Kenneth Deffeyes
Hubbert's Peak: The End of Oil
Friday, February 24, 2006, 11:30 AM
Kenneth Deffeyes is professor emeritus of Geosciences at Princeton
University. Early in his career he worked with famed petroleum
geologist King Hubbert, who correctly predicted that U.S. oil
production would peak around 1970, and who later predicted that world
production would peak around 2005...Deffeyes is also the author of Beyond Oil: The View from Hubbert's Peak (2005) and Hubbert's Peak: The Impending World Oil Shortage (2003).
Lecture Summary:
Dr. Kenneth Deffeyes, former Shell Oil geologist and professor emeritus of geosciences at Princeton University, spoke at the First Congregational Church on Friday 24 February.
Deffeyes grew up in the oil fields, and knows the industry first hand. At Shell, he worked with the legendary petroleum geologist M. King Hubbert. Hubbert predicted that U.S. oil production would peak in 1970. He was right. He then predicted that global oil production would peak in 2000.
According to Deffeyes, Hubbert was off by five years. Oil production peaked on 16 December 2005. Deffeyes claims "that's pretty good shooting."
Deffeyes took the audience through a basic tutorial on peak oil. Deffeyes claims we've found 94 percent of all the oil we're ever going to find - about 2 trillion barrels. The relationship between annual production and cumulative production can be described by the equation for a line (remember y = mx + b from high-school?). When you've hit the x-axis on this slope, you're halfway through your oil. We hit that point, one trillion barrels, a few months ago.
OK, but what if Deffeyes is wrong about the total reserves of oil? What if it's closer to three trillion barrels, as Daniel Yergin's Cambridge Energy Research Associates claim (based on USGS data)? Deffeyes answer is that CERA is wrong, that its methods are fundamentally flawed, and its assumptions are not open for scrutiny by other petroleum geologists. Furthermore CERA's staff of over one hundred consists almost exclusively of economists; they recently added two geologists. In order for CERA to be correct, we've got to find another Middle East plus another North Sea on top of that. Deffeyes doesn't think there's another Middle East lurking out there.
Let's say CERA and other cornucopians are right, and the world did start out with three trillion barrels of oil. When would peak production occur? Probably about twenty years from now. Not particularly comforting news at any rate.
But all the current evidence supports Deffeyes. In 2003, the world's biggest producer, Saudi Arabia, informed western government oil officials that its production had peaked at 9.2 billion barrels per year, and indeed 2005 production appear to be slightly lower. The world's biggest oil field, Gawhar, is rumored to be in decline. The Kuwait Oil Company has revealed that the world's second biggest field peaked at 2 million barrels per day and is now producing 1.7 million barrels per day. Here's what the chairman of Exxon Mobile said in September of 2005, “On average, production in the world's oil and gas fields is declining between four and six percent each year."
That's what oil companies say, but what are they doing? Well, they're taking their $10 billion and $20 billion-a-quarter in profits and handing it out as increased dividends, buying back stock, and giving it to their executives. They're not drilling. They're not building new pipelines. They're not building new refineries. If there were good prospects out there, they'd be drilling like crazy.
If we accept the reality of peak oil production, what are the implications? Firstly, price instability. This is exactly what we've seen in both oil and gas markets recently. We should expect sharp peaks and valley in an ever-upward ratcheting of energy prices. Second, we’re likely to witness severe problems for the agricultural, automotive and aviation industries. Ultimately, (and this is a best-case scenario according to Deffeyes) we may see a worldwide recession.
Can't we do anything about this? Deffeyes says it's too late to avoid significant pain. The time for that was when Jimmy Carter warned us this was coming, and set up energy programs that were dismantled by Ronald Reagan.
Deffeyes believes we can soften the “hard landing” a little with technologies that are mature and ready to use off the shelf: high efficiency diesel cars (100 mpg already available in Europe!), wind, clean coal and nuclear power.
One hundred miles to the gallon cars and wind sound great, but coal and nukes?!
Yes, coal and nukes, says Deffeyes. Coal can be used to produce dimethyl ether, an almost ideal diesel fuel, and gasification can separate out pollutants like mercury, and CO2 (which can be sold for oil recovery enhancement – ending up in the ground, not the atmosphere). Ethanol from cellulose (not from corn or soybeans) also may work.
And what about nukes? The audience and Deffeyes ended up agreeing to disagree. Deffeyes says nuclear plants are far safer than the general public knows. And that Yucca Mountain is politically motivated geotechnical insanity. He believes the same salt beds that store oil and gas for hundreds of millions of years are the place to store spent fuel. Still, public perception, regulatory hurdles, and financing present obstructions that will likely stymie significant nuclear development in the near future.
Deffeyes' advice on agriculture confounded many in the audience. He maintains that organic agriculture will not solve our food needs. Rather, he would focus on "low-energy" agriculture; limited fertilization, strategic petrochemical inputs, locally produced foods, and seasonal crops. Bottom line, we'll be canning berries instead of flying them from Chile.
He sounded anti-organic, but his point really was that we've backed ourselves into a corner with the steroid-like production capabilities of industrial agriculture, and that organic agriculture will not feed six or eight billion people. Some estimates put organic agricultural carrying capacity at one to two billion.
So, what's to become of us? As oil production declines, agricultural production will take a hit, as will our overall standard of living. Nations will struggle for oil. The worlds two biggest competitors, China and the United states, have both stated that a free flow of oil to their countries is not negotiable. This spells trouble.
Bottom line, Deffeyes thinks our best-case scenario is a global recession worse than the Great Depression. The worst-case scenario is the Four Horsemen of the Apocalypse: war famine, pestilence, and death.
