NationStates Jolt Archive


Has oil peaked? Yes, says petroleul geologist.

PsychoticDan
12-06-2006, 17:03
His solutions? Same as mine. Energy consumption tax and TRAINS!!!!!!!
Some trains get as much as 400+ MPG. Let's see your Prius do that.

The Texas oil industry knows all about peak oil, because we've already gone through it.

In 1972, Texas was King of the Oil World. We had increased our oil production by 40 percent during the previous 10 years at relatively low prices. Texas producers were poised for surging production as oil prices exploded and increased tenfold by 1980. Texas underwent its biggest drilling boom in history. The number of producing wells jumped 14 percent by 1982. The industry consensus was that oil production would increase dramatically.

To general astonishment, Texas oil production fell instead, despite dramatically higher prices, frantic drilling and improving technology. By 1982, production had dropped to almost exactly what it had been in 1962, reversing the earlier 40 percent gain.

Not everyone was surprised, however. In 1956, M. King Hubbert, a native-born Texan oil geologist working for Shell Oil, got up before a meeting of the American Petroleum Institute in San Antonio and made a startling statement. He predicted that Texas and Lower 48 oil production would peak, and start irreversible declines, between 1965 and 1971. Dr. Hubbert also predicted that world oil production would peak and then decline within 50 years, by 2006.

Dr. Hubbert used complex mathematics to predict recoverable oil reserves, but his resulting model was quite simple: fields, regions and ultimately the world tend to peak, and enter irreversible declines when they have produced about half of their ultimate recoverable reserves. The underlying cause is that the largest reserves are found first because they are large and easy to find. The average size of discoveries shrinks over time, so one looks harder and harder for smaller and smaller fields, as has happened in Texas.

The Lower 48 peaked in 1970. Texas peaked in 1972. Alaskan oil production slowed the U.S. oil decline, but U.S. oil production never equaled its 1970 peak. Today, Prudhoe Bay, the largest American oil field, is now at about one-fifth of its peak production and declining rapidly.

Did we stop finding oil in Texas in 1973? No.. However, it is impossible to replace old, very large oil fields, like the East Texas Field, with a collection of the much smaller fields such as we have been finding in Texas since 1972. Today, Lower 48 oil production is at about half of its 1970 output, and Texas oil production is at about one-fourth of its 1972 rate.

Dr. Kenneth Deffeyes, a former associate of Dr. Hubbert's, recently published a simplified method of predicting the total amount of oil that can be produced from a region. This method is commonly called "Hubbert Linearization," or HL. HL uses two known factors -- annual production and cumulative production to date -- to estimate the total recoverable reserves.

How reliable is the HL formula as a predictor? It shows us that the Lower 48 peaked when it was 52 percent depleted. Texas peak did not show up until our oil reserves were 57 percent depleted – but I suspect that can be explained by the Texas Railroad Commission's regulation of Texas oil production, which kept production equal to demand -- that is, below the maximum efficient rate of production.

Another example are the North Sea oil fields, where production has been falling steadily since peaking in 1999 at 52 percent of total recoverable reserves. North Sea oil production is now about one-fourth below its peak. The HL formula would have foreseen this, but the 10 major oil companies working the North Sea oil fields did not. Using the best engineers and technology available, they predicted just before what we now know was the peak in 1999 that North Sea production would peak around 2010. They were badly mistaken, but many of these same companies are now saying that world peak oil production is decades away.

The HL model says Saudi Arabia is 58% depleted and the world is 48% depleted. This is close to where Texas and the Lower 48 peaked and started irreversible declines in production. Based on the HL method and historical models, I believe that Saudi Arabia and the world are now on the verge of irreversible declines in conventional oil production.

Two legendary Texas billionaires, Boone Pickens and Richard Rainwater, who share a remarkable ability to profitably predict future trends--have looked at exactly the same regional and world data plots that I have looked at, and they have reached exactly the same conclusion that I have: that the world has used about half of its conventional crude oil reserves. Both Mr. Pickens and Mr. Rainwater have tried to warn us about the challenges that we will face as a result of declining conventional oil production.

