Gap Oil
21 Jan, 2009 04:52 pm
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Reduce text sizeIt is Gap Oil not Peak Oil that is the problem. Rising demand for oil will exceed the quantity of it that can be withdrawn from the earth, resulting in a supply-demand gap. Once production does peak the gap will be enlarged from both sides, drawing down the supply side against rising demand. This I suggest should be termed "Gap Oil". Energy efficiency and a reduction in our demand for oil is paramount and a growing dependence on what can be grown, to create a sustainable "bioeconomy".
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The world gets through around 84 million barrels of oil on a daily basis, which adds-up to just over 30 billion barrels a year; a staggering quantity which underpins the modern industrialised global mechanism and a relentless global population of 6.7 billion souls. Only time will tell history what extent that number will ascend to, but if the WHO is to be believed it will be over 9 billion by 2050 and rising perhaps to 12 billion in the subsequent century, all fed by oil. I have noted on previous occasions a Hubbert analysis, similar to that made for oil, that predicts instead that world population will rather peak at 7.1 billion by 2024 and then fall to around 2.5 billion by 2100. As I say, only time will tell us which manner of estimate is correct.
Demand for oil appears equally inexorable, and there are estimates made that in two decades China will be using more oil than the U.S., and that the world in total will demand another 50% by then. It is obvious that no matter how much recoverable oil there is in the ground, if it cannot be recovered at a sufficient rate to match the prevailing demand for it, then a gap will ensue between demand and supply, as happened last summer with the effect of driving-up the price of oil to almost $150 a barrel. This state of "gap-oil" will maintain a similar consequence: namely that the price of oil will soar from its present low value and the impact on the world economy will be severe, with oscillations of unparalleled amplitude to the global markets. There will be actual shortages of oil too, with supplies going to the highest bidder, and a shift of economic and political power being placed in those hands that hold the oil.
This will happen irrespective of whether we are at the peak of world oil production. The concept of world peak oil is misleading in any case, since all oil wells are at different phases of their relative depletion and so Russia will still be producing oil long after the North Sea, for example, and Saudi Arabia long after that. Hence some countries will be dependent on others. World peak oil can be thought of as the peaking of the largest fields, and once e.g. the giant Ghawar field peaks we can begin to kiss our lifestyles goodbye. This should auger-in a new age of energy efficiency and a growing reliance on sustainable economies, necessarily localised and so less dependent on transportation, and based around the bioeconomy, i.e. on what can be grown.
Technological solutions, e.g. the hydrogen economy will not be with us for decades if at all, and at the very least we need some interstitial solutions. The future of humankind will depend most viably on sustainable photosynthesis, rather than on the fossil fuel products of photosynthesis that were laid-down millions of years past. Once peak oil does strike it will enlarge the gap further by drawing-down the supply side, which will fall ever consummately against demand. It is gap-oil we need to fear, the state when supply fails demand and which is both inevitable and imminent.
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On November 9, the Uppsala University in Sweden published a report titled "The Peak of the Oil Age - The Uppsala World Energy Outlook". The report performs an analysis of the oil production forecast done by the International Energy Agency in 2008. One day before the release of the IEA 2009 edition of its World Energy Outlook report, the team of researchers notably pointed to a world oil supply in 2030 some 26 Mb/d lower than the IEA's predictions. Dr Michael Lardelli, one of the co-authors of the study, answers Scitizen's questions.
As the troubling realities of future oil supplies begin to penetrate official circles, the oil optimists are making even more outlandish claims.
An article in the Washington Post this weekend, together with a must-read interview in The Independent, a paper I used to read regularly when I lived in London, reminded me of an observation I made several years ago concerning the similarities between Peak Oil and Y2K. Having spent a fair amount of time in my former corporate role planning for the serious outcomes the latter might have produced, I don't intend this as a slam on the former. Without rehashing the technical arguments behind either phenomenon, it's worth spending a few minutes thinking about the consequences of a growing belief that we might be only a few years away from the end of oil, as we know it. Whatever one's take on the validity of the Peak Oil argument, it has already evoked noteworthy consequences, both positive and negative.
Laurel Graefe, a senior economic researcher working for the Federal Reserve Bank of Atlanta has written an excellent overview of peak oil, “The Peak Oil Debate”. I consider this a must-read piece, as much for armchair oil experts as beginners, and as much for who published this as what it contains. This should be very high on your list of “brother-in-law” documents, the ones you can safely recommend to co-workers, neighbors, or, well, your brother in law.
Energy optimists are fond of citing very large numbers for worldwide fossil fuel resources such as oil and natural gas. But they conveniently leave out the critical variable. How fast can we actually produce these resources?
The peak in conventional oil and gas production is not the only peak in the supply of natural resources to be confronted in the near future. It seems likely that the peak in conventional phosphate production from phosphate rock may also be near. A recent study of Cordell and coworkers, which is in press (1), suggests that ‘peak phosphate’ may occur between 2030 and 2040. ‘Peak phosphate’ may cause a shock. This is all the more so because oil and gas can be replaced by other means of energy supply, but phosphate is without a substitute.
