Is peak oil a fraud? from "Does it matter if global warming is a fraud?"

[Zythryn]

Iceland, IMO, provides some clues as to what a renewable energy economy can look like. I hear their use of geothermal energy is remarkable. I've not had enough time to do a thorough search, though.

It really is fascinating. My understanding is they have so much geothermal energy to use that they use some to convert hydrogen for fuel (another dramatically inefficient transfer of energy).

Now, not all places have the geography for massive geothermal, but it is quite commonly useful in residential settings.

 

Yes, that's one of the weird feedback loops of modern building and construction. It is better to get some than none, but what I had in mind was when possible or especially practical or designable, it might be better to convert sunlight directly into heat energy, and then find uses for that heat. This'd also include converting the heat energy into other forms of energy, such as steam, electricity, etc. :phones:

This is actually much more efficient and is highly recommended for solar energy. Solar panel systems used for water heating is much more efficient and less expensive than PV panels. If our geothermal wasn't generating our hot water for us we would have a solar water heating system (combining the two is a bit of a technical mess from what I am told).

 

 

I think a lot of people abide by the "if it ain't broke..." theory. But it's clear that our energy infrastructure (and perhaps our thinking about energy and energy security in general) is outdated. I think decentralized energy production and storage will become increasingly important.

Completely agree, and excellent observation about the 'if it ain't broke...' theory. The problem is going to be that it takes time to get large scale alternatives up and running. And if the initial steps to do so involve using lots of energy from fosil fuel sources, it will make it that much more difficult to shift to other energy sources AFTER peak oil has occurred.

[Zythryn]

So weaning off oil is not just about substituting one energy for another, like Pepsi for Coke, but rebuilding an entire transportation and mining infrastructure around the potentially abundant new forms of energy coming online, which are unfortunately in the wrong format (electricity) for the transportation and construction sector.

 

This is an excellent point, and one of the reasons I am such a proponent of electric vehicles.

EVs and the power grid don't care if the electricity came from a coal, hydro, nuclear, natural gas, oil, wind or solar plant. You produce electricity in any way and the car will run on it.

A minor change to gasoline make-up, such as adding ethonal to the blend and BOOM, take the refinery down for a couple of weeks, and then start pumping again. Change it alot, such as E85 and you need to revamp the vehicles themselves.

 

EVs are not only a highly efficient mode of travel, they are highly flexible when it comes to HOW the electricity is generated.

[CraigD]

Has anyone read the entire article?

Yes.

 

In short, its author, economist and oil executive Leonardo Maugeri, concludes that peak oil won’t occur for about 100 years, because of 3 major areas of anticipated technological progress: recovery; drilling; and underground imaging.

 

However, Maugeri’s estimate appears to assumption that demand for oil will remain at about its 2008 value, about 30,000,000,000 barrels/year. If, as many economists predict, many developing nations approach the per-person oil consumption rates of countries like the US, his estimate might be reduced by a large factor.

However, my biggest question about improved recovery is how much energy do these methods take?

Maugeri’s SciAm article doesn’t give such detailed information, but I believe an upper limit can be had by comparing the specific heat of oil, about [imath]2.5 \times 10^{3}[/imath] J/kg/K, to its energy density, about [imath]4.5 \times 10^{7}[/imath] J/kg. So, assuming the surrounding rock is a reasonably good insulator, and the oil is raised from 0 to 100 C, any sort of heat recovery method (steam flooding, gas injection, underground burning, etc.) requires on the order of 0.6% the energy of the recovered oil.

 

(Sources: wikipedia articles “specific heat capacity” and “energy density”)

Hypothetical question, if it takes two barrels of oil worth of energy to extract one barrel of oil from the ground, wouldn't we be better finding alternatives to oil?

Per my rough estimates, no recovery method comes even close to consuming as much energy as the recovered oil contains. According to the article, heat recovery is profitable when oil price is over $50/barrel

Peak oil is not about when there is NO oil left in the ground. It is about when demand continues to outpace supply.

The article notes that the major cost incurred when demand outpaces supply is due not to increasing well production, but increasing refinery capacity, which amounts to building more refineries.

Yeah, I didn't buy into it. I believe the author works for a major oil company.

