Oil depletion 2536075 226174493 2008-07-17T04:16:46Z NJGW 6012605 uh, no [[Image:Oil depletion per country.jpg|thumb|300px|right|'''Oil depletion per major producing country.''' This model assumes world oil depletion remains constant at the 2004 level of 80 million barrels per day.<ref name="national_geographic">{{cite journal | title = The End of Cheap Oil | journal = National Geographic | date = June 2004}}</ref> However, world oil depletion is currently (as of 2008) at 85 million barrels per day.<ref name="national_geographic_website">{{cite web | title = Tapped Out | url=http://ngm.nationalgeographic.com/2008/06/world-oil/roberts-text | accessdate = 2008-06-18 }}</ref> This model also assumes production will increase in the high-capacity countries as low-capacity countries become depleted.]] {{PeakOil}} '''Oil depletion''' is the process of extracting and consuming the world's [[petroleum|oil]] supply, which is effectively fixed because petroleum formation takes millions of years. The American Petroleum Institute, as reported in ''Popular Science'', estimated in 1999 the world's oil supply will be depleted between 2062 and 2094.<ref name="popular_science">{{cite journal | title = FYI | journal = Popular Science | date = March 1999}}</ref> The 1999 world oil supply estimate was between 1.4 and 2 trillion barrels.<ref name="popular_science">{{cite journal | title = FYI | journal = Popular Science | date = March 1999}}</ref> However, at that time drilling depth was limited to 3,000 feet. Recently (as of 2008), 29,060 feet is being penetrated below the Gulf of Mexico sea floor — the sea floor itself is more than a mile below sea level.<ref name="offshore_technology">{{cite web | title = Thunder Horse Field, Gulf of Mexico, USA | url=http://www.offshore-technology.com/projects/crazy_horse/ | accessdate = 2008-06-18 }}</ref> Even with the increase in drilling capability, world oil demand has increased more than new oil discoveries. The proven reserves in 2004 of 1.25 trillion barrels was being depleted at 80 million barrels per day.<ref name="national_geographic">{{cite journal | title = The End of Cheap Oil | journal = National Geographic | date = June 2004}}</ref> This lowered the estimated oil depletion year to 2057. The current daily depletion (as of 2008) is 85 million barrels.<ref name="national_geographic_website">{{cite web | title = Tapped Out | url=http://ngm.nationalgeographic.com/2008/06/world-oil/roberts-text | accessdate = 2008-06-18 }}</ref> The United States [[Energy Information Administration]] predicts world consumption of oil will increase to 98.3 million barrels per day in 2015 and 118 million barrels per day in 2030. See [http://www.eia.doe.gov/oiaf/ieo/pdf/ieoreftab_4.pdf]. The world's oil supply is fixed because it is no longer being naturally produced. Several hundred million years ago, [[plankton]] and [[bacteria]] (that fed on decaying plankton) thrived in the oceans of the then [[carbon dioxide]] rich atmosphere.<ref name="san_joaquin">{{cite web | title = What is Oil? | url=http://www.geocities.com/mudsmeller/oil.html | accessdate = 2008-06-20}}</ref> Also at that time, volcanic [[sulfur dioxide]] lined the ocean floor, preventing living creatures from inhabiting, and therefore consuming, the plankton and bacteria after their death. Those plankton and bacteria that settled in porous sandstone or limestone, and those plankton and bacteria that were then capped by shale or salt, were allowed to heat and become pressurized to form oil.<ref name="national_geographic">{{cite journal | title = The End of Cheap Oil | journal = National Geographic | date = June 2004}}</ref> The [[Hubbert peak]] is an theory concerning the long-term rate of conventional [[petroleum]] (and other [[fossil fuel]]s) extraction and depletion. The Hubbert peak is named after its author, [[United States]] [[geophysicist]], [[M. King Hubbert]]. The concept of passing the peak-point is to reach the downward side of the oil production curve. By Hubbert's projection, this point either has already been passed in 2007 or is about to be passed in 2010.<ref name=mkinghubbert1956>{{cite web |url=http://www.hubbertpeak.com/hubbert/1956/1956.pdf |title=Nuclear Energy and the Fossil Fuels 'Drilling and Production Practice' |author=M. King Hubbert |publisher=[[American Petroleum Institute|API]] |page=36 |date=1956-06 |language=English |accessdate=2008-04-18 }}</ref> {{EnergyPortal}} {{Portalpar|Sustainable development|Sustainable development.svg}} ==Production decline models== {{main|Hubbert peak theory}} Production decline occurs in a predictable manner based on geological circumstances, governmental policies, and engineering practices. The shape of the decline curve varies depending upon whether one considers a well, a field, a set of fields, or the world. ===Oil well production decline=== [[Image:Theoretical Oil Well Production Curve.png|thumb|right|Theoretical oil well production decline curve.]] In theory, [[Oil well]] production follow an [[exponential decay|exponential decline]] curve <ref name=mkinghubbert1956/>. Produced at their natural rates, oil wells will start off by producing at a high rate and then decline rapidly from that rate and eventually level off until they can no longer economically produce.