peak oil theory


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peak oil theory

  2. 2. NASA
  3. 3. 80 70 60Million barrels per day 50 40 30 20 10 1950 1975 2000
  4. 4. 9% 5% 66 % 4% 9% 7%Source: BP Statistical review of world energy
  5. 5. 2500Cumulative Discovery, Gb Illusion 2000 Inflexion due to Reality falling Discovery 1500 1000 OPEC “quota war” 500 “Back dated” reserves Reserves as reported 0 1930 1950 1970 1990 2010 2030
  6. 6. 60 Past discoveries 50 Future discoveries 40Gb 30 Production 20 10 1930 1950 1970 1990 2010 2030 2050 Past discoveries by ExxonMobil
  7. 7. Proved Reserves, Gb Saudi 200 Iran Iraq Kuwait 100 UAE Not proven by anybody! 0 1980 1990 2000 Accurate reserve estimates for OPEC countries are closely guarded state secrets Values for 1983 are probably accurate (for 1983) 430Gb rise in reserves, no adjustment for 193Gb produced since 1980 These questionable reserves are 45% of world oil reserves used by IPCC! A recent leak of Kuwait Petroleum Company documents showed the actual reserves are only 48Gb (official reserves are 102Gb) 1980 Kuwait reserves adjusted for production since then are 55GbFrom BP Statistical Review Gb = billions of barrels
  8. 8. What Is Peak Oil?reaches itsThe date an area‟s oil productionmaximumMeans that about half the oil has been produced Does not mean “running out of oil” Does mean a continuous decline in productionWhen 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
  9. 9.  Geophysicist at the Shell lab in Houston In 1956, he presented a paper with predictions for the peak year of US oil production
  10. 10. A model logistic distributionOil Wells and Fields Peak --- Regions Peak --- The World will peakEveryone agrees that world oil will peak – controversy on the date
  11. 11. Lots of bad news, but It‟s not hopeless!! Human ingenuity and technology are remarkable. Appropriate policy choices are available to minimize and adapt to climate change.Maybe we‟ll be lucky, and unanticipated factors or feedbacks may slow therate of change. Perhaps we (esp. U.S.) will be forced to change by the price and availability of fossil fuels. 13
  12. 12. L.A. smog plus invisible GHGsChief source: combustion of petroleum products 14
  13. 13. Petroleum: a thick, flammable mixture of solid, liquid, andgaseous hydrocarbons (organic compounds with H and C)that occurs naturally beneath the Earths surface.Crude oil (aka “oil”) * Liquid mixture of naturally occurring hydrocarbons * After refining: the chief source of transportation fuelsNatural gas •Gaseous mixture of naturally occurring hydrocarbons * After processing: used for power generation, residential, fertilizers, manufacturing, transportation (still very limited) 15
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  21. 21. Petrochemicals Chemicals produced from petroleum 23
  22. 22. “Plastics.”The Graduate 1967ALL PLASTICS are petrochemicals. 24
  23. 23. polystyrene epoxies 25
  24. 24. 26
  25. 25. PVCsolvents 27
  26. 26. Polyester: the most widely used artificial fiber in the U.S. apparel & home furnishings, plus bottles, fiberglass, LCDs, holograms, filters, insulators, auto body partsOther synthetic fibers, such as acrylics & dacron: clothing, yarn, rugs, rope, sails,grafts, containers, resins 28
  27. 27. NylonApparel, carpets, musical strings, fishing line, racket strings, rope, auto parts,machine parts, sutures 29
  28. 28. antiseptics detergents rubbing alcohol vinyl synthetic rubber MTBE dyes Modern developed societies depend on petroleum in innumerable ways. We are petroleum-dependent. “No civilization can survive the destruction of its resource base.” 30
  29. 29. Make lists of the top 5 countries: Petroleum production to date (since ~1860) USA Current (1997) rate of FSU KSA petroleum production Iran Remaining Venezuela KSA petroleum USA FSU Iran KSA Mexico/Venez FSU Iraq IranFSU = former Soviet Union Kuwait/USAKSA = Kingdom of SaudiArabia 31
