Understanding Peak Oil: Geology Is Destiny

Byron King explains why it’s in our best interest to Understand the “Peak Oil” phenomenon — and why it seems so many people would prefer not to.

ONE OF THE brightest days of my career was back when I learned that Gulf Oil Co. had hit it big on one of my drilling proposals in an underexplored part of the Permian Basin. Not only was I right about where to drill, and at what target to aim the drill bit, I was lucky.

West Texas is full of dry holes, every one of them being somebody’s former bright idea. One of those dry holes could have had my fingerprint on it. But that is not how it worked out. Yes, I was lucky. And Gulf had some great oil finders on the team. So not only was I lucky, I was fortunate. You can’t ask for more than that.

It is good to be lucky. And it is lucky for someone to be good, if you know what I mean. Also, there is something to be said for finding all of the oil that one will ever use in one’s life. I can drive fast without feeling guilt.

Over many years, I have read dozens of books on petroleum geology and structural geology and pondered the intricacies of geological and tectonic maps. I have pulled off many a highway onto the road berm to look at the rocks of a road cut. I have stared at seismic interpretations, trying to envision a world of rock at a depth. I have spent many days on the deck of a drilling rig and looking at cuttings, from Texas to Bahrain. I have sought out really smart people who know what they are talking about and pumped them for anything they could tell me. I have tried to stay informed about what is going on in the world of science in general, and earth science in particular.

(I even have an article coming up in Whiskey & Gunpowder on thermodynamics…but I won’t tell anybody up front that it is about thermodynamics. That might scare people off. Y’know… “science is hard,” and all that stuff.  I will wait until I explain it to them, then tell them that it was about thermodynamics. Won’t they be surprised!)

As for Peak Oil, I have read most of what professor Kenneth Deffeyes of Princeton (not a bad school…) and Colin Campbell and Matt Simmons et al. have written on the subject. Plus, I have read a lot of the better summaries and insightful commentaries by more general science writers (Amory Lovins and Richard Heinberg come to mind). Basically, I am on board with what they are saying. Global oil production is in the process of “peaking,” and soon it will level off, and then commence to decline.

Geology predicts it, and who am I to argue with geology?

Understanding Peak Oil: Right, Right, Right

Peak Oil is a real phenomenon, based on hard science. Ignore it at your peril. At root, the Peak Oil guys are right. How can I emphasize it properly? OK, they are “right, right, right.” Everybody else is “wrong, wrong, wrong.” These latter folks — who are wrong, by the way — are the equivalent of the violin section that played at the burning of Rome. Party on, dudes, but if everybody else stays wrong long enough, then, politically and economically, we will all be done for.

Despite the theories of so-called abiotic oil that are floating around (sort of the petroleum equivalent of the story of the pot of gold at the end of the rainbow), my belief is that oil comes from the unoxidized remains of ancient life forms. The remains of ancient life forms have been, essentially, cooked and refined to a higher energy state of matter by the Earth’s tectonic energy (shhh…it’s that “thermodynamics” stuff again). Now they are trapped inside bodies of sedimentary rocks by structure and/or stratigraphy.

Sediments are found, obviously, in sedimentary basins. We (i.e. mankind) know where all of the basins are on the crust of the Earth (well, OK, there might be a few more basins hidden under something else, or another that does not look like a basin). In the past century, we have pretty much mapped what is out there and identified the potential source rocks.

Beyond the big-picture fieldwork of geology, it is an effort that spans several generations to prospect and discover the oil resources, convert them to defined reserves, and pump them out and use ’em up. And we have been doing it for, oh, several generations. Darn…are we at the end of the line? Ummmm…yes. What do I mean?

There is only so much sedimentary volume in the basins of the Earth’s crust. Yes, the volume is a very big number, but then you have to factor in the fact that oil generation is a very tricky thing for the Earth to accomplish. You have to have just the right mix of sediments, just the right sequence of deposition and burial and subsidence, just the right thermal history and pressure-temperature regime, plus just the right kind of tectonic activity and structural events. You have to be very, very patient. A watched pot never boils, you know.

And then, after all of that past geological activity — bringing the matter into the here and now — you have to have smart geologists and geophysicists and engineers who can figure it out. You have to have an industrial base of astonishing complexity and investors who want to risk their dough poking holes in rock formations out in wildcat country. And did I say that you have to be lucky? After all of that, it only looks easy.

Understanding Peak Oil: Not “Running Out,” but —

Are we “running out” of oil? No. For example, take an oil well called the McClintock No. 1,drilled south of Titusville, Pa., in 1861. That well is still producing Pennsylvania-grade crude oil 144 years later. Just not very much. Hardly any, in fact — maybe a couple of barrels per week — but enough to pay the costs of lifting the greenish goo out of the ground. So the oil is down there, but the reservoir energy is depleted. Hence, the oil does not want to flow from its happy home in the Devonian-age rock to the borehole in the ground. Without reservoir energy, oil moves very slowly. Oil is funny that way.