<ref name=mkinghubbert1956/> There are many exceptions to this, some dictated by operational procedures at the surface (the typical Saudi Arabia well does not decline in this manner for example) and others dictated by allowable restrictions, such as oil wells in Louisiana, and specifically excludes any wells involved in EOR projects involving injection elsewhere in the reservoir.{{fact}}} Each well drains the [[oil reserves]] in its portion of the [[oil field]] at a high rate when pressures are high. As pressures decline and the oil in the immediate vicinity is reduced, the rate will fall, but will gradually level out as the production rate falls and pressure decline becomes slower. The theoretical curve will never actually reach zero, but at some point the well will no longer produce enough oil to cover its [[variable cost|production costs]] and will be shut in as [[economics|non-economic]]. In the United States, these low-production wells are referred to as marginal or [[stripper well]]s and receive special tax breaks to encourage companies to keep operating them as long as possible. Volumes for these wells can easily decline to less than 0.1 BBL Oil/Day and still be economic under operating scenario's in the Appalachian Basin. This standard decline curve can be affected by a number of factors which can modify its shape: * The well may be restricted to a lower production rate by lack of [[supply and demand|market demand]] or government [[regulation]]. This will flatten the top of the curve and level it out, but will not change the [[integral|area under the curve]] (the total well production) significantly. * The well may receive a [[oil well#Production|workover]] such as hydraulic fracturing (''fracing'') or [[hydrochloric acid#Other applications|acidizing]] to improve its production rate. This can cause a sharp spike in production as well as increase the recoverable reserves from a given wellbore. * The field may undergo a secondary or [[enhanced oil recovery|tertiary recovery]] project, discussed in the next section. ===Oil field production decline=== [[Image:Theoretical Oil Field Production Curve.png|thumb|right|Typical oil field production decline curve{{fact|date=February 2007}}.]] An oil field covers a fixed area. If oil wells are drilled in this area at a fixed distance apart at a steady rate, a curve such as at right will result{{Fact|date=February 2007}}. Production will rise rapidly at first{{Fact|date=February 2007}}, but start to level off as the wells which have already been drilled begin to decline. Eventually, when the field is completely drilled out, production will go into a sharp decline as all wells are now in decline. This decline will level off and production can continue on for a very long time. A number of oil fields in the U.S. have been producing for over 100 years. This curve can be modified by a number of factors: * Production may be restricted by market conditions or government regulation. Large oil fields tend to flood the market with oil and cause a temporary glut and [[demand response|low prices]]. This discourages drilling, flattens the peak of the production curve and pushes production into the future. * The field may undergo a secondary recovery project, such as [[water injection (oil production)|water]] or gas injection. This can repressurize the field and improve the production rate, putting off the decline for a while. However, it will not change the area under the curve. Eventually the field will go into a [[Cantarell Field|steeper decline]] than it otherwise would. * the field may undergo an [[enhanced oil recovery]] project, such as drilling of wells for injection of [[solvent]]s, [[carbon dioxide]], or [[steam]]. This can be very expensive but allows more oil to be coaxed out of the rock, increasing the ultimate production of the field. ===Multi-field production decline=== [[Image:Theoretical Multiple Oil Field Production Curve.png|thumb|right|Multiple oil field production decline curve.]] Most oil is found in a small number of very large oil fields, and there are probably a limited number of them. If they are found at a constant rate until they are all found, the combined production of the fields will yield a curve such as the one at right. Production starts off slowly, rises faster and faster, then slows down and flattens