  30. 30. The Benefits of Doing Business in Saudi Arabia
  31. 31. Rank Rank State Company Country2006 2005 Ownership % 1 1 Saudi Aramco Saudi Arabia 100 2 3 NIOC Iran 100 3 2 Exxon Mobil US 4 5 BP UK 5 4 PDV Venezuela 100 6 6 Royal Dutch Shell UK/Netherlands 7 7 CNPC China 100 8 11 ConocoPhillips US 9 8 Chevron US 10 8 Total France
  32. 32.  Operations in:  Exploration, production, refining, marketing, and international shipping. The company has approximately one fourth of world oil reserves The company is headquartered in Dhahran, Saudi Arabia and employs about 52,100 people. State Owned
  33. 33.  Population Size Description of Labor Force Consumer Purchasing Power Distribution
  34. 34. Oil wealth has made possible rapid economic development,which began in the 1960‟s and accelerated in the 1970‟s.Saudi oil reserves are the largest in the world, and Saudi Arabia isthe world‟s leading oil producer and exporter.A major new gas initiative promises to bring significantinvestment by the US and European oil companies to developnon-associated gas fields in three separate parts of Saudi Arabia.In April 2000, the government established the Saudi ArabianGeneral Investment Authority to encourage foreign directinvestment in Saudi Arabia.
  35. 35.  The population of Saudi Arabia is approximately 22,757,092, which includes 5,360,526 non-nationals. 42.52% of the population is aged 0-14. 54.8% of the population is aged 15-64. 2.68% of the population is 65 years old or older.
  36. 36.  Saudi Arabia‟s labor force is 7 million people, 35% of this population consists of non-nationals  Agriculture 12%  Industry 25%  Services 63%
  37. 37.  Saudi Arabia‟s Purchasing Power Parity is $232 billion. GDP Real Growth Rate: 4% GDP per capita: $10,500
  38. 38.  Railways: 1,389 km Highways (paved): 44,104 km Ports and Harbors: total of 13 Airports with paved runways: 70 Heliports: 5
  39. 39.  Saudi Arabias crude oil production peaked in 2005 at 9.6 mbd. In 2010 Saudi production averaged 8.2 mbd. According to official Saudi sources, Saudi oil production will not increase beyond 8.7 mbd until 2015. And as domestic consumption is projected to grow by 5% per annum, Saudi exports are expected to shrink by 10% in the next 4-5 years (see Table 2). A steady production decline was forecast from 2010 onwards (see Figure 1).
  40. 40. Year Production Consumption Net Exports---------------------------------------------------------------------------------------------------------------------1980 9.90 0.61 9.291990 6.41 1.11 5.302000 8.40 1.54 6.862001 8.03 1.61 6.422002 7.63 1.68 5.952003 8.78 1.78 7.002004 9.10 1.88 7.222005* 9.60* 1.96 7.642006 9.15 2.02 7.132007 8.72 2.14 6.582008 9.26 2.30 6.962009 7.95 2.44 5.512010 8.20 2.70 5.502015 8.70 3.45 5.25---------------------------------------------------------------------------------------------------------------------% change 1980-2015 - 16 + 466 - 43---------------------------------------------------------------------------------------------------------------------Sources: US Energy Information Administration (EIA) / Official Saudi data.* Peak production year.
  41. 41. 2005 140 12000 120 10000 Production kb/dDiscovery Gb 100 8000 80 6000 60 4000 40 20 2000 0 0 1930 1950 1970 1990 2010 2030 2050
  42. 42. Iraq Iran KuwaitKingdom of Qatar UAESaudi Arabia 46
  43. 43.  Most Middle East producers have passed their prime.  Iran peaked at 6 million barrels/day in 1970s.  Iraq, Kuwait, Oman, Syria and Yemen have all passed peak output. UAE and Iraq might have growth prospects. Many giant Middle East oilfields are far past Peak Oil. Saudi Arabia has 36% of Middle East reserves.
