$500 Oil Coming Part 2 - 11/19/08

The peak oil theory was introduced in the 1950s by a Shell geophysicist named M. King Hubbert.  He saw where the production of oilfields tended to follow a bell shaped curve, which peaked and turned down sharply.  After coming up with a formula to quantify his theory he predicted the U.S. crude oil production would max out in the early 1970s, which it did reaching its apex at under ten million barrels a day after which it began a long slide down.  Hubbert later predicted world oil production would peak in 1995.

Simmons and others point out some of the world’s largest oilfields like Prudhoe Bay and North Sea are in decline.  It is estimated the world’s current producing oilfields are in decline by 4% to 5% annually.  This means new reserves must be found, but since the mid-20th century new reserves have been slowing.

OPEC makes is very difficult to assess the situation due to their lack of information about oil production and reserves.  In the 1980s OPEC changed their production quotas to be based in reserve figures.  After this many of the producers raised their claims of proven reserves by 40% or more.  Saudi’s claimed reserves have stayed constant since 1988 even after pumping billions of barrels of oil since then. 

Simmons latest project has been tapping into power from the ocean to produce electricity.  Partnered with physicist George Hart with Ocean Energy Institute they have a plan to build floating wind turbine farms 20 miles off the coast of Maine, which could power the entire state.  The Gulf of Maine alone could power 10% of the United States consumption.  Playing off the T. Boone Pickens wind farm plan they are calling it the Pickens Plan Plus.  Senator Collins has thrown her support behind it giving the plan some fast movement forward.

Working with Advanced Engineered Wood Composites Center (AEWC) they are developing a new windmill blade technology for the project.  The project could be ready by 2020.  Simmons believes the timeframe must be compressed because with oil increasing in price as he believes we do not have that much time.  It would appear Simmons believes $500 oil has some time to get here, but it will come.  

Part 1

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