Rigzone: 'Peak Oil' Argument Does Not Account for Nontraditional Sources

The world is not running out of oil, and fears of "peak oil" are prompted more by outdated reserve reporting requirements than anything else, an industry analyst told a U.S. House panel today.
Robert Esser, senior consultant and director of global oil and gas resources for Cambridge Energy Research Associates, said his firm's field analyses and experience with geology shows "a substantial buildup of liquid capacity over the next several years," from so-called nontraditional petroleum sources that will become more common over time.

CERA projects world oil production will rise from 87 million barrels a day this year to 108 million barrels by 2015.

Esser told the House Energy and Air Quality Subcommittee that production would reach an "undulating plateau" followed by a long, slow declining profile similar to that which individual countries and producing regions have experienced.

Robert Hirsch, senior energy program adviser for SAIC and proponent of the "peak oil" theory, noted that peak oil assumes that there will be significant resources still left in the ground. "But it won't be the oil we and the rest of the world needs as the lifeblood for our economy and our civilization," he said.

While several lawmakers at the hearing noted promising advances in coal-to-liquids, alternative fuels and hydrogen technologies, Rep. Roscoe Batlett (R-Md.), the major congressional champion of peak oil, asserted that at an annual increase of 2 percent of coal consumption, the much-touted 250 years of domestic resources would shrink to 85 years. And by using the coal-for-liquid fuels, it shrinks further to 50 years, he added.

Well that makes everything OK then, I was worried for a bit.

I have a bet for Mr Esser: my life verses his (no point pussy-footing, and I think we can chuck in a billion or more random lives too), on: global oil production never, ever, reaches 108 mbpd in 2015 or any other year.

LOL, I would love to see him say in detail where he thinks it is coming from. Heck, I want his life so bad that I would take less than 95 mbpd peak by 2010. His soul would be forfeit if it hadn't been sold already, Grrrr!

Agric, you are agro! I salute your extremist temperament. You are the sort of people we need on our side.
er, "sort of person" I mean.
"a substantial buildup of liquid capacity over the next several years," from so-called nontraditional petroleum sources that will become more common over time.

what does he mean by this?

The only nontraditional petroleum source would be oil sands, I think.
Surely this means tar sands, oil shale, coal-to-liquids, biofuels and maybe even NGL's but i would imagine thats included under the umbrella of conventional sources.
Statements with this certitude sound to me more like the band playing "Nearer My God to Thee" on the Titanic.  IIRC from previous posts here the world hasn't made it to 87 mbpd yet so he's already short.
According to the EIA, we were 83.7 including NGLs for 2005 and just over 72 for petroleum. Where he thinks he is going to find 25 mbpd of new oil plus enough oil to offset all the declines is beyond me.
Doesn't say anything about decline rates from existing fields, either.
I can already predict that when this gentleman from CERA's testimony is made public my inbox is going to be overloaded with 'told you so' messages from friends and family. Its in our genes. Find a worldvies that fits your own then grab anything that backs it up...
worldview. sorry.
"from so-called nontraditional petroleum sources that will become more common over time"

What he means by this statement, which is good in a way, is that Alternative sources will come on line that will replace traditional petroleum sources. Now hopefully these new sources will include Biomass and other organic and renewable sources instead of digging, mining, or pumping a non-renewable and environmentally destructive resource out of our planet.

One way to look at it is what if next year someone discovered that we could generate 200% more energy globally each year by draining the blood from 1 million people a year, would the world signup for that? Probably. What if that number was 10 million or 100 million? That might be pushing it.

Now, what if there was a Natural, Organic, and Renewable Energy resource that could be produced in any amount required to generate practically Unlimited and Clean Energy that wasn't made of human blood? Would you sign up for it?

Just about everyone would except for the greedy bastards running the corporations and this country, it would impact their bottom lines. Funny how it all comes down to money.

There is a solution that solves all our energy problems and their associated environmental issues as well. It can also solve the economic crisis in this country by replacing all petroleum based products and their associated environmental restrictions that have forced numerous industries to foreign countries that have no EPA or Environmental Laws. In other words, they can destroy the environment with those countries governmental blessings.

What is the answer? Cannabis, Hemp, Marijuana.

End of story.

