Guardian: "The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying."
Oil running out faster than the International Energy Agency admits, says whistleblower
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Oil running out faster than the International Energy Agency admits, says whistleblower
Guardian: "The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying."... More.
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meh, more troubling is the implicit end of rock music.
This was discussed on Slashdot a few days back.
Apparently we have nothing to worry about. The free market will magically make oil appear out of thin air, or rocks.
The invisible hand of the market is too busy curing cancer and resurrecting Elvis at the moment.
If this were true, I would presume American government would be making a much better effort toward building infrastructure for alternative forms of transportation.
People in the industry like to give optimistic predictions; no surprise there.
We can expect the price to go up dramatically in the next few decades, but the rate of that increase depends on many unpredictable variables in the world's economic systems.
The only certainty is that it will take hundreds of millions of years for nature to replenish the oil we've sucked out of the ground in the last hundred years.
I wouldn't be surprised if this was "leaked" just to create an excuse to jack prices at the pump again ...
No this doesnt mean suddenly there wont be any car fuel in a few months, but it does mean we have been on a plateau where discoveries have not matched depletion since about '05 or '06. sure we can pump more if needed but never so cheaply.
It is hard to convince people how close to free light sweet crude was in the old days. You just poked a hole in the ground and the oil would flow many miles for the cost of a few pumps and some pipe to a refinery. Even refining light sweet was easy, not like heavy sour or even worse than the giga-watts to heat massive amounts of water required to convert oil shale and tar sand. For free market types, I mostly agree with you, but please show me a market substitute for nearly free light sweet crude.
I also wonder how strong a ceiling this will place on any recovery when a near depression still has $70 and higher oil.
I wonder how high oil prices will have to be before drilling in the arctic and antarctic are viewed as acceptable. Oil shale and tar sands look like a red queen's race to me. I sure hope the powers that be get serious about alternatives before top ramen costs 5 bucks a bowl. Makes having my youth behind me a little more palatable, though. Good luck, kids...you'll need it.
Everyone always thinks about oil shortages in terms of how they would impact car fuel, but 60 percent of the petroleum consumed in the United States is used for other stuff.
If we do run out of oil anytime soon you should worry less about what you're going to put in the tank of your SUV and more about where you're going to get your food and electricity.
Not to mention worrying about the people coming for your food.
If you truly believe this, then you could make a large profit by purchasing long-term oil futures right now. December 2015 crude is trading at 94.17/barrel today -- if you are convinced that in six years, oil will be more scarce than anyone else expects, then you should buy that oil now and sell it at a greatly increased price in 2015.
Yeah, somehow I get the feeling that driving to work or paying exorbitant amounts for a tank of gas are really the least of our worries.
Pretty much our entire economy runs on oil. The trucks, trains and planes that transport your consumer goods to wherever you are. The vehicles bringing you fresh produce (or even not so fresh produce).
It's not a case of, oh damn, we'll have to ride a bicycle.. it's Oh damn, how the hell do I get hold of basic life necessities?!
Larkin, trains run on electricity; they're part of the power grid, which should be running on water, wind, nuclear and wood/coal. On long term, gasoline prices would encourage building metros and trams in cities and new railways between towns.
Electric and compressive air powered cars have been built for decades, and particularly the latter can be charged from empty to full with about two dollars worth of electricity - and one tank takes you about 100 kilometres. Sure, it's no go for longer trips, but trains can carry cars too.
Personally I've always wondered why we transport our foods by lorry in the first place. The supply lines are pretty much set in stone for decades, and railways should pay themselves back sooner or later.
What I find more distressing are the ships and clothing. Ships can't be connected to a grid or charged every hundred kilometres. I saw a headline the other day about SCIENTISTS LOOKING A WAY TO POWER SHIPS BY WIND, but somehow I couldn't take that seriously.
On clothing.. well, oil is used for much more than just transport. Can plastic even be done without oil? I'm not sure (not a chemist), but at least they use it now.
"SCIENTISTS LOOKING A WAY TO POWER SHIPS BY WIND" Umm, I realize tankers are much larger, but wouldn't we just call these sail boats?
