Skip to comments.The myth of Peak Oil
Posted on 05/02/2010 11:34:18 AM PDT by PugetSoundSoldier
For decades, we've heard the call of "peak oil", that we're facing an ever-decreasing supply of oil. The US simply cannot maintain it's current usage of oil because we are on the verge of a collapse of apocalyptic proportions because the last oil in the ground is being used right now. Makes wonderful news copy, and is a great way to castigate the energy industry and justify entire reworking of the economy, but there's a problem: it's not true.
How? It's simple. It's called oil shale. And the US has enough to run 100% of our needs for nearly 3 centuries. There are somewhere between 2.8 an 3.3 TRILLION barrels of oil in shale worldwide, and the US has 62% of that. Assume the middle - 3 trillion barrels. That means the US has about 1.9 TRILLION barrels of shale oil. And nearly all of it is within the three states listed above.
Consider that number. One point nine trillion. 1,900,000,000,000. It's a mind-boggling number (well, maybe not so much any more, given that our budget deficits are around the same size!). It would be 271 barrels of oil for every single person on the face of the earth, or more than 6,300 barrels per person in the USA. Since there are 42 gallons per oil barrel, this represents about 266,000 gallons of oil per person in the US. Think about it. You know what a gallon of milk is like; imagine just over a quarter of a million of them! If you used a gallon a day every day, it would take 728 years for you to use it all.
What does that scale up to? Well, we use about 20 million barrels a day as a nation. Divide 20 million into 1.9 trillion and we find we have oil for 95,000 days. Or at least 260 years. And remember, this is the middle estimate value. Yes, we have oil shale for 260 years, minimum. A truly staggering timeline. If we started 100% of our consumption of oil from this reserve, and started in 2020, we'd finally be running out around 2250, sometime around the 110th President of the United States is elected.
\Many will talk about how it's too expensive. But is that correct? Consider that today, May 2nd 2010, oil is selling for about $82 per barrel. Suddenly the estimated cost of $21-$25 per barrel, we could cut our oil expenses by 70% or more. A massive savings for the nation, amounting to over $1 billion dollars a DAY in reduced oil expenditures. Over $400 billion a year in savings, about 3% of our GDP.
And it goes beyond that. Currently the US produces about 8 million barrels a day of oil. Rather than consuming that oil, we could, in fact, sell it (since we get our oil from shale). At a sell price of $82 per barrel, that would represent the ability to export $656 million dollars a day of crude, adding $240 billion to the positive side of our trade deficit. And because we're no longer importing 12 million barrels a day, that reduces our purchases by nearly $1 billion a day, for a total change in our trade deficit by $600 billion. The US nearly becomes a net exporter, and that would immensely improve our economic standing in the world.
And it goes beyond the change in the trade deficit; we could cut the costs of gasoline and heating oil by 4; the boost to our economy by bringing gasoline to less than $1.00 per gallon would be immense. Remember the peak in 2008, when gasoline reached above the $4.00 per gallon barrier? That - along with the housing crisis - was a prime reason the recession of 2008 hit so hard and so deep. Cutting our internal energy costs by a factor of 4 frees up a massive amount of dollars internally for other economic activity.
The facts are clear: the US has nearly 3 centuries of oil sitting within its shores; we have the ability to tap that massive reserve in 10 years; we could become one of the largest exporters of oil in the world; we could nearly eliminate the trade deficit; and we could severely cut the dollars we spend on energy within these United States. Peak oil - and the hysteria that goes with it - is a myth within at least the borders of the US.
Thought you’d like this...
It’s Peak CHEAP Oil ... not Peak Oil.
I mean, the other day, I had such a laugh - the gas station was touting how it was powered completely by wind turbines! Yes, wind turbines that were 110 miles away. There's too much invested in 'green' energy to turn away from those billions right now, so we'll continue to be dependent upon foreign energy sources. Besides, they want to raise the price of gasoline, not lower it...
Is $21 per barrel not cheap? Read my post, and check the links - we could produce for that. Peak oil - either as low cost or total reserves - is a myth. The reason we have $82 per barrel oil is because of political, not scientific, reasons.
Thanx for your home page, PSS.
ADD reducing the size of government and all its expense and its manipulating of the market.. bgusniss would leave China and India and retian here.. (WITH ALL THE JOBS)...
Actually could be "we" don't even know how much natural gas we have.. most oil fields burn natural gas as a nuisance..
Price is volatile. Regardless of how the price comes to be, I believe there will be Peak CHEAP Oil in the future ... and that has major ramifications for all humans on the planet.
Good luck for your beliefs; if oil stays high it’s because of political reasons, not actual lack of resources (including cheap oil). Facts say your view is not supportable, at least for the next 250+ years.
