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The Peak Oil Debate Will global oil production start its final decline soon, or not? Bruce Robinson Convenor, ASPO-Australia. www.ASPO-Australia.org.au An Australia-wide network of professionals working to reduce oil vulnerability. ASPO-Australia Working groups Finance Sector

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The Peak Oil Debate

Will global oil production start its final decline soon, or not?

Bruce Robinson

Convenor, ASPO-Australia


www.ASPO-Australia.org.au

An Australia-wide network of professionals working to reduce oil vulnerability

ASPO-Australia Working groups

Finance Sector

Health Sector

Social Services Sector

Remote indigenous communities

Active transport (bicycle & walking)

Agriculture, Fisheries and Food

Biofuels

Urban and transport planning

Oil & Gas industry

Behavioural change

Local Government sector

Regional and city working groups

Construction Industry

Freight sector

Public transport sector

Defence and Security

Economics

Tourism

Young Professionals working group

 Senate inquiry submission

Senate Inquiry into Australia's future oil supply and alternative transport fuels

ASPO-Australia is part of

the international ASPO movement


Peak Oil

but

when?

2050

2010

1970

1930

Outline

What is Peak Oil ?

the time when global oil production

stops rising and starts its final decline

We will never "run out of oil"

When is the most probable forecast date ? perhaps 2010-2015

What might it mean for Australia's Energy Security? lots!

What mitigation and adaptation strategies are practical?


Many books about

Peak Oil

Brian Fleay

Perth

1995

2005

Campbell &

Laherrère March 1998

Deffeyes

2001

2006

Heinberg 2003

Campbell 2003

Roberts 2004


APPEA

April 2005

Perth

Australian Petroleum Production & Exploration Association conference

  • Please put your hand up if you thinkthat we have crossed the Hubbert Peak and we are entering a demand driven pricing era,

  • and hands up those who don’t?

  • Undecided

  • 1/3rd

  • 1/3rd

Eric Streitberg

Executive Director

ARC Energy Limited

  • 1/3rd


US oil production: Peak in 1970

2002

Mb/d

Jeremy Gilbert, ex BP www.PeakOil.net


Past World Oil Production

and Forecasts

Dr Ali Samsam Bakhtiari

Iran

4

4

IEA

40

Prof. Bauquis

France

Shell

0

0

3

3

30

Deffeyes

Bauquis, Total

0

0

Gb

pa

2

2

20

ASPO & Skrebowski

0

0

1

1

10

0

0

2005

0

0

0

0

1930

1970

2010

2050

Chris Skrebowski

UK

Prof. Aleklett, ASPO

Sweden

1

1

2

2

4

4

6

6

8

8

10

10

12

12

1

1

1

1

1

1

1

1

1

1

1

1


Chris skrebowski editor petroleum review london the practical realities
Chris Skrebowski Editor, Petroleum Review, LondonThe practical realities

  • The world needs oil production flows

  • Consumers need delivery flows

  • Reserves are only useful as flows

  • Worry aboutflows not reserves

"40 years reserves left at current production rates"

....This is a very misleading statement


Alaskan North Slope ProductionReserves grow -- Production falls

Prudhoe Bay, Alaska


A simple observation or why peak will be earlier than most people expect
A simple observation -- or why peak will be earlier than most people expect

‘Global production falls when loss of output from countries in decline exceeds gains in output from those that are expanding.’


