http://www.fromthewilderness.com/free/ww3/102302_campbell.html
From The Wilderness,
http://www.fromthewilderness.com/
----------
Related information:
"Peak Oil: A Turning Point for Mankind", by Colin Campbell
Colin Campbell is a petroleum geologist. His excellent 1 hour
presentation can be viewed on Michael Ruppert's web site's
home page. The link is on the right side of page pretty far down:
www.fromthewilderness.com
The link to the actual video is here: (Real Player video)
http://www.rz.tu-clausthal.de/realvideo/event/peak-oil.ram
The link to the transcript of presentation (including slides)
is here:
http://energycrisis.org/de/lecture.html
----------
Colin Campbell on Oil
Perhaps
the World's Foremost Expert on Oil and the Oil Business Confirms
the Ever More Apparent Reality of the Post-9-11 World
by Michael C. Ruppert
[© COPYRIGHT 2002,
Michael C. Ruppert and FTW Publications,
www.copvcia.com
all rights reserved. May be reprinted or distributed
for non-profit purposes only.]
Oct. 23, 2002, 17:30
PDT (FTW) -- Colin Campbell is both an academic
and a businessman. Educated at Oxford and holding a Masters degree
he has served as a geologist for Oxford University, Texaco,
British Petroleum and Amoco (prior to the BP Amoco merger).
He has served in executive positions with Shenandoah Oil,
Amoco, Fina and was Chairman of the Nordic American Oil Company.
He has served as a consultant on oil for the Bulgarian government
as well as for Statoil, Mobil, Amerada, Total, Shell, Esso and
for the firm Petroconsultants in Geneva. He is the Convener and
Editor of the Association for the Study of Peak Oil and a
Trustee of the Oil Depletion Analysis Center in London.
As a member of The
American Society of Petroleum Geologists,
The Geological Society of London, and the Petroleum Institute
of London he has delivered more than 35 lectures on oil
depletion on three continents. His hosts have included
universities, governments, and auto manufacturers.
He has been published more than 150 times in the field
including the 1997 book "The Coming Oil Crisis"
(Multi-Science Publishing Co. & Petroconsultants).
Before beginning this
interview it is necessary for the
reader to understand several critical factors about oil
and oil production. All of these factors affect how much
you or industry pays for oil, how much is available,
and what this life-essential commodity can do. Almost
every current human endeavor from transportation,
to manufacturing, to plastics, and especially food
production is inextricably intertwined with oil and
natural gas supplies. Commercial food production
is oil powered. All pesticides are petroleum based,
and all commercial fertilizers are ammonia based.
Ammonia is produced from natural gas.
All oil production
follows a bell curve, whether in an
individual field or on the planet as a whole. On the
upslope of the curve production costs are significantly
lower than on the downslope when extra effort (expense)
is required to extract oil from reservoirs that are
emptying out. The best and easiest to produce oil
is always extracted first to maximize profits.
In 100 years mankind has used half of all the oil
on the planet, oil that took billions of years
to produce and is the result of climactic conditions
that have existed at only one time in the earth's
4.5 billion- year history. Oil is a non-renewable
resource.
The key event in the
Petroleum Era is not when the
oil runs out, but when oil production peaks, especially
as demand and population are rising. World per capita
oil production peaked in 1979 and has been in decline
since. The peak in volume of total world oil production
is upon us right now, even as the demand or better said
-- the need -- for oil is increasing rapidly.
Several things are
a given. First the total remaining
conventional oil on the planet is estimated to be around
1 trillion barrels. Second, at present rates (not those
of five or 10 years from now), the world is using close
to 80 million barrels per day. At the current rate there
would be only enough oil to sustain the planet for another
35 years under the best of scenarios. But the oil that
remains is going to be increasingly expensive to produce
and it will tend to be of a lesser quality, necessitating
higher refining costs, than what has already been used.
All of those costs will have to be passed on in the form
of price hikes or -- in some cases -- spikes. Oil price
spikes invariably lead to recession. The world's economy
is based upon the sale of products that are either made
from oil or which need hydrocarbon energy (including
natural gas) to operate, either via internal combustion
or via electricity.
Different regions of
the world peak in oil production
at different times. The U.S. peaked in the early-1970s.
Europe, Russia and the North Sea have also peaked.
However the OPEC nations of the Middle East peak last.
Within a few years they -- or whoever controls them
-- will be in effective control of the world oil economy,
and, in essence, of human civilization as a whole. Two of
the nations that will peak last are Saudi Arabia and Iraq,
both of which will not peak until the middle of the next
decade. Saudi Arabia contains 25 percent of all the oil
on the planet. Iraq contains 11 percent of all the oil
on the planet.
