Forbes: peak oil in five to ten years

[Terry in Austin]

Forbes magazine, "The Capitalist Tool" and longtime energy-crunch denier, has published an interview with noted industry analyst Charles Maxwell, headlined "Bracing for Peak Oil Production by Decade's End."

Maxwell, senior energy analyst at Weeden & Co, points out that the world now uses 3 barrels of oil for every new barrel discovered. He goes on to explain:

A bind is clearly coming. We think that the peak in production will actually occur in the period 2015 to 2020. And if I had to pick a particular year, I might use 2017 or 2018. ...By 2020, we should be headed in a downward direction for oil output in the world each year.

He bases his analysis on the historical interval between "peak discovery" in an area and "peak production":

The peak of production usually comes sometime between 30 and 50 years after the peak of finding oil. I believe that the peak of {worldwide} discovery fell in the five-year interval between 1965 and 1970. So if you took it at, say, 1968, and then you added 50 years, you would get to 2018.

Then Maxwell examines the slim prospects of replacing petroleum energy shortfalls with alternatives:

But most alternative supplies... can't be expanded quickly. Solar power is too small to be meaningful. Wind power, again, is too small, and most of the good places for wind have already been taken. So it looks like alternative energies will plug only a very small part of the hole.

...Even if we decide to seize the nuclear alternative, it's still a decade before we can get the plants built and operating.

Other than some general suggestions about "using more coal," these investors focus their response to the situation on how to make the most money from it.

Maxwell's analysis of the situation, however, is pretty much on target, although it isn't really that much news. The real news is that the story has made it as far into the mainstream as Forbes magazine, and being treated seriously.

[Taverner]

1. I imagine stills will be set up all over the place

When we hit it

[tularetom]

2. Peak production "usually" comes 50 years after peak discovery?

How the hell does he know that this is what usually happens? Did it happen the last time we had peak oil?

A statement like that sounds authoritative but it's so asinine it discredits anything else he has to say.

He may be referring to experiences on a local scale but he has no basis to predict global trends.

[Terry in Austin]

5. Peaks happen locally, regionally, and up

The biggest area being global. The geology of it is well understood and generally accepted.

This cross-checks with another fact: Consumption is outpacing discovery by at least 3 to 1. We'll have to discover the equivalent of a Saudi Arabia every two years just to stay even.

Petroleum Review's megaprojects report tracks oil projects in development out to 2018 and shows new production continues to decline dramatically at least that far into the future.

[customerserviceguy]

11. I agree

The discoveries that happened in the 1960's were when oil was a relatively cheap commodity. It wouldn't have made sense to explore for really tough to get oil at those prices. There have been oil price spikes, but they tend to produce recessions that drive the price right back down. If there is a steady rise in oil prices, there would be a steady income source to base more and more exploration on.

This is the chief reason that I don't believe in the concept of "Peak Oil", at least not within the next century or so.

[Terry in Austin]

14. The geology is pretty stubborn

Oil geology is perhaps the most advanced and well-funded science ever. They pretty much know where the oil is on this planet, and they're going full tilt getting it out. It still isn't enough.

We burn three barrels for every new barrel discovered. Given current and foreseeable demand, that means we'd have to discover the equivalent of a new Saudi Arabia every two years or so to stay even. It's not a matter of showing up with enough cash to inspire somebody to find new oil -- they're already doing it. And it still isn't enough.

The literal peak of oil production isn't actually a concept that we can believe in or reject -- it's an event that occurred somewhere in the middle of 2005. It means that the continual growth of oil production that we were used to for a century and a half has discontinued. Production is declining now and will soon start declining faster.

Nobody likes to talk about it much, but there it is.

[grantcart]

18. "next century or so" really?

The math is pretty clear.


We have so much known reserves under production.


We are increasing in global use by exponential numbers.


The amount of new discoveries each year is less than the replacement volume that is currently being used and it is in increasingly more difficult places to drill for.

[HereSince1628]

3. That's really funny. He uses 50 years? Not only the outside of his own horizon

but also it takes nothing into account about technology that allows oil exploration to more efficiently (as in more quickly)turn into production.

[taterguy]

4. Difficult to explore something that isn't there

There's no question that we're running out of oil.

The issue is how long it will take.

A sensible society would start planning for that contingency.

I'm beginning to suspect our society ain't so sensible.

