Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Debate brews: Has oil production peaked?
David J. Lynch, USA TODAY
Almost since the dawn of the oil age, people have worried about the taps running dry. So far, the worrywarts have been wrong. Oil men from John D. Rockefeller to T. Boone Pickens always manage to find new gushers.
But now, a vocal minority of experts says world oil production is at or near its peak. Existing wells are tiring. New discoveries have disappointed for a decade. And standard assessments of what remains in the biggest reservoirs in the Middle East, they argue, are little more than guesses.
“There isn’t a middle argument. It’s a finite resource. The only debate should be over when we peak,” says Matthew Simmons, a Houston investment banker and author of a new book that questions Saudi Arabia’s oil reserves.
…As global demand rises, American consumers will find themselves in a bidding war with others around the world for scarce oil supplies. That will send prices of gasoline, heating oil and all petroleum-related products soaring.
“The least-bad scenario is a hard landing, global recession worse than the 1930s,” says Kenneth Deffeyes, a Princeton University professor emeritus of geosciences. “The worst-case borrows from the Four Horsemen of the Apocalypse: war, famine, pestilence and death.”
He’s not kidding: Production of pesticides and fertilizers needed to sustain crop yields rely on large quantities of chemicals derived from petroleum. And Stanford University’s Amos Nur says China and the United States could “slide into a military conflict” over oil.
…Many in the industry reject the notion that global oil production can’t keep up. “This is the fifth time we’ve run out of oil since the 1880s,” scoffs Daniel Yergin, who won a Pulitzer Prize for his 1991 oil industry history The Prize.
…As the debate has persisted, it’s grown personal… When they’re not trading insults, the two sides disagree fiercely over the likelihood of future technology breakthroughs, prospects for so-called unconventional fuel sources such as oil sands and even the state of Saudi Arabia’s reserves.
…In recent months, the peak oil camp has received support from some fairly sober quarters, including the U.S. government. A 91-page study prepared in February for the Energy Department concluded: “The world is fast approaching the inevitable peaking of conventional world oil production … (a problem) unlike any yet faced by modern industrial society.”
(16 October 2005)
Update (18 Oct)
Presumably the 91-page report mentioned is the “Hirsch Report” now available online at the Dept of Energy:
Hirsch, R.L., Bezdek, R. and Wendling, R. Peaking of World Oil Production: Impacts, Mitigation, and Risk Management (319-KB PDF). DOE NETL. February 2005.
The plan is… there is no plan
A Canadian citizen considers that nations golden handcuffs to the resource sink next door.
Dan Crawford, Vancouver Republic
Canada is one of the world’s last resource rich countries. We have an abundant endowment in fresh water supplies, mineral resources, oil and gas, forests and rich farmland. Our population base remains small and supportable. Everything seems to be going just fine. That is until our trade agreements are reviewed and the question arises of what kind of strategy for the future we have. In doing this review, a giant sucking sound can be heard coming from the belly of the US, greedily consuming as much of our raw resources as it can and as quickly as possible.
The US Department of Energy web site reveals part of the story. They provide a country analysis on Canada stating that “Of the crude oil Canada exports, 99% of it goes to the United States. Canada is the single largest import component of US crude oil imports.”
…there is no public plan for Canada’s citizens on how the government would react to an oil disruption let alone a dwindling supply of energy. I spoke with a public servant in the media relations department at Natural Resources Canada on this subject. He assured me that there is no plan because “its impossible.” I asked if it’s impossible due to the complexity of implementing such a plan. His response: “No, its impossible because a disruption could never happen”…
(13 October 2005)
The Next Energy Crisis
Financial planner promoting powerdown?
Richard Vodra, Financial Planning magazine
Have you heard about Peak Oil yet? The idea–that the world is maxing out on its ability to produce oil and will soon be faced with a dwindling supply–is capturing the popular imagination. The Peak Oil concept is now being discussed in academic circles, in books and in cover articles for reputable magazines such as National Geographic and The New York Times Magazine. …
For all its importance, Peak Oil has not yet been widely discussed in this country, even though oil is the lifeblood of our economy (and the world’s). That means you have little to no guidance for interpreting how it might effect the projections you use to plan for your clients, who could face dramatically rising fuel costs in their lifetimes. …
The bottom line is that much will change, but not in a disastrous way. We will have the opportunity to create or rebuild local communities and the massive consumption that we both enjoy and decry will gradually diminish. Since the perceived level of happiness in the population today is no greater than it was in the 1950s–when per capita GDP was less than half of current levels, we can clearly adjust to this challenge in a healthy way.
When we ask our clients what they think is really important, the answer is rarely in terms of “more stuff.” Even today, virtually no one has enough money to own or do all the things they want. The terms of this discussion are changing, and the price and availability of “stuff” may be about to change dramatically and permanently, but our clients can still use their financial resources to create lives of real meaning and value.
Peak Oil may create a huge shift in the way all of us look at daily life and the future. It will not be easy or painless, either physically or psychologically. America has always based its prosperity on a generous supply of cheap natural resources–forests, farmland, gold, coal, oil and more–and we believe that we will always be entitled to that birthright. How Americans transition–and how we as planners help in that transition–will shape our society for the twenty-first century and beyond.
Richard Vodra, CFP, is vice president of Legacy Advisors in McLean, Va. For a more comprehensive version of this article, contact him at [email protected]. The author gratefully acknowledges the assistance of Nancy Deren and other members of the Nazrudin Project.
(5 October 2005)
No direction home
The NY Times and suburbia
James Howard Kunstler, Clusterf*ck Nation
When the Museum of Bad Ideas is built by Steve Wynn in Las Vegas (designed by Frank Gehry), surely one of its remote galleries will contain this week’s cover story in the New York Times Sunday Magazine about the suburban homebuilding racket titled “Chasing Ground.” The story focuses on one of the nation’s leading large production builders, the Toll Brothers, based in Philadelphia, and “ground” is their own cute phrase for the parcels of meadow and cornfield that they magically convert into suburban housing subdivisions all over the nation.
The Times brings its usual magesterial lack of critical thinking to the subject. Among the conclusions: that the suburban sprawl housing bubble will continue indefinitely into the future, and that the price of houses will continue to rise, probably forever, too.
“Indeed , Toll seemed certain that firms like his — with an expertise at finding and developing land — would become increasingly successful. The company expects to grow by 20 percent for the next two years and 15 percent annually after that.”
Philosophically, the story is grounded in Times columnist David Brooks’s concept that suburbia is a good thing because people seem to like it. But it’s the Times’s ignorance of practical matters that’s really breathtaking. The nation’s oil predicament is barely mentioned (and obviously only as an editorial afterthought, since the story was no doubt filed before Katrina and Rita shredded production in the Gulf of Mexico). Anyway, the issue is cavalierly dismissed. Missing altogether is America’s even more dire predicament over natural gas, which is used to heat half the houses in America and 99 percent of the brand new ones. Since the story focuses on large luxury houses over 3500 square feet, featuring cathedral ceilings and yawning lawyer foyers, you’d think the question of heating these behemoths might arise, but no.
(17 October 2005)
The NY Times article cited by Kunstler, Chasing Ground, is available online.
Fossil fuels are here to stay, says expert
Doom-and-gloom forecasts for gas, coal and oil are wrong, says SFU prof in a new book
Gordon Jaremko, CanWest via Vancouver Sun
EDMONTON — Reports of the death of fossil fuels are greatly exaggerated, a prominent Vancouver scholar and public servant has concluded after a research odyssey burned off his preconceptions and academic training about energy.
“They call me the fossil fool now,” Mark Jaccard joked recently between lectures he was giving in Edmonton.
But the Simon Fraser University professor and former chief executive officer of the British Columbia Utilities Commission was only half-kidding.
Cambridge University Press in England will this fall publish a book by Jaccard that breaks away from a recent gush of literature claiming current supply scares, price spikes and environmental resistance are the death rattles of oil, natural gas and coal. The volume will be titled Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy.
It has been assumed for decades societies will gradually switch to renewable energy forms and wean themselves off oil, gas, coal and atomic power, Jaccard said.
But he concluded the assumptions he was taught were wrong. His forthcoming book forecasts that oil, gas and coal will still satisfy 58 per cent of world energy needs in the year 2100. …
Following (?) the article about Mark Jaccard is this very welcome addition..
CALCULATING THE TRUE COST OF ENERGY PRODUCTION
It takes energy to make energy — and a lot of it — in the northern Alberta oil sands.
Bitumen projects will burn 1.01 billion cubic feet of natural gas a day by late 2006, the National Energy Board says in a new forecast. That will be a 40-per-cent increase from 2004 and about twice as much gas as all the homes in Alberta burn.
The growth in gas consumption roughly matches the pace of increases in oilsands output, which is forecast to hit 1.2 million barrels per day by late 2006.
The consumption growth rate is expected to moderate as new projects adopt emerging methods of cutting their use of gas — or making their own fuel — for heat-driven bitumen extraction systems, synthetic-oil upgrading and power generation.
But energy will remain a big oilsands expense. FirstEnergy Capital Corp. forecasts that as production grows to two million barrels daily by 2010, annual operating costs will more than double to about $10 billion from $4 billion in 2004 with increasingly expensive gas driving much of the rise.
The Alberta government will pay a share of the tab. Oilsands royalties are collected on the net value of production to the industry, after subtracting expenses.
Ran with fact box “Calculating the True Cost of Energy Production”, which has been appended to the end of the story.
From Mark Jaccards homepage at Simon Fraser University:
Dr. Jaccard is an economist focusing on sustainable energy systems. He leads the energy and materials research group (EMRG) in REM (6 full-time associates and 8-10 graduate students) in developing and applying models that assess policies to induce technological change. Recent applied work involves costing GHG emission reduction policies for government, industry and NGOs.
(17 October 2005)
An excellent rider to put Mr Jaccards forecasts in perspective. For full marks Mr Jaremko could have included Canada’s current annual oil consumption (2.2 million barrels/day, IEA 2005 for 2003) for context on the 2 million barrel/day hoped for from tar sands by 2010.-LJ
