A peak oil follower despairs of his movement's future  

Posted by Big Gav in ,

Platts has picked up on a blog post from TOD's Luis De Sousa, wondering what will become of the ASPO, an organisation which seems to be past peak - A peak oil follower despairs of his movement's future.

When OPEC officials meeting in Vienna are talking about "tremendous" surpluses of oil in the world, and US crude production has risen above 6 million b/d, it's tough to be a disciple to the peak oil school of the future.

Ask Luis de Sousa. This Portugese member of the the Association for the Study of Peak Oil has just returned from the recent ASPO meeting in Vienna, and he is not optimistic that the movement has a great deal of energy left in it.

It certainly isn't for lack of belief in the ultimate imbalance between the world's ability to produce oil, and its desire to consume it, which is what is at the heart of the peak oil school of thought.

De Sousa makes clear in a recent blog posting that was circulated by some other peak oil followers that he is very much still a believer.

For example, looking at the European debt crisis, he sees energy as having played a role: "Unfortunately, the role oil, coal and food prices had (and still have) in the economic crisis is not acknowledged by everyone, not even within ASPO. This is a terrible mistake, for it is exactly [the] way Peak Oil looks like. Getting ourselves intertwined in the debt or peak demand discourse is a self defeating path that will veer policy makers away from addressing the structural weakness of our economies. It is never too much to remind that the states today cut off from the European sovereign debt market are precisely those that were most dependent on oil before the crisis. "

So de Sousa's disullisionment is more like a parishioner at a church who sees the pews slowly emptying over time, and despairs of it ever reversing. For example, he writes: "But after 10 years of activity ASPO's message has failed to pass. Policy makers, climatologists, energy Industry, by and large are all yet to fully acknowledge the problem and its implications."

Or maybe it's more from the perspective of being in Portugal, a country in some degree of economic crisis, where at this point they'd probably be happy to have a rising level of energy consumption. As De Santos writes of his country: "Energy consumption is declining to levels of 15 or 20 years back, with most mechanisms once put in place for the energy transition being rolled back one after the other. As [a] founding member of ASPO-Portugal I can only take this as failure. It was precisely to avoid this kind of scenario that I started working on Peak Oil in 2005. But here we are; the efforts of the handful of people making up our association are now largely irrelevant. The media and the politicians that once showed interest on the subject are gone, and so are we."

Ironically, I just received notification of this year's ASPO-US conference. One notable change: it isn't in Washington. For a few years the gathering was mostly sited in Denver, after which the locale was switched to Washington, ostensibly to be near the seat of power. But this year it will be in Austin, the heart of academia.

It's an interesting move, and de Santos seems to foreshadow something like it when he writes: "Many of us question ourselves what future ASPO can have in the present setting. It can either remain a loose scientific organisation or push a more political structure to lobby on the institutions that have the means to act. I don't think ASPO should take the latter path, but more than that, it seems that it is presently unable to do so."

As far as De Sousa is concerned, he'll still continue to attend the international meetings, but he appears somewhat disillusioned: "There will be an ASPO conference in 2013, with the work for its realisation already under way. And I will probably be there too. But not any more as an avid information seeker, dreaming of saving the world, it will be just to see old friends and make new ones. After all, that was always the best about ASPO conferences."


In my opinion the peak oil theory as originally proposed by Hubbert has been misinterpreted. The peak oil community online comprised of websites like Oil Drum, yourself, Early warning believes peak oil production will occur now. But in fact peak oil is tied to a particular production technology . So there is peak in oil produced with conventional technology from the 80s overlaid with the production possible with 3D seismic, overlaid with production possible with horizontal wells and fracking, overlaid with oil from deep offshore, etc. Exxon publishes a outlook of energy industry going out 30 years which shows oil production rising significantly from the 80-90 bbpd today to 100 - 120 bbpd in 2040. Don’t take this wrong but it has to be the best forecast out there.
So don’t despair. Peak Oil is coming, but it is 30 or 50 or 100 years out. And that is a good thing. The number one thing that would help the world economy and the poorest people all over the world in $65 oil. I understand that happens to be Exxon’s forecast for average price of oil over their planning horizon.

I'm certainly not despairing - I've never been a hard core peaker.

In any case, crude oil production does seem to have plateaued - what little production growth there has been over the past 7 years or so has been biofuels, NGLs etc - unconventional crude production has mostly been replacing declining conventional crude oil production - so the "Hubbert peak" model for conventional crude production seems to have been reasonably accurate.

I certainly doubt Exxon's forecast - if sustained prices over $100 per barrel haven't caused any real production growth its hard to see what will ($65 per barrel woudl seem likely to see falling production given the cost of extraction from the more marginal sources).

Anyway - there are plenty of better sources of energy than oil so its a bit of an arbitrary debate unless you are invested in one sector or another...

"if sustained prices over $100 per barrel haven't caused any real production growth" I believe you are not considering the fact that bringing new sources of oil or gas into production has lead times of years, especially for deep offshore or remote locations. Plus the managers in the oil industry know that prices will fluctuate. They have to make business decisions based on multi-decade time frames.

8 years or so seems like a long enough time frame.

Anyway the marginal cost of new conventional (let alone unconventional) oil seems to be over $65, so my comment holds regardless of timelags.

Look at Kashagan for a good example of what happens even when the money is invested...

If you look at the last run up it was 12 years from the Arab oil embargo in 1973 to the capitulation of the price bulls in 1985. And it might take longer thsi time because the majors are more conervative. Exxon lost a lot of money when the price fell in 84-85. They wont lose money this time. I am not sure where you get the number of $65 per barrel for conventional oil. Costs for shale oil with horizontal drilling and fracking are said to $40 to $60.

Its not a relevant comparison - there were no supply constraints 30 years ago (not to do with cost of extraction anyway).

The marginal cost of new oil is now around $92 per barrel :

Marginal Oil Production Cost Nearing $92 Per Barrel

"The United States is producing an awful amount of oil from tight shale and tight sands reservoirs... If oil prices send a signal and drop below the $90-$80 level it is going to be uneconomic to drill those well. So drilling will stop immediately," said Michel Hulme, fund manager at Lombard Odier."

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