Peak oil hasn't gone away
Saturday November 1, 2008
Categories: Peak oil
Sharon Astyk explains why peak oil hasn't gone away, despite the rapid deflation in oil prices. The Financial Times this week published findings from a leaked draft of a forthcoming International Energy Agency report showing that output from the world's...
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About Crunchy Con
Rod Dreher is an editorial columnist for the Dallas Morning News, and author of "Crunchy Cons" (Crown Forum), a nonfiction book about conservatives, most of them religious, whose faith and political convictions sometimes put them at odds with mainstream conservatives. The views expressed in this blog are his own.
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One of the columnists at the NYT lamented the falling price of oil, fearing that it would take the sails out of the wind of alternative energy. I hope that it does not. We have a short window of opportunity to move towards sustainable energy sources, including our feet.
Glenn Beck had the former president of Shell Oil on his show a couple of weeks ago. Glenn Beck IS a "Woe is us!" kinda guy, but the former president of Shell Oil basically told him "Chill out. We will NEVER run out of oil!". He's an industry insider too. Who to believe, Rod?
We might never run out of oil as in pump the last barrel out of the ground, but the idea that we can keep on using it like we have been along with adding a two or three billion Chinese, Indians, Brazilians and so on to the Amero-European lifestyle is just insane. We might never run out of oil, but we are definitely running our of cheap oil. It may not be the apocalypse, ala Kunstler, but it is going to require some fairly large changes to our way of life and the sooner we get started with it the easier it will be. Don't get used to the current price of gasoline. It will start going up again by this spring, at the latest, I bet.
...hey, we can adapt creatively -- but we've got to start now."
That's the America I know and love. The tradition we give to the world is one of adaptation, we are supremely adaptable to new circumstances. Not that our adaptations are always pretty, but we've incorporated waves of immigrants from not just different religions or countries, but from different continents. We rally whenever the chips are down, and have historically prospered as a result of our difficulties. The sky is always falling in one way or another, over the past two centuries we've innovated our way to brighter skies than we had before. Sharon is right, let's get to work
the former president of Shell Oil basically told him "Chill out. We will NEVER run out of oil!"
This statement is pro-forma. There's nothing to lose from saying it, nothing to gain from saying we will run out of oil. If the world is going to run out of oil, "drill, baby, drill" is the equivalent of crying "more whips, baby, more whips" at the dawn of the automotive age.
I read the story in the FT, but I read it differently. It basically says that:
"Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times."
And:
"The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand," the IEA says."
So you need extra investment and new capacity.
What's the problem?
"The decline will not necessarily be felt in the next few years because demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified, oil executives say."
And:
"The watchdog warned that the world needed to make a "significant increase in future investments just to maintain the current level of production".
The only problem I see here is lack of investment.
"The effort will become even more acute as prices fall and investment decisions are delayed.'
The problem of investment could be compounded by the current crisis. This is a problem, but I've read plenty of articles in the FT about what oil countries and companies plan to do about this. The jury is still out.
And note this:
"All the increase in oil demand until 2030 comes from emerging countries, while consumption in developed countries declines.
As a result, the share of rich countries in global demand will drop from last year's 59 per cent to less than half of the total in 2030.
This is the clearest indication yet that the focus of the industry on the demand - not just the supply - side is moving away from the US, Europe and Japan, towards emerging nations."
Our consumption is already going to decline, even under this report.
The other story concerned only the U.K.
This story was about the effect of the current crisis and the drop in oil prices on investment. I don't see the story as saying anything more than that.
You might be right about peak oil, but, unless I'm missing something, this story doesn't seem alarming to me.
PS I don't drive or own a car.
"We'll never run out of oil" is true--it will be too expensive to extract whatever remains at the end. What is debatable is the statement, "We'll never run out of cheap oil."
Peak oil hasn't gone away, and unfortunately neither have the greedy twits in the banking industry: http://www.dailymail.co.uk/news/worldnews/article-1082165/U-S-warns-banks-using-bail-money-pay-pensions-executives-criminal-offence.html . Do these guys really want to see guillotines set up on Wall Street? They sure act like it.
Brazil.
Brazil took ten years to become fully independent of foreign oil by going to Sugar Cane ethanol.
Brazil. 10 years.
Brazil is independent of foreign oil, and we're still sucking on the teat of Saudi Arabia, Russia, Venezuela, etc., watching them cut oil production to keep prices artificially high.
USA! USA! USA!
Man... it hurts sometimes. The simplest solutions are unable to be implemented because of the entrenched lobbyists and businesses sucking on the government teat.
Ugh.
Rod,
I have been shaking my head at your blog lately. Are you doing alright? You seem to be all gloom and doom all the time. It really is getting ridiculous. You are extremely negative and that makes me sad. I used to enjoy your blog and I would read it all the time. Now, I am not sure I have the stomach to continue reading a Debbie Downer wannabe. Cheer up. Life is good. We live in the best country on Earth and are indeed blessed by God. I know times are tough....believe me, I know. My party is about to be trounced in the upcoming elections, but life will go on. I will rejoice in the knowledge that God is in control and everything will work to the glory of God. I miss your joy you used to post with.
Take care of yourself.
And what, Eddie, are they doing to their ecology in the meantime? I honestly don't know, but I'll look it up and I get the feeling it can't be good.
And to anyone who shouts about oil sands I offer the following:
http://www.howtoboilafrog.com/video/harperWater.html
Go Tech!!! Woohoo!!!!!
