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Peak Oil - May 4 (late-breaking)

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage

Oil Spiel
(profile of Kunstler and PO)
John Galvin, Outside Magazine
President Bush says Americans guzzle too much petroleum, and James Howard Kunstler would certainly agree. But the flamethrowing author of The Long Emergency-a wickedly entertaining and terrifying look into a future without cheap fuel-thinks the world isn't doing nearly enough to get ready, and nobody is safe from his wrath.
"You're not going to run Walt Disney World and the interstate highway system on ethanol or hemp! Or biodiesel! Or hydrogen! Or solar power, or all of them together," booms the man at the podium in the conservative khaki suit. "That isn't going to happen!" he continues in a staccato blast of invective. "We are going to have to make other ar-range-ments for how we live!"

James Howard Kunstler, a stout, bald 57-year-old author from Saratoga Springs, New York, is in the throes of his modern-day hydrocarbon jeremiad. He's pacing. He's yelling. He's livid. And just in case you missed his point, he's jabbing his fingers downward to show the direction of things to come.

America, Kunstler argues, is about to become one fantastically miserable place. Why? Because our entire standard of living is propped up by cheap oil, and the days of cheap oil are over. "No combination of alternative fuels is going to allow us to run the United States the way we've been used to running it," he tells the Dallas crowd. And though tonight he'll resist calls to pinpoint when the nightmare will begin, he's told the online environmental magazine that "we're going to be feeling the pain" in as little as three years, and suburban collapse might start in ten.

Sounds preposterous, on the face of it. But Kunstler bases his predictions on a geoeconomic concept called "peak oil" that is gaining credibility even within the petroleum industry.

...Hanging on Kunstler's every caustic word are students, enviros, urban planners, and fans like Jeffrey Brown, 49, a native Texan and concerned independent oil producer who helped organize this peak-oil talk.

A clutch of buttoned-up oil-biz men sit in the front rows, among them the legendary tycoon-turned-hedge-fund-manager T. Boone Pickens, who invests in oil and gas futures and alternative-energy firms. Nearby are some execs from Oklahoma-based Chesapeake Energy, which, like Pickens's firm, kicked in $5,000 to SMU to help pay for the event. The petro-professionals mainly showed up to hear the first speaker in this doubleheader, leading oil-industry investment banker Matthew Simmons, whose book Twilight in the Desert concludes that Saudi crude is running out. Stockbrokers, lawyers, traders, and Herbert Hunt, of the famous Texas oil clan, are all on hand. Although, at the moment, they probably wish they weren't.

"We are going to have tremendous problems!" Kunstler is shouting. The crowd sits erect, at attention, looking somewhat wan.
(May 2006)
One of the best-written articles on Peak Oil - entertaining, but covering all the bases. Note that Energy Bulletin contributor Jeffrey Brown figures in the article. Author John Galvin has written for Details, GQ, and The New York Times Magazine. -BA

Bartlett on CSPAN last night speaking about PO

Representative Roscoe Bartlett, U.S. Congress via thorn website
Madam Speaker, I have here in my hands two pretty big reports that were paid for by our government and have for reasons that it is difficult for me to understand been pretty much ignored apparently by the organizations that paid for them.

The first of these is a big report paid for by the Department of Energy called The Peaking of World Oil Production: Impacts, Mitigation and Risk Management. This is generally known as the Hirsch Report, because the project leader was Dr. Robert Hirsch from SAIC, a very prestigious scientific and engineering organization. This report is dated February, 2005.

For reasons that we are trying to find, this was bottled up, apparently, inside the Department of Energy, because it didn't become publicly available until several months after that.

The second report I have here is the report by the U.S. Army Corps of Engineers. This obviously is paid for by the Army. It is dated September of 2005, and it was just about 2 months ago that it finally got out of the Pentagon into the public. This one is called Energy Trends and Their Implications For U.S. Army Installations. I would submit that wherever they mention ``Army,'' you could substitute ``the United States'' and it would be completely appropriate.

What I would like to do for the first few minutes is to look at some of the comments and recommendations in these two reports; and I would like to keep asking the question, why have these two government agencies which paid for these reports done essentially nothing to promulgate this information across the country? Rather, it would seem that there was an intent to keep this information from the public, because the Hirsch Report was bottled up inside the Department of Energy for several months, and the Army Corps of Engineers report is dated September of 2005, and it says on the cover here, ``Approved for public release. Distribution is unlimited.'' But there was essentially no distribution of that until just about 2 months ago.

As you will see, Madam Speaker, if the content of these two reports is correct, if their observations and recommendations are correct, you would have expected these two government agencies to be using every vehicle at their disposal to get this information out to the public.