The Energy Watch Group released a report last week, stating that peak oil was reached in 2006. Scitizen sought the professional view of Dr Peter Jackson, Director of the CERA (Cambridge Energy Research Associates), whose position is that peak oil has not been reached. As well, we speak to Mr Jorg Schindler, the main author and Managing Director of Ludwig-Bölkow-Systemtechnik GmbH, about the report.
The Energy Watch Group released a report last week, stating that peak oil was reached in 2006. Scitizen speaks to Mr Jorg Schindler, the main author and Managing Director of Ludwig-Bölkow-Systemtechnik GmbH, about the report. As well, we sought the professional view of Dr Peter Jackson, Director of the CERA (Cambridge Energy Research Associates), whose position is that peak oil has not been reached.
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| [1] | Comment by bismilla - 21 Jan, 2009 08:41 pm Bad idea. Peak oil is a perfectly clear descriptive term: the peak rate of extraction. Oil peaks, and then starts to decline. Gap oil sounds like a bad sex lubricant. |
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| [2] | Comment by paal myrtvedt
- 21 Jan, 2009 09:07 pm Hello Chris Rhodes , nice essay. but you say : "You heard it here first: GAP OIL. I" I say NO, I , paal myrtvedt used the term "gap-oil" on January 15, 2009 via this poat here : http://www.theoildrum.com/node/4969#comment-460058 If you read my comments here you will find that I mean "there is no such thing as Gap-oil in the world, I'ts all imaginary oil ...", thus rendered nonsensical. Oil is traded at an auction, and as you imply in your essay , it will become more expensive with time. Thats all there is to it. |
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| [3] | Comment by Jens - 21 Jan, 2009 09:31 pm The concept of peak oil seems pretty straightforward to me, it is the point at which worldwide.. ah, I see somebody already made the point. After reviewing literally over 2000 pages of material over the internet, on my own time, and with no salary at all, it appears to me and other researchers of peak oil that: 1) Oil has already peaked. 2) It is clear that new discoveries have dropped off to but a small fraction of what discoveries were in 1950-1960. That means there are no new significant finds of oil to be made. 3) Canadian tar sands- it's very hard to get that oil out. 4) Oil shale - commercial production was never begun - and from what I see it will not begin. 5) Large amounts of enhanced recovery techniques are being used in Mexico and the Middle East - pumping large amounts of water or nitrogen into the oil fields to get the oil up - the amounts being used are increasing - and it contaminates the remaining oil. This leads me to think that some of the oil coming up soon will be more expensive to refine or even completely unusable. We need to move to an electric system of moving vehicles, if this isn't done soon, the number of personal vehicles in use will plummet - this isn't really a catastrophic outcome, but the effect on western economies will be staggering, many more layoffs in the auto industry with knock-on effects. Considering how no real movement in this direction has happened in China or Europe or North America, this is a likely outcome. |
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| [4] | Comment by Hacker - 21 Jan, 2009 10:05 pm I also think peak oil is an adequate term. Perhaps explaining it using the supply/demand gap is helpful for those who can't seem to get it straight. I also think that people are used to symmetric bell curves and don't see that the down side of the peak will produce more oil than the up side. This is due to technology improvements and price factors. The best thing about "peak", is that it's obvious that it's all downhill from here. Besides, Peak Oil would be a much better sex lubricant than Gap Oil. |
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| [5] | Comment by Clifford J. Wirth, Ph.D.
- 22 Jan, 2009 04:41 am We use gap oil when we're screwed, which we are. The problem is that the gap will widen faster than we think. The remaining oil requires much oil to extract less and less oil, it is low grade/low energy oil that is good for making asphalt, not diesel or gasoline. Many little pockets of oil require much equipment that does not exist. This is the quicksand effect discussed by Feralmet, AKA Chris Shaw www.onlineopinion.com.au/view.asp?article=5964 |
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| [6] | Comment by Chris Rhodes - 22 Jan, 2009 11:50 am I think we are singing from the same hymn sheet here. But, there are many who "can't get it right". If the CEO of the Royal Society of Chemistry (and an ex-oil man) is reinforcing the notion that plenty of oil down there = nothing to worry about, and peak oil = nonsense, then perhaps we need to use another term. Why does gap oil sound like bad sex lubricant? What do you get up to exactly? Don' t want to know! Back to the matter, though. If we agree that we are not going to be able to keep production going to meet demand then we need some clear consensus on what to do instead. The gap can come before the peak anyway, even if we are not quite there yet, especially if the economic turndown halts new extraction projects. But the actual arrival of the peak will simple make it all and irrevocably worse. |
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| [7] | Comment by SailDog
- 4 Feb, 2009 02:46 am The precise date of Peak is irrelevant; and it is the gap that matters as you have identified. However Peak Oil is a period, not a point in time because there is insufficient data to identify the precise month or week of Peak Oil. The downturn in prices has almost everyone fooled. Peak oil is almost certainly a historic term because investment in new supply has been seriously curtailed. Nevertheless the term is OK - it has a meaning that is broadly understood by many; and avoided at all costs by the politicians. |
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