Peak Oil:
Sooner? or Later?
Dennis Silverman
Physics and Astronomy
U C Irvine
www.physics.uci.edu/~silverma/
Laguna Beach Energy Workgroup
Sept. 22, 2007
World and US Oil Use
• The World uses 85 million barrels (mbl) of
oil a day.
• This is about 31 billion barrels of oil a year
worldwide.
• The US uses a quarter of this, or 21 mbl
per day.
• A barrel yields 42 gallons, about half of
which is gasoline, and which we use in our
cars.
Uses of a Barrel of Crude Oil
Petroleum Fuel Future
• US oil production peaked around 1970.
• World population growth is expected at 1% a
year.
• US energy consumption is increasing at 1.5% a
year.
• The US imports 60% of its oil.
• Proven world oil reserves are about 2,000 billion
barrels with 1,100 bbl of this already used.
• Unproven reserves plus better recovery may
boost this to 3,000 billion barrels.
Used (blue), Proved (red), Undiscovered (yellow),
Improved Recovery (purple)
3,000 bbl available / 2,000 bbl available
USGS Recoverable Oil (higher)
Industry Proven Reserves (lower)
• USGS:
– Total 2,300 BBls
– Middle East 40%
– N. America
includes tar
sands
• Industry:
– Total 1,020 BBls
– Middle East 66%
• Data for year
2000.
Pessimistic Oil Growth and Decline
if only 2,000 Bbl available (1,000 Bbl left in
reserves). OPEC dominance from 2008.
ASPO Projection: 2008 Peak
Oil Discoveries Declining (ASPO)
Optimistic 3,000 BBls of oil total resources, 2,000 Bbl left
(from USGS). Peaking unlikely as refineries only built for
long term production (20 years).
DOE / EIA: OPEC increases to 2030
Arguments for Peak Oil Soon or
The End of Cheap Oil
• Some oil geologists, Campbell and the
Association for the Study of Peak Oil and
Gas (ASPO)
• Major fields have all been discovered
• Non middle east fields are in decline
• Rate of discovery low
• Saudi fields cannot expand to close gap
(Matthew Simmons)
Projections for Peak Oil Later: USGS, Saudi
Aramco, Cambridge Energy Research
Associates
• Economists: If you can pay more, you can have more.
• Oil now at $80/barrel, not $20.
• Can pump fields up to 50-60% of resources with more
water and modern technology
• Saudi Arabia and middle east may have more fields,
haven’t yet explored them
• Saudis claim 50 years for oil fields, (but not that they can
increase production to make up for worldwide decline)
• Can afford alternatives as tar sands, oil shale, heavy oil,
synfuel from coal, biofuels, deep ocean fields.
CERA
Super Optimistic Oil Plus Oil Shale
2 Trillion barrels, 3 trillion barrels, and oil shale
Oil Production Scenarios 2007. Note Plateaus.
Earliest Peak: 2010 Colin Campbell ASPO.
Latest Plateau: 2065 Saudi, Daniel Yergin CERA
World Proven Oil Reserves by Region (2003):
Total 1,150 BBls, 31 BBls yearly usage.
Strait of Hormuz. 17 mbls per day out of world
total of 85 mbls per day (20%). US has two
months of imported oil stored in the Strategic
Petroleum Reserve.
• Iran on right
• Iraq, Kuwait,
Saudi Arabia,
UAE, Qatar on
left
• Two 2 mile wide
ship channels
Problems in Estimating Oil Reserves
• The simple fact is that everyone involved in the industry
is motivated to be super optimistic.
• Also, availability depends on the cost of oil which
recently has risen from $20 to $70 per barrel. It will
probably stay there since motorists haven’t cut
consumption at that price.
• When you get to the older oil fields, you can now pay
more for water and steam extraction, and tar sands
becomes a source, but it must be hard to estimate
production under such future methods.
• Congress has held hearings on this, but the basic
estimation problems will remain.
• New sources: deep sea drilling, melting arctic ice cap
allowing drilling, drilling near national parks and forests,
near shore leases in gulf proposed, outer continental
shelf drilling, and synfuel from coal.
Motivations for Oil Entities to Make
Optimistic Estimates
• OPEC countries can pump proportionately to their reserves, so
these may be overestimated. Many of them doubled their estimate
of reserves recently.
• Many countries have nationalized their oil, and estimates from them
are politically suspect. 65% of oil now in nationalized oil companies,
not available to others to develop.
• Such countries often don’t have the capital to exploit their fields in
the best manner.
• Oil company stocks depend on the value of their reserves.
• Oil shale costs of manpower and heating shale with natural gas for
extraction are underestimated.
• The oil companies also have a vested interested in seeding doubts
about global warming, which might limit their ultimate production of
$80 trillion in oil reserves.
• The super optimistic estimators raise money from subscriptions from
the oil industry.
Geopolitical Maxims
• Most oil producing states and regions are in
conflicts because factions or states are fighting
over the vast profits from oil.
• These battles and the nationalization of oil
usually lower the productivity of the oil fields in
question.
• They also lead to “failed states” of dictatorships
with a lack of human rights.
• Unless we act to significantly lower oil use, this
will continue, along with our continuing
involvement in the Middle East.
Pseudo Peak Oil
(All the Economy Will Bear)
• One way we would have known that we had hit
peak oil with increasing demand, is that the price
would go up.
• However, due the intransigent (inelastic)
demand of motorists, OPEC has managed to
increase the price of oil from $20 to $70 a barrel.
This would have happened anyway since there
is little spare capacity.
• This has at least held demand steady in the US,
although gas guzzler sales are on the rise again.
• So we have the effects of an oil peak, without
there being a peak, and should adapt
accordingly.
Cost of the Oil to Us
• Consider the lower reserve case at 1,000 Bbls (a
trillion barrels).
• At $80 / barrel, the reserve is worth $80 trillion.
• Assume the US still keeps using a quarter of the
oil, and the imports are at least 60% of this.
• Then the US will buy $12 trillion in imported oil.
• With 300 million citizens, this amounts to at least
$40,000 per capita that will go abroad
regardless of when the peak or plateau occurs.
Foreign Oil Sources for the US in percentages of
imports. Most imports come from Canada, Saudi
Arabia, Mexico, Venezuela, and Nigeria. The US
imports 60% of its oil.
Where do our oil import expenditures go?
Prince Bandar was the Ambassador to the US from Saudi Arabia. This
is his estate in Aspen, CO. It is now on the market for $135,000,000,
the most expensive home in the world. His 56,000 square foot
residence is larger than the White House.
Middle East Oil Fields. Dubai Tower is
now the tallest building in the world.
Peak Oil Ranges for three rates of growth.
The darker shading is the more likely area.
CERA Super Optimistic Plus Adds Oil Shale,
Extra Heavy to 4,800 BBls Oil, Including 800
from Further Exploration
US Crude Oil Pipelines. California isolated
from other states, leads to higher prices.
Future of Fossil Fuels
•
•
•
•
•
Petroleum
Natural Gas
Coal
Oil Shale and Tar Sands
CO2 Emissions
U.S. 20 Year Projections of Energy Use
in Quadrillions of BTUs (Quads)
US and World Natural Gas
• US demand growth is 3% per year.
• A shortage now exists in the US and plans for
Liquid Natural Gas (LNG) terminals for imports
exist around the country (Ventura, Long Beach,
Baja California)
• LNG could grow from 1% now to 20% by 2020.
• The graphs are for the time the supply will last.
• The units are in Quads (Quadrillion BTUs)
• The whole US energy consumption in all forms
is 100 Quads per year.
• Current US Proven is
12 years at current
production
USA Natural Gas Production Forecast.
Falloff starts in 2015
World Oil and
Natural Gas
Reserves
• Total reserves,
with natural gas reserves
in equivalent
billion barrels of
Oil (bbl).
• World oil consumption
is 30 bbl/year.
• Left out Canadian tar
sands at 179 bbl oil.
• US has 22 bbl oil, and
produces 2.0 bbl/year
and would last only 11
years.
Coal Strip Mining. Truck holds 350 tons of
coal. Enough carbon per capita for a US
resident for 60 years.
US Coal Supply
• The total US coal reserve is 5700 Quads.
