Oil Production: Will the Peak Hold?

[PS_RalphW]

Again, peak oil is not about peak fossil fuels. If we suddenly had less fossil fuels of all stripes, that is COMPLETELY different than just a dropping supply of the transport fuel specialist fossil fuel.

I think we are very close to peak fossil fuels, at least as measured by net energy content after extraction, processing and delivery to point of final use.

Oil represents about 39% of primary energy used in the world today. Coal and natural gas supply about 20% each. To a greater or lesser extent, they can be used interchangably, so that the final product (eg. personal transportation or domestic electricity) can come from any of them, with varying degrees of efficiency and necessary reinvestment in infrastructure.

Natural gas has some room for expansion, at least for a few years, but it is a regional supply, and EROEI goes down rapidly when you start using LNG terminals. EROEI will also be falling rapidly for North American gas, as the number of wells drilled to sustain supply each year increases exponentially.

Coal has large reserves, but as we peak oilers know, reserves do not mean extraction rates. Most of the high quality, energy dense coal has already been mined, and China is struggling to meet it's own exploding demand, with little prospect of doing so as EROEI must be falling. USA has also large reserves, but in the current economic climate, I cannot see the huge investment in infrastructure that would be needed to significantly expand production and distribution to power stations, or upgrades to their already flakey national grid to distribute the extra power to end users.

Nuclear power could expand, but it is hard to see new nuclear power stations being built at a rate even to match the current level of old stations being decommissioned worldwide. Either way, nuclear power is something like 7% or less of primary energy at present.

So I think for a combination of reasons, we will be at peak net energy world wide within the next 10-20 years. All key sources of energy have falling EROEI. This may not equate directly to falling GDP, because the extraction industries themselves will be expanding and part of GDP, but economic activity for the rest of us must decline.

[RGR]

Again, peak oil is not about peak fossil fuels. If we suddenly had less fossil fuels of all stripes, that is COMPLETELY different than just a dropping supply of the transport fuel specialist fossil fuel.

While correct I don't think that's an important distinction.

[RGR]

Natural gas has some room for expansion, at least for a few years, but it is a regional supply, and EROEI goes down rapidly when you start using LNG terminals. EROEI will also be falling rapidly for North American gas, as the number of wells drilled to sustain supply each year increases exponentially.

[snow hope]

Anyone who dismisses the ERoEI concept loses me to be honest. If more energy is required to get the oil or coal out of the ground than the energy that resource provides then it will soon stop. End of story.

I suspect this issue will become much clearer to the Peak Oil deniers regarding the likes of bio-fuels and tar sands very soon. It is only the current oil price levels that are making folks go for these resources at all.

[snow hope]

A) Fossil fuels aren't a "source" of anything, they are just old stored solar energy.
B) Oil is the most dominant fossil fuel for transport, not for electrical generation or home heating.
C) It is only "most dominant" if you consider driving your car more important than heating your heating, lighting and powering your home.

A) Semantics - coal is a source of heat in my house when I burn it in my solid fuel boiler. Oil is the source of energy that drives my car.

B) So? I happen to have oil fired heating for my house and in N Ireland we have oil fired power stations.

C) Most people, especially from your country consider driving their car pretty important, indeed critical. To belittle this activity does not make sense. People will lose their jobs when they can no longer drive to work, industry will start to collapse if people can't get to work. Shops will be empty if trucks can't drive, Basically life as we know it will change beyond recognition if this dominant fossil fuel becomes unavailable.

If you can't see this you really need to look at the bigger picture.

[PS_RalphW]

EROEI arguments are irrelevant. When cryogenic plants in the Middle East, and the cryo tankers to transport the liquid, and the LNG terminal in the US or Japan can all be built, maintained and operated within a long term contract price of no more than $5/Mcf, EROEI doesn't matter in the least as an argument for why it won't be done.

When you consume 15% of the supply of gas in liquifying/regassifying, that's 15% of proven reserves that aren't being used as an end product.
That is a lot of gas.

And in mature basins, of COURSE you drill more wells for unconventional resources. In 1981 the US drilled some 90,000 wells. In 2006, the estimate I found was 39,000. Are you suggesting we are exponentially DECREASING then?

The trend is quite clear. More wells are drilled as smaller and smaller pockets of gas are employed to provide the same supply of gas. The smaller the pocket, the faster the depletion rate. Before long you hit a logistic brick wall where you cannot drill wells fast enough to maintain supply. Then supply falls very fast. Much faster than for oil. Canada is close to that brick wall. It is only a string of warm winters that has prevented a North American gas crisis.

EROEI in coal doesn't mean any more than it does in oil. I've been in oil and gas for some 3 decades, my father is in coal, and neither of us in some 70 years of energy related activity has ever seen a project manager stand up in a meeting and declare, " Sirs! I have increased our EROEI from 10:1 to 20:1! And it only cost $10/ton to accomplish it!!" and if someone had been dumb enough to pull this routine, they sure wouldn't be around to try it twice.