Is this a surprise? World leaders are in so much denial. The end of cheap oil is really the end of our way of life.
Long haul trains run on diesel fuel. The actual motive engines are electric, yes, but the electricity to run them is generated by on-board diesel generators. They are not connected to the electric grid. Well, in the US that's the case, at least.
Local transit trains and such tend to be grid-tied electric only. But commuter trains tend to be diesel/electric.
It would be a massive project to move interstate trains over to grid-tied electric.
Never under estimate the power of profit when it comes to innovation. The problem will be taken care of. There are financial incentives.
So I'll need to decide whether to buy solar panels for my roof, even though it's not currently economically sensible. But that aside, as people say, it's all the other essentials that will take the hits.
@5alo: There are several commercial companies that are building huge kites for tankers, that theoretically greatly reduce their fuel needs. http://www.skysails.info, for instance. I think there are very few tankers actually using them yet. And plastics can be made out of plant oils as well. Linoleum, for instance, is made out of flax seed.
Ships powered by wind? Whoever heard of such a thing! (Kidding aside, I wonder if we'll be seeing nuclear-powered civilian wessels?)
Anyway, isn't the long-term ceiling on oil prices just whatever the price of the next-cheapest alternative is? As long as production gradually (not suddenly) decreases, I don't see an apocolypse here. Of course, if they HAVE been misleading us, then "the market" has been preparing for a situtation that is different from reality, and we might just be boned.
@SamSam actually buying solar panels right now could be a quite sensible thing to do considering that most PV manufacturers are in an overstock situation and are being forced to sell PV panels at a discount. However, this may be ending soon. (http://www.dailyfinance.com/2009/10/23/solar-panel-prices-signs-point-to-rebound-as-a-supply-glut-may/)
30 years at the current rates of consumption = probably 15 years. enjoy the downfall :)
There are a number of technically feasible alternatives out there, but they will have to be employed at a scale that will replace a significant portion of the 85 million barrels of oil consumed per day worldwide, an enormous undertaking that will take a number of years however you look at it. The current oil based infrastructure has been built by accretion over the last century, and if we have decades of gradual decline in oil production to make the switch it's no big deal, market forces will drive the change with relatively minor problems.
But if we only have one or two decades (or less, if you really want to consider a nightmare scenario) before oil production tanks significantly, and since we have yet to get the massive projects required underway...
I still don't understand why the energy companies would underestimate oil reserves. Underestimation should drive prices down which means they earn less profit. Since companies like BP have diversified out of being an oil only company, it would seem like they are poised to benefit from a shortage of oil and high prices.
By OPEC rules, since the 1980s oil production has been tied to new reserves proved. Places like Saudi Arabia and other middle eastern oil producers have been for years claiming new proven reserves that are what are needed to sell the amount of oil they are selling, with no external audit to confirm those new reserves. They have also "adjusted" their claimed reserves as needed to increase production. These producers have an enormous financial incentive to claim newly proven reserves at levels to maintain current production levels, and there have been fears for a number of years now now that they may well be exaggerating new reserves to keep their income from oil intact, at least in the short term.
The interesting thing about that article is the graph. It's the first thing that's presented and it's organized in a very sensationalized way.
Mind you I'm no proponent of oil or the oil industry, I think they are bane on the existence of man and I hope they are merely a bump in the historical road map, rather the end destination.
I digress. The graph. It's a market percentage prediction graph. So the sharp decline we see in the crude oil section, is a decline relative to the other possible energy sources in the market. A decline of this measure can happen for two reasons:
1) The stated reason, which is the eventual loss of crude oil all together
2) The unstated reason, the eventual mass adaptation and adoption of other forms of energy sources.
Focusing on point 2, you have to realize that the crude oil reserves could (potentially: that's important) stay the same, while the other energy sources increased, and you would see the same trend in the graph.
The fact that they present the graph first, puts you in the mind state to assume that the oil reserves are predicted to decline, because that's how we read graphs by default. But when you understand the graphs REAL representation, it becomes evident that there are multiple reasons why this graph is drawn the way it is.
