Around 40% of what is considered oil is actually comprised of substances that are not petroleum products, such as natural gas liquids (NGL)
The changing nature of oil production in the United States has led to a reliance on importing heavier oil from other countries to meet refinery needs
Deep dives
Peak oil is still a reality
The concept of peak oil, although not often discussed anymore, remains a relevant and important concern. While the focus on identifying the exact date of peak oil may have overshadowed the underlying complexities of the issue, the fact remains that oil production is not what it used to be.
40% of what is considered oil is not actually oil
When examining the components of what is labeled as oil, it becomes clear that a significant portion, around 40%, is made up of natural gas liquids (NGL) and other substances that are not true petroleum products. NGL has a lower energy density and heat content compared to crude oil, making it less valuable for fuel purposes.
Implications for the US and energy use
The United States, with its focus on selling products and maximizing profit, has become reliant on the production and export of light crude oil and natural gas liquids. However, the heat content of these lighter products is lower, and the US is forced to import heavier oil from other countries to meet refinery needs. This highlights the changing nature of oil production and its implications for the US economy.
Peak oil is not adequately addressed by renewable energy
While renewable energy sources are important and have their place, they cannot fully address the energy demands and complexity of our modern society. Relying solely on renewable energy for electricity generation does not solve the broader challenges posed by declining oil production and its implications for various sectors of our economy.
On this episode, petroleum geologist Arthur Berman returns to unpack the development and drawbacks of ‘peak oil’. Art explains how our institutions have redefined what is considered oil, which has created an illusion of constantly growing oil production. The reality is that - circa 2023 - fully 40% of what is called oil is comprised of things that are ‘not oil’. What does this imply for global peak oil? Is peak oil, an observation which has been around for decades and repeatedly proven ‘wrong’, even relevant today? Is a specific ‘peak’ date even helpful or should we be focusing on the logical implications of a declining primary resource for global economies? And then, what should we do
About Art Berman:
Arthur E. Berman is a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector.