What is the solution for peak oil? This was a question brought up recently by an ROE2 member. As you can imagine, there were many varying responses. However, there was one response that stood out to me because of facts that tended to "bring it home" if one was to thoroughly read it. I asked a poster, Ron, who has been studying the numbers for quite awhile, for permission to reprint his answer, and he abided (special thanks). I just have to share because he says it better than I can:
"....As far as your statement "I believe we will find out if this is all true
sometime in the next 5 years" I will post the following:
Believe who you choose but for your families sake plan for the closest
date. Those of us on these boards, of all people, should have a better
understanding of the numbers behind the claims. We "Peakniks" cannot
afford, like the rest of humanity, to hope for the "optimistic" (i.e.
disinformation) timeline presented within the mainstream media. The
media is owned by the same elites who are dictating our government's
actions. Here is some background information and numbers to help
clarify any misconceptions:
Mega projects - reserves of 500m/bl or more and the potential to produce
over 100,000 bl
New production - from the first discovery to the first production
generally it takes about 6 years. Less (around 4 years) if the new
project can make use of existing infrastructure.
The following data is from 2004 - Oil Field Mega Projects, 2004,
Shrebowski, Chris, Petroleum Review, Jan 2004 -
Discovery rates: 16 new mega project discoveries in 2000, 8 discoveries
in 2001, 3 discoveries in 2002, no new mega project discoveries in
New projects brought on stream: 7 new mega projects in 2003, 11 in 2004,
18 in 2005, 11 in 2006, 3 in 2007, 3 in 2008, no new mega projects on
track for 2009/2010
When trying to determine the Peak four variables need to be considered -
decline rate / new capacity / spare capacity / global demand.
As of 2004 1/3 of the world's production came from declining fields @
about a 4% decline rate (75m bl/d divided by 3 = 25m bl/d x .04 = 1m
bl/d decline rate). By 2007 production capacity was estimated to
decline by 3-4m bl/d
New capacity, the new mega projects being brought on-line, was estimate
at 8m bl/d. New capacity minus the 4m bl/d declining production
capacity brings a 4m bl/d spare capacity
Now for the fun part. In 2004 global demand was projected to grow by 1m
bl/d so in 2007 spare capacity was projected to be about 1m bl/d. At
the same rate of growth there would be no spare capacity beyond 2008.
Here's the rub. Worldwide demand growth has actually been close to
double the 1m bl/d projection over the past year at around 8%. We are
currently at around 81m to 82m bl/d compared to the 75m bl/d in 2004
with the government projecting, as of May, the world reaching 85m bl/d
by the end of 2005. There are currently no new mega projects being
discovered and even if there were it would take 4-6 years to bring that
oil on-line as stated above. Oil prices are already straining to stay
within the $50/bl range this year with 2005 having the most mega
projects scheduled to come on-line. Starting in 2006 each year brings
less new projects (i.e. oil to market) on-line through 2009 when no new
projects are scheduled. If any mega projects where discovered this year
they will not come on-line in time to prevent the Peak from occurring.
This is also why Goldman Sachs stated a few months ago they expect oil
to reach above $100/bl within the next 1-2 years and possibly even
$200/bl. Now you can understand why 2008 is the target date for Peak
Oil...and that is the optimistic projection.
None of the above analysis even considers into the equation the lack of
transparency in OPEC or specifically whether Gwahar is now in decline.
Do not forget that OPEC members miraculously "revised" their reserve
figures upwards throughout the 1980's. OPEC changed production quota's
by pegging them to a member's reserves. The higher the reserves the
more they would be allowed to produce (and sell) making more income.
Kuwait started it when it scrubbed its previous figures in 1985.
Overnight, its reserves went from 64bn/bl to 92bn/bl. Two years later
the UAE went from 31bn/bl to 92bn/bl, Iran's reserves increased from
47bn/bl to 93bn/bl, Iraq escalated its reserves from 47bn/bl to
100bn/bl, and let's not forget the mother lode in Saudi Arabia which
went from 170bn/bl to 258bn/bl in 1988. Now in 2005 these numbers
remain unchanged despite they have all been pumping millions of barrels
every day since they changed these numbers. At last weeks annual ASPO
meeting in Gulbenkian Museum in Lisbon, Colin Campbell asserted that
OPEC members, and others such as Russia, were stating the total amount
of reserves ever found, not the amount left for us to use. He said "it
is incredible that this 'flawed data' is still being used today".
Governments of the world are more worried than they want us to believe.
The International Energy Agency, The International Monetary Fund and G7
members all demanded that OPEC, and other producing nations, open their
fields to audit. "Without knowing how much oil is left to pump,
decisions about any energy transitions - the move away from oil as a
predominant fuel - remain impossible." But don't hold your breadth.
Even if there ends up being more transparency the masses will not be
told until it's too late. The elites will not help us find solutions;
we will have to determine them for ourselves.
(referenced Guardian article)
Believe what you want to believe, believe what they want you to believe
or believe the data. It's your choice and your survival may depend on
Thanks again, Ron. You needed to be heard, IMO.
OUCH! And I heard Greenspan saying today that the recent rises in oil prices were political because of countries like Mexico who won't allow companies to come in and drill. So THAT will be what makes the prices come down? Maybe temporarily, I agree. Will this be a scapegoat in the future? That's scary. Why is it nobody can fathom finiteness and look down the road any longer than 10-20 years to make a decent sustainable plan? I know, it's politics and the economic theory of infinity that get in the way. Anything to carry the illusion on a little longer. I'll have another post in a little while from another ROE contributor regarding economic and political systems that I thought was pretty thought provoking, too. I'll be right back.