More Evidence That Peak Oil Is A Reality Just Around the Corner
In the last month or so there have been two very public indications that not even the Middle East’s oil states are counting on endless supplies of the black gold which in the space of one or two generations moved their economies from the 18th century to modernity.
First came a puff piece on Saudi Aramco from CBS’ 60 Minutes. Although there was a lot of information in Lesley Stahl’s report, it leaned a bit too heavy on the promise of technology to greatly impact the output of Saudi Arabia’s aging oil fields. There is no doubt that the Kingdom is the promised land of oil – and will remain so – but their oil is getting harder to find and harder to extract than it once was. The massive nature of Saudi fields such as Ghawar camoflage this, but the fact is there have been no major discoveries there since the 1960s and they jump through more hoops per barrel today to get it out of the ground than they once did. Very telling was this from the end of the piece:
Rather than oil pushers, the Saudis see themselves as good global citizens who are trying to save the world from a catastrophic oil shortage. But, as Al-Naimi told 60 Minutes, the kingdom is hedging its bets.
He told Stahl the kingdom is doing research on solar energy, as sunshine is more than abundant in Saudi Arabia.
And he says it won’t hurt their oil industry, but supplement it. “Our vision is that we will be exporters of gigawatts of electricity. We will be exporting both: barrels of oil and gigawatts of power.”
And so, he says, the kingdom will still be in the energy business long after the sun sets on the age of oil.
Also hedging their bets are the Saudi’s neighbors in the United Arab Emirates. Abu Dhabi, home of man-made islands and other ostentatious displays of oil wealth will host the Second World Future Energy Summit next week. World business and political leaders will be in attendance for what the New York Times describes as the Davos of alternative energy. The entire Times story is worth a read. I found interesting some of the statements being made by Arab oil men other than Ali Al-Naimi, the above mentioned Saudi Oil Minister.
So even as President-elect Barack Obama talks about promoting green jobs as America’s route out of recession, gulf states, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy.
They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.
“Abu Dhabi is an oil-exporting country, and we want to become an energy-exporting country, and to do that we need to excel at the newer forms of energy,” said Khaled Awad, a director of Masdar, a futuristic zero-carbon city and a research park that has an affiliation with the Massachusetts Institute of Technology, that is rising from the desert on the outskirts of Abu Dhabi.
Notice how the language is changing? Yesterday they were oil exporters – now they are trying to remake themselves as “energy exporters.” Even the Arabs are saying that the future is in alternative energy. If oil supplies were endless these guys wouldn’t be wasting their billions on alternatives.
“If oil supplies were endless these guys wouldn’t be wasting their billions on alternatives.”
Yes they would, if they were concerned about the CO2 emissions restrictions.
One of the main lessons of 2008, and perhaps the biggest lesson, suggests that national and global economic models based on the DOCTRINE OF PERPETUAL GROWTH cannot be sustained.
Perpetual growth of the population and the global economy on Planet Over-Birth-Earth, a HOST ORGANISM of FINITE space and FINITE resources, is NOT progress. It is cancer! It is full blown cancer!
Where there is no insight, the people perish.
The top story of the year is that global crude oil production peaked in 2008.
The media, governments, world leaders, and public should focus on this issue.
Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.
Then in August and September of 2008 while oil prices were still very high, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of “Oil Watch Monthly,” December 2008, page 1) http://www.peakoil.nl/wp-content/uploads/2008/12/2008_december_oilwatch_monthly.pdf.
Peak Oil is now.
Credit for accurate Peak Oil predictions (within a few years) goes to the following (projected year for peak given in parentheses):
* Association for the Study of Peak Oil (2007)
* Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008)
* Tony Eriksen, Oil stock analyst; Samuel Foucher, oil analyst; and Stuart Staniford, Physicist [Wikipedia Oil Megaprojects] (2008)
* Matthew Simmons, Energy investment banker, (2007)
* T. Boone Pickens, Oil and gas investor (2007)
* U.S. Army Corps of Engineers (2005)
* Kenneth S. Deffeyes, Princeton professor and retired shell geologist (2005)
* Sam Sam Bakhtiari, Retired Iranian National Oil Company geologist (2005)
* Chris Skrebowski, Editor of “Petroleum Review” (2010)
* Sadad Al Husseini, former head of production and exploration, Saudi Aramco (2008)
* Energy Watch Group in Germany (2006)
* Fredrik Robelius, Oil analyst and author of “Giant Oil Fields” (2008 to 2018)
Oil production will now begin to decline terminally.
Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand. OPEC cuts could exacerbate the gap between supply and demand and drive prices even higher.
Independent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”
“By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame.”
With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
Documented here:
http://www.peakoilassociates.com/POAnalysis.html
http://survivingpeakoil.blogspot.com/