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World crude production 2013 without shale oil is back to 2005 levels
World crude production 2013 without shale oil is back to 2005 levels.
– MARCH 13, 2014
Unnoticed by the mainstream media, US shale oil covers up a recent decline of crude oil production of 1.5 mb/d in the rest of world (using data up to Oct 2013). This means that without US shale oil the world would be in a deep oil crisis similar to the decline phase 2006/07 when oil prices went up. The decline comes from many countries but is also caused by fights over oil and oil-related issues in Iran, Libya and other countries which can be seen on TV every day.
Fig 1: World’s incremental crude oil production Oct 2013
Incremental production for each country is calculated as the difference between total production and the minimum production between Jan 2001 and Oct 2013. The sum of minima is the base production. Countries which had substantial changes in production appear as large areas in the graph. Russia supplied – quite reliably – the largest increment and the North Sea (UK and Norway) had the largest losses. Countries which feature prominently are Venezuela (low production in Jan 2003 due to a strike), Iraq (low production in April 2003 during the Iraq war), Libya (war in 2011), Iran (sanctions) and Saudi Arabia (production increase since 2002 and swing role)
Production is stacked from bottom as follows:
(1) countries with growing production: Kazachstan (recently flat), Russia (only +100 kb/d last year), Colombia (+60 kb/d), China (recently flat) and Canada (+200 kb/d syncrude from tarsands)
(2) Countries flat or in decline like UK and Norway
(3) countries which recently peaked: Brazil and Azerbaijan
Groups (1) to (3) peaked in Nov 2011 (dashed line) and declined by 1.2 mb/ since then
(4) OPEC countries with Iraq, Saudi Arabia, Iran and Libya
(5) US on top to see the impact of shale oil
Fig 2: US shale covers up recent decline in rest of world
The world without shale oil declined after a recent peak in Feb 2012.to an average of 73.4 mb/d in 2013, incidentally the same average seen for the whole period since 2005 when crude production was 73.6 mb/d
Fig 3: Annual crude oil production and US shale oil vs IAE’s WEO projections
The rest of world continues on a bumpy crude oil production plateau. Oil demand and supply projections of the International Energy Agency in 2004 and 2008 did not materialize. Only the 2010 WEO came close but only due to US shale oil which had not been predicted at the time to the extend it actually increased.
Let’s have a look at the main players in the upper part of Fig 1
Fig 4: Incremental crude production of Iraq, Iran, Libya, Saudi Arabia and US
We can see that Saudi Arabia declined in 2006/07 (prices up), pumped more in the Oilympic peak year of 2008, (but not enough and prices skyrocketed), served as a (negative) swing producer during the financial crisis year of 2009 and stepped in (belatedly) when the war in Libya started and continued pumping at record levels when sanctions on Iran started. US shale oil has not brought down oil prices substantially and definitely the US does not act as swing producer. Most shale oil producers would go into receivership if they stopped pumping. Saudi Arabia apparently tries to compensate for Libyan and Iranian production losses but does not seem to reduce crude production to offset US shale oil. Iraq will have to return to OPEC’s quota system. It will be interesting to watch at which production level that will be agreed upon and whether Iraq will adhere to it. In any case, all ME oil producers need to balance their budgets as highlighted in this post:
14/8/2013 OPEC’s average fiscal break-even oil price increases by 7% in 2013
http://crudeoilpeak.info/opec-fiscal-breakeven-oil-price-increases-7-in-2013
.
Fig 5: Middle East only.
Decline in Syria and Yemen was offset by increases in Kuwait, UEA and Qatar. Iraq could not offset Iran’s production drops.
Russia and FSU
Fig 6: Eurasia
Former FSU countries: Azerbaijan declines at 50 kb/d after its peak in 2010. Kazakhstan is flat since 2010.
Fig 7: Russian crude oil production growth is slowing
Russia, producing now at 10 mb/d, is still growing at around 100 kb/d but this growth rate is down from 2010 and 2012 years.
