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Thread On Peak Oil And Its Implications
Mar 24th, 2010 | 33 responses
Last fall I came across an article that I wanted to write about but I didn’t know what to say that would fit within TMV guidelines (I even talked to Joe about letting me break them).
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves…
“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.
A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added…
A report by the UK Energy Research Centre (UKERC) last month said worldwide production of conventionally extracted oil could “peak” and go into terminal decline before 2020 – but that the government was not facing up to the risk. Steve Sorrell, chief author of the report, said forecasts suggesting oil production will not peak before 2030 were “at best optimistic and at worst implausible”.
But as far back as 2004 there have been people making similar warnings. Colin Campbell, a former executive with Total of France told a conference: “If the real [oil reserve] figures were to come out there would be panic on the stock markets … in the end that would suit no one.”
If peak oil is around the corner we are looking at an economic collapse (if nothing is done in the mean time) that makes the last few years look rosy. To understand why you have to understand that the economy is based on credit and for a credit based system to work it must continuously expand. Since there is a very high correlation between oil and economic expansion, then this logically shows that the economy won’t be able to expand until we change our technological/social structures to no longer have that correlation with oil output. Peak oil isn’t about running out of oil, it is about merely leveling of the rate of extraction.
Peak oil is starting to move more into the mainstream, Kuwait just released a prediction it will hit in 2014.
In the last thread there were many topics related to morality including environmental stewardship, personal growth, making sure others have basic security, etc. and the role of governance/company structures in those areas. I’m starting this thread because I think that peak oil (well peak energy) is going to destroy our current paradigm and dominant the discussion for the next few decades at all levels of society. This link gives a good overview of the expected implications of peak oil.
Anyway I have tons more to say but I don’t want to frontload it to allow people to say what they want.
33 Responses to “Thread On Peak Oil And Its Implications”
I covered this a few days ago Here. Our financial system is based on the oil standard. We have probably waited too long to transition away from oil because the energy and money will not be there to make the transition. You can find some facts on oil here.
I believe that there is still time to change how we are doing things so we can have security when it comes to our physical needs. There are a lot of low energy based methods for production coming online, and really it is more about social structures at this point than any technological/energy thing.
That's really a big part of the problem – social; structures don't change until they are forced to change. The danger is that when that point is reached the resources to change them won't be available.
Yes, financial/social structures don't adjust rationally to future expectations, they perpetuate far beyond sustainability and then collapse in a massive upheaval when all the feedback loops turn positive. To me the question is whether a concrete social model can be developed and proven to the point that when the collapse happens it will be able to step in very quickly and prevent full social degradation. This is why in my life I am working on it from many different angles on the technical side and starting to look to how to get that out generally. There is enough money, and it doesn't have to come from the government/megafunds:securing even a few million dollars will have enormous impacts and development.
And to think I was worried about fresh water this entire time….
I'm glad you could post this, a lot to think about.
Fresh water is probably as big if not bigger problem – living things need water they really don't need oil. That is the reason that oil shale and “fracking” for natural gas are not options.
I am glad to see this here on TMV. I used to talk to Joe G. about my own peak oil concerns all the time a while back–unfortunately, the bill is now coming due on our consumption habits, and we need to learn how to adapt to it–and I am confident that we can, it's just going to be more difficult than we think.
I hope you'll check out a couple of pieces on this, if you want to learn more, from a website called The Oil Drum–they're one of the many sites out there who focus on our energy future.
Here's a series on the basics of peak oil:
http://www.theoildrum.com/tag/overview
and here's a recent series on net energy (or energy return on investment) that is the key to understanding why oil is so important to our present way of life–and why we need to speed our science and attempts to get on alternatives at a much faster pace than we are so doing:
http://netenergy.theoildrum.com/
Social structures = trust each other. Water. and then soil and seeds. We'll work out the rest.
