Has Peak Oil Been Reached? No!
5 Nov, 2007 12:51 pm
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Reduce text sizeThe Energy Watch Group released a report last week, stating that peak oil was reached in 2006. Scitizen sought the professional view of Dr Peter Jackson, Director of the CERA (Cambridge Energy Research Associates), whose position is that peak oil has not been reached. As well, we speak to Mr Jorg Schindler, the main author and Managing Director of Ludwig-Bölkow-Systemtechnik GmbH, about the report.
Read the Energy Watch Group report and executive summary hereOne thing that strikes me is that the report does not present the detail of the analysis. I would expect to see a tabulation of outlooks for different countries including estimates of the contribution to productive capacity from new developments and exploration. In the copy I have these critical data are missing.
Scitizen: Energy Watch Group has released a report that stated peak oil was reached in 2006; do you have a comment for Scitizen on the report?
Dr Peter Jackson: The EWG report shows that crude plus condensate production reached a plateau in 2005/2006 based on EIA data. This analysis does not consider the total liquids hydrocarbon inventory which includes crude oil, condensate, NGL's, extra heavy oils and biofuels. This does not give a reliable picture of overall liquids supply. It is important to think about the entire inventory of contributing sources of hydrocarbons. Above ground factors, especially geopolitical factors, have had a major influence on production in many countries in the past 2 years, crude plus condensate production alone may have reached a temporary plateau, but this situation will change. This does not mean that productive capacity has reached an irreversible plateau. The EWG report does not document the results of a systematic analysis of current and future productive capacity, so it is not possible to comment in detail.
S: What is your opinion on the current situation of peak oil?
PJ: CERA does not believe in an imminent peak in global liquids supply. The most recent revision of our detailed outlook shows productive capacity growing substantially through 2017.
S: In your interview with us earlier this year, you mentioned that the oil production would reach a plateau instead of a peak. Has your opinion changed since this interview? Why or why not?
PJ: Our opinion has not changed. There is no evidence to suggest that productive capacity has stalled or is about to fall. On the contrary CERA believes that productive capacity will rise strongly over the next few years. Considering the dynamics of supply and demand, along with above and below ground factors, we continue to believe that supply will ultimately reach an inflection point and spend a number of years on an undulating plateau before declining fairly slowly. The concept of peak oil is not reliable.
Read the opposing view from Mr Jorg Schindler here
Dr Peter Jackson: The EWG report shows that crude plus condensate production reached a plateau in 2005/2006 based on EIA data. This analysis does not consider the total liquids hydrocarbon inventory which includes crude oil, condensate, NGL's, extra heavy oils and biofuels. This does not give a reliable picture of overall liquids supply. It is important to think about the entire inventory of contributing sources of hydrocarbons. Above ground factors, especially geopolitical factors, have had a major influence on production in many countries in the past 2 years, crude plus condensate production alone may have reached a temporary plateau, but this situation will change. This does not mean that productive capacity has reached an irreversible plateau. The EWG report does not document the results of a systematic analysis of current and future productive capacity, so it is not possible to comment in detail.
S: What is your opinion on the current situation of peak oil?
PJ: CERA does not believe in an imminent peak in global liquids supply. The most recent revision of our detailed outlook shows productive capacity growing substantially through 2017.
S: In your interview with us earlier this year, you mentioned that the oil production would reach a plateau instead of a peak. Has your opinion changed since this interview? Why or why not?
PJ: Our opinion has not changed. There is no evidence to suggest that productive capacity has stalled or is about to fall. On the contrary CERA believes that productive capacity will rise strongly over the next few years. Considering the dynamics of supply and demand, along with above and below ground factors, we continue to believe that supply will ultimately reach an inflection point and spend a number of years on an undulating plateau before declining fairly slowly. The concept of peak oil is not reliable.
