What happened to peak oil?
Here an older 2012 video from Swedish peak oil luminary and ASPO chairman Kjell Aleklett.
At the time, when we started this blog, we were entirely in the Richard Heinberg mode of thinking, summarized as: ‘industrial society is going to be hit very soon by a truck, that few see coming and industrial society is doomed, because the world is running out of oil quickly.‘
We no longer think that is the case. That doesn’t mean that peak oil is not going to happen, but it is at least a little postponed and there is fossil fuel life after peak oil. On the fossil fuel supply front, we are much more optimistic than we were three years ago. Meanwhile we think that it is very well possible to have a sustainable light-weight industrial society for 100% based on renewable energy, to be largely realized by 2050, at least in Europe, North-America and China.
There is no video made by Aleklett since, so this could suggest that he quietly dropped the peak oil subject? Not really. Here a recent article from his blog, let’s see what he has to say on peak oil in 2015:
[aleklett.wordpress.com] – The crash in the price of oil may change the oil market – a look at the IEA’s “Oil Medium-Term Market Report 2015”
The article discusses this report:
[iea.org] – Medium-Term Oil Market Report 2015 (80 euro)
Aleklett argues that he and the other ASPO members were basically completely correct with their predictions concerning conventional oil and that production indeed peaked in 2005. The increase in oil production of 4.2 Mb/d we saw from 2008 to 2013 was not cheap (conventional) oil; It came from deepwater, from Canada’s oil-sands and as NGL and shale oil from fracking in the USA.
The world acording to the IEA
Aleklett explains that a reduced need for oil imports (US cars becoming 25% more efficient over the past decade) has led to the current oversupply of oil on the world market and corresponding price implosion. In other words: demand destruction was an important factor causing the drop in the oil prices.
According to Aleklett, OPEC has lost its significance, because it no longer has the will to set the price by varying production, like it did in the past. Everybody is now producing the maximum amount it can, which lead to price erosion.
Aleklett is skeptical of the IEA’s future prognoses. According to him neither shale oil nor the price crash of the past six months negate the fact that the world finds itself near Peak Oil and he concludes concerning conventional plus unconventional oil:
There are strong indications that 2015/2016 may see this global peak.
Editor: in our view, Aleklett might well be right about “peak oil=2016”, but he is focusing too much on oil, where he should concentrate on fossil fuel in general. With the current level of technology, oil, gas and coal are highly interchangeable, although they are not equally clean (read: dirty). When you add up all potentially combustible hydrocarbon material, still stored in the earth’s crust or laying around on the bottom of the ocean (methane-hydrates), we tentatively come to the conclusion that fossil fuel is indeed an infinite resource. Not in a literally sense, after all the earth is a sphere with 12,000 km diameter, but in a practical sense, namely that there is probably more fossil fuel around than the tiny earth’s atmosphere ever can handle. This is easy to exemplify: the atmosphere measures about 30 km. If in a thought experiment the atmosphere would be cooled to near zero degrees Kelvin, that atmosphere would shrink to a pool of ca. 10 meter liquid oxygen and nitrogen. The atmosphere is that thin. And it is in that tiny pool that cars, airplanes, home heating equipment, etc., etc. discharge their combustion waste into.
To illustrate the huge fossil fuel reserves, take for example the recent report about the discoveries of huge coal reserves under the North Sea, 20-150 times the total amount of oil burned so far in the entire history.
Another question is if that fossil fuel is accessible. Key parameter is EROEI (energy return on energy investment), that is: do you get more energy in return compared to the amount of energy you need to invest to harvest the fuel? That’s a matter of technology and that is a very dynamic factor.
The fact that the atmosphere could be the final limiting factor in global fossil fuel consumption is acknowledged in the IEA report:
“There is a rapidly growing discussion within the oil industry regarding what are called ‘stranded assets’ – the fact that the larger part of the world’s fossil fuel reserves cannot be produced if the world is to avoid serious climate change. New calculations presented in the journal Nature in January show that 80% of the world’s coal reserves and one third of the world’s oil reserves cannot be used, at least not before 2050.
Conclusion: for better or for worse, there is a near endless amount of fossil fuel waiting in the earth’s crust, but it will be technology that will determine if these reserves can be exploited economically. The end of the fossil fuel age will probably come in leaps and bounds. Perhaps that in a year time oil prices will sky-rocket again, if the world does indeed pass peak oil (conventional + unconventional). This will cause a shift to other fossil fuels. The best energy strategy is to be not distracted by fossil fuel price variations and continue on the path of installation of renewable energy (wind/solar) and demand destruction.