The IEA WEO 2013 writes: “Oil production in Russia is approaching the record levels of the Soviet era, but maintaining this trend will be difficult, given the need to combat declines at the giant western Siberian fields that currently produce the bulk of the country’s oil.”
http://www.worldenergyoutlook.org/publications/weo-2013/
Europe
Fig 8: The North Sea is in full decline
Africa
Fig 9: Incremental production in Africa
Irrespective of what is happening in Libya, Africa peaked.
Latin America
Fig 10: Latin America
Brazil seems to have peaked while Colombia slowly increased heavy oil production. Venezuela’s data appear sus as they have not been updated since Jan 2011
Summary
Since end 2010, the group of still growing countries (+1.2 mb/d) can’t offset decline elsewhere (-2.4 mb/d), giving a resulting decline of 1.2 mb/d or 400 kb/d p.a. This is mainly oil-geologically determined decline.
OPEC, which is usually called upon to provide for the difference between demand and non-OPEC production, has got its own problems (geopolitical feed-back loops caused by peaking oil production) and was not able to fill that gap. Global crude oil without US shale oil declined by 1.5 mb/d since its most recent peak in Feb 2012.
Conclusion:
While the mainstream media lulls the public into believing that US shale oil is a revolution, peaking oil production in many countries eats like a cancer through the oil supply system. The big problem is that more oil dependent infrastructure is being built which will not be needed when US shale oil peaks and the underlying decline is revealed.
Peak Oil: “Show-Stoppers” – Peak Oil Matters
Peak Oil: “Show-Stoppers” – Peak Oil Matters.
Freshly fracked wells sent U.S. oil production soaring 39 percent since 2011. That’s the steepest climb in history, and if production continues apace, the U.S. would become the world’s biggest source of oil by 2015, according to the U.S. Energy Information Administration.
Rapid well declines threaten to spoil that promise. The average flow from a shale gas well drops by about 50 percent to 75 percent in the first year, and up to 78 percent for oil, said Pete Stark, senior research director at IHS Inc.
‘The decline rate is a potential show stopper after a while,’ said Stark, a geologist with almost six decades in the oil patch. ‘You just can’t keep up with it.’ [1]
That’s an interesting comment, given that the company Mr. Stark works for is more commonly known for its sunny optimism about our future fossil fuel supply.
FRACKING ISN’T FREE OR EASY
The reality is that rapid decline rates are a common feature of fracked wells. Drilling faster, more, and at higher costs just to keep pace with current production is not exactly a winning strategy. Higher costs for them are supported by the higher costs we pay. At some point, consumers balk, and when they do, there goes a lot of investable funds for more production. Then what?
The article from which that quote was sourced describes some of the admittedly-fascinating overview of the artificial intelligence systems now being considered—and it some cases already deployed—to improve the drill results from fracking (the hydraulic fracturing of shale in order to facilitate the flow of “tight” oil trapped in those rocks.) The article notes that “four out of every 10 clusters of fractures in an average horizontal well are duds.” Given that each well can cost millions of dollars, much more than wells drilled in conventional crude oil fields, that can be a problem.
AN UNSPOKEN CHALLENGE OR TWO
The use of fiber-optics and 3D seismic imaging are among the technological advances now being used to aid scientists “scientists see and hear what’s going on two miles underground.”
An executive of Schlumberger Ltd is quoted in this same article announcing that the combination of their own scientists’ expertise with the “U-ROC” software program “has led to an almost 30 percent increase in production in some wells in the Eagle Ford [TX].”
An official from another petroleum company that after collaborating with Halliburton and using a “science-based approach,” his company’s “shares doubled in the five months after” a conference call with investors.
If that’s not enough good news, by last summer the company enjoyed its “best-ever results” in the shale formations of western Texas’ Permian Basis, “and that it was‘among the best’ among its competitors at that location. The improvements were attributed in part, as a spokesman noted, to the company’s “own internal efforts to pump more time and money into the science of drilling and production.”
