Oil peak


Published on

Published in: Business, News & Politics
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Oil peak

  1. 1. Peak Oil: The World Greatest Challenge NASAhttp://en.wikipedia.org/wiki/Image:Moscow_traffic_congestion.JPG http://upload.wikimedia.org/wikipedia/commons/c/ce/Oil_well.jpgen.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg en.wikipedia.org/wiki/Image:Oil_platform.jpg
  2. 2. “Peak Oil” is coming It can’t be ignored
  3. 3. General Observations• Prediction is hard, especially about the future!• Peak oil will happen in stages T1-T4• The global situation will set the stage• Australia is lucky with large reserves of natural gas, although not where we want it. Potential for mitigation• Climate Change is a lot scarier than Peak Oil and they have a common solution set ASPO-Australia
  4. 4. What Is Peak Oil?• The date an area’s oil production reaches its maximum• Means that about half the oil has been produced – Does not mean “running out of oil” – Does mean a continuous decline in production• When oil half gone, the flow of oil begins to fall – Not like a gas tank – Oil in the ground is not in a pool but in tiny droplets – Droplets move slowly through the earth due to pressure – At halfway point pressure drops – flow decreases
  5. 5. Peak Oil Discoverer: Dr. King Hubbert 1903-1989• Shell Oil Geologist/ Petroleum Scientist• 1949 – projected short historical oil period – Triggered by 1930 U.S. discovery peak• 1956 – predicted 1970 as U.S. Peak Oil year – Came as predicted• 1969 – predicted World Peak Oil year 2000 – 1970-80 demand decline delayed it
  6. 6. Dr. Colin Campbell – King Hubbert 2006• Geologist/ Petroleum Scientist• Worked for most major oil companies• Founder, Association for Study of Peak Oil – Wrote “The Coming Oil Crisis” in 1997• Estimates World Peak for regular oil in 2010• Published two other books – “Essence of Oil and Gas Depletion” – “Oil Crisis”
  7. 7. Matthew Simmons• Oil Investment Banker – Backed many oil and gas drilling projects• Advisor to President Bush• Challenges Saudi Reserve Estimates – Thinks Saudi oil may soon peak• Author, “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy”• Given 100s of talks to government and business
  8. 8. Talk outlineOrigin – How do oil and gas form?Practical: Non-Renewable EnergyExploration and Production –How do we find oil and gas and how is it produced?Practical: Prospector GamePolitics – Why are oil and gas important?
  9. 9. Origin (1): Chemistryen.wikipedia.org/wiki/Image:Petroleum.JPG en.wikipedia.org/wiki/Image:Octane_molecule_3D_model.png Hydrocarbon • Oil and gas are made of a mixture of different hydrocarbons. • As the name suggests these are large molecules made up of hydrogen atoms Crude Oil attached to a backbone of carbon.
  10. 10. Origin (2): Plankton cache.eb.com/eb/image?id=93510 Plant plankton Animal plankton would fit on a pinhead! 10,000 of these bugs en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg en.wikipedia.org/wiki/Image:Copepod.• Most oil and gas starts life as microscopic plants and animals that live in the ocean.
  11. 11. Origin (3): Bloomsserc.carleton.edu/images/microbelife/topics/red_tide_genera.v3.jpg • Today, most plankton can be found where deep ocean currents rise to the surface • This upwelling water is rich in nutrients and causes the plankton to bloom • Blooms of certain plankton called dinoflagellates may© Miriam Godfrey give the water a red tinge Dinoflagellate bloom
  12. 12. Origin (4): On the sea bedupload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg When the plankton dies it rains down on sea bed to form an organic mush en.wikipedia.org/wiki/Image:Nerr0328.jpg If there are any animals on the Sea bed sea bed these will feed on the organic particles
  13. 13. Origin (5): Black Shaleupload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg • However, if there is little or no oxygen in the water then animals can’t survive and the organic mush accumulates • Where sediment contains more than 5% organic matter, it eventually forms a rock known as a Black Shale © Earth Science World Image Bank
  14. 14. Origin (6): Cooking As Black Shale is buried, it is heated. Organic matter is first changed by the Kerogen increase in temperature into kerogen, which is a solid form of hydrocarbon Around 90°C, it is changed into a liquid Oil state, which we call oil Gas Around 150°C, it is changed into a gaswww.oilandgasgeology.com/oil_gas_window.jpg A rock that has produced oil and gas in this way is known as a Source Rock
  15. 15. Origin (7): Migrationwww.diveco.co.nz/img/gallery/2006/diver_bubbles.jpg • Hot oil and gas is less dense than the source rock in which it occurs • Oil and gas migrate upwards up through the rock in much the same way that the air bubbles of an underwater diver rise to the surface Rising oil • The rising oil and gas eventually gets trapped in pockets in the rock called reservoirs
  16. 16. Exploration and Production: Oil Traps • Some rocks are permeableImpermeable and allow oil and gas to freely pass through them • Other rocks are impermeable and block the upward passage of oil and gas • Where oil and gas rises up into a dome (or anticline) capped by impermeable rocks Dome Trap it can’t escape. This is one Permeable type of an Oil Trap.