[dkf]

6. I was relying on Obama to be sensible. This should have been the project of our lifetimes.

So disappointing.

[taterguy]

9. Don't follow leaders

Obama wants to get reelected.

Telling Americans to reduce oil consumption is a surefire way to ensure you won't get reelected.

But as individuals we can make all sorts of choices that reduce oil consumption.

[dkf]

17. My dream since I learned of peak oil was to get a solar energy set up.

I think within the next 5 years we should get one.

[taterguy]

20. So do you have solar panels at your house?

If not, why not?

[dkf]

23. Solar water heaters yes. Solar panels no.

Solar panels are beginning to become popular here but the technology seems to be advancing by leaps and bounds. I would rather not purchase something obsolete.

I want a system capable of producing enough energy for the house and a couple of cars. Freedom from the grid is the ultimate goal.

[Ikonoklast]

12. Yeah it's all Obama's fault.

You are a one-note poster.

[dkf]

16. More like he was the only hope.

And yes I think he is messing up. His priorities are all wrong.

[Terry in Austin]

7. A paradox with technology -- he does talk about it

> about technology that allows oil exploration to more efficiently (as in more quickly) turn into production.

Basically, better oil technology results in faster production, which results in a quicker peak.

Here's part of Maxwell's comment when the interviewer asks "Is technology reducing the time between finding and producing oil?"

Technology is trying to give us the ability to produce more out of a giant field. In the early days we only produced about 25%. Today we're producing about 40% of the oil in place when a field is found. ...So we have technology improving production capability, but actually taking the oil out faster rather than getting much more out.

[ixion]

8. Their logic on alternative sources is quite lame and incorrect

All the "good" places have been taken? Is that a serious excuse? Please.

And to simply dismiss solar and wind as 'too small' is intellectually lazy. Not to mention the fact that they leave out geothermal and wave generated power. We can replace the Oily Beast with cleaner alternatives, but we have to be willing to do that and quit simply dismissing it out of hand.

[Terry in Austin]

13. The logic of scale is the important thing with alternatives

Yes, Maxwell was dismissive, either because he's an arrogant capitalist, or just trying to keep the story short.

The basic proposition for alt-energy is this: some combination of renewable energy sources can and will replace the entire amount of energy we currently get from fossil fuels.

It turns out that's a pretty tough case to make. The Oily Beast is so huge, the numbers for replacing it are staggering.

• Wind: Currently 160 GW, or 2% of world energy use. At 1.5 MW for a typical mill, that's about 80,000. Spacing requirements are about 60 acres per mill, so a quick trip to the calculator will give an idea of how big and how many are the wind turbine fields that need to be identified and reserved. Just for the US, we'd need an Indiana-sized total area.
  
• Solar: A Rice University study several years ago came up with similar estimates for solar, only the state they picked for comparable area was Oklahoma. Again, that's just the US.

These are the two technologies that scale up fairly well, although arguably not far enough. Less so for technologies like geothermal and wave.

It's one thing to believe that we can turn to solar and wind energy sources to any extent they're available -- we can and we should -- but it's quite another to demonstrate that all of these technologies put together can deliver the same magnitude of energy we get from coal and oil.

Bottom line: we learn how to live well on less energy. A LOT less.

[hunter]

10. Peak oil is now.

That's why the economy has crapped out and won't get better until we quit oil and figure out some other way to support ourselves.

The cost of the war in Iraq, the cost of empire, climate change, that's a real cost of oil. We're cooking the books to fit our freakish and entirely unrealistic economic ideologies. But nature doesn't pay any attention to our economic theories, nature doesn't measure anything by dollars.

Simply put oil is the stuff this civilization eats. As extracting oil becomes more difficult, as the easy oil is depleted, the oil eating economy starves.

[billlll]

15. BP EXXON etc...what will happen to them?

My area's jobs depend on the giants.

What will happen to the strength of the oil giants before and at Peake?

[DCBob]

19. Repubs still claim there are a bazzilion barrels of oil that is protected by environmental laws.

and there would be no shortage if we just let the oil companies drill baby drill.

Yes, it is significant that Forbes would run a story like this. Progress.. but probably already too late.

[DainBramaged]

21. And there is NOTHING WE can do about it except PAY MORE

All doom and gloom today. Break time...weekends are one of the few tings worth living for.....

[taterguy]

22. If only there was a cheap reliable form of transportation that didn't use oil . . .

:toast: