Shell CEO predicts peak oil before 2015
Jeroen van der Veer, the CEO of Shell, has all but acknowledged a rapidly approaching peak oil.
The Oil Drum has published an e-mail sent to all Shell employees in which the CEO admitted:
“Regardless of which route we choose, the world’s current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”
He went on to criticize the lack of response by governments to the coming energy crisis:
“Taking the path of least resistance, policymakers pay little attention to curbing energy consumption - until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.”
He described two possible scenarios for our energy future; the “scramble” and the “blueprint”, and argues for greater international agreement and Government action. Check out the whole e-mail at www.theoildrum.com
February 5th, 2008 at 4:38 pm
From the Shell article:
“By 2100, the world’s energy system will be radically different from today’s. Renewable energy like solar, wind, hydroelectricity, and biofuels will make up a large share of the energy mix, and nuclear energy, too”.
Be green. Go nuke
February 5th, 2008 at 4:51 pm
frog, you suck.
i hate to be crass, but how can you be so stupid?
peak oil is when world petrolium production reaches its maximum level - it’s peak.
the shell ceo ‘admits’ that demand will exceed supply - this doesn’t mean that supply is decreasing, just that it is INCREASING slower than demand.
February 5th, 2008 at 9:23 pm
Petermcc
Too true… from the gutter to you ain’t “up”.
Frog quoted the CEO of Shell and “The Oil Drum” … Accurately.
YOU asserted a claim that wasn’t made and then went on to namecalling.
Is yours a reading disability or an intellectual handicap?
Go advertise your deficiencies in another forum. Your efforts here fill some much needed blank space.
BJ
February 5th, 2008 at 9:40 pm
I think it’s your comprehension that is the problem:
Frog: “Jeroen van der Veer, the CEO of Shell, has all but acknowledged a rapidly approaching peak oil.”
CEO: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”
February 5th, 2008 at 10:05 pm
Perhaps innumeracy? Can you tell me how many years it is until 2015?
You persist in showing off your inadequacies. Such demonstrations are very instructive to the rest of us as negative examples.
February 5th, 2008 at 10:11 pm
you (and frog) clearly don’t understand supply and demand.
Enjoy: http://peteremcc.wordpress.com/2008/02/05/green-comprehension/
February 5th, 2008 at 10:54 pm
Petermcc — arguing from your conclusions isn’t valid logically.. What makes you think supply - and - demand isn’t connected with peak-oil?
Acknowledging a rapidly approaching (within 7 years is usually regarded as rapid in terms of human history) peak is what Frog did. He, as everyone with two working brain cells and the power to observe humans at work does, regards demand as being relatively inelastic.
Do you have some magical way of reducing demand rapidly in the face of growing populations and growing expectations in the third world…
Do you think the market will magically rescue all those dependent on this resource that they will, quite soon, be unable to pay for?
http://energytechstocks.com/wp/?p=819
As one of the magicians I am telling you that the next thing to come out of the hat isn’t likely to be a miracle.cure for the laws of thermodynamics.
BJ
February 5th, 2008 at 11:15 pm
i’m not saying we’re not going to have enough oil.
i’m saying that what the ceo described is NOT peak oil.
it is possible to not have enough oil without it being peak oil.
i’ve done some drawings for you on my blog to help you understand.
February 6th, 2008 at 12:46 am
peteremcc, Frog stated “Jeroen van der Veer, the CEO of Shell, has all but acknowledged a rapidly approaching peak oil.”
“All but” means van der Veer stopped short of actually using the words “peak oil”. Instead he repeatedly refers to studies of future oil supply and demand. If you take the time to locate these studies and read them you will find that they explicitly state that it is peak oil that will cause demand to exceed supply by 2015. Those studies discredit the popular explanations for the supply problems since 1999 as being little more than conspiracy theories.
The graphs on your blog do correctly portray two ways in which demand can exceed supply. Your failure to read what van der Meer actually wrote has lead you to an erroneous conclusion.
February 6th, 2008 at 12:53 am
Stop fiddling with words.
