(fwd from Schanoes) Oil and overproduction

Mark Jones markjones011 at tiscali.co.uk
Mon Jan 13 14:22:17 MST 2003

David Schanoes wrote:
> 1,125, 625,000,000 barrels.  Let's say 1 trillion.

There doesn't seem to be much purpose in discussing the geophysics of
natural resources with someone who seems to argue that how much oil is in
the ground depends on capitalists' mood swings. Only Bishop Berkeley could
do justice to that kind of thinking. But once again, David's
misunderstanding of the issues involved usefully encapsulates many common
errors and is therefore worth another comment, perhaps.

First of all, the US EIA is a government department and its statistics
should not be taken at face value. Other estimates which appear to be well
grounded suggest that the amount of recoverable conventional oil is
substantially less than a trillion barrels. But that is not really the

The point is this.

An oil well--any oil well--has a definite productive life. I don't think
even David disputes this. When production begins, all the reserve is still
under the ground, and produced oil is still zero. The rate of production
increases exponentially until it finally reaches a peak. This is true of all
oil wells ever exploited; there are no exceptions. Maximum output is never
achieved immediately; there is always an ascending curve of output until
finally production plateaus. Then, after peak output is reached, output
inexorably begins to decline, and the decline is exponential in the same way
as the original increase of output was exponential.

Thus, a graph showing the output of an oilwell always resembles a bell
curve. Production rises from zero to a peak, and then declines again to
zero, at which point all the originally recoverable reserve has been

Now, it is empirically true and also theoretically predicted, that one
output peaks, half the recoverable reserve has been extracted. When output
then falls by 25%, around 75% of the original reserve has been extracted.
When output falls to zero, 100% of the original reserve has been extracted.

This is all determined by the laws of physics and not by the whims of
capitalists. This means, for example, that you cannot produce at the maximum
until all the oil is extracted. Production does not fall off a cliff at the
end of an oilwell's life, it declines in a curve.

Now, consider the entire world as a single oilfield. Production began from
zero in about 1865. At that time the original endowment of oil was between
1750-2200 billion barrels. By the end of last year almost 900 billion
barrels had been extracted. Common sense is enough to show that world oil
production has therefore either already peaked or is about to. Therefore,
and nothing can alter this fact, from now on production must begin to
decline. In 40 years (or more likely, 15-20 years), world oil production
will have fallen close to zero. Meanwhile, the human population of the
planet will have increased to around 9 billion. According to the EIA and
other agencies, demand for oil will increase from around the present 80m
bbls/day to 110m bbls/day within this decade. The Chinese vehicle park
alone, for example, is doubling every 3.6 years.

Obviously, there will be insufficient oil to meet this new demand. There
will even be insufficient oil to meet existing demand. Much the sme
calculations also apply to natural gas.

Since there are no alternatives to petroleum and natural gas for most
applications (as primary energy, feedstock, transport fuel etc) it is clear
that this combination of circumstances is ominous. Not onyl will economc
growth of the kind we have grown to expect, become impossible; there will be
no way of preventing sharp declines in available energy. This will impact
all areas of social life. Since petroleum is also a key feedstock in
agriculture, industry, pharmaceuticals and indeed every walk of life, and
since there are no meaningful alternatives capable of substituting for most
of these uses, it is not simple a matter of energy either.


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