I'd missed this Guardian article from a few days ago until today. It's about the various estimates from various sources as to when oil production will reach its peak and begin to decline.
It seems a group of international bankers hired someone they thought would be an objective expert to report to them on the subject.
They called Colin Campbell, who helped to found the London-based Oil Depletion Analysis Centre because he is an industry man through and through, has no financial agenda and has spent most of a lifetime on the front line of oil exploration on three continents. He was chief geologist for Amoco, a vice-president of Fina, and has worked for BP, Texaco, Shell, ChevronTexaco and Exxon in a dozen different countries.
I guess they felt that the conventional wisdom on the subject might be suspect.
The US Geological Survey (USGS) states that reserves in 2000 (its latest figures) of recoverable oil were about three trillion barrels and that peak production will not come for about 30 years. The International Energy Agency (IEA) believes that oil will peak between "2013 and 2037" and Saudi Arabia, Kuwait, Iraq and Iran, four countries with much of the world's known reserves, report little if any depletion of reserves. Meanwhile, the oil companies - which do not make public estimates of their own "peak oil" - say there is no shortage of oil and gas for the long term. "The world holds enough proved reserves for 40 years of supply and at least 60 years of gas supply at current consumption rates," said BP this week.
...
But the business of estimating oil reserves is contentious and political. According to Campbell, companies seldom report their true findings for commercial reasons, and governments - which own 90% of the reserves - often lie. Most official figures, he says, are grossly unreliable: "Estimating reserves is a scientific business. There is a range of uncertainty but it is not impossible to get a good idea of what a field contains. Reporting [reserves], however, is a political act."According to Campbell and other oil industry sources, the two most widely used estimates of world oil reserves, drawn up by the Oil and Gas Journal and the BP Statistical Review, both rely on reserve estimates provided to them by governments and industry and do not question their accuracy.
Companies, says Campbell, "under-report their new discoveries to comply with strict US stock exchange rules, but then revise them upwards over time", partly to boost their share prices with "good news" results. "I do not think that I ever told the truth about the size of a prospect. That was not the game we were in," he says. "As we were competing for funds with other subsidiaries around the world, we had to exaggerate."
Campbell's opinion is just a bit more pessimistic than the official position.
Campbell reckons global peak production of conventional oil - the kind associated with gushing oil wells - is approaching fast, perhaps even next year. His calculations are based on historical and present production data, published reserves and discoveries of companies and governments, estimates of reserves lodged with the US Securities and Exchange Commission, speeches by oil chiefs and a deep knowledge of how the industry works."About 944bn barrels of oil has so far been extracted, some 764bn remains extractable in known fields, or reserves, and a further 142bn of reserves are classed as 'yet-to-find', meaning what oil is expected to be discovered. If this is so, then the overall oil peak arrives next year," he says.
It's tempting to dismiss Campbell as just one man whose opinion is contested by so many industry and government reports. Could all those other people
... [Campbell] and other oil depletion analysts and petroleum geologists, most of whom have been in the industry for years, accuse the US of using questionable statistical probability models to calculate global reserves and Opec countries of drastically revising upwards their reserves in the 1980s."The estimates for the Opec countries were systematically exaggerated in the late 1980s to win a greater slice of the allocation cake. Middle East official reserves jumped 43% in just three years despite no new major finds," he says.
The article goes into a little detail about the significance of this, but that part isn't really news. Mahigan put together a detailed post on this subject early this month which featured another "lone voice" whose predictions are more pessimistic than the official sources. The short version of the impact peak oil could have on you and me is summed up in a quote in the Guardian from one anonymous American analyst:
Just kiss your lifestyle goodbye.
As the article points out, conventional wisdom has at least progressed to the point where Hubbert's Peak is no longer a matter of "if" but "when." Now recall this story from early March in which yet another "lone voice" suggested that Saudi Arabia's production may have already peaked. Put all these lone voices together and it starts to look like a crowd.
Getting nervous yet?
This site explores the various positions currently taken on the peak oil issue. It's an interesting debate. The books they mention are well worth reading (C.J. Campbell is among the names that comes up again and again).
-J
Been reading about this for a while.