Science and the
oil industry have confirmed that there
is very little oil left to be found, certainly not enough
to make a difference in this grim picture, a picture
which goes a long way toward explaining the events of
9-11 and since.
----------------------------
FTW:
What will be the likely effects of hitting the downslope
of production?
Campbell:
Big question. Simply stated: war, starvation,
economic recession, possibly even the extinction of homo
sapiens, insofar as the evolution of life on earth has always
been accomplished by the extinction of over-adapted species
(when their environmental niche changed for geologic or climatic
reasons) leaving simpler forms to continue, and eventually
giving rise new more adapted species. If Homo sapiens figures
out how to move back to simplicity, he will be the first
to do so.
FTW:
How soon before we start to feel the effects of
dwindling oil supplies?
Campbell:
We already are -- in the form of the threatened
U.S. invasion of the Middle East. The U.S. would be importing
90 percent of its oil by 2020 to hold even current demand
and access to foreign oil has long been officially declared
a vital national interest justifying military intervention.
Probable actual physical shortage of all liquid hydrocarbons
worldwide won't appear for about 20 years, especially
if deepening recession holds down demand. But people
are coming to appreciate that peak is imminent and
what it means. Some places like the U.S. will face
shortage sooner than others. The price is likely
to soar as shortage looms, which itself may delay
peak.
If the U.S. does invade
there will likely be a repeat
of Vietnam with many years of fruitless struggle in
which the U.S. will be seen as a tyrant and an oppressor,
killing all those Arabs. It can't hope to subjugate the
place in perpetuity as the people don't surrender easily
-- as the Palestinians have shown. So when the U.S. has
finally gone, Russia and China will likely be welcomed
there to produce whatever is left in the ruins.
FTW:
Are the major oil companies currently downsizing?
If so why?
Campbell:
The majors are merging and downsizing and outsourcing
and not investing in new refineries because they know full well
that production is set to decline and that the exploration
opportunities are getting less and less. Who would drill
in 10,000 feet of water if there were anywhere else easier
left? But the companies have to sing to the stock market,
and merger hides the collapse of the weaker brethren.
The staff is purged on merger and the combined budget
ends up much less than the sum of the previous components.
Besides, a lot of the executives and bankers make a lot
of money from the merger.
FTW: How
much oil is really left?
Campbell:
You have to think of different categories of oil.
Speaking of conventional, which is the easy cheap stuff that
has supplied most uses to date and will dominate all supply
far into the future, there is about 1 trillion barrels left.
To this you have to add:
A) Oil from coal, "shale,"
tar sands, heavy oil -- the resource
is very large, but extraction rate is low and costly, sometimes
giving negative net energy.
B) Deepwater oil --
(from a depth of greater than 500 meters)
about 60 billion barrels
C) Polar -- about 30
billion, maybe.
D) Natural gas liquids
-- about 300 billion barrels
FTW:
I take it that it is a given that in any particular
oil field, or globally, costs of extraction increase as
one progresses down the curve. What is the usual nature
of these increased costs? Do they usually require additional
investment of capital for infrastructure? Is there a chart
which shows how costs increase as production declines?
Campbell:
Yes of course costs go up and every situation
is different. In Texas they can still profitably use wells
producing 5 b/d. But offshore the threshold is higher.
It is more complex because they have the sunk costs of
the platform and also face substantial abandonment costs.
Furthermore tax distorts the picture, with most operating
cost being written off against taxable income either in
the host or home country or both. But reserves are defined
as recoverable under current or foreseen economics,
so non-economic tail-end theoretical production is
not included anyway. I think the key issue is not
so much the economic cut off but when production
of even highly profitable oil heads into decline.
The tail end, which is susceptible to economic
constraints, is small and not very relevant.
Oil has a polarity being either there in profitable
abundance or not there at all -- mainly because
it is a liquid that flows to accumulate somewhere,
unlike coal where extraction is a matter of concentration
in seam thickness and access.
FTW:
Is all oil in the ground recoverable? If not, why not?
Campbell:
Only a fraction of the oil in the reservoir
is recoverable because it does not sit in one big cavern
down there but in the very small pore spaces between the
grains of sand. These grains are coated in water and when
it coalesces, it blocks the pore spaces preventing the
further movement of oil. Also there are many nooks and
crannies in the rocks that are not in communication.
Obviously light oil is easier to extract than heavy.
You can pump in steam etc. to try and move it, which
is now routinely done where feasible.
