Reading the IEA's Tea Leaves

It's safe to say that many of us were stunned by the appearance of the following graph in the IEA's latest World Energy Outlook:


I wondered this morning what this graph is hinting at. What might the IEA realistically think the oil situation will be like in 2035? To poke at the question a bit, I deconstructed the graph category by category.

I started with the assumption that the volume they predict from currently producing fields is relatively accurate. I agree that's not a totally safe assumption, but you have to start somewhere -- and the IEA already ate a lot of crow publishing it. However, they have been consistently optimistic in their supply projections, so I dock them a bit for that.

The "Fields Yet to be Developed" category has some potential to add to the output, but the observed lack of field development during the recent price run-up makes me as skeptical as hell. Also, most of these fields are in deep water, making them quite slow and expensive to develop. I decided to give them about half of their projection.

It's with the "Fields Yet to be Found" region that the hilarity really begins. Yes, there will be some, but we already know a heck of a lot about where the oil-bearing formations are around the world. As with "FYTBD" above, most of these fields will be in deep water, and will take a long time to discover, prove out and bring on line. Given that we don't even know yet if they're out there, and also taking into consideration the discovery profile for new fields over the last 40 years I decided to give them about 25% of their estimate.

Natural gas liquids are found in conjunction with oil, in the same wells. If we pump less and less oil we will also lift less NGL. So the increase they show is dodgy. I gave them a bit more than the proportional reduction of crude oil - about half of their projection.

Unconventional oil includes heavy oils and tar sands. It's dirty, energy-intensive (low EROI) and expensive to produce and refine. There will be increasing opposition to expanding things like tar sands production due to the environmental impacts. I'll give them a third of that.

So where does that leave us?


That represents a bit more than half of the oil we have today, and the decline to that level occurs over only 25 years.

As Robert Hirsch reminded us in his seminal 2005 paper for DOE, if we only start looking at mitigation strategies once we already have a strong signal that PO has occurred, we cannot avoid major economic and social impacts. Peak Oil has happened. We have barely recognized that fact, let alone begun serious work on mitigation.

We've been hearing about peak oil predictions of doom since the 1970s. I don't think we have much to worry about. It is reasonable to assume that over the next decades additional reserves and technology will keep things flowing. Concurrently, new technologies and alternate energy sources will become more prevalent; especially if prices rise. Don't worry...be happy.

Here is a differing opinion on peak oil.


Debunking the Myth of Peak Oil
http://oilprice.com/Energy/Crude-Oil/Debunking-the-Myth-of-Peak-Oil-Why-the-Age-of-Cheap-Oil-is-Far-From-Over-Part-1.html
http://oilprice.com/Energy/Crude-Oil/Debunking-the-Myth-of-Peak-Oil-Why-the-Age-of-Cheap-Oil-is-Far-From-Over-Part-2.html

Over the past 33 years mankind has consumed more than three times the world’s known oil reserves in 1976 – and today proven oil reserves are nearly double what they were before we started. The story with natural gas is even better – here and around the world enormous amounts of natural gas have been found. More will be found.

But if you had asked in 1976 what the supply of oil would be like given the demand of 2010, you would have come up with the “Peak Oil” theory then, and we would have supposedly run out of oil decades ago; an ongoing impending crisis.

I think the key to the argument of Peak Oil, is that it not only ignores the huge amounts of oil yet to be found, but other hydrocarbon fuels as well.

The actual observed flat production rates over the last 5 years despite the price gyrations during that time (tripling from 2005 to 2008 before falling back to the original level) tells me that the market is not responding to price signals. That lack or response indicates that something else is constraining production. So the constraint is either voluntary or involuntary. OPEC has quotas in place, but we've seen evidence of quota-busting from them in the past, and there was none this time, even in the face of a $147/bbl ca-ching. More and more countries that used to be oil exporters are diving deeper into net importer status. I have concluded that the majority of the constraint is involuntary.

It's odd that a situation that seems so utterly perspicuous to me would be so opaque to others...

Not so much "Glass half full" but "Glass completely full - it's just that you
haven't got enough faith that the transparent, intangible half really *will*
be there when we need it". Keep clapping!

:eyes:

You can always tell when a person doesn't understand what peak oil is about when they make the claims its "about running out of oil". Sorry to inform you but that's not what peak oil is about at all. So leave you debunking website and try to understand that peak oil is about a future where LESS OIL, A LOT LESS OIL is available to use on a worldwide basis.

No one has debunked peak oil occurring in many oil producing countries around the world including the USA!

and a long emergency. This really should be in GD.

Welcome to DU, Eddie!

:hi:

It would save a lot of time and repetition.

Let's see, there's -- what is it, must be argument #4: "We've been hearing these predictions since, like, forever."

Right. Oh, yeah, slapping on the "myth" label never hurts, either, along with the obligatory "debunking." Mmkay...

And the muthalode huge deposits we somehow haven't found. And just where would those be? "Well, obviously we haven't found them yet," goes the rest of the argument. See how that works?

Yeah, like the best-funded, profit-driven, results-oriented research and development establishment ever put together by humans doesn't know exactly where every last marginally-profitable oil formation is on the whole tiny planet. See, it's a geology thing.

Dude, relax. You're in good company. Everybody goes through these stages. There are five of them. Most are stuck on the first. Anger is next, but a lot of times people make short work of that one and get right to Bargaining, like: "If we show up at the window with enough cash, God will put more oil in the ground." Or "We can just put cool batteries in the cars and we can all keep driving."

That red pill can go down pretty hard. YMMV, of course.

Canadia is already pumping out around 4 mb/d, from their horrific tar sands. They'll likely be able to double it by then. They have the worlds second largest reserves. Those tar sands will be there long after civilization is reset.

google is your friend. Production of these tar sands is estimated to peak in the near future too.

B-)

faded and how rapidly China and India are putting cars on the road, 25 years seems optimistic.
Ghawar has been pumping oil for 60 some years now. It has to be tired.

in a percentage of oil extracted to be made for plant fertilizers.

There was a story awhile back............ok, in very poor regions they burn cow manure for heat....what happened to the human waste burning power plant? It's certainly renewable & can be a sort of pressure burner to generate more wattage. I don't know how much of an equal to regular power plants this would be but I think should be very seriously considered.