I got into quite an in depth debate with someone on another blog a couple years or so ago about peak oil, and was reacted to as an alarmist, which wasn't entirely unexpected given the ideology of the person and how much environmental concerns can track ideology (yes, I know it's ridiculous). I recall a National Geographic Issue that had peak oil as it's main article some time ago too, sorry can't remember exactly when – but it was an interesting article. Our dependence on oil is really incredible and we all know it's a non-renewable resource, which means it's just a matter of time, but how much time before crunch time? OK, I think it's about time for some peak oil denialists to weigh in. My time is up, need to go watch Road Warrior.
I guess the question is…do we trust the research from Kuwait?
If their research is honest….come 2015, we are in trouble.
You can kiss good bye all of our nature preserves that are located near oil.
Wow — our governments are misbehaving, misspending us into early oblivion if not checked, and now we get this news. Wouldn't it be interesting if this became a truly “lost decade” (inability for us to prepare for the tougher times starting in the 2020s with Baby Boomer retirements) with not only a continuation of the slump, but more misspending, deficits, and debt, and added to that, conflict over scarce petroleum and other natural resources?
“Fresh water is probably as big if not bigger problem.”
You're right, Ron, I believe. This won't be true everywhere, but in certain places, yes, indeed. The Euphrates is probably the best-known river that will spark conflicts eventually. (As CSIS described it a number of years ago, the Middle East is a “rapidly urbanizing desert.” While fertility has plunged all over the world, there are still a handful of places where it remains high, and parts of the Middle East are that way, leading to large population growth and a restless young society.)
Since I relocated back to the West, I've been appreciative from the start of its aridity (which is what defines the West fundamentally) and marveled at its continued growth and development, but also been concerned about the future (especially once Baby Boomers retire and so many in the East choose to join others in relocating to the Southwest).
wwa.colorado.edu/western_water_law/docs/Water2025_USDOI.pdf
And that's just cases of scarcity or fighting over available resources; there are still so many nations that lack clean, reliable, safe water supplies (for drinking and cooking, washing, etc.). There's only so much the future ailing Western nations will be able to do, and normally nothing more, to develop water and sanitary systems, electrification, etc., in the undeveloped world.
“I was worried about fresh water”
It depends on what you've experienced in the past, I guess. Some people have never had to worry about this and are complacent.
Don't they realize that even in the humid Southeast there have been “water wars”?
Just wait until the 2020s-2030s when Baby Boomers who don't head to the Southwest go southeast.
“And that's just cases of scarcity or fighting over available resources; there are still so many nations that lack clean, reliable, safe water supplies (for drinking and cooking, washing, etc.). There's only so much the future ailing Western nations will be able to do, and normally nothing more, to develop water and sanitary systems, electrification, etc., in the undeveloped world.”
That is really what concerns me with water…and oil to an extent. Developed countries will find away to survive. It will be hard, but we will figure it out. During this adjustment period of time, we will be too busy taking care of ourselves to worry about the lesser developed countries. Things could get really ugly.
They are starting to fall out of the woodwork
Might explain why Germany and France, two very green countries, have been holding off on tearing down their nuclear power plants….not to mention some other things worth mentioning, but would probalbly send this thread into a tail spin.
“Developed countries will find away to survive. It will be hard, but we will figure it out. During this adjustment period of time, we will be too busy taking care of ourselves to worry about the lesser developed countries. Things could get really ugly.”
That's true about global warming as well. That's after correctly discarding or rejecting 98-99.97+ per cent of what you are told about “global warming” or “climate change” as the garbage it is (from those who want to remake the world, as they have since the later 1960s, to conform to their demented PC-lefty dreams).
We can adapt more easily than the other nations can. Furthermore, global warming leaves much of our part of the world better off (other parts, worse off), while much of the lower latitudes would be worse off. (A reasonable worst-case scenario would desertify the tropical equatorial rain-forest zone, which includes tropical southeastern Asia, where the worst problems would happen.)
Assuming we may experience warming, we can adapt better than the lesser developed countries. We can and will want to help the other countries, but we'll be constrained by our own problems with aging and decline, and our future financial problems, from fiscal mismanagement over many years (facing us with heavy debt loads and the threats of debt trap and inflation), from entititlement and government-retirement overload, from labor shortages and tensions over immigration, to problems with resources and development (water, power, etc.). It's going to be tough.