  17. 17. Exploration and Production: Reservoir Rocks • The permeable strata in an oil trap is known as the Reservoir Rock • Reservoir rocks have lots of interconnected holes called pores. These absorb the oil and gas like a sponge This is a highly magnified picture of As oil migrates it fills up the pores a sandy reservoir rock (water-filled (oil-filled pores shown in black)Earth Science World Image Bank Image #h5innl pores are shown in blue)
  18. 18. How long will current reservesReserve Adds: last? 35 15 years• Exploration 30• Reserves Growth 10 years Production (bn bbl) 25• Nonconventionals 21 years 31 years 20 15 1000 bn bbl 10 10% Decline 5% Decline 5 3% Decline 25 bn bbl 0 1.5% Up, 5% down A 40 year supply? p.a. 10 20 30 40 50 60 Years
  19. 19. Exploration Potential – Discovery Trend 100 • Decreasing trend in volumes Discovered Volumes (bnbbl) 90 Discovered 80 Produced found from the early 60’s (peak) 70 to the early ’90’s. 60 • Slight increasing trend over 50 the last decade. 40 30 • Production exceeds 20 discoveries for last ca. 20 years 10 • Are these numbers 0 consistent? 1950 1960 1970 1980 1990 2000 Discovered Volumes (bnbbl) 25 Kashagan • Reversal in discovery decline largely due to 20 Deepwater the deepwater exploration theme – will this Other 15 continue? • Is Kashagan unique or are there other 10 supergiants? • Are the peak years of ’99 and ’00 5 anomalous? 0Data based on those of IHS Energy 1990 1995 2000
  20. 20. Nonconventional Oil Resource Type and Distribution Canada 36% (Extra)- Heavy Oil Oil Shale Others 9% USA Bitumen 32% MidEast 1% Africa Venezuela 3% 19% 7 trillion bbl Oil-in-PlaceData from IEA 2004 (WEO)
  21. 21. Distribution, Maturity of Conventional OilN.America FSU Europe 330 bnbl 360 bnbl 80 bnbl AsiaPacific Africa 130 bnbl 190 bnbl MidEast 810 bnbl World S.America 200 bnbl ProducedReserves • Most regions of the world are either at or past the mid-point of depletion 2100 bnbl • MidEast (and FSU and Africa) have produced <50% of their known resource 2
  22. 22. Oil – “Black Gold”• Provides 40% of our primary energy – 95% of all transportation fuel is from oil – Huge part of life – not just gas in the car• Fossil fuels are the basis of Industrial Agriculture – Oil is feedstock for herbicides and pesticides – With natural gas fertilizers, there are 10 calories of fossil fuel inputs for each food calorie output• Raw material for many plastics• Basis of 300,000 manufactured products• Cheap oil makes globalization possible – In U.S. average food product travels 1500 miles
  23. 23. Why Is Peak Oil So Important?• Core assumptions – Our economy “runs on oil” – oil “fuels our economy” – We measure our material welfare (income) by the economy – To paraphrase – our income is based on oil consumption• Economy grows when oil consumption increases• Economy shrinks when oil consumption decreases• Implies major societal change when demand exceeds supply – Oil prices will rise rapidly but shortages will still occur – Could have long-term recessions
  24. 24. The Money Implications of PeakingInflation Adjusted Monthly Crude Oil Prices 1946-Present• $40-$90+ oil lasted from early 1970s – mid-1980s• Oil shortfall was approximately 3%• North Sea, Alaska & Mexico discoveries increased supply• There are no new regions to explore now
  25. 25. World Population – Billions in 2000 Years• Invention of the steam engine – 1698 (Thomas Savery)• First oil well – 1859• Earliest major fossil fuel was coal
  26. 26. World Population – Billions 1900-2000• First half 1.5 Billion to 2.3 Billion – 150% increase• Second half 2.5 billion to 6 Billion – 240% increase• Spurt in growth correlates with switch from coal to oil
  27. 27. World Oil Usage – Billion Barrels/Year• Production vs. Population
  28. 28. All Energy per Capita Projected Decline• Slide/cliff – Declining fossil fuels meet growing population• From 10.4 boe/c/yr to 3.3 boe/c/yr is 4.5% decline – 3 % source decline, 1.5% population growth• Remember population – and fuel – in 2030 =~4x 1930
  29. 29. Government View 2005 – DOE Report• As peaking is approached…the economic, social, and political costs will be unprecedented.• …peaking will be extremely complex, involve literally trillions of dollars and require many years of intense effort.• Peaking…will cause protracted economic hardship in the United States and the world.• …the problem of the peaking of world conventional oil production is unlike any yet faced by modern industrial society.
  30. 30. Alternative transport fuels?• Renewables • Natural gas• Biofuels • Coal• Conventional oil • Nuclear• Unconventional • Hydrogen oil
  31. 31. Conclusions• Transport over 40% of final energy use in Australia• Transport heavily dependent on liquid fuels (oil)• The age of cheap oil is almost over• Short-term urgency in planning for post-oil age• More mitigation options in cities than in rural areas
  32. 32. What to do?• Commonwealth to become involved• “Do nothing” not an option• No magic bullet• ASPO Australia advocates – community engagement, individualised marketing, fuel tax escalator, tradeable fuel allocation system• Leadership required• Buy time!
  33. 33. Presented by: BEED II • Mabalay Jona• Miguel Jobelle Keith • Valdoz Kim Adalen • Gacutan Katrina • Jovero Jonalyn • Paulo MilJoice • Aripal Philana