Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Oil Customers Will Go Away Before Oil Does
Amory Lovins, Forbes.com
In 1850, whaling was big business. Whale oil lit most houses. But as whales got shy and scarce, the price of whale oil drifted up. This elicited competitors, chiefly synthetic oil and gas made from coal, that grabbed more than five-sixths of whale oil’s lighting market in the nine years before even cheaper oil was first struck in Pennsylvania in 1859. The astounded whalers ran out of customers before they ran out of whales. Whales were actually saved by profit-maximizing capitalists. The whalers were soon reduced to begging for federal subsidies on national-security grounds.
Oil feels like this today. Over the last few decades, the U.S. has built a vast portfolio of powerful technologies to save and replace oil. Yet nobody had totaled exactly how much oil these new technologies could save, until my team at Rocky Mountain Institute did in 2004. Our largely Pentagon-funded study Winning the Oil Endgame showed these technologies could more than replace all U.S. oil use, at an average cost of $15 per barrel (in 2000 dollars). Five years later, that finding looks conservative. Oil, as I’d long predicted, has become uncompetitive even at low prices before it became unavailable even at high prices.
…Such new technologies don’t just save oil, lives and money; they redefine markets. By using more fuel-efficient designs, Wal-Mart ( WMT – news – people ) and its suppliers have already cut diesel use per ton-mile in the world’s biggest civilian truck fleet by one-fourth, and will halve it by 2015. Replicate that nationwide, and 6% of U.S. oil use vanishes. The Pentagon, too, is leading the nation off oil. Most military fuel is wasted because military equipment is designed as if fuel cost $1 to $2 per gallon. New policies influencing future designs are valuing saved oil at roughly 10 to 100 times as much to reflect the huge cost, in blood and treasure, of delivering the fuel to the battlefield. This accounting change will drive radical innovation not just in military but also in civilian vehicles, much as military research gave us the Internet, GPS and the jet-engine and the microchip industries.
(24 July 2009)
Sent in by EB contributor SerialPeakist, who writes:
Amory Lovins at Forbes thinks we have NOTHING to worry about. Alt fuels and the market will kill oil much like the market and oil killed the whale oil industries.
How reasonable are oil production scenarios from public agencies?
Kjell Aleklett, Aleklett’s Energy Mix
When, in their future scenarios, politicians and economists discuss energy they most often refer to the scenarios presented by the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA). Kristofer Jakobsson, Bengt Söderbergh, Mikael Höök and Kjell Aleklett have analysed how reliable these prognoses are in an article that is now accepted for publication by the journal Energy Policy. A summary of the article is given below:
Abstract: According to the long term scenarios of the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), conventional oil production is expected to grow until at least 2030. EIA has published results from a resource constrained production model which ostensibly supports such a scenario. The model is here described and analyzed in detail. However, it is shown that the model, although sound in principle, has been misapplied due to a confusion of resource categories. A correction of this methodological error reveals that EIA’s scenario requires rather extreme and implausible assumptions regarding future global decline rates. This result puts into question the basis for the conclusion that global “peak oil” would not occur before 2030.
The article can be read in its entirety at the homepage of our research group Global Energy Systems at Uppsala University. In the article we attempt to show that the prognoses that, above all, the EIA discusses can result in large problems in the future. An unrealistic description of the future will mean that adaptation to a new, realistic one will be beset by conversion problems of enormous magnitude. I would like to quote the following text from the conclusion of our article:
“In the peak oil debate, analysts who downplay the possibility of an early peak are usually labeled “optimists”. This title we would like to claim for ourselves. In our view, optimism means to always have a constructive attitude after a sober look at the facts at hand, not merely hope for the best scenario to come about. An early production peak followed by a gentle decline should provide good opportunities for an orderly transition from today’s oil dependent economy to a more sustainable one. It should definitely not be interpreted as a doomsday scenario, but rather as a cause for cautious optimism. EIA’s high-peak-steep-decline scenarios, on the other hand, would make an orderly transition extremely difficult and likely have catastrophic consequences for the economy.”
(25 July 2009)
FACTBOX-Oil production cost estimates by country
Reuters
The cost of pumping a barrel of oil out of the ground depends on a variety of factors, including the size and accesibility of the field.
Oil companies are often reluctant to give precise cost information.
The following provides estimates of the cost of running a field for OPEC members and other individual countries, obtained from traders and industry analysts.
It also gives the International Energy Agency’s more general assessment of costs for the oil-producing regions of the world…
Source: International Energy Agency World Energy Outlook 2008
(28 July 2009)
Greenpeace study finds oil companies may be doomed
David Teather, The Guardian
A long-term decline in the demand for oil could undermine the huge investments in Canadian tar sands, which have been heavily opposed by environmentalists, according to a report published today.
The report, by Greenpeace, will make uncomfortable reading for the companies that are investing tens of billions of pounds to exploit the hard-to-extract oil in the belief that demand and the price would climb inexorably as countries such as China and India industrialise.
Citing projections from the oil producers’ cartel Opec and the International Energy Agency, as well as various oil experts, the report casts doubt on the conventional assumption that consumption and prices will begin gathering pace once the world pulls itself out of recession.
It argues that alongside the cyclical fall in the oil price there are more fundamental structural changes taking place. These are driven by advances in energy efficiency and alternative energy, cleaner vehicles, government policies on climate change and concerns over energy security. Greenpeace has posted the report to 200 shareholders in Shell and BP, including pension funds, in an effort to put pressure on the companies to think again. BP reports quarterly results tomorrow and Shell on Thursday…
(27 July 2009)
You can download the Greenpeace report here.
