This page has been archived and commenting is disabled.
The Cause of the Oil Spill: Peak Oil
Sarah Palin and many others
claim that the BP Gulf oil disaster happened because environmentalists
have prevented drilling in shallower waters and safer locations.
In other words, they claim that oil producers were forced into deeper, more dangerous conditions because of environmentalists.
Are they right?
BP was clearly criminally negligent, and government regulators were wholly captured by the oil industry.
But we have to take a step back to see the bigger picture.
As McClatchy pointed out last month:
Conventional
U.S. oil production has been in decline since the 1970s, and near-shore
production along the Gulf Coast peaked in 1997.***
Globally,
one in every 10 barrels of oil produced in 2030 will come from
ultra-deepwater operations, [Leta Smith, director of oil supply
research for Cambridge Energy Research Associates, a leading oil
analyst] said, adding that roughly 70 percent of the deep water in the
Gulf of Mexico remains unexplored.
In 1990, the deep waters of
the Gulf of Mexico yielded about 20,000 barrels per day of crude oil.
By 2009, that number had grown to 1 million, according to CERA.
Nine
projects that are coming onstream will add at least 200,000 barrels per
day this year, said CERA researchers, who expect deepwater production
to account for 17 percent of U.S. liquids production this year, which
includes oil and natural gas.
Today there are at least 42 active
deepwater projects for exploration or production in the U.S. Gulf of
Mexico or international gulf waters, and at least another five projects
in the works. Seventeen of those are ultra-deepwater.
***
Outside
the Gulf Coast region, Brazil is the world's most promising
ultra-deepwater producer, with new discoveries in the past five years
in the so-called Santos basin that experts think will make the South
American giant a powerhouse in the oil business. Deep waters off the
African nations of Nigeria and Angola also hold promise.
Nigeria has next to no environmental controls. So the fact that deepwater drilling is being explored off the coast of Nigeria speaks volumes.
As the Post Carbon Institute notes:
With
Federal regulators approving a new Gulf of Mexico oil well and the
Canadian government continuing to support deepwater drilling off its
own coasts, it looks like business as usual for the oil industry ....***
Anyone wanting to understand the issue should turn to an 87-page Minerals Management Service document, Deepwater Gulf of Mexico 2009: Interim Report of 2008 Highlights [which] states:
In
February 1997, there were 17 producing deepwater projects, up from only
6 at the end of 1992. Since then, industry has been rapidly advancing
into deep water, and many of the anticipated fields have begun
production. At the end of 2008, there were 141 producing projects in
the deepwater Gulf of Mexico.If 141 producing
deepwater projects in that area seems larger than expected, note that
there are many more leases on oilfields in the area – 7,310 active
leases in 2008 - and that the trend is towards ever deeper water. The
document continues:Over the last 15 or so years,
leasing, drilling, and production moved steadily into deeper waters.
There are approximately 7,310 active leases in the U.S. GOM, 58 percent
of which are in deep water. (Note that lease statuses may change daily,
so the current number of active leases is an approximation.) Contrast
this to approximately 5,600 active GOM leases in 1992, only 27 percent
of which were in deep water. There was a maximum of 31 rigs drilling in
deep water in 2008, compared with only 3 rigs in 1992. Likewise,
deepwater oil production rose about 786 percent and deepwater gas
production increased about 1,067 percent from 1992 to 2007. Production
from seven deepwater fields began in 2008, including Thunder Horse, the
largest daily producer in the GOM.
So why is drilling happening in such deep waters off the coasts of the U.S., Canada, Brazil, Angola, Nigeria and other countries?
In two words: peak oil.
As the head geologist of one of the world's largest oil companies - the guy whose job it is to find new oil - told me a year ago:
Yes, it is true [that we have peak oil]. We are no longer on the ascending part of the curve.
In other words, the rate of petroleum production (and also the rate of
energy return for a given amount of investment) is no longer on the
rising, left-hand side of the bell-shaped curve:
And the world's leading oil experts say that peak oil is real.
Peak
oil doesn't mean that the oil flow will suddenly stop. What it does
mean is that more and more extreme methods will be used to find and
extract oil, such as deepwater drilling or crushing literally tons of sand to squeeze out some petroleum.
