Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future Read Online Free Page B
Author: Richard Heinberg
exceeds the value of the oil being extracted. When that happens, the well is capped or plugged with cement, and equipment is removed from the site.
The same principle holds for larger aggregations of petroleum resources. When a new oil field is discovered, a few exploratory wells are drilled to help determine the size of the deposit and the nature of the geology. With this information, engineers determine optimum well placement and start drilling in earnest. The production rate for the oil field increases as more wells are drilled. Gradually, as older wells deplete, their production rates begin to decline, but new wells are drilled to offset those declines. Eventually, when all of the possible drilling locations have been used and production from most wells is tailing off, it becomes impossible to stave off the dwindling of the overall extraction rate.
Bundle many oil fields together and again the same principle holds. At this level of scale a pattern becomes apparent: the aggregate oil extraction rate begins to approximate a bell curve. The top of the curve represents the maximum production rate, or the peak of oil production, for the fields in question.
Most oil-producing countries—including Indonesia, the United Kingdom, Norway, and the United States—saw their national peaks in crude oil production years or decades ago. Their production declines have been offset by discoveries and production growth elsewhere in the world.
Figure 8. Norway, UK, and Indonesia Oil Production, 1980–2012.
Source: Energy Information Administration, May 2013.
But there are only so many potential oil-producing areas on our small planet. Therefore, the same peaking trend will inevitably hold for the entire world. The rate of global oil production will rise to a plateau or peak, then decline. Unless we have somehow substantially reduced our dependency on oil by the time that decline commences, the impact to the global economy will be serious-to-catastrophic. Therefore the timing of peak oil is of great importance.
And that’s what all the fuss is about.
Okay, When?
Oil analysts have two main ways of forecasting the timing of the global peak. One involves applying a fairly simple equation to past and current production statistics; the other is a more detailed method of adding likely flows from potential new sources and subtracting declines from existing fields (which number in the thousands). Neither method is foolproof. The data are too complex to permit the accurate forecasting of the global oil production peak to the day, month, or year. But many analysts agree that around 2005, as global crude oil production hit a plateau that continues to the present, our world entered the peaking period , and within a few years the global oil production rate will in all probability start to decline.
Here are some of the factors that complicate efforts to forecast the peak:
Reserves and resources. Some analysts (in the Introduction we called them “Cornucopians”) are highly optimistic about oil’s future. They typically point to enormous reserves of oil around the world, which continue to grow—for reasons discussed below. If there’s all that oil left to extract, they ask, does it make sense to worry about an imminent peak in production rates?
Peakists reply that focusing on reserves numbers can be misleading, as not all oil is the same. Saudi oil, most of which was discovered in the 1950s and 1960s, can be produced cheaply and quickly; the oil being brought on line now from tar sands, deepwater, and tight formations will either be extracted slowly, or will require high levels of investment, or both.
Sometimes reckless oil boosters confuse reserves (defined as the portion of the total hydrocarbon endowment that is extractable at realistic market prices and with current technology) with resources —the total endowment. For example, the Green River shale formation in Colorado represents a resource base equivalent to roughly a trillion
The same principle holds for larger aggregations of petroleum resources. When a new oil field is discovered, a few exploratory wells are drilled to help determine the size of the deposit and the nature of the geology. With this information, engineers determine optimum well placement and start drilling in earnest. The production rate for the oil field increases as more wells are drilled. Gradually, as older wells deplete, their production rates begin to decline, but new wells are drilled to offset those declines. Eventually, when all of the possible drilling locations have been used and production from most wells is tailing off, it becomes impossible to stave off the dwindling of the overall extraction rate.
Bundle many oil fields together and again the same principle holds. At this level of scale a pattern becomes apparent: the aggregate oil extraction rate begins to approximate a bell curve. The top of the curve represents the maximum production rate, or the peak of oil production, for the fields in question.
Most oil-producing countries—including Indonesia, the United Kingdom, Norway, and the United States—saw their national peaks in crude oil production years or decades ago. Their production declines have been offset by discoveries and production growth elsewhere in the world.
Figure 8. Norway, UK, and Indonesia Oil Production, 1980–2012.
Source: Energy Information Administration, May 2013.
But there are only so many potential oil-producing areas on our small planet. Therefore, the same peaking trend will inevitably hold for the entire world. The rate of global oil production will rise to a plateau or peak, then decline. Unless we have somehow substantially reduced our dependency on oil by the time that decline commences, the impact to the global economy will be serious-to-catastrophic. Therefore the timing of peak oil is of great importance.
And that’s what all the fuss is about.
Okay, When?
Oil analysts have two main ways of forecasting the timing of the global peak. One involves applying a fairly simple equation to past and current production statistics; the other is a more detailed method of adding likely flows from potential new sources and subtracting declines from existing fields (which number in the thousands). Neither method is foolproof. The data are too complex to permit the accurate forecasting of the global oil production peak to the day, month, or year. But many analysts agree that around 2005, as global crude oil production hit a plateau that continues to the present, our world entered the peaking period , and within a few years the global oil production rate will in all probability start to decline.
Here are some of the factors that complicate efforts to forecast the peak:
Reserves and resources. Some analysts (in the Introduction we called them “Cornucopians”) are highly optimistic about oil’s future. They typically point to enormous reserves of oil around the world, which continue to grow—for reasons discussed below. If there’s all that oil left to extract, they ask, does it make sense to worry about an imminent peak in production rates?
Peakists reply that focusing on reserves numbers can be misleading, as not all oil is the same. Saudi oil, most of which was discovered in the 1950s and 1960s, can be produced cheaply and quickly; the oil being brought on line now from tar sands, deepwater, and tight formations will either be extracted slowly, or will require high levels of investment, or both.
Sometimes reckless oil boosters confuse reserves (defined as the portion of the total hydrocarbon endowment that is extractable at realistic market prices and with current technology) with resources —the total endowment. For example, the Green River shale formation in Colorado represents a resource base equivalent to roughly a trillion
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