Energy Security

[Misifus]

If a country like Romania peaked decades ago and is down by 68%, I think we can conclude that the world has almost certainly lost an important oil producer. We can debate the time-lines and the circumstances & "ifs" in each country, but the overall trend seems pretty clear: we have a growing list of countries whose oil production is well below a prior production peak, and has been so for many years. Whether that prior peak is "the peak" remains to be seen.

RickM,

OMG! You make laugh You just won't give up! You persist in propagating the myth of Peak Oil. I have already showed you and the others here how Hubbert was full of mierda. Now that you are on the ropes you want to highlight the Romanian problem in your desperation to look legitimate.

The Romanian oil industry is in shambles, not because they have "peaked," but simply because they have mismanaged. They are as dumb as the Russians, actually dumber. Consider that Russian oil is easier for them to purchase then for them to get off of their lazy mismanaged butts and produce their own fields. Think Greece with an oil company.

Here's my suggestion to you. Get your butt on an airplane and go visit a Romanian oilfield. You will find half of the oil that the fields produce just laying on the ground there in puddles. Don't forget to take your knee-high galoshes. Sheeesh!

Now would you please quit posting on this subject so that I can go away?

[Rick M]

RickM,

The Romanian oil industry is in shambles, not because they have "peaked," but simply because they have mismanaged. They are as dumb as the Russians, actually dumber. Consider that Russian oil is easier for them to purchase then for them to get off of their lazy mismanaged butts and produce their own fields.

No-one can prove that Romania's 1977 peak will never be surpassed: miracles do happen. But do you believe that a turn-around of that scale is likely?

In James Hamilton's recent article, he provides a data appendix with some interesting historical data on American oil production.
He paired Indiana and Illinois and tracked their combined oil production, which reached a peak of almost 37,000,000 barrels in 1908 (ie. annual production). By 1936 this had fallen to around 5,000,000 barrels.
Given the length of time and the scale of the reduction, it would not have been unreasonable for people in 1936 to assume that the 1908 peak was probably permanent. But production suddenly surged in 1939 and the following year hit a new peak of 152,625,000. (It's currently around 11,000,000 per year.)

But such miraculous production turn-arounds are rare. As the years tick by with so few of them, would it not be prudent to assume that many of the apparent production peaks may indeed turn out to be permanent?

Given the vital importance of oil to us all, I really don't understand your aversion to even discussing this data & this issues which arise from it.

[Misifus]

[Rick M]

I do see potential for limited production due to political, security, and investment-related constraints. Any number of scenarios can be envisioned, all of which could result in major price spikes and significant economic dislocation. Again, the problem would not be an absence of oil, but that oil would become very expensive for some time. I don't see the idea of a "peak" being a useful way to describe this: it's more a situation where ability to increase production might be constrained, or where output might see a transient decrease, in response to factors not at all related to the geology or engineering of oilfields... factors like war, revolution, state collapse, etc, ad infinitum.

I can't of a credible PO analyst who would claim that the eventual peaking of global oil production will be due solely to geological factors.
Each factor that you have mentioned (and many more) is a very significant piece of this highly complex puzzle, and this is well understood by contemporary PO analysts.
PO thinking has evolved over the years and I think that most analysts these days place a much higher weighting on above-ground factors and less on the issue of reserves, which would be a shift from Hubbert's position in the 1940s & 50s.

Gail Tverberg would certainly be considered a PO analyst (and a thoughtful, reasonable one in my opinion), but she (like you) wonders about the usefulness of the "PO" term in describing the current situation:
"Some people would describe the phenomenon as "peak oil," but I am not sure that this is the best description of the issue."
http://www.theoildrum.com/node/8551#more

The PO debate has become highly charged over the years, which is not helpful. While PO analysts are characterized as alarmist doomers, cultists, failed predictors, psychotics, etc, we continue to consume 1,000 barrels per second of a fabulous resource which is finite. This is clearly unsustainable, yet people spend their time squabbling over who said what, and name-calling (not you, as I've said before).
The importance of the 'geological' argument is in highlighting the eventual inevitability of PO, but I believe other factors will play a much larger role, especially in the near term. Either way, surely we need to pause to examine the data and trends (re. discoveries, production & consumption) and consider the needs of our grandkids.