Energy and oil expert Byron King explains in a new interview:
[Interviewer]
We know about peak oil already. But… is it really THAT bad that we’re
having to search for oil buried beneath 12,000 feet of water? And after
the water, another 10,000 feet of dense rock? That’s a lot of risk to
take. Seems to be proof for the end of cheap oil theory, right?
[Byron
King] Exactly. The days of drilling a hole beneath the soil in Texas,
inserting a pipe and watching oil gush out are gone. We’re never going
back to those days.
It gets into what we’re dealing with here in
the search for deep sea oil… The energy industry has to go deeper and
deeper to make things work. Risking more and more capital – and
unfortunately, lives – along the way.
Look at what we’ve seen in
the last 20 years or so, since 1990, when the oil industry really
started to go deep. There was something like an “arms race” to develop
better and better deepwater technology, to go for the next levels down.
We’ve seen this race to deeper and deeper water. And it’s all because
the so called “cheap oil” is gone.
It used to be that drilling
at 1,000 feet water depth was the edge of technology! Youknow, back
then in the early 1990s it was 1,500 feet, then it was 2,500 feet, then
it was 5,000 feet…7,500, 10,000. Now they’re drilling at 12,000 feet of
water.
***
Offshore development is the future of oil. The oil
industry wouldn’t be taking these risks if cheap oil was still with us.
We’re just starting to scratch the surface of this deep-sea stuff. The
cheap stuff’s gone. Gotta go offshore…
The cheap stuff - and the less dangerous to get stuff - is gone.
Because
oil companies will go to more extreme measures and operate in more
dangerous conditions to extract oil, there will be more accidents. As
the Guardian reports:
One
industry insider, who asked not to be named, said: "Major spills are
likely to increase in the coming years as the industry strives to
extract oil from increasingly remote and difficult terrains. Future
supplies will be offshore, deeper and harder to work. When things go
wrong, it will be harder to respond."
And because it will
be so expensive to produce, companies will try to cut corners - just as
BP did with the Deepwater Horizon drilling operation.
Therefore,
there will be more catastrophic accidents, which are much harder to
clean up than a little oil gusher in the nostalgic oil fields of Texas.
Unless we switch to smarter forms of energy, the Gulf oil spill will end up simply being one of many catastrophes.
Note: While there are many promising prospects
for alternative energy, it is important to be honest. Many types of
alternative energy currently either use more energy than they produce,
require substantial amounts of fossil fuels or toxic chemicals to
produce, or only appear economical because of massive, hidden subsidies
(I'm all for subsidies, as long as they are out in the open). Of
course, oil is massively subsidized as well.
- advertisements -
GW,
I wanted you to see this...about the toxicity of the dispersants
http://blog.alexanderhiggins.com/2010/06/05/amount-neurotoxin-pesticide-...
Peak oil is gonna mess some stuff up.
look at the use of oil, the waste of what is. look to the defence
department for unfathomable waste, globalization in general, transporting
what could be made , grown, locally. look to debt basis of all operations
by design of the money system, a strict transfer of authority to the
"bankers". look to engineering as a pup for "leadership", the bankers /
owners. look to elimination of better judgement and safety / engineered
redundancy and human consideration as "economically", drop the socio part,
too costly in terms of
fiat dollars printed out of thin air and backed by nothing but the promise
to securitize and sell off to a greater (confused) fool to absorb the risk/loss/
collapse.
.
look to judgement, better judgement and caution, intelligence and
inspiration. look to integr ation/ity.
look to community of peoples, soul self, and soap boxes, symbols
and words from the source used to express the simple truth (narrative).
judgement, understanding principles and their relevance to any
particular consideration as it applies to competitive dynamics in a
exponentially debt based milieu, accelerating. oh no! ...............
someone said...
ps.
mr. w's blog. glad to see you have returned so soon. i think i
understand, have or had, the problem to a similiar degree?
a few ideas?
your blog , i can no longer leave comment per, say, last month?
something changed and do not know what? ?
there is no later or second chance when it comes to your childen.
this i know, love all around works.
peas.
