Matthew Simmons, chairman of Simmons & Co. International in Houston and author of Twilight in the Desert (on Saudi oil), has publically stated his belief that we have passed peak oil.
Peak Oil is, all told, a pretty simple concept:Â
* Oil is a finite resource … renewable over time periods of millions of years …
* Humanity has burned somewhere approaching 50% of known, recoverable reserves …
* When 50% of reserves have been extracted, oil will have peaked — and production will began to fall off as oil becomes more expensive (and more difficult) to recover
Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil ‘production,’ meaning extraction and refining (currently about 84 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence ‘peak’. Peak Oil means not ‘running out of oil’, but ‘running out of cheap oil’. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.
The challenging question is not “if” but when … there have been predictions that it has already occurred and the US Energy Information Agency (EIA) is predicting decades into the future. Cambridge Energy Research Associates (CERA — Daniel Yergin’s shop) made a similar optimistic prediction last fall — a report/analysis ripped apart at, among many others, The Oil Drum.
“We shall have much more to say about CERA’s forecast later. For now, it is sufficient to note that CERA’s analysis is lacking. The world’s oil supply will not continue to grow to meet ever-rising global demand, and worse, the consequences could irrevocably damage global economies. Such an outcome would have harmful effects on people’s lives. So, this debate is not “academic” â€” much depends on a correct analysis of the future oil supply.”
In any event, from Simmons’ Bloomberg interview:
“If you look at the numbers and you follow what’s going on starting with Mexico’s giant Cantarell field which is now in a very serious state of decline and then you look at the North Sea and you see just the UK and Norway, it’s pretty obvious to me that those three areas alone could actually decline by between 800,000 and 1 million barrels a day in 2007.
“That pretty well wipes out almost all the production gains coming onstream and in implicit in that it assumes that everyone else is flat.
“So I think basically too many of our oil fields are too old. Too many now are in decline. The Middle East is basically out of capacity. they’re some projects that are being worked upon, but most don’t hit the market until 2008, 2009 and we’re running out of time.
“… I am firmly of the belief that over the course of the next year or two, this issue of peak oil will replace global warming as an issue that we’re all worrying, debating and talking about.”
Peak Oil is terrifying in terms of the implications for the world economy and prospects for us all, but this issue of peak oil will replace global warming as an issue that we’re all worrying, debating and talking about is a rather terrifying prospect.Â Pursuing energy independence and dealing with Peak Oil can take paths that will be devastating in Global Warming terms.Â We must figure how how to deal with the nexus of the two critical issues, so that mitigating Peak Oil fosters mitigation of Global Warming … for an excellent discussion of that, see Richard Heinberg’s Bridging Peak Oil and Climate Change Activism.
And, Richard Simmons reminds us (US) that Peak Oil is a looming crisis … just as the IPCC report did Friday re Global Warming.