The Crash Course - Chris Martenson [77]
But something interesting happens at the halfway mark. Where oil gushed out under pressure at first, the oil represented by the back half of the curve (the down slope) usually has to be laboriously pumped or squeezed out of the ground at a higher cost, in terms of both energy and money, than before, when it gushed from the ground under pressure. Where every barrel of oil was cheaper to extract on the way up, the reverse is true on the way down; each barrel becomes more costly to extract in terms of time, money, and energy. Eventually it costs more to extract a barrel of oil than it’s worth, and that’s when an oil field is economically abandoned.
Figure 16.3 shows crude oil production in United States from 1900 to 2007. Starting with the first well drilled in 1859 in Titusville, Pennsylvania, more and more oil was progressively pumped from the ground until 1970 (“the peak”), and after that point, less and less came out of the ground. The massive finds in Alaska and the Gulf of Mexico could not overcome the rate of depletion in the lower 48 to achieve a new high water mark of oil production. The United States’ peak of oil production in 1970 was just under 10 million barrels a day, and 40 years later it produces just a little over 5 million barrels a day. So “Peak Oil” in the United States isn’t a theory, but a 40-year-old fact.
Figure 16.3 U.S. Crude Oil Production, 1900 to 2007
Broken out by major region.
Source: Energy Information Administration.
In Figure 16.3, you will notice that the data for the lower 48 is a very close match to the idealized depletion curve in Figure 16.2, but adding the new fields from the other areas serves to create a sort of “bumpy plateau” between 1970 and 1985.
So what we see for the United States is a nearly textbook-perfect example of Peak Oil: a steady rise in oil production to a peak, followed by a steady decline in oil production. Out of 54 oil-producing countries in the world, 40 are now past peak and in decline, leaving only 14 to try to both cover the declines occurring in other areas and add more oil to fuel to the story of growth.2 Again, these aren’t theories, but facts.
The United States consumes far more oil than it produces and by necessity imports two-thirds of its daily needs. Japan, lacking any domestic oil source, imports nearly 100 percent of the petroleum that it needs. The United Kingdom, having gone past peak in the incredibly productive North Sea fields in 1998 (which now produce less than half as much as their peak amount) became a net importer of both natural gas and petroleum in 2004 and 2005, respectively.3 Australia’s oil hit peak in 2000, and by 2009 Australia was importing close to 40 percent of its petroleum needs.4
Find First, Pump Second
It’s impossible to pump oil out of the ground that you haven’t yet found, so another unavoidable fact about oil is that in order to extract it, you have to find it first. Even after a major oil field is discovered, a fairly significant gap exists between the time of its initial discovery and its date of maximum production. There are two main reasons for this: The first is that it takes time to sink the wells and develop the necessary infrastructure to get that oil away from the fields and to market (pipelines, storage facilities, and separating units all have to be sited and built). The second is that a careful approach to production is often required to avoid accidentally damaging the field and possibly stranding some oil in place by pumping too quickly.
To understand this second point, imagine that you have been given an inflatable mattress glued to the floor and filled with creamy peanut butter, and you have the task of getting as much of the peanut butter out of the fill nozzle as possible. You’d probably begin by massaging the mattress