Why are oil supplies peaking
Why are oil supplies peaking? most people expect

  • We are not finding oil fast enough

  • We are not developing fields fast enough

  • Too many fields are old and declining

  • We are short of people and equipment

  • Oilfield inflation is soaring


The real oil discovery trend most people expect

Longwell, 2002


The real oil discovery trend most people expect

Longwell, 2002

1995-2025 Discovery Forecast USGS


Oil production flows all new flows take two to twenty five years

Global new field most people expect

discovery (7-10bn b/y)

Tar sands and Heavy oil

Biofuels + others

Known oil reserves

in production (90%)

NIP

10%

EOR

Yet-to-find

probable

Yet-to-find

possible

Current supply

84mn b/d or 30bn b/y

2 to 25 years

Oil production flows -- all new flows take two to twenty-five years


How old are the fields
How old are the fields? most people expect

  • Of the 18 largest fields, 12 are in decline, 5 have some potential and 1 is undeveloped

  • The 120 largest fields give 50% of total

  • 70% of production from fields 30+ years old

  • Few large recent discoveries

  • Relying more and more on ageing fields and new small discoveries


What are the bp statistics saying
What are the BP statistics saying? most people expect

  • OECD production peaked in 1997 and has now declined by just under 2 million b/d (8.8%)

  • Non-Opec, non-FSU production peaked 2002

  • North America/Mexico peaked in 1997

  • North Sea - UK/Norway/Denmark peaked in 2000 now declined by 1.2 million b/d (19.2%)

  • Around 25 significant producers in decline

  • About 28% of global production from decliners



North sea production by field
North Sea production by field 2010

Forties monthly production to date


The top five decliners in 2005

1970 2010

The top five decliners in 2005


How the megaprojects database is created and used
How the Megaprojects database is created and used 2010

  • All publicly available data

  • 2006-2012 148 Opec and 70 non-Opec projects

  • Opec data (from their website)

  • Incremental production allocated by start up date

  • Graphed to show volumes available to meet demand

Megaprojects Report, Petroleum Review April 2006



Chris skrebowski s conclusions
Chris Skrebowski's conclusions 2010

  • Supply will remain tight and prices high barring a major economic setback

  • Oil supply will peak in 2010/2011 at around 92-94 million barrels/day

  • Oil supply in international trade may peak earlier than the oil production peak

  • Collectively we are still in denial

  • WE HAVE JUST 1,500 DAYS TO PEAK


ABARE forecasts 2010

"Forecasters' Droop" ??

ASPO Random number generator

"If the price of eggs is high enough, even the roosters will start to lay."

ABARE to Senate inquiry into Australia's future oil supplies


NYMEX 2010

US$67

in 2011

now US$64.5

ABARE

2005

US$35 in 2006

ABARE

US$39

in 2011

ABARE oil price forecasts

US$/bbl

2002 for 2004 $26

2004 for 2005 $32

2004 for 2005 $37.95 – 4.8%


Australia’s oil production and consumption 2010

1965-2030

Actual Forecast

1.0

Million barrels/day

Consumption

0.8

0.6

Production

0.4

P50

0.2

0.0

1965

2005

2025

1985

Geoscience Australia, APPEA, ABARE


=1.3 EfT 2010 3

Australia uses 45,000 megalitres of oil each year

a 360m cube

Sydney Harbour Bridge

is 134 m high

80% of Australia’s oil usage is in transport

If Australia’s 20 M tpa wheat crop → ethanol = 9%

100 ml of oil contains 1 kWh of energy.