...the next chart depicts what we ought to be doing. The first thing we need to do is to buy some time. You see, it takes three things to develop these renewables: It takes money, and it takes energy, and it takes time. Mr. Speaker, we will not worry about the money, although we should. Because when it comes to money we just borrow it from our kids and our grandkids by running up a big debt. So let us not worry about the money here.

But we cannot borrow time from our kids, and we cannot borrow energy from our kids. The only way to buy some time and free up some energy is with a pretty massive conservation program which frees up some energy.

Today, Madam Speaker, there is no surplus energy to invest in alternatives. All of it is needed by the economies of the world, or oil would not be roughly $75 a barrel.

Madam Speaker, what this chart denotes is a program that I think needs three qualities if we are going to make this transition in any acceptable way. First, we must have everybody involved, a total commitment like World War II. I lived through that. Everybody had a victory garden, everybody saved their household grease and took it to a central repository. It was the last war, the last time that everybody in our country was involved. We need a program, Madam Speaker, that has the total commitment of our population in World War II. It needs to have the technology focus of putting a man on the moon, because we are going to have to have a lot of technology breakthroughs and applications here if we are going to make it.

Thirdly, it needs to have the intensity of the Manhattan Project. Minus that, I think we are going to have a very rough ride. We should have begun 26 years ago.

Once we have freed up some time and freed up some energy, we need to use it wisely. And what has the biggest potential? What will have the biggest payoff? I think there are enormous benefits to this. I can see the American people going to bed every night thinking to themselves, gee, I really contributed today. I used less energy, I lived very comfortably, and I am really working on that new project which is going to help my kids and my grandkids to live as well as I live or maybe even better.

I think that we can be a role model for the world. I think that we can develop a lot of technology that we can export, but, Mr. Speaker, we will never get there unless we start.
(2 May 2006)

Hirsch et al publish the Executive Summary of their latest study

Oil Depletion Analysis Center (ODAC)
As a follow-up to their report Peaking of World Oil Production: Impacts, Mitigation & Risk Management (PDF file, 1.61Mb), Robert Hirsch et al have published an Executive Summary entitled Economic Impacts of Liquid Fuel Mitigation Options (PDF file, 231Kb). It considers the economic impacts of a crash program to reduce U.S. oil imports through mitigation options based only on U.S. resources. The full report is expected to be released in a few weeks.

The report states: "The world is consuming more oil than it is finding, and at some point within the next decade or two, world production of conventional oil will likely peak. In addition to peaking, there are widespread concerns about the growing U.S. dependence on oil imports from both an energy security and a balance of payments standpoint... This study builds on one completed by the authors in 2005 which addressed the issue of world oil peaking. The current study deals exclusively with physical mitigation options for the U.S." The new study considered four options that the U.S. could implement for the massive physical mitigation of its dependence on imported oil: Vehicle fuel efficiency (VFE), Coal liquefaction (coal to liquids or CTL), Oil shale and Enhanced oil recovery (EOR).

"Our analysis showed that the mitigation options that we considered can contribute significantly to the saving and production of U.S. liquid fuels, although decades will be needed for significant impact and related costs will be in the trillions of dollar range. The cumulative 20 year impacts of such a massive crash program would be:

• Savings and production of 44 billion barrels of liquid fuels
• Requirement for over $2.6 trillion of investment
• Over 10 million employment years of jobs created
• Total industry sales of over $3 trillion
• Over $125 billion of industry profits
• Over $500 billion in federal government tax revenues
• Nearly $300 billion in state and local government tax revenues

... In his 2006 State of the Union Address, President Bush stated that the U.S. is 'addicted to oil,' and he articulated a goal of reducing U.S. oil imports from the Middle East by 75 percent by 2025. While we did not specifically address the question of Middle Eastern oil imports, in terms of reducing total U.S. oil imports we found that, if the mitigation crash programs were to be initiated in 2006, it may be possible to begin to noticeably reduce U.S. oil imports by 2010. In fact, the mitigation options may eventually reduce the total level of U.S. imports from the current 13 MM bpd to:

• 11 MM bpd in 2016
• 5 MM bpd in 2026

However, these relatively optimistic findings depend critically upon the crash mitigation option programs being started in 2006.

... It is important to note that initiation of all of the options simultaneously does not even satisfy half of the U.S. liquid fuels requirements prior to 2025. If the peaking of world conventional oil production occurs before 2025, the U.S. may not have a choice in terms of a massive national physical mitigation program. Even with the most optimistic assumptions and assuming crash program implementation, physical mitigation will require decades and trillions of dollars of investment to make substantial contributions."
(2 May 2006)
The original article has links to the reports.

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