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Two quick things.

1. One cannot make claims about global warming and climate change based on the changes and differences in daily weather patterns. This makes anything a weatherman says about climate change approximately worthless.

2. One can neither confirm nor deny the reality of peak oil based on short term oil spot-price trends. It is pointless to scream bloody Mary about oil and other energy prices when trying to inform others about the potentially massive problems of peak oil.

We Will Never Run Out Of Oil

What's that you say? You wouldn't ever expect such a statement to come from me? So you would say if you have ever had a discussion about energy with me. The following series of posts is my version of a peak oil primer.

First, a quick run down of the 5W1H:
WHAT is peak oil? Like gravity, peak oil is a theory and follows as such: Total oil production will, at some point during its period of extraction, hit a peak output (in terms of barrels per day). Once peak is reached, production will never be higher than that historic point. Production may plateau for some time, but will always enter into terminal decline. Less oil will be produced year over year until production becomes a net loser both economically and energetically - i.e. it costs $110 to produce a barrel that sells on the market for $100 or it requires two barrels of oil to pump out one barrel.

WHY and HOW does oil production hit a peak? Oil is a finite resource. A solar savings account built up over thousands of years in the form of, quite literally, liquid assets. Unless you believe abiotic oil is a real thing, there is nothing significant being added to our world petroleum account. Production tends to follow a bell shaped curve. Economics, industrialisation and the huge amount of growth over the past 150 years has resulted in constant, ever-increasing demand for oil. This explains the upward section of the bell curve of production. Industrialised growth has created a bottomless pit for the consumption of fossil fuels. There have (almost) always been markets willing and able to take oil and use it, so producers pump as much and as fast as they can to generate earlier cash flows from their fields. Basic capitalist markets at work. Eventually production hits the downward slope of that bell curve because of geologic limits (sometimes economic or political reasons as well). The characteristics of oil field geology are complex -just try reading a Society of Petroleum Engineers (SPE) technical paper- so I will try to explain in the most simple and basic way possible. Over time, as oil is extracted from a field, it begins to lose its natural pressure. It will eventually drop to the point where oil has to be pumped, then "swept" out of the field. There are tertiary methods of recovery as well, but I won't go into those. The above illustrates this point: the longer you produce an oil field, the slower the rate of extraction as it becomes increasingly difficult to move oil from its location in a geologic formation up the pipe to the surface.

WHO will be involved in the peak oil scenario? Aside from the tribal, pre-industrial peoples, it would be fair to say that everyone uses oil in some way, shape or form. There are a lot of players in the Who question as well as lots of ways to categorise them. There are consumers and producers. Importers and exporters. International Oil Companies - IOCs (BP, Exxon, et al.) and National Oil Companies - NOCs (Aramco, Pemex, etc.). There is the OPEC cartel which produces a bit over 30 mbd (~3/8ths of global production) and there are energy watch dog groups like the International Energy Agency -IEA (AIE en francais) and the U.S. based Energy Information Administration, which monitor production, supply, demand, consumption, inventories, technology, etc for the U.S., OECD countries and the West in general. The cast of characters and supporting roles is diverse. Energy and oil are quickly becoming some of the biggest and most global issues to face humanity. Because oil is such a global commodity, policies designed around its future will affect everyone, except Eskimos.

WHERE is peak oil observable? More importantly, has peak oil been observed? That answer is yes, on local scales. As stated above, production tends to follow a bell curve (unless we are talking about Russia - they are just plain goofy). Whether you are looking at an individual well, an entire oil field or a country, the production profile remains approximately the same, no matter the location. Oil is discovered, production begins and increases (usually at a steep rate) a peak production is reached and production enters either plateau or decline. Have a look at these graphs from the EIA that show the production profile for the United States. You can see that both the lower-48 curve and the Alaska curve on top both had their peaks and are now in decline. The above is a very simplistic explanation of where peak oil occurs and what that shape looks like, so it is a bit ostensible for me to state that production looks the same for all locations. Field management, reservoir characteristics and above ground factors will greatly influence the productivity of an oil field or even country (Iraq!). Another main idea I am trying to convey here is that production is not linear. A field cannot be produced at an ever increasing rate until all recoverable reserves are produced where production then falls immediately to nil. All oil is not produced equally. Where we have not seen a definitive peak, yet, is on a global scale; and this is one of the most hotly contested issues in the peak oil activist and energy community.

WHEN will we reach global peak oil production? This is where all of the oil players enter the picture. There are geologists, watchdog groups, bloggers, CEOs, governments, corporations and professors all opining on the timing of peak oil. The date ranges anywhere from 2005 to 2100 and beyond. Geologist Kenneth Defeyes controversially stated we would reach peak Thanksgiving Day, 2005 (+/- a few standard deviations). Chairmen and board members of Saudi Aramco claim the world will be supplied for the next century. The EIA offers a cheerful picture as well but warns of short and medium-term price and supply volatility. I have my own inkling of when production will peak, though this will come up later; and I readily admit it is only, at best, a semi-educated conclusion. Two of the biggest problems in attempting to predict the timing of peak oil are the complete lack of data transparency (OPEC!) and an uncertainty of how much oil is still yet to be discovered. Just by saying it was so, OPEC member nations in the 80s increased the proven reserves of their country, some up to a 3 fold gain. How is this possible? There is no certifiable external auditing of remaining and proven reserves; we simply take their word with blind faith. Petroleum geologists also cannot be exactly sure how much recoverable reserves the earth holds, though Geology and Statistics can make us fairly confident. I have no doubt that large discoveries will continue to be made for years to come, but they will be made further and fewer between. World oil discoveries peaked in the 60's and for a long time we have been producing more oil than has been found, in any given year. Our petroleum account is being drained. We are spending like a newly-divorced-gold-digger who thinks she still has a sugar daddy. New discoveries may well delay peak (by months, not decades) but this is no where near a mitigation of peak oil.

"I don't get the title of this post, can you elaborate?" Fact is, we will never "run out" of oil; billions of barrels will remain underground because we do not have the ability to recover them. People who concern themselves with peak oil are not the end-of-days type claiming oil is going to instantly disappear at some point in the future. Well, most aren't. We deal with somewhat more tangible things: supply and demand, engineering, finance, environmentalism and not apocalyptic prophecies. We use these tools to gain some idea of what the effects of a post peak oil world -a world of diminishing resources that face increasing demand- may look like in terms of social-political-economic structures, government, demographics, technology, transportation logistics, agriculture, etc. The list goes on.

I hope that this gives you an idea of what peak oil is, if you are hearing it for the first time. There are a lot of terms and concepts to deal with straight away (acronyms galore!). I am already writing the next post of the series about why on earth this matters and why we should care about it, and how it affects us. Aside from the excessive links to Wikipedia, I am not going to "cite" all of the above. This (and much more) is what I have learned over the last couple of years in my research into this topic. I typed away off the top of my head. Rather, I will list some of the best materials and resources that have been most enlightening to me. "Twilight in the Desert: The Coming Saudi Oil Shock" by Matt Simmons. www.theoildrum.com www.energybulletin.net "Powerdown: Options for a Post Carbon World" by Richard Heinberg. A peak oil documentary and how it will affect Ireland. I recommend seeing Heinberg speak. I also recommend checking out the daily posted "Drum Beat" at the Oil Drum and the discussion that follows.

Feel free to dis/agree with me. Yell at me. Think I am, and call me, crazy. Ask questions (I can answer them in the next post!). Thanks for reading and sorry for typos and grammatical errors.