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Means that about half the oil has been produced Does not mean running out of oil Does mean a continuous decline in production
When half oil produced, the flow of oil begins to fall Not like a gas tank Oil in the ground is not in a pool but in tiny droplets Droplets move slowly through the earth due to pressure At halfway point pressure drops flow decreases
1949 projected short historical oil period Triggered by 1930 U.S. discovery peak
1956 predicted 1970 as U.S. Peak Oil year Came as predicted 1969 predicted World Peak Oil year 2000 1970-80 demand decline delayed it
ASPO VIEW
Note plateau of conventional oil and U.S. Peak Heavy, deepwater, polar oil very expensive
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1930 U.S. lower 48 Oil Discovery Peak year 1970 U.S. lower 48 Oil Production Peak year Peak discovery/peak production lag time of 40 years
60 Past 50 40
Gb
60 50 40 30 20 10 0 2050
What do oil experts think Dr. Ken Deffeyes: author Hubberts Peak 2005 Dr. Colin Campbell: founder of ASPO 2010 PFC Consulting 2015
The argument is not if but when and how fast? 1 barrel of oil is found for every 5 barrels consumed.
Future Production
30 20 10 0 1930
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In 2002 Canada reserves increased from 4.8 Gb to 178 Gb Defined tar sands as conventional oil But tar sands is not oil must be mined and cooked
Jan. 12, 2004 Shell Oil reduced their reserves 20% Reduced three more times in 2004 Aug 25, 2004 Shell Oil fined $151,000,000 Feb. 3, 2005 Shell Oil reduced reserves for fifth time Feb. 2004 Russia declared all oil data a state secret
Oil companies (and countries) hold reserve data confidential Feb. 2005 G7 Meeting we need to know! Saudi Arabia Were not partners were suppliers The shocker no one knows!!! Its all guesswork
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Forcing the oil is harmful Injections may limit ultimate recovery Depletion occurs suddenly
Saudi Arabia is injecting 7 million barrels sea water daily Thats why when about half the oil is gone production must decrease This is a major concern cant predict depletion as well
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Provides 40% of our primary energy 95% of all transportation fuel is from oil Huge part of life not just gas in the car Fossil fuels are the basis of Industrial Agriculture Oil is feedstock for herbicides and pesticides With natural gas fertilizers, there are 10 calories of fossil fuel inputs for each food calorie output Raw material for many plastics Basis of 300,000 manufactured products Cheap oil makes globalization possible In U.S. average food product travels 1500 miles
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Core assumptions Our economy runs on oil oil fuels our economy We measure our material welfare (income) by the economy To paraphrase our income is based on oil consumption Economy grows when oil consumption increases
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$40-$90+ oil lasted from early 1970s mid-1980s Oil shortfall was approximately 3% North Sea, Alaska & Mexico discoveries increased supply There are no new regions to explore now
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Invention of the steam engine 1698 (Thomas Savery) First oil well 1859 Earliest major fossil fuel was coal
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First half 1.5 Billion to 2.3 Billion 150% increase Second half 2.5 billion to 6 Billion 240% increase Spurt in growth correlates with switch from coal to oil
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Slide/cliff Declining fossil fuels meet growing population From 10.4 boe/c/yr to 3.3 boe/c/yr is 4.5% decline 3 % source decline, 1.5% population growth Remember population and fuel in 2030 =~4x 1930
Source: Richard C. Duncan, Ph.D. The Olduvai Theory Terminal Decline Imminent, The Social Contract Quarterly, Spring 2007.
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GOVERNMENT VIEW
peaking will be extremely complex, involve literally trillions of dollars and require many years of intense effort.
Peakingwill cause protracted economic hardship in the United States and the world. the problem of the peaking of world conventional oil production is unlike any yet faced by modern industrial society.
Executive Summary from Peaking of World Oil Production: Impacts, Mitigation & Risk Management, Dr. Robert Hirsch, February 2005
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CONTD
Uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and decline in oil production Most studies estimate that oil production will peak sometime between now and 2040
An imminent peak and sharp decline in oil production could have severe consequences, including a worldwide recession
While the consequences of a peak would be felt globally, the United States, as the largest consumer of oil and one of the nations most heavily dependent on oil for transportation, may be particularly vulnerable
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CONTD
Uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and decline in oil production Most studies estimate that oil production will peak sometime between now and 2040
An imminent peak and sharp decline in oil production could have severe consequences, including a worldwide recession
While the consequences of a peak would be felt globally, the United States, as the largest consumer of oil and one of the nations most heavily dependent on oil for transportation, may be particularly vulnerable
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Despite technology improvements and major investments, world oil discovery has declined steadily for 40 years Experts forecast a global oil peak in 515 years Natural gas will follow a decade or so later No alternatives are clearly evident Dozens of options are being evaluated Huge investments are being made The essence of the problem There is no ready substitute Representative Roscoe Bartlett ASPO USA Nov. 2005
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