Information AboutPeak Oil |
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As first expressed in Hubbert Peak Theory , peak oil is the point or timeframe at which the maximum global Petroleum production rate is reached. After this timeframe, the rate of production will enter terminal decline. According to the Hubbert model, the production rate will follow a roughly symmetrical bell-shaped curve. Some observers such as Kenneth S. Deffeyes , Matthew Simmons , and James Howard Kunstler believe that because of the high Dependence of most modern industrial transport, agricultural and industrial systems on inexpensive oil, the post-peak production decline and possible resulting Severe Price Increases will have negative implications for the Global Economy . Predictions as to what exactly these negative effects will be vary greatly. More optimistic outlooks, delaying the peak of production to the 2020s or 2030s and assuming major investments in alternatives occur before the crisis, show the price at first escalate and then retreat as other types of fuel sources are used as transport fuels and fuel substitution in general occurs. More dire predictions which operate on the thesis that the peak will occur shortly or has already occurred predict a global depression and even the collapse of industrial global civilization as the various feedback mechanisms of the global market cause a disastrous chain reaction. The shortfall will cause Demand Destruction which may be Mitigated with planned conservation measures and using alternatives if implemented 20 years before the peak. in 1956.]] TIMING The only reliable way to identify the timing of peak oil will be in retrospect. M. King Hubbert , who devised the peak theory, predicted in 1974 that peak oil would occur in 1995 at 12 gigabarrels per year "if current trends continue". Colin Campbell of the Association For The Study Of Peak Oil And Gas (ASPO) has suggested that the global production of conventional oil peaked in the spring of 2004 albeit at a rate of 23 gigabarrels per year, not Hubbert's 13 gigabarrels per year. During 2004, approximately 24 billion barrels of conventional oil was produced out of the total of 30 billion barrels of oil; the remaining 6 billion barrels coming from Heavy Oil and Tar Sands , deep water oil fields, and natural gas liquids (see adjacent ASPO graph). In 2005, the ASPO revised its prediction for the peak in world oil production, again, from both conventional and non-conventional sources, to the year 2010. Another peak oil proponent Kenneth S. Deffeyes predicted in his book ''Beyond Oil - The View From Hubbert's Peak'' that global oil production would hit a peak on November 25th, 2005 (Deffeyes has since revised his claim, and now argues that world oil production peaked on December 16 2005 ). Texas oilman T. Boone Pickens has stated that worldwide conventional oil production will top out at 84 MB/day Related peaks The peak of world oilfield ''discoveries'' occurred in 1965. SUPPLY and the Former Soviet Union ]] Peak oil is concerned with the production flow of oil measured as the quantity extracted over time. Recoverable reserves are important only in that they must exist before any oil can be extracted and delivered to the market. Reserves See Also: Oil reserves Conventionally reservoired crude oil resources comprise all crude oil that is technically producible from reservoirs through a well bore using any primary, secondary, improved, enhanced, or tertiary method. Not included are liquids from mined deposits (tar sands; oil shales) or created liquids (gas-to-liquids; coal-to-liquids). Oil reserves are classified into categories - proven, probable and possible. Proven reserves are claimed to be "Reasonably Certain" to be producible using current technology at current prices and are intended to be 90% certain of containing the amount specified or more. The "Probable Reserves" category has an intended probability of 50% and the "Possible Reserves" an intended probability of 10%. Some care must be taken with these categories, as the majority of reserves have not been subject to outside audit or examination. Quantifying reserves In forecasting the date of peak oil — and in testing the validity of Hubbert's theory — one difficulty is the strong opacity surrounding the oil reserves classified as 'proven' (see above). This was best exemplified by the scandal surrounding the 'evaporation' of 20% of Shell's reserves. How Shell blew a hole in a 100-year reputation , '' has argued that oil companies have an interest in making oil look more rare than it is in order to justify higher prices (Armed Madhouse). Unconventional sources See Also: Heavy crude oil Tar sands Oil shale DEMAND Transportation See Also: Energy conservation#Transportation sector Population See Also: Population growth Because of World Population growth, oil production Per Capita peaked in the 1970s. The world’s population in 2030 is expected to double from 1980 and be much more industrialized and oil-dependent than it was in 1980http://www.census.gov/ipc/www/idb/worldpop.html. Some predictions suggest that worldwide oil production in the year 2030 will have declined to the same level as it was in 1980, in which case worldwide demand for oil will significantly outpace its worldwide production. Some physicists maintain that the non-sustainability of oil production per capita was not addressed due to the political correctness implications of suggesting population