Studying Peak Oil - ASPO International Workshops on Oil Depletion |
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Annual International Workshops on Oil Depletion are held in Europe by
the Association for the Study of Peak Oil and Gas, ASPO. The most
recent, and by far the largest and most prominent, was hosted in Berlin
by the German Geological Survey, BGR in May 2004. Papers and
presentations are available at www.PeakOil.net. Oil depletion experts
from the US, Europe, Russia and the Middle East gather to discuss the
growing body of evidence that world oil production will reach a peak
then decline relatively sharply within a decade or at most two.
At the first workshop APSO also released the first edition of its
"Statistical Review of World Oil and Gas", a nation-by-nation
evaluation of reserves and production rates, based on the most reliable
technical data available. The ASPO data differ substantially from those
published in oil trade journals and by the IEA which have very serious
commercial and political biases and inconsistencies. Evaluation of
non-conventional oil is now included in the current predictions shown
in figure 3a. Non-conventional oil includes heavy oil (which needs to
be heated to flow adequately), oil from deep water (>500 metres) and
from polar regions and condensates from natural gas. These sources will
in part offset the rate of decline of conventional oil after the "Big
Rollover"
Presenters at the International Oil Depletion Workshops included
Matthew Simmons, a prominent energy-sector investment banker from
Houston who advises President Bush. Simmons said, "I have studied the
depletion issue intensely for too long now to have any remaining doubts
as to the severity of the issue. But I am still amazed at the limited
knowledge that exists, even in the U.S. or within our major oil and gas
company’s senior management about this topic and its dire
consequences", (Simmons (2002))
"Most serious scientists worry that the world oil
supplies will peak [and then decline]. Peaking of oil can not be
predicted accurately, but the event will occur. Peaking turns out to
only be clear through a ’rear-view mirror’. By then, an alternative or
solution is too late. My analysis leads me to worry that peaking is at
hand, not years away. If I am right, the unforeseen consequences are
devastating. The facts are too serious to ignore.” (Simmons (2003))
Dr Samsam Bakhtiari, of the National Iranian Oil Company, provided a
pessimistic view of future oil supply decline and of its effects: -
"Seen from a Middle Eastern
perspective, the present global oil situation can be summarised within
five major and inescapable trends:
* The world's super giant and giant oil fields are dying off;
* There are no more major frontier regions left to explore besides the earth's poles;
* Production of
non-conventional crude oil has been initiated at great costs --- in
Venezuela's Orinoco belt, Canada's Athabasca tar sands and ultra-deep
waters;
* Even OPEC's oil production has its limits;
* No major primary
energy rival can possibly take over from oil and gas in the medium
term.
Adding up these five trends, one can envision a
global oil crunch at the horizon --- most probably within the present
decade....." "...It would take a number of miracles to thwart such a
rational scenario. Now, a single miracle is always a possibility, but a
series of simultaneous miracles is not --- for there are limits even to
God Almighty's mercifulness". (Samsam Bakhtiari, 2002)
Samsam Bakhtiari has also since published simulations of the World Oil
Production Capacity (Wocap) model which suggest that global oil
production will peak at a point near 81 million barrels per day well
before the end of the decade, likely by 2006-07 (Samsam Bakhtiari
(2004)). Dr Samsam Bakhtiari visited Australia recently, presenting
seminars in four cities. He also briefed the WA Cabinet about oil
depletion risks on August 9th 2004.
A paper in December 2002 by Exxon Mobil Vice President, Harry J.
Longwell (Longwell (2002)) contains the world oil discovery decline
curve (Fig 4) which agrees well with those published in Aleklett and
Campbell (2002). Declining past oil and gas discovery success rates
foreshadow future production decline rates, and acknowledgment of this
by a major oil company is very significant. There is an
often-overlooked truism that oil production can only follow oil
discoveries. Longwell also showed a peak of global gas discovery in
about 1970 with a sharp decline in natural gas discovery rates since
then.
