PEAK OIL

Over the past 100 years humankind has experienced unprecedented improvement in the quality and span of life, largely as a result of the easy abundance of inexpensive oil. It all happened in what’s been called “The Era of Cheap Oil.” The world’s economy, in that 100 year span, has become extremely dependent upon relatively easy to produce, abundant and cheap oil. Peak Oil refers to the predicted peak of global oil production, given that most evidence would suggest that oil is a finite and non-renewable resource.

We have used approximately 1 trillion barrels of oil in the past 100 years - about half of the oil that most geologists believe ever will be produced from under the crust of our planet. The latest projections are that we will use the last trillion barrels in just the next 30 years. The first trillion barrels were relatively easy to get; hence they were used first. However, the next trillion barrels of oil will prove far more difficult, and a lot more costly, to extract and bring to market. Our world’s economy could be noticeably affected by this shift.

Although there is a broad range of opinions about Peak Oil’s timing, what seems clear is that the current volatility and increase in the cost of oil are here to stay. It also is clear that the world’s economy and many local economies have developed an extreme dependence on oil.

We are exploring a new way to think about energy. At the Biomass Energy Foundation, our methods of hydrogen conversion will play a large role in the coming shifts in energy production, distribution and usage.

For more information on peak oil - www.peakoil.org
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Production Peaking

From: “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management.” Published by the U.S. Department of Energy, February, 2005, Robert L. Hirsch, SAIC, Project Leader. Pp.12-13. The full report is at
http://www.physics.unc.edu/about/robertsonseminars/hirschstudy.pdf

World oil demand is expected to grow 50 percent by 2025. To meet that demand, ever-larger volumes of oil will have to be produced. Since oil production from individual reservoirs grows to a peak and then declines, new reservoirs must be continually discovered and brought into production to compensate for the depletion of older reservoirs. If large quantities of new oil are not discovered and brought into production somewhere in the world, then world oil production will no longer satisfy demand. That point is called the peaking of world conventional oil production.

When world oil production peaks, there will still be large reserves remaining. Peaking means that the rate of world oil production cannot increase; it also means that production will thereafter decrease with time.

The peaking of world oil production has been a matter of speculation from the beginning of the modern oil era in the mid 1800s. In the early days, little was known about petroleum geology, so predictions of peaking were no more than guesses without basis. Over time, geological understanding improved dramatically and guessing gave way to more informed projections, although the knowledge base involves numerous uncertainties even today.

Past predictions typically fixed peaking in the succeeding 10-20 year period. Most such predictions were wrong, which does not negate that peaking will someday occur. Obviously, we cannot know if recent forecasts are wrong until predicted dates of peaking pass without incident.

With a history of failed forecasts, why revisit the issue now? The reasons are as follows:

1. Extensive drilling for oil and gas has provided a massive worldwide database; current geological knowledge is much more extensive than in years past, i.e., we have the knowledge to make much better estimates than previously.

2. Seismic and other exploration technologies have advanced dramatically in recent decades, greatly improving our ability to discover new oil reservoirs. Nevertheless, the oil reserves discovered per exploratory well began dropping worldwide over a decade ago. We are finding less and less oil in spite of vigorous efforts, suggesting that nature may not have much more to provide.

3. Many credible analysts have recently become much more pessimistic about the possibility of finding the huge new reserves needed to meet growing world demand.

4. Even the most optimistic forecasts suggest that world oil peaking will occur in less than 25 years. The peaking of world oil production could create enormous economic disruption, as only glimpsed during the 1973 oil embargo and the 1979 Iranian oil cut-off.
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