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Testimony Before the Senate Committee on Energy and Natural Resources
John Dowd Senior Research Analyst Sanford C. Bernstein & Co., LLC
Excerpt:
2. The primary reason that we find ourselves with such limited spare capacity is because the record investment by the energy industry aimed at expanding oil production has not resulted in the expected supply response. Conventional wisdom holds that more investment will lead to more supply. In the case of global oil production, the validity of conventional wisdom does not appear to be certain. This uncertainty emanates from several sources:
a. Global oil production growth rates outside of OPEC and the Former Soviet Union have slowed each decade over the past five, regardless of the level of investment.
b. Investment in U.S. hydrocarbon production has doubled over the past decade and production has not grown. The record investment undertaken by the industry over the past five years has not been sufficient to cause global oil reserves outside of OPEC and Russia to expand. Furthermore, exploration success rates in deepwater basins have been substantially below initial expectations.
c. Virtually every rig and every petroleum engineer in the world is already working. Materially increasing the level of activity beyond the current level is not feasible over the coming 3-5 years. (6 September 2005) Significant statements which seem at odds with the usual economic doctrine that money can create energy. Highlighted by gr8scott8rg on the EnergyResources; mailing list. Sanford Bernstein & Co., specializes “in providing expert advice and research to Wall Street.” -AF
A discussion with David Pimental
Thomas, Prudent Bear forums
My office happens to be about 200 yards from that of David Pimentel (Cornell Ag school), one of the two most outspoken opponents of producing ethanol for energy purposes. (The other is a guy at Berkeley.)
As an effort to find out if peak oil is a scam (y2k revisited), I decided to give him a call. This is what I got…
(13 September 2005)
An interesting informal account of meeting researcher David Pimental which concludes: “He struck me as profoundly concerned, sincere, and without doubt convinced that peak oil is not only real but imminent … Ignore the warnings at your peril. I stand deeply concerned until further notice.” -AF
Another Way of Looking at CERA
Stuart Staniford, The Oil Drum
In this post, I want to investigate how some of the bottom-up projections we’ve been discussing here look from a top-down perspective. Here’s the graph, which I’ll explain below the fold.
The idea behind this kind of graph is as follows. Hubbert’s model of total oil production is that it follows a logistic curve. The logistic curve is a famous mathematical model for exponential growth in a finite system. It was originally derived by Pierre Verhulst in 1838 for modeling human population, but has since been widely used in ecology, economics, epidemiology, marketing, and no doubt many other fields.
…I think the only remotely possible interpretation of CERA’s line is that we will be making very large scale use of oil shale, tar sands, etc – with the eventual URR from those reserves being comparable to what we get from conventional oil.
But I think what they are also effectively assuming is that those reserves can be ramped up as fast as conventional oil ramps down. That, I think, is a very problematic assumption, given that those alternatives have EROEI on the front side of their peak an order of magnitude poorer than EROEI on the front side of the conventional oil peak, and heaven knows what it’s like on the back side of their peak.
I don’t see how the curve today can possibly extrapolate in the way they suggest. Not to mention the lousy climate (and us poor suckers that have to live in it). But those are subjects for another day.
(13 September 2005)
An article for the quantitatively minded. Even if you don’t speak calculus, this is an interesting post; it compares predictions from Deffeyes, Staniford, Koppelaar and CERA.
Seven Questions: The Future of Oil Interview with Matthew Simmons
Foreign Policy
High gasoline prices have returned oil to the forefront of the national debate. Matthew Simmons, an energy industry investment banker, is a leading voice warning of “peak oil”—the theory that world oil output will soon decline. Saudi officials and many economists say oil production will increase to meet growing demand, but Simmons doesn’t buy it.
…FP: If you were the Secretary of Energy right now, what policies would you recommend to President Bush?
MS: If we restructure the way we use fuels, we might be able to get along very well with oil in decline. The single most energy inefficient way we use oil is large trucks delivering goods over large distances. If you take all the goods that are trucked more than, say, 50 miles, onto railroad tracks, depending on the length of travel, you’d use between three to ten times less energy. If you put them on a marine vessel, it’s even more efficient. So forget about just-in-time inventory. Once you get the large trucks off the road, you make a tremendous dent in traffic congestion, which is public enemy one through five on passenger car fuel efficiency.