  44. 44. Significant traps are extremelylocalized in space oil = red largest: Ghawar
  45. 45. Persian Gulf Close-up
  46. 46. The Middle East contains 45–60% of the world‟s petroleum reserves.Ghawar Ghawar: probably the most important place you‟ve never heard of * World‟s largest oil field * 60-65% of KSA production to date * 6% of global production to date * 6% of modern production 51
  47. 47.  Discovered in 1948 Huge anticline structure 250km by 30km wide 3400 wells Reserves when discovered 100 billion barrels Current production 5 million barrels per day 7% of the Northern tip of the field produces 2 million barrels per day 7 million barrels of water pumped in daily to recover 5 million barrels of oil
  48. 48. Sideways Drilling – e.g., Ghawar (increases flow by exposing longer length of borehole to oil floating on injected water) 3-D view of "bottle-brush" well completion Greatly increases flow rate from single top view wells (e.g., 10,000 barrels/day vs. 300 barrels/day) from Mattside view Simmons
  49. 49. Ghawar Largest Oilfield(~5% worldproduction) (from reference on
  50. 50. Ghawar 3D Seismic Survey CloseupOil column thickness (orig: 1300 feet) Shiv Dasgupta, “Reservoirblue 0-30 feet monitoring with permanentgreen more than 120 feet borehole sensors: Ghawar Arabred boreholes (most now used for waterDinjection) 74th SEG reservoir”, Conference, 2004
  51. 51. possible location of traverse on 3D reconstructionfrom garyp
  52. 52. Ghawar Boreholes blue: oil brown: water inj (approx. overlay)
  53. 53.  Ain Dar, Shedgum, Uthmaniyah, Farzan, Ghawar, Al Udayliyah, Hawiyah and Haradh.
  54. 54. Ghawarlargest resevoir in world (looking south) surface defined by impermeable cap (anhydrite bed)
  55. 55. Ghawar Depletion by Region Ghawar Base Case Production Model total prod. ‟02 to ‟28 = 30 Gb 5 Mb/d 4 Mb/d 3 Mb/d 2 Mb/d 2007 2014 from Euan Mearns
  56. 56. Rock permeability is spatially complex (model of Ain Dar andShedgum, northern Ghawar)
  57. 57. Depletion of North ‘Ain Dar Oil Oil Oil Oil Staniford from Stuart
  58. 58. Ghawar Field Oil Saturation Plot, 2002 (presumably just under anhydrite cap) „Ain Dar [blue is now oil, not water]
  59. 59.  “Oil has never run out.” Great new discoveries “must be around the corner”. Proven oil reserves (1.2 trillion barrels) equates to 40 years current use. Oil sands and other unconventional oil wait in the wings. High oil prices will likely create new energy supplies, economists are our „high priests‟.
  60. 60. THE DEBATE OVER RESERVES: PESSIMISTS AND OPTIMISTSDuring the 1990‟s, the debate over oil reserves generatedcontroversy between the "pessimists" and the "optimists". Oil is so important that publishing reserve data has become a political act. Most of the dispute between the so- called pessimists (mainly retired geologists) and the optimists (mainly economists) is due to their using different sources of information and different definitions. The pessimists use technical (confidential) data, whereas the optimists use the political (published) data. “
  61. 61. PESSIMISTS •the world is finite and so are its recoverable oil resources • all of the oil-bearing regions worth exploring have already been explored • the big fields have already been discovered • claim that official figures for proven reserves have been overestimated • world oil production is currently at its optimum (peak) and will decrease steadily •Geologists and physicists tend to hold this position. OPTIMISTS •hold a “dynamic” concept of reserves • believe that volumes of exploitable oil and gas are closely correlated to technological advances, technical costs and price • tend to be economists
  62. 62. Remaining in place Produced; 27 billion bbls 17 billion bbls 25% 40% 10% Possible; 5% 20% 7 billion bbls Probable Remaining proved; (incremental); 14 billion bbls 3,5 billion bblsOIIP: 68.1 billion barrelsProved reserves: 41 billion barrels ( 60% of OIIP)Estimated ultimate recovery: 51 billion barrels (75% of OIIP) Source: Saudi Aramco, 2004
  63. 63. from WSJ, Feb 9, 2006
  64. 64.  Ghawar has produced about 60% of all Saudi Arabian oil from 1951-2004 and still accounts for some 50% of the Saudi production When Ghawar output declines, Saudi production will most likely have peaked After peak in Saudi Arabia it is difficult to envisage a global increase in conventional oil production
  65. 65.  The entire world assumes Saudi Arabia can carry everyone‟s energy needs on its back cheaply. If this turns out to not work, there is no “Plan B”. Global spare oil capacity is now “all Saudi Arabia”. No third-party inspector has examined the world‟s most important insurance policy for years. Conventional wisdom says “Do not worry, Saudi Arabia has always come up with the goods.” If conventional wisdom is wrong, the world faces a giant energy crisis.
