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Many more articles are available through the Energy Bulletin homepage.
The Future of Oil: Geology versus Technology
Various authors, International Monetrary Fund (IMF)
Abstract
We discuss and reconcile two diametrically opposed views concerning the future of world oil production and prices.
The geological view expects that physical constraints will dominate the future evolution of oil output and prices. It is supported by the fact that world oil production has plateaued since 2005 despite historically high prices, and that spare capacity has been near historic lows.
The technological view of oil expects that higher oil prices must eventually have a decisive effect on oil output, by encouraging technological solutions. It is supported by the fact that high prices have, since 2003, led to upward revisions in production forecasts based on a purely geological view.
We present a nonlinear econometric model of the world oil market that encompasses both views. The model performs far better than existing empirical models in forecasting oil prices and oil output out of sample. Its point forecast is for a near doubling of the real price of oil over the coming decade. The error bands are wide, and reflect sharply differing judgments on ultimately recoverable reserves, and on future price elasticities of oil demand and supply.
This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
(May 2012)
Suggested by Walter Ryan-Purcell, who writes:
Comparing data from the EIA, IEA, Dr. Colin J. Campbell and others.
Dr. Colin Campbell is speaking at the New Energy Era Forum this Tuesday May 8th at 10am. Professor Douglas Reynolds, The University of Alaska Fairbanks speaks at 2pm on Wednesday 9th. The New Energy Era Forum takes place at Liss Ard Estate Skibbereen, West Cork, Ireland, www.lissardestate.com
World Oil: New analysis of peak oil is refreshingly comprehensive
Dr. Roger Bezdek, World Oil
“Peak oil” is a concept that, in barely a decade, has gone from total obscurity to being a hot-button issue, rivaling global warming and sustainability. It is almost universally misunderstood and often misinterpreted. On one hand, many peak oil advocates are ideological extremists—Armageddonist back-to-nature types who seem to feel that living without oil is preferable (“life in the 15th century was really great”). On the other hand, the Pollyannas say, “not to worry,” since the world has an endless supply of affordable oil available for centuries.
It is thus refreshing to find a comprehensive, peak oil analysis that relies on rigorous scientific methods and empirical data. The just-published book, Peeking at Peak Oil, by Dr. Kjell Aleklett of Uppsala University in Sweden. Dr. Aleklett, a physicist, is a leading expert, and this book should be required reading for anyone seriously interested in the future world energy market and economy, especially politicians and policymakers.
… It is a race between declining conventional oil and increasing unconventional oil. Can unconventional liquid fuels fill this gap soon? Aleklett’s work is enlightening. He uses the standard IEA definitions of “unconventional”: Bitumen and extra heavy oil from Canada’s oil sands, extra heavy oil from Venezuela’s Orinoco belt, oil produced from shale, coal-to-liquids, gas-to-liquids, ”refinery additives,” etc.
Potential for increase. After a painstaking, detailed analysis, he concludes that the maximum, incremental production increase from all unconventional sources, combined, is about 8 million bpd during the next 25 years. Since the total flow from fields already producing is decreasing 4 million bopd every year, unconventional output gains during the next 25 years can only compensate for a two-year decline in conventional production. More importantly, even if he has underestimated the possible, unconventional oil increases by 100%, this would still only compensate for four years of decline.
There is further concern. Aleklett and other analysts estimate that worldwide conventional oil production could begin declining within five years. Unconventional oil is expensive to develop and has long lead times.
Dr. Roger Bezdek is an internationally recognized energy analyst and President of Management Information Services, Inc., in Washington D.C. He has 30 years’ experience in research and management in the energy, utility, environmental and regulatory areas, serving in private industry, academia, and the U.S. federal government.
(May 2012)
Suggested by Michael Lardelli and Kjell Aleklett. Dr. Aleklett writes:
The journal World Oil is the first to have written a review of my book “Peeking at Peak Oil” that will be released in three weeks at the end of May. Springer sent out a number of copies of the book to various newspapers and journals and World Oil chose to write about my book in its May issue. It is wonderful to read what they think and I am especially pleased with the way they have put it: “…this book should be required reading for anyone seriously interested in the future world energy market and economy, especially politicians and policymakers.”
The complete article seems to be behind a paywall. You still can access it, apparently, by clicking on the link to the World Oil article at Dr. Aleklett’s post.
-BA
Now Playing at a Computer Near You: The ASPO-USA Webinar Series
Jan Mueller, ASPO-USA
As many Peak Oil Review readers know, ASPO-USA has launched a regular webinar series to provide in-depth analysis and discussion of a wide variety of Peak Oil and energy-related topics. You may have seen information regarding the first two webinars held this past month-one on shale gas featuring Art Berman, and another on global oil exports featuring Jeffrey Brown. I would like to use this opportunity to say a little more about the webinar series, because I hope you will take advantage of this rich information resource-and I hope it will provide another great reason for you to begin or renew your ASPO-USA membership.
