This document discusses global oil supply and peak oil. It begins with an introduction to conventional and unconventional oil sources. It then discusses various oil producing regions and projects declining production from fields in the North Sea and the lower 48 US states. It summarizes projections from the International Energy Agency that show declining estimates of future oil that will be discovered. The document discusses expanding oil production from Canada's oil sands, and the pipelines needed to transport this oil. It also discusses declining energy return on investment for oil production. In the end, it uses the metaphor of bottles of champagne to represent the world's remaining oil reserves and consumption, to argue that the global oil production peak is near and we must take steps to transition away from oil.

1. 1
Stockholm, 2012 November 7
Charles A. Hall Kjell Aleklett
State University of New York President of ASPO International
College of Environmental Global Energy Systems
Science and Forestry Uppsala University, Sweden
Syracuse, New York, USA kjell.aleklett@geo.uu.se
Blog: aleklett.wordpress.com
chall@esf.edu
Kjell Aleklett

2. 2
Our society needs oil !!!
Kjell Aleklett

3. Time is running out
3
Kjell Aleklett

4. Global energy use
?
Kjell Aleklett

5. Fossil fuel and other energies
Kjell Aleklett

6. 6
Conventional/unconventional Oil
Kjell Aleklett

7. What is oil?
• Conventional oil
• Crude oil.
• Oil produced as shales oil.
• Unconventional oil
• Bitumen and extra heavy oil from Canada’s oil sands.
• Extra heavy oil from Venezuela’s Orinoco belt.
• Oil produced from oil shales (kerogen shales)
• Oil produced from shale oil
• Conversion into oil
• Oil produced from coal by CTL methods (coal-to-liquids)
• Oil produced from natural gas by GTL methods (gas-to-
liquids)
Kjell Aleklett

8. Our Daily Barrel
We have a liquids problem
Kjell Aleklett

9. 9
World Oil Supply in 2010 according to
International Energy Agency
• Total liquids 87.3 million barrels per day
• Ethanol 1.8 million barrels per day
• Processing gains 2.3 million barrels per day
• Total oil 83.2 million barrels per day
2007 2008 2009 2010
IEA: 82.2 Mb/d 82.8 Mb/d 81.3 Mb/d 83.2 Mb/d
BP: 81.5 Mb/d 82.0 Mb/d 80.3 Mb/d 82.1 Mb/d
Kjell Aleklett

10. There must be places where we can find more oil
endowment - USGS
Kjell Aleklett

11. Oil and Gas in the North Sea
Kjell Aleklett

12. Oil Production in the North Sea 12
Kjell Aleklett

13. ASPO – The Association for the Study of Peak Oil&Gas
"The term Peak Oil refers the maximum rate of the
production of oil in any area under consideration,
recognizing that it is a finite natural resource, subject
to depletion."
Kjell Aleklett

14. 14
Peak Oil
Peak Oil is a liquids problem.
How much will the tap deliver in
the future?
Kjell Aleklett

15. Discovery and Production of Crude Oil in the
lower 48 states in USA
Kjell Aleklett

16. Obama 2012-11-07: We should
16
free our self from foreign oil.
Kjell Aleklett

17. 17
Number and size of oilfields
Kjell Aleklett

18. 18
Number and size of
oilfields
Kjell Aleklett

19. 19
Discovery of oil
Kjell Aleklett

20. 20
Production of crude oil
Kjell Aleklett

21. World Energy Outlook 2010 – Crude Oil
Production from field yet
to be found: 18 Mb/d
Prediction for 2030
WEO 2004 – 121 Mb/d
WEO 2006 – 116 Mb/d
WEO 2008 – 106 Mb/d
WEO 2010 – 96 Mb/d
WEO 2012 – 86? Mb/d
“Peak of the Oil Age”
K. Aleklett, M. Höök,
K. Jakobsson,
M. Lardelli, S. Snowden,
B. Söderbergh
Energy Policy, Volume
38, Issue 3, March
2010, Pages 1398-1414
Kjell Aleklett

22. The peak oil production in the
North Sea was 6 Mb/d. 18 Mb/d
is three North Seas
Kjell Aleklett

23. Oil and Gas in the North Sea
Kjell Aleklett

24. 24
First Press Release from ASPO 2002
“The world oil depletion curve, above, is based on all available
information on oil reserves and estimates of the amounts yet-to-
find, and indicates that world oil production will reach a peak (85
million barrels per day) around 2010 and decline thereafter.”
Kjell Aleklett

