Some people take drink or eat chocolate when bad news strikes. I go out to the barn and milk the goats (ok, I eat chocolate too sometimes ;-)). You see goats, (whose motto is “We’re people too, and would you mind if we came inside with you and stood on your dining room table for a bit.”) do best if you keep their routines intact (think of them as toddlers with hooves) – so no matter what is on your mind, how busy you are with other things or what kind of mood you are in, you have to go out to them. They have to be brushed, fed, enticed to their spots, you have to lean your body against their warm one, and you must immerse yourself in the rhythym of milking. And it is almost impossible, by the end, to be in the same place in your head that you were when you started. They are too real, too concrete – the abstractions tend to settle down.
What on earth does this have to do with oil depletion? Well, not much, actually – except that the last couple of days, what I’ve taken out to the barn to my two little fuzzy therapists has been the new IEA depletion rate. And the problem I keep taking out there is this – how can I or anyone else make something as resolutely unsexy, as deeply, eye-glazingly dull-seeming as oil depletion rates, appear engaging enough to actually get people to understand how much this matters. I thought I could do worse than starting with the cute goats ;-).
Earlier this week, the Financial Times leaked the International Energy Agency’s figures that show the rate of decline in production of the 400 largest oilfields in the world – and they concluded that without large scale, above normal investment, the annual decline will be 9.1%.
It is hard to understand how important that number is, particularly given the situation we are in right now. In an excellent essay on the subject, Richard Heinberg observes,
“Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That’s a new Saudi Arabia every 18 months.”
This is huge news, and it got very little media attention. If you did read it online or in your morning newspaper, your eyes probably did glaze over a bit, unless the implications were teased out in the article.
In order to fully understand these implications, you have to have some background about what we’ve known or suspected about oil for a while. The first thing most articles don’t tell you is that we’re not discovering anything like enough oil to keep up with that figure. Now I’m something of an energy geek, so I keep track of this stuff, but most of us, if we read the papers, hear about big discoveries in Brazil or the Gulf of Mexico, about offshore drilling and ANWR and think we’re pretty well set on discoveries. In fact, that’s not true. We’re not replacing the oil we’re extracting with new discoveries, mostly becauses we pretty well know where the oil is. Oh, we find new barrels – but only one for every six we consume.
And the other thing you would have to know is that we’re shifting from what we might call “easy” oil – the kind that comes pumping out of the ground without too much effort, to oil that is pretty tough to extract. In some cases, our new discoveries, like the Bakken oil shale are places we knew there was energy that could theoretically be extracted, but it was so expensive, and so difficult, and so energy and water intensive that it wasn’t worth bothering. We can talk about new discoveries, or new technologies, but it is really important to realize that when we compare a newly discovered barrel of oil with a played out field in Saudi Arabia, we aren’t necessarily comparing equivalents. First of all, it may take a lot more energy and money to get at that oil in the first place – and that money may not be available when we want it. When oil prices shot up to $125 barrel, some of this new oil started to look pretty good – but falling back under $70, its not so easy. We’re already seeing new energy projects being put into mothballs due to the financial crisis.
Second, a lot of what we’ll be getting isn’t the easiest oil to use – there are multiple kinds of oil out there. The most desirable sort is light, sweet crude. That needs refining, but not nearly as much as heavy, dirty oils – and now we’re getting a lot more heavy, dirty oils that cost more energy to clean up, and are expensive to produce, and not that efficient. The two kinds of oil aren’t really equivalent – think of it as though someone took your beer and replaced it with an equal volume of Tab – they are both somewhat carbonated liquids, but they don’t really produce the same results.
Now I’m unashamedly a peak oil activist. The media is presently declaring peak oil to be a hoax, something that they were willing to consider when oil prices were high, but now that they are low, something to be dismissed. That’s because they’ve never understood what peak oil was – no one has ever claimed we were running out of oil. What has been claimed is that we were running out of cheap oil – the days of stable low prices and easy supplies are over. Peak oil was never about price – yes, if we’ve passed the halfway point of extraction, prices will probably go up. But the key word is not “expensive” but “volatile” – that is, of course if rising energy prices help tank the economy, the cost of energy that people can’t afford to buy will go down. And they’ll probably go up again, too, just at the moment most of us find it hard to pay. That’s pretty much common sense. The idea that it is only peak oil if the price goes up every time is just wrong.
