The average daily global oil supply has exceeded the 2005 so-called peak every year since 2009. It makes no sense to claim that the peak occurred in 2005 if we discard the output of the shale fields. Either those fields are part of the total "endowment" of reserves, the endowment being one of the key parameters for Hubbert to make his calculations, or there is no basis for making the calculations of peak.
The reason for this is that we are using shale oil, as shown in the first article I shared, and the data comes from the EIA. The fact that we are using shale oil while crude oil has been in a 73.4 Mb/d plateau is proof of peak oil.
The IEA gives more details in its 2010 report:
https://www.iea.org/publications/freepublications/publication/name,27324...
The "oil endowment" includes the estimated oil resource (resource being a "concentration in or near the earth's crust in such form and amount that economic extraction of a commodity is currently or potentially feasible") plus all the oil that has already been extracted. A "reserve" is a portion of a resource that can be economically extracted or produced at the time of discovery.
What's important is not oil reserves but production rate:
"The only true metric of energy abundance: The rate of flow"
http://www.resilience.org/stories/2013-04-28/the-only-true-metric-of-ene...
In fact, the effects of peak oil can take place even before oil production drops. That is, when demand exceeds production.
Clearly, we can the basis for the changing estimates of reserves, and resources-- they are economic functions,not geological. That there exists a finite supply is not the issue. Everyone agrees that there is a finite supply. The issue is economically and thermodynamically can the extraction process yield a surplus? If the answer is yes, then the next question, "for how long" depends not solely on the resource or the reserve, but the technology and social organization of extraction
That's exactly the reason why we should not look at reserves.What needs to be studied is historical flow rates and capital expenditures. There are more details in the lecture shared earlier.
Hubbert made various projections for the global peak of production, with the last ones centering around the year 2000. His "heirs" Campbell, Deffeyes, Laherrere have all made predictions that haven't come to pass, and of course, many of the Hubbertists have revised their estimates of the oil resource.
From what I remember, he argued that crude oil production would peak in 1995+10 years due to the '73 oil shock:
"1976 Hubbert Clip"
https://www.youtube.com/watch?v=ImV1voi41YY
In 2010, the IEA confirmed what Hubbert argued:
"International Energy Agency says 'peak oil' has hit. Crisis averted?"
http://www.csmonitor.com/World/Global-Issues/2010/1111/International-Ene...
As for "unconventional sources"-- here is the criteria utilized by the USGS:
The oil and natural gas resources that exist in geographically extensive accumulations.
[nothing different there]
The deposits generally lack well-defined oil/water and gas/water contacts and include coalbed methane, some tight sandstone reservoirs, chalks, and auto-sourced oil and gas in shale accumulations.
[what of this is a specific geological category?]
Consider the EIA definition.
The assessment methodology and production practices vary from conventional resources.
[Finally, we get to the nitty gritty-- which is a function of technology; and technology is a function of economics]
But economics is affected by energy cost. That's why oil production cost for unconventional oil is high.
Finally, Ralfy should check the reports filed by the major oil producing companes-- which provide the average cost-price for the company of a barrel of oil. $10, not $85, is the number. Certainly, that is an increase-- from the $2.50 it was not so long ago; but it's not that much of an increase given rates of inflation.
Given a global survey, as of 2013 it was between $50 and $90 a barrel for crude oil and $70 to $90 for Bakken and others:
https://en.wikipedia.org/wiki/Unconventional_oil#Extra_heavy_oil_and_oil...
Now we need to examine the notion that the shortage of "cheap oil" has driven the price upwards-- the usual evidence cited for this is the fact that the application of greater investments in the technological apparatus of production are required to access the less accessible supplies, and because oil is a limited resource, we have the classic Ricardian rent syndrome, where the most expensive producer determines the price of the commodity for all other producers.
That's part of peak oil and also proves my argument. See the lecture shared earlier for details on capital expenditures.
First, let's ask ourselves, if this is the case, what has been the experience with other limited fossil resources that have required greater applications of technology.......like coal (the "approaching peak" in coal production was also a concern of Hubbert). Has the production of coal been driven by a "bell shaped curve" and if not, why is coal different from oil? Fossil fuel, under the ground, so what's the difference. Has the depletion of fields and the introduction of new technologies driven the price of coal relentlessly upwards? Not hardly.
Logically, what affects oil should also affect coal. See, for example,
"Peak Coal Passed in 2008 as Mining Costs Rise, Group Says"
http://www.bloomberg.com/news/2013-10-30/peak-coal-passed-in-2008-as-min...
What should be considered is increasing resource and energy demand worldwide, especially given a growing global middle class:
"The rise of the global middle class"
http://www.bbc.com/news/business-22956470
According to the IEA, in order to meet global economic growth, the equivalent of one Saudi Arabia every seven years will be needed. In order to meet that and a growing global middle class, even more will be required.
I would argue that the price spikes and collapses of oil have nothing to do with supplies or "ease of extraction." Let's remember, fixed capital, increases in the application of fixed capital do not and can only be passed along over the life of the apparatus, and tend to reduce the cost of unit production. BUT what can occur is that profit, value, gets distributed according to the size of the capitals deployed. There is no greater mass of capital concentrated in a single sector of capitalist production than the mass concentrated in petroleum. And that massive capital demands a share of the profit proportionate to its size. This distribution is accomplished through the price mechanism.
That's assuming that production rises significantly, but that's not the case, as shown in the EIA data for crude oil production. See the lecture shared earlier, which looks at production and capital expenditures.
Short version: If OPEC didn't exist, the bourgeoisie would have had to invent it. OPEC did exist, and the bourgeoisie still had to invent it.
It won't matter, as this does not change the physical limitations of oil production.
We might ask ourselves what is the basis for Hubbert's analysis-- that there is a finite quantity of oil available, and that extraction of that oil follows a predictable path which reaches a limit that cannot be overcome. Well who can argue with that? I mean after all, what's he arguing really? Nothing but the laws of thermodynamics; the law of entropy. The issue is are we at the edge of the cliff now? Soon? In the near future? All available evidence is that that answer is no.
It's irrelevant to ask when oil production will drop as the effects of peak oil can take place even before that happens. That's why the price of oil has tripled, and oil production cost is catching up.
What is evident, however, from the writings of Hubbert and his followers, is the strong Malthusian bias to the analysis (with at least one or more of these Hubbertist followers likening human beings to a "virus" on the body of the earth) which uses predictions of catastrophe to make an indeterminate process appear as an immediate threat.
The point that oil is finite is not based on bias. Also, Hubbert was not predicting catastrophe as he thought that nuclear energy could replace. See his first report for details.
But if you look at the other points, you will see that it is also one that involves "resource characteristics," etc. In short, no matter how much money is expended to get oil that is deeper or requires more processing, the energy return will still be low.
That's why crude oil production has been in a 73.4 Mb/d plateau since 2005 and shale oil has taken over. That's also why U.S. oil production peaked back in 1970.