Posted by Big Gav in peak oil
I mostly try to ignore George Monbiot's erratic twists and turns of opinion nowadays - the doomerish eco-socialism I can mostly tolerate but the flip flops on nuclear power and now peak oil are simply annoying - for someone who appears to be incredibly intelligent he doesn't appear to need much in the way of new information to change his tune - False Summit
Peak oil hasn’t happened, and it’s unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun(9). The constraints on oil supply over the past ten years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.Maugeri's article referenced by Monbiot has garnered a lot of attention lately but it didn't appear to say anything new. The shale oil boom does exist but the volumes are still trifling compared to US oil consumption, let alone global oil consumption and this is exactly what you'd expect to see - using technology to exploit (expensive and dirty) unconventional oil reserves as production of conventional oil sources peaks.
Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s.” The investments required to make this boom happen depend on a long-term price of $70 a barrel. The current cost of Brent crude is $95(10). Money is now flooding into new oil: a trillion dollars was spent over the past two years, a record $600bn is lined up for 2012(11).
The country in which production is likely to rise furthest is Iraq, into which multinational companies are now sinking their money, and their claws. The bigger surprise is that the other great boom is likely to happen in the US. Hubbert’s Peak, the famous bell-shaped graph depicting the rise and fall of US oil, is set to become Hubbert’s Rollercoaster.
Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn’t flow naturally. There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable)(12). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 this January (13).
So this is where we are. The automatic correction – resource depletion destroying the machine that was driving it – that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.
We have confused threats to the living planet with threats to industrial civilisation. They are not, in the first instance, the same thing. Industry and consumer capitalism, powered by abundant oil supplies, are more resilient than many of the natural systems they threaten. The great profusion of life in the past – fossilised in the form of flammable carbon – now jeopardises the great profusion of life in the present.
There is enough oil in the ground to deepfry the lot of us, and no obvious means by which we might prevail upon governments and industry to leave it in the ground. Twenty years of efforts to prevent climate breakdown through moral persuasion have failed, with the collapse of the multilateral process at Rio de Janeiro last month. The world’s most powerful nation is once again becoming an oil state, and if the political transformation of its northern neighbour is anything to go by(14,15), the results will not be pretty.
The other big potential jump in oil production comes from Iraq which isn't exactly news - its been obvious to anyone who has researched the history of the country that this is the one massive source of conventional oil which hasn't really been tapped - however this is not enough to invalidate peak oil theory nor will it make decades of difference to the global peak point.
The brouhaha over this reminds me a bit of an earlier episode this year, started by a report from Citibank and fanned by the likes of Alan Kohler, predicting "the death of peak oil" which was notable for its confusing of gas with oil and a complete absence of numbers (not to mention claiming large reserves of shale gas in places like Poland where it has been proven to not be the case).
Chris Nelder had a good critique of this episode - Energy independence, or impending oil shocks? (Matt Mushalik also weighed in with a relatively restrained - for him - piece - No number crunching in Alan Kohler opinion piece on premature peak oil death).