Carpe Diem

Peak oil? Shale oil and gas proved the optimists to be correct

Some excerpts from an editorial in today’s New York Times by Christof Ruhl, chief economist of BP:

Only two or three years ago, consensus was building among pundits that we had reached peak oil, that the fossil fuel industry was in its dotage and that the world would suffer repeated energy price shocks in the transition to a post-fossil fuel economy. Many people in the oil industry were skeptical of this dire prognosis, and the extraordinary recent expansion of unconventional gas and oil production in North America proved the optimists to be correct.

Last year, in BP’s Energy Outlook 2030, we hailed the prospect of North American energy self-sufficiency. With the incentive of high oil prices and the application to oil of drilling techniques mastered for shale gas, we now estimate that tight oil will account for almost half of the 16 million barrel per day increase in the world’s oil output by 2030. Almost two thirds of the new oil will come from the Americas, mainly U.S. tight oil and oil sands from Canada. The United States is likely to surpass Saudi Arabia in daily output very soon, and non-OPEC production will dominate global supply growth over the coming decade.

A surge in shale gas and tight-oil production is transforming our energy landscape. Forecasts of its potential differ widely. What is certain, however, is that our energy future is not wholly at the mercy of geology. The speed at which we can bring this useful resource to market will depend to a great extent on issues that will be decided by our governments, in our parliaments and in our town halls.

9 thoughts on “Peak oil? Shale oil and gas proved the optimists to be correct

  1. Funny how they never mentioned that the shale producers were losing their shirts on gas and are now trying to reposition themselves as shale liquids players. Isn’t the idea for companies to make money?


    Also from the NYT: California shale will dwarf Bakken, Texas and all the other weirdo subsidized Midwestern states, most of which should have been left as BLM land, and federal territories.

    Peak Oil goes into the “False Scare Museum” along with Y2K scare, the AIDS treat to heterosexuals, and the War of the Worlds radio-cast.

    • How ironic. The same publication that printed the internal e-mails that questioned the shale gas and oil scam prints an article that claims untapped riches and the people who attacked the first article are using the second as proof of their position.

      You do realize that the NYT is not exactly known for its crack in-depth reporting of complex issues. I would be very careful what I believed no matter what side of the debate I were on. It is better to look at the real data and make up one’s own mind.

  3. The Oil Drum
    July 11, 2012

    “To estimate the global production capacity that is lost each year, it’s necessary to estimate the production-weighted aggregate decline rate of all fields, including those in build-up and plateau. Using the IEA data, we estimate this figure of 4.1%/year which is comparable to CERA’s estimate of 4.5%/year. This implies that around 3 mb/d of capacity must be added by new investment each year, simply to maintain global production at current levels.”

    My comment: World oil production has been roughly flat, since 2006. It seems likely, we can expect higher prices, more conservation, and greater use of alternative energy, including ethanol and natural gas.

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