Peak Oil Predictions – Only 50 Years Left!?

Welcome to part 2… As you will recall, part 1 was a resurrected blog post from 2010.  Back in 2010, it looked like there was only 50 years of oil left for the entire world to use.  That was before the recent “boom” in U.S. oil production from the fracking of oil-containing shale rock.  How has this boom changed peak oil predictions?  Keep on reading to find out.

Some important questions we came up with last time…

  • What the heck is “fracking” anyhow?
  • What does the increase in U.S. production mean for the future of oil?
  • How does Saudi Arabia and the current drop in oil prices play into this?
  • What happens if we burn all that oil?
  • What can I do to be ready for when the oil runs out?
What is Fracking?

Let me dust off my geology degree and see if I can explain this sucker.

Fracking is the technology of drilling horizontal wells, then pumping in hot toxic fluids under pressure to make the rock give up its “tight” oil.  Tight oil is oil that is trapped inside an impermeable rock; “impermeable” meaning that nothing will flow through it.

To get the oil out, holes are punched into the impermeable rock all along the bore hole, then a mix of hot fluids and sand are pumped in under great pressure, which causes the rock to fracture.  The sand grains in the fluid hold the tiny fractures open creating a way for the oil to escape, while the hot fluid makes it easier to pump out the oil.

Here’s a nice little video animation from Marathon Oil.  Note the carefully chosen words in this industry-produced piece.

There are many environmental concerns about fracking.  Fracking may contaminate drinking water and, of course, causes the release of the greenhouse gasses methane and carbon dioxide.

A properly constructed oil well probably poses little risk to aquifers that hold drinkable water in the ground; however, in the mad rush to drill for new oil I’m sure many of these wells are not optimally constructed.   The uncertainties about fracking led Governor Cuomo to ban fracking in New York state.

What does the increase in U.S. production mean for the future?

The big wild card is just how long will these fracked wells keep producing oil?  Estimates vary wildly from 10 to 40 years.  However, it’s almost certain that these wells will go dry sooner than normal oil wells made in permeable and porous sandstone (permeable means that oil can flow through it, while porous means there are lots of tiny gaps in the rock that can hold the oil.)  And let’s not forgot, even though U.S. production has increased, we still import about a third of the oil we use.

“…the words “energy independence” are more of a political catchphrase than reality.”

In the past few years, the increase in fracking has allowed U.S. oil production to increase from 8.85 to 12.36 million barrels per day.  While U.S. proven reserves (everything still in the ground) have gone up from 19.2 to 30.5 billion barrels of oil. As the table below shows, this is a drop in the bucket when you look at the big picture.

peak oil predictions

(Click here for the U. S. Energy Information Administration data  used in the table above)

Several VERY interesting things stand out from this table.  The data for the year 2010 is from the start of the fracking boom, while the 2013 data reflects fracking in full swing.  Based on current consumption rates, AND even with the increase in new oil reserves — we have only gained 0.83 years of additional oil production from the fracking “boom”(6.78 minus 5.94 years).

ALSO, even though the oil production boom has allowed us to cut imports, we still import about a third of the oil that we use.  This means that the words “energy independence” are more of a political catchphrase than reality.  Of course, this info doesn’t cover energy from natural gas and coal.  Natural gas is also produced by fracking and is undergoing a big upswing in production as well.

This table blows my mind when I think about it.  To hear political pundits and industry folks talk, you’d think we have enough oil to be the new Saudi Arabia.  While it’s true that we have surpassed the Saudis in daily oil production, we only have about a 1/10 of their proven reserves.

The Saudis have enough oil to keep pumping for another 63 years, while we will only be pumping for another 6 or 7.  Of course, there are lots of variables in play, but one thing is for sure… we will not, nor will we ever, approach Saudi Arabia for sheer volume of oil under our feet.

So What are the Saudis Up To?