It is said that recovery
has increased from 30 percent
to 40 percent thanks to technology and is set to rise
from more technology in the future. But most of this
improvement has nothing to do with technology. It is an
artifact of reporting. The industry has always made
conservative initial estimates (liking to build an
inventory of unreported reserves to tide them over
bad years and also reduce taxes) so reserves naturally
grow over time.
Besides, extracting
a bit more has a minimal impact on peak,
which is the critical turning point, much more important
than eventually running [completely] out, which we may never
do as the tail end can drag on.
FTW:
What would you say to the people who insist that oil
is created from magma, or that there's really so much that
we don't have to worry?
Campbell:
Oil sometimes does occur in fractured or weathered
crystalline rocks, which may have led people to accept this
theory, but in all cases there is an easy explanation of
lateral migration from normal sources. Isotopic evidence
provides a clear link to the organic origins. No one in
the industry gives the slightest credence to these theories:
after drilling for 150 years they know a bit about it.
Another misleading idea is about oilfields being refilled.
Some are, but the oil simply is leaking in from a deeper
accumulation.
FTW:
Will Central Asian-Caspian pipelines have an impact
on the crisis? How long will it take them to come on line?
Campbell:
There was talk of the place holding over 200 Gb
[billion barrels] (I think emanating from the USGS
[U.S. Geological Survey]), but the results after 10 years
of work have been disappointing. The West came in with
high hopes. The Soviets found Tengiz onshore in 1979 with
about 6 Gb of very deep, high sulfur oil in a reef. Chevron
took over and is now producing it with difficulty. But
offshore they found a huge prospect called Kashagan
in a similar geological setting to Tengiz. If it had
been full, it could have contained 200 Gb, but they
have now drilled three deep wells at huge cost, finding
that instead of being a single reservoir it, like Tengiz,
is made up of reefs. Reserves are now quoted at between
9 Gb and 13 Gb. BP-Statoil has pulled out. Caspian
production won't make any material difference to world
supply. There is however a lot of gas in the vicinity.
To put it in perspective
this would supply the world
for a little over a year, but it is broadly the same
as U.S. potential
It is quite possible
that the Afghan war was about
securing a strong point in this area. But interest
in it has now dwindled along with Caspian prospects
as the U.S. turns to Iraq, which does have some oil.
It is curious that these two U.S. military exercises
had different pretexts
A) Afghanistan was
to find the supposed architect of
Sept. 11 -- in which it failed; and
B) Iraq is about a
sudden and unexplained fear that
it might develop some objectionable weapons that might
pose a threat to someone in the future. North Korea,
which already has nuclear weapons and long range missiles
-- and isn't exactly a friendly place -- is not deemed
a threat. The cynic can be forgiven for thinking there
is some other motive for these military moves:
could it be oil?
FTW:
When and how was it discovered that the Central Asian
reserves were much smaller than anticipated?
Campbell:
I guess you could say over the past 24 months
as the different pieces in the jigsaw fell into place.
There is no single event or date, but rather an evolving
picture.
FTW:
What about replacement sources and alternative energy?
Tar sands?
Campbell:
Of course there is a range of alternatives from wind,
sun, tide, nuclear, etc. but today they contribute only a
very small percentage, and do not come close to matching
the oil of the past in terms of cost or convenience.
No doubt production from tar sands and heavy oils can
be stepped up in the future but it is painfully slow
and expensive, carrying also environmental costs.
It will help ameliorate the decline but has minimal
impact on peak. The simple solution is to use less.
We are extremely wasteful energy users. But it involves
a fundamental change of attitude and the rejection of
classical economic principles, which were built on endless
growth in a world of limitless resources. Those days are
over, exacerbated by the soaring population, itself now
set to decline partly from energy shortage.
FTW:
Has anyone determined what percentage of oil is used
for military purposes worldwide? If so, how much?
Campbell:
I don't know how much is used for military
purposes, but it must be considerable. The U.S. has
built a huge stockpile in the Middle East for the war.
FTW:
Is China the end game of competition for oil?
Campbell:
Yes, China is in desperate need of imports
as its own supply depletes. It has been very thoroughly
explored. It will be vying with the U.S. for access
to foreign oil. It is already well established in Iraq.
That is about how I
see it.
[A more detailed discussion
of the world oil crisis,
its connections to 9-11, and its implications for the
future will be contained in FTW Editor Michael C. Ruppert's
forthcoming book, "Across the Rubicon: 9-11 and the
Last Empire," scheduled for release by Feral House
in spring 2003.]
###
