Asides
PEAKING: If Greens stop lying to us, they’d have a lot more credibility
Peak oil hasn’t happened, and it’s unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun(9). The constraints on oil supply over the past ten years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.
Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s.” The investments required to make this boom happen depend on a long-term price of $70 a barrel. The current cost of Brent crude is $95(10). Money is now flooding into new oil: a trillion dollars was spent over the past two years, a record $600bn is lined up for 2012(11).
Discussion
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I have little time for the Greens, as it seems to me they tend to oversimplify complex issues with wishful thinking. Unfortunately, in blaming the Greens for peak oil inaccuracy, this article suffers the same disease. If you read Maugieri’s paper at the Harvard website he lays the blame on a number of factors - from his paper
”decline profiles of already producing oilfields appear less pronounced than assessed by most experts, being no higher than 2 to 3 percent on a yearly basis”
He also lists other factors, such as the rapid development of new technology for exploiting “unconventional oil” reserves (eg tar sands) which were not only uneconomic but completely unavailable in the past – from his paper
“Thanks to the technological revolution brought about by the combined use of horizontal drilling and hydraulic fracturing, the U.S. is now exploiting its huge and virtually untouched shale and tight oil fields, whose production – although still in its infancy – is already skyrocketing in North Dakota and Texas”
Of course the time it takes to reach Hubberts Peak will be pushed out to the degree that alternative fuels are embraced. It may have served a useful function in spurring the development and use of oil alternatives, for example I came across this in a Morningstar publication “LNG is increasingly used to fuel long distance trucks, rather than petrol diesel. Shell just announced plans to build 100 LNG stations to service long distance trucks across the US in their clearly defined routes. Volvo is churning out LNG truck engines. US road transport is the single largest user of oil in the world, so this cheaper alternative could gradually cap the price of oil driven upwards by Hubberts Peak considerations”