PLENTIFUL ENERGY

Fatih Birol, has recently been quoted at length to this effect [4] and IEA projections
moved toward this view for the first time in World Energy Outlook 2008. [7]
There is consensus now on “conventional oil” production: it‟s now at its
highpoint. It‘s not often stated this way, but there now seems to be broad agreement
that production of ―conventional oil,‖ the free flowing ―light sweet‖ crude that is
easy and cheap to recover, has probably reached its peak level worldwide. This is a
truly startling development. It is new and it has grave implications. ―Peak oil‖
theorists used to be routinely ridiculed, but the fact is that increasing numbers of oil
industry insiders, at the highest levels, are now also saying the same thing: the point
of maximum production is approaching. Their comments attribute the peak to a
variety of factors, but the fundamental point is an approaching inability to meet
current demand growth. In this principal fact they are in agreement with the peak
oil theorists. Controversy and debate continues about the details—the oil industry
people speak of it as a plateau, a long-duration peak, and the ―peak oil‖ people
forecast more rapid decline based on their observations of past oil fields in decline.
But the very fact of it now seems to be largely accepted. The principle of
exponential demand meeting production rates that are slowing, leveling, and
declining is not altered by details. Its implications remain the same. It is true that
the current recession, higher prices for oil, and the resulting lesser usage of oil to
fuel a no-longer-robust economy obscure the realities somewhat at the moment. But
postponing the crisis point is not the same as preparing a solution for it.
Natural gas is linked to oil. It has been suggested that a ―natural gas bridge‖ is
possible when oil production falls, ―bridging‖ the gap between oil scarcity and
some new non-fossil source of energy, typically wind or sun. Peak gas, however, is
linked to peak oil in a fundamental way. World gas supplies, even today, are not
assured, and will decline, loosely linked to oil. Demand projections for world
electricity forecast annual growth rates approaching 9 percent or so; all assume,
either explicitly or implicitly, that ―abundant and cheap,‖ as well as
―environmentally friendly‖ natural gas will take the increasing load. No practical
credence can be given to suggestions that wind farms or other new, dilute, and
variable ―alternative energy sources‖ will make a meaningful contribution. Without
cheap gas, the ―gas bridge‖ to ―alternative energy sources‖ collapses. The other end
of the ―bridge‖ exists in imagination only.
Most U.S. gas comes from gas-only fields, although worldwide it is produced
principally where oil is found. Gas is found in three types of formation: associated
gas, the gas occurring in associated oil fields; non-associated gas, the dry gas from
conventional gas fields with identifiable boundaries; and unconventional,
continuous gas fields in tight formations, coal bed gas, and shale. The first two have
discrete boundaries, high permeability, and consequent high recoveries.
Unconventional gas fields have more diffuse boundaries, low permeability, and
consequently low (and consequently more expensive) recoveries.
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