Maugeri does, in a sense work for a major oil company, as its CEO senior executive vice president. From the SciAm article:

Leonardo Maugeri is an economist and senior executive vice president of the Italian oil company Eni. He is a visiting scholar of the Massachusetts Institute of Technology and a member of M.I.T.’s External Energy Advisory Board. In 2007 his book The Age of Oil received the U.S. Choice Award. His new book,

Beyond the Age of Oil: The Myths, Realities, and Future of Fossil Fuels and Their Alternatives

, will be published in early 2010 by Praeger.

Thought I'd toss it this way, anyway. One thing it does well is it shows the tricks and hollow optimism of Peak Oil denialists.

Without a lot more research, I can’t comment in detail at the goodness of Maugeri’s analysis, but wouldn’t describe it as showing "the tricks and hollow optimism of Peak Oil denialists", or describe Maugeri as a Peak Oil denialist. He appears to have a sophisticated and well-developed idea of how the price of oil, driven both by free market factors and, as he proposes, intentional manipulation by a “Global Energy Agency”, can drive the adoption of sustainable alternative energy sources that will supplant oil consumption before a catastrophic supply-and-demand peak occurs. To quite the article:

The world needs an oil price that is neither too high nor too low. In today’s conditions, the ideal price would be between $60 and $70. At prices above $70, inefficient methods of producing biofuel become profitable, for example, turning corn into ethanol. Biofuel production then tends to displace global agriculture, with devastating effects on the world’s poorest people. Below $50 or $60, conservation is left aside, and renewable source projects vanish.

[Eclipse Now]

One more scary statistic... from Dr Garry Glazebrook, University of Technology Sydney.

 

From a recent email exchange I was having with him...

 

Hi Dave

Av car trip is 10k

av rail trip 18k

 

Our 30 year plan assumes 10% of current car commuters will switch to walk/cycle/scooter, and 10% to PT (25% in the case of people working in major centres), over next 30 years. 40% of jobs all up are in major centres.

 

This would double PT use, triple walk/cycle, and keep car VKT constant

 

Cheers

 

GG

 

For any Aussie readers he's running a seminar on 23 Feb 2010.

http://www.terrapinn.com/2010/utw/SPK-dr-garry-GLAZEBROOK.stm

[maikeru]

Maugeri does, in a sense work for a major oil company, as its CEO. From the SciAm article:

Leonardo Maugeri is an economist and senior executive vice president of the Italian oil company Eni. He is a visiting scholar of the Massachusetts Institute of Technology and a member of M.I.T.’s External Energy Advisory Board. In 2007 his book The Age of Oil received the U.S. Choice Award. His new book,

Beyond the Age of Oil: The Myths, Realities, and Future of Fossil Fuels and Their Alternatives

, will be published in early 2010 by Praeger.

 

Without a lot more research, I can’t comment in detail at the goodness of Maugeri’s analysis, but wouldn’t describe it as showing "the tricks and hollow optimism of Peak Oil denialists", or describe Maugeri as a Peak Oil denialist. He appears to have a sophisticated and well-developed idea of how the price of oil, driven both by free market factors and, as he proposes, intentional manipulation by a “Global Energy Agency”, can drive the adoption of sustainable alternative energy sources that will supplant oil consumption before a catastrophic supply-and-demand peak occurs. To quite the article:

The world needs an oil price that is neither too high nor too low. In today’s conditions, the ideal price would be between $60 and $70. At prices above $70, inefficient methods of producing biofuel become profitable, for example, turning corn into ethanol. Biofuel production then tends to displace global agriculture, with devastating effects on the world’s poorest people. Below $50 or $60, conservation is left aside, and renewable source projects vanish.

 

Take my apologies for the knee-jerk comment earlier. You've done a much better job at analyzing it. I think I'm a bit jaded by all the economics reports and Peak Oil denialists I've encountered. I've encountered innumerable reports or predictions from economists who've predicted oil coming back down to $30-50 a barrel, which hasn't happened yet, and I don't believe will happen as things currently stand.

[Zythryn]

Yes...

Maugeri’s SciAm article doesn’t give such detailed information, but I believe an upper limit can be had by comparing the specific heat of oil, about [imath]2.5 \times 10^{3}[/imath] J/kg/K, to its energy density, about [imath]4.5 \times 10^{7}[/imath] J/kg. So, assuming the surrounding rock is a reasonably good insulator, and the oil is raised from 0 to 100 C, any sort of heat recovery method (steam flooding, gas injection, underground burning, etc.) requires on the order of 0.6% the energy of the recovered oil.

