Tuesday, July 10, 2007

IEA Essentially Confirms Peak Oil

Earlier this year that General Accounting Office of Congress announced that a majority of the world's petroleum geologists believe we are at or very close to an oil peak. Today the Internation Energy Agency, probably the biggest and most influential international energy research body announced that peak oil will almost certainly happen by 2012, and that without Iraq's oil (how much you wanna bet that Iraq will be peacefully pumping oil anytime soon), the head of the IEA announced the world will be petroleum crisis by 2015. Some links are here at Energy Bulletin (the original report is paywalled) http://www.energybulletin.net/31865.html.

Essentially, they are predicting oil shortages within five years. And since production capacity decline is 2-3% per year in the field, but more like 5% in actuality (as more oil goes to actually getting the oil out of the ground and nations reserve more for themselves), we can expect some significant difficulties. The 1970s oil shocks, complete with gas lines, recession and people freezing to death in their houses came from a shortfall of about 5% total - whereas we're expecting, worldwide, a 3-5% reduction in capacity annually.

Shocking news - guess what, we're using up the last of the cheap oil right now! If peak oil is a new concept to you, do some research. An excellent beginning is Gail Tverberg's very clear material on peak oil, including the oil quiz : http://www.energybulletin.net/31847.html and her explanation of the limits of alternatives : http://www.energybulletin.net/28051.html. You might also look at Matthew Simmons' (George Bush's former Energy Czar and head of Simmons and Assoc. investment firm), who is presently predicting that refinery capacity shortages will cause gas lines this summer or next. http://www.energybulletin.net/31847.html

Peak oil is really no longer a debate - the question is when, and how do we respond. And even when doesn't matter as much as we think - as long as we still dreamed there was hope that it was 40 years from now, we had an excuse not to get to work. But the difference between peak oil in 2005, 2010 or 2015 is insufficient. The US Department of Energy's Hirsch Report analyzed that we needed a minimum of 20 years *before* the peak to make a comfortable transition.

Peak oil is here. It is a real part of the everyday discourse now, not a marginal position. And it is about to be a real, everyday part of our lives.

Sharon

20 comments:

Correne said...

I think I have to do some reading on peak oil. I love your blog and I have learned so much, but this peak oil stuff confuses me. You say that we only have until 2010 or 2015, but I have read in LOCAL newspapers that there is enough oil in the Alberta oil sands alone to supply the ENTIRE WORLD's oil needs for the next 25 years. Obviously, the demand for oil is increasing each year, so it probably won't last 25 years, but it's sure not going to run out by 2015. HELP!

jewishfarmer said...

Correne, the problem is that the Alberta tar sands are counted as real oil we can get at, when in fact, only a very small percentage of it is likely to be extractable, due to shortages of natural gas, water and the simply enormous costs of getting oil out of the tar sands. The reserves in Alberta are one of the creative accounting techniques used by the oil industry.

And yes, the IEA, one of the most reputable bodies in the energy industry, knows that the Alberta tar sands are there. Their estimates *include* the best case scenarios we can expect to extract in Canada. So, I think you do need to do more research - because the IEA is talking about all sources of oil running out before 2015.

Sharon

Anonymous said...

Correne - There is no alternative energy source, tar sands, oil shale, or otherwise, which can or will make up for the decline of oil.

Here is an explanation about tar sans in particular:
http://resourceinsights.blogspot.com/
2004/10/tar-baby-oil-sands-and-peak-oil.html

Here's a gentle primer for you: http://gailtheactuary.wordpress.com/
2007/06/19/peak-oil-overview-june-2007/

and a no-holes barred one: http://www.lifeaftertheoilcrash.net/
Get educated - you will need it!

Unknown said...

Sharon,

You statement:
"The US Department of Energy's Hirsch Report analyzed that we needed a minimum of 20 years "after" the peak to make a comfortable transition."

Don't you mean "before"?

jewishfarmer said...

Oops, yes, David, I definitely did mean before!! Thanks for the correction.

Anonymous said...

Time to take our foot off the accelerator. Wouldn't it be great if the world could find the brake pedal, stop and look around to see the true lay of the land - you know like that cliff just ahead of us?

I think it is going to take actual gasoline shortages for Americans to really wake up for this even if this is not directly tied to peak oil. It is more of a refinery capacity issue, but the wake up call won't happen until there are visible consequences that hurt. [Yes, I recognize refinery capacity is not completely independent of peak oil.] Kind of like what the 2005 hurricane season did to make people start paying attention to the world's climate.

Richard

David said...

Hey Sharon:

This is just so disheartening... I don't mean the news about peak oil being closer or more real than we may have thought (although that is pretty bad news); but the horrible thing is that here in Powell River, BC, we are deperately fighting off the removal of 847 acres of agricultural land to be converted into a luxury gated housing development and private airport for corporate jets and for the ultra-wealthy to fly up to their 4000+ sq. ft. homes. This is what we've come to: selling off usable agricultural land in the city for a ridiculous project like this, right at the moment in time when the realities of climate change & peak oil should be hitting home with our elected leaders. Unfortunately, our City officials are the ones pushing this criminal waste of public money, under the banner of jobs and taxes. We had a public information meeting here, chaired by members of the Agricultural Land Commission, a provincial body which is aupposed to protect farmland from development. Many people spoke very passionately about the need to keep more farmland available for future use, esp. given peak oil, climate change, & the fact that we are effectively an island community (2 ferry rides away from Vancouver). And now we wait to hear back from the commission. If they let this development go through, we are going to be feeling such regret in a few years, when we realize the trade we made: land for asphalt.