If you improved your EROEI from 10:1 to 20:1 you WILL have SAVED $10/ton and you will be promoted! Energy costs. It wasn't called EROEI, but you ALWAYS dig the high EROEI stuff first. That is simple profit. The cheap stuff is gone, and it will take more energy, more steel, more manpower more everything to get the rest out. (Iron ore price went up 60% TODAY). Coal will cost more. The demand for the extraction resources will exceed supply. Expansion will be limited supply of these resources. This is exactly the same as the oil industry.

Flakey? Supplying 300 million customers with electricity day in and day out over a country the size of Europe, and I lost power twice last year, once in a blizzard and once when a car hit the power pole at the base of the hill. Sure doesn't seem flakey to me.

A generation of underinvestment has left the grid fragile. There was a power cut a few years ago that left a large part of the NE without power for many hours. It took days to get it all back on line. There is NO WAY that it could handle the increase in power that would be needed to have an electric car fleet of 100 million vehicles without MASSIVE investment.

The same guy who invented the peak oil concept in 1956 also solved the problem in the same paper. I am always amazed how peakers want to ignore what a majority of that paper was written about, which was Hubberts solution.

Nuclear provides 7% of our energy. It would need to increase tenfold to replace our current fossil energy use. That would make the Manhattan project look like a walk in the park. Our known reserves of Uranium would be consumed in less than ten years. There are lower grade Uranium ores, but you again hit the logistic brick wall. It would take most of the global supply of iron, manpower, etc. to dig it out of the ground.

MUST decline. Have you ever read Duncans Olduvai Gorge silliness? According to him, we had peak energy in about 1979 or so. Using less ever since, per capita. Any reason why we've had growth in that time period when obviously we've been doing it with less energy and falling EROEI the entire time?

Most of the per capita energy reduction is because the population increase has been almost entirely in the third world where they use hardly ANY energy compared with us. Western energy consumption
per capita has been largely flat for 30 years, but has been rising recently.
EROEI has declined, for oil only from 100 to 1 to 10 to 1 worst case.
As long as overall supply was increasing that could be offset. Overall supply is approaching peak now, so the reduced EROEI now means reduced net energy.

Increased efficiency in end use of energy has allowed the global economy to grow. There are limits to eficiency increases available. Again, the easy ones are done first.

Read 'The Upside of Down' by Homer-Dixon.

[RGR]

Anyone who dismisses the ERoEI concept loses me to be honest.

That is unfortunate.

[RGR]

A) Semantics - coal is a source of heat in my house when I burn it in my solid fuel boiler. Oil is the source of energy that drives my car.

[biffvernon]

When I taught in a school I was aware that I was driving several miles past several schools and most other teachers were making similar journeys in various directions. I don't think education would have suffered very much if all teachers walked to their nearest school.

I expect the same happens in many walks of life.

(Ok, it would be a bit chaotic on day one if the transition was made overnight )

[snow hope]

When I taught in a school I was aware that I was driving several miles past several schools and most other teachers were making similar journeys in various directions. I don't think education would have suffered very much if all teachers walked to their nearest school.

I expect the same happens in many walks of life.

(Ok, it would be a bit chaotic on day one if the transition was made overnight )

Straw poll of home to office miles in my office :-

Me - 6.5 miles
Emp2 - 7 miles
Emp3 - 11 miles
Emp4 - 13 miles
Emp5 - 14 miles
Emp6 - 14 miles
Emp7 - 16 miles

Everybody can't switch to the train / bus even if they are lucky and it is reasonably close.

Bicycle? Maybe for the shorter journeys above - climate in NI is very wet though.

I live at 450ft so cycling is a problem because of the steep hills, but more importantly they are narrow, twisty roads for half my journey and it is really to dangerous to cycle even if the traffic halved.

N Ireland is not very over-populated and people still live pretty close to work. I know lots of people in England who work in London (some in the "City"). The lucky ones live in places like Letchworth, Stevenage, etc - only 40/50 odd miles from the office, others commute from further afield - 70 or 80 miles or more by car or train - every day! Not a lifestyle I would care to live, but millions do!

NO EASY ANSWERS!

[snow hope]

I would recommend the same to you, because pretending that people would rather have NO job than a job which is expensive to get to ( but which they get to keep with nothing but rebudgeting for the cost of fuel ) strikes me as silly as shooting yourself in the head to save on grocery money.

RGR, I am not pretending anything. Many people will still keep their jobs and I think many will lose their jobs because of travel costs, because their jobs will go away when recession bites hard, eg advertising executives, marketing executives, loads of different type of jobs, because they will take to decisions to take local jobs which pay less but save the fuel outlay, etc.

You are making simplistic arguments in my opinion and I couldn't be bothered arguing these points with you any more. I am sure you have extensive oil industry experience and I am a complete amateur compared to you, but if you choose to believe that the world will go on pretty much as normal or without any major repercussions when the total amount of oil we get out of the ground starts to reduce year on year by 3, 4, 6, 8% (whichever it is) then that is your perrogative.