In 1986, oil reached it’s cheapest cost ever - $9 per barrel. In today’s dollars, that would be $18. Given a $21 per barrel cost for oil shale, we should be paying just over the lowest historical price ever, and we should have gas around $0.75 per gallon. Anything above that price is because of politics and is possible because people refuse to look at the facts objectively.
Strip all the taxation off of oil and gasoline would likely cost .75 at the pump.
And that completely ignores the possibility of using the FischerTropsch process to convert coal to liquid fuels, which adds additional reserves.
we got more oil than Opec and idiots for government.
Uhhh, that’s not really what you show. Four billion barrels is about 200 days of our consumption - about 7 months. Note that oil shale promises 260+ YEARS of oil.
And Saudi Arabia’s reserves are around 270 BILLION barrels, not four billion. Our liquid oil reserves are smaller than Saudi Arabia, Iraq, or Iran, even Venezuela and Mexico. OPEC has a LOT of liquid oil. We have even more in oil shale, though.
In the big - or small - scheme of things, Bakken is a very small find, not really much to get excited about.
How true. Too much personal freedom would be the result of tapping into an ample domestic supply of oil and $0.75/gallon gasoline. That’s the last thing nanny state pols want.
Hydrocarbons have enabled and sustained a larger world population - and God loves life and has provided that provision and blessing. However, when the rejection to God’s message increases, the pains of the absence of these blessings become economic realities (i.e. lack of knowledge to produce economical energy) as well as governmental ignorance (i.e. control thru environmentalism).
The core problem isn’t the lack of a resource, but the rejection of the world to God’s message . . .
Nonsense. It has ramifications for the monetary system. Yes, oil in dollars will be more expensive, but I don’t see it increasing in real terms. That’s got as much to do with the problems of the dollar not a perceived oil shortage.
Former Vice President Al Gore and his wife, Tipper, have added a Montecito-area property to their real estate holdings, reports the Montecito Journal.
The couple spent $8,875,000 on an ocean-view villa on 1.5 acres with a swimming pool, spa and fountains, a real estate source familiar with the deal confirms. The Italian-style house has six fireplaces, five bedrooms and nine bathrooms.
The Peak Oil” concept was NEVER just a resource problem - and it might not even be a resource problem at all!
First of all, in terms of current oil exploration technology, it might very well be just a resource problem. To the best of my knowledge - and correct me if I am PROVABLY wrong - all of the oil that we have extracted, from all of the oil deposits we have ever found, is “Kerogen” based, and isotopic analysis of MANY samples indicates that it was formed by subterranean heat and pressure from buried, prehistoric algae beds right here on the very young Earth.
But we have also heard about “Abiotic Oil”, which various theories have suggested as either a continuous process in/on the Earth or residue of a primordial source. Supporting the latter is the astronomical evidence of Carbon Monoxide, Methane, and other non-organic carbon compounds throughout the universe. These were certainly present when the Sun and the Earth formed, and might still be rising from the core and mantle to form new hydrocarbon compounds - possibly, to collect within the drained kerogen deposit sites of depleted oil fields.
Another conundrum is the massive amount of hydrocarbons on Saturn’s largest moon. Titan is DRENCHED in hydrocarbon compounds - probably amounting to more than ALL of the hydrocarbons on Earth! And these were NOT biologic in origin, at least not within this solar system.
The other failure of Peak Oil Theory is that it generally ignores economics, which plays at least an equal role in determining access to the resource. Oil exploration technology is constantly improving, and every improvement reduces the cost of reaching and extracting the source. This, in turn, makes smaller, more difficult oil pockets economically viable, thus increasing total reserves.
But we also need to find new ways to locate any abiotic oil - if it exists, and if it does not just rise up to refill depleted pools we already know about.
And finally, since we already know so much about kerogen oil, we need to be harnessing that knowledge - and much more research - to determine the natural processes that created kerogen oil, and learn to shortcut that process.
All of the big oil companies (each of which is MINISCULE compared to the dozen or so big oil COUNTRIES) are spending major dollars studying Algae. And why not? It worked before!
I believe that Algae farming to produce hydrocarbon fuel feedstocks will eventually replace oil exploration as our refined petroleum source, but many questions remain.
Natural, selected, or bioengineered algae?
Target product is Hydrocarbon, Ethanol, or more exotic, such as Butanol?
Natural sunlight, supplemented sunlight using solar cells, batteries, and nighttime light sources, or completely artificlal light, perhaps with optimized wavelengths.
Open or covered ponds, sealed bioreactors, tube circulators, or some other physical environment?
Continuous production (probably requires bioengineering) or batch drying and fermentation?
Co-siting with CO2 producers? With refineries?
Any way, we need to get off the Ethanol Myth, as well as the myth that we can just live smaller, meaner lives with our smaller carbon footprint.
Al Gore needs a GIGANTIC carbon footprint on his thieving black (whatever!)
Don’t forget the oil shale in North Dakota.
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