 

(Sources: wikipedia articles “specific heat capacity” and “energy density”)

Per my rough estimates, no recovery method comes even close to consuming as much energy as the recovered oil contains. According to the article, heat recovery is profitable when oil price is over $50/barrel

 

Awesome, thank you Craig. I had no idea it was that small a percentage.

Even with innefficiencies included it shouldn't be more than a few percent I'm thinking?

I am a bit surprised at the author not taking into account a greater growth in demand. Considering that China has just surpassed the USA in number of cars sold annually it doesn't look like the demand is going to stay level for long:(

[Eclipse Now]

Maugeri is an economist who uses all the tricks of the trade to sell his product. After all, he IS a CEO of an oil company. He's an oil baron, not a geologist.

 

I'm actually embarrassed for SCIAM that they published this trash! This wasn't a scientific piece but more of an economist's dogma!

 

When did they put the paywall up? I think I read this article a while back, but now there's a pay-wall.

 

Anyway, apparently Maugeri has a go at 2 of my heroes, retired Geologists Dr Colin Campbell and Jean Laherrere.

 

Please see the following review.

 

Read it slowly and carefully to try and get the vibe of the sometimes honest mistakes, and sometimes apparently deliberate fudging of data that Maugeri engages in. Maikeru was absolutely right to have a knee-jerk reaction about an economist reviewing the complexities of peak oil data. They believe that the free-market tooth fairy will wave the magic wand, and more oil will just appear in the ground, and new technologies will just develop to get the oil that is already there.

 

In other words, implicit behind all the assumptions of Maugeri's 'article' is that we should all close our eyes to the real world data and just TRUST that more oil will turn up, and just TRUST that new technologies will arrive just in the nick of time to extract more of the 50% of the oil we leave behind in most fields. Rather than, horror of horrors!, WEAN OFF HIS PRODUCT (all the ladies swoon and faint at the idea of this poor man's company shares dropping), we should just believe that the oil picture is OK because oil we don't know is there and technologies we don't have yet will save us.

 

Comments on Scientific American's "Squeezing more oil from the ground" | Energy Bulletin

 

From this review we can see that Maugeri just insists we trust in the stuff we haven't found yet, DESPITE the fact that the last time we found more than we burn was nearly 30 years ago.

 

Maugeri writes:

It is absurd to predict a peak of world production because it presupposes that one knows how much oil is in the ground.

Yep, absolutely absurd! We're ticking off the oil nations that have peaked, the peak of discovery was 45 years ago, the last time we found more than we burned was 1981, but it is ABSURD to try and be alarmed about his product vanishing before our eyes! The Tooth Fairy the Tooth Fairy!:phones:

 

As Campbell and Laherre answer:

On that basis, logic suggests that it would be equally absurd to accept Maugeri’s claim that the peak is not coming until 2030 or that more than 50 percent of the oil known at the time will be recoverable.

That said, we can agree that no one really knows the volume of oil in the ground, meaning that little reliance can be placed upon assumed recovery factors.

Maugeri believes that only one third of sedimentary basins have been explored, but out of about 600 sedimentary basins only 200 basins have the potential of generating oil or gas for well understood geological and especially geochemical reasons. He shows that for the past 25 years, the United States had more exploration drilling than any other country.

But he fails to say that the ownership of oil rights in the United States differs from that in the rest of the world. The United States supports more than 20 000 oil companies, and the economics are also quite different. For the last 25 years over 60 000 pure exploration wells (New Field Wildcats) have been drilled in the United States compared to 5000 in Canada and 40 000 for the rest of the world. The average size of oil discovery is 0.3 Mb for United States, 0.9 Mb for Canada and 740 Mb for the Middle East, 14 Mb for Africa , and 7 Mb for the world outside US & Canada. Again comparing the United States with the rest of the world is comparing apples and oranges!

 

In other words, Maugeri's an economist and talks rubbish! He's already stated that a third of the possible locations have been drilled... but only because he's **multiplied by 3** the possible locations for new discovery by simply confusing the kind of sedimentary basins that can actually store oil! I hear over and over again that the old timers are pounding their fists on the table saying there are no more *significant* new oil provinces to be found! We've been drilling the planet for this stuff for 150 years, we've scouted the best areas, we've looked for the BEST locations for the BIGGEST fields and found them all!

 

This is a state of the art, multi-billion dollar industry, and they're GOOD at what they do! Discovery peaked 40 years ago, yet this guy wants us to believe we've only found a third of the good stuff? ;)

 

Now let's switch from an economist / CEO perspective to that of a hardened oil man with a Phd in this stuff, and actual field time decades ago enjoying the adrenaline rush of the hunt for oil.