I researched hemp and asked some forestry professors about it - clearly it should be legalized and we could benefit from the fiber, seed-oil, etc. While it is true one can get magnitudes of biomass per acre more than traditional tree farming, what marijuana proponents forget is that if the plant is removed (for use) that the soil rapidly depletes and requires (fossil fuel based) fertilizer. It ranks closely with canola and rapeseed as an energy source but way below algae, palm oil and some others.
You should look at George Monbiot's article in the Guardian The most destructive crop on earth is no solution to the energy crisis


Over the past two years I have made an uncomfortable discovery. Like most environmentalists, I have been as blind to the constraints affecting our energy supply as my opponents have been to climate change. I now realise that I have entertained a belief in magic.

In 2003, the biologist Jeffrey Dukes calculated that the fossil fuels we burn in one year were made from organic matter "containing 44 x 1018 grams of carbon, which is more than 400 times the net primary productivity of the planet's current biota". In plain English, this means that every year we use four centuries' worth of plants and animals.

There is no doubt that using ANY resource that is grown in the ground can cause more serious issues than mining or digging out of the ground, but Hemp is the ONLY natural resource than can be produced indoors in controlled environments. Indoor production would negate the negative effects that this crop would have on the farm land and it could be scaled to any level needed. Therefore, the negative issues concerning Biomass fuels are eradicated.
"...but Hemp is the ONLY natural resource than can be produced indoors in controlled environments......Therefore, the negative issues concerning Biomass fuels are eradicated."

You're joking right?  If you grow the plants indoors, that doesn't mean they no longet need N, P, and K.  Now you've got to mine for the P and K and use natural gas to create the Nitrogen.  You've just shifted the "negative issues" to someplace other than where the plants are grown.
-BiologyFool (who thinks MJ should be legalized for other reasons)

There is (or was) an hydroelectric facility in northern Canada whose primary customer was an ammonia plant. The electricity was used to electrolyze water for hydrogen and to cryogenically extract nitrogen from the atmosphere. Using the Haber-Bosch process they manufactured NH3(anhydrous ammonia). No fossil fuels needed.
   This is exactly the type of industry'expert' that will cause peak to damage our country more than it already will.Remember all those doctors who swore smoking had no effect on the lungs?these{expl.dele.}are 1000 times worse.I can hope for a special place in hell for them.
  From the best case,{10years leadtime and thats if we get some real leadership in the whitehouse.}To the worse case.{we are at peak now and kadie bar the door}...No attempt has been made ,or commitment of resource made at this time, for the infrastucture neccesary to convert to alternitive fuels.

   The only actions that have been taken were to secure the resource by millitary means

Its always easier to steal/control than build.

Until I see a dozen coal gasification plants,a nuke sitting up on the tarsands of canada,and reseach prizes for energy efficiency,and conservation as a national priority,I will remain of the opinion that we ,as a civilzation ,are in grave peril

Re: "CERA projects world oil production will rise from 87 million barrels a day this year to 108 million barrels by 2015."

Assuming everything goes just perfectly above the ground geopolitically and declines in existing megafields are not significant. Perhaps it is reasonable to call these questions into assumption? See Burgan in Kuwait.

Maybe a bit of a rant, but....
Never, never, underestimate the human capacity for self-deception. The way it is now (exponential growth notwithstanding) is the way it will always be. The sun rose yesterday, it rose again today, always has, always will, what's the problem?

Well, I'll tell you what the problem is in a nutshell:
  • Events in Earth's Geological history changed constantly (admittedly over large timescales)
  • This analogy applies to the smaller timescales we are experiencing now regarding oil depletion and climate change.
As I've said before, "Jesus Wept".
Thanks, Step Back, useful links and blogsite. I have read the Esser testimony and re-listened to his words on audio, twice, just so I was sure I was hearing things accurately.

While statements of his like "peak oil... is not a helpful concept" and him forseeing rather "an undulating plateau 3 or 4 decades from now" raise some questions regarding his sanity, this was the clincher for me:

"All regions except US and North Sea will show strong growth to 2020."

I listened to that bit three times to be sure.

The only conclusion I am left with is: he must be on a different planet. Perhaps there really are two Earths which only coincide on the internet or in my deranged mind.