There's a lot of regular analysis over at The Oil Drum http://theoildrum.blogspot.com/ - indeed, there's an entire net ring on peak oil.
Oil: it's in use everywhere. Plastics, pesticides, fuel, asphault, freaking food products...
If oil gets very expensive, as it will, what will that do to global trade? Won't local economies rule once again?
Should we continue to pave over our best farmland? Won't we be needing that LOCAL food soon enough, lest we pay high prices for basic staples?
Should we keep designing suburban environments based upon the premise of everyone owning a car?
And on, and on, and on...
We have to - NOW - start redesigning how we do things in Canada. You can't just turn a key and move over to a new energy source. We should be treating this like a prelude to war: start preparing for it now. Instead we're just sleepwalking into oblivion.
As for America: Oil junkies.
Isn't it incredible how our society can scale itself up quickly to do immense acts of violence, but takes forever to do what is really necessary for our health and survival?
Nervous? About peak oil? Me?
Um, know any fairly inexpensive farmland for sale? Anyone still make horse carriages? Hell, anyone selling a horse? When are the best times to plant corn, beans, etc?
Ah well. All good things (?) as they say.
Campbell, IMO, has really tried not to be chicken little on this but can't help be blunt. He thinks we'll be at peak by the end of the year and from what I'm seeing this is not out of the question, if we haven't hit peak already.
The problem is that those of us who have taken the time to research the issue know the deal. And we see that major governmental and economic players know too - but they are not telling the people. WE have to tell the people.
Good job as usual pogge.
Isn't it incredible how our society can scale itself up quickly to do immense acts of violence, but takes forever to do what is really necessary for our health and survival?
There's a peace time example of what can be done: the American effort to put a man on the moon. The government provided leadership and mobilized every part of society necessary to aid in the effort and ten years later it was done.
Where peak oil is concerned, governments are either sitting on the sidelines ignoring the problem or actively minimizing it because solving it will upset the existing economic order. There's no leadership. So as Kegbot1 points out, it falls to bloggers picking up on articles in the Guardian or Rolling Stone to keep pointing this out and saying "Um, excuse me but shouldn't we be paying attention to this?"
Thanks, Kegbot1. Is there a story behind that nickname?
Nervous? No.
As you pointed out this is the prediction of one analyst which has yet the be confirmed by any other expert or organization. Quite frankly these sorts of claims have been made for decades. After all Jimmy Carter predicted that current fossil fuel resources would be exhausted decades ago, and there were analysts saying the samething at the time.
The problem is that these predictions are based on estimates of current proven reserves. I think there is really no reason to think that these reserves are going to begin to falter for another 50 years. A few hours drive north of Edmonton the oil sands are begining to be developed at a rapid pace. Estimates have reserves in the oil sands being as substantial as that which exist within Saudi Arabia.
Furthermore, rising oil prices are going to spur increasing development and the ultimate defeat of some environmental objections. There will be drilling in ANWAR, there will be offshore drilling in BC. People paying more at the pump will be increasingly indifferent to where the resource comes from, only that they are paying too much.
Some have also noted that the industry has been somewhat lax in searching for new reserves in recent years as there exists alot of existing reserves to tap. As current reserves dwindle there will likely be a rush of exploration. I think its a fairly reliable bet that reserves will be found in more remote locations such as the Arcticand various offshore locations that will further prolong the availability of oil.
These developments may be relfected in a higher cost of production, but certaintly as the demand for oil rises it becomes economical to produce to produce oil from more difficult to exploit locations. Eventually the cost of implementing alternative engeries will match or be less than exploiting more difficult oil resources and will be phased into place. Its not really a crisis that's looming, its simply an evolution which will be technologically driven.
Fifty years ago computers for the most part filled up the entirity of a room and used vaccum cleaner parts. Today, you can place on your lap that can do the most complex calculations and direct you to information available on the internet located all about the world. This was at the time perhaps only possible in the most vivid imaginations of science fiction writers.
So the preachers of gloom and doom are again trotting out the "we'll run out of resources" line of thinking that every time in the past has proved itself false. I find the entire environmentalist outlook on these sort of questions quite frankly disturbingly backward. It tends to place some sort of angery nature spirit characterization on the planet, and if we don't all repent and change our ways we're doomed.
