May 17, 2019 at 9:39 pm #19324Mouse WizardParticipant
I’ve monitored Peak Oil since the 1990’s. It’s actually the root cause of everything we’re seeing today. The peak (circa 2005) and subsequent early part of the decline curve has been slow enough that most have stopped paying attention, and of course there’s the “Look! Over there…” continuous distractions of the recent political climate as well as the “Shale Oil Miracle” of the US.
However, Light Tight Oil (LTO) that comprises our Shale Oil Miracle needs to be mixed into conventional heavy oil unless you want to re-design your refinery (see slide 13). The refiners will opt for the cheap approach, of course. That plus we’re not producing enough LTO to cover our needs should conventional oil go away (even if we re-jiggered all the refineries). We import 20 million barrels per day and produce around 8 million barrels of LTO per day.
The point is we are highly reliant on conventional oil imports to handle our transport fuel needs. Which brings me to Ghawar, the Saudi supergiant field. The true capacity of Ghawar has long been a Saudi state secret. Now, for some reason (I wonder why?), the Saudis need foreign investment, and investors need verifiable information. Oops:
So they’re pumping less. Big deal, right? Wrong. The very next day we have an analysis that puts this all in context:
To conclude, in our view Ghawar’s decline heralds the abrupt end of the Oil Age, as we have known it so far, <span style=”text-decoration: underline;”>over the next ten years</span>. It does not mean that we are “running out of oil”; there is plenty left but most of it will stay underground. If a resource cannot be used to generate economic activity it loses all value and ceases to be a resource. Like it or not, we now have to face the harsh emerging reality on the downside of the Energy Seneca.
If there’s no conventional oil to mix in with the US LTO, the shale oil miracle will turn into a curse very quickly, given the paltry percentage of firms that have been able to actually make money on LTO to date. So the trucks will stop running for everyone but the elites, and eventually even for them.
When the trucks stop running the airplanes stop flying, and so we lose out on food as well as Amazon gee-gaws.
But look on the bright side: At least we’ll have stopped climate change before it got too far out of hand.
I wonder how many of us will be left to celebrate that come 2030.
May 17, 2019 at 9:42 pm #19328Crow BarKeymaster
Zero Hedge has noted this for quite sometime now.
May 18, 2019 at 2:00 pm #19334namelusParticipant
That’s why usa need alberta tar sands oil, and the pipe line plus but the bitumen softer is dependant on Saudi oil. Without heavy crude… no medications nonlubricants, no deisel, no fertilizer, no plastic.
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