Peak oil

Idea

Peak oil is a theory that the rate of crude oil extraction will reach a peak and start to decline in the near future. A common confusion is that the primary importance is when complete depletion will occur, whereas the most practically important issue is extraction rates over time. It is based upon models using geological reasoning and statistical modelling. In common with other peak theories, it is only possible to comprehensively demonstrate peak has occurred in retrospect and as such peak oil is a controversial topic.

Oil’s key role in human activities

Fossil fuels, and fuels refined from oil in particular, have historically been very important in creating the current lifestyle for the typical westerner. Enormous amounts are used: for example, total yearly world oil production in 2004 was 4.7 teraliters, or 4.7 billion cubic meters.

There are several reasons why oil is so preferred:

1. It provides are large reserves of energy which are easily extractable. Although other energy sources have a greater EROEI, they tend to require greater capital investment and time to extract. In particular, it means that it is feasible for a the majority of the population to be supplied with their energy by a comparatively small number of energy workers.

2. It is liquid, hence easier to use in vehicles than a solid or gas.

3. It has higher energy densities than other fuels, in particular high enough for mobile usage.

These properties are very important in enabling mass-market, cheap personal travel (via cars) and international travel (via aeroplanes). To a lesser extent, it is responsible for the ability to use heavy machinery (e.g., mechanical diggers) anywhere desired without needing energy infrastructure.

These effects, along with large scale industrial agriculture, it is argued, allow the majority to spend their time upon other issues.

In addition, ammonia is an important inputs in the creation of artificial fertilizers. Currently, the preferred feedstock for creating ammonia are primarily coal and natural gas.

Although petrochemicals are used to create plastics and miscellaneous other products, the volume of petrochemicals used is small compared to other uses and potential substitutes exist, so this is not a priority consideration.

As discussed in the Questions (below), there are substitutes and technologies for all these uses but the sheer magnitude of current world usage and infrastructure may present problems.

“Definitions”

Flow rate, independence from field size

“All liquids”

Data reliability - quota incentives

Observational evidence

Models and predictions

A few of the major models for attempting to predict oil extraction curves is considered in medium detail here. There are some features common to all models:

1. Even peak oil skeptics accept that an individual field will undergo a “life-cycle” of a ramp-up period, a possible production plateau and a period of decline until it becomes uneconomic. The models aim to estimate the aggregate production summing the outputs of various fields at various stages in their lifecycle and new discoveries.

2. The goal of modeling is qualitative understanding as much as precise prediction. One of the most interesting, and potentially important, things arising from various “semi-realistic” models is that the combined output tends to curves with roughly the same shapes as simpler, purely statistical models.

Hubbert linearisation

See the detailed article hubbert linearisation.

Dispersive Discovery + Oil Shock Model

This combines models for both the field discovery process as well as the individual field output curves.

dispersive discovery+oil shock

(Original analysis and illustrations by “WebHubbleTelescope”.)

computer simulation post blog

Sam Foucher added to the Shock Model, trying to reconcile with the Logistic curve, labeling it the Hybrid Shock Model

The online posts were combined into a comprehensive document on oil depletion called The Oil ConunDRUM

Bentley model

The primary goal of this model is to understand what kinds of aggregate production curves arise from large numbers of simple (eg, triangular) individual field models.

The following plots illustrate, for the Norwegian oil production, how the precise aggregate production from the various fields is very close to the aggregate from triangular approximations. (Original analysis and plotting by Sam Foucher.)

The practical import of this model is as a demonstration of how the simpler statistical models yield curves with the same characteristics as detailed models.

Bentley model

EROEI of oil based fuels

Note that these figures are for different parts of oil’s supply chain. From when it is first discovered, to when it is refined into distillate fuels, and does not include information of the EROEI of it’s use in different applications. No detailed, referenced source of information found for some of these figures. Others are from Science (1984), the state of California (2006), and other sources.

Notice that the figures for discovery and production are indicative of the declining EROEI as oil discovery and production have continued over time.

