Peak Oil

[cheesehead]

"Warning: Oil supplies are running out fast"

http://www.independent.co.uk/news/sc...t-1766585.html

Originally Posted by Steve Connor

Catastrophic shortfalls threaten economic recovery, says world's top energy economist

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.

. . .

Let me note here that there are two different types of crunch, with different causes and timing.

1. Demand exceeds supply on a short-term (a year or less) basis, but supply can be increased by adding new production facilities (oil wells, refineries). Sometimes, this is an inventory problem: countries have reduced their oil imports so much that when demand picks up their oil in local storage is insufficient to feed refineries fast enough, but this can be remedied by increasing ones imports. That's what the last paragraph above ("There is now ...") is about.

2. Demand exceeds supply forever, starting several years from now (estimates vary). AKA "Peak Oil". That's what the third ("In an interview ...") and sixth ("One day we ...") paragraphs are about.

I'll let you read the rest of the article.

The Oil Drum (http://www.theoildrum.com/), as usual, has informed commentary on that article from the Independent.

The Independent also has its own analysis article comparing the energy crisis and the financial crisis.

"Jeremy Leggett: Another crunch is coming -- but will the world act?"

http://www.independent.co.uk/opinion...t-1766551.html

There is one major similarity between the energy crisis and the financial crisis and one main difference. These two things tell us a lot about the role of cultures in how our modern version of capitalism plays out.

The similarity is that we are dealing with two massive global industries who have their asset assessment systemically, and roundly, wrong. The difference is that few people and organisations warned about the credit crunch as it approached, where as with the oil crunch, a host of people – many in and around the oil industry – are shouting a warning, and so to are a few good organisations concerned companies span British industry.

As for the international energy agency, it is as the World Bank was warning about the credit crunch a few years before it hit. In 2007, I convened an industry task-force on peak oil and energy security in the UK. It is chaired by Virgin, and members include Scottish and Southern energy, Arup, Foster + Partners, Stagecoach and my own company, Solarcentury. We released our first report at the London Stock Exchange last November, and our second will be released in November this year.

The first report concluded that peak oil is a grave risk for the global economy. Specifically, what concerns us is the threat in the premature peak in global oil production caused by either or both of a collective overestimation of reserves by the global oil industry, and an inability to deliver enough flow capacity because of underinvestment. The second report will examine, among other things, the impact of the recession on the global prices.

My own view of the state of play is that the recession might have bought us a little time, but has deepened the crisis beyond. The central problem is that the underinvestment in the oil industry today will play out as a tighter crunch in the middle of the next decade. It takes an average of six and a half years from finding an oil field to bringing it onstream and, in the rare case of giant fields, often more than 10 years. Why haven't more people in government, and the oil industry itself, seen this particular crisis coming? Why aren't they acting proactively to soften the blow?

The same question can be asked, with hindsight, of the bonus cultists who gave us the credit crunch, and their institutional fans. Gillian Tett of the Financial Times, a trained anthropologist, describes in her recent book the effort made by the banking elite at "ideological domination" ahead of the financial crash. Elites do this to maintain power, she explains. They decide what is talked about and what is not. There was a major "social silence" around the epidemic growth of derivatives.

This is exactly what I see going on among my old friends in the oil industry when it comes to weighing their assets. And their dysfunctional culture extends right into Whitehall, which is asleep on this issue. Civil servants will barely engage with the UK industry task-force.

One of the few financiers who saw the credit crunch coming said derivatives were financial hydrogen bombs built by 26-year-olds with MBAs. Here is another set of similarities and differences. The oil crunch is an economic hydrogen bomb. But it is being built by men close to retirement. The average age in the oil industry is 49, one of the biggest problems. It will fall to 26-year-olds to clear up their mess. Few of them have ever found an oilfield, much less built a refinery.

Yes, we've seen the oil crunch coming, for decades. I'm on record about it.

Watch the great overlap of AGW deniers with Peak Oil deniers. Their descendants will curse both groups.