There are many retired and non-retired CEOs from oil companies who are now owning up publically to the problem we are facing as well as people like Hirsh who have produced reports for the American military and for me that is good enough confirmation that there is a brick wall in front of us (with a mountain behind it) and we are hurtling towards it at 100mph.

[RenewableCandy]

When I taught in a school I was aware that I was driving several miles past several schools and most other teachers were making similar journeys in various directions. I don't think education would have suffered very much if all teachers walked to their nearest school.

I expect the same happens in many walks of life.

(Ok, it would be a bit chaotic on day one if the transition was made overnight )

Straw poll of home to office miles in my office :-

Me - 6.5 miles
Emp2 - 7 miles
Emp3 - 11 miles
Emp4 - 13 miles
Emp5 - 14 miles
Emp6 - 14 miles
Emp7 - 16 miles

Amateurs!

Me - 30 miles
New bloke - about 20 miles
My boss - 30 miles
His boss - Unknown. Drives a Hybrid that does about 60 mpg
New draffy - 5 miles (he travels by bus/train and it takes about an hour)
Chap on bike - 5 miles, but they're rather horrible/dangerous miles
Lass who emigrated to Australia - (was) 5 miles (took an hour. That's probably why she left!)

[emordnilap]

Me: 6 mile cycle any weather, no probs
Emp 1: 1 mile drive (never ever, not once, walked, wouldn't even consider it)
Emp 2: 2 mile drive (cycle in hot weather only)
Emp 3: 6 mile drive
Emp 4: 6 mile drive
Emp 4: 7 mile drive
Emp 5: 14 mile drive
Emp 6: 16 mile drive

[Miss Madam]

Me - 3 miles (cycle - and I actually picked this job because it was close to home and wouldn't require a hellish commute for PO reasons)
Colleague 1 - half a mile (walks)
Colleague 2 - 8 miles (train and cycle - she has a brompton)
Colleague 3 - 22 miles (drives)
Colleague 4 - 6 miles (drives)
Colleague 5 - 4 miles (cycles)

Not bad, but then we are meant to be professional environmentalists...

[clv101]

Again, peak oil is not about peak fossil fuels. If we suddenly had less fossil fuels of all stripes, that is COMPLETELY different than just a dropping supply of the transport fuel specialist fossil fuel.

While correct I don't think that's an important distinction.

I think its an absolutely critical distinction.

As I said, I think you're right to say it would be completely difference situation, why I said it's not an important distinction is that whilst there may be a little more growth in gas and coal to come, when oil peaks the total energy from fossil fuels likely peaks. CTL and GTL aren't able to make up the shortfall. It would be an important distinction if they could.

Oil is the most dominant fossil fuel, the most dominant marketed energy source.

A) Fossil fuels aren't a "source" of anything, they are just old stored solar energy.
B) Oil is the most dominant fossil fuel for transport, not for electrical generation or home heating.
C) It is only "most dominant" if you consider driving your car more important than heating your heating, lighting and powering your home.

A) You're being silly making the distinction, in any practical sense fossil fuels can be regarded as a source of energy.

B) Oil is the most dominant form of marketed energy - full stop. You can break it down into sectors, countries etc. and there will be variation but the fact remains that globally, we get more energy from oil than from another other source.

C) It's the most dominant in terms of energy - irrelevant of application.

Peak oil very likely also represents peak fossil fuels and peak energy.

Can you frame this angle a little better please? Peak oil most certainly isn't peak energy, or peak coal, or peak natural gas, so I am interested in how you state this as though you actually believe it.

Oil represents a larger share of the global marketed energy mix than any other source. When the largest contributor peaks and starts to decline it is unlikely that smaller sources will be able to make up the difference. Especially when the two next most significant (gas and coal) have their own supply-side constraints and are themselves not many decades from peaking. You say "peak oil most certainly isn't peak energy", how do you know this? What sources of energy do you see increasing at a greater magnitude than oil declines post peak?

It simply isn't feasible to expect non-oil fossil fuels or alternatives like wind, biomass or nuclear to pickup the shortfall created by oil declining at say 2% per year.

Why not? The US uses 100 quads of energy in a given year. Oil is approximately 25% of that energy. 2% decline in 25 quads means next year there will be 24.5 quads available, a net energy loss of only 0.5%.

I think that overcoming an energy deficit of 0.5% in a single year sounds quite reasonable, and doable without even undue stress.

Don't think US, think Global where oil is some 37-39% to total energy depending on data source. Also don't just think one year, think a decade or two post peak. Then we're looking at 16-30 mbpd down - you think we can bring on alternatives to oil of that magnitude over that time scale? I see that as unlikely and hence say it is likely peak oil represents approximately peak energy.

For example biofuels, if we convert the entire human food supply into biofuels we get a grand total of 10-15% of today's oil supply (energy terms not volumetric terms).