Time Glas Peeking at Peak oil

ASPO Conference 2012 – 10 Years of ASPO (1)

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Presentation of the book Peeking at Peak Oil

ASPO was formed ten years ago in 2002 during the world’s first Peak Oil conference in Uppsala. During the autumn of the year 2000, a number of people had encouraged Colin Campbell to take the initiative to form an organization that would study Peak Oil and informs the world that it faced a great challenge – within ten years the world’s oil production would reach its maximum level. Together with Jean Leherrere, Colin had described this fact in an article in Scientific American in March 1998. This year’s conference was our tenth and, at the same time, a ten-year jubilee for ASPO. My opening presentation can be downloaded for viewing. You can look at it as I refer to it in the text below. The presentation also shows some of the information and images from my book “Peeking at Peak Oil” that summarizes ten years with ASPO and the work that my research group at Uppsala University has done during the past decade.

(Download the presentation)

(Slides 3-6) In the article The End of Cheap Oil, it was shown that conventional crude oil production would reach a maximum in around 2006 at a production rate of 72 million barrels per day (Mb/d). The IEA has now recognized that the world had maximal conventional crude oil production in 2006 but that the production level only reached 70 Mb/d. The fact that the oil industry could not produce 72 Mb/d means that the world can now experience a longer production plateau at 70 Mb/d. The decline that Colin and Jean showed is based on the knowledge on oil reservoirs that existed in 1998 and with assumptions of future discoveries made at that time. The IEA shows as we have that the decline in production from currently producing conventional crude oil fields is about 4 Mb/d per year. In the future prognoses published by the IEA, they show that they believe that fields that have already been found (but are not yet in production) and fields yet to be found will compensate for the decline in currently producing fields. The IEA believes the yet to be discovered fields should give 19 Mb/d of production in 2035. In reality, this would mean a rate of production three times greater than was achieved in the North Sea when its production was maximal. Time will tell, but we do not believe such a rate of production is possible. Therefore, we can state that Colin and Jean’s prediction made in 1998 was correct.

(Slides 8-13) In October 2001 I visited Colin in Balydehob, Ireland and we decided to organize an international workshop at Uppsala University. The collage of images taken by the University’s photographer shows some of the 60 people that participated in the workshop (ASPO 1). Two of the main speakers were Roy Leonard, who was then the head of the exploration for the Russian oil company Yukos and Matt Simmons, who in the photo is being interviewed by the well-known Swedish TV journalist Bo Holmström. At the far left in the second row is Bert Bolin, who formed the IPCC and was its first president (but retired in 2002). During that year’s conference, the viewpoint was presented that we should work together with the IPCC and that was something that I had hoped for from the beginning. However, the IPCC did not wish to collaborate with us. It was very important that Bruce Stanley, who worked for AP in London, came to Uppsala and wrote about our workshop. His article was read around the world and when Matt Simmons opened his morning newspaper in Houston that Saturday he could read that he had been in Uppsala and he could also read, for the first time, the expression “Peak Oil” in the international press. Today, a Google search for “Peak Oil” gives 6 million hits. The following images define Peak Oil, show which nations of the world have ASPO associations and where we have held our conferences.

(Slides 14-18) In connection with the conference in Uppsala, we sent out a press release showing how we then, ten years ago, estimated that there would be a production plateau in around 2010 of 85 Mb/d (oil production as defined by BP, i.e. without “processing gains” and ethanol). The average value for oil production given by BP for the years 2002-2010 is 81.5 Mb/d which means that the prognosis ASPO showed in 2002 was too optimistic. However, in 2002 our prognosis was regarded as unrealistically low. The various prognoses that Fredrik Robelius gave in his thesis had, as a condition for reaching the highest production levels, that there would be large investments in oil production in Iraq. That did not occur.

(Slides 19, 20, 21) An important part of our research addresses the “Depletion rate of remaining recoverable resources, DRRR.” In simple terms, we have shown that, in any year, one can only produce a certain percentage of the resources that remain in an oilfield or region. For the North Sea, the maximal DRRR was 6%.