Returning to the examples of Romania and Indiana/Illinois (etc.), as the years progress it matters less & less what set of factors caused the peak & decline decades ago.
Unless there is a rare & miraculous turn-around, the result is pretty much the same.

[Rick M]

Caption under photo was:

"Sorry, guys, I assumed that we had plenty of fuel.
I won't make that mistake again...."

[Misifus]

Caption under photo was:

"Sorry, guys, I assumed that we had plenty of fuel.
I won't make that mistake again...."

Nice try, but the Enterprise, starship or aircraft carrier, does not run on fossil fuel

[Rick M]

Fatih Birol is Chief Economist for the International Energy Agency, which will issue its annual World Energy Outlook in 36 hours or so.
Mr. Birol's interview today with EurActiv ended with this exchange:

You’ve said in the past that you believe that the world has already passed its ‘peak oil’ moment – the point at which the amount of oil already used outweighs the amount left in the ground. How far past that moment do you think we are, and what are the economic and environmental consequences?

[Birol:] We have said that we have seen the peak of commercial oil. There is still uncommercial oil and other forms coming and we will definitely need oil for our mobility systems for cars, trucks and jets and for our economic daily life to continue.

However, one day we will run out of oil - not tomorrow or the day after but one day we will. Given its strategic importance for our societies, it is important to prepare our societies for that very day and try to find alternatives to oil especially in transportation systems. These could be electric cars, hybrid cars, natural gas, or biofuels-driven cars, or putting more emphasis on mass transportation.

When we talk about CO2 emissions, people think directly about coal. But if you look at the numbers, the contribution of oil to global CO2 emissions is only a few percentage points lower than coal. Therefore it needs to be taken closely into consideration.

We’re not running out of oil today or tomorrow but we need to prepare ourselves for the day that we do. We have to leave oil before it leaves us.

I do not recall Birol saying that we have peaked in "commercial oil" before. There has been some discussion about the IEA conceding that we may have peaked in conventional oil, but I do not recall previous statements about "commercial oil."

[Ken White]

Man taketh away but the Lord giveth...

LINK.

Not to dispute the gist of Mr. Birol's comment but to me he did not say the world was past its peak oil moment in that quote; he did say it will come some day and we should prudently plan for that. No argument from me on that.

I earlier today ran across the Argentine find and I suspect there are others to come around the world. I also suspect that the world energy picture is about to undergo a major transformation and many people will try for various reasons to forestall the changes that are coming.

Long way of saying I see no absolutes in this but do see a lot of vested interests trying to skew the picture...

That last item doesn't apply to anyone here, just to the world at large.

[Rick M]

Birol... did not say the world was past its peak oil moment in that quote; he did say it will come some day and we should prudently plan for that. No argument from me on that.

No argument from me, either.
But there are others who view the PO issue as alarmist nonsense. There is little likelihood of prudent planning so long as that view prevails: indeed, there seems to be some antagonism to even discussing the matter, which is surely a prerequisite to planning.

The situation is similar re. the issue of carbon emissions & climate change.

Tomorrow's WEO should be interesting:
http://www.youtube.com/watch?v=M8NWnA64A_4

[Rick M]

I was very skeptical of claims that some earthquakes, however minor, may have been caused by nearby hydraulic fracturing.

This recent article provides some interesting information, enough to make a person wonder whether there might be a causal connection in some cases:

http://www.minyanville.com/businessm...7856?page=full

[sappeur]

Good evening. Just endeavoring to post my first thought to this blog and try it out. I'll keep it short. I believe it is not wise for DoD to bifrucate its energy policy between OSD-Installations, Energy and Environment and OSD-Operational Energy.