Oilfield discovery, production, transportation and refining	estimated EROEI
typical California oil refinery, 2006	22
typical US oilfield (discovery, assumes 1 BOE equivalent/foot drilled), pre-1950s	100
typical US oilfield (discovery), 1970s	8
typical US oilfield (production), 1970s	23
typical US oilfield (not specified), 2000	11--18
California oilfield (production), 2006	6
Ghawar supergiant field (not specified)	100
Shale oil (not specified)	1.5--4
Oil sands (not specified)	5--6
the oceanic transportation of oil and it's products, 2008	100
Oil derived fuels in California, 2006	4-5

Common criticisms of peak oil theory

The major criticisms of the peak oil theory

1. The figures show there’s plenty of oil. As discussed, there is some doubt about official reported reserves. In addition, there’s a difference between the amount of oil reserves and the acheivable extraction rate.

2. Peak oil “evidence” so far is due to geopolitics. It is undoubtedly true that geopolitical issues affect oil production (eg, the removal of Iraq from the early 1990s onwards, deliberate reductions of output quotas by OPEC, etc). However, (i) the statistical nature of modeling implicitly attempts to take this into account and (ii) humanity doesn’t appear to be getting better noticeably better at resolving geopolitical issues. As such, even if this were completely true it’s unclear it affects the conclusions.

3. New oilfields are being discovered all the time. This is qualitatively true, but it appears that the majority of the huge, easy-to-access oilfields have already been found. The new discoveries are large numbers of smaller fields or in more difficult and expensive to access locations such as in the continental shelf deep at sea (often requiring new drilling technology to be developed). These factors act to reduce possible extraction rates, even if they are large fields. This list of oil megaprojects gives some idea of future predictions. (There are some claims that there is sufficient oil that simply improved discovery technology, eg, using Binary Seismo-Electromagnetic (BSE) signatures, will dramatically postpone peak oil. This case, particularly supporting the existance of an abundance of economically extractable oil which simply needs finding, is far from convincingly made.)

4. Oil is generated abiotically. This is based on the theory that oil is generated by purely geologic processes, so that models based upon finding viable locations for where compressing plant matter becomes fossil fuels dramatically underestimate the amount of crude oil available. This theory appears to have little compelling support in retrodicting previous finds, and there are no announced successful predictions of new oilfields using abiotic theory.

5. Extraction technology is improving and along with investment will increase the ultimately extracted reserves. (Note that every oilfield will have a depletion point at which it is either economically or energetically unviable to extract the remaining oil.) This is qualitatively true, but it appears that the magnitude of the improvements is relatively minor compared to existing field depletion. In addition, it appears that technology advocates often underestimate how much of the improved technology is already being used by oil producing nations (thus reducing the magnitude of the potential improvement).

6. Other substances will be substituted for oil. Here it is often stated that it was as whale oil became more difficult to obtain its price rose and that this caused a transition to the use of crude oil. This is true but happened at a time with a much smaller world population and energy usage. As mentioned in the discussion of oil’s role, it is unclear that there’s a convincing substitue for oil on the scale of current world usage. The current oil usage of around 86 million barrels per day corresponds to using around 0.5 exajoules of energy per day: substituting on this magnitude is clearly a very big task, even assuming no losses from energy conversion. Similarly, as an energy carrier, gasoline (petrol) has an energy density of 37.3 MJ/L whilst,for example, compressed hydrogen only has an energy density of 5.6 MJ/L. (Figures from Wikipedia’s Energy Density page.)

   Even minimizing just one aspect, for instance gasoline consumption in the United States, would require a huge increase in electricity generation. Assuming that we did so through an expansion of wind power, we would need roughly 700 billion kWh of electricity (2 trillion passenger vehicle miles traveled per year at .34 kWh per mile) to power a nation of Nissan Leaf sized automobiles. As of 2009, wind power in the U.S. generated roughly 75 billion kWh, so we would need to increase wind generation by nearly an order of magnitude to generate this electricity. Assuming a rate of installation equivalent to the amount installed in 2009, we would need roughly 30 years to accomplish this.

Environmental issues from obtaining and using oil

Extensions of peak oil theory

Export land model

Responses

Questions

1. There are substitutes available for all the uses of oil, but is the sheer magnitude of the transition task in itself going to cause problems?

