Energy Security

[Rick M]

Here are the two graphs from the Nov.08 IEA World Energy Outlook.
Neither graph was included in the Executive Summary (I got these from Matt Simmons' presentations).

The upper graph indicates a steep decline in crude oil production from currently producing fields, starting now and dropping to around 25 mbpd by 2030.
The anticipated growth in production to 104 mbpd requires 64 mbpd of actual production (ie. the "six new Saudi Arabias" that must be found and brought on-stream, all within 20 years).

Please note the relatively flat line for crude oil from 2005/6 onward. Even adding in the "yet-to-be found" and enhanced oil recovery, the line barely lifts and does not reach 80 mbpd.
This is consistent with the claims of Matt Simmons and several other analysts that "peak oil is already past tense" since crude oil production has been stuck between 74 and 75 mbpd since early 2005.
The WEO indicates that we are likely to move much beyond that and that any growth in liquids must come from other sources.
(How much of that energy will be net energy is another story....)

The second graph reveals how reliant our past and current oil production is on giant fields which have been producing for 40 years or more (let's not quibble over a few months... 2010 will be here soon enough and we're talking decades).
Meanwhile the Santos Basin off the coast of Brazil has been touted as the largest discovery of oil & gas in over 20 years. Some analysts believe that there may be up to 31 billion barrels.
Even ignoring the issue of net energy, 31 billion is equal to current annual global consumption... 365 days.

[davidbfpo]

Rick and others here,

Not my subject, although I do try to follow some of this thread. The link is to an IISS conference on 'The Global Security Implications of Climate Change' http://www.iiss.org/about-us/offices...he-21-century/ You may find the linked blog of value, even if little populated.

davidbfpo

[Rick M]

Thanks, David

I will try to learn more about the IISS conference.
The blog entries were interesting, esp the Himalayan water issue.

The (glacier-fed) Athabaska River is vital for tar sands production, so there are long-term concerns on that one as well.
Water may be a limiting factor for oil shale production also.

Meanwhile, CNA did a fairly thorough analysis on CC two years ago (around 65 pgs):
http://securityandclimate.cna.org/report/

[Rick M]

An article appeared yesterday which examines media coverage of Peak Oil (including this week’s exchange in the New York Times).

The author’s central point is:
"The fact is that if the Peak Oil proponents are correct, it amounts to one of the biggest stories of our time, right up there with global warming."

As the link below indicates, some of the most progressive mainstream coverage of PO is coming from the UK.
Brits are now awakening to the brevity of oil, having gone from importers to major suppliers and now to net importers, all within 40 years, half a human lifetime.
Same with natural gas, I believe.

http://www.huffingtonpost.com/gabrie..._b_270347.html

[Rick M]

On Thursday evening the Saudi anti-terror chief (and member of the Saudi royal family) emerged relatively unscathed from an al-Qaida suicide attack at his home.

This follows increasing warnings during the summer about Yemen and the potential for a spill-over into Saudi Arabia.

Security has been tightened at major Saudi oil facilities (as indicated by this, which was posted a few hours ago):
http://uk.reuters.com/article/idUKLU...090830?sp=true

Abqaiq and Ras Tanura are the only facilities in the world that handle more than 3 million bpd (each handles about double that, more like 5-6 mbpd).

[Rick M]

This 10-page analysis is entitled “Fueling the Balance: A Defense Energy Strategy Primer” and is authored by two members of the Obama ’08 defense policy task force.

This report builds on concerns which are increasingly being expressed about the vulnerabilities which are inherent in current energy consumption patterns (both in terms of physical supply and affordability).

Although this study focuses almost exclusively on DoD consumption, many of its concerns apply to the civilian sector as well, and of course it is the productivity of the domestic economy which funds DoD and other government services.
Clearly, our reliance on petroleum is suddenly emerging as an urgent issue.

Its bibliography reflects the incorporation into this study of the recent concerns of Col. Gregory Lengyel, the Defense Science Board, Cdr. Jeffrey Eggers, and the recent CNA study.

This study points to the upcoming Quadrennial Defense Review and states that “a closing window of opportunity must not be missed…. the energy nexus…. cannot be deferred again” (p. 1).

This is a concise and highly relevant study, well worth reading.
Thanks to Lisa Wright at Congressman Roscoe Bartlett’s office for passing along the link:
http://www.brookings.edu/~/media/Fil...egy_singer.pdf

[Dayuhan]

Interesting piece of news today: new oil discovery in the Gulf of Mexico, estimated at a billion recoverable barrels. Deep, will be expensive to recover: $200 million per well, not all the wells will produce, and there's the transport infrastructure to consider. But still, with a billion recoverable barrels at, say, $70-100 each, you can afford to put $10-20 billion into production.

A billion barrels is significant, but the real significance of the find is the location, which is an impressive demonstration of what modern exploration and recovery techniques can do. The Gulf of Mexico is probably the single most explored oil-producing region on the planet. 20 years ago they were calling it "The Dead Sea"; it was considered all dried up. Clearly not so.

What we're seeing now (the 28 billion barrels off Brazil, discovered in 2007, is another example) is the beginning of the next wave of discoveries. They will be complex and expensive, but they are there.

I mentioned this in an earlier post, but it's worth repeating: most of the world's oil-producing regions have not seen systematic exploration in 20 years, often more. From the late 80s through 2002-2003 there was anb oil glut, offering little incentive to explore. From 2003-2006 the price spike was seen as just another transient spike due to instability in the Middle East. It's only in the last few years that we've seen real exploration beginning. It takes a good deal of time to produce results, both because of technical and political constraints.

Many traditional oil producing regions still aren't getting attention: Mexico, Venezuela, Indonesia, Libya and many others are still pumping from deposits discovered 30 years ago and more. In these cases National oil companies don't have the technology and government policies make investment by oil majors unattractive. Iran and Iraq have not seen significant exploration in 30 years. Even the GCC states have let exploration languish for years: given their known reserves they simply had no reason to go looking.

How much more is out there? We don't know. Probably a fair amount, and as long as oil remains expensive the next 20 years are likely to see an interesting range of technologies developing for getting more out of existing fields. Today we assume that only 20-30% of a given reserve is recoverable; that is likely to change. Today's technology is likely to look as primitive in 20 years as the technology of 20 years ago (which seemed really impressive back then) looks today.

Again, we do face major problems, but the geological problem (is there oil there) is less immediate and less vexing in many ways than the political and investment-related problem (can the oil that's there be brought to market). From the reactive perspective, the conclusion is the same either way: we need to prepare for potential shortage. From the proactive perspective, the actions needed to maintain supply are very different. This is the danger of the obsessive focus on absolute reserves: it distracts from the essential focus on confronting the political and investment-related concerns.