 

Jeremy Leggett: I’ve been talking to people who I know because of my past in these big oil companies and they tell me there are no more big oil fields left to find.

 

Narration: So if we’ve found nearly all the world’s oil, how long before it runs out?

 

Surprisingly, that’s not so important. The real question is when will we reach half way – it’s known as 'peak oil'.

 

Catalyst: Real Oil Crisis - ABC TV Science

 

Now try this from Four Corners.

 

Campbell's gloomy prediction is that peak global production of cheap, conventional oil may have already passed. If oil from deepwater and the polar regions and liquids derived from gas are added, production will peak soon after 2010.

 

< snip >

 

COLIN CAMPBELL, ASSOCIATION FOR THE STUDY OF PEAK OIL: The discovery of oil has been falling ever since, relentlessly. And it's been falling despite a worldwide search always aimed at the biggest and best prospects - no-one's looking for the smallest and the worst - the biggest and the best. It's been falling despite amazing technological and geological advances. We understand this business so much more than we did.

And I think there is no good reason to expect that this downward trend will change direction.

 

Maugeri's the head of an oil company and yet even he doesn't seem to know that oil requires a VERY specific bedrock situation to form and then STORE the oil, with just the right pressure, just the right depth, just the right heat, just the right porous rock to migrate upwards through, and just the right kind of non-porous rock capstone to seal it off and collect it. I'm not even a scientist but I can list these conditions off on my fingers, mainly because I've had an overwhelming interest in the rather perplexing story that is Western civilisation's apathy to this threat!

 

Maugeri seems to be arguing from a URR perspective, but what if we count the actual new production projects known about (these take upwards of 6 years to develop) and estimated decline rates?

 

Forgive me, but this episode of Four Corners was great, there's more I need to quote.

 

CHRIS SKREBOWSKI, EDITOR PETROLEUM REVIEW: MAN: The work I do, obviously, is based on publicly available data and we're looking, with some accuracy, forward about six years. So, out 2012, we can be fairly confident that we've got an idea of what's going on. And the answer there is that supply and demand remain pretty tight to about 2010. And after 2010, it really starts looking rather difficult. They don't add up very well.

JONATHAN HOLMES: Are you saying that, as far as you can see, from the figures that you look at and the projects that you look at, that supply will actually start to decline from around 2011?

CHRIS SKREBOWSKI, EDITOR PETROLEUM REVIEW: Yes.

JONATHAN HOLMES: Peak oil, in other words?

CHRIS SKREBOWSKI, EDITOR PETROLEUM REVIEW: Yes.

 

Four Corners - 10/07/2006: Program Transcript

 

That Maugeri submits an article to SCIAM this biased and misinformed is either incredibly unprofessional, or an outright attempt to misinform the public.

 

And even if we did, after 2010 demand is supposed to rise by 1 mbd (million barrels a day) every year.

 

New demand + existing depletion rates from older fields, that is the *measurable* depletion from the 15 of the TOP 30 oil producing nations that have already passed their peak, means we'd need a new Saudi Arabia every 3 years to meet demand.

 

Anyone want to bet their entire civilisation on that happening? Because, it seems to Maugeri, that is what we should be doing.

 

The same thing happens across the board when economists play outside their sandbox. Australia's misinformation on this crisis can be traced to Dr Brian Fisher of ABARE (our department charged with predicting resource prices.)

 

From the Australian Senate enquiry:

 

RACHEL SIEWART: Has Australia commissioned any such research? Is anybody aware of that? And looking at the potential impact of peak oil and whether peak oil is a reality?

DR BRIAN FISHER, EXEC. DIRECTOR ABARE: Madam Chair, I'm...well, nobody's asked ABARE to do such work.

Umm, I thought your job, Dr Fisher, was to predict the price of oil, and ummm, I'm no economist but isn't SUPPLY a vital part of that equation? Sorry, but this answer to Australia's Federal Senate enquiry sounds too much like "the dog ate my homework".

 

I think in a very few years, once all the semantics have played their course and we live in a world of permanently declining oil supplies... and our economies are bleeding and cheap international airfare is a thing of the past, I think people are going to be looking back with a great deal of anger at all the Denialist arguments put by Exxon and the likes of Maugeri.

 

The world is mad, and is not run by grown-ups but by infantile children waiting on Santa Claus or the Tooth Fairy to save them.