I'd like to see another party not associated with global warming alarmist King make the same claims about oil reserves before I get more concerned than I am now.
“global warming may be responsible for the devastation reaped by Hurricane Katrina”
http://www.independent.co.uk/news/world/america…
http://news.bbc.co.uk/2/hi/3381425.stm
etc.
“why Germany and France, two very green countries, have been holding off on tearing down their nuclear power plants”
If they don't do this, they need to build even more new coal-fired power plants.
I expect that as things deteriorate the christian fundamentalists will start coming to the fore again. Maybe they can team up with the science deniers and form an alliance, take turns preaching about the apocalypse and the liberal devils.
To me the real culprits here are same as they've ever been: ignorance, arrogance, and the inability to snap out of destructive short term thinking. If we as a country had been making sustainable living a priority back when environmentalism first started coming into the national awareness, we would be much less likely to be worrying about a coming panic now. The old fable about the goose that laid the golden egg is metaphor for humans living on earth.
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He said nothing counterfactual, let alone “alarmist.” It is well agreed that hurricane frequency has little to do with surface temperature and more to do with long term oscillations (of which we are entering the upswing period) but that major hurricane intensity is directly related to surface temperature and the record percentage of Cat 4+5 hurricanes can be attributed to warming.
The latter isn't alarmist either.
You just use “alarmist” to mean that you don't agree with his opinion on the action that should be taken to address issues, it has nothing to do with the validity of his claims about science.
Mikkel,
King has been alarmist, as have been others, such as Hansen. (Hansen's book, “Storms of My Grandchildren,” has plenty of facts in it that make it worth reading — I bought and have read it, myself — but Hansen is also alarmist, remarkably alarmist and extremist, in his book, as well as blatantly political.) This whole “climate change” political movement (which is what it is) is getting tiresome with the hype.
It makes King's claims suspect here. I'd like to see someone else also state what he says. That it could be true doesn't surprise me, which is why I haven't expressed any unusual reaction to it one way or the other. Where I currently am, the main city has been drawing ground water and discovered not too long ago that the aquifier is smaller than it thought it was. Oops.
With oil, if reserves are smaller than we believed, it just advances the time of scarcity and conflict.
________________________________
Read the oil drum site extensively and see what you think.
“Read the oil drum site”
I will do so, Mikkel.
By the way, if you haven't read Hansen's book, it's worth your time. Hansen is overly insistent (“urgently” so) on phasing out coal use (and leaving other fossil fuels, too, “in the ground”), and blatantly political (with the additional amusing touch that he seems oblivious to it when recalling all the problems he has faced with others related to global-warming politics), but he has good factual knowledge, is not irrationally anti-nuclear; in fact, he actually wants reprocessing and a demo “fourth generation” fast breeder put into operation as soon as is practical to use (consume) the waste from new “third generation” modular advanced light-water reactors. (He knows nukes are today's alternative to coal for electricity generation.) He's also strongly against cap-and-trade scams, favoring a carbon tax instead (and a “fee-dividend” scheme that redistributes the carbon tax equally among the entire population).
He'd like us down to 350 PPM. (I do not believe we can reduce from our current levels.)
This reminds me of a book I came across: Energy and Man.
'In this important volume five distinuished authorities on the production, use, and importance of energy in civilization have collaborated to produce a symposium of immense significance.' Contributions are by Allan Nevins, Robert G. Dunlop, Edward Teller, Edward S. Mason and Herbert Hoover, Jr.
The oil man (I don't remember who at the moment) had a long thing congratulating the industry on helping mankind and saying that it would provide indefinitely, and the only threats were regulations. Then Teller came up and said that while the accomplishments were notable and that we had fossil fuels for the next half century, that we must start transitioning off of them because:
a) the release of CO2 would cause global warming (although he was far too extreme about how much change is needed to melt greenland, he said only a degree)
b) peak oil would hit in about 50 years (i.e. now) with peak coal in the middle of this century
and then he said:
(the then hypothetical) PV cells were amazing and a great personal technology that should be widely adopted.
nuclear energy was the future for industrial production, but ONLY thorium based breeder reactors would ever be economical and all traditional uranium plants would never work.
that once our industrial power was safe on breeder reactors then that would give us a couple centuries to develop fusion based plants.