Anonymous said...

no such thing as peak oil, we are not in jeapardy of running out of oil. btw, i am a moderate liberal, hate gwb, hate the war and all that crap, but we are not running out of oil folks. do some research and don't believe all that you read.

Hanley Tucks said...

"Peak oil is really no longer a debate - the question is when, and how do we respond."

It never was a debate, the question only ever was "when". It was and still is divided between those who say, "no worries, we'll see it coming, and Science! will save us" and those who say, "oh shit." That is, everyone agreed we were tied up on the train tracks, but people disagreed - and still will - about whether we've time to struggle from our bonds before we get hit by the oncoming train.

Sharon, you must speak precisely about this issue. "the IEA is talking about all sources of oil running out before 2015." No, they are speaking about oil running short before 2015, absent Iraqi production.

Running short and running out are very different things. Going back to your post about rationing tells us why; if we're short, we can still have a good society by using what we have wisely, while if we're out we can't.

Correne, regarding the tar sands, there's an interesting article here talking about some of the technical difficulties of it. Setting aside the technical and pollution problems, the basic point is that there's a difference between "reserves" and "production."

Suppose that you have a well on an aquifer, there are 100 million gallons of water there - that's your "reserves". But suppose that you just have a ten gallon bucket, and a rope to lower it an fill it - you can't get more than ten gallons a minute out of the well - that's your "production."

If you have 10,000 people who want to draw from that well, and they all need 10 gallons each, then 10 gallons a minute is not enough to give them water each day. The water reserves are more than enough to give water to everyone, but the water production isn't enough, some people will die of thirst, or else the water will have to be rationed out.

It's the same with oil. Just because we find somewhere with a lot stored up doesn't mean we can get it out fast. In extracting the Alberta oil, we run into these technical difficulties. There are physical limits to how fast we can extract it. Even the company taking the oil hopes for at best a million barrels of oil a day by 2015. Sounds a lot, but the world uses 84 million barrels a day now, and the USA uses 21 million, and demand for oil is going up by 2.2% a year - or one million barrels. Whereas production is flat or declining.

It's a bit like if you have a job which pays all your bills - say, $500 a week for wages, then $450 for bills. Then one year your bills go up to $480 a week, but your wages stayed at $500. Then next year the bills are $495, and your wages still $500. Then bills are $510, and wages still $500. Woops.

The difference is that we can go into debt for money; but we can't go into debt with a physical resource.

Anonymous said...

To Anonymous (comment 8),
If you're going to make these statements in such a glib fashion, please add some references or links to substantiate your comments. Anyone can make the statement "There is no such thing as Peak Oil", but the overwhelming evidence points to the contrary. Sounds like denial to me!

Anonymous said...

I think the "no such think as 'peak oil'" comment comes from the mistaken belief that it means we have run out and there is no more. Sometimes those discussing it don't make it clear that peak oil represents a peak of production. Sometimes when we talk among those of us who already understand this, we forget to reinforce that basic point or sometimes we mess up our works and get it wrong outright. The reality of peak oil comes down to two issues: (1) do you belief the earth is not making any more (significant) quantities at present and (2) if it isn't, then it is a finite resource which means as some point production will decrease - i.e. peak oil production. Given point #2, we can discuss ad nauseum when that will occur and its implications, but if you accept point #1 (and reject the long ago discredited abiotic theory of oil creation), then peak oil will occur.

Richard

Anonymous said...

Great post, Sharon. Continue to enjoy the blog.

jewishfarmer said...

Kiashu, thanks for correcting my typo - I did indeed mean to say "running short" rather than "running out."

As for our dubious anonymous - again, the GAO agrees that the majority of petroleum engineers worldwide believe we are at or near peak. The IEA believes we are at or near peak. The US Army believes we are at or near peak. The US department of Energy believes we may be at or near peak. So perhaps the question becomes - what research are you doing, and where are you getting it from?

It is true, we're not running *out* of oil - but the days of oil being cheap to extract are over - period. And that means that the price of everything that is petroleum dependent is going to go up forever (that would be everything pretty much), and our capacity to meet needs is going to go down.

Sharon

Jeff Clark said...

Sharon, I just finished reading a book called "The Black Swan." The essential argument in the book, if I understand it correctly, is that the public is never prepared to handle so-called "black swan" events, outliers that outside the day to day patterns. I think that's one reason peak oil is so difficult for many people to understand.

One of my greatest fears is that peak oil, climate change, peak food, peak water, and peak economy are all happening at the same time. They could create a self-reinforcing spiral that ruins my prediction of a soft landing for the many changes ahead of us all.

Anonymous said...

Dear Jewish Farmer

Can you please provide links to:

"the GAO agrees that the majority of petroleum engineers worldwide believe we are at or near peak. The IEA believes we are at or near peak. The US Army believes we are at or near peak. The US department of Energy believes we may be at or near peak."

Thank you all for the great discussion thread!

Anonymous said...

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Anonymous said...

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