Peak Oil: Strangely Emotional and Oddly Overdone?
...although the peak oil debate is never really absent, its intensity does seem to be correlated with the level of oil prices. It reached its most recent peak when oil prices were very high and rising during the first half of 2008, the infamous 'annus horribilis' of excessive oil price volatility. Trainloads of articles appeared saying that this time the world was running out of oil, that prices would soon hit $200 and more, etcetera. Today, the intensity of the debate is somewhat lower, but it is still raised at nearly every energy conference or debate.The author makes some interesting points about the peak oil hysteria cultorama. When oil prices periodically rise, the peak oil fever tends to spread and rise in intensity and power of conviction. It becomes easier to jump on the bandwagon and shout from the soapbox, when every Tom, Dick, and Harry believer is crowded alongside.
...historically it is hard to dispute that, as Daniel Yergin and others have pointed out, the prediction of oil production peaking is a recurring theme, ever since the beginning of the oil age in the 1850's. Analysts have identified 1948, 1956, 1974, the early 1980's and 2007/2008 as 'peaks' in the oil peak debate.
...the definition of what's peaking or not matters a lot. Are we talking about non-OPEC supply, crude oil production or, more relevant, liquid fuels including unconventional oil (oil sands, heavy oil, shale oil), Natural Gas Liquids (NGL's), gas-to-liquids (GTL), biofuels? That makes an enormous difference....
On a related point, it is often assumed (explicitly or implicitly) that a peak in global oil production is followed by a fast and steep drop (following the shape of the famous Bell curve for an individual field) with all the undesired implications. However, it is not clear why after reaching a peak in global oil production we couldn't experience a plateau even for decades following the moment production peaked. The implications for energy policy are vastly different in that case. _European Energy Review
But cycles tend to go down as well as up, and people who bet too heavily on "peak oil" near the top of the upswing, tend to lose parts of their shirts on the downswing. High oil prices draw in new investment, new exploration, and new technologies of recovery, exploration, and substitution.
...the power of technology is often severely underestimated. The global recovery rate is now 35%, and it is well-known that only a 1%-point increase in the global recovery rate already provides 2 years of extra global oil consumption at current rates.If a person wants peak oil to be true -- if they actually want civilisations to collapse, cities to burn, and the law of the jungle to control the world once again -- they will resist all contrary arguments to their last ragged breath. But someone who is looking for the truth is likely to acknowledge that the entire peak oil extravaganza has become strangely emotional and oddly overdone.
We know that in some important fields companies are already recovering 50% or more of reservoirs, using new technologies like enhanced oil recovery (EOR) and 3D seismic ...barring new field discoveries, there is a huge upward potential in recovery rates as existing technologies get more widely adopted and new technologies are developed. Certainly when oil prices remain relatively high, there is a very strong incentive to raise recovery rates, even for oil in current reservoirs that is costly to exploit.
...On the aggregate it is hardly disputed by serious experts that whereas mankind has roughly utilized 1 trillion barrels of oil, the remaining conventional and unconventional oil resources probably are in the order of 3-4 trillion barrels. _European Energy Review
Perhaps part of the problem is the Mayan prophecy of the apocalypse, or other religious tales of armageddon or the Mahdi. A large part of the excitement is no doubt the prevalent secular religion of the day -- dieoff.orgy lefty-Luddite greenism. Or, perhaps humans are truly on the cusp of an important historical transition. Not doom from carbon hysteria or resource scarcity, perhaps, but something phenomenal all the same.
To people who are set in fossilised ways of thinking, any disruption at all -- even disruptions that lead to greater abundance, prosperity, and overall human happiness -- would be a catastrophe. The only way that such persons can portray such a monumental change would be through the lens of doom. If such doomerism penetrated high enough within a society, it could become something of a self-fulfilling prophecy, if its recommendations were ever put in force by governments and inter-governments. Now, that really would be overdone.
Labels: peak oil