A LOOK AT THE UNSPOKEN
Improved performance is improved performance. But for those of us interested in how depleting and finite fossil fuel resources—with a healthy concern that technology and economics will continue to make extraction and production feasible to begin with—will keep up with demand in the years ahead, the doubling of a company’s shares, “an almost 30 percent increase in production in some wells,” being “among the best,” and pumping “more time and money into the science of drilling and production” suggests that all is not well in Oil Production Land.
That’s precisely what those of us concerned about peak oil continue to stress to listeners and readers.
It’s probably safe to assume that none of those efforts or the technologies employed are inexpensive. It’s also a certainty that whatever costs are associated with developing, testing, supplying, and using those impressive advances get passed on to consumers.
The impressive technologies now in play, with their higher costs, to locate and produce a product harder-to-come-by and not of the same quality as the conventional crude oil we’ve used to power our civilization for more than a century all point to the fact that we clearly can no longer rely on Business As Usual in oil production itself and fossil fuel usage by all of us.
Taking a bit of a detour in the headlong pursuit of ever more expensive technologies in order to plan for what happens in years to come when that resource just doesn’t do what we all need it to do; or devote more resources to the alternatives which will be needed when it makes little sense to continue the fossil fuel chase; or even provide more information to the public now so that they can get into the game doesn’t seem all that unreasonable, does it?
~ My Photo: Corona del Mar, CA – 02.16.18
3 Surprising Sources of Oil Pollution in the Ocean
3 Surprising Sources of Oil Pollution in the Ocean.

An iridescent sheen spreads from a drop of crude oil on top of the water in the Gulf of Mexico.
PHOTOGRAPH BY JONATHAN BLAIR, NATIONAL GEOGRAPHIC
Christine Dell’Amore and Christina Nunez
PUBLISHED MARCH 25, 2014
Obvious oil spills, like the 168,000 gallons (635,000 liters) of oil that leaked into Galveston Bay on Saturday, usually make national news, accompanied by pictures of oil-blackened wildlife.
But such publicized events account for only a small part of the total amount of oil pollution in the oceans—and many of the other sources, such as automobile oil, go largely unnoticed, scientists say.
In fact, of the tens of millions of gallons of oil that enter North Americanoceans each year due to human activities, only 8 percent comes from tanker or oil pipeline spills, according to the 2003 book Oil in the Sea III by the U.S. National Research Council of the National Academy of Sciences, which is still considered the authority on oil-spill data.
Most oil pollution is “different than the pictures you see of beaches covered with tar and ducks getting stuck in it,” said David Valentine, a biogeochemist at the University of California, Santa Barbara. (Read more about how pollution harms the oceans.)
Here are three little-reported sources of oil that contribute to oil pollution in North American oceans.
1. Natural Seeps
Natural seeps of oil underneath the Earth’s surface account for 60 percent of the estimated total load in North American waters and 40 percent worldwide, according to the National Academy of Sciences.
These leakages occur when oil—which is lighter than water—escapes into the water column from highly pressurized seafloor rock. (Read about Gulf of Mexico seeps.)
Off Santa Barbara, California, some 20 to 25 tons of oil flows from seafloor cracks daily—making it one of the world’s largest seeps.
Valentine, who studies the Santa Barbara seep, noted that much of the natural oil is consumed by ocean bacteria that have evolved to eat certain oil molecules. (Read about how nature tackles oil spills.)
But in “places which don’t have natural oil seeps and you come along with an oil spill or a sewer pipe that delivers [oil pollution], organisms have not had an opportunity to adapt and are going to respond differently,” said John Farrington, dean emeritus and marine geochemist with Woods Hole Oceanographic Institution in Massachusetts.
2. Cars and Other Land Vehicles
A “pretty big issue,” Valentine said, is the oil on roads and other surfaces that’s flushed into the sea during rainstorms.
Most cars drip oil onto the ground, usually on impermeable concrete or asphalt, and that oil ends up trickling into the ocean. In drier places like California, the oil builds up on the asphalt and, when it finally rains, the water shuttles large amounts of oil into the ocean.