until it reaches a peak. After the peak, it starts to decline faster and faster, and eventually flattens out. Oil production never actually reaches zero, but eventually becomes very low. Factors which can modify this curve include: * Inadequate demand for oil, which does not keep up with supply. This will limit the steepness of the rise and push the peak into the future. * Sharp price rises at the top of the curve as production fails to meet demand. This can cause a sharp drop in demand and a dip in the top of the curve. * Introduction of new technology and production of non-conventional oil. This can reduce the steepness of the decline and cause more production of oil or conversion of other substances to oil. ===United States production decline=== [[Image:United States Oil Production 1900 to 2005.png|thumb|right|United States oil field production decline curve.]] Oil production in the [[United States]] has followed the theoretical Hubbert Curve in a general fashion. U.S. oil production reached its peak in 1970 and by the mid-2000s it had fallen half way down the production curve to a level last seen in the 1940s. In 1950, the United States produced over half the world's oil, but by 2005 that proportion had dropped to about 8%. In 2005, U.S. oil imports were twice as high as domestic production. [[Image:Alaska Oil Production 1975 to 2005.png|thumb|left|Alaska oil field production decline curve.]] [[Image:Texas Oil Production 1935 to 2005.png|thumb|right|Texas oil field production decline curve.]] The production peak in 1970 came as a complete surprise to the U.S. government and oil companies, and despite their best efforts, the production decline was irreversible, except during the embargo of the late-70's. – U.S. oil production never reached the peak of 1970 again but has outstripped Hubbert's projections consistently since the US Peak. Oil companies have drilled large numbers of oil wells but did not find enough oil to slow the decline, on a nationwide scale. Production declines have been reversed in natural gas in the United States as well as smaller areas, or countrywide areas the size of Venezuela. By 1972 all import quotas and controls on U.S. domestic production had been removed. Despite this, and despite the quadrupling of prices during the [[1973 oil crisis]], Texas oil production peaked sharply in 1973 and has been declining ever since. It now is less than 1/3 of the level it was at its peak. Despite the fact that Hubbert was only one year out in predicting the peak of U.S. oil production, the actual production curve does deviate from the Hubbert curve in some significant ways: * Production followed the demand curve up rather than the classic bell-shaped curve. This was because too much oil created a glut on the market and regulatory agencies such as the [[Texas Railroad Commission]] stepped in to restrain production. * The curve peaked at a sharp point rather than gradually flattening out. This occurred because as consumption began to approach production limits, oil companies drilled out all their existing fields as fast as they could, and many of those fields peaked simultaneously. * Production fell after 1970, but started to recover and reached a secondary peak in 1988. This occurred because, despite the fact the supergiant [[Prudhoe Bay]] field had been discovered in 1968, regulatory delays prevented completion of the [[Trans-Alaska Pipeline System]] (TAPS) until 1977. * After 1988, production began to decline again because Alaska production peaked that year. By 2005, Prudhoe Bay had produced over 75% of its oil. As a result, the TAPS may have to be shut down in a few years because production will not pay its operating costs. The [[Arctic National Wildlife Refuge]] (ANWR) may contain enough oil to keep the TAPS running for a few more years, but the U.S., as a mature basin, is primarily growing its reserves through the growth of reserves in existing fields rather than new discoveries. ===World oil production=== {{see|Peak oil}} [[Image:World Oil Production 1960 to 2005.png|thumb|right|World oil field production curve.]] World oil production has followed a typical exponential growth curve, which has continued to grow for over a century with only a few dips, but the experience of the United States decline has caused many people to question how long the world can continue to produce steadily increasing amounts of oil. As of the mid-2000s, all of the world's oil producing countries except [[Saudi Arabia]] were producing at maximum capacity, and some experts such as [[Matthew Simmons]] were questioning whether even Saudi Arabia had any reserve capacity left. Industry observers and proponents of the [[peak oil]] theory have pointed to the similarities between the global production curve in mid-2000s and that of the United States