• The current rate of use is about 20 Quads per year.
• Population growth will reduce its longevity from 250
years with no growth
• Conversion to motor fuel (synfuel) uses 2 Quads of coal
to generate 1 Quad of fuel plus the additional CO2
emission.
• Conversion to hydrogen fuel uses even more.
• The following graph of US coal lifetime assumes 54% of
underground coal is recoverable.
• Estimates are for various growth rates of use.
US Coal Lifetime. Only 100 years if 1.5%
growth or if partially converted to gasoline.
World Coal Reserves
Dilute Fossil Residues
• Oil shale or tar sands has dilute amounts of heavy oil or
near-solid carbonaceous residues.
– Surface is mined at 2 tons per barrel of oil.
– Deeper deposits are steam diluted and further processed to yield
fuel, using energy, and costing CO2 production.
– Cost is range of $20-$40/barrel before shipping.
• It also contains nitrogen and heavy metal compounds.
• The US has little. Worldwide estimates are large but
speculative. 180 billion barrels worth in Canada.
• Source for several of the previous graphs is on the web
in Physics Today, July 2004, by Paul B. Weisz.
Fossil Fuel Future Summary
• Oil, Natural Gas, Shale Oil, and Coal produce CO2.
– Carbon sequestration requires an extra 30% of power and needs
research. FutureGen $1 billion research plant.
• Oil is needed for transportation fuel
– Too expensive for electricity generation
– Reserves: About 50 years with growth in use
– 2/3 is in the Middle East
• Coal may be converted to liquid fuel for transportation
– 250 years at current rate, 100 years with conversion
• Total world reserve of oil is a large question, uses politically
motivated estimates of individual countries
• Current rate of use of fossil fuels will increase world wide
• U S proposed climate technology program
Comparative Recent World CO2 Emissions
2000 and 2025 World Greenhouse Gas
Emissions
Short Term Optimum
• The best way to hold down CO2 increases is to remove
fossil fuels from electricity generation, but use it just for
vehicles.
• Since ½ of US electricity comes from coal which
generates twice as much CO2 per energy unit as does
natural gas, we should switch to natural gas. This,
however, involves massive and possibly costly imports.
• We need increases in alternate energy sources such as
hydro, nuclear, wind and solar.
• We also need increases in energy efficiency and
conservation.
• This especially includes high mileage vehicles.
Transport gives 41% of California
greenhouse gases as an end-use sector
Comparative Projected Vehicle Fuel
Economies
Carbon in Fuels: Billions of tons of C
What can California Do?
• California is the world’s fifth largest economy, and has
led the way on reducing vehicle pollution before.
• State law and executive order for utilities to increase
renewable electricity to 20% by 2020.
• Use combined heat and electricity systems in large
plants.
• Clean up older, high polluting plants.
• Mass transit and growth planning.
• Removing firewood in forests and increasing them as a
carbon storage component.
• See Union of Concerned Scientists:
www.climatechange.org
• Unfortunately, they leave out a nuclear plant option.
Paris: Energy efficient small car
and convenient parking
Fossil Fuel Energy Units
• The Quad is 1015 Btu (British Thermal Units)
• Total U.S. energy use is nearly 100 Quad per
year.
• A barrel of oil (bbl) is 5.8 million Btu.
• So 100 Quads is equivalent to
100 x 1015 / 5.8 x 106 = 17 x 109 bbl
or 17 billion barrels of oil.
• A barrel of oil is 42 gallons.
The Long-term Challenge
Carbon emissions and stabilization scenarios
The Global Carbon Cycle - 1990s
Units Gt C and Gt C y-1
Atmosphere
…are leading to a
build up of CO2
in the atmosphere.
3.2
750
63
500 Plants
6
0
Soil
2000
6.3
About
16,000
1.6
Fossil emissions ...
91.7
9
0
…and land clearing
in the tropics...
The KP seeks to reduce net
carbon emissions by about
0.3 Gt C below 1990 levels
from industrial countries
Fossil Deposits
Oceans
39,000
Minimum Summer Arctic Ice
2007 versus 2005
Summer ice may be all gone by as early as 2030