George Monbiot declares Peak Oil greatly postponed in new article

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matbrady's picture
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George Monbiot declares Peak Oil greatly postponed in new article

Here is the link to George Monbiot's new article in the Guardian claiming that, with the new upsurge in oil production, Peak Oil will not arrive until many many years to come.

He bases this on a Harvard report by oil executive, Leonardo Maugeri, which is found here:

His conviction is rather strong: 


Peak oil hasn’t happened, and it’s unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun(9). The constraints on oil supply over the past ten years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s.” The investments required to make this boom happen depend on a long-term price of $70 a barrel. The current cost of Brent crude is $95(10). Money is now flooding into new oil: a trillion dollars was spent over the past two years, a record $600bn is lined up for 2012(11).

The country in which production is likely to rise furthest is Iraq, into which multinational companies are now sinking their money, and their claws. The bigger surprise is that the other great boom is likely to happen in the US. Hubbert’s Peak, the famous bell-shaped graph depicting the rise and fall of US oil, is set to become Hubbert’s Rollercoaster.

Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn’t flow naturally. There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable)(12). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 this January (13).

So this is where we are. The automatic correction – resource depletion destroying the machine that was driving it – that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.


Tall's picture
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A more nuanced and informed perspective

The production boom in shale oil has momentum, and that is likely to carry on for some time, even in the face of sharply falling prices, as has been the case for natural gas. The rig count in shale oil production is skyrocketing, even as the rig count for natural gas falls, and production lags rig count.

The quantity of recoverable oil has been considerably hyped, and this resource is not going to represent a game-changer. In fact it would not even if we were not facing economic circumstances set to crash production.



guardia's picture
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BTW, Monbiot turned pro nuclear after Fukushima

What can we expect from soulless individuals like than? Let's just please leave them alone, they don't deserve an audience.


LesPhelps's picture
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It's really a simple question

This reminds me of debates about whether we are in a recession or not. By definition a recession is two consecutive quarters of negative real GDP growth. I hear economists don't like this definition, just like politicians don't like straight forward inflation and unemployment calculations. Big suprise.

World oil production ticked up just slightly in 2011 after being essentially flat since 2005. I'm trying to remember. Is 70% of the oil being produced by countries on the down side of the Hubbert curve, or is it higher? Did Monbiot mention tha the reserves reported by Middle East nations never seem to go down?

We are not dealing with complex, questionable science here, like global warming. There is a lot of information readily available to anyone interested in doing a little personal research.

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land2341's picture
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“Peak idiocy” So where did

“Peak idiocy”

So where did it all go wrong for peak-oil alarmists? Interestingly, for better ‘experts’ than Monbiot, it was their abject failure to understand either energy or the economics of energy. A double failure that led inexorably into a state which economist Mike Munger rightly terms: “peak idiocy”. Munger’s thesis bears repeating:

“Of all the idiotic things people believe, the whole “peak oil” thing has to be right up there. It is literally impossible for us to run out of oil. We have never run out of anything. And we never will.

If we did start to use up the oil we have ... three things would happen.

1. Prices would rise, causing people to cut back on use. More fuel efficient cars, better insulation on houses, etc. Quantity supplied goes up.

2. Prices would rise, causing people to look for more. And they would find more oil, and more ways to get at it. Quantity demanded goes down.

3. Prices of oil would rise, making the search for substitutes more profitable. At that point alternative fuels and energy sources would be economical, and would not require government subsidies, because they would pay for themselves. The supply curve for substitutes shifts downward and to the right.

Well put and accurate. And precisely the argument posited in Huber and Mill’s seminal book, The Bottomless Well, which states: “Energy supplies are – for all practical purposes – infinite”. So why don’t more allegedly informed pundits grasp the basic economics of energy? In a word: ideology. In this particular case, the ideology of the leftwing social engineer prepared to politicize any issue for their personal ‘higher’ purpose."


If this is at all true then why doees the government have to keep subsdizing thes areas?  why do they still need massive govenment tax breaks to do what they do?