The title of this blog post is - “Shell CEO predicts peak oil before 2015″ - no buts (or all buts) about it.
February 6th, 2008 at 12:55 am
Oh and note also the very next sentance after the one you quoted:
“As a result, society has no choice but to add other sources of energy - renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands.”
February 6th, 2008 at 1:15 am
Given that the evidence is growing that oil production peaked in May 2005, predicting that supply may fail to keep up with demand after 2015 is less than impressive.
Trevor.
February 6th, 2008 at 1:18 am
I wouldn’t be surprised if supply fails to meet demand sooner than that - China and India and others are growing at a tremendous pace as they embrace capitalism.
February 6th, 2008 at 2:12 am
Aint nothing worse than a sore loser.
For the last two years supply has been struggling to keep up with almost static demand. The surge in oil prices at the start of the decade failed to dampen demand growth but the second surge mid-decade has definitely supressed the growth in demand for oil, even in India and China.
February 6th, 2008 at 9:12 am
I’m sure Peter must be wrong.
But where does the Shell CEO predict peak oil before 2015?
The van der Veer comments about demand and consumption are real interesting, thanks for sharing.
But Peter must be wrong. Please show him this by quoting the passage concerned with Shell’s observations about the oil supply. As it stands Peter seems to be right and Frog seems to be missing the boat! Can’t have that now can we?
February 6th, 2008 at 9:13 am
So we get to the crux of your problems with this post… besides your incredibly insulting attitude.
Peak oil isn’t any sort of problem for anyone if there isn’t any demand. Is it?
Of course not.
Peak oil is a problem ONLY in the context of demand… and the CEO of Shell and Frog and the folks at the Oil Drum, all of us have a good handle on “demand” as part of the equation. The recession that is hitting the US has been reducing demand there near a year now. That recession could become something economically “worse” and demand is definitely slacking off… a little… but Inelasticity in demand for this commodity has always been the rule. Look at the economic damage that has to be done to reduce demand.
Am I to take it from the things you’ve posted that you DON’T believe that oil production has peaked, is peaking or will peak?
i’m saying that what the ceo described is NOT peak oil.
it is possible to not have enough oil without it being peak oil.
You don’t quite say that…. the implication is weak, but if that is not the case then I simply don’t understand why you chose to go non-linear about a pedantic point of difference.
The problem you have is that…. demand exceeding supply, as described by the CEO of Shell, Frog, Yourself, Maxwell, Chefurka, Simons et.al.. IS NOT A PROBLEM if the market can adjust by simply moving the price point higher and so increasing the supply. It has done this repeatedly over the past 200 years. We all understand that the market works and how well it works… and yet we are all saying that there will be a problem.
This problem comes because the invisible hand is a hand. It isn’t an eye, or a brain or a heart and it has none of their characteristics. It can react only to those things it feels in real time and it can anticipate nothing whatsoever. It has no way to prepare for the imposition of an inelastic supply.
You chide us about Supply and Demand and appear to be pointing at increases in demand as being the issue. The problem for you is that UNLESS peak oil restricts supply, the price and the supply will follow demand as obediently as a well trained dog. If the market works the price rises and the supply increases. End of problem. Only the onset of peak-oil based supply inelasticity can make it a problem.
… and since it IS a problem according to all the people I’ve mentioned so far and more, it is related to Peak Oil… not increasing demand.
.
Maxwell’s discussion,the CEO of Shell… I’ve posted half a dozen links elsewhere on this blog, showing that peak oil *in your terms* is happening.
As a result there is a problem in the supply-demand equation over the next 10 years. Peak Oil creates the problem because there is no no sane price to make supply catch up anymore… it has to go high enough to suppress demand, which is already inelastic and as a result price goes ballistic.
If we were on the upside of that peak oil curve, supply would still be elastic and price would affect supply and nobody would be concerned at the way the market adjusts.
Your abusive posts are not appreciated here. When you contribute to the discourse we can respect your opinion even if we disagree. You must however, state the disagreement more clearly than calling people “stupid” and you owe Frog an apology.
