What is Peak Oil ?

9 days ago
31 in peak

Have you ever heard of Peak Oil?

Peak Oil is a theory (actually a fact) that oil production would peak at some level of production, and then would go into decline. Forever.

In 1956, Peak Oil was a prediction by Marion King Hubbert (commonly known as M. King Hubbert), a geologist and geophysicist for Shell Research Lab in Houston, Texas.

Hubbert predicted oil production, in the United States, would peak in the early 1970s.

Hubbert was proven correct, in about 1971 or 1972, after the United States oil production started to decline, from its peak of about 10 Million barrels of oil per day.

Does this alarm or shock you? Likely, it doesn't, simply because you are unaware of the dire situation we are now in!

But everything seems normal. Financial news channels report that we've got a "glut" of oil supply. Gas is cheap - in some places, currently, gas is under $2 per gallon, and traffic congestion seems to be getting worse in the big cities, such as Chicago, Boston, New York, Seattle, Houston, San Francisco, Washington DC and the nightmarish interstates of Los Angeles. (Wait till you hear about what's going on in other "developing" countries, like India and China)

Before going much deeper, you should understand that oil production can be done in at least three different ways. 1) Conventional Oil Drilling, 2) Fracking and 3) Oil Sands extraction (also known as "Tar Sands").

Without going into the details of each, it may intuitively be understood that "conventional" oil production is the easiest, most cost-effective method. Fracking is more expensive and less productive. And Oil Sands is the costliest worst way to get it! Got it?

For now, just talking about conventional oil drilling and production...

What you need to know about peak oil is that every single oil well has a bell curve. A bell curve is simply a bell-shaped curve that looks like a bell. Or maybe like a roller coaster. It starts off as an increasing line going up, peaks, and then goes down. After that, the ride is over. But please remain buckled and seated until the ride comes to a complete stop.

Once you have a well producing oil, it can be extracted easily and production can increase for years. Perhaps 10 years or longer. After time, the flow begins to slow. At that point, water and pressure may be required to continue to extract oil. At that point, you are burning more energy to extract oil. You are also adding water and other chemicals to keep the pressure and extraction going. At that "mid point" you begin to extract less and less oil, until the point that is no longer economical and the well must be shut down and capped.

The bell curve can be applied to a single well, to a single oil field, to a region of the country, a region of the world, and (here comes the gut punch) to the world!

So - where the hell on the bell curve are we now? Don't look now, but we're on the down side!

The next question could be, "Are we running out of oil?"

The answer is not so simple. But the answer is, we are OUT OF CHEAP OIL!

Just to clarify... THE WORLD IS OUT OF CHEAP OIL.

I know... things seem normal. Gas still seems cheap and abundant. But when you look close at what's happening with the major oil companies - ExxonMobil, Shell, Chevron, you might discover the underlying debt propping things up, for now.

The complex answer would require you to know and understand more about the geopolitical, economic and natural forces that are happening right now. Such as "the petrodollar," the fiat money/currency system we've been forced into, gold, silver, geology and many things I'm sure not even I'm aware of, at this time.

You can do some research yourself, but be warned NOT to believe everything you hear or read. Don't even believe me - find out for yourself. Do some YOUTUBE searches for "peak oil." There are many videos on the subject. Search for official government and corporate reports and documentation on oil production, by country or regions.

Once you understand the growing population (now about 7.5 billion people on this planet) and how exponential growth, forever, in a finite world, is an impossibility, you may start to get concerned about what's ahead in the not-too-distant future, and you might start to think about how you will handle the tsunami of problems coming into view. Not clear to see if you're wearing blinders.

There are many things to consider. How much oil is used in the United States, compared to the rest of the world. The growing demand for oil by other countries, especially in China and India. Will there be oil and gasoline shortages here in the United States? Will the price of gasoline go to $5 or $10 per gallon? Could we see $500 per barrel oil?

You gotta wonder - how will I be affected by all of this? What does this mean for how we live, travel and do business? Are bad things really going to happen? And WHEN?

I don't have the answers, but it seems like the tremors are now happening and an earthquake or tsunami of "trouble" may be imminent - as in months or a few years.

Learn and prepare, at least mentally.

Understanding what may soon be upon your doorstep can help guide you to take proper actions instead of faulty reactions.

I'd like to conclude by recommending two very short videos (only 2 minutes each).

FIRST: M. King Hubbert in a 1976 interview:

SECOND: A little cartoon showing the past, and heading into the future:

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71
  ·  9 days ago

peak oil is bogus.
never gonna happen
check the proven reserves
there are more now that at the
beginning of the industrial age.

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31
  ·  9 days ago

I'm sorry, everittdmickey, but I give more credibility to M. King Hubbert, who received a masters and Ph.D degree on the subject matter, and who was a geologist and geophysicist for Shell Research Lab in Houston, and who, in 1956, correctly predicted the peak of conventional oil production in the United States.

According to a November 7, 2016 article from the US Energy Information Administration, "U.S. crude oil production in 2015 was the highest since 1972, but has since declined.”
Source, with graphs: https://www.eia.gov/todayinenergy/detail.php?id=28672#

BTW, "proven reserves" is not the same as production capabilities. And "proven reserves" are not always what they're reported to be, as it is often used as a measure of collateral for loans, and can change with market prices. Proven reserves are those barrels that, supposedly, can be extracted at current market prices. A lot of Canada's "proven" reserves are now being abandoned, as one article put it, "Shell’s withdrawal from the tar sands is the latest move in a growing trend..." Source: http://environmentaldefence.ca/2017/03/14/seven-oil-multinationals-pulling-canadas-tar-sands/

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71
  ·  9 days ago

ah...appeal to authority..
gotcha.
don't let mere facts get in the way
the priest hood has spoken.

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31
  ·  9 days ago

Facts are a funny thing.

Got any verifiable facts to prove me wrong, sir? Or are you just spittin' out a bunch of jibber jabber to collect steem points?

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71
  ·  9 days ago

Shale Oil?

More oil in just Texas than the middle east.

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31
  ·  9 days ago

Doesn't matter how much oil you're talking about. The easy cheap stuff is GONE. Otherwise there would be no fracking.

Unlike conventional drilling, fracking uses new technologies to extract "tight oil," which does not freely flow through porous ground or rock.

Fracking requires special horizontal drilling and uses substantially more energy to extract smaller reserves, thus the profit (or EROEI / Energy Return on Energy Invested) is much less.

A fracked well also depletes much faster, and instead of a bell curve, it starts at the top (like a water slide at the water park), with the most oil being extracted in the first year, and declines very rapidly after about two or three years. This, in turn, requires more and more fracking wells to be drilled just to keep production at a certain level.

When oil was $140+ per barrel, fracking may have been profitable, but now that much financing went into those operations, the debts are killing the oil companies as the oil price collapsed to $29 to $45 per barrel oil.

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71
  ·  9 days ago

I worked in the Oil Industry for a few years.
the cost of new tech ALWAYS comes down.
i used to drive a truck..diesel was $5 a gallon once.
it's $2.00 (give or take) now.
guess why?

you can't have it both ways...if oil is cheap...good
if it's not..
frack.
no peak.

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31
  ·  9 days ago

I agree with you... the cost of tech has come down, as newer methods have been deployed to maximize oil extraction.

What most people don't understand is EROI (Energy Return on Investment) or, by another name, EROEI (Energy Return on Energy Invested).

As Wikipedia explains, "In physics, energy economics, and ecological energetics, energy returned on energy invested (EROEI or ERoEI); or energy return on investment (EROI), is the ratio of the amount of usable energy delivered from a particular energy resource to the amount of energy used to obtain that energy resource."

As an oil reserve depletes, more energy must be used to extract the remaining oil. So, the EROEI (or profit) can drop until you've gotta pack up your bags and go home. (or go searching for another reserve to exploit / and discoveries are not keeping up with current consumption - but that's a discussion for another time) - BUT, if you really want to understand the dilemma we're facing, I suggest that you read the following article from the Steve St. Angelo's SRS Rocco Report on this subject:
https://srsroccoreport.com/eroi-factor/

According to this article, "By 1970, production fell to a ratio of 30 to 1, and by 2000 it stood at just 11 to 1."

BTW - I have cross-checked many stats from SRS Rocco Report, and I have found them to be accurate and well sourced.

I've seen stats that fracking EROEI is as low as 6 to 1, and Canada's Oil Sands to be a low as 3 to 1.

If cheap, abundant oil was still available anywhere on this planet, there would be no need for fracking, or extracting "Oil Sands" by digging up and polluting miles of Canada's once-pristine boreal forest lands.