You see that the head of Gazprom, the Russian energy giant, says he expects to see $250 a barrel oil by 2009? That seems wack. I'd really like to see where he gets that number. That said, here are some sobering remarks by Jeroen van der Veer, the chief of Shell Oil, from an online Q&A with the Times of London:
Q: Robin Mackrill, LondonThe recent Brazilian offshore discoveries of Tupi and Carioca are reported to be potentially the largest in 30 years.
What is the probability of further big oil discoveries in the future?
A: Jeroen van der Veer:
We certainly can’t rule out the possibility of further big finds. However, I think the likelihood is declining.
Much of the world’s easy-to-access oil and gas has already been located and is under development. What remains is in harsh frontier environments, such as deep ocean or the Arctic, where it is more difficult and more expensive to extract. Or it is in deposits like oil sands that we tend to lump under the term “unconventional”, which basically means it takes special technology to produce it. There the hurdle is not so much locating resources - in many cases we already know they are there -- but rather inventing cost-effective and environmentally responsible ways to extract them.
That’s one reason we are putting increased emphasis on developing unconventionals to meet growing energy demand. We expect around 15 per cent of Shell’s oil production will come from unconventional sources in 2015, up from about 5 per cent now.
More:
Q: Jan Sunner, Portsmouth, UKFor decades, science has clearly understood the inevitability of both “peak oil” and climate change. Nothing has been done and both are now here. ...
A: Jeroen van der Veer:
This is a key area of focus for us. The peak-oil theory, as first published by King Hubbert, who was an American former Shell employee, is correct for easy-to-access oil, at least. In his time, this theory was true for easy to access oil in the USA, but he could most certainly not have envisaged the future development of the Gulf of Mexico or today’s development of oil sands.
It is true that “easy oil and gas” - or conventional oil and gas that are relatively easy to extract - will not be able to match the pace with which demand is growing. The main reasons are the maturing of existing fields in many parts of the world, the scale of the investments required to enhance oil recovery from these fields and to bring new projects on stream, and of course the limited access for the international energy industry in some countries.
I have been warning for sometime about the end of the “easy oil” era, and I think the message is slowly beginning to sink in. And so is the logical consequence: we need all the energy we can get. ...
What is less obvious to many people is that even if we develop and deploy all the energy we can together - including unconventional oil and natural gas, including alternative energy, including nuclear and including more coal - we will still struggle to match demand. Unless we can curb the consumption of energy through radically more efficient technology.
Oh, and think we're going to stay at current capacity, much less grow, by slapping solar panels on our roofs or sticking windmills on the back 40? Here's what van der Veer said about that:
Let me give you some examples of the difficulty of scaling up renewables. For instance, if we were to replace all of today’s coal-generated electricity with wind farms - at typical wind farm load factors - that would require a land area equivalent to 3 times the entire area of France. And if every house in Britain had a 4-m² solar PV panel set up on the roof, it would only generate the same amount of electricity in a year as half of a modern, 1-gigawatt nuclear power station. For context, in 2005/06, Britain’s maximum demand was 63 gigawatts.
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Rod, enough of the peak oil nonsense. Its like environmentalism and evolution. A theory.
Ah yes, the "it's just a 'theory' " claim.
Bob, you can't be serious, Carter?
Yes, I'm serious, and I challenge you to refute one word Carter uttered in that prescient 1977 energy address.
gill, dry holes don't come free. You drill where there's a reasonable chance of significant oil reserves because you have to spread the cost of the dry holes between the productive ones. And the costs are not just monetary; ANWR is a case in point. Our elected representatives decided that the oil available there wasn't worth the candle. You may disagree about non-monetary costs... but even a Republican Congress under an oil-man President couldn't get a majority of Congressmen to change their minds.
I haven't run the financial numbers because I'm not an oil economist, nor do I play one on TV -- but if the ANWR reserves would last less than a decade, per the projections, would it pay to build the infrastructure to transport the oil out of there? Prudhoe Bay, remember, has been producing for three decades and is still going, so the Alaska Pipeline and Valdez oil terminals have paid for themselves, probably even including cleanup costs for the Exxon Valdez.
Dan: are you discounting the Bakken formation findings of late? Appears to be even larger than previous estimates. Some figures say as high as 200 billion barrels in an area even larger than previously measured.
Yes aaron a theory. Nothing has been proven. Seems all based on conjecture, speculation and static constants. Nobody really knows where the next discovery of oil will be. We are far from exhausting all our options. Just because a lot of scientists say it don't make it so. Seems many only like the whole "peer-review" thing when it suits their beliefs. The prevailing peer review mentality long ago held that the earth was the center of the universe, and (I know this horse has been beaten enough) prevailing peer-review wisdom in the 70's held that we were headed for another ice age back in the seemingly presicent days of carters energy crisis speech. I have yet to hear anyone explain or refute what happened with that theory and why it was so wrong, or how we could have been heading for global warming and global ice age at the same time. Care to try?
All I'm saying is that Im not an oil slut and I'm not for justifying our fat dumb and lazy American way of life. Like I said earlier, I'm for changing our patterns of consumption, being more thrifty, local and less wasteful, and making ourselves more truly independent of middle east oil I just disagree with the chicken little mentality of people and the doomsday mindset they get in when they try to understand the ways of the earth when there is no way to even really predict what the weather will be tomorrow, you only have an idea what you think it might be.
gill, actually I was unaware of the Bakken formation results, thanks! USGS pegs it at only 3-5 billion bbl (that's one or two years of current US consumption) as of April 2008, but it's in an area (NoDak and Montana) where the transportation and production infrastructure is already in place -- unlike ANWR.
The principle of peak oil isn't "just a theory," in the colloquial sense of "tentative hypothesis." It's reasonable economics, and also common sense. Eventually, there won't be any more oil to find. Period. The supply isn't infinite.
Sooner than that, the supply of oil that's cheap to extract will run out; it may have already peaked, and industry analysts such as Mr. van der Veer see the peak approaching rapidly. You can't hold prices down below the cost of production; as Nixon found, that leads to artificial shortages.
Eventually you will run up against the First Law of Thermodynamics, when it costs as much energy to extract and transport and refine the oil as you get out of it. Long before that, you'll find that extracting and transporting the oil is more expensive than converting coal to liquid fuels, or rebuilding our transportation infrastructure to run on electricity.
You seem to think that the point of Peak Oil is comfortably far in the future, but all your oil reserve estimates appear to be inflated. If the USGS under an oil-friendly administration disagrees with you about the Bakken fields by two orders of magnitude... Well, I'm not going to put too much confidence in your numbers.
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