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Live Chat: Peak Oil—Is the Well Running Dry?

Richard Kerr:
Hello everyone and welcome to our chat on the future of oil. I’m Richard Kerr, a reporter for Science. We’ve got two topnotch oil and energy specialists with us today.

David Greene is at Oak Ridge National Laboratory as well as the University of Tennessee. He has spent over 30 years researching energy policy issues related to transportation and oil dependence.

Mark Finley is General Manager, Global Energy Markets and US Economics, at BP in Washington, DC. He has 25 years of private- and public-sector experience as an energy economist, including managing the annual production of the BP Statistical Review of World Energy.

We have a lot of questions coming in, and we’ll get to as many as possible. To start off, I’d like to ask both of our guests about the upturn in U.s. oil production in the past few years. It reverses a decades-long decline, so what’ behind the upturn and what might lie ahead for U.S. production?
(2 February, 2012)

The Unfounded Fear of the ‘Peak Oil’ Monster

Michael C. Lynch, US News & World Report
Another article has appeared in Nature magazine that argues that the world has entered a period of ‘peak oil,’ and it is more illuminating as to the nature than the content of the debate. The authors are James Murray, an oceanographer, and David King, former British science adviser and a physical chemist.

What would a physical chemist and an oceanographer know about forecasting oil production? Ay, there’s the rub. The two have apparently read a number of articles, online postings, etc., and regurgitated it to make a case for global oil production having peaked. However, they are unfamiliar with the literature and more generally the subject, focusing only on those which agree with them. Cherry-picking is good for farmers, but not policy makers.

Michael Lynch is the president and director of global petroleum service at Strategic Energy & Economic Research.
(3 February 2012)

Technology Is Turning U.S. Oil Around But Not the World’s

Richard A. Kerr, Science
For at least 20 years, oil “peakists” have been warning of an imminent maxing out of world oil production. Daniel Yergin, chair of IHS Cambridge Energy Research Associates, thinks not. Instead, Yergin says, technological innovation driven by higher prices will make hard-to-extract North Dakota “tight oil,” Canadian oil sands, and far-offshore deposits accessible and profitable. That opening of new, abundant sources will help put off the much-feared peak until “perhaps sometime around midcentury,” Yergin writes in his recent book, The Quest. Less-optimistic analysts remain unconvinced. Many think it will barely offset the declining output of aging fields. Because harder means slower, Yergin’s midcentury timing of the peak remains dubious for many analysts.
Science : Vol. 335 no. 6068 pp. 522-523
DOI: 10.1126/science.335.6068.522
(3 February 2012)
The rest of the article is behind a paywall. Suggested by EB contributor Michael Lardelli of Australia.

Once, men abused slaves. Now we abuse fossil fuels

Jean-François Mouhot, Guardian
Pointing out the similarities (and differences) between slavery and the use of fossil fuels can help us engage with climate change in a new way

In 2005, while teaching history at a French university, I was struck by the general disbelief among students that rational and sensitive human beings could ever hold others in bondage. Slavery was so obviously evil that slave-holders could only have been barbarians. My students could not entertain the idea that some slave-owners could have been genuinely blind to the harm they were doing.

At the same time, I was reading a book on climate change which noted how today’s machinery – almost exclusively powered by fossil fuels like coal and oil – does the same work that used to be done by slaves and servants. “Energy slaves” now do our laundry, cook our food, transport us, entertain us, and do most of the hard work needed for our survival.

Intriguing similarities between slavery and our current dependence on fossil-fuel-powered machines struck me: both perform roughly the same functions in society (doing the hard and dirty work that no one wants to do), both were considered for a long time to be acceptable by the majority and both came to be increasingly challenged as the harm they caused became more visible.
(3 February 2012)

Our peak oil premium

Thomas Homer-Dixon, Globe and Mail
Peak oil – it’s history, right?

Everything has changed so fast.

Two years ago, the world was facing an intractable oil crisis. “By 2012, surplus oil production capacity could entirely disappear,” the U.S. Defence Department declared in a major report. “A severe energy crunch is inevitable without a massive expansion of production and refining capacity.”