It's too late now…
“the release of CO2 would cause global warming (although he was far too extreme about how much change is needed to melt greenland, he said only a degree)”
Hansen is also extremist in claiming an ice-sheet melting threat greater than others claim there is.
You don't need to get his book, either. His view of the threat and the solution can be found here.
http://www.columbia.edu/~jeh1/2008/TwentyYearsLater_20...
Hansen's original models were way ahead of their time and considered extreme, but the details have shown them to be largely accurate. He claims that the current models have none of the positive feedback loops that are expected and that the situation is far worse than the current models show. I trust him on this and put a lot of faith in his view until such time it is addressed by the larger scientific community.
His extremism turns me off (so does the politicizing he and others do of the science and related policy issues, but it's a bizarre example in Hansen's case, so affects me little), and the burden of proof is on him and those that make exaggerated or just extra-large claims, not on their critics.
As with “threats” and related hysteria, even more with what is stated we should do — any rush to “decarbonize” is not only unrealistic but perversely destructive and counter-progressive.
I'd like to see an overdue reintroduction of realism and sensibility to the environmental movement.
(That is what this is, the environmental movement, and rationalization of government interventionism, not “science” nor “reasoned” public policy advocacy.)
“any rush to “decarbonize” is not only unrealistic but perversely destructive and counter-progressive.”
I don't believe this to be the case. I think that writing off bad debt and then large investments in transportation, developments and energy of the type you have expressed support for in the past would suffice. It will require shared hardship on the scale of say WWII rationing, but it is feasible based on our technology. I look at it more about will and broken government/social/business structures holding us back.
“I don't believe this to be the case.”
Nuclear is the only substitute for coal to produce base-load electricity, currently. Aside from irrational (and worse) political resistance to nuclear, it's expensive to get started with it.
We have no practical substitute for petroleum for so much of our transportation. “Without trucks, America stops.” (Trains are marvelously efficient, as are barges, but we aren't all served by them.)
There is no reason for deliberately lowering our standard of living substantially. (We can achieve a good reduction in our energy use through conservation, but there is no merit in deliberately crippling ourselves, raising the cost of things greatly, eliminating most discretionary inter-city travel, etc.)
“I think that writing off bad debt and then large investments in transportation, developments and energy of the type you have expressed support for in the past would suffice. It will require shared hardship on the scale of say WWII rationing”
We in the West don't need to subject ourselves to such hardship, and I believe it would be worse, and there have been at least some studies actually trying to quantify the economic consequences of “decarbonization” (the environmental component of the environmentalist and socialist alternative that activists have sought since the late 1960s, first due to the “population explosion” “threat.”
Determining an optimal economic “solution” to this problem is certainly a useful subject (as it gives us information about how high to set a “carbon tax,” which makes sense in and of itself for reducing real pollution) and I know of at least one publication for the lay public on this subject:
citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.128.808&rep…
Off the shelf efficiency technology plus geothermal reduces energy needs by 30%. Running stuff off peak (like washing machines, dryers, whatnot) reduces peak load needs 15% or so.
Concentrated solar power can deliver industrial power in southwest. Small scale power generation (micro-hydro, wind, solar) can account for 50% of energy needs throughout the country. Geothermal power can supply 20% of total current needs.
I think that we can cut electricity usage 30% in relation to GDP and reduce utility needs by 50%.
Increased public transportation and car sharing services would reduce transportation needs drastically. Electric cars/trucks can be dominant within 10-20 years. Transportation corridors like you've said you support would help a ton too.
I think all of this investment would allow us to peak at 450 which is manageable and would be very good for the economy.
I would not be so optimistic as you with savings claims, and we won't (and there's no “need” to) submit to things like car-sharing when we don't want, but –
“Electric cars/trucks can be dominant within 10-20 years.”
I am guessing that is possible, but it could take longer. Note that these will have batteries, I'm convinced, and that there will be a big need for power provision as well as infrastructure to do the charging (which will use much more power than “necessary” because we insist on fast recharging).