Interesting that Rigzone should so emphasize the CERA side of the argument (giving them the headline and most of the column inches). The Oil and Gas Journal played it the other way round.
Guess I should give a tease:

Lawmakers: US should prepare for global oil flow peak

Nick Snow

Washington Correspondent

WASHINGTON, DC, Dec. 7 -- While there is disagreement about when world crude oil production will hit its peak, the US should begin preparing for it now, two US House members told an Energy and Commerce subcommittee hearing on Dec. 7.

Reps. Roscoe G. Bartlett (R-Md.) and Tom Udall (D-NM) led off the hearing before the Energy and Air Quality Subcommittee because they lead the House Peak Oil Caucus, which has six other members.

"We started it to bring immediate and serious attention to this issue. The continued prosperity of the United States depends on its ability to act on this," Udall explained.

Whatever his other politics are, Roscoe Bartlett is a hero for pushing PO to the forefront in the US Congress despite the nay saying denials of the Adam Smith cornucopians.

All these excuses about "urgent" and "important" and the urgent trumping the important are just that, excuses. Mother Nature pays no heed to excuse noises made by human critters or any other critters.

The reindeer on St. Matthews Island probably made similar noises which in their understanding distinguished between the "urgent" and the "important".

You can see it unfolding like this:

Roscoe Reindeer: "Mr. President, I must warn you that we are overshooting our resources."

BushGrazing Reindeer: "Yes Roscoe, I know everything about everything. Trust me. But here in the Matthews District of Cornucopia (DC), the urgent takes precedence over the important. Now go away and bother some other less urgently involved reindeer. And one more thing, Roscoe with your nose so bright."

"Yes Mr. Reindeer President?"

"Have a Happy Holiday Season. Know that I see nothing but victory for our herd. Patriots stay the course. Chicken deer cut & run. I didn't say what I just said. Now go away in peace."

May I suggest that theoildrum devote a specific thread to a close analysis and critique of Esser's testimony?  It seems to me that there is an awful lot to critique in it, even upon a cursory analysis.  For example:  Esser's assertion that models predicting imminent Peak do not take account of various non-conventional liquid sources is simply flat-out false.  Yet, it is an assertion that is critical to the apparent tenability of his position.  Also, it seems to me that there are abundant grounds to critique key assertions he makes regarding the depletion rates of fields presently in production.

As I have pointed out before: Taking the trouble to systematically dissect the weaknesses of the case made by one's intellectual opponents is a very efffective way of strengthening one's own case.

PhilRelig: May I suggest that theoildrum devote a specific thread to a close analysis and critique of Esser's testimony?

Maybe move this to the Open Thursday Thread?


Opening salvo:

Esser: "As a nation, we have previously gone through periods of deep concern about the adequacy of energy supplies."

translation: Ha Ha. Chicken Little was always wrong before and sound logic therefore assures us the Peakists are flat out wrong this time also

Esser: "Rather than an imminent "peak," we envision an "undulating plateau" two to four decades away.

translation: Ha Ha. Even if there ever will be a problem, which trust us there won't be, it is far far away in a distant galaxy and it's nothing more than a few minor bumps in the road

No point, PhilRelig. Esser clearly lives on a different, doppleganger, Earth. See my comment above.

That or quantum uncertainty has made a sudden leap to the macro (human sized world) in which case reality will be very confusing or I have gone stark raving mad.

But seriously...

He's saying 2.0 to 2.5 mbpd supply increase per year for the next 5 years from the 10 biggest projects per year, plus, presumably (my presumption), a similar amount per year from smaller projects, and a decline rate of less than 5% for FIP (interpolated).

2.5 + 2.5 - 2.0 = +3 per year = 100 mbpd in 2010

Easy wasn't it? I wish I were on his planet.

My gloomy Earth suggests:

1.7 + 1.0 - 4.0 = -1.3 per year = 79 mbpd in 2010

Hopefully these two quantum Earth states will collapse into a reality close to their mid point which will be near 95 mbpd in 2010. I can see no way of realistically conjouring the numbers higher.

Oooops, correction, 90 mbpd 2010 mid point
IEA reckons that OPEC can increase production by 2mbd by 2006 (the gross increase is 3.1mbd suggesting they are assuming a depletion of 1.1mbd (a bit less than 4%).