That being said, oil sucks, and I hate the fact that we're so dependent on it. Go solar, live well, think often and question everything.
I'd just like to point out the real idea behind Peak Oil theory since a few commenters seem to be confused... The problem isn't that we're going to suddenly run out of oil one day (we won't--not ever) the problem is that the rate at which we get oil out of the ground will fall behind the rate at which we use it (or expect to use it anyway).
For example, if the demand for oil is 85 billion barrels/day (which is pretty close our actual current demand I think) that means we need at LEAST 85 billion barrels/day coming out of the ground to meet demand. Since demand tends to grow over time production must grow at the same pace or we'll face Peak Oil.
As oil deposits get depleted the rate at which you can extract oil from them drops significantly. So if the IEA whistleblower is correct we'll be facing Peak Oil a lot sooner than agencies like the IEA are claiming.
There are various ways to keep the rate of oil flowing steadily past the half-way point in an oil field (e.g. injecting water). However, the longer you keep the extraction rate up like this the more abrupt the rate will drop suddenly once you reach that critical point of no return. Also, when you use things like water injection to increase the rate of oil extraction you *significantly* reduce the amount of recoverable oil in a field--which will significantly reduce your total reserves.
For many years it has been known that the Saudis are pumping 3 barrels of water to extract 1 barrel of oil in their largest oil field (Gawar). I suspect that the discrepancy between proven oil reserves and actual reserves largely results from this water injection/loss of recoverable oil aspect being omitted when calculating totals.
In other words, it wouldn't hurt to be prepared for the hydrocarbapocolypse in the near future.
-Riskable
"The road to inefficiency is paved with the pink slips of IT professionals and cemented with proprietary products."
I've been waiting for the world's consumption to hit one or both of the two brick walls of resource depletion and pollution since 1972 when I first read "The Limits to Growth". I wonder if I'll live long enough to see it. Or if my 23 year old kids will live long enough to see it.
"Waiting for the axe to fall"
But if they were forced to pump less oil, wouldn't the price increase and they would have a higher margin because the the disparity between supply and demand? Or alternatively might you not see countries leaving the cartel because complying with the rules was costing them money? I can see how the argument that they want to pump a ton of oil and they have to lie in order to do that makes sense on its face, but I'm not sure it jives with actual behavior. OPEC has recently decreased production because of the decrease in demand in order to buoy the price of oil because their economies are structured around $75/barrel oil. Which makes me think they might prefer higher prices to volume.
OPEC came into being to keep producers from cutting each others throats by having a unified pricing structure for oil. It is in the producers collective interest not to produce more oil than there is demand to keep prices up. At the same time, they cannot afford to allow demand to exceed supply, because the market would drive prices up so much that alternatives would become attractive and consuming nations will move to them and permanently reduce demand, thus cutting their own economic throats. The producers are in competition with one another for their slice of the pie, and if one producer reduces production, another producer will pick up the slack as long as such production capacity exists. Net production will still equal demand, but the producer who cut production will lose market share and income. It is in OPEC's best interest that its customers not move to alternatives before actual supply is less than demand, and any hint that supply is growing short would (hopefully) trigger such a move.
This doesn't seem to be supported anywhere in the article.
For starters, the graph is not, directly at least, a graph of market percentage. It's specifically a graph of oil production, in barrels, and shows that oil production from known fields will start to decline sharply.
Now, you could say that their predicting that the fields will start to produce less because they know that no one will want any more oil in the future, but that seems unlikely and is specifically not what all the quotes in the article say.
If he meant "if was forced to scale back its predictions because it realized that solar power was going to hit 10¢ a watt," I think he would have specified that.
Why would it create panic if the reason for the graph leveling off was just because people would find cheaper power elsewhere?
That description makes OPEC sound a lot more capable than I have seen. OPEC countries are notorious for being bad at making decisions about investing in production capability. I believe this is assumed to be b/c the oil companies, in each respective country, are state run, compared to the much more nimble MNC's. And those OPEC nations don't have a great history of allowing those MNC's to put their reserves into production when they fall short of production capability.
