Rossputin’s Ross Kaminsky e-mailed to me a few links that offer yet further evidence that “peak oil” is peak nonsense. For example:
And this:
And this:
Oh, and don’t miss this superb letter in today’s Wall Street Journal:
Patience Wheatcroft argues that “peak oil—the point at which global production reaches its maximum—is no more than five years away.” (Agenda Europe, “The Next Crisis: Prepare for Peak Oil,” Feb. 11) In fact, peak oil has been five years away for decades.
So far, despite the gloomy prophecies on resource exhaustion, not only oil, but every other resource has become, on average, more abundant, not more scarce. Such increasing abundance is reflected—in the long run—in decreasing real prices. We have enough oil below the ground to focus on more urgent and less permanent “crises.”
Moreover, Ms. Wheatcroft might consider that nuclear power—a reliable and clean energy source—is not a substitute for oil, as the former can only be used for electricity generation, while the latter is mostly used for transport and petrochemicals. Buying into the peak oil myth is a poor service to the cause of nuclear power.
Carlo Stagnaro
Milan
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Peak oil is not our problem, peak congress is.
Knowing the oil is there, having rights to it, having the ability to actually drill and pump it out, is not the same as being allowed to do it.
It is great that the world has the reserves in oil, but I'd like to see more coming out of the nozzle at the gas station.
Knowing the oil is there, having rights to it, having the ability to actually drill and pump it out, is not the same as being allowed to do it.
We also need more refineries.
Every resource?
What about gallium, selenium, mercury, and lead? All show post peak behavior.
Actually, anything that can be used for electricity generation is a potential substitute for a lot more than most people think, even if only in extreme conditions. Even fresh water can be substituted with uranium, via a power plant and desalination, if the price gets high enough.
Lead can't be that rare. It comes for free with toys from China
Sense of humor, darkly!
“Moreover, Ms. Wheatcroft might consider that nuclear power—a reliable and clean energy source—is not a substitute for oil, as the former can only be used for electricity generation, while the latter is mostly used for transport and petrochemicals. Buying into the peak oil myth is a poor service to the cause of nuclear power.”
Huh? Coal is the fossil fuel electricity generator and there are centuries worth of coal still left in the ground.
Is Stagnaro not worried because all that is needed is a rebuild of electrical infrastructure so electric vehicles can get fast recharges?
Do we have a shortage of refinery capacity?
Today, national and state legislation requires refineries to meet stringent air and water cleanliness standards. In fact, oil companies in the U.S. perceive obtaining a permit to build a modern refinery to be so difficult and costly that no new refineries have been built (though many have been expanded) in the U.S. since 1976. Some attribute increasing dependence in the U.S. on imports of finished gasoline, to lack of new refineries. On the other hand, studies have revealed that accelerating mergers among the refineries have further reduced capacity, resulting in tighter markets particularly in the U.S.
All the raw petroleum in the world is useless if there is not enough refining capacity to meet demand for finished products like gasoline.
Remember five or six years ago when oil first jumped to $70/barrel and gas barely rose above $2.25/gallon? Oil has dropped back to that neighborhood, but the price of gas is still well above $2.50/gallon. Why? My guess is that demand for gas has gone up while refining capacity has not.
Please don't be offended by what I say: I think your guess is incorrect.
Here's a few facts from the U.S. Department of Energy about U.S. refining capacity and utilization:
1. U.S. refinery capacity in both 2008 and 2009 was higher than it has been for at least 27 years, and probably longer;
2. U.S. refinery utilization in both 2008 and 2009 – the percent utilization of operating capacity – was at the lowest levels in 20 years.
3. U.S. refinery capacity has grown steadily since the early 1980's.
4. Total U.S. demand for refined gasoline (production + imports – exports) peaked in 2003 but has dropped steadily since then.
5. Total U.S. demand for refined gasoline in 2006 was about the same as it was 20 years earlier, and demand has declined since then.
I agree that environmental regulations and local resistance make it nearly impossible to open new refineries. But total U.S. refinery capacity has still been expanded over the past 25 years. Not only have U.S. refiners expanded nearly every large U.S. refinery, but they have also figured out how to increase refinery utilization. The most significant way they've done so is by sharply reducing the spring and fall turnarounds.
Your sources that refer to “tighter markets” are surely out of date. Refinery utilization and total demand for refined gasoline have both dropped sharply since 2003. Please check U.S. Energy Department statistics to see what I'm referring to. You will need to combine data for U.S. refinery production, U.S. gasoline imports, and U.S. gasoline exports in order to obtain total U.S. gasoline demand.
Does the replacement rate include acquisitions?
How silly. We have already seen light sweet oil production peak in 2005 and are now looking at a lower production rate than we had in 2008. During this time we have seen the IEA admit that depletion rates from conventional fields are running at around 7% per year and have not seen the discovery of new sources that would permit us to offset conventional production declines for very long. You need to check your premises because there is no way to argue that recoverable oil is more abundant now than it was several decades ago. While we have more exploitable oil in the ground from unconventional sources, we have to use a great deal of energy to get that oil out of the ground. That means that the era of cheap petroleum is over and the price declines that will keep happening as the general trend goes higher will be caused by temporary technical reasons and demand destruction, not because of an adequate supply response in the short to medium term.
Surely the issue with “Peak Oil” is not that we are running out of oil but that it's getting more difficult to get it out of the ground fast enough – it's not the size of the tank, but the size of the tap that matters…
Surely the issue with “Peak Oil” is not that we are running out of oil but that it's getting more difficult to get it out of the ground fast enough – it's not the size of the tank, but the size of the tap that matters…
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