ppss. cause. a very strong and important word. peak oil, perhaps
an effect and cause of many things. to say peak oil was the cause of
this "spill" is to say this spill was unavoidable or inevitable. perhaps
a learning curve necessity? i suspect i disagree as i think they cheaped
out, bowed to finance, and eliminated redundant safety features well
established in the intelligent sector of the industry. just a guess.
http://www.bing.com/videos/watch/video/gas-well-explosion-in-texas/6b8xf2w
.
http://www.bing.com/videos/watch/video/forecasting-the-gulf-economy/6vv87ct
Or we could just allow industrial hemp production. We'd basically have no energy crisis if this occured on a large scale.
http://fuelandfiber.com/Hemp4NRG/Hemp4NRGRV3.htm
Hence in part why Ron Paul sponsored legislation to legalize industrial hemp production here in the US.
http://www.govtrack.us/congress/bill.xpd?bill=h111-1866
Hemp is our only hope for scale. And even then it won't quite achieve the level of crude oil. We'll still have to make some changes but hemp would make things a whole lot easier than they're going to be without it.
The number of people believing into peak oil is vastly outnumbered by the peak oil deniers.
When Shell geologist Hubbert predicted the peaking of US oil production in 1970, he was laughed at by experts in the 1950's. Today, US crude oil production is less than half of the production in 1970 and very few people dare to deny that the US is past its peak of oil production.
In ten years, few people will deny that the world is past the peak of global oil production.
"Peak Oil" is just another buzzphrase, more bullshit, more propaganda, used to generate MONEY: money for "research", money for academia, money for charlatans of all stripes, money for hysteria--money, money, MONEY!
Who cares if oil exploration and extraction is more "difficult" today, so long as it's possible? Medical breakthroughs are also MUCH harder to come by these days, than 100 years ago. Does that mean we should just give up??
What a load of crap!
Do you know how to read a graph? If so, look at this one and tell me what you see:
http://www.theoildrum.com/uploads/44/cera_figure_1.jpg
Hubbert accurately predicted U.S. peak oil. He predicted global oil production would peak around 2001. But he could not have forseen three things that resulted in his prediction being off a few years: 1) Max. national speed limit set at 55mph; 2) The Arab oil embargo; 3) a national conservation movement lasting several years. All these factors contributed in pushing global peak for conventional crude oil to May, 2005, and "all liquids" in July, 2008.
Oil production has been flat for the past 6 years:
http://www.theoildrum.com/files/oilwatch_may2010_1.png
Now, I've offered some facts in favor of Peak Oil. Let's see your facts disputiing it and not the usual BS denialist unsupported tripe.
You really aren't any good at things like basic fucking MATH, are you?
Don't tell Denninger. He'll call you a Kunt (sler) too.
But Denninger thinks the answer to everything is to throw money at it. The key point is EROEI = Energy Returned On Energy Invested, the original oil wells gave back 100 times the energy invested but today the deep offshore wells are down to less than 10 times so we're getting less back, a receeding horizon. There would be no point in sucking oil out if it took more energy to do so.
Oil discoveries peaked back in the 60s and we're now using four times what we find each year. Of course we have to find it before we can extract it. Will we use this tragedy to cut back? Probably not intentionally but we will when we are outbid by China or India with three people on a scooter against a soccer mom in an SUV.
No...consumption growth pre-peak was outstripping discoveries growth by more than 8:1
When was the last new refinery built in the US? I saw articles from 2006 claiming that none had been built since 1976, but there seemed to be one built in SD which refined Canadian oil.
Iran plans to build new refineries.
Very interesting post and comments.
Peak oil is just another scam to sell seminars, books, speaking engagements, and do-it-yourself programs. The prognostications are Malthusian. Its an agenda. Don't get me wrong, I'm not against conservation, growing your own vegetables, being green. But not because of peak oil. Don't confuse peak oil with cheap oil; the former is a scam, the latter is real. Its just that there is no will in the US to do anything about this (production of oil from unconventional sources) until there finally will come a time in the future, as of yet unpredictable, when a crisis is upon us. Then it will be too late.
Did you take a fucking stupid pill this morning?
Go say that shit over on TOD. What you think of "cheap oil" IS peak oil
Zodiac, manufactured or otherwise, the crisis is upon us, no doubt.
