Wednesday, October 27, 2004

Peak Oil: Can Alternative Energy Replace Oil?

My latest post (July 2006) on how to replace oil is here:
Ethanol E85 Fuel

Paul Roberts, author of "The End of Oil" in this article for Mother Jones discusses how we may have "a lot less time than we thought" to replace fossil fuels.

As he notes,

One of the most alarming symptoms of an energy system on the verge of collapse are found in the oil markets. Today, even as global demand for oil, led by the economic boom in Asia, is rising far faster than anticipated, our ability to pump more oil is falling. Despite assurances from oil's two biggest players -- the House of Bush and the House of Saud -- that supplies are plentiful (and, as George W. Bush famously put it, that getting the oil is just a matter of "jawboning" "our friends in OPEC to open the spigots"), it's now clear that even the Saudis lack the physical capacity to bring enough oil to desperate consumers. As a result, oil markets are now so tight that even a minor disturbance -- accelerated fighting in Iraq, another bomb in Riyadh, more unrest in Venezuela or Nigeria -- could send prices soaring and crash the global economy into a recession. "The world really has run out of production capacity," a veteran oil analyst warned me in late August. "Iraq is producing less than a third of the oil that had been forecast, the Saudis are maxed out, and there is no place else to go. And America is still relying on an energy policy that hasn't changed significantly in 20 years."

Nor is it any longer a matter of simply drilling new wells or laying new pipe. Oil is finite, and eventually, global production must peak, much as happened to domestic supplies in the early 1970s. When it does, oil prices will leap, perhaps as high as $100 per barrel -- a disaster if we don't have a cost-effective alternative fuel or technology in place. When the peak is coming is impossible to predict with precision. Estimates range from the ultra-optimistic, which foresee a peak no sooner than 2035, to the pessimistic, which hold that the peak may have already occurred. In any case, the signs are clear that the easy oil is harder to find and what remains is increasingly difficult and expensive to extract. Already, Western oil companies are struggling to discover new supplies fast enough to replace the oil they are selling. (Royal/Dutch Shell was so concerned about how declining discovery rates would devastate its stock price that it inflated its reserves figures by 20 percent.)

Worse, according to a new study in the respected Petroleum Review, in the United Kingdom, Indonesia, Gabon, and 15 other oil-rich nations that now supply 30 percent of the world's daily crude, oil production -- that is, the number of barrels that are pumped each day -- is declining by 5 percent a year. That's double the rate of decline of even a year ago, and it has forced other oil producers to pump extra simply to keep global supplies steady. "Those producers still with expansion potential are having to work harder and harder just to make up for the accelerating losses of the large number that have clearly peaked and are now in continuous decline," writes Chris Skrebowski, editor of Petroleum Review and a former analyst with BP and the Saudi national oil company. "Though largely unrecognized, [depletion] may be contributing to the rise in oil prices."

UPDATE (June 2005): I have just finished reading Paul Robert's book "The End of Oil" and I can wholeheartedly recommend it as the best book I've so far read on the energy challenges facing us. I can also recommend "The Party's Over" by Richard Heinberg.

As Paul Robert's notes the idea of peak oil is getting mainstream now being featured in major newspapers and magazines. An Alternative Energy Blog reader recently left a comment asking my opinion on the site life after the oil crash a website that partly inspired me to start this blog (although I question a number of the assumptions and conclusions made). When I visited the site again I noted the full length ebook is now available for free download until election day. Take a look and let me know what you think.

Mother Jones article on oil depletion

Matt Savinar's The Oil Age is Over: What to Expect as the World Runs Outs of Cheap Oil, 2005-2050. Free Download until election day


Anonymous Anonymous said...

What about Russian oil - technically closer to the US. I think finding a replacement for fuel oil couldn't be that difficult in the long run but it's in the interests of global economies to depend on it. Manufacturing oil is a different matter - what could replace oil in plastics?

1:33 pm, November 10, 2004  
Blogger Tim said...

The production numbers for this year are looking ominous. The Energy Information Agency has compiled monthy statistics up through August. Between December, 2003 and August 2004, OPEC's production has increased by 1.26 million barrels a day and Russia's production has increased by 815 thousand barrels a day. But worldwide production has only increased by 861 thousand barrels a
day. That means that, outside of OPEC and Russia, there has been a net loss of over 1.2 million barrels a day of production.

Since the bulk of OPEC's increase was from already existing wells, it will be difficult for supply to keep up with countries in decline, much less with demand. The people who have been predicting an oil peak in 2005 my turn out to be right.

8:14 am, November 13, 2004  
Anonymous Anonymous said...

Can Alternative Energy Replace Oil?


12:55 pm, January 17, 2005  
Blogger Joe Berwind said...

The rhetoric for and against peak oil has never been more intense. See for updated commentary. Also, James would care to link sites given our mutual interests? See our website for more on who we are.

1:52 pm, April 26, 2005  
Anonymous Anonymous said...

There's a fascinating artice, 'Is 'Peak Oil' A Scam? Oil Fields Are Re-Filling Naturally And Rapidly', on the 'Current News You Need To Know' page at SurvivalistSkills.Com.

Makes for interesting reading!

12:42 pm, May 06, 2005  

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