Wednesday, May 14, 2014

The end of "Peak Oil"?

A picture is worth a thousand words:

The nature of tight rock oil wells means that each well is limited in how much oil it can produce over its lifetime, but the number of wells that can be drilled and fracked is immense.
The US shale plays have been a bonanza for smaller oil companies. The huge multi-nationals have been late to the game.
Smaller, independent North American oil producers own five times more land in the major U.S. shale plays than Big Oil companies like BP, Royal Dutch Shell and Exxon Mobil. Shale reservoirs from South Texas to North Dakota are dominated by names like EOG Resources, Continental Resources and Pioneer Natural Resources. The diverse array of competitors from private equity firms to independent producers has made it tougher for Big Oil to compete. __
Smaller companies are more nimble, and often have the advantage in developing new industries — as long as government interference is kept to a minimum.
The implication is that the only hope for Peak Oil is an alliance of environmentalists, government, and Big Oil to squash the small oil companies driving the petroleum revolution.


Eagle said...

"Peak oil" was always a lie concocted by the oddest collaboration of all: "big oil" who wanted to raise the price of oil to increase profits, and the "green lobby" who wanted to generate a crisis that could force change toward "renewable" resources at the expense of the economy.

Neither group foresaw the commercialization of technologies that would make it economically feasible to recover fuel from shale or oil sands. And neither group was ready for small and independent producers to use those technologies on private land without reliance on the "biggies".

What we now know is that there are sufficient deposits of oil and natural gas to provide for our energy needs for at least the next 100 years. And with the development of new technologies that may make coal usable at low/no "greenhouse gas" output (, we may even be on the road to being able to use coal again.

Now, if the government would invest in technologies that show promise in solving our energy supply issues rather than technologies that are limited by stupid things like, er, darkness....

Unknown said...

"What we now know is that there are sufficient deposits of oil and natural gas to provide for our energy needs for at least the next 100 years."

Perhaps so, but we need to use the fuel and time wisely in developing infrastructure that is easily used and maintained without the cheap energy that we enjoy now.

Now before I am accused of being a greenie central planner (I definitely am not), I propose that individuals and small communities make decisions based on likely outcomes of shortages in the future. It will likely happen and if not our grandkids can laugh at us while enjoying efficient systems we engineered today.

Lissa said...

So, what happens to the Middle East now? And will we care very much?

Eagle said...

Mike, I'm definitely not an anti-greenie: I definitely support the development of energy sources that are non-polluting and renewable.

But I hesitate to think that we'll be able to travel in battery- or solar-powered trans-Pacific aircraft in my lifetime. Nor do I think we'll see equivalent replacements for diesel-powered massive earth-moving or heavy construction equipment (for building that infrastructure you mentioned) powered by wind alone.

Conservation of fossil fuel resources to reduce waste and effects on the environment? Yes. Better use of existing materials to make lighter, and thus more energy-efficient vehicles? Absolutely. Conversion of vehicles from gasoline/diesel fuels to LNG where it makes sense (e.g. city-owned vehicles)? Yup.

The market is inevitably moving toward more efficient vehicles (hybrids, electric, etc), and consumers have shown their willingness to buy those vehicles. But with a commute that's 32 miles each way and no way to recharge during the day, I need more than a Nissan Leaf.

When I can purchase a vehicle that doesn't use fossil-based fuels (including hydrogen), can transport me for hundreds of miles on a single charge/refill with a recharge/refill time as short as filling my tank at the local gas station, and at a cost that is no more than an equivalent fossil-fueled vehicle, I'll be one of the first in line.

Anonymous said...

I also wonder about "peak pipeline" and "peak refining". Being able to pump it out of the ground is pointless and wasteful if it doesn't find it's way into my gas tank.

Borepatch said...

Mike, it makes sense to invest in these other technologies only when the price of existing ones starts to go up. Otherwise we'll likely get nothing but Solyndra style crony capitalist boondoggles.

As to the 100 years limit, remember that 10 years ago that was a 50 year limit. My bet on the technology is that there will end up being much more oil than even this 100 year estimate before all is done.

Lissa, the best thing we can do for world peace is to get the price of gas to tank. (so to speak)

newrebeluniv, this is the way they're trying to kill it. But the Permian basin is in Texas, near to existing pipelines. So far they haven't been able to block the signal.

SiGraybeard said...

The situation of the small companies owning and starting to develop the resources is the norm in the mining. Gold mines, for example, typically take several years between finding the deposit and getting gold bars out of the smelter. This is high risk stuff, so the big companies let the little guys take the risk, develop the resource until gold starts to flow, and then they buy up the little guys.

Paul, Dammit! said...

What's interesting to me is that there's still a *huge* lag between investment in infrastructure and oil supply. We've got a glut of supply in the US, but now we've got a limit on marketability. There's a huge bottleneck at the Bakken crude disports, since it was developed with investment in Keystone xl's infrastructure in mind- without the concurrent development of the XL pipeline, I wonder what impact infrastructural lag will have on development of the up-and-coming fields like LPG and gas reprocessing? Personally, I'm hesitant to invest in infrastructural developers despite what seems like a phenomenal job market.