[10metreh]

As a Brit, I would like to state that The Independent is, IMO, the British newspaper that most likes making people walking past in the shops think "This could be the end of the world!" in order to attract them into becoming regular readers. How much the journalists care about this planet I do not know.

[MooooMoo]

Originally Posted by cheesehead

"Warning: Oil supplies are running out fast"
...
The Oil Drum (http://www.theoildrum.com/), as usual, has informed commentary on that article

The Oil Drum's usually an informed source? What about this site, then:

http://www.lifeaftertheoilcrash.net/

One interesting note: Pay attention to the first letters of the title of that site. It's
Life
After the
Oil
Crash
Spell LAOC backwards, and you get the solution to peak oil: COAL. That's right, the world's abundant resources of coal can be turned into a liquid fuel to replace oil. The technology was known before World War II, and it becomes cost-competitive with oil at $70/barrel or more:

http://en.wikipedia.org/wiki/Coal_liquefaction

[cheesehead]

Originally Posted by MooooMoo

The Oil Drum's usually an informed source?

From my memory -- yes. From a quick review -- it seems still so. If you disagree, please tell me what you've found that indicates otherwise.

Saayyy... you wouldn't be confusing my adjective "informed" with other terms such as ... (I don't really know, since you didn't give any evidence or reason for your question mark) ... "advocating renewable energy" or "balanced look at all energy sources", would you?

IMO it's an well-informed source about the petroleum industry (hence the name). IIRC, just about everything I've read there is consistent with my own knowledge of the industry, so I recommend it as a good source of information about the oil industry.

For informed commentary on types of energy sources other than petroleum, go elsewhere.

What about this site, then:

http://www.lifeaftertheoilcrash.net/

I don't know -- I'm not familiar with it.

One interesting note: Pay attention to the first letters of the title of that site. It's
Life
After the
Oil
Crash
Spell LAOC backwards, and you get the solution to peak oil: COAL.

Yeah ... well, the cutesy title makes me a bit leery of it, but I really don't know whether stuff at that site is well-informed or not.

That's right, the world's abundant resources of coal can be turned into a liquid fuel to replace oil. The technology was known before World War II, and it becomes cost-competitive with oil at $70/barrel or more:

http://en.wikipedia.org/wiki/Coal_liquefaction

Yes, that's one way to use the coal in processes that require liquid fuel (such as internal combustion engines).

When considering the relative merits of different carbon-based fuels, one needs to look at the relative amounts of hydrogen and carbon in the source material. Compared to oil, coal has a higher proportion of carbon and less hydrogen. If the use is to be combustion with oxygen, then the carbon generally produces CO₂ while the hydrogen winds up as H₂O.

That's why coal combustion is, generally, a greater contributor to the carbon dioxide portion of the greenhouse effect than oil (or a derivative of it, such as gasoline) or natural gas (CH₄) -- for the same amount of energy output. The latter produce a higher proportion of water vapor than coal combustion. (There's also the greenhouse effect of water vapor itself, but water vapor's residence in the atmosphere is much shorter than carbon dioxide's.)

If coal is to be liquefied or gasified before use in combustion, then one needs also to take into account the various inputs and byproducts of the conversion process. Note the section titled "Carbon dioxide emissions" at the end of that Wikipedia article about coal liquefaction.

[MooooMoo]

Originally Posted by cheesehead

From my memory -- yes. From a quick review -- it seems still so. If you disagree, please tell me what you've found that indicates otherwise.

The Oil Drum has been becoming a more pessimistic, end-of-the-world, "we're doomed" type of site. A year or two ago, it was a site that mainly sticked to discussing the technical aspects of the oil supply (how much we have left, depletion rates, when we'll peak, etc). But recently, it has focused less on the technical aspects of oil and more about a backward transition into a pre-Industrial Revolution lifestyle. Here are some examples:

From- http://www.theoildrum.com/node/5633
"Things Fall Apart: Complexity, Supply Chains, Infrastructure & Collapse"
"We are not in the middle of a financial crisis, but at the edge of civilisational one."

