Welcome to the age of diminishing returns

Sunday, August 25, 2013

Who said that peak oil models were wrong?


An impressive graphic (click to enlarge) from a recent presentation by Jean Laherrere. The text is partly in French, but it is easy to understand the main results of the study. In the figure above, we see how well the world's oil production has followed the models over nine years. On this point, Laherrere says "There is little difference between the forecasts of 2004 and those of 2013. The difference is smaller than the precision of the measurements" A remarkable result that vindicates the soundness of the "peak oil" theory. 

The main difference between today and nine years ago is the appearance in the picture of the "non conventional" resources. With these new resources, we may be able to stretch the availability of liquid fuels for some more years, as long as we'll be able to pay their high costs. But we keep following the expected path and the news about the death of peak oil truly seem to be a bit exaggerated.



11 comments:

  1. >some more years

    How many? "In the long term, we are all dead"

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  2. If the graphs above are correct (and it is very likely that they are)....world production in 2040 will have fallen back to about what it was in 1970. Namely a roughly 40% fall from today's peak. And that 40% drop between now and 2040 looks nearly linear. Which would mean that over the next 27 years to 2040, there would be a drop in overall production (exploitation) of about 40 / 27 = 1.5 % per year. Given that demand will continue to increase by at least that much per year....that makes for a pretty serious shortfall ....and probably starting very soon. (at least this is how I read the graphs and conclude from them, but of course I may have made some mistake) So maybe "economic growth forever" will finally prove undoable and a new and better economic paradigm that fits the finite nature of the planet and limits to growth will finally have to be considered seriously? (but of course there will be plenty of pain before it is ever conceptualized and implemented)


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    1. I think demand cannot increase after supply starts to decrease. The impact of supply decrease will make demand decrease as well in absolute terms, as industrial activity deteriorates and consumers can afford less and less the expense. In relative terms I suppose it will increase. I mean the difference between supply and demand will increase, and will only start to decrease after societal and demographic collapse.

      Artur Sixto (Barcelona, Catalonia)

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  3. Not only about the peak oil, but may I suggest you this reading ?

    http://m.theatlantic.com/international/archive/2013/08/how-resource-shortages-sparked-egypts-months-long-crisis/278802/?utm_content=buffer59280&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

    Good example in the real world of the mechanisms underscore in "Limits to the growth". Egypt is facing a depletion of its ressources, and the consequences of pollution, so the contry is collapsing. Probably a window to our future.

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    1. Hello Anonymous, and thank you very much for the link you provided above to the excellent recent article by Nafeez Mossadeq Ahmed whose articles are in fact nearly always excellent. I think you are right that it is a good "real world" example of some of the mechanisms and dynamics involved in limits to growth.

      I thought that two key points (though there are several others) in the article were these:

      i) "Underlying growing instability is the Egyptian state's increasing inability to contain the devastating social impacts of interconnected energy, water and food crises over the last few decades. Those crises, already afflicting other regional states like Yemen and Syria, will unravel prevailing political orders with devastating consequences-unless urgent structural transformation to address those crises becomes a priority" ... and..

      ii) According to Jean Laherrère, a petroleum geologist formerly with the French major Total S.A., two-thirds of Egypt's oil reserves have likely been depleted, and annual decline rates are already at around 3.4 percent.

      I found the entire article very useful and - like you- I too can (strongly) suggest reading it to others.



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    2. The Egyptian case study about resource depletion was already identified by Chris Marteson in 2011:

      http://www.peakprosperity.com/blog/egypts-warning-are-you-listening/52575

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    3. building a wall around the pyramids kinda makes sense now...can't have the tetrahedron cult's prize possession defaced during the kill off eh?

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  4. I suspect that we will have to rethink our expectations and way of life. I am betting we will have to rework the landscape so that quality of life, local farming and energy conservation get put on the front burner, while putting corporate profits, economic growth, all debts being paid, big box retail, and driving everywhere on the back burner.

    With the right changes, we could reduce our oil and gas consumption 30% to 50% with minimal impact to the quality of life we enjoy. Just eliminating the 9AM and 5PM rush our commute, a shift away from trucking for freight (use train and boat as the norm), the willingness of companies to assemble goods locally (as opposed to shipping to countries with third world labor costs), and growing food locally would make a huge dent. Over time we will have to relocalize our economies more, walk places, etc. The transition will also require a heavy investment in alternative energy technology, especially technologies that are scaleable and give high enough EROEI (such as Wind, Solar, Ocean Wave Motion, Algae Biofuel, Liquid Ammonia Fuel, Thorium Nuclear, Small scale Hydroelectric, Geothermal, etc).

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  5. The key to the good fit is that he concentrated on the conventional crude oil component only.

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  6. We should have the EROEI of unconventional sources , to understand possible trends.

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  7. The elephant in the room is the global population of 6.5-7 billion. Even if every one of us suddently went sterile, the declines in food production would be more aggressive than "natural attrition".

    Steven in Dallas

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