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Pedal Power solutions to petroleum dependence and polluting vehicles: Arcata Library Bikes, Pedal Power Produce, and more!

CAOE - Committee Against Oil Exploration - stop offshore oil drilling to protect sensitive habitats and cut petroleum dependence.

Culture Change through music! The Depavers eco-rock!

Take our Pledge for Climate Protection and learn about the Global Warming Crisis Council.

SEI hometown action!
Arcata city council's proclamation against war on Iraq and Kyoto Protocol proclamation.

Overpopulation has become a reality.  Overpopulation Resources and News Tidbits

Sail Transport Network

Fact Sheets
Press Releases

Long Distance

The fall of petroleum civilization 
will take place primarily in the U.S. as it is most dependent on limited resources.  
Helpful in understanding trends is an honest assessment of alternative energy, in terms of potential for a given population size and number of decades usage.  
Additionally, U.S. foreign policy can be glimpsed more and more clearly in its drive to maintain its oil-fueled, corporate-based empire.

New: Dow Jones Newswires' energy service has produced a series on peak oil and shortage.  Read a survey of experts on the subject, including comments by Jan Lundberg of Culture Change.  This story, part one of a series, marks the first "oil press" airing of the impact of oil production peaking globally. - ed.

OIL OVER A BARREL: Good-Bye To Cheap Oil From 2010?
by Stella Farrington 

The following article was first published by Dow Jones Newswires on Monday 8 March 2004.

History is replete with dire warnings that the world is running out of oil. 

While there's no prospect of that happening, the era of cheap oil may be over sooner than many expect. There's compelling evidence suggesting global production will peak soon after 2010.

At that point prices will rise as the oil industry struggles to meet rising demand and as extraction of the remaining barrels becomes more difficult and costly. 

Oil prices wouldn't need to rise much above current levels to put a heavy brake on global growth. Oil is still at the heart of the modern world, fueling 90% of its transport while being used in the manufacture of around half a million goods. As for agriculture, the huge improvement in farm yields over the last century was greatly due to oil. 

The end of cheap oil is an unpalatable prospect and not one that short-termist governments or oil companies are normally ready to admit. But those attitudes might be slowly changing. 

"Oil companies are now raising their doubts," said Pierre-Rene Bauquis, a former head of strategy and planning at Total (TOT). "They voice it softly, but clearly they are starting to feel if they don't raise any doubts, the public will be hostile to them." 

Indeed it was Royal Dutch/Shell Group (RD) who unwittingly highlighted concerns over oil reserves earlier this year when it slashed its reserve estimates. 

At an industry event in London last month, John Williams, exploration manager for ConocoPhillips (COP), said of conventional oil: "There is strong evidence to suggest that we are finding less, consuming more and there is an end in sight." 

Despite some high-profile errors, many past forecasts for oil production actually resonate with those of today that predict peak supply in the early part of this century, said Roger Bentley, Senior Research Fellow at the University of Reading in the U.K. 

He's studied forecasts made since 1972 and says they "constitute a 30-year series of warnings of oil supply difficulties it would be wise to heed." 

One of the loudest more recent warnings comes from Colin Campbell, former oilman and chairman of the Association for the Study of Peak Oil. He has produced a detailed study which forecasts that, because of the 40-year falling trend in oil discoveries, the natural decline from established fields won't be offset by new production by around 2010. 

This would mark a supply peak followed by a decline in oil production that new technology or discoveries will be unlikely to reverse, he says. 

Since large-scale oil production began in the late 19th century, the world has used just over a trillion barrels of oil. Around 1.7 trillion recoverable barrels of conventional and non-conventional oil remain, according to Campbell and other sources. 

It may look reassuring that there's more recoverable oil in the ground than has been used over the past century. But, at a consumption rate of 30 billion bbl a year, the world is fast approaching the halfway point, and that's what's crucial because that's what will put the brake on production levels. 

An oilfield reaches maximum capacity at roughly the point when it's half depleted, and then daily production falls as pressures drop. In rough terms, when global oil reaches the halfway point, maximum global capacity will be reached. 

"The problem is not with the tank but with the tap," said Jean Laherrere a retired geophysicist and geologist who spent 37 years with Total. 

As demand continues to rise, the resulting shortages will be permanent and not the result of deliberate supply constraint as with previous oil crises. 

Campbell's estimate of peak oil at 2010 is pessimistic by most people's reckoning, but even if the peak is closer to 2020 as some ASPO members think, that's still cause for alarm, they say. 

Campbell's study changed the way some industry specialists look at the business but many question his numbers and brand him alarmist. 

Other oil industry veterans believe there will always be supply cycles. "In the history of the oil industry, there've been many cycles of expecting shortages followed by surpluses," said Daniel Yergin, Chairman of Cambridge Energy Research Associates, and author of 'The Prize: The Epic Quest for Oil, Money and Power.' 

He said people often underestimate the potential of technology to increase both discoveries and recovery and added: "Often the more important constraints are not geological but have to do with political decision-making and the timing of investments." 

Questions Raised Over Non-Conventional Oil Projects 

This is why investments in non-conventional oil projects such as Canadian oil sands, gas-to-liquids and Venezuelan heavy oil are closely watched. The International Energy Agency forecasts that, by 2030, conventional oil production will have peaked at just over 100 million barrels a day and that, with demand at 120 million b/d, the gap will be filled by non-conventional oils and, later, by coal. 

Non-conventional resources are enormous but few are economically recoverable with current technology. Production is negligible, around 1 million barrels a day, and it's difficult to see how this can grow to 20 million b/d in the next two decades, say depletion experts. 

Last week, Canadian Oil Sands Trust. (COS.UN.T) announced that the expansion to the Syncrude project in northern Alberta, the world's largest oil sands project, will cost more than double its original estimate and won't start until mid-2006 instead of late 2005. Credit Suisse First Boston said: "The Syncrude announcement raises questions for future oil sands projects." 

Economists argue that price increases will inevitably lead to extraction from previously uneconomic fields, effectively turning today's non-conventional expensive oils into tomorrow's conventional oil. 

Geologists say this has only limited potential. There's no point in recovering a barrel of crude if it uses more energy to extract than the barrel itself will produce. 

Moreover, they say it is unlikely that any new oilfield discovered now would be able to reverse the post-2010 decline in output. 

Discovery rates peaked in the 1960s when they averaged around 80 billion barrels a year. Now the find rate is 7 billion-8 billion barrels a year and tends to be more expensive to produce. 

"We've discovered all the easy stuff; everything from here on in is going to get harder," said Matthew Simmons, CEO and chairman of investment bank Simmons & Co, and a former adviser to President George W. Bush on U.S. energy policy. 

Production has always depended on a few ultra-large fields such as Saudi Arabia's Ghawar, the largest field in the world estimated at around 115 billion barrels. 

Between 2000 and 2003, there have been just two discoveries of fields with reserves above one billion barrels, according to Geneva-based energy research company IHS Energy. 

"No one can absolutely discount that a few large fields remain to be found, or that we'll find a way to produce heavy oil faster," said Campbell, "but politicians have no right to assume miracles and should plan on what is known." 

What is known is that for every barrel of oil discovered today, almost four barrels are consumed and, in most countries, peak oil production isn't a thing of the future - it's already happened. 

Sixty out of 100 potential or actual oil-producing countries are now past peak output, said Michael R. Smith, technical director of EnergyFiles Ltd. 

However, getting governments to take notice is tough. "Governments, just like the corporate bottom line, are short term-oriented," said Jan Lundberg, head of Culture Change, part of the U.S. Sustainable Energy Institute. "They don't want to alarm people and, as with corporations, there is a vested interest in maintaining the status quo." 

That's echoed by Jim Meyer, director of the London-based independent charity the Oil Depletion Analysis Center. "Whether oil supply is going to fall off this decade or next isn't the key point," he says. "Even if the 'pessimistic' predictions are a few years off, we need to face the issue now."

Reprinted by permission of Dow Jones Newswires, (c) 2004, Dow Jones & Company, Inc. all rights reserved worldwide.

From part 6 of the Dow Jones series:

Matthew Simmons, chief executive of investment bank Simmons & Co. International and former energy advisor to President George W. Bush:

Oil and natural gas still underpin almost all aspects of modern society. Transport is almost solely reliant on oil. It's oil that is the basis for the fertilizers that enhance food stocks and that is used in the manufacture of countless goods. 

"We have to radically start changing our lifestyles and trying to come up with a brand new source of energy. At the moment we can't even replace 5% of the oil we use with alternatives. 

"The world economy has no Plan B."

Get to main page Fall of Petroleum Civilization
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Articles of interest:
Anti-globalization protest grows, with tangible results.  WTO protests page

Tax fossil-fuel energy easily
by Peter Salonius

UK leader calls War on Terror "bogus"

Argentina bleeds toward healing by Raul Riutor

The oil industry has plans for you: blow-back by Jan Lundberg

It's not a war for oil? by Adam Khan

How to create a pedestrian mall by Michelle Wallar

The Cuban bike revolution

How GM destroyed the U.S. rail system excerpts from the film "Taken for a Ride".

"Iraqi oil not enough for US: Last days of America?"

Depaving the world by Richard Register

Roadkill: Driving animals to their graves by Mark Matthew Braunstein

The Hydrogen fuel cell technofix: Spencer Abraham's hydrogen dream.

Ancient Forest Protection in Northern California . Forest defenders climb trees to save them.

Daniel Quinn's thoughts on this website.

A case study in unsustainable development is the ongoing crisis in Palestine and Israel.

Renewable and alternative energy information.

Conserving energy at home (Calif. Title 24)



Culture Change/Sustainable Energy Institute mailing address: P.O. Box 3387 , Santa Cruz , California 95063 USA
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Culture Change (Trademarked) is published by Sustainable Energy Institute (formerly Fossil Fuels Policy Action), a nonprofit, 501(c)(3) California non-stock corporation. Contributions are tax-deductible.