in a recent article by George Monbiot in the Guardian
His views seem to have been altered by a report from Harvard which can be read here.
Firstly, perhaps we should say we agree with George that, from a climate change viewpoint, we need to leave fossil fuels in the ground (we return to this argument later). We also agree that many people have wrongly predicted peak oil. It is worth saying at this point that the (wrong) prediction by the first person to study peak oil, M.K.Hubbert which Monbiot references in the article was later revised after the 1970s oil shock. An interview with Hubbert on this subject can be seen on YouTube. The sound quality and his accent make it hard to follow but basically he says the peak has been shifted back by about 10 years which takes it to about 2000ish…
The report referred to by George seems to us to be based on the usual mismash of optimistic data put about particularly by the US Geological Survey. This organisation has a long-standing reputation for being very optimistic about oil (and other resources) which goes all the way back to Hubbert’s 1956 lecture. The Maugeri report is also very optimistic about Middle Eastern reserves particularly Saudi Arabia. There is plenty of evidence suggest these countries conflated their reserves in the 1980s, this has been picked up in the wikileaks saga also see and this.
As I (Neil) look at the latest BP statistical review of world energy with country after country showing falling production I’m left wondering can so many regions turn round and start producing more oil? It’s possible, but seems unlikely. Can Iraq produce as much oil as is suggested when there is still so much violence? The IEA World energy output reports in recent years have suggested conventional crude production has peaked in about 2005 (not far from Hubbert’s revised estimate) and that any gap has to be made up from biofuels, new discoveries and unconventional oil. Why was Fatah Birol their chief economist so pessimistic on ABC’s “The Science Show” (23/4/11)? His view is that over the next 25 years we need to find 4 Saudi Arabias to just maintain current demand, this report does not suggest this is possible George. Some of the recent discoveries such as of Brazil seem huge until you divide them by the daily demand, they then last less than a year…
Leonardo Maugeri also ignores another vital aspect of this issue which we cover in some detail in our forthcoming book, that is the energy return on energy invested. To put it simply it takes energy to make energy (not a scientific way of explaining it, but a practical way). There is another way of expressing this, as Rob Hopkins puts it, the upside of the peak is not the same as the downside of the peak. If you imagine an oil production peak as a bell shaped curve then on the way up to its summit you use easy to extract sweet light crude. On the way down you use harder to extract unconventional oil, this takes more energy to recover and the net energy return is lower. Hopefully you see where this is going. We are taking a lot more energy to extract oil, gas and coal (and minerals such as copper) than we were a century ago. At the beginning of the last century gushers gave us a ratio of 100:1 return in the 1960/70s this had dropped to around 30:1 and is now at 12-20: (oil from tar sands gives only a marginal return on the energy invested and unconventional gas and oil are likely to be less than 10:1). The same pattern is seen in coal and gas and arguably uranium. Thus to stand still we deplete faster.
We’d make two last points; firstly on daily oil production. You get different figures quoted, but daily conventional production is about 77mbd. The figure of 93mbd quoted by Monbiot includes unconventional oil, gas, biofuels and shale oil. BP quote a figure of 83mbd, this excludes liquid fuels from other sources such as biomass and coal derivatives. Secondly, we return to global warming, whilst it is certainly true there is enough carbon fuels to fry us, (Neil’s) hope is that peak oil would at least raise the prices of all conventional fuels meaning renewables could take up some of the slack and people would use less energy. Depressing, isn’t it, that to save us from climate change we would have to cope with another major crisis. Its possible we are wrong but looking at all the evidence we are going to stick our necks out and say we are at the top of the peak for conventional oil production – in fact a plateau from about 2005 to date. Only time will tell, and we’ll see after 2015.
Neil and Andy