Enough to move a small car to the top of the Eiffel tower


Million barrels/ day 2005 2010

BP Statistical Review, 2006

Australia uses 0.9

China 7.0

US 20.6

World 82.5

US 1 cubic km oil / year

1 km

l

l

China

Australia

United States


Total Oil Consumption 2010

Production Net imports

M bbl/day

China

20

EU 15 + Norway

Australia

10

l

l

1 km

United States

0

Aust Eu-15+ USA China Japan

Aust Eu-15 USA China Japan

Oil consumption bbl/day/1000 people

Registered vehicles /1000 people

70

60

50

40

30

20

10

0

Aust Eu-15 USA China Japan


E 2010 NERGYFILES

www.energyfiles.com

Energyfiles Ltd

Oil production is not shared equitably

US: 5% of world's population uses 25% of world oil

China: 21% 8%


1000 Barrel/day 2010

UK

Consumption

Export/Import

Production decline rate ~ 10%

UK will be a net importer by 2007

Quelle: BP Analyse: LBST, ß


1000 Barrel/day 2010

Indonesia

Consumption

Export

Quelle: BP 2003; Analyse: LBST, ß


2020 2010

Consumption

1000 Barrel/day

China

Production

Imports

Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi


Common Myth 2010

Leonardo Maugeri

ENI SPA Rome

15th December 2003

Economist

Ultra-optimist

“..just as the Stone Age did not end for the lack of stones, the Oil Age will not end because of the scarcity of oil.

Rather oil will inevitably be surpassed in convenience by a new source of energy in the future”.

BiomassWalking, horses, horse & cart, horse-drawn barge

Coal Trains

Oil (& gas) Cars, trucks, trains, planes

??

Is there anything else better than oil & gas ??

or even as good ? Thermodynamics? Theology?


12 2010 th January 2004

Realist ?,

Pessimist ?

Richard Miller

BP Exploration Operating Co. Ltd. Middlesex, UK

…oil, the most energy-dense of the natural, non-nuclear fuels on the planet..

But there isn't anything conceivable that could replace conventional oil, in the same quantities or energy densities, at any meaningful price…


2005 Study 2010

35

EOR

Coal Liquids

25

Impact

(MM bpd)

Heavy Oil

15

GTL

5

Efficient Vehicles

0

0

5

10

15

20

Years After Crash Program Initiation

Worldwide Crash Program Mitigation of Conventional Oil Production Peaking

A Study for DOE NETL

Hirsch et al., 2005

Delay / Rapid growth.

Roughly 35 MM bpd at year 20.


Les Magoon, 2010

USGS 2001

Is there a possible transition to another fuel?.

Probably not.

Can we run ALL our cars on water, hydrogen, ethanol, GTL ??

No.

EROEI (Energy return on energy invested)

Very important


December 2005 2010

July 2006




The Peak Oil Debate 2010

Will global oil production start its final

decline soon, or not?

Probably yes. As the Senate report shows,

the "no-worries" camp are remarkably short

on reliable future production data and

remarkably long on hope.

What should we do.?

Governments and businesses should each

set up an "Office of Oil Vulnerability" to help

people plan for the probability of Peak Oil.

There are many options useful for mitigation

and adaptation.

No "Silver Bullet", but "silver buckshot"

Oil vulnerability risk assessment and management

is an important mechanism of minimising exposure

and maximising opportunities. It is a new and

promising field.

Hint:

Check your superannuation is not being invested

into urban toll-roads, tunnels and airports.

offshore

onshore

ENERGYFILES

www.energyfiles.com

[email protected]

08-9384-7409 0427 398 708

www.ASPO-Australia.org.au


a few more slides follow, 2010

in case they are needed for questions


February 2004 2010

By 2015, we will need to find, develop and produce new oil and gas equal to eight out of every 10 barrels being produced today.


Gboe/pa World All Oil 2010

}

Oil

2005

www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004


Gboe/pa World All Oil & Gas 2010 (gas at 10,000 cft=1bbl)