Read the opposing view from Mr Jorg Schindler here
Interview by Audrey Wang
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On November 9, the Uppsala University in Sweden published a report titled "The Peak of the Oil Age - The Uppsala World Energy Outlook". The report performs an analysis of the oil production forecast done by the International Energy Agency in 2008. One day before the release of the IEA 2009 edition of its World Energy Outlook report, the team of researchers notably pointed to a world oil supply in 2030 some 26 Mb/d lower than the IEA's predictions. Dr Michael Lardelli, one of the co-authors of the study, answers Scitizen's questions.
As the troubling realities of future oil supplies begin to penetrate official circles, the oil optimists are making even more outlandish claims.
An article in the Washington Post this weekend, together with a must-read interview in The Independent, a paper I used to read regularly when I lived in London, reminded me of an observation I made several years ago concerning the similarities between Peak Oil and Y2K. Having spent a fair amount of time in my former corporate role planning for the serious outcomes the latter might have produced, I don't intend this as a slam on the former. Without rehashing the technical arguments behind either phenomenon, it's worth spending a few minutes thinking about the consequences of a growing belief that we might be only a few years away from the end of oil, as we know it. Whatever one's take on the validity of the Peak Oil argument, it has already evoked noteworthy consequences, both positive and negative.
Laurel Graefe, a senior economic researcher working for the Federal Reserve Bank of Atlanta has written an excellent overview of peak oil, “The Peak Oil Debate”. I consider this a must-read piece, as much for armchair oil experts as beginners, and as much for who published this as what it contains. This should be very high on your list of “brother-in-law” documents, the ones you can safely recommend to co-workers, neighbors, or, well, your brother in law.
Energy optimists are fond of citing very large numbers for worldwide fossil fuel resources such as oil and natural gas. But they conveniently leave out the critical variable. How fast can we actually produce these resources?
The peak in conventional oil and gas production is not the only peak in the supply of natural resources to be confronted in the near future. It seems likely that the peak in conventional phosphate production from phosphate rock may also be near. A recent study of Cordell and coworkers, which is in press (1), suggests that ‘peak phosphate’ may occur between 2030 and 2040. ‘Peak phosphate’ may cause a shock. This is all the more so because oil and gas can be replaced by other means of energy supply, but phosphate is without a substitute.
It is Gap Oil not Peak Oil that is the problem. Rising demand for oil will exceed the quantity of it that can be withdrawn from the earth, resulting in a supply-demand gap. Once production does peak the gap will be enlarged from both sides, drawing down the supply side against rising demand. This I suggest should be termed "Gap Oil". Energy efficiency and a reduction in our demand for oil is paramount and a growing dependence on what can be grown, to create a sustainable "bioeconomy".
The Energy Watch Group released a report last week, stating that peak oil was reached in 2006. Scitizen speaks to Mr Jorg Schindler, the main author and Managing Director of Ludwig-Bölkow-Systemtechnik GmbH, about the report. As well, we sought the professional view of Dr Peter Jackson, Director of the CERA (Cambridge Energy Research Associates), whose position is that peak oil has not been reached.
| [1] | Comment by Ron Steenblik (Global Subsidies Initiative)
- 5 Nov, 2007 11:52 pm I tend to agree with Dr. Peter Jackson's assessment of future oil production. But I am surprised to see him state that "the total liquids hydrocarbon inventory ... includes crude oil, condensate, NGL's, extra heavy oils and biofuels." What is the rationale for including biofuels with these other fuels in an "inventory" of hydrocarbons (unless one is counting only that which is available in storage at any given time)? |
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| [2] | Comment by Dr Luc Arnold - 13 Nov, 2007 05:52 pm I do not agree with Jackson's statement "The concept of peak oil is not reliable". The concept itself is reliable of course, otherwise it would mean that oil resources are infinite. The difficulty, due to the complexity of the problem, is to predict accurately *when* the peak will occur (or has it occurred recently?). The applicability of the concept is thus probably limited, I mean in term of accurate predictability as a physical law. But even if the peak oil (or a plateau) occurs in 2017 instead of now, obviously it will be followed by a decrease of oil production. I think this is the force of the peak oil concept, to just remind us that *there will be a decrease* with significant impacts on our societies. |
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