“Transportation corridors like you've said you support would help a ton too.”
I really think this may end up being considered someday.
“would allow us to peak at 450 which is manageable”
This is possible. I don't believe Hansen and others who insist on a lowering to 350, if not more, are being realistic, to say the least.
The realistic worst case (worse than 450) is also a stable state, around 500 with a thawed Arctic (ice-free ocean or ice-free except for seasonal ice in shallow water around the shore — it always has been a silly rush to assume opening of the Arctic coastlines to shipping year-round). We can handle that here in the States, where it will be an improvement in some places, harsh in others. The big question is the effects from possible desertifying of the Amazon and Congo rain forest areas. That is possibly worse for us than desertifying of tropical southeast Asia, where so many people are. Desertifying the rain forest zones is worse than any slash-and-burn deforestation currently.
I suspect much of the worry will end when we do go eventually to electric vehicles, which will really clean up the air more in metro-urban areas as well as (something neglected by many) introduce a much more efficient source (90s per cent versus 20s-30s per cent) of propulsion. It increases our need for electric power, but is an overall reduction of energy needs as well as something cleaner (and less noisy).
Many people have a mistaken notion: we will continue using more and more oil until the moment it runs out, then we fall off a cliff. A right triangle, in other words. No, that isn't the way it works. Think instead of something more like a bell curve. Resources are exploited at an increasing rate until the marginal costs of further developing supplies falls below the marginal gains that can be achieved from the sale of those resources. At that point, the depletion rate of already-developed resources starts to outrace the rate at which new capacity can be profitably added. The curve usually isn't as nice and smooth in practice as it is in theory, as geopolitical disruptions or changes in demand may cause substantial wiggles up or down. However, these do not change the underlying reality, and serve mainly to confuse and mislead people as to what is actually happening.
So, yes, oil supplies are inevitably going to peak, and we are actually there for all intents and purposes, but no, we're not falling down a cliff, but rather are about to take a rather scary ride down a slope. This does not necessarilly mean the catastrophic collapse of the economy, but it does necessarilly at least mean some serious long-term economic decline. The US economy at present operates on about 100 quads of energy (BTUs). A little over a third of this comes from oil. We will be using oil for most of this century, but we will certainly be having to use less and less of it each year. The coal and natural gas will last quite a while longer, which is good, but they will be following the same type of supply curve as oil has been, so those will eventually start to decline as well. That leaves nuclear (providing about 8% of our energy at present), and renewables (which provide about 7%). Renewables are obviously the way to go for the very long term, but are they going to be able to provide 100 quads per year or more? I very much doubt it. My own back-of-the-envelope calculations suggest that 25 quads might be a more realistic and achievable goal for the US to plan for renewables over the next half-century or so. Nukes are much more controversial, of course, but even if you're going to go for them, extreme caution is absolutely necessary; the very words “crash program” in connection with nukes should raise the hair of anyone who hears them. We probably will be building some more nukes, but it is doubtful whether we will be able to do very much more than just replace capacity that will be going off line due to decommissionings.
The bottom line is that we really do need to be thinking seriously about how best to transition to a lower energy economy. Efficiency has often proven to be the least expensive energy “source” of all, which is good. There is a very extensive menu of initiatives that we should be doing. My guess is that sooner or later, we will no longer have the luxury of not doing these.
The bad news: There does seem to be a pretty strong correlation between energy use per capita and GDP per capita. How much can we cut our energy use – especially if forced by supply depletion – without that hurting our economy? We'll find out, but I'm inclined to be pessimistic. My guess is that it won't just be a matter of being more efficient, we'll also have to actually give up some things we have come to enjoy, and live more frugal lives that do without the more energy-intensive (and thus expensive) things. Such a thought is apparently “beyond the pale” for most policy makers and opinion leaders and “experts”. It shouldn't be. There is no guarantee that nations and their economies automatically go up and up and up without ceasing. There have been nations in the past that have suffered catastrophic collapse, and there are others that haven't collapsed but simply did very poorly, and suffered decades of economic decline. It can happen here, too.