}

Gas

}

Oil

2005

www.PeakOil.net ASPO 2004


} 2010

Gb/year

50

Demand

Trend

World oil

shortfall scenarios

40

Shortfall

Past Production of Oil

30

20

Forecast

Production

10

2005

2030

0

By 2030, the gap is equivalent to 6,000 nuclear reactors


Gb/year 2010

Efficiency

Demand

Growth

World oil

shortfall scenarios

Transport

mode shifts

Pricing / taxes

City design/lifestyle

Past Production of Oil

Other petroleum fuels

gas, tar-sands

Other fuels

Deprivation, war

Forecast

Production

2005

  • no single “Magic Bullet” solution,

  • probably no replacement ever for cheap plentiful oil

  • Urgent preparation and adjustment are vital


Demand 2010

Past Oil Production

and Forecasts

Australia

Geoscience Australia

Total

Bass Strait

1970

1930

2010

2050

4

4

IEA

40

Shell

World

ASPO and others

0

0

3

3

30

Bauquis

0

0

Gb

pa

Samsam Bakhtiari

2

2

20

Deffeyes

ASPO

0

0

1

1

10

0

0

2005

0

0

0

0

1930

1970

2010

2050

1

1

2

2

4

4

6

6

8

8

10

10

12

12

1

1

1

1

1

1

1

1

1

1

1

1


Australian Government Policy and Action Options 2010

1: “Talk about it, Talk about it”

2. Engage people, “Participatory democracy”

3. Dismantle the "perverse policies" that subsidise heavy car use and excessive freight transport.

4. Encourage frugal use of fuel, and disadvantage profligate users.

Fuel taxes should be incrementally raised to European levels to reduce usage.

5: SmartCard personal fuel allocation system. A flexible mechanism for short-term oil shocks, as well for encouraging people to reduce their fuel usage..

6. Concentrate on the psychological and social dimensions of automobile dependence, not just “technological fixes”

7. Implement nationwide "individualised marketing" travel demand management.

8. Railways, cyclepaths and public transport are better investments than more roads.

9. Give priority for remaining oil and gas supplies to food production, essential services and indigenous communities, using the Smart-Card system.

10. Review the oil vulnerability of every industry and community sector and how each may reduce their risks.

11 Promote through the United Nations an Intergovernmental Panel on Oil Depletion, and a Kyoto-like protocol to allocate equitably the declining oil among nations. An international tradable sliding scale allocation mechanism is one hypothetical option.


Australia 2010

US

China


E 2010 NERGYFILES

www.energyfiles.com


Australian Parliament, 2010

Senate

Rural and Regional Affairs

and Transport References Committee

Inquiry into

Australia's future oil supply

and alternative transport fuels

194 submissions

Interim report "Peak betweennowand 2030"

September 2006


We must acknowledge oil depletion 2010

All of us: industry, governments

community, media, academia...

We must not let the opportunities slip away

Many of the policy options to reduce fuel usage

will also lead to economic opportunities and

healthier and happier communities.

We are very well placed globally

 Long, growing awareness of oil depletion,

but no reliable information from Federal Govt,

only ABARE, BTRE

 World-leading demand management skills

TravelSmart and water conservation

 Considerable uncommitted gas reserves

Failure to act now will prove incredibly costly

Govts should set up "Office of Oil Vulnerability"

"Oil vulnerability risk assessment and management"

www.ASPO-Australia.org.au


This is the real new capacity to 2012 peak in first quarter of 2011
This is the real new capacity to 2012 2010 (Peak in first quarter of 2011)


Running on empty 2010 August 27, 2006

You're about to hear two of the scariest words in the English language — "peak oil".The point where oil production reaches its absolute peak; the point when supplies start running out.

Oil prices will keep rising: analyst

The Age, August 21, 2006

Chris Skrebowski."The price of oil will continue to rise until world oil production peaks in 2010 at around 94 million barrels of oil per day

31/8/06 WA Planning and Infrastructure Minister Alannah MacTiernansaid that major Federal investment in public transport was vital if Australia was to avoid major disruption as global petroleum production reached its peak.

Sept 11 2006

The world has an abundant

supply of oil, ExxonMobil Australia chairman Mark Nolan said today.

He debunked the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.

Four Corners Peak Oil? 10/07/2006

Dr Brian Fisher of ABARE was positively jovial.

If the price of eggs is high enough, even the roosters will start to lay.

Oil production limit reached: expert

ABC NewsJuly 10, 2006.

Former National Iranian Oil Company executive Dr Ali Samsam Bakhtiari has told the Financial Services Institute in Sydney the world's oil fields are producing as much oil as they can.


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