“We’re doing a much better job than 40 or 50 years ago of recycling motor oil,” Woods Hole’s Farrington said. “You can find storm sewers around the nation that have stencils on them that say ‘don’t dump, it goes to the sea.’ So there’s less input in that regard.”
But he notes that there are still a lot of cars and trucks contributing to the “dribble, dribble, dribble” effect of slow leaks that end up on asphalt and contribute to runoff pollution.
Not surprisingly, this sort of invisible pollution is more subtle than the Galveston Bay spill, which is much more localized and visible, Valentine noted.
Oil runoff from land is “complex in that it can hang around [in the ocean] and move between water and sediment, [which] makes it difficult to effectively track.”
A hotly debated topic, he added, is what these constant pulses of oil are doing to the environment and its inhabitants. Scientists know that animals directly exposed to oil suffer health problems, but what’s unknown is the impact of low, chronic oil exposures on wildlife, he said. (Related: “On 25th Exxon Valdez Anniversary, Oil Still Clings to Beaches.”)
3. Recreational Boats
People operating recreational craft, such as Jet Skis and boats, sometimes spill oil into the ocean.
“It’s usually operational error, human error or unpreparedness, [or] lack of education. A lot of time mostly it’s just negligence,” said Aaron Barnett, a boating program specialist at Washington Sea Grant, a state-federal partnership aimed at marine research and outreach across Washington State.
“It’s just not on [boaters’] radar scope. They’re there to have fun, it’s leisure, it’s recreation. … That means that certain things don’t get dealt with, like proper engine maintenance.”
Barnett added that boat owners will top off their fuel tanks as they would a car, and on a hot day the fuel expands and escapes through a vent.
Just like land-based pollution, though, oil spills by recreational boats are “hard to track, because about 80 percent of oil spills go unreported, so there’s really no way to know” on what scale this is happening, Barnett said.
Overall, he said, the Environmental Protection Agency “looks at the small-oil-spill problem as sort of like death by a thousand cuts.”
Ukraine Only Has Enough Gasoline For A Month | Zero Hedge
Ukraine Only Has Enough Gasoline For A Month | Zero Hedge.
Nothing to see here, move along. While it appears the Russians are willing to pay the price of modest sanctions from the west to ‘liberate’ their fellow countrymen, the fallout from further tension with Ukraine could “boomerang” once again on the divided nation. As RBC Ukraine reports, the Minister of Energy and Coal Industry Yuriy Prodan said at a press conference today that “oil reserves will last for 28-29 days” in Ukraine. After that, the negotiation begins as Ukraine already owes billions for previously delivered gas – as Ukraine’s storage levels more than halved in the last 3 months.
Stocks of petroleum products in Ukraine will last for 28-29 days, said at today’s press conference, the Minister of Energy and Coal Industry Yuriy Prodan.“Speaking on the situation with oil, then ensure there is quite stable. Today oil reserves will last for 28-29 days,” – he said, the ” RBC-Ukraine . ”
At the same time, the Minister noted the significant risk reduction in the supply and rising gas prices. As of March 25, 2014 in Ukrainian underground gas storage facilities located 7 billion cubic meters of gas.
“Up there can be about 2 billion is not the quantity that scares experts, it would be possible to hold only a week. It all depends on what kind of regime will be whether we can take about 20 million cubic meters. Meters of gas to reverse and so on “- said Prodan.
According to the company “Ukrtransgaz” abnormally warm winter 2013 2014. has reduced gas extraction from underground storage by an average of 37% compared to the same period last year: it was 60 million cubic meters per day.
In late December 2013. occupied at the time the post of Minister of Energy and Coal Industry of Edward Stawicki reported that Ukrainian gas reserves in underground storage is 16.5 billion cubic meters.
We suspect any further military intervention will only crimp this supply even faster.
Climate Change and Human Extinction – A Personal Perspective | Peak Oil News and Message Boards
Climate Change and Human Extinction – A Personal Perspective | Peak Oil News and Message Boards.