Peak oil or valley oil, Deepwater Horizon has happened and from it and all it's ramifications, there will be no escape.
Oh regional Indian
http://www.businessinsider.com/matthew-simmons-on-oil-hurricane-2010-6-
Oil Guru: The Real Nightmare Will Be When A Hurricane Picks Up The Oil And Paints The Gulf Coast Black
I must agree with Silver Bullet on this one. Peak Oil and $200 a barrel are Malthusian BS generated to support the anti-fossil fuel global warming idiots. The majority of the US shallow water oil remains untapped. Massive areas of the US have been kept free from drilling and the US is sitting on an incredible store of gas and oil before we have to start processing the more expensive oil sands. Mexico and Canada also have massive fossil fuel supplies. All of that on our continent. And those old wells in Oklahoma and Texas? As long as oil remains above $18 or so, they are producing income for my family as they have for over 75 years. Will they run out someday? Probably, but no one can tell me when.
Diversification of our fuel supply to include more, readily available nuclear power supplemented by coal and solar power, once it becomes economically viable (For many users solar power takes between 20 and 30 years to pay off the initial investment... at which point you undoubtedly have to replace the original system.) The recent LA School District story shows this clearly, spending over $100M to save an estimated $5M a year... 20 years to pay off the initial investment if they don't have to pay interest on the debt (and I understand they are borrowing this money so there will be interest).
Spill? Might as well call the war in Afghanistan a pillow fight.
As to the pillow fight, we're almost there. The rules of engagement for SEALs and Marines and Rangers over there are more restrictive in many ways than those for police and SWAT teams operating against US citizens. The White House is slow cooking our military to no useful effect in a remote hellhole while the rest of NATO does laundry and typing back at base. FUBAR
Once people were only able to use oil that was naturally seeping from the earth in very small volumes. It was darned expensive and some even used it as a medicine. Those beliefs that consuming it would cure disease are very similar to to the Peak Oil beliefs.
When the Spindletop gusher was drilled everything changed on the tenth day of the new 1900's century in Beaumont, Texas. It flowed at an uncontained rate of more than 100,000 bbls a day. Is Beaumont a dead zone?
http://www.priweb.org/ed/pgws/history/spindletop/spindletop.html
The oil age began because people had learned how to utilize something that had been an unknown resource. People today have the opportunity to further expand that capability of utilization of the earth to find resources. That is why Peak Oil is BS.
I cannot even articulate how stupid this post of yours is.
But, I'll just concede; you polyannas have convinced me that exponential growth can run forever.
According to the 1911 Census of England & Wales, the three largest occupational groups then were domestic service, agriculture, and coal mining. By 2008, the three largest groups were sales personnel, middle managers, and teachers.
What we can first notice is one hundred years ago much of the work done in the economy was direct human labour. And much of that labour was associated directly with harnessing energy in the form of food or fossil fuels.
Today, the largest groups have little to do with production, but are more focused upon the management of complexity directly, or indirectly through providing the knowledge base required of people living in a world of more specialised and diverse occupational roles.
What evolved in the intervening hundred years was that human effort in direct energy production was replaced by fossil fuels. The contribution of fossil fuels to the economy can be expressed as being energetically equivalent to a huge slave supplement to our economy. The energy content of a barrel of oil is equivalent to twelve years of adult labour at forty hours a week. Even at $100 /bl, oil is remarkably cheap compared with human labour. As fossil fuel use increased, human labour in agriculture and energy extraction fell, as did the real price of food and fuel. These price falls freed up discretionary income, making people richer.
From the really excellent Tipping point .pdf research paper.
In a sane world you'd be correct. But in the world we live in, where millions of jobs and particklelerly the jobs of those in charge of oil companies, the masterminds of status quo, where they are plugged in to the political establishment, nay, created it, we could easily be at peak oil.
No doubt we have or will the ingenuity to develop a fuel delivery system that provides twice the mileage we now get from oil. The question is really will the progress needed be fast enough to thwart the best efforts of a corrupt political system?
I wanted to say that the only important stuff in the report was that Nigeria has no regulation on environment. I lessen the point, there might be other interesting stuff.
Part of the loath to Africa is that it is easy to fish examples. Makes a lot of people angry.
