Putting Peak Oil to Rest

Humans are naturally attracted to doom and catastrophe stories. Predictions of doom and apocalypse come and fail routinely. But one perennially failed prediction of doom that never quite goes away, is Peak Oil DOOM! More from fool.com:

One of the problems with peak oil predictions is that they have so little imagination. They don't consider the impact of new drilling techniques that open new oil fields to massive amounts of production. A decade ago, shale drilling wasn't a well-known technique outside of the industry, much less a major contributor to our oil production. Today, Kodiak Oil & Gas (NYSE: KOG ) , Continental Resources, and Whiting Petroleum have turned the desolate North Dakota prairie into an energy bonanza by unlocking shale oil there.

Offshore drilling has also grown by leaps and bounds. Drillers like SeaDrill (NYSE: SDRL ) , Transocean (NYSE: RIG ) , and Noble are building ultra-deepwater rigs as fast as they can to unlock new fields off the coasts of Brazil, Angola, and other parts of the world that were once out of our reach.

Then there are Canadian oil sands, which hold the second-largest oil reserves in the world, behind Saudi Arabia. These developments alone unlocked enough oil to delay peak oil for a few more years at least.

Evidence that these innovations have turned peak oil on its head is undeniable. According to Bentek Energy, North American oil production will top a 40-year-old peak by 2016. The U.S. Energy Information Administration predicts that by 2020, U.S. oil production alone will grow another 20% to 6.7 million barrels per day. Even OPEC's surplus oil production capacity is expected to increase from 2.55 million barrels per day in 2011 to 3.92 million barrels per day by the end of 2013.

It's hard to see how oil production could fall in the short term. And longer-term peak oil theorists have even more problems on their hands. _Fool.com

Total US recoverable natural gas resources (includes conventional, unconventional in lower 48, Alaska and offshore) totals 4.244 quadrillion cubic feet according to the Institute for Energy Research:

• Enough natural gas to meet US electricity demand for 575 years at current fuel demand for generation levels
• Enough natural gas to fuel homes heated by natural gas in the United States for 857 years
• More natural gas than Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan combined.

The US has Three Times the Proven Reserves of Saudi Arabia in Shale Oil. Global oil shale resources exceed 10 trillion barrels. More than 1.8 trillion barrels of oil are trapped in shale in Federal lands in the western United States in the states of Colorado, Utah and Wyoming, of which 800 billion is considered recoverable–three times the proven reserves of Saudi Arabia. The INTEK assessment for EIA found 23.9 billion barrels of technically recoverable shale oil resources in the onshore Lower 48 States. The Southern California Monterey/Santos play is the largest shale oil formation estimated to hold 15.4 billion barrels or 64 percent of the total shale oil resources followed by Bakken and Eagle Ford with approximately 3.6 billion barrels and 3.4 billion barrels of oil, respectively.

New Jobs Creation is driven by Low Cost Energy. A report from PricewaterhouseCoopers for the National Association of Manufacturers says low cost domestic natural gas will save $11 billion per year in US manufacturing costs over the next ten years and create more than a million new jobs. This new low cost energy reality is expected to increase disposable income by $2,000 per year per household in the United States. The growth in domestic natural gas production from unconventional sources (shale gas) has decoupled domestic North American gas prices from world oil and LNG prices, reversed the once expected US dependence on imported LNG, and driven down prices to near record low levels from long term reliable domestic energy supply.

New Jobs Creation Leads to Growing Worries over Skills Shortages and Fierce Competition for Talent.Just as the shale growth phenomenon takes off, the market face a looming new reality that more than 10,000 baby boomers per day will begin retiring in the US alone. The same fate or worse affects other global markets. The good news is the demand for experience, skills and technology expertise among workers in the oil and gas industry means that many will be coaxed into working longer or auctioning off their expertise to refill their retirement accounts left shattered by the great global recession. The demand for replacement skills is expected to swell the ranks of engineering, technology developers, science, math and software training programs and universities to meet that need. But the bigger need will be welders, plumbers, electricians, skilled machinists and other crafts to install and operate the equipment and support the technology deployment around the world. _GWPF

So you see from the above that the real peak problem is peak manpower skills. The growing shortages of trained, skilled workers is the greatest limitation that an abundant future faces.