I tend to think that whatever challenges happen in the future, they'll be met in the same way they have in the past through the genious of human creativity. The ability to adept and survive in new situations has always been man's claim to dominion over the planet, the enterprising spirit that lead from the development of agriculture onwards has lead to the constant advancement of our lifestyle. The idea that reserves are static is simply fallacious, they're based on current knowledge while that knowledge itself is fluid and subject to continued correction.
Nor is fear an appropriate response to a situation that may occur 50 years into the future. Human ingenuity will overcome such triffles. Lacking any coberation and with the fact that new reserves are still being discovered, some expanded and others continually exploited for the foreseeable future the conclusion that oil is about to disappear is a difficult claim to prove.
However, claims that increased industrialization of India and China will lead to a much higher oil price than North Americans were previously used too are fairly sound.
Pogge,
Thanks. I'd forgotten the example of the moon race... though that was tied into competition with Russia and the arms race as I recall.
Chris,
Well, there's a lot more than just one analyst saying this now. There's a variance as to when peak oil is reached, of course.
Keep in mind that this is a peak. No one is arguing more won't be found. They are arguing that it is unlikely that we will find sufficient quantities sufficiently fast to offset increasing demand.
There's no doubt that rising oil prices make oil sands production viable, but that oil's been counted in the peak oil calcs, as I recall. And note the high price requirement. Oil is everywhere. When it stays expensive, everything becomes so. This is a problem.
A lot of so-called environmentalist claims of us being close to to resource bust in the past weren't that at all. There's what was said, then there's what was perceived. There was hyperbole as well, of course, but, in general, the argument has been that we just don't know our resource limits. In the 70s, it was often pointed out that we only knew for sure of sufficient oil to really last x years (was it seven or nine, I don't recall), yet we were living as if that fact wasn't hanging in front of us.
Converting out of using oil is not likely to be an easy endeavor, and optimism doesn't make oil deposits show up. Alternative sources are not clear. The 'hydrogen economy' idea is really an electrical economy, which is still reliant to a significant degree on fossil fuels.
Check out http://theoildrum.blogspot.com/ . It gets into all this quite deeply, and addresses issue you've raised, I do believe.
I think an issue which really jumps out from one of the articles is the degree to which North America in particular has gone for roads over rails--which is not an issue in Europe and most of Asia. If there's any kind of contraction at all, then railroads and railbeds become crucial, both for longhaul and communting. And it's true that they can run on anything from wood on up (A nuclear-powered train isn't beyond question)
In the Canadian setting, I see this hitting some cities worse than others. Calgary, for example, is based on incredibly low density and massive sprawl. Passenger rail is atrophied in Western Canada--how long would it take to return?
I guess the more basic question is, though, even absent a collapse, what happens when growth ceases or plateaus for a long period?
So the preachers of gloom and doom are again trotting out the "we'll run out of resources" line of thinking that every time in the past has proved itself false. I find the entire environmentalist outlook on these sort of questions quite frankly disturbingly backward. It tends to place some sort of angery nature spirit characterization on the planet, and if we don't all repent and change our ways we're doomed.
I'm not sure that's what pogge is saying at all. The assumption is that high oil prices seem to be here to stay, and that peak oil is coming at some point in the relatively near future.
If that's the case, we (ie Canada) need to start applying some of that "genious of human creativity" NOW in order to avoid severe economic consequences, rather than simply having faith that it'll all magically work itself out in the end.
We know this is coming, sooner or later. Why should we wait until the last possible moment to prepare?
According to my research, we've probably already hit peak oil or will by 2007 at the outside. I'm looking at getting rid of my car and going to a public trans lifestyle. That's a choice I can make because I live in a city with an excellent (if aging) public transit system. Most people don't.
Scott,
I keep saying to anyone who will listen: This is an opportunity, not a disaster!
I keep saying to anyone who will listen: This is an opportunity, not a disaster!
Mark,
I agree - this is a tremendous opportunity for anyone with enough foresight to start investing *NOW* in alternative engery solutions. It's an ideal time for governments to start putting money in to R&D for renewable energies.
It's only a disaster if everyone does nothing...