Discussion

1. The world peak is different to the peaks we’ve seen in individual countries and fields, because the price can now rise. This should mean that the tail is more stretched out as otherwise uneconomic fields come into play (like tar sands, very heavy oil, coal liquefaction, abandonned fields, and maybe even oil shales). Also it means that there is a lot of pressure to get off oil as much as possible. Even the Saudis don’t want to burn oil for electricity. Electric cars are coming for some uses. Nuclear powered commercial shipping may be economic. Etc. It will be many decades before we run out of oil for high value applications. However it seems that many of these changes are not starting soon enough and things will be bad for a while.

1. On energy density: The fuel of choice for interstellar flight is anti-matter. Lots of energy goes into making the powerful lightweight batteries we use in portable stuff like mobile phones and laptops. The message is that, in a normal way, there is good value in using lots of stationary energy to produce much smaller amounts of dense energy for transportation or transportable applications. This fact has been suppressed by the availability of oil which was cheap and already dense. Now that we are looking into this problem we may remember Sheik Yamani’s (past Saudi Oil minister) quote “The stone age didn’t end because they ran out of stones”.

1. Peak Oil is related to claims of Peak Fossil fuel. However it seems that exploration and development of gas and coal have been suppressed by the availability of the more convenient liquid form. The claims wrt coal are based on traditional extraction methods, but deeply buried coal can be accessed by underground coal gasification.

1. A (possibly temporary) oil peak is happening now, with oil production unable to expand in response to price increases. It would be nice if we could get the economists who favour all possible effort to expand the economy (like Paul Krugman from NY Times) to respond to the question: “That would result in greater oil consumption. What if the world can’t pump that much more oil at the moment?”. It would also be nice if we could admit that growth is going to be limited for a while and have a rational discussion about how society should handle that fairly. E.g. an answer might be to get people working but not spending, with future financial security, by forcing them to take some of their income as “Energy Crisis Bonds” which will retain their value as a fraction of GDP, but not be spendable until enough of the massive infrastructure changes have been implemented..

2. Looking at the EROEI of oil extraction alone seems kinda weird since it’s an intermediate product as opposed to a finished product like diesel or electricity. If we look at just the natural gas and electricity needed for refining it appears that the EROEI of fuels from oil at a maximum of ~22:1 or more if we include the co-product (eg asphalt, ethane and propane for plastics, and so on) energy equivalent. We use ~65kWh of electricity/natural gas to refine the stuff and get out about ~1450kWh of gas/diesel/jet fuel/etc. I think this also implies another interesting idea, if we took the energy needed to extract and refine a gallon of fuel in California (~8kWh of electricity equivalent per gallon), and instead used that to power an electric car, we could go almost the same distance as a comparable gasoline model goes using all the energy needed to extract/refine that gallon of gasoline plus all the energy inherent to that gallon of gasoline. The EROEI figures for “extraction” should also be taken with a grain of salt. The 100:1 figure was for discovery only, not extraction, and the other figures were for both. None of them include the EROEI of refining the oil, so it’s fuels are still capped at ~22:1. Even the figures for extraction were based on the assumption that the energy used for drilling was less than one BOE/foot, which may or may not be correct. In terms of substitution the amount of useful work done depends on the application. If someone is using N kWh of electricity to heat their home then that’s more or less equivalent to n kWh of heating oil, however if we’re comparing gasoline used in an internal combustion engine to electricity used in an electric motor, then a kWh of electricity will generate more mechanical energy than a kWh of gasoline will. W/ a conventional car ~35kWh of gasoline will take us ~30 miles, and with a hybrid ~50 miles, but an electric car will go ~100 miles given the same amount of energy as electricity.

References

Here are two plans of action related to peak oil:

• Richard Heinberg, Oil Depletion Protocol: A Plan for a Sensible Energy Future.

• Amory B. Lovins, E. Kyle Datta, Odd-Even Bustnes, Jonathan G. Koomey and Nathan J. Glasgow, Winning the Oil Endgame, Rocky Mountain Institute, 2007.

Here are references for some of the EROEI figures:

• Margaret Sheridan, California crude oil production and imports, April 2006

• California energy commission, California Petroleum Industry, Last Modified: 06/18/08

• RTI International, EnSys Energy & Systems, Inc., Navigistics Counsulting, Global Trade and Fuels Assessment Future Trends and Effects of Requiring Clean Fuels in the Marine Sector, Prepared for the U.S. EPA on November 2008