What about unconventional sources of oil? The unconventional reserves are very large but can only be produced slowly because of high capital and energy costs per barrel of production. In recent years, new tar sands production has balanced declines in conventional Canadian oil production, with no net increase for exports.

There will be massive efforts with unconventional oil, such as Canadian tar sands and the tar and very heavy oil deposits in Venezuela. However, I predict that unconventional sources of oil will only slow--and not reverse--the decline in total world oil production because of the time and energy needed to expand production of these "oils."

Without question, we have to reduce greatly our energy consumption to account for this new reality. What can we do? I have seen two very sensible proposals.

The first is that we fund Social Security and Medicare with a tax on energy consumption, especially at the gas pump, offset by reducing or eliminating the highly regressive payroll taxes. Doing this would unleash enormous free market forces against profligate energy use.

The second proposal is that we electrify our freight railroads and encourage freight to go by rail instead of truck with any of a variety of economic incentives while building electric urban rail systems, such as DART, at a rate much faster much faster than today's pace.

Incidentally, both strategies will also find favor with those concerned about global warming.

Jeffrey J. Brown, an independent petroleum geologist in the Dallas area, can be reached at westexas@aol.com. Bart Anderson, with the Energy Bulletin, and consulting engineer Alan Drake both contributed to this article. Read more of their work at www.energybulletin.net.
http://www.dallasnews.com/sharedcontent/dws/dn/opinion/points/stories/DN-brown_11edi.ART0.State.Edition1.900c598.html
Neo Kervoskia
12-06-2006, 17:05
It's peaked , but it hasn't come yet.
PsychoticDan
13-06-2006, 03:52
bump
Trostia
13-06-2006, 03:57
His solutions? Same as mine. Energy consumption tax and TRAINS!!!!!!!
Some trains get as much as 400+ MPG. Let's see your Prius do that.


http://www.dallasnews.com/sharedcontent/dws/dn/opinion/points/stories/DN-brown_11edi.ART0.State.Edition1.900c598.html

Yeah, but on the other hand, I can't get a train ticket for my friends house who lives 35 miles away, or to and from my job 25 miles away.

There's a lot to be said for personal transportation.
Davevillelandia
13-06-2006, 03:58
is it wrong that my first thought after reading some of this, as an American consumer, was "wow, I want my own train?"
Not bad
13-06-2006, 03:59
His solutions? Same as mine. Energy consumption tax and TRAINS!!!!!!!
Some trains get as much as 400+ MPG. Let's see your Prius do that.




HO scale Miles Per Gallon? Or gallon of fissionables in a nuclear train?
[NS]Liasia
13-06-2006, 03:59
A what geologist?
The Nazz
13-06-2006, 04:00
Is Amtrak a publicly held company?
The Nazz
13-06-2006, 04:01
Yeah, but on the other hand, I can't get a train ticket for my friends house who lives 35 miles away, or to and from my job 25 miles away.

There's a lot to be said for personal transportation.
Yet. You can't get it yet. There will be a massive building effort along these lines in the next ten years in the US because there won't be much other choice.
AB Again
13-06-2006, 04:07
Yet. You can't get it yet. There should be a massive building effort along these lines in the next ten years in the US because there won't be much other choice.

Corrected to remove over optimistic position.
Kyronea
13-06-2006, 04:22
Is Amtrak a publicly held company?
I dunno. I plan on investing in train companies and other, similar companies though. There's going to be a lot of money made in such investing, and I'll need a lot if I even want to THINK about a political career...
The Nazz
13-06-2006, 04:22
Corrected to remove over optimistic position.
It's liable to be that or walking, because gas is going to be $10 a gallon before it's all over.
AB Again
13-06-2006, 04:29
It's liable to be that or walking, because gas is going to be $10 a gallon before it's all over.

I would invest in shares of walking boot manufacturers then (and bicycle factories and horse breeders etc.)

I simply believe that creatingf the kind of infrastructure needed for an effective rail system is not politically interesting to the powers that be, and as such it will not happen.
Kyronea
13-06-2006, 04:34
I would invest in shares of walking boot manufacturers then (and bicycle factories and horse breeders etc.)