One main difference between Nigeria and the US is that a spill cannot go unpublicized in the US. Who cares about what happens off Nigeria coasts and the consequences of what happens? Nobody.
Palin and co are already shown wrong. The big issue in the US is not regulation causing the spill. There are spills off Nigeria and no regulation.
The big issue is that in the US, the story goes wildy public and people expect the firm to foot the bill.
Remove regulation, you wont remove spills. Same mess. What they have to work on is the report of the story and the fact it is considered a kind of national emergency. Bring the same level of indifference as the US has on Nigeria off coastal operations and the issue is solved.
The Nigerian "spills" primarily result from the locals drilling holes in the pipelines and stealing oil. The company knows nothing about it until the flames burn the closest 300 huts. Theieves really have no responsibility for the aftermath. But is a Nigerian thief's disregard for destruction and degredation much different from someone in the US who steals from a bank by not repaying their loans?
After a time, you get to know people.
Unsurprising.
Oil spills in Nigeria for the reason you mention are around one case out of four. Still leaves 3 cases out of four for other causes.
Does not read like primarily.
Save, of course, in case you have a bias. Which you have.
Yes, it's much different for two reasons:
1) a loan is a contractual matter
2) the bank never had the fucking money to lend in the first place
You have used flawed logic. The initial statements are simply nonsense. There is no Peak Oil. There are politicians who want to have Peak Power and creating an energy shortage allows them to allocate energy to their suporters.
Shale gas. Shale oil. Methane Hydrates. Coal.
Deep water GOM has been a testing zone to prove up theories that there can be oil and gas at greater depth, world wide, than previously estimated. The Peak Oil nutters cannot accept that.
Recall that the Gorebot won the Nobel Prize because he discovered that the earth's core temperature is MILLIONS of degrees. He used the money to buy a houseboat.
Do you know what EROEI is? Define it for us. Also, bring back the production profiles for, oh let's say 10 of the countries listed in this image:
http://www.ece.cornell.edu/images/PeakOil.jpg
Notice the source of this image.
Now run along and educate yourself.
EROI
EROEI is right!
Posted this before and will post again:
http://www.youtube.com/watch?v=wYuLjGQQ-jg
I don't agree with all of his premises (esp re the current recession/depression) but he has interesting stuff to say about the global economy and energy prices. But he has facts and figures together - as well as logic.
Anecdotally, I'm hearing that a few steel plants in Hamilton Ontario are starting up again.
Interesting.
Great illumination Geo. MK Washington. Energy has followed the trail blazed by finance in capturing government and instilling the belief that both are essential to the national security of the nation and any efforts to supervise the activities of these Too Essential To Fail organizations will wreck complete havoc and destroy not only the free world, but humanity itself. It appears the whole concept of balance has been lost. Indeed finance & energy are essential activities, but that does not warrant the complete subjugation of government in the pursuit of profit at any cost.
Sorry on this one GW. Peak Oil is a hoax created by the Anglo-Venetian faction of oligarchs. Malthusian hysteria is a permanent feature of oligarchy, and this hoax is just one of the latest manifestations of it. Lord Victor Rothschild had the quack hubbert come up with a way to make people pay more money for something that is as common as water.
It is not a fossil fuel, it is an abiotic compound produced deep inside the earth on a continuing basis. Campbell is a charlatan, and has been wrong for years and years. Check into J.F. Kenney at www.gasresources.net, and spread the word about the modern Russian-Ukrainian school of petroleum geology.
A quackademic called Jevons created a Peak Coal hoax (The Coal Question) in the 1860s on behalf of the British oligarchs, and back then they wanted special taxes and the limits to growth and development. Same as the global warming hoax today in terms of taxation and the destruction of development around the world. Oil and gas are very plentiful and very cheap. The only reason that there are problems with them is the oligarchy.
Bwahahahhaha! Everything you said is wrong! Where the hell do you get your information?
Jeesus fucking CHRIST.
Do *I* have to ghostwrite an above-fold article on this site to get you idiots to GET IT?
The AMOUNT of reserves DO NOT MATTER. ALL that matters is the RATE at which they can be extracted and the ENERGY RETURN ON INVESTED (EROI) ratio of the extraction.