BJ
February 6th, 2008 at 11:59 am
Thank you BJ.
I am so thankful for your quiet sanity & cool reason.
February 6th, 2008 at 12:34 pm
Yes, I apologise for the insult, but quite frankly I couldn’t believe what I was reading on a blog that should know better on enviromental issues.
I maintain that frog said that the ceo said that peak oil was coming in 2015, where as all the ceo actually said was that demand would exceed supply in 2015.
“You don’t quite say that…. the implication is weak, but if that is not the case then I simply don’t understand why you chose to go non-linear about a pedantic point of difference.”
Well I said exactly that, in my first comment, and in all the following ones. I even made a nice drawing to illustrate the point in case I wasn’t describing it clearly in words.
Considering that frog proudly declares that a ceo of a petrolium company predicts (and therefore believes in the coming) peak oil in 2015, I wouldn’t consider the fact that he did no such thing a ‘pedantic point of difference’.
“Am I to take it from the things you’ve posted that you DON’T believe that oil production has peaked, is peaking or will peak?”
No it hasn’t peaked
The second part depends on what you mean by ‘peaking’… if you mean is heading up towards a peak, then yes it is, if you mean it is currently - right now - at the top of the peak, then no.
Yes it will peak - that’s just common sense, it is the date that is hard to determine.
February 6th, 2008 at 2:07 pm
OK Peter - Thanks for that and welcome back.
As for when peak oil occurs or will occur, both of us know that it’s going to be impossible to accurately identify it until we can look back at it. However, the evidence of it is definitely available.
I like this guy cause he’s collected a lot of research and gone over the “The Oil Drum” and worked out a lot of it there as well.
http://www.paulchefurka.ca/
http://www.paulchefurka.ca/WEAP2/WEAP2.html
The eye-in-the-sky view of what the Saudi supply looks like.
http://satelliteoerthedesert.blogspot.com/
This guy does more on consequences than when the actual peak shows up
http://www.roadtransport.com/Articles/2008/01/31/129670/worried-about- oil-shortage.html
This is the source where you can see Maxwell’s analysis. He hasn’t become who he is by being wrong about this sort of thing.
http://energytechstocks.com/
http://energytechstocks.com/wp/?p=819
That’s part/page 1 where he lays it out.
This is the latest and greatest off the oil drum.
http://www.theoildrum.com/tag/update
http://www.theoildrum.com/files/PU200712_Fig3b.png
..and the original source article.
http://www.theoildrum.com/story/2006/11/13/225447/79
Given what we know at this point I think Maxwell is being optimistic except that the recession is going to kick demand in the teeth, which also affects price and how much is pumped. Which tends to make this peak rather fuzzier than it might be.
Since production did decline a little we could actually have already seen the peak. Since it COULD conceivably and with enough market price incentive, be boosted another little bit we might be premature by a year or two if we called it now.
respectfully
BJ
February 6th, 2008 at 8:21 pm
I’ll second Joy, thanks BJ for taking the time.
February 6th, 2008 at 10:46 pm
Thanks BJ.
Yes pedantic, thrash it out over semantics, passes the time I guess. I notice fewer seem intent on debating peak oil as a theory lately, with superfluous nit-picking over minute details being more common, like squabbling over chairs on the titanic.
I could not care less about the most common discourse of how they will run their cars and trucks and flights to London. Mobility pales on a cavernous stomach. Even IF there was a smooth transition here to a stable state precariously mainlining on hydro/wind/tui/lignite CTL… it would be a fools paradise with asia in petro-collapse and australia nearing completion of their desertification project. I would wager that ‘kiwis’ are too apathetic and deeply indoctrinated in the cult of consumer greed to survive.
February 7th, 2008 at 10:52 am
Howdy readers, sorry if my poetic licence caused a fracas. The title was chosen to “mix it up” and I agree was not entirely accurate based on the e-mail from the Shell CEO. However, the “all but acknowledged” line at the beginning should have cleared that up. To anyone used to hearing what CEOs of major oil companies come out with, that was the closest thing to an admission of peak oil that it’s economically or politically possible to come out with.