I simply believe that creatingf the kind of infrastructure needed for an effective rail system is not politically interesting to the powers that be, and as such it will not happen.
You are in Argentina, though. Perhaps ti is not politically interesting there. But here in the U.S., it will become so as things move on. I've already started seeing commercials on T.V. about freight companies using trains instead of semis, for instance.
The Nazz
13-06-2006, 04:42
I would invest in shares of walking boot manufacturers then (and bicycle factories and horse breeders etc.)

I simply believe that creatingf the kind of infrastructure needed for an effective rail system is not politically interesting to the powers that be, and as such it will not happen.
Not nationwide perhaps, and certainly not immediately, but this will be a revived time for rail if for no other reason than it will soon be cheaper (if it isn't already) to ship food via rail than via truck. Passenger service inside metropolitan areas will be on the upswing--it already is in a number of cities--and all those exurbites are going to have to be able to get to work somehow.

We've already got an lot of underused rail line in the US--it's more a matter of updating and transforming it into passenger service rail than of putting an immense building project underway.
AB Again
13-06-2006, 05:00
You are in Argentina, though. Perhaps ti is not politically interesting there. But here in the U.S., it will become so as things move on. I've already started seeing commercials on T.V. about freight companies using trains instead of semis, for instance.

You want me to hate you don't you. I am in Brazil. Should I now call you Venezuelan, Cuban or French - which would insult you the most - choose that one.

Here we still go around by horsepower anyway, so meh.

Freight can be moved by train only where there are rail tracks, right? Now to substitute semis, to any great degree, an awful lot of track will have to be laid, using up a lot of prime real estate in the process. This is simply not going to happen.

Yes, transcontinental and interstate haulage will continue to be largely train based in the USA, as it already is. It is the local in state distribution that needs to be shifted away from the roads, and that requires investment that simply isn't going to happen any time soon.
AB Again
13-06-2006, 05:05
Not nationwide perhaps, and certainly not immediately, but this will be a revived time for rail if for no other reason than it will soon be cheaper (if it isn't already) to ship food via rail than via truck. Passenger service inside metropolitan areas will be on the upswing--it already is in a number of cities--and all those exurbites are going to have to be able to get to work somehow.

We've already got an lot of underused rail line in the US--it's more a matter of updating and transforming it into passenger service rail than of putting an immense building project underway.

Local area rapid transit systems can be constructed, and are a good move. The problem though is not really one of moving people, but one of moving freight, and this does not lend itself so well to elevated or tunne systems.

To bring freight into the centre of metropolitan regions by train would require a lot of eminent domain aquisitions - not a popular move. However they may do it, I just wouldn't bet on it.
Kyronea
13-06-2006, 05:10
You want me to hate you don't you. I am in Brazil. Should I now call you Venezuelan, Cuban or French - which would insult you the most - choose that one.

Here we still go around by horsepower anyway, so meh.

Freight can be moved by train only where there are rail tracks, right? Now to substitute semis, to any great degree, an awful lot of track will have to be laid, using up a lot of prime real estate in the process. This is simply not going to happen.

Yes, transcontinental and interstate haulage will continue to be largely train based in the USA, as it already is. It is the local in state distribution that needs to be shifted away from the roads, and that requires investment that simply isn't going to happen any time soon.
...no. I remembered incorrectly. Thought it was Argentina, not Brazil. (By the way, calling me another nationality wouldn't be an insult. Unlike some people, I don't find that kind of mistake insulting. More amusing than anything else.)

You'd be surprised at how efficient rail can be. Is it really all that more inefficient than highways, freeways, interstates, and road networks everywhere? We could concievably replace much of our highways with rail tracks and probably SAVE space overall. The U.S. is not anywhere NEAR a shortage of space for ANYTHING at the moment. We don't have huge swaths of rainforest(though in some respects that would be nice. Yay foliage and animal life!)
AB Again
13-06-2006, 05:19
...no. I remembered incorrectly. Thought it was Argentina, not Brazil. (By the way, calling me another nationality wouldn't be an insult. Unlike some people, I don't find that kind of mistake insulting. More amusing than anything else.)