Now here’s what you most need to know about these numbers – I can’t speak for any other peak oil activist, but they are much higher than I expected. And that’s really bad news. There has been a lot of speculation over the years about what the decline rate really is, and there are a lot of smart people out there who have good and useful cases on this subject. Matt Simmons, for example, author of _Twilight in the Desert_ and Jeffrey Brown, the creator of the Export Land Model have both been telling as many people as they can that the decline rates, for a host of reasons, are going to be higher than most people expected. Maybe they anticipated this. But I sure didn’t. And I don’t think most people did.
We’re not going to find the equivalent of a new Saudi Arabia every 18 months – most of the new discoveries you’ve heard about in the media are a long way from development. And the biggest thing needed to keep up oil production is a lot of investment money – precisely the sort of thing that is disappearing in the credit crisis. Peak oil folks get accused of having too bleak an outlook – but right now, I don’t think it would be inaccurate to say that most of us have actually had too rosy an outlook – we’ve been expecting a depletion rate considerably lower than that.
What about renewable energies? Can they take up some of the slack? Well, they could if we were building them rapidly enough – we aren’t. And they are facing the same failures of investment capital that new oil extraction techniques are. They need money. Not only that, they need a lot of fossil fueled energy. That last part may sound kind of crazy – solar and wind need a lot of fossil fueled energy? Absolutely – there’s not a plant out there making solar panels that doesn’t depend on a stable supply of oil, and certainly most of the US ones depend heavily on coal-fired electricity as well. Getting those wind turbines set up means a whole lot of trucks using diesel fuel. In itself, that isn’t a problem – but let’s imagine you have to replace 9% of our oil production every year with those renewables – that is, that not only is our oil production likely to see a decline, not only are we already struggling to match demand from other places, but now a large percentage of our incoming fossil fuels have to be allocated to a build out of renewable energy. Could that be done? Sure – it would be a lot like living in World War II, where everyone was serving a greater project, but it could be. But it hasn’t been, and I have my doubts that it will.
Now everyone in the peak oil community has their project, and their particular niche. Some folks chase down the data, deal with media or start up this project or that – and there’s so much to do that I personally can’t help but be grateful to everyone. Here’s what I’ve been doing – in the simplest possible terms, I looked at the scale of the problem, and I looked at our response (not much so far), and I came, broadly, to this conclusion. We might screw it up. Oh, it is possible that I’m underestimating human ingenuity, and that we’ll do everything right. On the other hand, it seemed like having some kind of contingency plan for a scenario in which we did not replace all our energy infrastructure rapidly, where we did face tight supplies, volatile prices and perhaps an economic depression, in part created by our situation was a good idea.
So that’s what I’ve been doing all along – at the same time that I nightly pray that we’ll get our act together, my own relationship to this (since the other best cure for worry, besides goats, is action) is to get as many people, and communities, neighborhoods and other groups ready to deal with less energy, less wealth, less security as possible. And I have to say, learning that the decline rate is 9.1% makes me feel that my strategy has mostly been the right one. Because that’s a huge and shocking number – we’re already running as fast as we can to keep in place. We can reduce our demand some (in fact, it seems that the economic situation will probably do that), and we can increase our investment as much as possible, given the constraints of our debt and resources. But in the end, we’re probably going to have to make our transition to new energy supplies more gradually than most of us like or are prepared for. We’re probably going to have to make do with a lot less.
The good news is that that’s not such a bad thing. There is hope here – yes, the cheap energy is going away (whether in the form of rising prices or our simple inability to pay the bills) – but that’s not the end of the world. Merely a vast challenge – and challenges can be met – maybe we won’t have all the energy we want, but we have the courage to live differently. But before we can meet that challenge, we have to know what we’re facing.