in the 1970s, which peaked without warning and started to decline. * The [[oil price increases since 2003]] were preceded by a decade of production cutbacks in [[OPEC]] countries in an attempt to keep prices high despite an oil glut. This is similar to production cutbacks in [[Texas]] and other states to maintain prices despite an oil glut in the decade prior to the [[1973 oil crisis]]. * World oil prices reached record highs in the mid-2000s, but new oil did not appear on the market, as the theory of [[supply and demand]] would predict. This is reminiscent of price increases in the United States in the 1970s when U.S. oil production started to decline despite record high prices and record drilling by oil companies. * There are serious doubts about whether OPEC countries really have the [[oil reserves]] they claim. This is similar to the illusionary oil reserves that U.S. oil companies claimed to have in the decade prior to the 1973 and [[1979 oil crisis]]. In the 1970s, the companies were unable to produce as much oil as they claimed, and production went down instead of up. ==Implications of a world peak== {{further|[[Peak_oil#Possible effects and consequences of Peak Oil|Possible effects and consequences of Peak Oil]]}} [[Image:Iraq-oil-power.jpg|thumb|right|250px|An oil power plant in [[Iraq]].]] A [[Peak oil|peak]] in oil production could result in a worldwide oil shortage, or it could not even be noticed as demand decreases in conjunction with decreased supply, such as what happened in the U.S. in 2005 and 2006. While past shortages stemmed from a temporary insufficiency of supply, crossing Hubbert's Peak would mean that the production of oil would continue to decline, and that demand for these products must be reduced to meet supply. The effects of such a shortage would depend on the rate of decline and the development and adoption of effective alternatives, ongoing as you read this. If alternatives were not forthcoming, it has been speculated that the numerous products produced with oil would become scarcer, leading to at the very least lower [[living standard]]s in developed and developing countries alike, and possibly in the worst case to the collapse of the entire international banking system, which could not hope to sustain itself without the prospect of growth{{Fact|date=February 2007}}. The political situation may change dramatically, with potential wars between countries over access to dwindling supplies. Accordingly, inequalities between various countries and regions of the world may become exacerbated. ===Catastrophe=== [[Economic growth]] and prosperity since the [[industrial revolution]] have, in large part, been due to increased efficiencies in the use of better and higher concentrations of energy in fossil fuels. The use of fossil fuels allows humans to participate in [[takedown]], which is the consumption of energy at a greater rate than it is being replaced. Some believe that decreasing oil production portends a drastic impact on human culture and modern technological society, which is currently heavily dependent on oil as a fuel and chemical feedstock. For example, over 90% of transportation in the United States relies on oil. Some envisage a [[Malthusian catastrophe]] occurring as oil becomes increasingly inefficient to produce, others have learned from the examples demonstrated in mature basins and applied those operational procedures to these basins to preserve their operational tempo. Since the 1940s, [[agriculture]] has dramatically increased its productivity, due largely to the use of chemical [[pesticide]]s, fertilizers, and increased mechanisation. This process has been called the [[Green Revolution]]. The increase in food production has allowed world population to grow dramatically over the last 50 years. Pesticides rely upon oil as a critical ingredient, and fertilizers require natural gas. Farm machinery also requires oil. Arguing that in today's world every [[joule]] one eats requires 5–15 joules to produce and deliver, some have speculated that decreasing supply of oil will cause modern industrial agriculture to collapse, leading to a drastic decline in food production, food shortages and possibly even mass [[starvation]]. It must be noted, however, that most or all of the uses of fossil fuels in agriculture can be replaced with alternatives. For example, by far the biggest fossil fuel input to agriculture is the use of natural gas as a hydrogen source for the [[Haber process|Haber-Bosch]] fertilizer-creation process [http://www.carbohydrateeconomy.org/library/admin/uploadedfiles/How_Much_Energy_Does_it_Take_to_Make_a_Gallon_.html]. Natural gas is used simply because it is the cheapest currently-available source of hydrogen; were that to change, other sources, such as [[electrolysis]] powered by [[solar energy]], could be used to provide the hydrogen for creating fertilizer without relying on fossil fuels. Oil shortages may force a move to lower input "[[organic agriculture]]" methods, which may be more [[labour (economics)|labor]]-intensive and require a population shift from urban to rural areas, reversing the trend towards [[urbanisation]] which has predominated in industrial societies; however, some organic farmers using modern organic-farming methods have reported yields as high as those available from conventional farming, but without the use of fossil-fuel-intensive artificial fertilizers or pesticides. [http://www.biotech-info.net/Alex_Avery.html] [http://extension.agron.iastate.edu/organicag/researchreports/nk01ltar.pdf] [http://www.cnr.berkeley.edu/~christos/articles/cv_organic_farming.html] [http://www.terradaily.com/news/farm-05c.html] Another possible effect would derive from America's transportation and housing infrastructure. A majority of Americans live in [[suburbs]], a type of low-density settlement designed with the [[automobile]] in mind. Current EV technology would allow these living arrangements to continue well into the next millennia but some commentators such as [[James Howard Kunstler]] argue that because of its reliance on the automobile, the suburb is an unsustainable living arrangement; the implications of peak oil would leave many Americans unable to afford fuel for their cars, and force them to move to higher density, more walkable areas. In effect, surburbia would comprise the "[[slum]]s of the future." A movement to deal with this problem early, called "[[New Urbanism]]," seeks to develop the suburbs into higher density neighborhoods and use high density, mixed-use forms for new building projects. ===Recession=== A more modest scenario, assuming a slower rate of depletion and a smooth transition to alternative energy sources could cause substantial economic hardship such as a [[recession]] or [[economic depression|depression]] due to higher energy prices. Historically, there is a close correlation in the timing of oil price spikes and economic downturns. [[Inflation]] has also been linked to oil price spikes. However, economists disagree on the strength and causes of this association. The world economy may be less dependent on oil than during earlier oil crises. Conversely, the recessions of the early 1970s and early 1980s were associated with a relatively brief period of somewhat dwindling energy availability; the possible future increase in oil prices might be much higher and last longer. See [[Energy crisis]]. ===Rising food prices=== {{main|food vs fuel}} Rising oil prices cause rising food prices in two ways. First, if it costs farmers more to fuel their tractors etc. they will have to charge more for what they produce. Second, higher oil prices are causing farmers to switch from producing food crops to producing [[biofuel]] crops. <ref>[http://www.engineeringnews.co.za/article.php?a_id=119281 Food versus fuel debate escalates<!-- Bot generated title -->]</ref> <ref>[http://www.theglobalist.com/StoryId.aspx?StoryId=5077 How Food and Fuel Compete for Land by Lester Brown – The Globalist > > Global Energy<!-- Bot generated title -->]</ref> The [[law of supply and demand]] predicts that if less farmers are producing food the price of food will rise. <ref>{{cite web |url= http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=7216688&story_id=10252015 | title= The Economist – The End Of Cheap Food}}</ref> == Further reading == *Kenneth S. Deffeyes. ''Hubbert's Peak : The Impending World Oil Shortage'', Princeton University Press (August 11, 2003), ISBN 0–691–11625–3. *Richard Heinberg. ''The Party's Over: Oil, War, and the Fate of Industrial Societies'', New Society Press ISBN 0–86571–482–7 * Mathew R. Simmons. ''Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy'', Wiley (June 10, 2005), ISBN 0–471–73876-X ==References== {{Reflist}} == See also == *[[Oil Megaprojects]] == External links == *[http://www.oilposter.org http://www.oilposter.org] – Free for teachers. *[http://www.communitysolution.org/cuba.html http://www.communitysolution.org/cuba.html] – Learn from Cuba. *[http://www.peakoil.net/ http://www.peakoil.net] *[http://www.wolfatthedoor.org.uk/ Wolf at the Door – beginner's guide to peak oil] *[http://www.theoildrum.com/ The Oil Drum – discussions about energy and our future] *[http://www.peakoildebunked.blogspot.com/ The thinking mans response to Peak Oilers] *[http://www.peakoil.nl/ The dutch foundation Peakoil] *[http://www.fromthewilderness.com/free/ww3/061203_simmons.html Peak Oil and Natural Gas Depletion: The world most serious question (Published June 12, 2003)] [[Category:Economic theories]] [[Category:Futurology]] [[Category:Peak oil]] [[Category:Economic problems]]