NOTHING else matters. Oil can as far as I'm concerned be shit out of Hades' ass!
The rate of PRODUCTION by the hot biosphere is SIGNIFICANTLY below the rate of consumption by the cold biosphere, aka HUMANS on the surface.
Any moron who thinks Peak Oil is a hoax is actually maintaining that exponential growth can be sustained FOREVER.
Do you NOT KNOW that gold production peaked in 2000? Helium production peaked in 2002. In the US, I posted the peak production dates of a VARIETY of minerals and elements, along with oil, which peaked here in 1970. It peaked in the USSR in 1989. In Mexico in 2004. Indonesia peaked. JFC, look at the peak production dates on WIKI.
Production PEAKS; this is a fact and no amount of delusional wishing about gas on Titan can change that.
Good fucking lord, there is no such thing as "abiotic oil".
The first oil well in the USA, was in Pennsylvania...they struck oil at 69 feet, it was pumped dry, along with hundreds of thousands of other wells since then. For gods sake, use your fucking brain, okay.
Why in the hell are we drilling ultra-deep OFFSHORE wells if OIL is just percolating up from the interior of the earth?? I'll go ahead and answer that for ya, because there is none, noda, zip, zero, new oil deposit discoveries on dry land for the last decade, why??? because we pumped it all out of the god-damned ground.
No, no no...those wells are actually refilling.
INCREDIBLY SLOWLY, but refilling nonetheless.
Maybe if we wait 100M years, they'll fill back up. hahaha
TOTAL LOLZ at all the Peak deniers. You freakin idiots, peak already HAPPENED. 54/65 oil producing nations are in production decline, yet you can't get people to accept the REALITY that exponential growth cannot last forever.
Exactly, just have to look at individual production curves from the super giant fields (of which none have been found for 30 years) and you can see they clearly reach a peak and then decline.
I tend to agree.
A more proper term could be called "peak supply". ANWR being just one example.
The flow of oil is managed to ensure maximum profitability for big corporations and their government stooges.
An untopical hoax then.
Because peak oil is not about limited amounts of oil (oil will stay available long after peak oil) but about flow rate.
You could have unlimited amount of oil but still a limited flow rate.
That is what peak oil is: when you reach that point when opening whole the taps in the world no longer allow to increase the flow rate.
Not really matters as people prefer to believe in what favours them.
Notice that by the way the Russian story can be described as self serving. Russia's weight comes mostly from their use of their natural resources. A declining stock means their decline as a nation.
Silver thanks for the fascinating link. I had read about abiotic oil long ago.
To reiterate my earlier point though, the danger of peak oil is not about the supply side alone but a clash of the supply side along with the terribly wasteful way the demand has played out over the last century especially.
That is the wall we are going to hit.
Inefficiency meets inefficiency in some geometrically rising way.
Not good.
A BP exec joked last month about the problem being "not enough air" rather than not enough crude. Another hoax is highly probable if not outright expected.
Perhaps the reason they were drilling in deepwater is not because they "had to" but because they were just sailing with the winds to their backs. Leave the easy stuff closer to home so when the manure hits the fan the 'cheap to get' reserves are plentiful.
Good ole' fashioned Texas Two Step. Maybe even Teflon Rahm is in on it.
Talking of BP, its a pity that some folks with REAL jobs will be idled for years to come unless they pack up and move to some other areas of the US.
The Russians might be right ... but if we tap out the surface pools of oil generated by geologic processes, then it might be more expensive and riskier to drill down to the deeper pockets under the surface, no?
Great article, but I have to take issue with your comment that "oil is massively subsidized". The link refers to the research spending by the DOE. The amount of money spent by the DOE on oil research is negligable in comparison to the total capital spending of the oil industry. But industries like ethanol, solar, and wind depend heavily on subsidies for their existance. I have been involved in several DOE projects and I have to say the money is mostly wasted, as is most federal spending.
Don't forget, there is a significant amount of untapped shallow oil off the coast of Florida, but the Floridians have deemed that the tourist industry is more important than all other industries. The same goes for California. And Alaska has 13 untapped sedimentary basins. I'm sure most of them could produce significant quantities.
CEO of the Sofa
Writing from the Sultinate of Oman