25. 25
The Uppsala scenarios and
production according to BP
2007: Thesis by Fredrik Robelius
and data from BP Statistical Review of World Energy
Kjell Aleklett

26. 26
Peak of the Oil Age
Prediction for 2030
WEO 2004 – 121 Mb/d
WEO 2006 – 116 Mb/d
WEO 2008 – 106 Mb/d
WEO 2010 – 96 Mb/d
WEO 2012 – 86? Mb/d
“Peak of the Oil Age”
K. Aleklett, M. Höök,
K. Jakobsson,
M. Lardelli, S. Snowden,
B. Söderbergh
Energy Policy, Volume
38, Issue 3, March
2010, Pages 1398-1414
Without shale oil
Kjell Aleklett

27. 27
Conventional/unconventional Oil
Kjell Aleklett

28. Reported Reserves of Oil Sands and
Crude Oil (Billion barrels)
300
250
200
Saudia Arabia
Iran
Iraq
Billion Bbls
United Arab Emirates
150 Kuwait
Venezuela
Russia
Libya
100 Nigeria
U.S.
Canada´s Oil Sands
50
0
Kjell Aleklett

29. Athabasca oil sand and
29
First Nations in the regions
Kjell Aleklett

30. Oil (tar) sand production 30
Kjell Aleklett

31. Oil sand production
Kjell Aleklett

32. “Crash Program Production” from
Canadian Oil Sands, (Energy Policy, 2007)
7000
6000
Thousand Bbls Per Day
5000
4000
3000
2000
1000
0
2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Year
Total Mining, Crash Program Total In Situ, Crash Program
Bengt Söderbergh, Fredrik Robelius, Kjell Aleklett
Energy Policy 35 (2007) 1931–1947
Kjell Aleklett

33. 33
5 Mb/d - The size of the tap in 2030
Data by the Canadian Association of Petroleum Producers.
Kjell Aleklett

34. 34
The two new ”taps” from Alberta
Kjell Aleklett

35. 35
Enbridge Northern
Gateway pipeline
Kjell Aleklett

36. 36
Enbridge Northern
Gateway pipeline
Oil Pipeline
•Transport petroleum from Edmonton to Kitimat
•1,177 km in length
•36 inches in diameter
•Will carry an average of 525,000 barrels of “oil” (delbit blands
has 25% condensate, aound 125,000 barrels per day, net oilsand
production through pipeline is 400,000 barrels per day)
Condensate Pipeline
•Transport condensate from Kitimat to Edmonton
•1,177 km in length
•20 inches in diameter
•Will carry an average of 193,000 barrels of condensate per day
•Condensate is used to thin petroleum products for pipeline
transport
Kjell Aleklett

37. 37
The US “tap” –
The Keystone
pipelines
Kjell Aleklett

38. Crude Oil Infrastructure Bottlenecks in North America
Caused by Huge Increase in Shale Oil Production
Canadian Oil Sands Production
being shipped to the US by rail.
RBN Energy
Kjell Aleklett

39. 39
The Vancouver Observer (Nov 30th, 2011)
Let’s be clear about one thing: Big Tar is planning to
build lots of new pipelines. Keystone XL was just one of
many. The tar sands industry says they plan to increase
their production by 4.5 million barrels per day in the
next 25 years. Here is how many pipes they will need to
move that extra oil:
• 15 new pipelines the size of existing Kinder Morgan
Transmountain into Vancouver, or
• 8 more pipelines the size of the proposed Enbridge
“Northern Gateway” giant to Kitimat
Kjell Aleklett

40. 40
Capacity
2025: 2.4 Mb/d
Kjell Aleklett

41. 41
The Yinka Dene Alliance
Includes 6 First Nations (Nadleh Whut'en, Nak'azdli, Takla Lake,
1
Saik'uz, and Wet'suwet'en) in northern BC who have banned the
Enbridge Northern Gateway Pipelines from their territories.
Kjell Aleklett

42. 42
Export and
import of oil
Kjell Aleklett

43. 43
Kjell Aleklett

44. We Have to Build a ”Crash Mat”
Kjell Aleklett

45. 45
World Oil
May 2012
“This book should be required
reading for anyone seriously
interested in the future world
energy market and economy,
especially politicians and
policymakers. “
Kjell Aleklett

46. CHARLES A. HALL
DECLINING EROI
(FOR PRODUCERS)

47. EROI: definition, history and future implications

48. I. DEFINITION of EROI (Sometimes EROEI)
Energy return on investment for an activity:
Energy delivered to society
EROI = __________________________
Energy put into that activity
Usually consider energy invested from society

49. Best First Principle
• Humans use high quality, low cost
resources before low quality, high cost
resources
(Ricardo)
• Best-to-worst ordering of resource
exploitation

51. • Spindletop ,
Beaumont Texas,
1901.
• 18 million
barrels a year
from a trivial
investment.