From- http://www.theoildrum.com/node/5621
"Civilization and our cheap-energy lifestyle are on the verge of collapse. The longer we deny the situation and try to perpetuate the past party, the more severe will be the crash and fewer will be our options."

From- http://campfire.theoildrum.com/node/5511
"when this civilization 'collapses', (which in the opinion of this writer is inevitable - the timing, direction, and severity of which remain the salient unknowns), it will be the first to have at least some portion of its inhabitants anticipate and understand its own collapse"

edit: another one from - http://www.theoildrum.com/node/5381
"our American way of life cannot be perpetuated through ingenuity or technological innovation; nor can it be perpetuated through hard work...our American way of life...must and will come to an end in the not-too distant future"
"our sustainable living standard...would be approximately 3.2% of its current level - essentially that of Cambodia or North Korea today"

I put the "life after the oil crash" website since it also shares that end of the world viewpoint regarding peak oil.

Yes, that's one way to use the coal in processes that require liquid fuel (such as internal combustion engines).

When considering the relative merits of different carbon-based fuels, one needs to look at the relative amounts of hydrogen and carbon in the source material.
...
coal combustion is, generally, a greater contributor to the carbon dioxide portion of the greenhouse effect than oil
...
Note the section titled "Carbon dioxide emissions" at the end of that Wikipedia article about coal liquefaction.

Will large-scale coal liquefaction lead to a significant CO2 emissions? Yes. Is that a price we should pay if we can avoid oil shortages? You decide. I'm just pointing out that we have that option.

[cheesehead]

Originally Posted by MooooMoo

The Oil Drum has been becoming a more pessimistic, end-of-the-world, "we're doomed" type of site. A year or two ago, it was a site that mainly sticked to discussing the technical aspects of the oil supply (how much we have left, depletion rates, when we'll peak, etc). But recently, it has focused less on the technical aspects of oil and more about a backward transition into a pre-Industrial Revolution lifestyle.

Okay, that's a change, and your examples seem to support your opinion as far as I've read.

Here are some examples:

From- http://www.theoildrum.com/node/5633
"Things Fall Apart: Complexity, Supply Chains, Infrastructure & Collapse"
"We are not in the middle of a financial crisis, but at the edge of civilisational one."

From- http://www.theoildrum.com/node/5621
"Civilization and our cheap-energy lifestyle are on the verge of collapse. The longer we deny the situation and try to perpetuate the past party, the more severe will be the crash and fewer will be our options."

From- http://campfire.theoildrum.com/node/5511
"when this civilization 'collapses', (which in the opinion of this writer is inevitable - the timing, direction, and severity of which remain the salient unknowns), it will be the first to have at least some portion of its inhabitants anticipate and understand its own collapse"

edit: another one from - http://www.theoildrum.com/node/5381
"our American way of life cannot be perpetuated through ingenuity or technological innovation; nor can it be perpetuated through hard work...our American way of life...must and will come to an end in the not-too distant future"
"our sustainable living standard...would be approximately 3.2% of its current level - essentially that of Cambodia or North Korea today"

I read into each of the four to get an idea of how the arguments were being supported (i.e., how informed they were).

Though I haven't yet read any of them completely 100%, so far my impression is that each article is well-informed, collectively drawing together ideas from economics, thermodynamics, history, psychology and some other fields to illustrate each article's theme. None of the evidence drawn from any field contradicts my knowledge of that field. None of it contradicts or otherwise fails to support the articles' themes as represented by the quotations you present.

Though I might be reluctant to word my own predictions in the bluntest terms used by the four, I've not yet seen any reason why their predictions should not be respected and their warnings heeded.

None of them can be fairly characterized as "end of the world" IMO. For instance, end of civilization-as-we-know-it is not end-of-world, though that's a bit grandiose. I expect that there will have to be some very-large-scale adjustments by societies within a century after my death. The sooner we start on them (such as within my remaining lifetime), the less unpleasant the changes will be.

When I asked you to show why the site was not informed, I meant: evidence why their statements were not properly supported. Instead, you seem to be saying that they're not well-informed because you don't like the unpleasant predictions and conclusions.