We also need to embrace the concept of distributed work. In most of our non-manufacturing commercial jobs, we assume that it’s better to have a lot of people working at the same site, even though it’s not necessary. By allowing people to work at home and keep their job, all they have to do is invest in communications such as video conferencing, the internet, and cell phones. We have to also change the way we distribute food. An amazing amount of the global food supply is transcontinental and produced by energy-intensive large-scale agriculture. Whole Foods, a successful grocery retailer, has basically created organic farming near each store it builds. The produce is less energy intensive to grow and ship.
…FP: Which countries are best positioned to deal with a decline in oil production?
MS: Papua New Guinea. Unfortunately that’s an honest answer. The countries that haven’t yet built a society that needs an exponential amount of oil are in the best shape. Around 30 years ago, around half the world didn’t really use oil. And now look, cities like Hanoi have millions of motorcycles they didn’t have five years ago. We’ve built the global economy based on the false assumptions that oil is just another commodity, that the Middle East has basically unlimited amounts of oil, technology will improve and that the price of oil would get progressively cheaper.
The more I’ve gotten into this, the more similar it is to what we do in our own minds with ignoring people getting old. When do you take your parents’ car keys away? It’s so painful that you go into denial that they’re getting really old.
(September 2005)
FOREIGN POLICY was founded in 1970 by Samuel Huntington and Warren Demian Manshel, and is now published by the Carnegie Endowment for International Peace in Washington, D.C.
Crossing the Rubicon: An Interview with Michael Ruppert
Rob Williams, Toward Freedom
Most people I know have some intuitive sense that the stories told about the way the world works in our culture of daily “news” (and I use the term loosely) are suspect. The real stories about power and the ways power is exercised lie buried beneath the surface. But how deep, to quote The Matrix’s Morpheus, does this rabbit hole go? For those willing to crawl down the hole, U.S. investigative journalism has its own Morpheus, and his name is Michael Ruppert.
A UCLA political science honors graduate and former LAPD narcotics investigator, Ruppert is the editor/publisher of From the Wilderness (www.fromthewilderness.com), a monthly newsletter now read by more than 16,000 subscribers in forty countries, including forty Congressmen, both Houses’ intelligence committees, and professors at more than thirty universities around the world. He is also author of a new and startling book called Crossing the Rubicon, in which he draws on From the Wilderness’s seven years of research to tell a disturbing story about the way the world really works. (13 September 2005)
Peak Oil in Guatemala and the U.S.: Energy Crises at Both Ends of the Development Spectrum
Gregory Nipper, Global Public Media Gregory Nipper, a graduate student in history at Portland State University, spent three months studying energy issues in Guatemala. In this article he explores the situation Guatemala faces as the second poorest nation in the hemisphere with respect to energy sources, shortages, related environmental problems, and new alternatives.
(13 September 2005)
Long and informative article, itself summarising Mr Nippers research.
Policies for Sustainable Food Systems, National and Global
Michael Meacher, ISIS
Why our current agriculture and food production is not sustainable.
There are five reasons why our current food system is not sustainable. First, the increasingly mechanised agriculture depends on oil, but the supply of oil is beginning to run out, or at least half of the 2 trillion barrels of oil available has already been used and oil demand from China, India and other major developing countries which are industrialising fast is rising so sharply that production cannot keep up with demand, and permanent shortages of oil will kick in within a decade or less. The price of oil will escalate to $100-$200+, and oil-driven food production will sharply decline.
Second, the growing shortage of water means that half a billion people now already live in water-stressed areas, and the UN expects this to rise 5-6 fold to half the world population by 2025. This will lead to massive shifts of populations and water wars. Frankly, the current use of water in agriculture is extravagant and utterly unsustainable. For example, US prairie farmers and East Anglian barley barons need 1 000 tonnes of water to produce 1 tonne of grain, plus 1 000 energy units are used for every 1 energy unit of processed food. That is just not sustainable. This article is from a speech delivered at Sustainable World International Conference 14 July 2005, Westminster, London. (14 September 2005) Michael Meacher is a British MP, and former Environment Minister in the Blair government.