But now we’re told that the world is awash in oil. Deepwater production from the Gulf of Mexico and offshore Brazil is soaring. New “elephant” fields have been discovered off Ghana and possibly Angola. Meanwhile, hydrofracking technology is liberating hundreds of thousands of barrels a day from “tight” shale oil formations in North Dakota and Texas, with more coming on line from Colorado, Wyoming and even Ohio.

… But there’s a nagging issue: Oil prices remain stubbornly high. The North American benchmark price of West Texas Intermediate is hovering around $100 a barrel. The world benchmark price for Brent crude is currently about $110. Sure, the possibility of war with Iran has created a risk premium that explains a portion of this high price. But the fact remains that oil has been trading around $100 a barrel for about a year, despite chronic weakness in the world economy and on-again, off-again concerns about Iran.

In fact, as University of California energy economist James Hamilton shows in a new paper, except for brief periods in the late 1970s, early 1980s and in 2008, oil is far costlier in constant dollars today than at any time since the beginning of the modern oil age in the 19th century.
(1 February 2012)

The End of Elastic Oil

Tim Konrad, Forbes
The last ten years have brought a structural change to the world oil market, with changes in demand increasingly playing a role in maintaining the supply/demand balance. These changes will come at an increasingly onerous cost to our economy unless we take steps to make our demand for oil more flexible.

We’re not running out of oil. There’s still plenty of oil still in the ground. Oil which was previously too expensive to exploit becomes economic with a rising oil price. To the uncritical observer, it might seem as if there is nothing to worry about in the oil market.

Unfortunately, there is something to worry about, at least if we want a healthy economy. The new oil reserves we’re now exploiting are not only more expensive to develop, but they also take much longer between the time the first well is drilled and the when the first oil is produced. That means it takes longer for oil supply to respond to changes in price.

In economic terms, the oil supply is becoming less elastic as new oil supplies come increasingly from unconventional oil.
(26 January 2012)

Power paradox: Clean might not be green forever

Anil Ananthaswamy and Michael Le Page, New Scientist
“A better, richer and happier life for all our citizens.” That’s the American dream. In practice, it means living in a spacious, air-conditioned house, owning a car or three and maybe a boat or a holiday home, not to mention flying off to exotic destinations.

The trouble with this lifestyle is that it consumes a lot of power. If everyone in the world started living like wealthy Americans, we’d need to generate more than 10 times as much energy each year. And if, in a century or three, we all expect to be looked after by an army of robots and zoom up into space on holidays, we are going to need a vast amount more. Where are we going to get so much power from?

It is clear that continuing to rely on fossil fuels will have catastrophic results, because of the dramatic warming effect of carbon dioxide. But alternative power sources will affect the climate too. For now, the climatic effects of “clean energy” sources are trivial compared with those that spew out greenhouse gases, but if we keep on using ever more power over the coming centuries, they will become ever more significant.

While this kind of work is still at an early stage, some startling conclusions are already beginning to emerge. Nuclear power – including fusion – is not the long-term answer to our energy problems. Even renewable energies such as wind power will have to be used with caution, because large-scale extraction could have both local and global effects. These effects are not necessarily a bad thing, though. We might be able to exploit them to geoengineer the climate and combat global warming…
(30 January 2012)

How Much Energy Does Energy Efficiency Save?

Matthew Yglesias, Slate
It’s obvious that under some circumstances increased energy efficiency won’t actually cut energy consumption. The underlying technology of the internal combustion engine, for example, has improved dramatically over the past 40 years making our cars much more energy efficient than they used to be. But one main result of that has been for the cars to get much larger with more powerful engines rather than simply consuming less fuel. Apparently some people in the green community have extremely strong feelings about how big a deal this kind of “rebound” effect is, but realistically, to get good estimates would require careful empirical study. This little FAQ from Jesse Jenkins, who’s a believer in a pretty strong rebound effect, does a good job of at least sketching out what the issues are.
(23 January 2012)