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Is Peak Oil Slowly Fading into the Dawn?

Is Peak Oil Slowly Fading into the Dawn?

Peak oil has taken on the trappings of an apocalyptic religion recently. True believers tout "Hubbert Curves" and "Simmons Depletion Analyses" in circular jerkulars and echo choruses across the webosphere. Oil should be well over $500 a barrel by now, according to not-so-distant predictions of the peakers -- some dead and some alive. But oil is in the $80 range largely due to a combination of the weak Obama dollar, the speculative lemming's rush to a safe investment haven, and a misleading surge in demand from India, China, and Brasil.

But ignoring the doomseekers, what are the actual hydrocarbon resources which we have to deal with? Below are some rather conservative early estimates of hydrocarbon resources -- neglecting the vast terrestrial and sub-sea coal and methane clathrate resources. It may take a while to achieve "peak oil" when you consider how quickly industry is developing means of converting these unconventional hydrocarbons to conventional liquid fuels.

Estimated Energy Resources
Image Source

Unconventional Oil Resources

Here is more on the vast hydrocarbon resources remaining:

How fast are we using our oil reserves?

Currently, we are consuming about 31,100,000,000 barrels a year.

How much oil do we have? Or more specifically, how much do we have left, and in what forms?
- Conventional Oil, About 1,750,000,000,000 barrels left.
- Oil Sands Oil, About 3,600,000,000,000 barrels left.
- Oil Shale Oil, About 3,300,000,000,000 barrels left.
- Bio Fuel, Till the sun burns out…

At this burn rate, it’ll take approximately 56 years before we run out of easy to get conventional oil or 278 years till we run out of oil reserves altogether. One of the common misconceptions about our consumption of oil is that we are using it at an ever increasing rate. While in reality, there was a peak in refining capacity which occurred in 1980 and most of the world and has been remarkably steady ever since. _Source

The outlook expressed above is remarkably rosy when viewed from a doomer's perspective. But in reality, the resource estimates are likely to be far too low in the long run.

It is all a moot point, however, because long before conventional oil is exhausted, humans in advanced countries will have begun to shift to resources which are essentially inexhaustible, such as advanced interlocking fuel cycles of nuclear fission, microbial biofuels, and perhaps nuclear fusion.

The world's transportation and chemical industries are far too reliant upon conventional crude oil at this time. But Canadian oil sands are coming on quickly -- as long as the price of oil stays above $70 a barrel. Other unconventional fuels are following along. More will follow as needed.

Microbial biofuels are ten years in the future to price competitiveness, and another ten years to scale up to necessary volumes to truly compete. By that time, development of CTL, GTL, BTL, and oil sands, oil shales, methane clathrates, etc. should be in full bloom. Advanced nuclear fission will also be taking off, as small modular reactors begin to take over from coal generation plants.

History is witness to the scatterings of myriad apocalyptics all the way back to antiquity. It's not a bad scam, if you can keep yourself respect and your sanity.

