Join us as we watch the crisis unfolding
November 28, 2005
Why is this Thanksgiving different from all other Thanksgivings? It's the peak of world oil production. We should have given thanks for the automobile, airplane, diesel trains and ships, two-lane blacktop, warm houses, plastics, fibers, and a huge range of petrochemicals. Your Thanksgiving dinner was produced with fertilizers, tractor fuel, pesticides, and transportation provided by oil and natural gas. Richard Katz sent a photo of his Thanksgiving sweet-potato casserole, decorated with Hubbert's peak outlined in mini-marshmallows.
Photo: Richard Katz, San Francisco
For raw numbers, I have to wait until Oil & Gas Journal publishes the 2005 statistics at the end of the year. Looking at the EIA monthly numbers doesn't help much. The EIA country with the third-largest production is "Other." Their footnote says that "Other" is obtained by subtracting the rest of the listed countries from the world total. Wayminnit. How did they get the world total other than by adding? It would be funny, except that my tax dollars are paying for the EIA exercise.
The O&GJ 2005 total world oil production will probably be higher than 2004. Is that the dawn of a Brave New World, or are we burning the candle at both ends? With these high oil prices, any producer who suspects that production from one of his wells has dropped abruptly will have Halliburton out there tomorrow morning diagnosing and fixing the problem. Of course, I suspect that we are hastening the peak by pumping every accessible barrel.
Of course, I suspect that we are hastening the peak by pumping every accessible barrel.
The major oil companies are not about to comment directly, but we can tell something from their actions. Chevron's ads say that we are burning two barrels of oil for every new barrel we find. ExxonMobil is stating that, since the mid-1980s, we have been consuming more oil than we discover. Shell has announced that they will now focus on drilling for natural gas and not oil.
The profits of major oil companies are piling up by the tens of billions of dollars per quarter. They are hoarding cash, buying back stock, and declaring dividends. They are not investing heavily in new facilities. If oil production has ceased growing and is about to decline, nobody needs new refineries, new pipelines, or new tanker ships. Most telling of all, the majors are not increasing their investment in exploration drilling. What I hear all around the oil patch is, "There are no good prospects out there." Of course, there is agitation to open areas for drilling that are currently closed. The implication of the plea is that additional drilling access will "solve" our oil problem. Every little bit helps, but it is incumbent on the companies to show that these are something more than a little bit.
What can we do? I have three categories: actions that we can take immediately, methods whose engineering is already done, and futuristic dreams.
Immediate: A 55 mph speed limit (they'll hate me in Montana), teach the kids to turn out the lights when they leave a room, open the house windows for cooling or heating when the weather is not extreme.
Engineered: Nuclear power, high-efficiency diesel automobiles, wind turbines, coal gasification (with the carbon dioxide sold for enhancing oil recovery).
Dreams: Hydrogen fuel cells, alcohol from corn, solar cells. Don't pin your hopes on a Manhattan Project or an Apollo program.
The "oil peak" side of the debate is gaining momentum, but we have a long way to go. The November 18, 2005 issue of Science on pages 1106—1108 had yet another "he said, she said" treatment. A few of our opponents have posted downright nasty comments on the Internet. We can get nasty too. I'm starting an honor roll of names and the dates when they announced that the peak is here. The list is also known as the "Cornucopian Cemetery." James Medlin earned a spot on the honor roll by circulating a long interesting paper along with a note saying that oil had already peaked before Hurricane Katrina. T. Boone Pickens and Matt Simmons are already on board. And I have plots reserved for Daniel Yergin, Michael Lynch, and Thomas Ahlbrandt. They can sign up anytime that they are ready to admit that the peak has arrived.
I see no reason to retract my Thanksgiving, 2005 prediction.
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