[saymaListserv] Peak Oil

Steve Livingston nc_stereoman at charter.net
Thu Mar 3 10:45:28 JEST 2005


Friends,

Daryl sent out his  "Peak Oil" essay to a few people prior to posting it on 
the listserv. I replied to his essay, offering a somewhat different 
perspective on the issue, and he has asked me to post it here.

It may well be that a significant amount of petrol is 
trapped in such inaccessible strata that it would 
require more energy than can be extracted from a bbl 
of refined petrol to extract a barrel of crude. So 
defining "peak oil" as the point at which half of the 
petrol is still in the ground is somewhat 
counterintuitive if a goodly portion of that half is 
not economically extractable.

A somewhat more practical definition IMHO is derived 
from looking at the continuum of cost-of-extraction. 
In the beginning, discovery of new resources vastly 
outpaced increasing demand, and as extraction 
technology improved, the energy cost per bbl of 
extracted crude declined significantly. It became 
extremely profitable to extract far more than the 
market demanded, as the storage of reserves cost far 
less than what the stored reserves were worth.

Coming up to present day, we see a steady decline in 
discovery of new resources, with known resources 
requiring increasing amounts of energy to extract, 
and demand rising so fast that stockpiles of reserves 
are being depleted because the value of the stored 
reserves is less than the cost of increasing the rate 
of extraction. This point in time is the alternative 
definition of "peak oil": the point in time where the 
cost of increasing the rate of extraction of known 
resources became greater than the cost of depleting 
stored reserves.

Using this definition, we can look backward from the 
present day and place the point of "Peak Oil" about 
fourteen years in the past. Remarkably, this point 
coincides almost exactly with the first invasion of 
Iraq.

Estimates that I have read indicate that there 
remains somewhat more than 600 Billion bbl of petrol 
in the ground worldwide, perhaps as much as 1 
Trillion bbl. These numbers sound very large indeed 
until one factors in the actual rates of consumption, 
currently about 30 Billion bbl per year and growing 
at a current rate of 8% per year. At this rate, all 
of the petrol will be depleted in far less than 
twenty years, not merely half, but all. In fact, half 
of the world's known petrol has just about been 
depleted already, so even by your definition, "Peak 
Oil" is upon us.

It is a curious anomaly of our current political 
climate that citizens are being cajoled and scared 
into allowing the government to borrow several 
Trillion dollars to forestall a Social Security 
"crisis" that is forty years in the future, while 
nothing whatsoever is being done to address the Peak 
Oil crisis which is hardly a decade in the future. 
Something is wrong with those priorities.

Steve
-- 
Steve Livingston
nc_stereoman at charter.net
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