Peak oil by any other name is still peak oil

10 09 2016

This article was reproduced from Ugo bardi’s excellent blog, Cassandra’s legacy….

Guest post by Diego Mantilla

One of the most compelling charts I have ever seen is the “Growing Gap” chart that used to appear in every ASPO Newsletter. This is the one from the last ASPO Newsletter, written by Colin Campbell and published in April 2009.
Since then, more than seven years have passed, and peak oil has disappeared from the mainstream press headlines–almost. On August 29, Bloomberg published a story alerting to the fact that conventional oil discovery has reached a 70-year low. It published a very interesting chart, using data provided by Wood Mackenzie, the oil consulting firm, to show that fact. Unlike the ASPO chart, Bloomberg’s chart only goes back to 1947, the year before Ghawar was discovered.
I thought I would reproduce the “Growing Gap” chart using Wood Mackenzie’s data.
Neither Wood Mackenzie nor Bloomberg make public the data behind the chart, but I used a digitization program,WebPlotDigitizer, to extract data from the chart. The results are not perfect, of course, but give a good enough estimate. One must keep in mind that discovery data are not precise and may have a significant margin of error.
In order to obtain conventional oil production, I subtracted US tight oil production and Canadian tar sands productionfrom the EIA’s global crude plus condensate number. I know I must also subtract the extra-heavy production from the Orinoco Belt, but it is hard to find data for it. In any case, this is a very good estimate. According to data gathered byJean Laherrère, the Orinoco extra-heavy production is only around 1 Mb/d today.
The following chart shows the digitized Wood Mackenzie conventional discovery data and the production data described above. According to the data, since 1980, when the gap between production and discovery began to appear, humanity has extracted about 47 percent more conventional oil than it has discovered.
And the following chart shows a three-year moving average of discovery, to replicate the ASPO chart. Notice that discovered volumes are generally larger than Campbell’s data, but the drop since 2011 is more precipitous than he anticipated.
According to the Bloomberg story, this shortfall in discovery will be felt 10 years from now, when it begins to “hinder production.”  Peak oil by any other name is still peak oil.
UPDATE
This turned up in my inbox, also from Bloomberg……

Creditors are recovering an average 21 percent of what they lent, compared with about 59 percent in past decades, the credit-rating agency said Monday in a report that looks into lending to 15 exploration and production companies that filed for bankruptcy protection in 2015. That may be on par with, or worse than, the telecommunications industry collapse in 2001 and 2002, the study led by David Keisman said. High-yield bonds recovered a mere 6 percent, compared to 30 percent in previous years going back to 1987.

http://www.bloomberg.com/news/articles/2016-09-12/oil-bankruptcies-leave-lenders-with-catastrophic-recovery-rate

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2 responses

10 09 2016
Chris Harries

One of the most dispiriting things that has happened in the past 6 or so years is the extent to which many on the progressive side of politics fell in line with the industry story that ‘the world is flush with oil’. Lowering petrol prices played a part in confirming this fallacy.

I wondered about this for a long time and realised that the Peak Oil movement had erroneously sent out an overly simplistic message – that world oil supplies would peak and go into terminal decline. For those concerned about climate change this was very welcome news and as a result many progressive had become became happy ‘peak oilers’, if only for a while.

Conventional oil did literally peak 8 years ago now and world oil production from major oil wells has never since risen above the 74 million barrels per day ceiling. Filling the demand gap has been unconventional hydrocarbons – thousands of much smaller pockets of liquid and gaseous hydrocarbons that are in the rock structures under our feet nearly everywhere.

All is not lost. The same people who were temporary peak oilers have more recently become ardent anti-frackers, many of them not realising that the decline of conventional oil production has directly resulted in fracking and a range of other extreme (and very dirty) drilling and extraction projects that are frightening landowners and jeopardising ground water supplies everywhere.

The FRACKING that we despise so much is the hard face of PEAK OIL. We’ve had a few years holiday from Peak Oil media publicity yet it’s been under our feet all the time.

One sobering statistic: since the industrial revolution about 1 trillion barrels of oil have been extracted from the Earth. That’s from an estimated 22 trillion barrels of oil of resource that was originally down there.

This leaves 21 trillion barrels still to go? Well, no. Nearly all hydrocarbons are not extractable using any technology. Oil resources start with some very big deposits (mostly now expiring) this then dispersing down to tiny pockets, locked in geological crevices, and pockets of sludge. With ever increasing inputs of energy and money and chemicals and fancy drilling technology we could probably extract another 1 trillion barrels at best. But as we go each barrel becomes dirtier, pollutes the atmosphere much more, and ultimately we get to the point where it extraction requires more energy than we get out of the oil when burning it. That’s the theoretical end game.

But we can even forget all that. The ultimate limit that will bring on disruption to our lives is the impossible financial cost. We’re virtually at that point right now. The global economy is on tenterhooks.

10 09 2016
Brendon Crook

I’ve been spending a lot of time reading Our finite World or rather more the comments there.
There appears to be many commentators there that say when the financial system goes belly up it’s pretty much game over for humanity & life on earth with things like spent fuel rods needing cooling & spewing out radiation (when the power goes off) enough to spread out over the planet & cause an extinction event for humanity.

I have no fixed idea as to whether or not this would happen but would be most interested in what others think on this subject……………….?.

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