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Top Ten Reasons Why Peak Oil Arrives Sooner Rather Than Later
For Clear Creek Watershed ForumSteve Andrews
ASPO-USAMarch 21, 2007
This isn’t sustainable…
USA
Mexico
North Sea
FSU
Saudi Arabia
0
10
20
30
40
50
60
70
80
90
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
mill
ion
b/d
0
10
20
30
40
50
60
70
80
90
mill
ion
b/d
Eight fold increase
Source: Dr. Peter Wells, Neftex (11/05)
We need a commonframe of reference
• 85 mmb/day – world’s daily dose• 21 mmb/day – US• 14 mmb/day – US transport sector
• 9.5 mmb/day – US gasoline
There are two camps, two views about the peak oil “theory”
Fields peak, then regions, then nations…
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Pro
d.
(b/d
)
1975 1980 1985 1990 1995 2000 2005 2010 Year
Prudhoe Bay extraction history
The first peak: U.S. oil extraction 1900 - 2050
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
GONE: 2/3-3/4 OF U.S. OIL HAS
BEEN USED. IT’S HISTORY.
2005DOWN
THE OIL “OFF
RAMP”
PEAK 1970
Eventually continents peak…
Source: PFC Energy (2004 slides)
! ! !
Timing: add regions and the world peaks
Source: PFC Energy
Source: ASPO-USA; created by OilPoster.org
Key nations past peak• 1. Russia*• 3. USA• 4. Iran*• 5. Mexico• 6. China (this year??)• 7. Norway• 9. Venezuela*• 11. Kuwait*• 15. UK• 17. Libya* (3.3 > 1.7)• 20. Indonesia
• Oman (0.96 > 0.78)• Argentina• Egypt• Columbia• Australia• Syria• Yemen• Denmark• Congo• #39 Gabon
– (0.37 > 0.23)
Primary source: BP Statistical Review of World Energy—2005 data
You can see it now or you can wake up later…
1. Geologic and non-geologic factors
• M. King Hubbert (1956)—for the big picture – There are geologic limits
• Numerous other synergistic constraints against expanding production in a timely way– Timely investment– Logistics– Equipment shortages– Skilled manpower– Weather / extreme environments– Political or military conflict
2. Oil is geographically concentrated, and large producers are flagging
• 20 countries = 83% of production• Half have peaked for various
reasons– Geologic limits: US, Norway, UK,
Indonesia (China peaking soon)– Political/financial/geologic: Mexico,
Russia (now increasing; repeaks soon)– OPEC/political: Iran, Venezuela
(daydreaming of doubling)– Mixed: Iraq, Kuwait, Libya (incr.),
0
1
2
3
4
5
1930 1950 1970 1990 2010 2030 2050
Dis
co
very
Gb
0
500
1000
1500
2000
2500
3000
Pro
du
cti
on
kb
/d
UK (ASPO-Ireland)
0
5
10
15
20
25
30
35
1930 1950 1970 1990 2010 2030 2050
Dis
co
very
Gb
0
2000
4000
6000
8000
10000
12000
14000
Pro
du
cti
on
kb
/d
Note: the depletion slopes shown here could well be more gradual
Russia (ASPO-Ireland)
3. Non-OPEC to peak soon
• Everyone agreed at National Academy of Sciences peak oil workshop (Oct 20-21, 2005)– PFC Energy– ExxonMobil, Chevron– OPEC– CERA– ASPO-Ireland
• Canada, Brazil, Kazakhstan not enough
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
mill
ion
b/y
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
mill
ion
b/y
FSU
Non-OPEC/FSU
Source: Dr. Peter Wells, Neftex
Note: the depletion slopes shown here could well be more gradual
4. Most oil in the Middle East; risks abound
• Riven by religious and cultural conflict
• Cauldron for geopolitical and military conflict
• Muslim countries control 2/3 of remaining conventional oil
• Most are bitterly opposed to US policies
• Resource for expanding production is larger than the current desire/ability to do so
5. Production from non-Gulf OPEC
• Unlikely to compensate for production declines elsewhere
• Nigeria’s problems persist
• Indonesia declining• Venezuela’s spiral not
finished• Newcomer Angola not
large enough
6. Relentless depletion
• If world average decline rate is 5%, we lose 2.5 million barrels/day per year
• If true, we’ll need 20 mbd new by 2015 just to offset depletion
• Largest fields sagging Cantarell
7. National Oil Companies (NOC)s hold the cards
• Roughly 80% of the world’s oil• Some longer term thinking (e.g., oil for the
grandkids) – UAE, Kuwait• A finger in the eye – Venezuela• World energy power flex – Russia• ExxonMobil—12th rated producer, riding a
plateau• Project delays now
increasingly the norm
8. Discovery rates falling
• The big easy oil is gone (Chevron)
• Large non-OPEC finds rare – no repeat cavalry of the 1960s and 1970s
• Offshore West Africa, Caspian, Brazil and GOM are smaller, more complex, more $$ than Prudhoe, North Sea, Cantarell
• Producing 2-3 barrels for every one we find
“2005 will go down in history books as perhaps the poorest year for exploration since World War II…” World Oil magazine 8/06
9. Domestic consumption in exporting countries will play a growing role
• 2006 Russian consumption increased faster than production increased, so exports dropped (based on early reports)
• Iran, Mexico, Venezuela in worse situation• “Peak exports” probably impact before
peak/plateau production • ASPO-USA anticipates peak/plateau
production any time between now and 2015 (2020 at the very outside)
10. Unconventional petroleum resources won’t substantially impact peak
• Not all barrels are equal (“oil shale” is vastly different from tar sands and conventional oil)
• Development is expensive, technically arduous and slow – think delays and dollars
• Other issues– Timing of flow--mostly post-peak?– Rates of flow—can slow but not offset declines– Carbon/environmental footprint– Demand for power, other infrastructure– Net energy
• Oil from sands: 0.5 – 1.5 mmb/day• Gas-to-liquids: 0.4 to 0.75 mmb/day• Ethanol (corn): 0.3 to 0.4 mmb/day (% of crop?) • Coal-to-liquids: 0.1 to 0.4 mmb/day• Oil from shale: 0 to 0.1• Biodiesel 0.1?• Electricity for PIHEVs: 0 to 0.2• Hydrogen: zero (25 fueling stations today)• Efficiency: 1.0 – 2.0 mmb/day• Mode shifting: 1 to 3 mmb/day
Additional unconventional fuels by 2015 (potential peak)
Alt fuels: net energy is really important
Input Output
U. S. oil industry today: 1 to 15
Ethanol from corn: 1 to 1.3
Kerogen from marlstone;
oil from tar sands SAGD
1 to 3 +/-
Impacts and form matter
??
• Texas oil 1930: 100 to 1• US oil 1970: 30 to 1• Wind today: 18 to 1• US oil today: 15 to 1• Ethanol ( Brazil) 8 to 1• Coal to liquids, gas to liquids: 6-1 to 8-to-1 (est.)• Oil sands SAGD: 3 to 1 (mining =higher EROEI)• Oil shale: 3.5 to 2.0 to 1 (Shell’s fig.)• Ethanol from corn 1.5 to 1 (ave. gov’t figures)• Electricity from coal: 0.35 to 1• Solar (6 to 1?), nukyalur? cellulosic ethanol? H2?
Net Energy; also known as “Energy Returned on Energy Invested”
Many of these have ranges. Wind and solar vary with location. Ethanol from corn varies from irrigated to non-irrigated crops. Source: Cutler Cleveland, Boston Univ.