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We were wrong on peak oil.
11-17-2012, 03:52 PM, (This post was last modified: 11-17-2012, 04:43 PM by macfadden.)
We were wrong on peak oil.
You gotta love it ;D

Quote:The facts have changed, now we must change too. For the past 10 years an unlikely coalition of geologists, oil drillers, bankers, military strategists and environmentalists has been warning that peak oil – the decline of global supplies – is just around the corner. We had some strong reasons for doing so: production had slowed, the price had risen sharply, depletion was widespread and appeared to be escalating. The first of the great resource crunches seemed about to strike.

Among environmentalists it was never clear, even to ourselves, whether or not we wanted it to happen. It had the potential both to shock the world into economic transformation, averting future catastrophes, and to generate catastrophes of its own, including a shift into even more damaging technologies, such as biofuels and petrol made from coal. Even so, peak oil was a powerful lever. Governments, businesses and voters who seemed impervious to the moral case for cutting the use of fossil fuels might, we hoped, respond to the economic case.

Some of us made vague predictions, others were more specific. In all cases we were wrong. In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995. In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010. In 2003 the geophysicist Kenneth Deffeyes said he was "99% confident" that peak oil would occur in 2004. In 2004, the Texas tycoon T Boone Pickens predicted that "never again will we pump more than 82m barrels" per day of liquid fuels. (Average daily supply in May 2012 was 91m.) In 2005 the investment banker Matthew Simmons maintained that "Saudi Arabia … cannot materially grow its oil production". (Since then its output has risen from 9m barrels a day to 10m, and it has another 1.5m in spare capacity.)

Peak oil hasn't happened, and it's unlikely to happen for a very long time.

A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun. The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Maugeri's analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is "the largest potential addition to the world's oil supply capacity since the 1980s". The investments required to make this boom happen depend on a long-term price of $70 a barrel – the current cost of Brent crude is $95. Money is now flooding into new oil: a trillion dollars has been spent in the past two years; a record $600bn is lined up for 2012.

The country in which production is likely to rise most is Iraq, into which multinational companies are now sinking their money, and their claws. But the bigger surprise is that the other great boom is likely to happen in the US. Hubbert's peak, the famous bell-shaped graph depicting the rise and fall of American oil, is set to become Hubbert's Rollercoaster.

Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn't flow naturally.

There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 in January.

So this is where we are. The automatic correction – resource depletion destroying the machine that was driving it – that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.

We have confused threats to the living planet with threats to industrial civilisation. They are not, in the first instance, the same thing. Industry and consumer capitalism, powered by abundant oil supplies, are more resilient than many of the natural systems they threaten. The great profusion of life in the past – fossilised in the form of flammable carbon – now jeopardises the great profusion of life in the present.

There is enough oil in the ground to deep-fry the lot of us, and no obvious means to prevail upon governments and industry to leave it in the ground. Twenty years of efforts to prevent climate breakdown through moral persuasion have failed, with the collapse of the multilateral process at Rio de Janeiro last month. The world's most powerful nation is again becoming an oil state, and if the political transformation of its northern neighbour is anything to go by, the results will not be pretty.

Peak Oil Myth - Scam Busted by Noe van Hulst Youtube

What Peak Oil? by John Aziz of Azizonomics 16 June 2012,

Myth: The World is Running Out of Oil (Peak Oil) Youtube

The US's new secret weapon Youtube
11-19-2012, 06:32 AM,
RE: We were wrong on peak oil.
Peak Oil? Maybe Not.

Quote:The Coming Oil Boom

Published: August 9, 2012 NY Times

NEW YORK — Forget America’s fiscal cliff, Europe’s currency troubles or the emerging-markets slowdown. The most important story in the global economy today may well be some good news that isn’t yet making as many headlines — the coming surge in oil production around the world.

Until very recently, our collective assumption was that oil was running out. That was partly a matter of what seemed like geological common sense. It took millions of years for the earth to crush plankton into fossil fuels; it is logical to think that it would take millions of years to create more. The rise of the emerging markets, with their energy-hungry billions, was a further reason it seemed obvious we would have less oil and gas in 2020 than we do today.

Obvious — but wrong. Thanks in part to technologies like horizontal drilling and hydraulic fracking, we are entering a new age of abundant oil. As the energy expert Leonardo Maugeri contends in a recent report published by the Belfer Center at the John F. Kennedy School of Government at Harvard, “contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption.”

Mr. Maugeri, a research fellow at the Belfer Center and a former oil industry executive, bases that assertion on a field-by-field analysis of most of the major oil exploration and development projects in the world. He concludes that “by 2020, the world’s oil production capacity could be more than 110 million barrels per day, an increase of almost 20 percent.” Four countries will lead the coming oil boom: Iraq, the United States, Canada and Brazil.

Much of the “new” oil is coming on-stream thanks to a technology revolution that has put hard-to-extract deposits within reach: Canada’s oil sands, the United States’ shale oil, Brazil’s presalt oil.