February 7th, 2008 at 10:55 am
“Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”
Sounds to me like he’s saying ‘we’ll be drilling less accesible oil, so that’s why prices are going up and please focus on this and don’t look too closely at out massive profits.’
“if policymakers… actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, mobility and buildings… Since CO2 capture and storage adds cost and brings no revenues , government support is needed to make it happen quickly on a scale large enough to affect global emissions. At the very least, companies should earn carbon credits for the CO2 they capture and store… Companies can suggest possible routes to get there, but governments are in the driving seat. And governments will determine whether we should prepare for a bitter competition or a true team effort…”
And this all sounds like ‘we want to be paid for looking after the environment and we want government (i.e. public) money for developing new technology and we want the government to make sure we get government money without having to compete for it, ta very much.’
Not really anything new here.
February 7th, 2008 at 11:10 am
“Matt Simmons (MS): My opinion is that it’s increasingly likely that we actually set an all-time record in May 2005 of 74,252,000 barrels per day. And for the first three months of 2007, we’re almost a million barrels per day behind that, and we’re dropping fast. If that record still holds a year from now, I’ll bet someone ten-to-one that we set peak oil in May 2005 and it’s now past tense.”
http://www.financialsense.com/editorials/casey/2008/0109.html
February 7th, 2008 at 12:18 pm
Blue Peter said: Be green. Go nuke
peter, nuclear may be an answer for populous nations such as China and India, but it is not an answer for New Zealand.
Our electricity system has to be able to back up its largest unit for times that it will be out of service, and the reserve turbines must be already spinning at the cut-off point if blackouts are to be avoided.
Nuclear shutdowns would remove 1200 megawatts without warning, compared to a large gas station of 400MW or 250MW at one of the four Huntly units.
A single nuclear plant would risk security of supply because the NZ system cannot provide instant back up at any reasonable cost.
Building, operating and maintaining two of them would therefore be necessary. This would provide a generating capacity far in excess of New Zealand’s needs, and would therefore result in very expensive electricty.
February 7th, 2008 at 4:26 pm
Wonder why Frog didn’t quote the recent BP sumission to the UK parliament that production is likely to peak due to flattening demand caused by political interventions rather than resource issues?
Are we scared of ‘peak demand’?
February 7th, 2008 at 4:59 pm
thanks for the admission frog, though I agree with Sam’s analysis.
note that I don’t want government subsidies to the petrol companies either….
now would you kindly ask your mps to quit with the poetic licence they use to scare everyone too…?
February 7th, 2008 at 5:02 pm
>>but it is not an answer for New Zealand
Didn’t say it was.
However, nuclear science doesn’t sit still. Smaller generation IV reactors may be applicable in future.
February 7th, 2008 at 9:32 pm
The security risks do not scale down with smaller nuclear reactors.
New Zealand would not - and probably wouldn’t be allowed to - set up a nuclear fuel manufacturing capability, nor would we set up a spend nuclear fuel reprocessing capability. We would therefore be dependent on other countries for both of these, and therefore at their mercy when it comes to setting prices and priorities. As other countries set up nuclear reactors, expect the market to favour the few suppliers of nuclear technology and services.
Nuclear reactors have long lead times. We can expand our hydro, geothermal and wind generation capability and invest in solar, tidal current and wave technology and have that all running well before a nuclear plant could be completed.
IMHO if any country doesn’t need nuclear power in the coming oil-less years, it is New Zealand.
Trevor.
February 12th, 2008 at 8:49 am
I hope our major power companies are listening, and quietly abandoning their plans to import natural gas when ours starts dwindling next decade. As for building new gas-fired power stations - forget it.
Trevor.
February 14th, 2008 at 8:40 pm
Energy Watch Issue #46 is the Peak Oil issue. It was out in December:
http://www.energywatch.org.nz/recent.html
Trevor.
June 11th, 2008 at 8:15 am
Its classic way to keep the price of something as high as you possibly can for as long as you can. Anyone seen the film Blood Diamond?