  66. 66. Saudi Arabia problemsSince 1970, Saudi Arabia has been the world‟s “swingproducer” of petroleum: the only country capable ofgreatly increasing production in a short time (in responseto supply interruptions such as hurricanes in GOM,violence in Nigeria, war in Iraq).KSA insists it still can fulfill the role of swing producer,but releases no verifiable data....its attitude is “trust us.”Analysts are (finally) starting to get very concerned (MattSimmons). A. Unexplained jump in reserves in 1990 (170 to 258 Gb). B. Ghawar reserves? 70 Gb (SA); 25–40 Gb (analysts).71
  67. 67. C. Almost all KSA production comes from 6 supergiantfields, and >60% comes from Ghawar. All six werediscovered 40–60 years ago. Five of the six have producedat very high rates for most of their history.D. At least some of the wells in these super giant fieldsare producing very, very high amounts of water withpetroleum(70% to 90%; 30% is typical trouble level). Inother fields, these levels have led to very rapidproduction declines.E. Saudi Aramco says production from existing fieldsdeclines 8% every year. Thus, KSA needs to increaseproduction by up about 1 million barrels/day every yearjust to compensate.72
  68. 68.  The Ghawar field found in 1948 has produced 60% + of Saudi oil, is now producing approx. 5 million bopd and is approaching its tail. When Ghawar peaks, Saudi will have peaked and so will the world. Indications are that the OPEC “swing production is about to be exhausted
  69. 69.  Peak means that production can no longer be increased; we have then produced about half of the oil After peak the price of oil will be market driven
  70. 70.  Multinational companies depend on cheap energy for global trade. The whole economic model of more and more each year will have to be re thought. Everything possible will be brought into service to maintain the current economic system. Unpredictable consequences.
  71. 71. ► Last man standing► Wait for the techno fix► Powerdown► Create lifeboats
  72. 72. Action required on two fronts (Think globally; act locally):Personal lifestyle changesAchievement of world wide political consensus and action. - Shift of consciousness?
  73. 73. ► Adopt the Uppsala protocol - Distribution of remaining energy, rather than fight over it.► Reduce population and consumption to long term carrying capacity by each country living within its ecological footprint►Oppose the scandalous promotion of Nuclear power►Press for meaningful debate about our energy future.
  74. 74. ► Let as many people as possible know about peak oil  ► Get informed  Web based news  The Ecologist, Resurgence, Positive news
  75. 75. ► Chose a low energy lifestyle.► Learn to live and really live with less not just make do. "Faced with a choice between the survival of the planet and a new set of matching tableware, most people would choose the tableware" - George Monbiot
  76. 76. ► Create communities. You can‟t go it alone.► Re-localise economies and energy production.
  77. 77. VisiontheFuture
  78. 78.  If we use this opportunity to radically change what we do and how we do it, (adopt a post industrial society), then something positive can emerge. However, if treat this as just an energy crisis then we are setting ourselves up for a bigger fall further down the line.