Getting oil out of a tight rock is more expensive than getting it out of the usual porous sandstone.  Due to advances in the technology of fracking over the past few decades, AND the high price of oil, getting that tight oil has been profitable.

However, as of today the market price of a barrel of crude oil had dropped to $47 a barrel.  The cost of producing of a barrel of “tight” oil (using 2013 data) is about $30 to $68 per barrel, averaging about $50 per barrel, depending on how “tight” the rock is.  So some operations are breaking even, while many are losing money.

The main reason for the current low oil prices is that the Saudis have refused to cut production, even though the world’s oil supply exceeds consumption.  This creates a glut of oil, and drives the price down.  One theory states that they are doing it to slow the development of fracked oil production.

The Saudis are okay with loosing money for now, so long as they can maintain control of world oil prices in the long run.  The Saudis are trying to turn the tight, fracked oil into a “stranded asset,” as the economists like to say, meaning it costs more to take it out of the ground than you can sell it for.  Pretty soon though, all oil will be a stranded asset, as the cost of burning all the oil becomes clear.

What happens if we burn all the oil until it’s gone?

What would be the effect of burning all the remaining oil?  Pretty horrific.  Soaring ozone levels would cause all sorts of health problems, as we discussed before, and all the bad health effects associated with a warming planet would run rampant.

But for now, lets just talk about the big picture.

A few years ago, the U.S. Department of Energy’s Lawrence Livermore National Laboratory (LLNL) ran a model on one of their fancy supercomputers to see what would happen if we burned all the oil and coal left in the ground.  (Just so you know, climate models have proven to be accurate, and usually under-predict effects —  contrary to the rants you may hear from deniers.)  The LLNL modeling showed that, by 2300 A.D…

“If humans continue to use fossil fuels in a business-as-usual manner for the next few centuries, the polar ice caps will melt, ocean sea levels will rise by seven meters (23 feet) and average air temperatures will soar to 14.5 degrees (F) warmer than current day.”

That’s pretty striking.  If we burn all the oil, most U.S. coastal cities will be underwater, ~80% of the world’s population will be forced to move inland, and a whole bunch of other not so pleasant effects will occur.  Of course, some of you may think that 2300 is a long way off, but these effects have already begun; and more worrisome — if geologic history is any guide — big changes usually happen in leaps and bounds, not in gentle steps.

So how much can we safely burn?  According to the calculations of British investigative journalist and environmentalist George Monbiot, we can only burn about 30 to 60% of the world’s reserves of fossil fuels if we want to keep the temperature from rising more than 2 degrees centigrade, the supposed temperature limit that we can safely cope with.

So what can I do??

There may be decades of oil left in the ground, but it’s becoming harder and harder (more expensive) to get out, it won’t last, and if we burn it all we will be royally screwed.  So what should we do in light of all this?

I have a few suggestions, which is why this site is The Climate Advisor, and not The Climate Reporter!

  • Enjoy it while it lasts, cause it won’t.  When the Saudis figure that they’ve caused enough pain to their competitors (or themselves) they’ll cut back production, ending the glut, causing oil prices to go back up.
  • I’m saving about $10 per week in lower gas costs.  I used to have a Toyota 4-Runner, and if I still had it I’d be saving about $40 per week!  I might use my gas savings to…
    • insulate my house, further lowering my energy use and saving me even more money
    • buy a bike and helmet, and bike to work and the grocery store, thereby saving money, AND getting more fit
    • pay off a bit more of my debt
    • save it for a rainy day
  • Divest from fossil fuel investments
    • ask organizations I belong to (school, alumni organization, unions, pension funds, etc) to divest from fossil fuels
    • support conversion to alternative energy
    • be politically active

If you have any other great ideas please share below.

We will delve deeper into these issues and more in the weeks and months ahead.  So please keep coming back and consider subscribing to this site via the box to the right-side of the page.  I will post a major article about every week.  Thank you and Happy New Year!