Can you show me where statements in the four lack factual support?

You may have noticed that I am a great fan of "the lessons of history". I've seen no reason why the U.S. or any other modern nation is exempt from those lessons. Part of those lessons is why ordinary life got worse for people at certain times in the past. The change from one type of civilization to another may well be seen in retrospect by farther-future historians as the end of a "Golden Age of Oil". Unpleasant changes have happened before, and they will happen again. The human species is capable of adjusting; can it do so, for the first time in history, in advance of foreseeable changes, or will it wait, as usual, until reality compels it to change more unpleasantly?

I'm also a fan of psychology, which teaches, among other things, that we often perceive change as painful. (This has support from study of the nervous system. It makes evolutionary sense that that is a natural consequence of the architecture of that system. Evolution was not "directed" toward making us pick optimum choices when considering factors well beyond our local group, tribe, or neighborhood.) We avoid certain types of change when possible, and often fail to soberly consider the future consequences of certain types of change. Furthermore, we will go to great lengths to deceive ourselves about certain aspects of reality.

I chose not to heed informed warnings about certain effects of my lifestyle earlier in my life. I sometimes excuse myself on the basis of having had clinical depression, but the truth is still the same either way. As a result, my current state of health is not as good as I might reasonably have expected if I had followed the majority of sound, well-informed advice to which I've had access. Again, the truth is the same either way.

Show us why the unpleasant predictions and conclusions in those four articles are illogical, contradict known fact, or otherwise should be derided or ignored.

I put the "life after the oil crash" website since it also shares that end of the world viewpoint regarding peak oil.

Okay. I see why you did so, though I'm not any more familiar with the latter site than I was yesterday.

We are in agreement about large-scale coal liquefaction.

[cheesehead]

BTW, that we're going to have to make painful changes in regard to using oil doesn't mean everything in life is going to pot.

By using our foresight and reasoning, we can make the best of the situation for our descendants and others in future generations.

[MooooMoo]

Originally Posted by cheesehead

Can you show me where statements in the four lack factual support?
...
Show us why the unpleasant predictions and conclusions in those four articles are illogical, contradict known fact, or otherwise should be derided or ignored.

The articles are more guilty of over-exaggeration than of not providing facts. Look at the last one for example. It's claiming that "our American way of life cannot be perpetuated through ingenuity or technological innovation; nor can it be perpetuated through hard work...[it] must and will come to an end in the not-too distant future"
"our sustainable living standard...would be approximately 3.2% of its current level - essentially that of Cambodia or North Korea today" (if population is kept constant and doesn't increase)

So, why can't our way of life continue through ingenuity, hard work, or technological innovation? Can the author perfectly predict the future and say that no new technologies will save us? Also, that statement about Americans having to get back to Cambodian or North Korean living standards is ridiculous. Covering just 0.1% of the Earth's surface with solar panels would be enough to power the world's energy needs (all types of energy, not just electricity), even after accounting for cloudy days, nightime, transmission losses, and the fact that solar panels only capture 20% of the sun's energy. Silicon, the second most abundant element in the Earth's crust, is used in solar panels and in concentrated solar power, so resource shortages aren't an issue. Solar power isn't constant, so wind, nuclear, geothermal, tidal, and hydroelectric power will be used when the sun doesn't shine for extended periods.

Will we have to make some big changes to deal with an oil shortage? Yes. We'll be using electric cars instead of gasoline powered ones, high-speed rail will replace most flight, our gadgets will become more energy-efficient, we'll be getting our energy from uranium and renewables instead of from fossil fuels, our goods will be manufactured locally instead of overseas, and any exurbs that are out of the range of an electric car (more than 50 miles away from the city center) will probably die out and revert back to farmland.

Those changes will be quite an adjustment for many people, but they are a world away from Cambodian or North Korean living standards.

[Spherical Cow]

Originally Posted by cheesehead

I read into each of the four to get an idea of how the arguments were being supported (i.e., how informed they were).