(Slides 22, 23, 24) There are many different opinions about how much more crude oil can be discovered. We must first note that, initially, approximately 1% of the world’s oil fields possessed 65% of all the world’s oil. If we study how many oilfields are found with every passing year and how much oil exists in those fields, then we can state that the greatest number of oilfields was found during the 1980s – 360 fields per year. We can also state that, with time, the fields discovered are becoming smaller and smaller. Up to 2035, I estimate we will find approximately 250 fields per year with an average size of 30,000 barrels of oil per field. It means that we will find less than 200 billion barrels of oil by 2035.

(Slides 25 & 26) Oil that is discovered can then be produced, and the fact is that we cannot produce more oil than has been discovered. Oil production is limited by the laws of physics and the particular physical law that will limit our future is named “Darcy’s Law.” The law states that the rate of flow of a fluid (i.e. “the size of the tap”) is determined by k, the size of the pores in the rock; A, the contact surface between the well and the oilfield; the Greek letter that represents how viscous the oil is and the last term, dP/dL which is the pressure difference between where the oil exists and the actual well. Horizontal wells mean that A is increased and the production rate can be greater. One can increase the pressure difference by pumping water into the oil-bearing rock, but if the pressure is too high, then the water will force its way past the oil to the well. Thus, we see a future in which the laws of physics ultimately determine the rate of oil flow and production.

(Slides 27-30) Now we have come to deepwater oil production. “Deepwater” means production at depths of over 500 meters. First I show the technological development that has occurred over recent years. The most developed area of deepwater production is the Gulf of Mexico where the production rate has already plateaued.

(Slide 31, 32) There is particular terminology used by the oil industry, and this can be confusing especially when one discusses reserves. Economists often spend their time discussing P1 reserves while oil engineers discuss 2P reserves. “Recovery Factor” means that fraction of the oil resource that can be produced. Over time, technology can increase recovery factors somewhat.

(Slides 33-36) If one had conventional and unconventional oil reserves of the same size, one would find it much more difficult to obtain a flow rate from the unconventional reserve equaling that from the conventional reserve. Canada’s oil sands are a good example. In Peeking at Peak Oil, I have calculated how much greater a level of oil production we can expect from Canada’s oil sands compared to today. This calculation should be regarded as optimistic. In the article “Peak of the Oil Age” three scenarios are presented where a rapid expansion of oil sand and other production activities can give increasing world oil production up until 2014. Naturally, we might also see a prolonged plateau of production from the oil sands resource. Closer to 2030 we see a world oil production rate of between 70 and 75 Mb/d for the three scenarios.

(Slides 37-39) The world can be divided up into nations that export oil and those that import it. The largest flow of exported oil comes from the Middle East. In Figure 39 we see that the volume of world oil exports was greatest in 2005 and it has since declined while, simultaneously, India, China and other nations in Southeast Asia have increased their oil imports. In future, the OECD countries will have difficulty since their access to the world’s exported oil will decrease.

(Slides 40-51) These slides discuss the IPCC’s carbon dioxide emissions scenarios from 2000. We see that Peak Oil & Gas together with Peak Coal mean that most of the scenarios for emissions from fossil fuels are not possible. Therefore, it is time to change our focus from carbon dioxide emissions to future energy shortages.

(Slide 52) If one takes all the fossil fuel reserves reported in the BP Statistical Review of World Energy and converts these reserves into carbon dioxide, one can see which nations of the world have the greatest potential to release CO2. If we add together the emissions from the 15 largest emitters, then this equals 85% of all possible future emissions. One realizes immediately that the greatest issue for future emissions of CO2 is coal production. Coal is used mainly as a fuel in electricity generation for so-called “baseload” power.

(Slide 53) Here the possible futures are summarized as seen from various viewpoints. Economists see increased energy consumption providing for continued economic growth. Environmental concerns mean that fossil energy will decrease by half or disappear. However, around 30% of fossil fuel production is used to produce food for the world’s population that is growing. The renewable’s share of world energy production (including hydroelectric power) is currently quite small. It is unrealistic to imagine the growth of renewable energy by more than 7% per year. The future is complex.

(Slide 54) The time for taking action on Peak Oil is running out.

(Slides 55, 56, 57) Thanks to Olle, Michael and my students.

Kjell Aleklett is Professor of Physics at Uppsala University in Sweden where he leads the Uppsala Global Energy Systems Group (UGES).

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