Peak oil and climate change
2 September 2005
we still struggle to learn about and understand the magnitude of human
tragedy inflicted on the Southern US by Hurricane Katrina, especially
around New Orleans, it now becomes clear that the world is facing
a double whammy: climate change and peak oil happening at the same
a recent issue of the New Scientist evidence was presented
by Utrecht University that glaciers had reached a peak sometime in
the early 19th century, long before industrialization, and have been
in retreat since then. We seem to be looking, therefore, at a combination
of a rebound from the little ice age and human-induced greenhouse
gas effects compounding each other.
physical laws of nature are all non-linear - very often meaning
that a small change in one parameter, like temperature, can lead to
a big change in weather events and ultimately climate change.
States oil production peaked in 1970, with a second, lower peak
in the mid 80s resulting from the Alaska oil discoveries. In the meantime,
as depletion in US on-shore fields continues unabated despite
the application of the most modern technology the focus of
oil production has shifted to off-shore fields in the Gulf of Mexico.
Thirty per cent of US production is now highly vulnerable to hurricanes,
and that at a time of year when global seasonal demand surges by 2
million barrels/day. According to the US Energy Information Administration
Hurricane Katrina reduced Gulf of Mexico production by 1.3 million
barrels/day or 90 per cent of the total. In other words, we can expect
these events to occur frequently, probably annually.
spare capacity will remain tight until the world reaches peak oil
in the next years, it is quite likely that this peaking will occur
in the fourth quarter of the peak year. In April this year, Chris
Skrebowski, member of the London based Oil Depletion Analysis Centre
and editor of the professional oil and gas journal Petroleum Review,
published a list of new oilfield projects coming on-stream up to 2012,
an update of his earlier mega projects study which started in early
2004. According to this list, by 2008, 780 Kb/day in new capacity
is expected to come from the Gulf of Mexico oil urgently needed
to offset rampant decline in many oil provinces around the world.
There can be no doubt that these new projects are now being delayed.
A new platform, Thunderhorse, (200 Kb/day), for example, was already
listing after the seasons first hurricane passed over it. This
will worsen the situation resulting from the damage to existing facilities.
The US Coast Guard reports that 20 oil rigs and platforms are missing
of Mexico hurricanes will therefore result in an earlier peak year
around a bumpy oil production plateau, possibly with multiple peaks.
The situation will be very confusing. It will be even more difficult
now to detect the absolute peak than was described in Matthew R. Simmons
recent book Twilight in the Desert the coming Saudi Oil
Shock and the World Economy, in which he warned that Saudi Arabia
might have reached the end of secondary oil recovery, to be followed
by a slow, costly, tertiary phase in which oil left behind in the
two previous oil production phases will have to be pumped out
in ever declining quantities as has been happening in the US
for three decades.
meantime, the Australian Government continues business as usual and
is in full denial mode over coming oil shortages and increasing oil
prices. In a recent presentation of a working paper entitled Is
the world running out of oil, a review of the debate by the Bureau
of Transport and Regional Economics (BTRE) in Canberra, the classic
view of economists prevailed: market forces will result in higher
prices which will bring about increasing oil production. The bureau
ignores what is happening around us. Higher oil prices have now brought
two Australian companies highly dependent on oil prices
to decrease staff levels: Qantas, to compensate for rising fuel costs
and Holden, to cut production of their fuel inefficient cars. The
job cuts confirm what Simmons said about suppliers: if they
cannot make money, they quit.
politicians are quitting, too. We urgently need a set of responsible
leaders to bring us through the coming crisis
and an electorate
that forces the twin issues of peak oil and climate change to the
top of the agenda.
SEE ALSO ...
a week passes without media reports on rising petrol prices and tight
oil supplies. Often the impression is given that were dealing
with a temporary coincidence of unrelated events and that oil prices
will go back to normal. Few of these articles analyse
the situation in enough detail to explain the root cause the
successive and continuous peaking of oil production in many oil producing