[From O&GJ]
OPEC production capacity rising, IEA report says
Bob Tippee

....In its November Oil Market Report, the International Energy Agency increased its estimate of sustainable production capacity among members of the Organization of Petroleum Exporting Countries by 100,000 b/d to a total of 31.8 million b/d.

IEA expects further increases: to 32.1 million b/d by the end of this year and to 33 million b/d by the end of 2006.

The November increase accounts for expected gains by yearend of 50,000-100,000 b/d each from northern Kuwait, deepwater Bonga field off Nigeria, and onshore expansions in Abu Dhabi. They're offset by a 100,000 b/d reduction to 4 million b/d in the estimate for Iran, where there have been problems in the offshore Soroush-Nowruz heavy oil fields.

IEA expects that, net of assumed field declines, OPEC production capacity will increase by 2 million b/d during all of 2005-06.

Key gross additions during the period will be Algeria 255,000 b/d, Indonesia 85,000 b/d, Iran 370,000 b/d, Kuwait 300,000 b/d, Libya 150,000 b/d, Nigeria 485,000 b/d, Qatar 100,000 b/d, Saudi Arabia 450,000 b/d, the United Arab Emirates 200,000 b/d, and Venezuela 175,000 b/d. IEA also expects gains in OPEC members' capacities to produce NGLs and condensate totaling 600,000 b/d during the period.

Much of the new production capacity will yield fairly light, low-sulfur crude, which refiners favor. Capacity coming on stream recently has tended to be ...

Re: "IEA expects that, net of assumed field declines, OPEC production capacity will increase by 2 million b/d during all of 2005-06"

Indonesia--+0.85/mbd? (they've tipped over into Type 3 depletion) or what about Kuwait--+0.3/mbd? (given Burgan peak) or Iran--+0.37/mbd? (given large decline rates) or Saudi Arabia--+0.45/mbd (of what, heavy sour crude nobody can refine right now?).

Questions, questions, I have problems with these numbers.
0.085mbpd on Indonesia. I agree though. The implied decline rate is much lower than what the EIA says for FIP decline rates in key OPEC countries (check the CABs for Saudia Arabia and Iran, for example).
Sorry about that Indonesia mistake re: the decimal point. We're in agreement.
Step Back:   Thanks for the links.
IMO  it will be NG and not peak oil that will awaken the folks in the US  to our energy problems.  With fertilizer, chemicals, and plastics  production moving to foreign locations this may temporarily ease demand for NG in the US, however it will be the farmers that really bring the problem to everyone's attention. I grew up during the 30's and 40's in the corn belt on a typical 160 acre farm, and I have a lot of contact back there with in-laws, nephews and etc.  This past fall listening to there conversation was an earful. One farmer says: The way chemicals and fertilizer prices are increasing, If I stopped fertilizer application for a couple years I sure could dig myself out of this hole. The first year I could nearly maintain my corn yields, and the second year I could rotate them with beans and alfalfa.  Maybe if we all do this we could knock down the surplus and bring up the price by the third year.  Second farmer: Ya well with all the ethanol production coming on line the next few years the surplus is gone. If I can hang on a few more years your going to see big changes in cattle, hog and poultry prices,  even eggs and milk,  Ya corn prices are going to get the ball rolling for us. Third farmer:  Ya but after a few years of high meat prices, all the welfare and fixed income people will be back on pancakes and cornbread, and all the burger eaters will be on peanut-butter and jelly, and we'll all be back in the same old fix again. First farmer: Na it don't work that way, I been reading about NG. This country's  running short of NG  and when they do look out. Everybody in the world will want it, That's when fertilizer prices will skyrocket and food prices also. That's when the government will step in and try to protect us. When food prices shoot up they'll pass a bunch of crazy laws wait and see.  This'll not be  like the 30's we may finally get our just reward. Show me somebody that works from sun up to sun down 7 days a week and then some,  and I'll  show you a BS artist.  Second farmer: Ya well you ain't been talking to them diesel mechanics, and you ain't worked on Sunday since your kid started feeding the cattle, and further more you know we still all love it.
Interesting that CERA's optomism is based on convincing the SEC to change the rules of the game.