Someone has kindly pointed out to me an article in the Bulletin of the Atomic Scientists that puts some light on an earlier, little commented, presentation by ExxonMobil, where they essentially, if implicitly, acknowledge the reality of peak oil, even if in an underhanded way, as shown by this graph:
Source: The Outlook for World Energy – a 2030 view (a bigger version of the graph can be found here (pdf, 1 page))
This graph may look innocuous, as it fits with the usual scenarios of oil demand and supply growing to 120 mb/d by 2030, but it it nevertheless interesting as it really says that peak oil is already a reality for BigOil because all the production growth is expected to come from OPC and BigOil currently have little production in OPEC countries, and prospects to get more are currently not good.
The bottom part of the graph shows Non-OPEC oil production, and that will peak in just a few years. This is highly relevant because a majority of the production of the Western oil companies still comes from mature provinces like the US (including the Gulf of Mexico) or the North Sea, which are in full decline, as the case of the UK shows:
(from this 1MB pdf presentation by UKOOA, the industry association. The blue line is the bullish case by the most upbeat party around…take your pick: production divided by 2 or by 4?).
The rest of the production of BigOil is coming from the rest of the world, i.e. places like Angola, Azerbaijan or Brasil which are not easy to operate in (politically and technically) and where the available reserves are not that big, relatively speaking.
Most of OPEC is closed to foreign investment, and there is a lot of uncertainty about the true extent of their reserves, with this graph (which I first commented in this diary) showing bizarre massaging of the numbers and no link whatsoever with current production)
But irrespective of the true extent of their reserves, these are simply too unreliable to be counted upon. These countries have not invested in their upstream industry in the past 20 years, and they have no motivation to do so, as their revenues are likely to increase faster if they don’t. And even if they did invest, we’d still suffer from our dependence on that production, with the accompanying geopolitical costs (military or otherwise) in addition to the actual price of that oil.
And yet, from 2010, these countries are expected to add 1 mb/d of net new production – each year, although they have been unable or unwilling to do this in the past few years?
So ExxonMobil is essentially acknowledging that political peak oil is upon us, and that it is at most a question of a few years – i.e. it is already a hard fact, as we already know what fields are currently being developed in the non-OPEC world and will come on stream in the next few years.
ExxonMobil suggests that non-conventional oils could be a major resource, but this is not apparent in their forecasts for oil production (as in the graph above), and that idea is shot down in the BAS article quote above the fold:
Extracting oil from the 3 trillion barrels of oil shale cited in the Outlook presents its own challenges. The term "oil shale" is also quite misleading, since there is no oil in this mineral, but rather an organic material called kerogen, which is a precursor of petroleum. To extract oil, the shale (typically between 5 and 25 percent kerogen) must first be mined, then transported to a plant where it is crushed, then heated to 500 degrees Celsius, which pyrolyzes, or decomposes, the kerogen to form oil. After processing, most of the shale remains on the surface in the form of coarse sand, so large-scale mining operations will produce immense amounts of waste material. An estimated 1-4 barrels of water are required for each barrel of oil produced, both for cooling the products and stabilizing the sand waste. To satisfy these water requirements, petroleum companies once contemplated diverting the Columbia River–a feat that can be excluded today on political and environmental grounds.
The more interesting point finally, is to note how much of the ExxonMobil presentation concentrates upon improving fuel efficiency on motor vehicles. ExxonMobil praises the Toyota Prius hybrid (as well as the European diesels) and indicates that it sees these as the future of the automobile. As BAS notes, the simple fact that the biggest oil producers is actively encouraging its consumers to use less of its product should be taken as significant in itself…
(larger pdf version here)
In the most optimistic scenarios, i.e. there is enough supply to provide all demand for oil, fuel use by cars (the red zone above) is not expected to be higher in 2030 than now in the developed world. ExxonMobil does not expect Americans to keep on buying gas-guzzling SUVs, even in their dream scenarios.
And here’s their conclusion:
We have demonstrated the fundamental linkage between economic growth and energy usage, with special focus on personal vehicle trends. We have highlighted the need for focus on accelerated efficiency gains – initiatives which extend the life of the world’s finite resources, reduce the potential for unwanted emissions and, simply put, just make sound business sense.
Why does ExxonMobil hate the American way of life?