A skeptical view of peak oil

Learn more about Peak Oil at Energy and Capital.

Since posting my very own Peak Oil Clock, I have been mulling over this Peak Oil concept. Since I do work for an oil company, I knew about the concept but it seems to me that there are conflicting and vested interests in determining when Peak Oil Production will be reached. According to the clock above, it is less than 3 years away. Other predictions take Peak Oil to 2015 and beyond. It depends obviously on who you ask. Oil companies are not interested in discussing a short-term Peak Oil because it would affect their stock price - even though price of oil after Peak Oil is reached will definitely begin to rise sharply. Governments of oil producing companies (why is it that oil is found in troublesome spots like Nigeria and Venezuela?) are not interested in discussing the issue although I suspect Mr. Chavez may want to say that Peak Oil has been reached already as he wants the price of oil to rise to $120 per barrel.

And it will rise. But, very important to understand the debate, is to look at past estimates of our oil reserves. According to Wikipedia, here are the estimates of world reserves during the course of the 20th century:

- In 1874 the state geologist of Pennsylvania believed that all the oil would be gone by 1878
- In 1920 the U. S. Geological Survey estimated 60 billion barrels as the world reserve
- In 1950, estimates were raised to 600 billion barrels. Note that some barrels of the original 60 had already been consumed.
- In 1970 we were looking at 1500 billion barrels
- The same USGS estimated in 1994 2400 billion barrels and in 2000 revised the estimation to 3000 billion barrels

Where are those barrels coming from? They are not being produced but better estimates and better extraction technology (as well as rising prices) are allowing more and more oil to be recovered from places that were previously inaccessible and uneconomical to produce from.

Dave O'Reilly, Chairman of Chevron Corporation, indicated in a speech at the 26th annual Oil and Money Conference in London, that Peak Oil would more resemble a plateau than a peak. It seems to me that he is on to something, as there is a lot of investment going into increasing production, what with oil at $90 per barrel more and more locations where previously oil companies did not feel inclined to give a second glance at are now being actively worked on. The oil containing sands in Canada and Colorado are one example - this oil would have been uneconomical to recover at $40 or $50 a barrel but with current prices, it begins to look like a good opportunity.

And the side of consumption needs to be looked at. Although we are now using more fuel efficient vehicles, oil consumption continues to rise, with China and India leading the way. These countries are both motivating international oil companies to look for new sources of oil as well as sending their own national oil companies to look for sources of crude abroad. An example is the newly formed alliance between China and Venezuela and the (unsuccessful) attempts of China to buy out other oil companies such as Unocal.

When discussing Peak Oil, these factors have to be taken into account and as one of our known skeptical thinkers, Brian Dunning, likes to say: "Be skeptical".

TED: 10 ways the world could end

Stephen Petranek delivers an incredibly humorous presentation on 10 ways the world could suddenly come to an end. He delivers them in a "top ten" format and although, obviously, all of them spell tragedy for mankind, you can't avoid the feeling that this is tongue-in-cheek, even when you are seriously pondering all of them as the presentation ends. This is a video that can be watched online, downloaded to your desktop or imported into iTunes and viewed via your iPod. Choose your weapon. Click on the TED logo to watch or download the video. While at the TED site check the other interesting and intellectual talks on the TED website. There are fantastic presentations there, like Chris Bangle on cars as an artistic expression or Ngozi Okonjo-Iweala talking about how foreign help can really help Africa (a powerful presentation by an impressive woman) or Jane Goodall reflecting on what differentiates us from apes (she seems to imply that apes are the better man). This excellent site is great nourishment for your intellect. I am hooked on the TED talks and keep coming back to the site for more. I hope you will feel the same.

The world is not enough

No, it is not a James Bond movie, it is a report by the UN on the world resources. Again, as with the Peak Oil Clock, I am skeptical of the conclusions but they are scary, nonetheless. I guess we have to start educating our children on how better to support our activities leaving a very light footprint on this world, which we only have one, anyway...

Check out the article on the Scientific American Website. Picture is linked to the SCIAM website as well - it is not mine! Click on the red Earth picture above to go to the Sciam Website and read the full article!

Misquoting Jesus: how scribes altered scriptures and how readers may never know

This is a highly recommended series of videos of a lecture by Dr. Bart Ehrman, who is a bible scholar and teologist. I highly recommend you look at the whole series and you will seriously doubt the claim that the bible has any "divine" inspiration.

Work Peak Oil Clock - be very afraid!

This is really amazing. I am skeptical of the time left for Peak Oil (a subject of much debate) but the consumption numbers you can trust.
Something to think about, no doubt...

Learn more about Peak Oil at Energy and Capital.