And 144 years from now, Saudi Arabia’s Ghawar field will still be producing oil from its thousands of wells, just not 4 million barrels per day like we see now. Maybe 40,000 barrels per day. Inshallah, God willing. And every drop of that substance will probably be worth fighting over. But that’s another story line.

Is Peak Oil an “ominous event”? Only if you really think about it and come to understand it.

If you don’t really think about Peak Oil or understand it, it is no big deal. It is kind of like the people in Sri Lanka who heard that there would be a big wave hitting the shore a few hours after the Dec. 26, 2004, earthquake in Indonesia and went down to the beach to watch. So if you understand Peak Oil, yes, it’s a problem. If you don’t understand it, hey…surf’s up.

My explanation for why most people in leadership positions don’t have a feel for Peak Oil is called cognitive dissonance. People hold two diametrically opposed concepts in their heads at the same time. It seems pretty intuitive that every time you pump out one barrel, that is one less barrel remaining in the ground. But the world has pumped out so much oil for so long that it seems kind of natural, like the stream of water that flows from the mountains to the river and thence to the sea. It just kind of happens, and it happens on a scale so vast that it is no big deal.

But that vast scale in and of itself is the problem. In the case of oil, it is a big deal…the easy stuff is pretty much gone. Pumped and burned, and as near as the local traffic jam.

Oil is not and never was a birthright of humanity, let alone of the good citizens within the political jurisdiction of the United States of America. This country, and our culture, has been so lucky for so long that we as a nation have confused luck with entitlement. We think that because we have things like “free speech” and “trial by jury” in this fair land our economy grew to make us rich and powerful. Not to be disrespectful of the Bill of Rights, but I think that the abundance of oil (and coal and natural gas) may have had something to do with it as well.

The “shining city on a hill” shone so brightly only because Mr. Rockefeller and his ilk bought barrels of petroleum from the well drillers of northwestern Pennsylvania and converted the petroliferous substance into lamp kerosene. No oil, no “shining city on a hill.”

Think whatever you want about Rockefeller. Most people, and even most modern historians of the 19th century (and I have met many of them), cannot even begin to describe what Rockefeller did in and to the oil fields and refining business of the nation. But I mention his name merely to illustrate the point that the American people and their nation’s industries had to work hard to make their own national luck (like lucky me, in my own small way, when I worked at Gulf, if you don’t mind my saying so).

As a nation, we worked very hard. Yes we did. And we can feel good about it. For the most part, the history is pretty clear that it took U.S. technology to find and develop most of the oil not just in the United States, but also in most of the rest of the world. (Where others did it in other parts of the world, they mostly used pirated U.S. technology, so it is our national accomplishment by implication.) So bravo to us and our kith and kin! As to the present deindustrialization of the U.S. economy…another discussion for another time.

Understanding Peak Oil: Scarce at Any Price

Now, however, we are confronted with the predicament that oil is going to get expensive. Maybe the price will fluctuate with market forces and big moneybags trading in and out. But the long-term trend is up — up and expensive. But I do not wish to understate the case. We are headed for oil that is not just expensive, but scarce at any price.

Scarce at any price? This is one of those things that they call a “strategic problem” up at the Naval War College. In the 20th century, nations waged war for oil when it was not so hard to find and relatively cheap to purchase on world markets. What will nations do in the 21st century now that oil is becoming truly scarce?

Consider a future in which there will be two kinds of nations in the world…those that have access to oil and those that don’t. And I mean access at any price. For example, the Chinese — who have a well-deserved reputation of thinking for the long term — are buying up old oil fields in Venezuela, not to mention the rights to the Athabasca tar sands, in Alberta, Canada. We live in interesting times.

Oil discoveries have been on the downside for decades. At the same time, oil production and daily consumption have been increasing from a diminishing reserve base. The trends are not our friends. The production and the reserve curves are intersecting. And when the big rollover occurs and global oil production flattens out for the long term, then enters the irreversible decline. I believe that people will suffer from mass psychosis as century-old concepts of oil entitlement start to flat line. Most modern Western brains — conditioned as most of them are to think in terms of happy, statist conclusions — are simply not wired for what people used to call “country living.”

If mankind can transition to something else, like hydrogen fuel or improved nuclear-generated electricity (Mankind? Try just the U.S. of A.)…that would be great. But my opinion is that it will not be pretty as we get there.

To end on a slightly upbeat note, at least we are free to talk about it, even if only a few people are listening.

Thanks for listening.

Until we meet again… 
Byron W. King
March 21, 2005




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