 

Only in this case, it is the truth that really hurts.

[maikeru]

Awesome, thank you Craig. I had no idea it was that small a percentage.

Even with innefficiencies included it shouldn't be more than a few percent I'm thinking?

I am a bit surprised at the author not taking into account a greater growth in demand. Considering that China has just surpassed the USA in number of cars sold annually it doesn't look like the demand is going to stay level for long:(

 

It seems standard practice for many economists and Peak Oil denialists to estimate future reserves or supplies based on current use or usage, as if growth somehow magically flat-lines like a patient with a heart attack. We know it can and will change. Such a simple or myopic mistake has far-reaching consequences. IMO, many economists and business investors seem to be "bulls" producing more bull****. Economic laws hold while the Laws of Thermodynamics take a vacation.

 

Sorry to put it so bluntly.

[Eclipse Now]

Agreed... and Four Corners backs you up, and indeed implied this was why Australia was so unaware and unprepared for the geological realities that are about to rock the world economy.

[Eclipse Now]

Anyone actually read Campbell and Laherre's reply to the SCIAM article mentioned above? I just feel like my post above might have been so long that people missed the link.

[Zythryn]

Wow, thank you for reposting that Eclipse.

The full data really kind of shreds the original article.

[maikeru]

Anyone actually read Campbell and Laherre's reply to the SCIAM article mentioned above? I just feel like my post above might have been so long that people missed the link.

 

I read it twice now, and it seems to me they do a good job rebutting Maugheri's article.

[Eclipse Now]

I've been out of this game for a bit now.

 

Anyone have the latest American government Department statements re peak oil? It just seems to be the sort of thing governments have inquiries over, then a few sexy press releases come out sounding very alarmist, and then everyone goes back to sleep again. I find it surreal.

 

As you can see from many of my quotes in this thread, much of my material is 2 or 3 years old. Anyone see anything on peak oil in the media recently, or is it all short-term concerns like the GFC, or even more serious matters, like Oprah retiring or Tiger Wood's latest sexual exploits?

[Zythryn]

Since the financial fallout, and the nosedive in demand, PO really has taken a back seat in the media.

I am not aware of any recent government 'findings'. Once demand picks up again I expect we will see some more concern. Of course, it is less painful to resolve the issue earlier rather than later.

[REASON]

Of course, it is less painful to resolve the issue earlier rather than later.

 

Unfortunately, that's really not our style here in the so called "center/right" US. These days we prefer to be dragged kicking and screaming.

[Eclipse Now]

I'm not a peak oil doomer, I really think Technological growth and incremental improvement is amazing these days.

 

But it will be an interesting race between the terminal decline of oil production and new infrastructures and adaptation being rolled out.

 

Again, I'd put my money on "Better Place" being a fair part of the solution.

Better Place - Wikipedia, the free encyclopedia

 

If you live in Israel, San Franciso, Denmark, Hawaii, Canberra, Tokyo, Ontario or Oregon, you are going to be seeing this logo everywhere, soon.

 

 

 

But please, if you see a big news announcement on peak oil, please update me here? Just bookmark this thread and add it here... I'm in the middle of a career change and am about to hit the books again.

 

(I'm moving into Accounting, for the sheer excitement! :shrug::):hyper:)

[Buffy]

Well of all the people you could think of who would be interested in scaring people into looking at alternatives to oil, would Kuwait come to mind?

 

Predicting the end of oil has proven tricky and often controversial, but Kuwaiti scientists now say that global oil production will peak in 2014.

 

Their work represents an updated version of the famous Hubbert model, which correctly predicted in 1956 that U.S. oil reserves would peak within 20 years. Many researchers have since tried using the model to predict when worldwide oil production might peak.

...

The scientists from Kuwait University and the Kuwait Oil Company adopted a newer approach by including many Hubbert production cycles, or bell-shaped curves showing the rise and fall of a non-recyclable resource. Earlier models typically assumed just one production cycle, despite the fact that most oil-producing nations have historically experienced more of a roller coaster ride in production.

 

Such production cycles reflect the influence of new technological innovations in the oil industry, government regulations, economic conditions and political events. The factors include the discovery of new oil deposits, the recent economic recession and the rise of renewable energy.

...

For now, Kuwaiti scientists say that the world continues to consume its oil reserves at a rate of about 2.1 percent each year.

 

h/t Daily Kos

 

The only time you ever run out of chances is when you stop taking them, :doh:

Buffy