Scary Oil News
Tue Feb 22, 2005 at 11:06:52 AM PDT
Since the mid-1950s it has been apparent to some petroleum engineers that the era of readily available oil will be short indeed on a historical scale.
M. King Hubbert, the first engineer to publish such results, predicted in 1956 that oil extraction rates in the "lower 48" contiguous United States would peak, then begin to decline, around 1970. The actual peak of U.S. production came in 1971, clearly confirming Hubbert's calculations.
The world's earliest extraction of petroleum by drilling began near Titusville, Pennsylvania on August 27, 1859. From that date until the peak in 1971, the heyday of U.S. oil production lasted only 112 years. Yet even that is a significant overstatement, since in today's terms the entire world output of crude oil was negligibly small until about 1915. We might more reasonably say that the "good times" for the Lower 48 lasted only 55 years.
More below the fold.
Hubbert later predicted that world oil production would peak in the 1990s. But the whole world is a much more diverse territory than the lower 48 states, and had not, at that time, been as comprehensively surveyed. Hubbert's prediction for the world's oil production peak, we now know, turned out to be premature.
But how far off was Hubbert really? The February 2005 newsletter of the Association for the Study of Peak Oil & Gas (ASPO) predicts that world "conventional" oil will peak in... 2006.
The exact predicted date of the peak is quite controversial, with some authorities claiming it is still decades off. Further, the experts seem to agree that we can never be certain we have seen the peak until after it has passed. Thus no one has been absolutely sure whether it's time for the public to start worrying about this bothersome problem.
So when one of the Bush Administration's most respected petroleum advisors unexpectedly says that "we may have already passed peak oil," producers and consumers of petroleum all around the world instantly sit up and take notice.
Matthew Simmons, President of Simmons & Co International, is reported to have told Al-Jazeera just that.
If Saudi Arabia have damaged their fields, accidentally or not, by overproducing them, then we may have already passed peak oil. Iran has certainly peaked, there is no way on Earth they can ever get back to their production of six million barrels per day.
Since world oil consumption has been increasing steadily for many decades, the day when actual oil production begins to decline is a serious moment indeed. And previous experience in the oil business indicates that once production actually declines for a given region, it never goes up again. In effect, the oil fields are starting to empty out, and it becomes progressively more difficult to extract the remaining oil, which is trapped in porous rocks rather than simply floating on the surface, waiting to be pumped out.
By all means read about Simmons's new words of caution. Then, if you really want to know what fear feels like, take a look at this recent article by Jan Lundberg. Lundberg was formerly the author of the famously authoritative "Lundberg Letter" about the petroleum business. Although the newsletter continues to be published under its original name, Lundberg himself has moved on and now works on conservation issues.
The bell curve of oil "production" was devised by Marion King Hubbert, a Shell Oil and U.S. government geologist. Although Hubbert has on the whole been borne out except in the minds of fundamentalist-classical economists, what he did not factor in was collapse. Therefore, the curve will be truncated to a cliff just as the gap between supply and demand is felt and hits.
The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over 80 million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.
The trucks will no longer pull into Wal-Mart. Or Safeway or other food stores. The freighters bringing packaged techno-toys and whatnot from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence and chaos. For only a short time will the police and military be able to maintain order, if at all. The damage that several days' oil shortage and outage will do will soon wreak permanent damage that starts with companies and consumers not paying their bills and not going to work.
And that was just the good news. For reasons of delicacy I have refrained from quoting Lundberg's next paragraph. If you want more, follow this link to the full article.
Although Jan Lundberg is probably in a better position to understand these matters that I ever will be, nevertheless I make bold to say he is being overly pessimistic. If panic does come, it will likely be quelled somehow before civilization is completely disrupted. Price controls and military supervision will ensure that the remaining oil arrives at critical destinations at least most of the time for several years, if not decades. Note: warranty void if nuclear weapons are used to secure oil supplies for any one country.
Read Lundberg's dire predictions and judge for yourself.
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