By. Al Fin

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  • Anonymous on October 27 2010 said:
    Mr. Fin:As I read your piece I felt that I was reading something that Daniel Yergin would write. Your ability to create affordable and usable replacements for oil energy from what Yergin refers to - Un-conventional oil" is a way out for those who don't believe or want to believe that the world has a serious problem. I then decided to look you up on Google and sure enough you, like Yergin have an axe to grind with your association with bio-fuels. I have yet to find people like you who dismiss Peak Oil as a reality. You should think about things like EROEI, pollution, land and water destruction before you state that Peak Oil is not a problem. I always want to ask people like you - what if you are wrong?Paul
  • Anonymous on October 28 2010 said:
    It's very noticeable that the optimists tend to cite amounts of oil in the ground, while peak oilers think more in terms of the rate of extraction and even more important, the energy return on energy invested. The latter has been getting progressively more unfavourable since the 1930s. It's this that is the crucial point - conveniently ignored by the cornucopians.
  • Anonymous on October 28 2010 said:
    I'd hate to think you did the math and forgot to apply the industry's rate of recovery on proven reserves.
  • Anonymous on October 28 2010 said:
    It is actually Hotelling's Law of Substitution which is the most important of all.
  • Anonymous on October 29 2010 said:
    Hotellings law of substitution. Let's see now. I am the leading academic energy economist in the world, but have never heard of that law. Perhaps I should turn my LAEE badge in.Speaking of economics, if one of my students praised this article, he or she would be shown the door. What I would like to do though is to fail him or her on the spot.
  • Anonymous on October 29 2010 said:
    Why am I not surprised that Mr. Banks is ignorant of the basic rule - or law - of substitution of resources? No wonder the academic approach to the economics of energy is so screwed up.But seriously, the insular view of ivory tower economists has gotten the world into a pretty pickle this time. Is there anything less useful in the real world?
  • Anonymous on October 29 2010 said:
    Misleading article.Peak oil is NOT about the world running out of oil - no one is saying we are about to run out of oil. What they are saying is that it is getting harder and harder to meet demand as oil fields effectively dry up and others, though having plenty of hydrocarbons left, are only able to produce so much per year. In addition, new oil fields are much smaller than the ones discovered in the past, there are not enough of them, and they are often in places that make extraction difficult and/or energy intensive i.e. to extract oil requires oil, and increasingly requires more oil.The upshot of all this is a PEAKING IN PRODUCTION LEVELS, and a subsequent dislocation between supply and demand, causing the price of oil to rise.
  • Anonymous on October 29 2010 said:
    But real world economics (as opposed to academic economics) doesn't work that way, Richard. As real prices rise, consumers either curtail their activity that requires the product or they locate substitute products or services which allow such activity to continue. If they curtail the activity, they tend to find other activities which are equally or more satisfying, which do not require the higher priced product.Current high oil prices are deceiving, given the very low value of the US dollar, in which petroleum is priced. Instability in the middle east adds about $30 a barrel to the price as well.There are about a dozen different varieties of peak oilers -- each with his own definition of peak oil -- but all of them are apparently ingnorant of real world laws of substitution.
  • Anonymous on October 30 2010 said:
    Alfonso is correct when he says that the academic approach to energy (economics) is "screwed up". I was in a meeting on natural gas yesterday and I doubt if I have ever been treated to so much mediocrity.But Mr A., if you turned up in my classroom with your nonsense about Hotellings law of substitution, you would be a very happy man when the bell sounded the end of the session. If you have any ambition at all where energy economics is concerned, don't make the kind of mistake you have made here.
  • Anonymous on October 31 2010 said:
    For those who are stil interested in this discussion, do not - DO NOT - have anything to do with what somebody has called 'Hotelling's law of substitution'. Of course, if you believe otherwise, and happen to be in Sweden in the near future, contact the mediocrities who make the decisions in the academic world, tell them that you would like to make a fool of Professor Banks, and ask them to please arrange a seminar where this would take place. I think that you might get your seminar, but neither you nor they will like what takes place during that meeting.
  • Anonymous on November 01 2010 said:
    For the more intelligent readers, do not - DO NOT - have anything to do with anyone claiming to be an energy economist who retreats from the crucial underlying concepts under discussion, hiding behind jargon in a nitpicking attempt to change the subject. :-*
  • Anonymous on November 05 2010 said:
    Better hit the libraries folks, and look for Hotelling's 'Law of Substitution'. Alfonso is running a game on you, promoting something that is completely irrelevant to this discussion - if indeed it exists at all. What about the connection between the oil price and the exchange rate for the dollar. Better check that out too. It might be OK, but then again....
  • Anonymous on November 06 2010 said:
    Harold Hotelling would be spinning in his grave. He made original contributions in several areas of economics, and did some important work in scarce resource economics.And the "law of substitution" is incredibly important to any business or enterprise working with finite resources.Unfortunately, I was apparently trying to give Mr. Hotelling credit for work he did not exactly do.Thanks to Mr. Banks for persisting in his duty to the nitpicking committee of Stockholm economics. He has forced me to painstakingly hunt down the source of my error, which did require more than a little work. It is always worth it to correct a mistake, however.To rehash: The law of substitution is incredibly important in relation to "peak oil" and other finite resources. But Hotelling's contribution was only peripheral, and he does not deserve credit. My mistake.
  • Florencia on June 21 2012 said:
    Wind power is killing more birds and bats than BP's oil spill.Did they tell you how much more the wind power was going to cost you?

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