Peak Oil and Economic Limits

Peak OilWe’ve had a debate about global warming; so what about the economic and environmental effects of our consumption of oil?

h/t to Wu Ming over at Surf Putah blog who found this on The Oil Drum.

The reality here is that in addition to the problem of global climate change, which the vast majority of scientists believe to be primarily caused by man, we are now or will soon be facing the reality of Peak Oil production.  This will mean greater prices at the pump and even greater acceleration of the effects of global warming if oil production is to meet demand.

So flat-earthers, have at it.
Read the rest of the story, watch the clip, and let the debate begin.

  1. Is the theory of Peak Oil a reality or myth? 
  2. Will the pursuit of the remaining oil reserves of the world prove the reality of global warming and accelerate its effect on the planet?
  3. Or is this all a bunch of hot air?

This interview with Jim Jubak, senior markets editor for MSN Money, does a good job of laying out the basics of peak oil in a calm and reasonable way, and ties it to the seeming paradox of oil companies making record profits but not really reinvesting it in oil infrastructure. Where one invests when oil production plateaus and eventually begins to decline, is a huge question that the global economy is going to have to come to grips with. Jubak thinks the oil companies will shift to invest in the production of alternative liquid fuels – he mentions liquified natural gas as one possibility – but the question is wide open.

[youtube][/youtube]The Hubbert Peak theory is based on the fundamental observation that the amount of oil under the ground is finite. It posits that for any given geographical area, from an individual oil field to the planet as a whole, the rate of oil production tends to follow a bell-shaped curve, and shows how to calculate the point of maximum production in advance based on discovery rates, production rates and cumulative production. Early in the curve (pre-peak), the production rate increases due to the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines due to resource depletion.

The theory is named after American geophysicist Marion King Hubbert, who created a method of modeling known oil reserves and production rates. Hubbert’s theory was initially greeted with skepticism by many in the oil industry, but oil companies now routinely use Hubbert’s methods to predict future yields of existing oil fields. In 2004, Association for the Study of Peak Oil and Gas predicted that conventional plus unconventional oil production would peak around 2007.


As the more easily accessible sources of oil are exhausted, other less accessible sources such as oil sands will need to be developed to feed our appetite. Oil sands, also referred to as tar sands or bituminous sands, are a combination of clay, sand, water, and bitumen. Technically speaking, the bitumen is neither oil nor tar, but a semisolid, degraded form of oil which will not flow toward producing wells under normal conditions, making it difficult and expensive to produce. Oil sands are mined to extract the oil-like bitumen which is upgraded into synthetic crude oil or refined directly into petroleum products by specialized refineries. Conventional oil is extracted by drilling traditional wells into the ground whereas oil sand deposits are mined using strip mining techniques, or persuaded to flow into producing wells by in situ techniques which reduce the bitumen’s viscosity with steam and/or solvents. On average bitumen contains 83.2% carbon, 10.4% hydrogen, 0.94% oxygen, 0.36% nitrogen and 4.8% sulphur.

The standard extraction process also requires huge amounts of natural gas. Currently, the oil sands industry uses about 4% percent of the Western Canada Sedimentary Basin natural gas production. By 2015, this may increase by a factor of 2.5 times.

Oil sand deposits are found in over 70 countries throughout the world, but three quarters of the world’s reserves are in two regions: Venezuela and the Athabasca located in northern Alberta and Saskatchewan, Canada. While oil sands were used by the ancient Mesopotamians and Canadian First Nations, they have only recently become considered to be a major part of the world’s oil reserves, that is, they have become economically extractible at current prices with current technology. To distinguish the bitumen and synthetic oil extracted from oil sands from the free-flowing hydrocarbon mixtures known as crude oil that oil companies have traditionally produced from oil wells, oil sands are often referred to as non-conventional oil.

The original process of extraction used at the oil sands was developed by Dr. Karl Clark, working with the ResearchCouncil of Alberta in the 1920s. Historically (since the 1960’s), the oil sands have been mined in huge open pit mines and extracted from the sand by variations of the Clark water-based extraction process, which separates aerated bitumen from the other oil sand components in gravity settling vessels. More recently, new in-situ methods have been developed to extract bitumen from deep deposits by injecting steam to heat the sands and reduce the bitumen viscosity so that it can be pumped out like conventional crude oil.

So flat-earthers, have at it.

  1. Is the theory of Peak Oil a reality or myth? 
  2. Will the pursuit of the remaining oil reserves of the world prove the reality of global warming and accelerate its effect on the planet? 
  3. Or is this all a bunch of hot air?

The lines are open….

  2 comments for “Peak Oil and Economic Limits

  1. Andrew Davey
    August 15, 2007 at 1:56 pm

    I’m not a “flat-earther”, but I’d still like to respond to your questions:

    1. Reality.
    2. Yep, it certainly will.
    3. No, but the BS coming out of the mouths of the right-wing denialist spinners certainly provide extra hot air to warm our atmosphere.

    Good stuff, Chris. 😉

  2. joe shaw
    August 15, 2007 at 3:00 pm

Comments are closed.