[Bill Moore]

Ken and Rick,

The arguments I have heard presented by the so called experts is we're past peak oil for the easy/cheap oil. Now the majority of oil will require advanced methods to recover, deep water drilling, special techniques to extract the oil, etc. Regardless of whether we hit peak oil or not, the rise of the rest and the corresponding greater demand for oil and other natural products will no doubt move us much more rapidly to peak oil and beyond. At least there "seems" to be a fair amount of investing in alternative energy forms, but unless I'm missing it there seems to be an under investment in energy efficiency (vehicles MPG rating, smart grids, new materials for tranferring energy, etc.).

[Rick M]

Welcome, Sappeur
I don't know enough about the inner workings of DoD to say whether the current structure is wise or not, but Andy Bochman & Dan Nolan run a website which is very thorough in examining DoD's approach to energy use (in terms of departmental organization, mandates, budgets, implementation, etc... just in case you aren't aware of it):
http://www.dodenergy.blogspot.com/

Bill,
I agree.
Again, DoD is a leader in both research and in application when it comes to energy conservation. At the 2010 ASPO conference, RADM Larry Rice said that he felt DoD was doing its part (and mentioned several efforts by USN) and that the civilian sector needs to get serious/on board as well.

[Misifus]

http://www.economist.com/node/14548839

[slapout9]

Link to the Rocky Mountain Institues newest Energy project called Reinventing Fire, pretty interesting stuff.

http://rmi.org/reinventingfire

[Dayuhan]

Not for lack of oil...

http://www.economist.com/node/14548839

I'm curious on this... is there tangible evidence of significant currently unknown reserves in Mexico? I've always suspected that there's a lot of potential, simply because PEMEX is so thoroughly inept (they obviously haven't caught up with the "reserves must be replaced" mantra) and so little effective exploration has been done, but I've no hard evidence to back that suspicion up. I'm sure your opinion is better informed than mine... what do you think?

[Misifus]

I'm curious on this... is there tangible evidence of significant currently unknown reserves in Mexico? I've always suspected that there's a lot of potential, simply because PEMEX is so thoroughly inept (they obviously haven't caught up with the "reserves must be replaced" mantra) and so little effective exploration has been done, but I've no hard evidence to back that suspicion up. I'm sure your opinion is better informed than mine... what do you think?

Yes, I have seen the data there. Mexico is under-explored. There are many structures there that have been seen with seismic surveys, but no wells have been drilled to test these structures for oil. This is in shallow waters. Furthermore, they really haven't even looked in deep waters.

[Rick M]

Misifus,
Thanks for the Economist post... I had not seen it.
The article mentions the work of David Shields... are you familiar with his analyses of Mexican oil production?

[Misifus]

Misifus,
Thanks for the Economist post... I had not seen it.
The article mentions the work of David Shields... are you familiar with his analyses of Mexican oil production?

No. I've worked enough with Pemex in their centers in Cd. Carmen, Villahermosa, and D.F. to draw my own conclusions.

[Rick M]

The UK's Energy Institute describes itself as:

"the professional body for the energy industry, delivering good practice and professionalism across the depth and breadth of the sector....
A Royal Chartered membership organisation, the EI supports around 15,000 individuals and 250 companies across 100 countries, serving society with independence, professionalism and a wealth of expertise in energy matters."

Virtually everyone views EI and its membership as highly credible.

Please note the topic of their conference in 3 weeks, as well as the involvement of PO analysts like Skrebowski and Bentley, etc:
http://www.energyinst.org/events/view/591

EI is taking a rather open-ended approach to the PO issue. Their conference will focus on the practical aspect which ultimately matters, "Have we reached the end of cheap oil and if so what effect will this have?"
Whatever combination of factors prevents us from having a steady flow of affordable oil, the fact remains that (unless we find an adequate replacement very quickly) we may face risks on an unprecedented scale.