The series is part of ASPO-USA’s ongoing efforts to harness the knowledge and brain power of our expert network, and is intended to complement ASPO-USA’s other educational activities. A webinar, in case you are not familiar, is simply a way to give a presentation remotely with the help of web-based tools to display visual information and broadcast sound (attendees also have the option to participate via telephone). The format, however, can be adapted in many different ways. It can feature one presenter with questions and discussion, or a multi-person panel. It can employ a standard one-way presentation, or it can be structured as an interview, panel discussion, or debate. ASPO-USA intends to explore and employ these different variations.
Each webinar is intended to provide a stand-alone treatment of a given topic, but we also intend that the webinar series taken as a whole will “add up” to provide a coherent and integrated understanding of Peak Oil issues. The challenges posed by Peak Oil and the responses they will compel are multi-faceted and enormously complex. The webinar series, we hope, will help put these issues into a useful perspective. For example, Jeffrey Brown’s presentation focused on oil export trends and the importance of rising oil consumption, especially in oil-exporting nations, in addition to overall production. This work is fundamental to forming a clear view of the global oil picture. Meanwhile, Art Berman’s insightful analyses of shale gas and shale oil plays commands serious attention, and we plan to bring in other expert viewpoints to compare and contrast with Art’s work.
Each webinar is scheduled as a “live” event with attendees listening in and asking questions in real time to the presenter or panelists. However, every webinar will be recorded and available for future viewing along with other video products on ASPO.TV. This allows users to “attend” a webinar at their convenience, and allows ASPO-USA to develop a library of recorded webinars that can be used for other purposes.
Is there a specific topic or question that you would like to see addressed in an ASPO-USA webinar? Please feel free to share your ideas and specific interests. The ASPO-USA webinar series is intended to serve the needs and goals of our members and constituents. Your input will help us achieve that goal.
For more information, check out the ASPO-USA Webinar Series webpage or email us at [email protected].
Upcoming Webinars
May 17–Shale Oil in Perspective – Art Berman
June 7–A National Oil Emergency Response Plan – Roger Bezdek
Jan Mueller is the Executive Director of ASPO-USA
(30 April 2012)
T. Boone Pickens: Biggest Deterrent To U.S. Energy Plan Is Koch Industries (text and video)
Morgan Korn, Daily Ticker (Yahoo News)
Investor T. Boone Pickens has made a fortune over the years running an energy-oriented hedge fund, and in recent years he’s been placing big bets on the natural gas and wind industries.
The 83-year-old founder and CEO of BP Capital has been one of the most fervent supporters of natural gas, promoting its usage throughout the country and trying to convince lawmakers, including President Obama, that natural gas could be the energy solution that ends the nation’s dependence on foreign oil.
The U.S. has an abundance of natural gas, which is found in rock and shale formations. Booming production and growing investment in the field has led to a natural gas supply glut, pushing the price down nearly 50% over the past 12 months
… Pickens’ biggest concern right now centers on what he sees as the Obama administration’s lack of an energy policy. He says special interests are blocking real energy reform, and he singles out Koch Industries, a chemical, fertilizer and refining juggernaut run by brothers David and Charles Koch, as the main culprit.
“The biggest deterrent to an energy plan in America is Koch Industries,” he says. “They do not want an energy plan for America because they have the cheapest natural gas price they’ve ever had, and they’re in the fertilizer business and they’re in the chemical business. So their margins are huge. And they do not want you to have an energy plan, because if you had a plan, then natural gas prices would come up.”
(2 May 2012)
Cheap Oil Built ‘The American Way’ but All the Cheap Oil is Gone
Guy Gold, Yahoo Voices
In 1981 Merle Haggard wrote a song with the rhetorical question “Are The Good Times Really Over For Good?” With the benefit of hindsight-we now know the answer was “yes.”
… The problematic economic circumstances Merle Haggard saw that motivated him to write “Are The Good Times Really Over For Good” were starting to manifest themselves by 1981. Manufacturing jobs has started to go overseas and the government was beginning to turn to money printing to stimulate the economy. Prior to 1970 increased oil production improved worker US worker competitiveness and stimulated the economy (how true prosperity had been achieved). The money printing (artificial stimulus) was an effort to offset the reality that America reached Peak Oil around 1970. Prior to American Peak Oil American wages were higher than the rest of the world but the technology that allowed Americans to have the jobs over cheaper foreign labor was American produced oil.
… If the public, economists, and politicians recognized these realities they’d all quit deluding themselves that the economic problems we face are tied to too few Americans having college degrees. Believing that putting more Americans through college is the solution to our economic problems has resulted in the US Government now helping to create a higher education ponzi scheme to rest upon all the other American ponzi schemes. Every year the per capita rate of Americans with college degrees increases-if that were the key to economic prosperity then there would have never been a near financial collapse in 2008.
(6 May 2012)
Guy Gold writes: “Yahoo bought my editorial on Peak Oil. I get a performance bonus based on views.” If the photo of Guy on Yahoo is current, he’s one of the youngest peak oil contributors yet. -BA