And none of this,  not one bit, examins the cost of the continued use of this energy.  There are ample examples of renewable resources that are usable and viable.  While none of them can do everything petrochemicals can do,  they can do alot of it and should be burying their dirtier competition.  This is not a free market in any way shape or form.  And as new technology emerges that threatens oil gets buried over and over? We all lose.

(And this is coming from some one whose livilihood depends on oil....)


treebeard's picture
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Repeating Story

You keep hearing this same old story, free market fanaticism dressed in different clothing.  This is the same psychosis that we heard Porter Stansberry throwing at Chirs Martenson in that horrible interview.  The theory is that oil production is a economical problem and not a geological one.  The free market has been imbued with magical powers to alter physical reality driven by mans creative desire to amass wealth.

Always ignored are the relentless declines of existing super giant oil fields and the huge investments required in existing societal infrastructure that would cost trillions over several decades. The Hirsch Report lays all this out in great detail.  

At the heart of the matter is the conflation of spiritual principals of limitless human potential and the religion of materialism that rules the current day.  A joyful and vibrant future are a possibility but not by following that  same exact trajectory that got us into this mess in the first place.  Commodification and objectification of the living world for purely material gain is not the answer.

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limits are limits...

...and finite means finite.  If these people are paying attention they will note that oil probably isn't going to go below $80/bbl for any length of time, and will likely go much higher.  The new sources that are ramping up share 3 characteristics, low eroei, increasingly dirty extraction methods and and increasing difficulty getting the stuff.  We aren't doing much to develop substitutes and those that we have come up with are inferior to the real stuff.  Ramping up production and/or adopting altenatives to scale is a long term prospect.  Peak oil may or may not be as devasting as some predict, but it will certainly result in very different economic and lifestyle realities.

When combined with other upcoming and current forces like climate change and our economic disaster, things are getting interesting.


paranoid's picture
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Another call for lower priced oil


Article below comes from Stansberry Research. Apparently these guys are pretty good at obtaining reliable statistics…and even better at using their data to predict future trends.

The below was published back on June 22, 2012…

Oil production is soaring in the United States. Inventory data out this week confirm all of the anecdotal evidence I’ve been gathering over the past several months. The consensus forecast was for a stockpile drawdown of 1.3 million barrels, as the summer driving season is upon us. But instead, reserves grew by 2.8 million barrels. As a result, U.S. crude inventories have never been higher at this time of year than they are right now.

This trend toward massive new amounts of production is going to continue… for decades. Let me explain why…

At the end of 2010, the United States had about 15 billion barrels of proven, recoverable oil. Today, according to my sources in the industry, at least five new major shale plays have more than 20 billion barrels each of recoverable oil: the Bakken in Montana and North Dakota, the Eagle Ford in Texas, the Marcellus in Pennsylvania and New York, and the Monterey in California…

Plus, there’s another shale formation in Texas that’s still almost completely unknown. It is reported to be the largest in the country, with more than 35 billion barrels of recoverable oil.

Each of the major new shale plays will probably double the total reserves we have today. And one of them would triple our current reserves. It will take many years to drill enough wells to prove out these reserves. However, the number of drill rigs in operation has exploded. Between 1990 and 2010, there were between 200 and 600 oil rotary rigs in operation with an average of probably 300 to 350 during that 20 year stretch of time. In 2011, the rig count jumped through the previous 20 year high of 600 and today is over 1,300 and climbing. This is a massive increase of rigs not seen for many decades. And that’s why oil production is soaring.

Another impact on oil will be the conversion of diesel trucks to natural gas due to the above mentioned shale discoveries that have increased our natty reserves to numbers that will give us a 100 years worth of reserves at today’s usage levels.

To sum it up, I’m looking for oil to slowly decouple from the valuations we’re used to using as the “new normal” for Oil is higher supply for several years. I also think that QE infinity will help offset the higher supply effect, so it’s anyone’s guess as to the price oil will receive as these two forces battle it out.

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