52. The energy
cost of
getting the
next barrel
is going
way up

53. • Today: Thunder horse platform -- up to 90 million
barrels a year –but investment is huge

55. US Oil Field Size
80
Millions of barrels
60
40
20
0
1900 1920 1940 1960 1980

56. Petroleum production in Norway in 1970
– 2008

57. Energetic cost of petroleum production in
Norway in 1991 – 2008.
Leena Grandell

58. EROI of Norwegian petroleum production
in 1991 – 2008
EROI for Norwegian oil has declined
by half in 11 years 

60. EROI for Oil: US and other

63. Horizontal fracking - part 1
63

64. Horizontal fracking - part 2
64

65. Production from a good shale
well
65

66. 66

67. 67

68. 68

69. 69

70. 70

71. 71

74. Two miles west of Parshall – not an oil rig
in sight….

75. Three miles West of Parshall – first
grasshopper

76. Then the oil rigs came faster than you could snap th
pictures – dozens and hundreds

77. New City: First of many, many fracing
facilities

78. Downtown New City

79. New City : Housing

80. Typical street corner scene

81. Typical scene …

82. Typical (?) drill site

83. Looks like a sweet spot to me…

84. Before long…no more visible oil activity

85. Energy Prices
http://econ.worldbank.org

86. Metals Prices

87. III.c DECLINING EROI FOR
IMPORTERS
custserv@press.uchicago.edu

88. Figure in page 62

89. Figure in page 63

90. IV. ECONOMIC IMPLICATIONS

91. Another way of looking at the same data

92. Global petroleum

95. Scope of the
problem.
This concentrator
photovoltaic
collector can
generate 138
kilowatt-hours per
day, half the energy
consumption
of an average
American.

96. Systems science has often been concerned with STABILITY

97. 4. Every recession since 1970 has been
preceded by a spike in the price of oil

98. Break-Even Cost
McKinsey GEM, 2010 using IEA, Wood Mackenzie, Interstate Oil and Gas Compact Commission

105. R. Hersh

108. CONCLUSIONS
1.Economic growth in the past has been highly dependent
upon growth in fossil fuels
2.We cannot assume this growth will continue
3.While technology is important and continuing, it appears
that depletion is trumping technology as indicated by
declining production and EROI
4.The U.K. is likely to depend increasingly on the EROI of
imported fuels
5.Our existing economic approaches and theories are
completely inadequate for understanding this situation

109. Can we learn anything from ecology?
In ecology, succession occurs after a disturbance. Production (photosynthetic energy
capture) increases rapidly and then becomes asymptotic. Respiration (energy use)
increases more slowly as biomass increases. Eventually, energy use equals energy
gain and the system stops growing.

111. -

113. 113
Epilogue
The Champagne Festival
Kjell Aleklett

114. Oil fields in Iraq
Kjell Aleklett

115. Oil fields in Iraq
Let us squeeze in 100 Gb
of oil into one bottle of
Champagne.
Kjell Aleklett

116. “We are drinking oil!”
If 100 Gb of oil is squeezed
into one bottle of Champagne
we have consumed 11 bottles.
Kjell Aleklett

117. The global reserve of crude oil is
8 (9) bottles of Champagne
Kjell Aleklett

118. Where to find the crude oil
or the 8 bottles of Champagne
?
Kjell Aleklett

119. The global consumption per year is
30 billion barrels of oil
One bottle of Champagne is equal to
the consumption in three years and
four months.
Kjell Aleklett

120. The USA is addicted to oil
President Bush, Capitol Hill, 2006:
“We have a serious problem. America is
addicted to oil”
From the beginning
the nature had put
two bottles in the
ground in USA.
They are just now
sipping on the last
glass.
Kjell Aleklett

121. The global reserve of crude oil is
8 bottles of Champagne
We will discover two more bottles of
Champagne
We also have three more bottles
“sparkling wine” in Canada and Venezuela.
Kjell Aleklett

122. The global reserve of crude oil is
8 bottles of Champagne
We have in total 11 bottles (8+3) to empty and 2 more to
find, in total 13 bottles. If it takes 3 1/3 years to empty one
bottle everyone should be aware of that the party is over
and that we need to sobering up!
+ +
Kjell Aleklett