(sorry)
How could something that was never there in the first place go away. Peak oil is as big a fraud as Jimmy Carter's energy crisis.
Eddie:
Where in the United States do we have the surplus land to grow enough sugar cane to become fully independent of foreign oil via ethanol production? I wasn't aware that we have an Amazon Basin just waiting to be exploited.
You need to think these things through before you post them.
From Bloomberg, food for thought:
"Energy Projects
Brown's visit coincides with the signing of a number of deals in which Gulf states will invest in renewable energy projects in the U.K.
``Gulf oil and gas revenues have provided masses of finance for the region, but will now also be used to help kick-start the British green energy revolution,'' Miliband told reporters. ``Gulf states recognize the U.K., too, has natural assets to offer investment opportunities for them.''
BP Plc Chief Executive Officer Tony Hayward, Centrica Plc CEO Sam Laidlaw and Royal Dutch Shell Executive Director Malcolm Brinded were among business leaders accompanying Brown.
The initiative comes at a time when oil-rich states are suffering from a plunge in oil prices. Brent crude futures prices have fallen by more than half from a record of more than $147 in July."
German scientists discovered how to process coal into oil back in the 1920's
Jim -
If we switched all the corn fields we currently use for Ethanol to Sugar Cane, which gives a MUCH HIGHER YEILD OF ETHANOL PER ACRE, we'd have more than enough land to make the switch.
Are you aware that a Columbian company is starting Sugar Cane Ethanol Production in Lousisiana this upcoming year?
http://www.greencarcongress.com/2008/06/columbian-group.html
That's right. A COLUMBIAN company coming to the USA to produce Ethanol.
You need to do your research before you become the contrarian.
Here's a few links to help you start:
http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil
Perhaps you'd care to revise your comment?
EddieInCA,
A great deal of our corn acreage is in places such as Iowa, KS, Neb. As far as I know, sugar cane is a tropical to semi-tropical crop which depends on a long growing season and a great deal of water. The great plains are not suitable to sugar cane. Louisiana and Florida are suitable to sugar cane--probably Mississippi and Alabama. I doubt seriously that we could grow sufficient sugar cane to get us off foreign oil supplies without a significant life-style change. Also, replacing food crops with energy crops will impact food availability across the world.
Ethanol (yet again):
1. Sugarcane does yield more ethanol per acre than corn - 662 gal/acre vs. 354 gal/acre (*).
2. US net oil imports are currently 12E6 bbl/day, or 26.8 EJ/yr (***).
3. Ethanol energy content = 21.1 MJ/liter (***).
4. Taking into account #1-3, we'd need 506E6 acres of sugarcane to replace annual US oil imports.
5. By way of comparison, 2008 corn acreage was ~87E6 acres (**), down from ~93E6 acres in 2007. [Anyone with more up-to-date figures, please share.] Note also that total US farmland, cropland, & harvested cropland were 938E6, 434E6, & 303E6 acres, respectively, in 2002 (****).
6. Sweet potatoes, with ethanol yields comparable to sugarcane (*****), might be better suited to the US. (Or not; anyone know?) Unfortunately, as shown above, even sugarcane yields may not be enough.
7. WRT biofuels generally: Not only do they amount to burning food - either directly, as with corn ethanol, or indirectly, by competing with food crops for land - but they would also leave our energy supply at the mercy of weather, pests, & crop diseases of various kinds. (E.g., what happens if bad weather and blight wipe out 40% of our biomass crop in a given year, as happened with the US wheat crop in 1954?)
(*) earth-policy.org/Books/PB2/PB2ch2_ss5.htm
(**) globenewswire.com/newsroom/news.html?d=139164
(***) eia.doe.gov/basics/quickoil.html; see also Table 1.4 of 2008 AER.
All energy densities taken from: bioenergy.ornl.gov/papers/misc/energy_conv.html
(****) ers.usda.gov/StateFacts/US.htm
(*****) 6.4 m3/hectare works out to ~685 gal/acre. See greencarcongress.com/2008/08/study-a-regiona.html
Oh, sure, sweet potatoes are far more easily grown across the US. They are at least not tropical/semi-tropical. I know that they are grown by gardeners in Kansas/Nebraska, and I know that they can be grown throughout the southeast quadrant of the US. WE could also use land for sugar beets, which probably yield more ethanol than corn. But, I agree with you, MI, that we simply do not have that much arable land. We still have to grow wheat, corn, and all manner of crops to feed our own nation (never mind other nations). And, if we wish to not use polyester (requires crude oil or coal-to-liquid technology) for clothing, we will need to have land for cotton, and food to grow wool-bearing animals (here in KS, we call those "sheep").
I was wondering about the difference between "farmland" and "cropland". I am guessing that the definition of farmland includes pasture, perhaps?
I am guessing that the definition of farmland includes pasture, perhaps?
It does. That same source estimates pastureland at 395E6 acres for 2002. Woodland was 76E8 acres, while land for houses, roads, waste, etc., was 33E6 acres.
The key thing to remember is that price is a result to the interaction of two key variables. Supply which because of peak oil is not increasing. Demand which is decreasing because of the credit crunch.
The key thing to remember here is that even if supply has peaked prices can go down if demand is going down faster then supply. When the economy starts growing again prices will probably go up a lot.
So now is not a good time to buy a Hummer as gas prices will probably rise at about the same time as you have to start replacing parts.
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