Peak oil felt like a very real and immediate possibility around the time of the oil price peak in mid-2008, but the “oil-is-here-to-stay” crowd has enjoyed something of a resurgence since then.
Oil prices are down (though back to more than twice the low seen after the financial meltdown). Furthermore, 2009 was a banner year for new oil field discoveries — more than 10 billion barrels in potential reserves of black gold, which was the most found since 2000. Then there’s the fossil fuel riches of the Arctic that will likely be opening up in years to come, thanks to climate change.
Don’t get too excited, though. While there might be plenty of oil left below the surface of our planet, it won’t be enough to prevent an oil shock in the short-term future. Here’s why:
- What’s left is deep, hard to drill for and expensive to get at: BP’s Tiber find in the Gulf of Mexico, for example, lies below more than 3/4 of a mile of water … and then below an additional 6.6 miles of ocean crust. There are no more easy-to-reach, gushing Spindletops awaiting us just one-fifth of a mile below dry land.
- With rising technological challenges comes rising risk: The Deepwater Horizon rig that exploded in flames and then sank in the Gulf of Mexico last week was drilling a well nearly 3 1/2 miles deep below the ocean at the time. The disaster, which has caused a massive leak of oil into the environmentally sensitive and economically important Gulf, is being blamed on a blowout preventer failure. Blowout preventers are needed to cope with the steep pressures and temperatures encountered while drilling such deep wells … and the risks of them failing grow ever higher the deeper we drill. (Ironically, it was the Deepwater Horizon responsible for last year’s Tiber find, courtesy of the deepest well ever drilled.)
- One word: rust: Oil industry expert Matthew Simmons (pdf) has an expression for the oil industry’s looming infrastructure problem: “Rust never sleeps.” The combination of ageing, rusting oil and gas pipes — coupled with a high-skill workforce that’s also ageing — create “almost insurmountable obstacles” for the industry, he argues.
- Price volatility: OPEC ministers now say an $80 barrel of oil is about the right price to keep the fuel flowing. (It’s trading at around $85 today.) That might be fine for OPEC, but it puts a bit of a pinch on a global economy that just over seven years ago was used to a price just a third as high. Bring the price much higher, and the economy can’t cope — people stop spending on other purchases to free up cash for the oil-related essentials, which include not just fuel but food. Bring the price much lower, and the energy companies lose their incentive to invest in new exploration, much less infrastructure upkeep and development of non-traditional fuel sources like oil sands, which require a high oil price to justify.
Government officials and business leaders, take heed: you’d be a lot better off tuning out the soothing reassurances from OPEC and the oil giants, and tuning in the warnings being given by everyone from Virgin’s Sir Richard Branson and the UK Industry Task Force on Peak Oil & Security.
As the Task Force noted upon releasing it latest report earlier this year, “Our message to government and businesses is clear. Act now. If we don’t, we run the risk of a return to the oil price shocks of the 1970s and 2008 with all the inherent uncertainty and trauma that brought.”
Oil is finite.
Only big oil is the winner. They can charge whatever the market will support. THe losers are the transportation companies that don’t have products lines to deal with a market for alternative technology vehicles. Consumers will adapt based upon their ability to do so.
Oil is finite.
tal vez la ambicion de demostrar el poder y la ambicion de ser uno de losprimeros en tener el oro negro ahora lo tenga que pagar muy caro con este derrame al no poder eliminar la fuga
Bear in mind that the depths of these deep water wells are far beyond the depths attainable by manned submersibles and that remote controlled submersibles are small and of very limited capabilities.
that’s mostly true, but i believe the shifting tectonic plates actually delivered some of the oil rich regions to the Arctic. also, the eras when the plankton probably lived were very hot, and there was little or no ice in the Arctic (the reason the seabed was anoxic was there was not enough of a current supplied by today’s cold poles). someone please correct me if i’m way off.
“Furthermore, 2009 was a banner year for new oil field discoveries — more than 10 billion barrels in potential reserves of black gold, which was the most found since 2000.”
This is deep sea oil, the reason a lot of it has been found is because until recently noone bothered to look for it before. Why? Look to the current disaster in the gulf of Mexico.
“Then there’s the fossil fuel riches of the Arctic that will likely be opening up in years to come”
There is no oil in the arctic regions. Oil comes from plankton that died 50-100 million years ago, but didn’t decompose because the seabead under it was a dead zone. There has never been a dead zone in the arctic.
Yes, as another poster said, we did find 10 billion barrels. Great! Only, we burned 33 billion in the same time! It has been around 1:3 find to burn ratio for a while.
The most oil we ever found we in 1965 and it has been going down ever since. Why people can’t understand this? I blame our education systems. Here is the chart. Peak Oil deniers, can you please explain yourselves? Since I assume you are also unable to read more into the graph, the area under the lines are reserves. Notice how the burn area is getting close to the discovered area? Once you get to the half way point, it’s all downhill. You can’t support an exponentially growing economy with falling production output, especially since we have NO viable alternative that can come even close to this amount of energy.
Open conversation about peak oil reality hastens the world economic crash. Some might think that is a good thing, many millions including most probably your own family will die.
Sure enough, gee…drill, baby, drill with subs neato
You say (correctly) that 2009 was a banner year for new oil field discoveries — more than 10 billion barrels in potential reserves.
That covers about 4 months of global consumption, at current rates.
Take some subs and start shooting missiles at it until it closes up to limit the flow and then continue to drill a second hole to pump concrete to close.
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