What is Peak oil?
"The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion."
Submitted by Kjell Aleklett on Tue, 2013-09-03 17:33.
Nobody denies that there is a connection between economic growth and oil consumption. The clearest signal came in 2008-9 when the world economy crashed at the same time as oil production sank dramatically. If one is to describe this in a little more detail then it is not oil production itself that is decisive rather than that part of oil production that passes through the world’s refineries and then becomes transport fuel. Transportation of raw materials and components for manufacturing of goods, transportation of products to retail outlets and, finally, transport of customers to those outlets is the chain that gives economic growth. Therefore, it can be interesting to study what passes through refineries, where it is, and what refinery products are produced.
Submitted by Kjell Aleklett on Tue, 2013-08-27 14:36.
The American shale gas revolution began in the area that goes under the name of the Barnett Shale. On the map above you can see active permits and wells. The Railroad Commission of Texas (RRA) is the organization that holds responsibility for the official oil- and gas-statistics in Texas. On 22 August 2013 the RRA published the latest statistics on the Barnett Shale (see report). The official name of the area that lies from southwest to northwest of Dallas is not the Barnett Shale but, rather, “The Newark, East Field”. According to the RAA the area is 13,000 square kilometres in size and in Sweden the area of Uppland is a comparable size, 12,676 square kilometres.
Comments on Wood Mackenzie’s report “China on Track to spend US$500bn on Crude Oil Imports by 2020, Surpassing US Import RequireSubmitted by Kjell Aleklett on Fri, 2013-08-23 18:06.
On 20 August Wood Mackenzie (WoodMac) released a report on China and the USA’s future imports of oil. WoodMac regards itself as one of the world’s leading companies producing energy analyses. The title of the report is “Heading in Opposite Directions: China and US Reliance on Oil”, but I chose to use the report’s subtitle as part of this blog, “China on Track to spend US$500bn on Crude Oil Imports by 2020, Surpassing US Import Requirements”.
In recent days WoodMac’s report has been cited by a large number of news outlets around the world and in Sweden. As an example I can cite Reuters’ article “China oil imports to overtake U.S. by 2017”. According to WoodMac, China will surpass the USA as the world’s largest importer of oil in 2017 and by 2020 it is estimated to be importing 9.2 Mb/d per day. Per year this would amount to 3.36 billion barrels of oil.
Submitted by Kjell Aleklett on Sat, 2013-08-17 10:04.
Last Sunday The Guardian newspaper published an article illustrating one of the negatives of fracking, "Fracking boom sucks away precious water from beneath the ground, leaving cattle dead, farms bone-dry and people thirsty". The title of the article was “A Texan tragedy: ample oil, no water”. It is good that they are beginning to realise that fracking has its problems.
As an introduction to the article online, they show a video with the following explanatory text, "In Mertzon and Barnhart in western Texas, the worst drought in two generations is choking the water supply. Water shortages are raising tensions between locals and the fracking industry. Drilling for shale gas uses up to 8m gallons of water each time a well is fracked" (8 million gallons is the same as 30 million litres, or 30 thousand cubic metres).
Submitted by Kjell Aleklett on Tue, 2013-08-06 19:09.
The title, “New data show record growth in U.S. crude oil reserves” might lead most readers to believe that fantastic developments are afoot in the USA. However, if we study the report in detail we can see that large question marks exist over future oil production. The US Energy Information Agency, EIA, has now reported changes in proven reserves during 2011. Recently I discussed how different types of oil reserves are reported and I can suggest that readers might like to look at that blog again. For proven reserves the EIA states the following criteria: “Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions”.
Submitted by Kjell Aleklett on Fri, 2013-08-02 14:46.
The next issue of The Economist has a front cover that says, “The future of oil – Yesterday’s fuel".
14 years ago, on 4 March 1999, the front cover had a completely different message. Then, the editors of the Economist published an article titled, “Drowning in Oil”. They wrote that “The world is awash with the stuff, and it is likely to remain so”. They thought that cheap oil from the Middle East would reduce the then price of $10 down to $5 per barrel.
One year earlier Colin Campbell and Jean Laherrere wrote in an article in Scientific American that cheap oil would reach peak production in around 2004 (read the article). It was the flow of this cheap oil that, according to The Economist, would force the price down to $5 per barrel.
Submitted by Kjell Aleklett on Mon, 2013-07-22 22:13.
The discussion of Israel’s oil reserves gives me reason to discuss the rules that exist for reporting of resources and reserves of conventional oil. It is this oil that still dominates world production and it is production of this oil that has now reached peak oil and has slowly begun to decline. A bright future for increased production requires that we address production of unconventional oils and for those there are not yet any firm rules about how resources and reserves should be reported. As an example I can point to how the kerogen oil in Israel was compared with Saudi Arabia’s conventional oil without mentioning that the “tap” (flow) of kerogen oil could only be opened to a far lesser extent.
Oil & Gas Journal is an industry news journal on oil that I keep an eye on and on 18 July they published an article with the title, “Resource estimate hiked for Israel nearshore license”.
Submitted by Kjell Aleklett on Fri, 2013-07-05 10:44.
The conference, “Global Energy Systems 2013” in Edinburgh, UK, has now concluded with great success. The initiative to hold a conference in Scotland was taken when ASPO International met in Vienna in 2012 after the successful conference there. According to our regulations a meeting of ASPO International members should occur when an ASPO conference is held and in 2012 we decided to try to organise a conference in the UK. Euan Mearns from Aberdeen, the prolific writer for The Oil Drum website, took upon himself the task of assembling a group to organise a UK conference and report back to the ASPO International. We decided that Uppsala would be the backup destination for the next ASPO conference if the UK idea failed.
ASPO International is an entirely non-profit organisation without a budget and so the financing of a conference by a national ASPO organisation can be a difficult issue. During the organisational work it became evident that a conference on Global Energy Systems would find sponsors while a traditional Peak Oil conference would have difficulties.
Submitted by Kjell Aleklett on Wed, 2013-05-15 16:48.
by Kjell Aleklett and Colin Campbell
Today, the Arctic Council’s eight foreign ministers from Sweden, Norway, Denmark, Finland, Iceland, Russia, Canada and the USA meet in Sweden to discuss, among other things, oil production in the Arctic. They will attempt to agree on a binding joint treaty regarding what preparations will exist in case of an oil spill/accident. The amount of oil that is accessible for production is limited and large fields are required for such production to be profitable. The thing that distinguishes the polar region from e.g. the area between the UK and Norway is that the oil-bearing sedimentary layers are much older and have been subjected to more extreme conditions than those under the North Sea. This means that the likelihood of finding oil is less. So far it is mainly in Alaska that they have been able to extract oil but the reserves there have begun to run out.
Submitted by Kjell Aleklett on Tue, 2013-05-14 14:08.
At the end of April the newspaper Svenska Dagbladet led with the story that “Russian aircraft practiced attack against Sweden” (This is an article in English about this event). In the explanatory graphics accompanying the article we read, “Instead of flying their usual route south out in the middle of the Baltic towards Kaliningrad, the six Russian aircraft turned towards Gotska Sandön [an uninhabited Swedish island]” In an article in DN on 10 May headed, “Russia did not conduct exercises against Swedish targets” our foreign minister Carl Bildt asserted that “There is no foundation in substance for the idea that they practiced an attack against Sweden”. He would not explain what led him to make this statement. We who grew up in the shadow of the threat from the Soviet Union and who remember how every maneuver during our military service ended with a victory over the enemy from the east possibly have difficulty imagining any other reason for the Russian movements than a planned attack against Sweden.