Tuesday, October 02, 2007

Peak Oil 10-20 years away, according to WEC.

The debate continues and we will not know the answer to the question of when peak oil will arrive until it does exactly that. Nor will we know it at the time, but only by looking at production some years beyond it, which will show a fall in output from the maximum (peak). It is estimated by the World Energy Council (WEC) that proven recoverable reserves of oil stood at 1.215 trillion barrels (160 billion tonnes), at the end of 2005, which is somewhat higher by 117 billion barrels than were costed at the end of 2002 which amounts to an extra 4 years supply given that we get through 30 billion barrels a year and rising, worldwide.

Most of the world's oil lies under the Middle East to the tune of 61% of the total; 11% lies under Africa; South America and Europe - including the whole of the Former USSR - have 8% each; while North America holds less than 5% of the total. WEC concludes that oil will not run-out as such for many years but that we were likely to see peak oil within 10 - 20 years; a figure to be compared with the Norwegian Statoil's recent prediction that it will come somewhere between 2010 and 2015. To be fair, the peak is imminent. It is debatable just how much oil Saudi has amid concerns that the regime has revised upward its estimates of its oil holdings, and this is true across the Middle East in general.

Cheap oil will run-out first - world light crude production peaked at the end of 2005 - and following the peak the commodity itself, and everything that depends on it, which is everything, will rise inexorably in price. The price of a barrel of oil is now around $84, which is a short throw from the putative $100 barrel that seemed outlandish as a prospect only a few years ago, but now appears an inevitability, and then $150, $200 or who knows how much? Transportation will be hit hard and as I have predicted throughout these postings, I see no alternative but to curb the use of cars, trucks and planes on a massive scale, resulting in the localisation of communities based on local economies, not strawberries and all manner of consumer products flown thousands of miles to us. I sometimes speculate that the economic miracle in China and India may prove a flash in the pan, since it is largely those of us in the West who buy their goods from them, and if we cannot readily ship and fly them over, then where is the incentive to make them in the first place?

Reserves of natural gas are, in contrast, reasonably healthy. The volume of proven gas reserves have doubled since 1980, as a result of new technologies for exploration and more encouraging estimates of the reserves held in existing fields. It is thought there is sufficient gas to last another 56 years. However, it is the Middle East which holds the trump card, and for example, 44% of the world's gas is contained in about 20 mega and supergiant fields, and nearly half of that is the North Field/South Pars which lies under the waters of Qatar and Iran.

WEC acknowledge that gas exploration is a younger technology than oil exploration, and through its further developments, gas might be brought out from deeper and more complex geologies. For example, coal-bed methane is already a significant contribution to the amount of gas used worldwide, and non-conventional sources such as tight gas sands and methane-hydrates could be harvested in the future. Gas can of course be converted into synthetic crude oil, as I have described before, by steam-reforming it into syngas and catalytic transformation of the latter into liquid hydrocarbons using Fischer-Tropsh methods.

Related Reading.
"Peak Oil 10-20 years away, claims world energy council," http://www.thisisnorthscotland.co.uk/displayNode.jsp?nodeId=149212&command=


Anonymous said...

The key phrase "..world light crude production peaked at the end of 2005..", i.e. Peak Oil - in the fullest sense of the term - took place sometime during 2006.

The pricing of oil historically will undermine attempts to replace it and its related lifestyles and economic cycles and "business" models.

By this I also mean the type of expectations of material rewards in exchange for one's labour and efforts, incl. job satisfaction, the benefits of science and education (rendered virtually synonymous during this era).

Where I am now, I see tremendous anxiety over design and use of robotics and computer technology; the selling of computing skills to the highest bidder is currently at a frenzy. This has dire consequences for ongoing projects that cannot be finished.

Professor Chris Rhodes said...

It is interesting just how many different predictions there are about when the oil-peak will come, and probably supply is kept-up by means of enhanced recovery methods from the simple curve-model's indications.

This is worrying, because once supply does begin to fall (having artificially extracted a greater reserve of oil than simple considerations might indicate), then production of conventional crude will plummet. Then we are in trouble... big time!

There are many proposed fixes - pv, hydrogen, laser-fusion etc. - but even if they can be made to work eventually, we will still hit an energy minimum within a decade or so, and perhaps there will be insufficient of that to extract resources or to fabricate them into these saviour-technologies.

The world should have started on alternatives seriously in the early 1970's when OPEC hiked-up the price of oil artificially, but all such incipient attempts were scuppered by the re-emergence of cheap oil on the markets.

We were fooled, and now we really are in trouble, since the availability of oil depends on geology more than politics, and that is something mere political will, or even war, cannot change!


Anonymous said...

The latest con and pro arguments:

But nobody "for" oil says the prices will or should drop to levels that encouraged "irrational exuberance" long before that phrase became a cliche.
Big Oil just doesn't get it because they still rule the roost. This is a struggle of a lifetime, many lifetimes.