Though I haven't yet read any of them completely 100%, so far my impression is that each article is well-informed, collectively drawing together ideas from economics, thermodynamics, history, psychology and some other fields to illustrate each article's theme. None of the evidence drawn from any field contradicts my knowledge of that field. None of it contradicts or otherwise fails to support the articles' themes as represented by the quotations you present.

I read the fourth one, on the unsustainability of the American system, and it seems to me to be only an unconvincing opinion in the editorial-page style, with very little hardcore backup or evidence. The majority of his illustrations contain no data at all, and are just sketches with dramatically sharp slopes up or down depending on what he's trying to persuade us of. (I admit I am biased against these kinds of data-less plots, and it immediately makes me questions the assertions.)

Below is one such "plot"- I counted 8 similar data-less plots in the article, and more in the expanded version of the article.

The expanded article contains an impressive list of references but without a peer-reivew-like detailed reading, I don't know how well they actually support his conclusions. Many of the references are to "The OilDrum" itself. A little too circular for my taste.

I have no doubt about overuse of resources by the US, and that it is leading to serious future problems (I have a 35-year career in the natural resources/environmental fields to drag around with me) but the article strikes me as
an unconvincing extremist viewpoint. He states:

"Absent immediate fundamental changes to both our distorted worldview and our dysfunctional resource utilization behavior, American society will collapse—not in 1000 years, or 500 years, or even 50 years; but almost certainly within 25 years. America, as we know it, will cease to exist well before the year 2050."

Collapse within 25 years? I am completely unconvinced.

Norm

[MooooMoo]

Originally Posted by cheesehead

Hmm... I can't find "Cambodia" or "3.2%" in the article (and forgot to mention that in my previous post). Where is that quote?
...
(I'd really like to see the context of the Cambodian and North Korean mentions :-)

Here you go:

http://www.theoildrum.com/files/Sust...0standards.png

[cheesehead]

Okay, now that I've found Cambodia and North Korea again, I'll respond later to that part.

Meanwhile:

Originally Posted by MooooMoo

The articles are more guilty of over-exaggeration than of not providing facts.

"over-exaggeration"? Shall we infer that there was a level of exaggeration you'd have found acceptable?

Look at the last one for example. It's claiming that "our American way of life cannot be perpetuated through ingenuity or technological innovation; nor can it be perpetuated through hard work...[it] must and will come to an end in the not-too distant future"

Depends a lot on ones definition of "way of life", doesn't it? I bet that the author was more thinking of all the ways we use personal autos and other oil-product-powered machines than you or I would include those in our version of "way of life".

So, why can't our way of life continue through ingenuity, hard work, or technological innovation?

Perhaps it could, if ones definition of "way of life" is not too heavily dependent on oil products.

Can the author perfectly predict the future and say that no new technologies will save us?

I don't see any claim to do so, so this is a straw-man -- an exaggeration of your own.

Covering just 0.1% of the Earth's surface with solar panels would be enough to power the world's energy needs (all types of energy, not just electricity), even after accounting for cloudy days, nightime, transmission losses, and the fact that solar panels only capture 20% of the sun's energy.

Assuming the 0.1% is not far off, that may be true. Do you see the author denying that? Where?

Silicon, the second most abundant element in the Earth's crust, is used in solar panels and in concentrated solar power, so resource shortages aren't an issue. Solar power isn't constant, so wind, nuclear, geothermal, tidal, and hydroelectric power will be used when the sun doesn't shine for extended periods.

Sounds good to me. Where does the author deny that ... or does he? If not, what is the point of these statements?

Will we have to make some big changes to deal with an oil shortage? Yes.

Ahhh... an item of agreement with the author!

We'll be using electric cars instead of gasoline powered ones, high-speed rail will replace most flight, our gadgets will become more energy-efficient, we'll be getting our energy from uranium and renewables instead of from fossil fuels, our goods will be manufactured locally instead of overseas, and any exurbs that are out of the range of an electric car (more than 50 miles away from the city center) will probably die out and revert back to farmland.

... but none of that qualifies as a change in way of life, in your opinion?