You'd be surprised at how efficient rail can be. Is it really all that more inefficient than highways, freeways, interstates, and road networks everywhere? We could concievably replace much of our highways with rail tracks and probably SAVE space overall. The U.S. is not anywhere NEAR a shortage of space for ANYTHING at the moment. We don't have huge swaths of rainforest(though in some respects that would be nice. Yay foliage and animal life!)

You don't seem to get it do you. Rail tracks in the middle of nnowhere do not benefit you anything. They have to go to where the freight is wanted - i.e. into the cities.

Oh and most of Brazil is not covered in forest. (Study some geography at some point, please. I know that this is the image of Brazil that the press presents, but it would be like my thinking that everything between NYC and LA was Arizona desert.)
The Nazz
13-06-2006, 05:25
You don't seem to get it do you. Rail tracks in the middle of nnowhere do not benefit you anything. They have to go to where the freight is wanted - i.e. into the cities.

Oh and most of Brazil is not covered in forest. (Study some geography at some point, please. I know that this is the image of Brazil that the press presents, but it would be like my thinking that everything between NYC and LA was Arizona desert.)
Try living there sometime--culturally, that's exactly what it is. :D [/snark]

Seriously, though, I think you're seriously underestimating the amount of track we have going into and out of major US cities, and even not so major ones. Plus, what Kyronea said is true--you could run track down the center of the medians between highways if necessary. Light rail already does that in places--the BART runs between highways on the East Bay (San Francisco Bay). Those highways are major ingresses and egresses of cities, and you don't have to sweat eminent domain since the government already owns them.
AB Again
13-06-2006, 05:28
Try living there sometime--culturally, that's exactly what it is. :D [/snark]

Seriously, though, I think you're seriously underestimating the amount of track we have going into and out of major US cities, and even not so major ones. Plus, what Kyronea said is true--you could run track down the center of the medians between highways if necessary. Light rail already does that in places--the BART runs between highways on the East Bay (San Francisco Bay). Those highways are major ingresses and egresses of cities, and you don't have to sweat eminent domain since the government already owns them.

In that case, tell me why it has not been done before?
The Nazz
13-06-2006, 05:35
In that case, tell me why it has not been done before?Two words: cheap oil. Seriously, that's why. Rail was king in the late 1800s and early 1900s, but once the automobile was made inexpensive enough and oil was cheap enough for the average consumer to make use of it, rail was pushed aside. The energy industry and auto industry successfully lobbied the federal government to build roads and it was on from that point.
Gymoor Prime
13-06-2006, 05:41
Two words: cheap oil. Seriously, that's why. Rail was king in the late 1800s and early 1900s, but once the automobile was made inexpensive enough and oil was cheap enough for the average consumer to make use of it, rail was pushed aside. The energy industry and auto industry successfully lobbied the federal government to build roads and it was on from that point.

And auto and oil companies actively lobby against mass transportation systems NOW as well.
AB Again
13-06-2006, 05:41
Two words: cheap oil. Seriously, that's why. Rail was king in the late 1800s and early 1900s, but once the automobile was made inexpensive enough and oil was cheap enough for the average consumer to make use of it, rail was pushed aside. The energy industry and auto industry successfully lobbied the federal government to build roads and it was on from that point.

And you expect these same industry lobbies to sit down and do nothing to maintain their economic importance. They saw what happened to the railroads, they are not going to want it to happen to them.

However, I hope you are right, I just am very cynical about anything being done in the next ten years.
The Nazz
13-06-2006, 15:08
And you expect these same industry lobbies to sit down and do nothing to maintain their economic importance. They saw what happened to the railroads, they are not going to want it to happen to them.

However, I hope you are right, I just am very cynical about anything being done in the next ten years.I expect some will adapt and others will die, as is usually the case in these matters. But they are going to be affected by situations outside their control.
BogMarsh
13-06-2006, 15:14
I expect some will adapt and others will die, as is usually the case in these matters. But they are going to be affected by situations outside their control.

Let it be us to adapt -
and others to die....