Friday, June 14, 2013

The Peak of The Oil Lies - 6

Let's talk about the religion of Oil-Qaeda, which has tenets that have now become government policy.

The religious tenet, which they try to pass off as science, is epitomized in the Bible's old testament book of Kings:
So Elijah went to Zarephath, and as he came to the town gate, he saw a widow gathering firewood. “Please bring me a drink of water,” he said to her. And as she was going to get it, he called out, “And please bring me some bread, too.”

She answered, “By the living LORD your God I swear that I don’t have any bread. All I have is a handful of flour in a bowl and a bit of live oil in a jar. I came here to gather some firewood to take back home an d prepare what little I have for my son and me. That will be our last meal, and then we will starve to death.”

“Don’t worry, “Elijah said to her. “Go on and prepare your meal. But first make a small loaf from what you have and bring it to me, and then prepare the rest for you and your son. For this is what the LORD, the God of Israel, says; ‘The bowl will not run out of flour or the jar run out of oil before the day that I, the LORD, send rain.’”

The widow went and did as Elijah had told her, and all of them had enough food for many days. As the LORD had promised through Elijah, the bowl did not run out of flour nor did the jar run out of oil.
(1 King 17:10-16, emphasis added). Now let's hear what the International Energy Agency wants us to believe, as well as some opposing scientists, so we can compare the conflicting stories:
So, what is peak oil? In short, peak oil will occur when the extraction rate of this resource ceases to rise. Typically, this point is reached when half or less of a natural commodity has been removed. It is the peak of the bell curve; the point at which the tail is longer than the rise to the top.

Last month, Time reported that peak oil had been certified dead by the International Energy Agency (IEA). It seems that unconventional energy sources in North America have delayed the onset of peak oil. To proclaim that peak oil is dead, however, is a little misleading. It would be more accurate to say that peak oil is dormant, or at least, that the rate at which oil is extracted is likely to continue on a bumpy plateau for longer than anticipated.

Of course, it is possible to argue over the exact point at which global peak oil will arrive, but at some time in the not too distant future, we are going to have deal with this problem. Oil is a finite resource and as such, it cannot sustain indefinite extraction.
(Preparing for Extinction of Petroleum Man emphasis added). The oil barons want us to believe they can do the same oil miracle that the prophet Elijah did for the widow.

Is it good government policy to believe that petroleum is not a finite resource which will become more and more scarce as it is used up?

Is such magical cornucopia thinking the proper basis for sound public policy?

Then there is the other magical thinking which is a belief that using oil as fuel, which increases carbon dioxide content in the atmosphere, has no damaging impact on The Global Climate System (Terrarists).

The next post in this series is here, the previous post in this series is here.

"Stuck inside a Mobile with the Memphis ...", Dylan: lyrics here.


  1. US officials cut estimate of recoverable Monterey Shale oil by 96%: Link

  2. The magic kingdom of oil propagandists see the day when their propaganda will fail:

    "• In June 2009, the Nigerian oil minister stated that Nigeria's potential production was 3 million b/d, but the countrysupplied less than 2 million b/d in 2013.

    • In mid-2013, the Venezuelan oil minister announced that his country would reach 3.25 million b/d production by theend of the year, but Venezuela's December production was only 2.4 million b/d.

    • Angola had planned to reach 2 million b/d during 2013, but in mid-2013 the country's oil minister postponed thisgoal until "2014 or 2015." Current Angolan production is only about 1.7 million b/d.

    • In 2009, when international oil companies were awarded the first postwar projects in Iraq, the country targeted 4.5million b/d of production by 2014. Current production is about 3.5 million b/d, although the country may reach 4million b/d by year-end.

    Iran's oil production has long been in decline. Recent sanctions have further restricted Iran's output to about 2.8million b/d, down from an average 3.6 million b/d in 2011. The shut-in of some producing wells may have caused permanent reservoir damage, preventing an eventual return to previous production levels.

    While Iran has announced plans to offer greater incentives to foreign investors in its oil and gas industry once sanctions are lifted, most oil companies have so far shown little interest.

    Algeria's oil output has also been declining in recent years. In January, Algeria launched a new oil exploration licensinground based on liberalized terms, but investors question the security situation following the deadly attack on the InAmenas gas facility one year earlier and the highly controversial recent presidential election.Without directly admitting so, Opec may itself have come to recognize that its upside production potential, overall, is limited.

    In response to questions about the impact of increasing US oil shale production on already oversuppliedmarkets, the Saudi Oil Minister was quoted as saying: "The supply of shale oil is welcome to the market. Very welcome to the market. Actually any addition to supply in this big market is welcome." Non-Opec producers generally operate their facilities at or near capacity. Oil companies producing North American unconventional liquids are compelled by shareholders to earn a financial return on their investments, and cannot affordto maintain idle capacity.

    Consumers worldwide therefore depend on Opec to provide a rapid output surge in the event of a supply interruption. If Opec's current idle capacity is less than assumed, and if Opec is not capable of expanding that idle capacity as global consumption grows, the danger of sudden price jumps will increase.

    While the perception that oil markets are currently oversupplied is correct, and the near-term prospect is for oil prices (in the absence of a supply interruption) to decline, this perception should not reinforce an uncritical belief in oil abundance.

    While Opec may soon focus on how to prevent a price slide, over the longer term Opec may be less able to prevent oil prices from soaring.

    We must not be mesmerized by reports of oil abundance any more than we should have been by popular interpretations of peak oil.

    Peak Oil Production