“Just one source, methane from the arctic…leads us [by 2030] to…a temperature beyond which humans have never existed on the planet.” Guy McPherson, professor emeritus of University of Arizona in Environmental Studies, shares highlights from his compilation of recent reports on climate change effects. Their number and extent have grown exponentially since he began five years ago. In this interview, he shares his personal journey through despair and deep grief to recent acceptance. “I suspect we get to see the end of this movie… Nobody else in human history [has]… We get to see how humans act in the face of their own demise.” Episode 262. [guymcpherson.com] Watch Guy’s Climate Change presentation February 2014
Climate Change and Human Extinction – A Personal Perspective | Peak Oil News and Message Boards
Climate Change and Human Extinction – A Personal Perspective | Peak Oil News and Message Boards.
“Just one source, methane from the arctic…leads us [by 2030] to…a temperature beyond which humans have never existed on the planet.” Guy McPherson, professor emeritus of University of Arizona in Environmental Studies, shares highlights from his compilation of recent reports on climate change effects. Their number and extent have grown exponentially since he began five years ago. In this interview, he shares his personal journey through despair and deep grief to recent acceptance. “I suspect we get to see the end of this movie… Nobody else in human history [has]… We get to see how humans act in the face of their own demise.” Episode 262. [guymcpherson.com] Watch Guy’s Climate Change presentation February 2014
Major oil spill after million-gallon barge collides with ship in Texas | wwltv.com New Orleans
Major oil spill after million-gallon barge collides with ship in Texas | wwltv.com New Orleans.
wwltv.com
Posted on March 23, 2014 at 5:57 PM
Updated yesterday at 6:01 PM
McALLEN, Texas — A barge carrying nearly a million gallons of especially thick, sticky oil collided with a ship in Galveston Bay on Saturday, leaking an unknown amount of the fuel into the popular bird habitat as the peak of the migratory shorebird season was approaching.
Booms were brought in to try to contain the spill, which the Coast Guard said was reported at around 12:30 p.m. by the captain of the 585-foot ship, Summer Wind. Coast Guard Lt. j.g. Kristopher Kidd said the spill hadn’t been contained as of 10 p.m., and that the collision was still being investigated.
The ship collided with a barge carrying 924,000 gallons of marine fuel oil, also known as special bunker, that was being towed by the vessel Miss Susan, the Coast Guard said. It didn’t give an estimate of how much fuel had spilled into the bay, but there was a visible sheen of oil at the scene.
Officials believe only one of the barge’s tanks was breached, but that tank had a capacity of 168,000 gallons.
“A large amount of that has been discharged,” Kidd said. He said a plan was being developed to remove the remaining oil from the barge, but the removal had not begun.
The barge was resting on the bottom of the channel, with part of it submerged. He said boom was being set up in the water to protect environmentally-sensitive areas and that people would be working through the night with infrared cameras to locate and skim the oil.
The barge was being towed from Texas City to Bolivar at the time. The Coast Guard said that Kirby Inland Marine, which owns the tow vessel and barge, was working with it and the Texas General Land Office at the scene.
The Coast Guard said six crew members from the tow vessel were in stable condition, but it offered no details about their injuries.
Jim Suydam, spokesman for the General Land Office, described the type of oil the barge was carrying as “sticky, gooey, thick, tarry stuff.”
“That stuff is terrible to have to clean up,” he said.
Mild weather and calm water seemed to help containment efforts, but stormy weather was forecast for the area on Sunday. Suydam said almost every private cleanup outfit in the area was out there helping out under the coordination of the Coast Guard and General Land Office.
Bruce Clawson, the director of the Texas City Homeland Security, told The Daily News in Galveston that the barge sank, but that there is no danger to the community, which is about 40 miles southeast of downtown Houston. Suydam said he could not confirm whether the barge sank.
Tara Kilgore, an operations coordinator with Kirby Inland Marine, declined to comment Saturday.
On its Facebook page, Texas City Emergency Management said the dike and all parks on the water are closed until further notice. And the Coast Guard said that part of the Houston ship channel was closed to traffic.