As to the alternatives, isn't that what is currently occurring in fits and starts? There was an oil shock in the 70's and it spawned huge interest in alternatives. Production capacity was increased dramatically to meet demand and we then had very cheap oil only to have another huge run up here recently. The most recent run up sent alternatives into the forefront of thought again with more far reaching results than the first time. This was possibly do to the specter of AGW. The change over just isn't in the timely and orderly way that peak oil proponents wish it. But that is how the market typically works.
"Running on oil", forget oil used as a fuel, think of oil and grease used as a lubricant. Water and wind may be used to generate the power, but the oil allows it to turn. There are dry bearings, but I don't see many cars, lorries, buses, medium and big generators, big industrial machinery, etc., using them. We may be living in the information age, but its foundations are still industrial.
That description makes OPEC sound a lot more capable than I have seen.
Well, it is a very simplified outline of the functioning of OPEC, as a one paragraph description is bound to be. The reality is, as you say, more complicated and less coherent than that description might imply. The individual producer nations are still unlikely to reduce production before they have to.
The oil shock in the 70's was different in kind than the impending one as it was caused by an embargo, not by an actual global supply shortage, but it did have a huge impact on our car centric psyche. The fear about the next oil shock, reasonable or not, is that a sharp spike in oil prices will have a disastrous impact on the economy. The "fits and starts" move to alternatives you describe means that other than nuclear power, the contribution from alternates is so low as to be practically non-existent, and if the economy takes a dump it will greatly complicate implementing them, as market forces need a functioning economy to work.
In any case, prudence might tend to indicate that it would be wise for the government to anticipate the need and force the move to alternatives before real supply shortages arrive because the market won't, just in case the reduction in supply isn't as gradual as we might like.
Just another thought, no tree huggers jumping up and down in glee? Maybe they have realised that 6 billion people and no oil means everybody will be cutting down the trees to burn to keep warm when it gets cold. Anarchy is great as long as it happens to someone else.
Why would this make treehuggers "jump up and down with glee?" Treehuggers don't want cities to increase use of solar panels because they randomly want people to spend money, but because they recognize that drilling for oil isn't sustainable, either for humans or for the planet. Why would noting that the end of human sustainability could possible come sooner make anyone "jump for glee?"
Also, any smart environmentalist will look at this graph, particularly the increase in oil from fields yet to be found, "additional enhanced recovery," and "non-conventional oil" and see thousands more stip-mined oil fields and tar sands in the attempts to sqeeze out the last few drops.
What did your comment mean, anyway? Do you know any "treehuggers" who want anarchy? Do the articles over at treehugger.com match any of your stereotypes?
As for your comment above, lubricants probably account for a tiny fractions of one percent of all oil used, and could anyway be replaced by seed oil substitutes.
Just another thought, no tree huggers jumping up and down in glee?
That's kind of like expecting the vegetarians to be happy if we suddenly ran out of cows.
Just another thought, no tree huggers jumping up and down in glee? Maybe they have realised that 6 billion people and no oil means everybody will be cutting down the trees to burn to keep warm when it gets cold.
There are a little more than 7 billion of us now, not 6 billion, and the biggest threat of "no oil" isn't getting cold, it is that the green revolution that allows us to feed ourselves in our multitudes currently relies on petrochemical fertilizers and mechanized farming.
We are a few billion people past what traditional agriculture can feed, so if oil production drops drastically before we can develop alternatives (hopefully an unlikely scenario), you need not to worry about the trees, we'll starve to death in vast numbers before we strip the forests bare.
Maybe that's why no one is jumping up and down in glee.
Just think of all the notice we had when analog TV's became obsolete. Congress postponed the switchover to give people more time to prepare and even gave away free converter boxes. And that's just for TV. For something as important as oil there will be so many new forms of energy to choose from well before the last drop of oil is even mined. The world won't end, although a few wars might. But my uncle is a geologist for an oil company and he swears there's enough oil in Russia to last the world 100 years, which I think is a more unsettling scenario.
if you are convinced that in six years, oil will be more scarce than anyone else expects, then you should buy that oil now and sell it at a greatly increased price in 2015.
What if I believe that money will be more valueless than you expect in 2015? What should I do then?
well said danlalan