Officials Wake Up to Peak Oil
Posted by Xeno on April 5, 2010
When I began writing about peak oil professionally in 2006, it was generally considered a tinfoil hat theory. The notion that oil production might peak around 2012 (plus or minus) was only taken seriously by a few analysts who were considered extremely pessimistic.
Official forecasts had no cognizance of it whatsoever. All were confident that oil supply would continue to grow steadily to 130 million barrels per day (mbpd) and beyond, at prices that would be considered astoundingly cheap by today’s standards. Oil companies rarely mentioned peak oil, and when they did, it was in a casually dismissive way.
But as time marched on, the cornucopian arguments fell one by one. …
UK Task Force on Peak Oil: Shortages by 2015
The first bombshell was actually dropped on February 10, when the UK Industry Task Force on Peak Oil and Energy Security issued a report called “The Oil Crunch: A wake-up call for the UK economy.” I only mentioned it in passing at the time, but it was a stern warning that “oil shortages, insecurity of supply and price volatility will destabilise economic, political, and social activity potentially by 2015.”
It only made the news because Sir Richard Branson personally endorsed it; but the fact that the task force comprised top UK executives and energy experts lent it enough weight to be rather widely circulated in the press.
The British government, including energy minister Lord Hunt, responded by staging a closed-door summit meeting with the taskforce on March 22. As the UK’s Guardian reported, the government intended to develop an action plan to contend with a near-term peak, and to “calm rising fears over peak oil.”
Veteran peak oil analyst and taskforce member Jeremy Leggett explained: “Government has gone from the BP position — ’40 years of supply left, the price mechanism works, no need to worry’ — to ‘crikey’.” He urged the assembly to properly assess the risks of peak oil, and to immediately begin preparing for the end of globalization and an era of oil shortages in the West. …
Kuwait Report: Peak by 2014
The next was a report that surfaced around March 12. Three authors from the College of Engineering and Petroleum at Kuwait University had applied advanced mathematics to reserve and production data for the top 47 oil producing countries using a multi-cycle Hubbert model, which demonstrated a much better fit to historical data than single-cycle Hubbert Curve analyses.
The model estimates the world’s ultimate crude oil production at 2140 billion barrels, with 1161 billion barrels remaining to produce as of the end of 2005. It forecast that world production would peak in 2014 around 79 mbpd. The annual depletion rate of world reserves was estimated to be around 2.1%.
The results weren’t really news to the peakists, for they matched up quite well with the models of Colin Campbell, Jean Laherrère, and other analysts who have warned about peak oil since 1995. What made this report interesting was that first, it was from Kuwait; and second, it brought a new level of mathematical rigor to the study. …
Oxford Report: Reserves Exaggerated by One Third
On March 22, another bombshell exploded in the press as former UK chief scientist David King and researchers from Oxford University released a paper claiming that the world’s oil reserves had been “exaggerated by up to a third,” principally by OPEC.
Their “objective analysis” showed that conventional oil reserves stand at just 850-900 billion barrels — not the 1,150-1,350 billion barrels that are officially claimed by oil producers and accepted by the politically influenced IEA.
They anticipated that demand could outstrip supply by 2014-2015.
In a statement that sounded like a direct echo of what peak oil analysts like me have been saying for years, co-author Dr. Oliver Inderwildi remarked, “The belief that alternative fuels such as biofuels could mitigate oil supply shortages and eventually replace fossil fuels is a pie in the sky. Instead of relying on those silver bullet solutions, we have to make better use of the remaining resources by improving efficiency.” …
ConocoPhillips Gives Up on Growth
On March 25, ConocoPhillips CEO Jim Mulva admitted that pursuing new oil reserves just doesn’t pay. The remaining resources have become too marginal and too expensive, and the competition for them has become too intense.
Rather than keep slugging it out with bigger and better-funded players in pursuit of growth, Conoco has decided to sell $10 billion worth of its assets over the next two years, all of them in the marginal category, and concentrate on producing its core assets.
The proceeds will be used to buy back its stock, reduce its debt, and raise dividends — just as rival ExxonMobil has been doing for the last five years or so.
Interesting because years ago Mike Ruppert said Dick Cheney was behind the attacks of 9/11 and as a motive said Cheney held secret energy meetings, learned we are running out of energy, and directed the shadow government to allow us to invade Iraq, where the world’s 4th largest oil reserves reside.