Figure 4: World oil discovery rates have been declining since the early
1960s as now acknowledged by Exxon Mobil. (Longwell (2002))
More recently, there has been an increasing level of coverage of oil
depletion issues in the scientific and general media. Some examples
follow.
New Scientist ran a cover story (2nd August 2003).
“Crisis looms – When demand for oil outstrips supply”
“... we could be in for a big shock: we are going to
run out of cheap oil. That's not oil per se, but we're approaching the
point when global demand for oil will outstrip supply. It is not clear
when we will reach this tipping point. The economists say we have about
35 years before oil production peaks, while geologists think we have
only a decade. At present the geologists' argument is in the ascendant,
having won the backing of some investment banks and oil consultants.”
Oil & Gas Journal editorial (18th August 2003)
“...can a peak in production be
anything other than imminent? That question breeds others. How rapidly
will production decline after the peak?"
The Guardian (2nd December 2003) "Bottom of the barrel – The world is
running out of oil - so why do politicians refuse to talk about it?"
“Every generation has its taboo, and
ours is this: that the resource upon which our lives have been built is
running out. We don't talk about it because we cannot imagine it. This
is a civilisation in denial.”
Richard Miller, BP Exploration UK, wrote in a letter to the Oil &
Gas Journal (12th January 2004) sharply refuting a statement from an
extreme economic optimist (Maugeri, O&GJ, Dec 15th 2003) who had
claimed “.. just as the Stone Age did not end because of the scarcity
of stones, the Oil Age will not end because of the scarcity of oil.
Rather oil will inevitably be surpassed in convenience by a new source
of energy in the future”.
Miller stated:
“This is the classical economist's
view: something will turn up, when the price of oil is high enough,
because something always does. But there isn't anything conceivable
that could replace conventional oil, in the same quantities or energy
densities, at any meaningful price. We can't mine the oil sands in
sufficient quantity because there isn't enough water to process them.
We can't grow bio-fuels because there would be no land left to grow
food. Solar, hydro, wind, and geothermal don't yield enough energy,
hydrogen (from water) takes more energy to make than it can yield, and
nuclear fission and fusion are presently off most political agenda. The
oil consumed directly and indirectly by the average American is
equivalent to the work output of 135 slaves, unfed, unclothed,
unhoused, and paid $2 a day between them. When oil gets too expensive,
surviving Americans will still obtain energy from alternative sources,
but in much smaller amounts and at much higher prices. Westerners will
have to live with only a handful of slaves."
Christian Science Monitor, 29th January 2004
“Has Global Oil Production Peaked?...
The question now making the rounds in energy circles: Has production
already peaked?"
West Australian, March 10th 2004 "End looms for the days of cheap oil"
"Oil companies are now raising their
doubts. They voice it softly, but clearly they are starting to feel if
they don't raise any doubts, the public will be hostile to them".
This well-researched long article was taken from an international
newswire service. The fact that the West Australian was probably the
only newspaper in Australia which ran the story may illustrate the
reality of the community taboo against discussing oil depletion.
As production outside the Persian Gulf declines, the balance of oil
power will shift more and more towards OPEC and the Middle East.
Substantial short-term disruptions, for instance from a revolution in
Saudi Arabia (Bauquis (2004)) and large market-force pressures in the
medium-term are quite possible. The permanent decline phase will start
once the Middle East production starts falling as forecast, possibly in
about 2010 or so. Physical constraints in addition to market forces and
geopolitical factors will then limit oil availability. Rising world
demand, for instance from China and India, will add enormous pressures
to the oil market. The past oil shocks have been predicted to be mere
ripples compared to the changes which will probably occur in the next
decade or two.
These reliable forecasts of declining domestic production and uncertain
world supplies indicate that Australia is very vulnerable to "Oil
Shocks" in the short term (2 months), medium term (2 years) and long
term (within 1-2 decades).
The declines in Australian and world oil availability are likely to be
much faster than any alternatives can be brought on stream in
significant volume and much faster than the necessary structural and
efficiency improvements can be made, unless extraordinary measures are
taken very soon. |
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