Richard Gibbons, the conservation director of the Houston Audubon Society, said there is very important shorebird habitat on both sides of the Houston ship channel.
Audubon has the internationally-recognized Bolivar Flats Shorebird Sanctuary just to the east, which Gibbons said attracts 50,000 to 70,000 shorebirds to shallow mud flats that are perfect foraging habitat. He did not know how much oil had been spilled, but said authorities were aware of the sanctuaries and had practiced using containment booms in the past.
“The timing really couldn’t be much worse since we’re approaching the peak shorebird migration season,” Gibbons said. He added that tens of thousands of wintering birds remain in the area.
Monday marks the 25th anniversary of the Exxon Valdez spill off the coast of Alaska. Suydam said that spill spurred the creation of the General Land Office’s Oil Spill and Prevention Division, which is funded by a tax on imported oil that the state legislature passed after the Valdez spill. The division does extensive response planning including pre-positioned equipment along the Texas coast.
Major oil spill after million-gallon barge collides with ship in Texas | wwltv.com New Orleans
Major oil spill after million-gallon barge collides with ship in Texas | wwltv.com New Orleans.
wwltv.com
Posted on March 23, 2014 at 5:57 PM
Updated yesterday at 6:01 PM
McALLEN, Texas — A barge carrying nearly a million gallons of especially thick, sticky oil collided with a ship in Galveston Bay on Saturday, leaking an unknown amount of the fuel into the popular bird habitat as the peak of the migratory shorebird season was approaching.
Booms were brought in to try to contain the spill, which the Coast Guard said was reported at around 12:30 p.m. by the captain of the 585-foot ship, Summer Wind. Coast Guard Lt. j.g. Kristopher Kidd said the spill hadn’t been contained as of 10 p.m., and that the collision was still being investigated.
The ship collided with a barge carrying 924,000 gallons of marine fuel oil, also known as special bunker, that was being towed by the vessel Miss Susan, the Coast Guard said. It didn’t give an estimate of how much fuel had spilled into the bay, but there was a visible sheen of oil at the scene.
Officials believe only one of the barge’s tanks was breached, but that tank had a capacity of 168,000 gallons.
“A large amount of that has been discharged,” Kidd said. He said a plan was being developed to remove the remaining oil from the barge, but the removal had not begun.
The barge was resting on the bottom of the channel, with part of it submerged. He said boom was being set up in the water to protect environmentally-sensitive areas and that people would be working through the night with infrared cameras to locate and skim the oil.
The barge was being towed from Texas City to Bolivar at the time. The Coast Guard said that Kirby Inland Marine, which owns the tow vessel and barge, was working with it and the Texas General Land Office at the scene.
The Coast Guard said six crew members from the tow vessel were in stable condition, but it offered no details about their injuries.
Jim Suydam, spokesman for the General Land Office, described the type of oil the barge was carrying as “sticky, gooey, thick, tarry stuff.”
“That stuff is terrible to have to clean up,” he said.
Mild weather and calm water seemed to help containment efforts, but stormy weather was forecast for the area on Sunday. Suydam said almost every private cleanup outfit in the area was out there helping out under the coordination of the Coast Guard and General Land Office.
Bruce Clawson, the director of the Texas City Homeland Security, told The Daily News in Galveston that the barge sank, but that there is no danger to the community, which is about 40 miles southeast of downtown Houston. Suydam said he could not confirm whether the barge sank.
Tara Kilgore, an operations coordinator with Kirby Inland Marine, declined to comment Saturday.
On its Facebook page, Texas City Emergency Management said the dike and all parks on the water are closed until further notice. And the Coast Guard said that part of the Houston ship channel was closed to traffic.
Richard Gibbons, the conservation director of the Houston Audubon Society, said there is very important shorebird habitat on both sides of the Houston ship channel.