control. One factor that may ameliorate this effect is the rapid decline of population growth rate since the 1970s. In 1970, the population growth rate was 2.1%. By 2006, it had declined to 1.1%. Meanwhile, oil production has continued to grow strongly. From 2000 to 2005, human population only grew by 6.3% whereas global oil production increased by 8.2% [http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2006/STAGING/local_assets/downloads/pdf/table_of_world_oil_production_2006.pdf . Supplies of contends that to achieve a Sustainable Economy and avert Disaster , the United States must reduce its population by at least one-third, and world population will have to be reduced by two-thirds. Current U.S. Population of more than 300 million as well as World Population exceeding 6.6 billion are, according to Pfeiffer, unsustainable. Eating Fossil Fuels Industrialization See Also: Industrialization Developing countries As countries develop, industry, rapid urbanization and higher living standards drive up energy use markedly. The energy supply to drive industrialization mostly comes from oil. For example, thriving economies such as China and India are quickly becoming large consumers of oil. China has seen oil consumption grow by 8% yearly since 2002http://www.eia.doe.gov/emeu/international/oilconsumption.html, currently imports roughly half its oil, and is expected to double its oil consumption by 2025 to 14.2 mb/d. India's oil imports are expected to more than triple to some 5 million barrels a day by 2020.20 Cars and trucks will cause almost 75% of the increase in oil consumption by India and China between 2001 and 2025.21 As more countries develop, the demand for oil will increase further. MITIGATION See Also: Mitigation of peak oil Hirsch report According to the Hirsch Report prepared for the U.S. Department of Energy in 2005, a global decline in oil production would have serious social and economic implications without due preparation. The effects of peak oil can be mitigated through conservation and finding alternatives 20 years or more before the peak. Because mitigation can reduce the consumption of traditional Petroleum sources, it can also affect the timing of peak oil and the shape of the Hubbert Curve . CURRENT EVENTS Peak oil production—has it happened already? As of July of 2007, analysts still disagree on whether peak production capacity has been reached. The IEA projects non- OPEC production estimates for 2007 and 2008 to remain largely unchanged from July 2007, at 50.0 mb/d and 51.0 mb/d, respectively. Growth is projected to recede thereafter as the slate of verifiable investment projects diminishes. The report points to only a small amount of supply growth from OPEC producers, with 70% of the increase coming from Saudi Arabia , the UAE and Angola as security and investment issues continue to impinge on oil exports from Iraq, Nigeria and Venezuela. Chuck Masters of the USGS says: Resource nationalism In Russia, Vladimir Putin's government has pressured Royal Dutch Shell to hand over control of one major project on Sakhalin Island, to Russia's Gazprom in December. Such moves strain the confidence of international oil companies in forming partnerships with Russia. Oil price ]] An oil price chart can be seen here . US economy versus US government In order to be profitable, many alternatives to oil require the price of oil to remain above some level. So investors in these alternatives must gamble with the limited data on oil reserves available. This imperfect information can lead to a Market Failure caused by a Move By Nature ; for instance see Hotelling's Rule for Non-renewable Resources . Even with perfect information the price of oil correlates with spare capacity and spare capacity does not warn of a peak: ALTERNATIVE VIEWS Not all non-'peakists' believe there will be endless abundance of oil. CERA , for example, instead believes that global production will eventually follow an “undulating plateau” for one or more decades before declining slowly. Dr. R.C. Vierbuchen, Vice President, Caspian/Middle East Region, ExxonMobil Exploration Co. believes :"A peak in petroleum liquids production, resulting solely from resource limitations, is unlikely in the next 25 years. Predictions of an imminent peak on the methodology developed by Shell Oil Co. geologist M. King Hubbert in 1956 do not adequately account for resource growth from application of new technology, knowledge and capability, which combine to increase recovery, open new producing areas and lower economic thresholds." :"Supplies from OPEC and non-OPEC countries, gas-related liquids and unconventional resources are growing. Furthermore, nations with the largest remaining resources produce under long-term restraints not envisioned in Hubbert’s method. The ultimate peak in petroleum production may result from factors other than resource limitations." The U.S. Energy Information Administration projects world consumption of oil to increase to 98.3 million barrels a day in 2015 and 118 million barrels a day in 2030.
The EIA estimates of future oil supply are countered by Sadad Al Husseini, retired VP Exploration of Aramco, who calls it a 'dangerous over-estimate'. Campbell argues that the 2000 USGS estimates is methodologically flawed study that has done incalculable damage by misleading international agencies and governments. SEE ALSO REFERENCES EXTERNAL LINKS Web sites
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