Hubbert’s Peak for Global Oil Production: Over the Hill, or do Alps on Alps Arise?: Hubbert’s Peak for Global Oil Production: Over the Hill, or do Alps on Alps Arise? Rick Sibson Geology Department University of Otago


OIL - ECONOMIC LIFEBLOOD: OIL - ECONOMIC LIFEBLOOD ~40% of GLOBAL ENERGY SUPPLY HEATING & POWER GENERATION > 95% SHORT-HAUL TRANSPORT - cars, buses. >95% LONG-HAUL TRANSPORT - trucks, trains, ships, aeroplanes AGRICULTURE - diesel power, transport, pesticides, herbicides, fertilisers, feed - 10:1 Energy / Food-Energy PLASTICS, etc. one estimate is that without oil energy and products, Earth could support < 1/6th of its present population


WHAT MAKES OIL SO SPECIAL?: WHAT MAKES OIL SO SPECIAL? High energy density - oil > coal > wood Convenient, easy to transport - pipelines, ships, trains, etc. CHEAP - 45c per cup (cf. coffee) - cheaper than water (in plastic?) 22 BILLION ENERGY SLAVES


Conventional Oil: Conventional Oil >95% current production onshore ‘light’ oil shallow offshore ‘light’ oil (natural gas liquids - NGL)? (deepwater ‘light’ oil)? (polar oil)? <5% current production heavy oil tar-sands gas-to-liquids - GTL coal-to-liquids - CTL shale oil biomass-to-liquids Unconventional Oil WILL TODAY’S UNCONVENTIONAL OIL BE TOMORROW’S CONVENTIONAL OIL?


Supply vs. Demand: Supply vs. Demand Global Consumption ~85 million barrels per day USA - ~5% of global population consumes ~25% of oil Economic Growth (GDP)  Oil Consumption Global Oil consumption increases 2-3% per year Existing oil-fields deplete at >4% per year CHINA - INDIA !!! IEA predicts demand of 118 Gb/day by 2030


The Problem: The Problem We are burning ~5 barrels for every new barrel discovered 4.9 km ~4.9 km3 < 1 km3 4.9 km 1 km


THE BIG ASK: THE BIG ASK Global demand increases 2-3% per year (China, India!) Global oil reserves shrink by ~4-5% per year TO MEET ANTICIPATED WORLD ENERGY DEMAND IN 2015 REQUIRES US TO DISCOVER THE EQUIVALENT OF 1 NORTH SEA OIL PROVINCE PER YEAR OVER THE NEXT 10 YEARS - Exxon-Mobil - 2005 TO REPLACE ALL THE ENERGY PROVIDED BY THE ONE CUBIC MILE OF OIL WE BURN GLOBALLY PER YEAR REQUIRES THE COMMISSIONING OF ONE 1000 MW NUCLEAR POWER STATION PER WEEK FOR THE NEXT 50 YEARS - Hew Crane, Engelbart Symposium, Stanford


M.K. Hubbert1903-89: M.K. Hubbert 1903-89 • scale modelling laws • overthrust mechanics • mechanics of hydro- fracturing • hydrodynamics and oil migration • Resource Analysis • Shell Oil 1943-64 • USGS 1965-76 • Stanford 1963-68 • UC Berkeley 1973-76


Oilfields in a Sedimentary Basin: Oilfields in a Sedimentary Basin - the biggest fields are generally the easiest to find


Hubbert’s Peak: Hubbert’s Peak PRODUCTION TIME Production history for an individual oil well, an oil field, an entire oil province, a country, or the Earth? Midpoint USA - 1970 easy cheap difficult expensive M.K. Hubbert, 1956, etc.


Slide12: USA - Oil Production Hubbert’s 1956 prediction derided and ignored Hubbert Prediction 1956 2007


Slide13: Global Discovery and Production


Slide14: Non-OPEC Production


Slide15: 54/65 - significant oil-producing countries now past peak


What’s Left?: What’s Left?


Slide17: But How Much Is Left - Everybody Lies! - 300 Gb false reserves? Colin Campbell


Slide18: Are We There Yet?


Global Hubbert Peak: Global Hubbert Peak PRODUCTION TIME WHEN? easy cheap difficult expensive PESSIMISTS vs. OPTIMISTS PEAK 2005-2010 2030+? URR ~2000 Gb ~3000 Gb


Slide20: R.L. Hirsch - DOE/NETL-2007/1263 When? Simmons, Matt (Oil-Gas Investment Banker )…………………….……..About now


Slide21: When? R.L. Hirsch - DOE/NETL-2007/1263


Slide22: When? R.L. Hirsch - DOE/NETL-2007/1263


Slide23: ASPO 2006


Slide24: R.L. Hirsch - DOE/NETL-2007/1263 The End of Cheap/Easy Oil


DECLINING EFFICIENCYE.R.O.E.I - Energy Return on Energy Invested : DECLINING EFFICIENCY E.R.O.E.I - Energy Return on Energy Invested 1930’s heyday of oil discovery ~100:1 1970 - 25:1 1990’s - ~15:1 Today - Saudi Arabia ~10:1 Today - global exploration ~3:1 Tar Sands ~1.5:1


Slide26: Alberta Tar Sands E.R.O.E.I. = 1.5:1


Slide27: R.L. Hirsch - DOE/NETL-2007/1263 Recent Statements of Concern


Megaproject Analysis: Megaproject Analysis Oil Production FLOWS require: RESERVE FLOWS WELLHEAD + FIELD FLOWS REFINERY FLOWS DELIVERY FLOWS PERSONNEL FLOWS ALL require major infrastructure investment (5-10 year lead-times Peak Oil occurs when FLOWS can’t meet demand Oil Supply will peak in 2010-2011 at 92-94 Gb/day Chris Skrebowski 28/8/2006 (Editor, Petroleum Review)


POLITICAL FACTORS: POLITICAL FACTORS INCREASING RESOURCE NATIONALISATION Less prospective ground for BIG 6 to explore ‘Sluggish behemoths’ (The Economist) Bank or Spend? NET EXPORT MODEL Population and Economic Growth in Oil-producing countries Oil retained for economic development Less oil available for export Exacerbates decline after peak production


Beyond Peak Oil: Beyond Peak Oil Supply will not be able to meet demand Cost of energy will escalate hugely Energy becomes the basic currency?


NZ VULNERABILITY: NZ VULNERABILITY AGRICULTURE - strongly oil-dependent - 10:1 Energy / Food-energy EXPORTING - (meat, milk, timber, etc.) - escalating costs of long-haul transport TOURISM - long-haul transport costs GLOBALISATION - unsustainable?


NZ OPTIONS: NZ OPTIONS RELOCALISATION Plan B - ISLAND ECONOMY? - limited overseas trade for critical needs - metals? ANZEC - ANZ economic cooperation? Indigeneous Resources - coal, oil, gas - full exploration of shelf + enhanced oil-gas recovery (40 % is good!) Long-haul transport - coastal shipping and electrified rail Virtual Tourism?


Slide33: Changing Course Is Difficult, But It Can Be Done!


Slide34: • Increasing competition for what’s left • Transition back to COAL • Accelerated global warming • Recession • Powerdown WAR SICKNESS FAMINE DIE-OFF PROSPECTS GOOD LUCK!