“The extraction technologies are not new,” Mr. Maugeri explains in the report, “but the combination of technologies used to exploit shale and tight oils has evolved. The technology can also be used to reopen and recover more oil from conventional, established oilfields.”

Mr. Maugeri thinks the tipping point will be 2015. Until then, the oil market will be “highly volatile” and “prone to extreme movements in opposite directions.” But after 2015, Mr. Maugeri predicts a “glut of oil,” which could lead to a fall, or even a “collapse,” in prices.

At a time when the global meme is of America’s inevitable economic decline, the surge in oil supply capacity is an important contrarian indicator. Mr. Maugeri calculates that the United States “could conceivably produce up to 65 percent of its oil consumption needs domestically.” That national energy boom is already providing a powerful economic stimulus in some parts of the country — just look at North Dakota. Crucially, at a time when one of the biggest social and political problems in the United States is the disappearance of well-paid blue-collar work, particularly for men, oil patch jobs fill that void.

What Mr. Maugeri dubs the next oil revolution also has tremendous geopolitical implications. One way to understand the battlegrounds of our young century is through the pipelines that flow beneath them. The coming surge in oil production, particularly from North America, will transform that geopolitical equation.
11-21-2012, 01:10 PM, (This post was last modified: 11-21-2012, 01:19 PM by macfadden.)
RE: We were wrong on peak oil.
Oil, Oil Everywhere
Leonardo Maugeri 07.24.06

We're not running out of oil--but high oil prices are needed to find it, says the head of strategy and development at Italian energy company, Eni.

There is an alarmist theory that the world is running out of oil. Quite the contrary. There is plenty of oil in the ground, and high prices are just what's needed to tap the earth's vast reserves.

For two decades low prices have discouraged the search for new resources in areas with the largest deposits of crude. Over time this has thinned out global production capacity and virtually eliminated the safety margin needed to provide a cushion against sudden crises. Today spare capacity is a mere 2% of world consumption, holding the price of oil hostage to every kind of political or climatic crisis, and fueling rumors and speculation.

Starting in the mid-1980s and continuing until the early years of the new century, the price of oil mostly oscillated between $18 and $20 a barrel, held down by oversupply. In 1986 and 1998--99 prices dipped below $10. In this environment oil producers, terrified by the specter of overproduction, held back on the search for new oilfields. Some countries limited production to already active fields.

The scope of this phenomenon is extraordinary but barely understood outside the industry. During the last 25 years more than 70% of exploration has taken place in the United States and Canada, mature areas that probably hold only 3% of the world's reserves of crude. The Middle East, on the other hand, has been the scene of only 3% of global exploration, even though it harbors 70% of the earth's reserves. In the Persian Gulf, holding 65% of the region's reserves, fewer than 100 exploration wells were drilled between 1995 and 2004. During the same period, 15,700 such wells were drilled in the U.S.

Looking back over a longer time frame, you find the same lopsided ratios. In Saudi Arabia only 300 oil and gas wells (including developmental wells) have ever been drilled, as opposed to several hundred thousand in the U.S. The contrast is even more striking with respect to Iran and Iraq, and Russia is still paying the price for the technological backwardness and poor management of its fields during the Soviet era. Even today it is scarcely expanding its productive base, although its recent groping toward Western capital and expertise may change that picture ( click here to see story).

Venezuela could double its production of crude in ten years with the help of foreign capital and technology, but political considerations drive it in the opposite direction, and its production is falling.

In fact, the vast majority of prime producing countries get their oil from old fields, most of which have been in production since their discovery in the first half of the last century. And in many instances they are operated with 50- and 60-year-old technology and equipment.

There is little that the small or large Western oil companies can do to alter this situation. They control only 8% of global reserves of crude, while more than 90% of the world's reserves are in countries that do not allow foreign access and are unwilling or unable to develop new reserves on their own.

While the industrialized world is concerned with future energy supply security and price, the producing countries have been driven by concern over future demand. Will consumption of crude hold up in the future, they ask, or is the current scenario only a bubble, bound to explode as it has done so many times before?

Only relatively high prices for oil can provide a painful but effective antidote for the current situation. The process has already begun, but the cure will take time. Thanks to high prices, investment in oil exploration and development has exploded during the last two years worldwide. A plausible forecast is that by the end of the decade the daily demand for oil will have expanded by 7 to 8 million barrels. If global production continues at present rates, it could grow by 12 to 15 million barrels per day in that period. In other words, there is more than enough oil in the ground.

Leonardo Maugeri head of Strategy and Development at Italian oil and natural gas company Eni; Author, The Age of Oil: The Mythology, History and Future of the World's Most Controversial Resource.

Interview with Leonardo Maugeri; former oil industry executive and Senior Fellow for the Belfer Center's Geopolitics of Energy Project.

The Next Oil Revolution 10/19/2012

Harvard global oil expert Leonardo Maugeri discredits peak oil and explains the coming influx of shale. Dr. Leonardo wrote the breakthrough report, "OIL: The Next Revolution." Maugeri discusses data that shows a coming shale boom.

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