Moving peaks
Posted on 05/03/2012 12:08:05 PM PDT by Ernest_at_the_Beach
Oil production from oil shales in North Dakota is increasing rapidly and the much-heralded “peak” of oil production may have to be postponed. Alarmists will not be pleased.
“Peak Oil” and “Peak Gas” are the points in time where the production of oil and gas respectively reach a peak and then decline to zero. The concept is based on the normal production cycle of an individual well extrapolated to all the oil and gas existing. The fundamental flaw in these hypotheses when trying to apply them to “finite” and exhaustible resources of any product is of course that:
Moving peaks
In recent times the development of fracking technology and the discovery of huge deposits of gas-bearing shales together with the discovery of new deep-sea sources of natural gas have pushed the “peak” for gas production beyond the visible horizon and into the distant future (a few hundred years). When – rather than if – methane hydrates become available for gas production, the “peak” will shift further into the future.
In the case of oil there are already many feasible alternatives which are technically feasible but where commercial production by these methods can only be triggered by the sustainable price being higher than the production cost. For example bio-diesel costs are commercial with oil prices above about $70 per barrel but there is a hidden cost in decreased or disrupted food production. Coal liquefaction would need oil prices above $120 per barrel while oil extraction from oil shales and oil sands become commercial at about $90 and $100 respectively. Deep sea wells (new exploration) are increasingly commercial as the price increases.
The alternatives are now coming into play:
…. A decade ago, shale drilling wasn’t a well-known technique outside of the industry, much less a major contributor to our oil production. Today, Kodiak Oil & Gas, Continental Resources, and Whiting Petroleum have turned the desolate North Dakota prairie into an energy bonanza by unlocking shale oil there. Offshore drilling has also grown by leaps and bounds. Drillers like SeaDrill ,Transocean , and Noble are building ultra-deepwater rigs as fast as they can to unlock new fields off the coasts of Brazil, Angola, and other parts of the world that were once out of our reach.
Then there are Canadian oil sands, which hold the second-largest oil reserves in the world, behind Saudi Arabia. These developments alone unlocked enough oil to delay peak oil for a few more years at least.
Evidence that these innovations have turned peak oil on its head is undeniable. According to Bentek Energy, North American oil production will top a 40-year-old peak by 2016. The U.S. Energy Information Administration predicts that by 2020, U.S. oil production alone will grow another 20% to 6.7 million barrels per day. Even OPEC’s surplus oil production capacity is expected to increase from 2.55 million barrels per day in 2011 to 3.92 million barrels per day by the end of 2013.
Just as for gas, the oil “peak” is now moving into the future.
The Wall Street Journal writes:
Citigroup announced to the world Thursday that peak oil is dead. The controversial idea that world crude oil production is almost at its peak and will soon begin an irrevocable long-term decline has been laid to rest in the highly productive shale oil formations of North Dakota, with potentially big consequences for oil prices, the bank said. ….
Changes in oil markets in the past decade have given significant traction to the argument that world oil production is close to peaking. Despite the huge incentive of a near-threefold increase in the price of benchmark Brent crude from 2000 to 2010, the world barely managed to eke out a 10% increase in crude oil production, according to BP data.
Many have argued that this proves the physical limit on global crude oil production is near, or may already have been passed.
“The belief that global oil production has peaked, or is on the cusp of doing so, has helped to fuel oil’s more than decade-long rally,” Citigroup said in a note to clients. “This is now all changing because of what is happening in North Dakota,” where new technology has led to a large and unexpected surge in oil production from shale rock.
After decades of decline, “U.S. oil production is now on the rise, entirely because of shale oil production,” said Citigroup. Shale oil could add almost 3.5 million barrels a day to US oil production between 2010 and 2022 and has already slashed 1 million barrels a day from U.S. oil imports. One day it may allow the U.S. and Canada to be self-sufficient in oil, it said.
There are other parts of the world with similar promise, the bank said. Argentina has already discovered significant shale oil deposits. Australia may have shale reserves.
…. Despite this optimism, it’s a fair bet that not everyone will be convinced. Indeed, there is good reason to be skeptical that the world’s oil production can be forever buoyed by new technology. This is the fact that, year in year out, oil production from existing areas like the North Sea or Alaska declines steadily, meaning the industry must run just to stand still. …
The organic processes that create the organic energy have not stopped.
No, but if the process came close to our current rate of consumption, and had continued for hundreds of millions of years, it would cover the earth in several miles of depth.
The process hasn't stopped, but the rate of production is so small compared to current consumption to be considered insignificant.
Not arguing that the rate is sufficient for our needs, but even if the rate were 100,000 times smaller, we would still have a few thousand years supply. Enough time to find alternatives I would say.
Also surely you don't mean to imply that it would have actually come out. Whatever is generated presumably rouglhy replaces the volume of material that was its source...
Of course, IF it is abiogenic to begin with...
This blog post is carefully worded, selective in which numbers it uses and a bit deceptive. Peak oil says that we will hit a maximum level of output per year at some point. That level can be plateaued for quite some time, but that will make growing economies difficult.
Yes, US oil production is growing, from a low base more than 1/3 below our all time high in 1980 despite hundreds of billions of dollars and every president promising to end our reliance on foreign oil.
The problem the world faces is the scale of what is consumed. At current consumption, we humans burn 32 billion barrels of oil per year. To put that into perspective, Saudi Arabia claims their maximum reserves were 270 billion barrels, which many geologists doubt given how much they have already produced. So if we discover another Saudi Arabia, thats only 9 years of consumption. Add in the growth in consumption from all the new cars being sold in China, and you can see why oil prices are so high.
I went through the math once. If it was produced near our current consumption rate for a few hundred million years, the quantity was 6 miles deep across the surface of the planet.
Given that oil is found in the tiny pores between the grains of rock:
The amount of oil found above the mantle would be an order of magnitude greater in depth. Now that is approaching the entire range of sedimentary rock on the earth. It is not based on any reality, only wishful thinking.
Of course, IF it is abiogenic to begin with...
Same issue applies, ignoring the other problems with the theory.
The did not even cover the Eagle Ford projected production. Fair enough to say there are many shale plays in the US besides bartlett shale.
"Marcellus Formation (also classified as the Marcellus Subgroup of the Hamilton Group, Marcellus Member of the Romney Formation, or simply the Marcellus Shale)...
The Romney Formation? lol, should Mitt claim it and then campaign on helping make us energy sufficient?
What I am saying is: Even if the production rate was 100,000 times slower than our current consumption rate, because it has been presumably going on for billions of years, it would still result in enough oil for thousands of years.
If that amount existed, we couldn’t drill without hitting oil.
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