SciAm: Has Petroleum Production Peaked, Ending the Era of Easy Oil?

[Paul Mobbs]

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Last paragraph is the key:
In fact, King and Murray argue that global economic growth itself may be 
impossible without a concurrent growth in energy supply (that is, more 
abundant fossil fuels, to date). "We need to decouple economic growth from 
fossil-fuel dependence," King adds. "This is not happening due to industrial, 
infrastructural, political and human behavioral inertia. We are stuck in our 
ways."

P.



http://www.scientificamerican.com/article.cfm?id=has-peak-oil-already-happened

Has Petroleum Production Peaked, Ending the Era of Easy Oil?

A new analysis concludes that easily extracted oil peaked in 2005, suggesting 
that dirtier fossil fuels will be burned and energy prices will rise

David Biello, Scientific American, 25th January 2012


Despite major oil finds off Brazil's coast, new fields in North Dakota and 
ongoing increases in the conversion of tar sands to oil in Canada, fresh 
supplies of petroleum are only just enough to offset the production decline 
from older fields. At best, the world is now living off an oil plateau—roughly 
75 million barrels of oil produced each and every day—since at least 2005, 
according to a new comment published in Nature on January 26. (Scientific 
American is part of Nature Publishing Group.) That is a year earlier than 
estimated by the International Energy Agency—an energy cartel for oil 
consuming nations.

To support our modern lifestyles—from cars to plastics—the world has used more 
than one trillion barrels of oil to date. Another trillion lie underground, 
waiting to be tapped. But given the locations of the remaining oil, getting 
the next trillion is likely to cost a lot more than the previous trillion. The 
"supply of cheap oil has plateaued," argues chemist David King, director of 
the Smith School of Enterprise and the Environment at the University of Oxford 
and former chief scientific adviser to the U.K. government. "The global economy 
is severely knocked by oil prices of $100 per barrel or more, creating 
economic downturn and preventing economic recovery."

Nor do King and his co-author, oceanographer James Murray of the University of 
Washington in Seattle, hold out much hope for future discoveries. "The 
geologists know where the source rocks are and where the trap structures are," 
Murray notes. "If there was a prospect for a new giant oil field, I think it 
would have been found."

King and Murray based their conclusion on an analysis of oil data from the 
U.S. Energy Information Administration. Looking at use and production trends, 
the two note that since 2005 production has remained essentially unchanged 
whereas prices (a surrogate for demand) have fluctuated wildly. This suggests 
to the authors that there is no longer any spare capacity to respond to 
increases in demand, whether it results from political unrest that cuts 
supply, as in the case of Libya's political upheaval last year, or economic 
boom times in growing countries like China. "We are not running out of oil, 
but we are running out of oil that can be produced easily and cheaply," King 
and Murray wrote.

Other statistics, however, argue against a plateau. Oil company BP found in 
its most recent analysis that oil production was actually more than 82 million 
barrels per day in 2010, higher than the proposed plateau of 75 million. That 
difference may be the result of the increasing use of "unconventionals"—
Canadian tar sands or the natural gas liquids co-produced with oil extraction. 
Rising production in the China, Nigeria, Russia and the U.S. also hints that 
technological improvements may allow greater production from existing fields 
than the new research suggests.

Plus, the price of oil may argue against any such plateau. Adjusted for 
inflation, today's $100 per barrel is roughly equivalent to prices in 1981, 
according to environmental scientist Vaclav Smil of the University of 
Manitoba. Smil also notes that in the last 20 years enough oil has been found 
to satisfy the demands of two new consumers—China and India—nations that now 
import more oil than is consumed by Germany and Japan.

Some of that price stability is the result of increased efficiency—the 
potentially vast reserve of unused oil. The U.S. and other developed countries 
have maintained economic growth while reducing the amount of oil (and other 
energy) required for that growth, although some of this apparent efficiency has 
come from outsourcing energy-intensive economic activity, such as steel 
production. "We have about halved oil intensity since 1981," Smil argues. "We 
could halve it again, so we could do with so much less oil—why should we panic 
about producing less, even if that were the case?"

If King and Murray are correct about 2005 marking the end of easily extracted 
oil, however, then Smil's additional halving of demand, plus conservation and 
a rapid deployment of alternative energy, would be required to avoid even more 
economically painful oil price shocks in the future. As it is, the U.S. spent 
more than $490 billion on gasoline in 2011—$100 billion more than in 2010, 
even though the number of miles driven was similar, according to data from the 
New America Foundation.

An easy-oil plateau is not good news for the climate, either. Harder to 
extract oil means increased burning of dirtier oil like that from the tar 
sands—or even dirtier coal. In fact, there are trillions more barrels of 
carbon-intensive fuel out there in the form of huge coal fields, such as the 
one currently being brought into production in Mongolia. "There will still be 
enough CO2 produced to result in significant climate warming," Murray notes.

Even with large supplies of coal and natural gas, the world faces a potential 
energy shortfall, one reason that the U.S. Department of Energy suggested in a 
2005 report (pdf) that a "crash program" to cope with any decline in oil 
supplies be instituted. The report argued this program should start 20 years 
before peak global production to avoid "extreme economic hardship." That's 
because it will take decades for any kind of energy transition to occur, as 
evidenced by past shifts such as from wood to coal or coal to oil.

In fact, King and Murray argue that global economic growth itself may be 
impossible without a concurrent growth in energy supply (that is, more 
abundant fossil fuels, to date). "We need to decouple economic growth from 
fossil-fuel dependence," King adds. "This is not happening due to industrial, 
infrastructural, political and human behavioral inertia. We are stuck in our 
ways."


- -- 

.

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