The Oil Drum: Europe

Last week saw the publication of The Oil Crunch, securing the UK's energy future (discussed on TOD here). This is the first report from a taskforce of leading UK companies and sounds the alarm bell on peak oil. The group formed around 18 months ago through a common concern that peak oil and energy security are not receiving the attention they deserve.

Jeremy Leggett, Chairman of Solarcentury and taskforce member has provided The Oil Drum with an interview with "an anonymous cynical journalist". He discusses the thinking behind the report, the credit crunch, the global oil industry's culture towards the future and the report's recommendations.

On Wednesday 29th October 2008 I attended a press conference at the London Stock Exchange. The meeting was convened by the "Industry Taskforce on Peak Oil & Energy Security" (www.peakoiltaskforce.net) to introduce a new report: The Oil Crunch, securing the UK’s energy future. September last year, former US Energy Secretary Dr James Schlesinger addressed the ASPO6 conference in Cork, Ireland with these words: The peakists have won ... to the peakists I say, you can declare victory. You are no longer the beleaguered small minority of voices crying in the wilderness. You are now mainstream. You must learn to take yes for an answer and be gracious in victory. The taskforce behind this report formed around 18 months ago.

Click to download .pdf

There is an old vaudeville skit that has an actor (Annie) come on stage behind the M.C. and begin visibly searching the floor of the stage. “What are you doing, Annie?” asks the M.C. “Looking for my ring,” she says. So they both start to look over the floor. After a while the M.C. looks at Annie and asks “Where did you lose it?” “Backstage,” says Annie. “Then why are we looking for it out here?” asks the M.C. “Because it is too dark to see backstage,” says Annie.

I was reminded of this skit as I watched a ”panel of experts” on the PBS News Hour with a couple of energy analysts talking about petroleum economics, and the cause of the current price rise. Their reasons (one blaming it in part on the Federal Reserve decision to cut interest rates) related to their areas of expertise and knowledge in the Commodities Markets. It is a common failing. Experts will try and explain events or seek to control events, based on their what they know and are comfortable with discussing (where it is light), rather than necessarily going to the root cause of the problem (where the ring was dropped). It is a fault both of those who select the experts to give an opinion, and the focus of those experts, and where this approach is used extensively it tends to hide the nature of the true problem from the public, in the obfuscations of those who are comfortable only when turning the question to allow answers that relate to subjects they know about.

One of the side benefits of attending the World Oil meeting in Denver last week was that I could pick up a few of the DVD's that Global Public Media had available including a long interview with Colin Campbell.  Watching the first half of that tonight, I was reminded by him, that while we are discussing the depletion rates for oil, the more critical one for immediate attention is that for natural gas.

When one taps an oil reservoir the oil requires a certain amount of differential pressure to push it towards the well, and with the passages it must pass being generally narrow, flow is relatively constricted.  Good well management means that, in order to control water and gas problems, the pressure difference between the well and the rock is carefully controlled, and this allows the oil to be effectively recovered at rates which, while worryingly increasing, are still generally considered to be less than 10%..

Natural gas, on the other hand, flows a lot more easily, and normally does not have a lot of the constraints that producing oil has.  Thus, if your pipeline can handle the flow, and there is a demand, the gas field can be drained much more rapidly, with a consequent dramatically more rapid conclusion to the flow.  As Dr Campbell pointed out fields may last just months, and then "boom" they are gone.