Audubon has the internationally-recognized Bolivar Flats Shorebird Sanctuary just to the east, which Gibbons said attracts 50,000 to 70,000 shorebirds to shallow mud flats that are perfect foraging habitat. He did not know how much oil had been spilled, but said authorities were aware of the sanctuaries and had practiced using containment booms in the past.
“The timing really couldn’t be much worse since we’re approaching the peak shorebird migration season,” Gibbons said. He added that tens of thousands of wintering birds remain in the area.
Monday marks the 25th anniversary of the Exxon Valdez spill off the coast of Alaska. Suydam said that spill spurred the creation of the General Land Office’s Oil Spill and Prevention Division, which is funded by a tax on imported oil that the state legislature passed after the Valdez spill. The division does extensive response planning including pre-positioned equipment along the Texas coast.
Peak Oil: Sobering Realities – Peak Oil Matters
Peak Oil: Sobering Realities – Peak Oil Matters.
Expenditures for finding and developing oil fields have tripled in the last decade and the return from these expenditures has not been enough to justify the costs. Nearly all of the major oil companies have announced major reductions in their exploration and drilling programs and several are selling off assets as they are caught in a trap between steady oil prices and rapidly rising operating costs.
Tom Whipple, a former CIA analyst and highly-respected editor of the daily Peak Oil News and the weekly Peak Oil Review [published by ASPO – the Association for the Study of Peak Oil] offered that observation, [and the other quotations here], in an informative, straightforward, and necessarily sobering assessment of the current state of fossil fuel production.
His efforts won’t gain him rapid admittance into the Happy Talk Misleading Hall of Fame. What his observations will do (coupled with those of other esteemed analysts and commentators on the subject of peak oil) is to interject a much-needed awareness of facts and reality into public discussions about our future and the energy supplies we’ll all be relying upon.
That awareness cannot come too soon, burdened as most citizens are by a steady parade of foggy assertions bearing a reasonable but incomplete relationship to truth. We need more than passing acquaintance with facts that so clearly affect each and every one of us. Few of us appreciate just how much we rely upon inexpensive, readily-available supplies of energy to live our lives.
Taking this for granted shouldn’t come as a surprise to anyone. It’s pretty much all any of us and our immediate prior generations have ever known. Who among us considers the air we breathe thousands of times each day?
The simple fact, however, is that there is one vital aspect to this great body of fossil fuels which has powered us from the time of our Founding Fathers to this extraordinarily complex and awe-inspiring technologically-advanced 21st Century. These are finite resources.
We’ve drawn the cheap and easy supply in ever-more innovative and ingenious ways for nearly two centuries. Our go-to supplies are now harder to extract, more costly, less efficient. An engineering degree is not required to appreciate that this combination does not bode well for societies blindly pursuing more of everything without a pause to consider an alternate plan or two.
The world’s existing fields are depleting at rate of circa 4 million b/d each year so without constant drilling of new wells in new fields global production will quickly wither and prices will climb still more….
To keep the oil flowing, the world’s oil companies have invested some $4 trillion in the last nine years to drill for oil. About $2.5 trillion of this was spent on simply replacing production from existing oil fields. Even this gigantic expenditure was not enough since conventional oil production fell by 1 million b/d during the period.
Pause for a moment to consider that current state of affairs. For all the hype about the marvels of fracking and the energy boom tight oil production unleashed, the investments and returns aren’t adding up as bottom-line admirers hope. We consumers aren’t delighted with paying the higher prices needed to support the more extravagant energy production costs associated with unconventional energy supplies being relied upon more and more. (Worth mentioning again that the decline rates of fracked wells, and thus the need to drill more and more wells, at higher and higher prices, for less efficient products, are facts all conveniently omitted from the cheers offered by the oil industry’s media shills.)
A reckoning on both scores will come soon. Tom Whipple was succinct in that regard:
[I]nvestments in future production are going down, meaning that in a few years depletion likely will overwhelm new production and output of conventional oil will drop.
His inquiry was as good as any:
What is going to happen in the next few years?
Contemplating an answer or two might be a good investment.
~ My Photo: “Know The Risks” – Newport Beach, CA 02.16.14
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