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Reporter questions oil news
John Whiteside, Blue Bayou
For ordinary non-oil-industry insiders (like me) it can be tough to make sense of news about world oil supplies and prices. We’ve seen gas prices go up and then drop, we hear about “peak oil,” and then we see a wide range of reports from industry players. The other day this article from an industry publication came my way, with some interesting comments from Saudi Aramco, the Saudi national oil company:
The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.
Abdallah S. Jum’ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco, said the world has the potential of 4.5 trillion barrels in reserves _ enough to power the globe at current levels of consumption for another 140 years.
…Sounds like good news, but it leaves me with lots of questions. So, since I am sitting here in Houston, a world center of oil industry knowledge, I thought I’d raise them here in hopes that this will be one of those topics where some of you out there reading can share some knowledge.
1. As I understand it, oil gets harder to extract from the earth as there is less of it. The idea of peak oil isn’t that we’re about to run out of oil, but that the cost of getting what’s left will go up – and with it, of course, its price. So how does this 18% figure relate to any of that?
2. Where does the 18% figure come from? Is it real?
3. Where is that oil? If that other 82% of the world’s oil is still there, but it’s in political treacherous places (like the Middle East), won’t it still leave us coping with the problem of relying on a resource that’s in a part of the world that poses political challenges?
4. I know that all oil is not created equal: some is easier to get and to refine that other. (Not long ago the SO and I were at the Museum of Science and he pointed out, with lots of explanation, an exhibit there illustrating this.) So depending on the nature of that oil, aren’t there significant cost implications?
5. Even if it’s all there, accessible, and usable, it seems to me that we’re still left with the non-trivial issue of climate change if we use it all as we have been in the past.
6. 18% sounds like we haven’t used much, but with demand growing – particularly from fast-growing economies of China and Asian countries – it’s not that small of a number. If we’ve used up nearly a fifth of it since we started burning it, and demand is growing, it seems wise to be thinking hard about what we will need to do when we’re at the other end of the depletion curve.
So, readers, what should we make of this? Good news? Bad news? No news?
(15 Sep 2006)
$15 oil? The cornucopians are fighting back, European Tribune
Jerome a Paris, European Tribune
Recently, there has been a quite visible backlash in the media against peak oil theory. If the past few months had seen the sudden emergence of the concept in the mainstream press, the recent fall in oil prices (from a high of $78 to about $62 today in just a few weeks) has brought back the cornucopians in force.
The announcement of a significant find in the deep offshore area of the Gulf of Mexico was hyped (see quotes below); now there appears to be a concerted effort by big industry players, starting with Saudi Arabia and ExxonMobil, to downplay concerns.
(16 Sep 2006)
Also posted at Daily Kos. This is number 31 in Jerome’s series: “Countdown to $100 oil”
Pragmatists and Heretics – Peak Oil and Runaway Global Warming
Bill Henderson, Peace, Earth and Justice News
There is no more wicked a heresy today than to suggest that the organic growth of our present economy should be interfered with, should be replaced by a much more planned and regulated economy. Is there a fool who would endanger millions of people’s lives arguing for the impossible?
In his observations of the recent ASPO conference in Italy Rob Hopkins describes a division between pragmatists and heretics:
I was struck deeply by the two distinct paradigms visible within the attendees, which I have to say, in my naivity, I was rather shocked by.
“The first paradigm we might call the ‘Business-as-Usual-at-all-costs’ paradigm. This argues that peak oil is simply a problem of energy supply, and that provided we can resolve that, everything will be fine. The second paradigm we might call the ‘Cultural Evolution’ paradigm’, which argues that we cannot solve the problems peak oil presents with the same thinking that got us into the mess in the first place. I’d say that at ASPO 5, the balance was about 5:1 in favour of the former.
Another example of these differing ‘paradigms’ (and I know many hate the word) separates those who see ethanol in hybrids as the solution to the end of cheap energy from those who see no solution within a world designed for cars. And even more broadly, from those who think there is no long term sustainable solution within a growth economy, especially one addicted to car/sprawl growth.
…Only radical intervention and innovation can get us out of the car economy quickly in order to avoid war or severe economic dislocation. Even if we continue to follow the Bush Admin down the resource war path and seize enough oil, America cannot in all probability survive the collapse of the global economy, and even then our present ‘luxury’ use of diminishing cheap oil would be starkly evil as millions starve globally.
If you agree that the peak oil problem is not solvable within our present economy with dire consequences then heretical options need to be considered…
(15 Sep 2006)
Pennsylvania conference touts alternatives to oil
Jim Hook, Public Opinion (Pennsylvania)
Outside in the parking lot, Bob Swaim entertained people by riding around on his eclectic collection of bicycles.
Inside in the lecture hall, sustainable energy was an almost desperate alternative to the disturbing decline of the world’s oil resources.
Tom Whipple of the Association for the study of Peak Oil and Gas told those attending the “life after cheap oil” seminar at Wilson College that the world is expected to reach peak oil between 2008 and 2010. Peak oil is the point after which oil production enters a terminal decline.
The exact date doesn’t matter, he said.
“It’s happening in our lifetime,” Whipple said. “It’s not the end of world oil. It’s just not going to be cheap or affordable. There will always be oil. Three-dollar (a gallon) gasoline didn’t slow us in the slightest. At some point most of us are not going to be driving around in cars.”
The U.S. imports 66 percent of its oil, and oil imports could be halted for any of number of reasons, according to Whipple. Just a 5 percent cut in the 1970s led to gas lines and rationing.
“The rate of decline will be very important,” he said. “If it goes like a brick, you have a problem.”
Peter Koch, a retired stained glass maker, asked Whipple, “Is there a silver bullet?”
“That’s what this conference is all about,” Whipple said. “If there is a a silver bullet: We waste so much energy; the quickest thing we can do is conserve, conserve, conserve.”
(Sep 2006)
IEA’s Mandil: Instability drops, oil follows suit (transcript)
Alan Kohler, ABC (Australia)
…ALAN KOHLER: To what extent is the future demand for oil going to be controlled or dampened by substitution, do you think?
CLAUDE MANDIL: Substitution is not an easy task, because you need liquid fuels. The only possible substitution today is biofuels, and certainly not to a large extent. I think that the main way of slowering oil consumption is more energy efficiency – less SUVs, more efficient engines, etc – which is what we are seeing right now in most markets.
ALAN KOHLER: On the question of supply, the big issue that we have been talking about in Australia recently is peak oil, because one of the adherents of peak oil theories was in Australia talking about it so there has been a lot of discussion about that subject here. Do you believe that oil production is about to peak in global terms?
CLAUDE MANDIL: There is no ‘yes’ or ‘no’ answer. Depends what you are talking of. If you are talking of the global supply of liquid fuels worldwide, including non conventional fuels – that means including the fuel you get from tar sands, from ultra deep waters, from the Arctic Sea, from coal to liquids, from gas to liquids – we really think that we are extremely far from any peak. I don’t see any peak in the foreseeable future. Now, if you are thinking of conventional oil accessible to international oil companies, which are very often barred from the Middle East, which do not seem to be welcome in Russia right now. That means in conventional oil in conventional areas – North Sea, North America, Australia, Africa. Maybe we will witness peak oil in the coming decades, I don’t know exactly when. But I think it’s more a problem for international oil companies than for oil supply globally.
(17 Sep 2006)
Related: Capacity limits to curb oil price fall
