Wow. Our experiment is off to a great start—let's see if we can finish it off sooner than expected.
If you've been reading this blog regularly, you already know the basics about peak oil:
Over at Wonkblog, Brad Plumer interviews energy analyst Chris Nelder about peak oil, and Nelder has this to say about unconventional oil:
BP: So what we're seeing is that the world can no longer increase its production of "easy" oil — many of those older fields are stagnant or declining. Instead, we're spending a lot of money to eke out additional production from hard, expensive sources like Alberta's tar sands or tight oil in North Dakota.
CN: Right, and that's entirely consistent with peak oil predictions, which said that extraction would plateau, that the decline in conventional oil fields would have to be made up by expensive unconventional oil. Right now, we're struggling to keep up with declines in mature oil fields — and that pace of decline is accelerating.
Mature OPEC fields are now declining at 5 to 6 percent per year, and non-OPEC fields are declining at 8 to 9 percent per year. Unconventional oil can't compensate for that decline rate for very long.
Even all the growth in U.S. tight oil from fracking, which has produced about 1 million barrels per day, hasn't been enough to overcome declines elsewhere outside of OPEC. Non-OPEC oil has been on a bumpy plateau since 2004.
There's more oil out there. But it's hard to find; expensive to extract; declines quickly; and is usually disappointing in volume (Nelder: "Anticipated production growth for tar sands has consistently failed to meet expectations, year after year after year. Ten years ago, tar sands production today was expected to be twice what it actually is."). We may or may not be quite at peak oil yet, but we're either there already or else very, very close. And either way, production costs of unconventional oil make it unlikely that oil will ever get much below $100 per barrel again. This makes it a significant restraint on global economic growth, and unless and until we make a huge switch to renewable energy, this will continue permanently. Any time you see a medium or long-term forecast of global growth that doesn't mention oil constraints, you should probably take it with a big grain of salt.