TechnoSanity #33: A look at the World Energy Outlook, 2009

As noted in TechnoSanity #32: Fudged numbers in the IEA's World Energy Outlook, 2009?? the International Energy Agency (IEA) has released the 2009 edition of the World Energy Outlook. This yearly report focuses on worldwide statistics about "energy" use where "energy" is primarily defined as coal and oil and natural gas. The report is used by governments and businesses around the world for planning their energy (coal, oil and natural gas) policies and purchases. This year is a little different due to the Copenhagen summit on Climate Change set to occur next month. The 2009 World Energy Outlook has a lot of information about the climate change impacts of energy policy choices. In particular the IEA is offering data for a target of 450 parts per million of CO2 equivalent, and the required policy changes to meet that target.
This year the documents include a freely available "Climate Change Excerpt" which was presented at the Bangkok UNFCCC meeting. That excerpt begins with this statement:

The World Energy Outlook 2009 (WEO-2009) delivers a simple, stark message: if the world continues on the basis of today's energy policies, the climate change impacts will be severe. Energy, which accounts for two-thirds of today's greenhouse-gas emissions, is at the heart of the problem - and so must form the core of the solution. We need urgently to set in motion an energy and environmental revolution, to transform the way we use energy and to deliver a sustainable future. WEO-2009 maps out this transformation, detailing the role of the energy sector in a scenario that leads to the long-term stabilisation of the concentration of greenhouse gases in the atmosphere at 450 parts per million of CO2 equivalent - our 450 Scenario - and setting out the investments and financing needed to make it happen

It seems there is some controversy over what CO2 concentration to target to successfully repair the climate. A couple weeks ago was the "350" event which was meant to raise awareness to a different target, 350 parts per million. The IEA says their recommendations are for an "overshoot trajectory" which peaks at 510 parts per million in 2035 and settling down eventually at 450 parts per million CO2 equivalent. But of course there is this controversy over what's the best CO2 concentration.
Worldwide to achieve the 450 ppm target means that in 2030 CO2 emissions are 26.4 gigatons rather than the expected 40.2 gigatons if no regulatory changes are made. They expect population to grow to 8.2 billion regardless of whether regulatory changes are made. To reach the 450 ppm targets they say CO2 emissions per capita must decrease, energy use per capita must decrease, the CO2 intensity index must decrease, and the CO2 intensity of the power and car industry must decrease. In other words they indicate that the worlds societies must learn to be more efficient, so we can do more with less energy, and to decrease the CO2 intensity of the energy we use.


For example one chart shows that to decrease the the energy intensity of transportation, that there must be a widespread adoption of hybrid, plug-in hybrid and electric cars.

In power generation they specify the following changes to meet the 450 ppm scenario: Drastically decrease the use of coal without carbon capture and sequestration. To increase the use of natural gas. To increase use of carbon capture in coal plants. To increase the use of nuclear power. To Increase use of hydroelectric power. To increase the use of wind power. To increase the use of "Other renewables".

It is interesting to note they did not have a line in the graph to cover solar electricity, only wind energy. Are they assuming that solar electricity will remain a niche product due to remaining too expensive? If so have they heard the people at 1366 Technologies talk about the trending of solar electricity to become cheaper than coal plants and to be the biggest energy industry in the world? (see Solar power at the cost of coal?)

Turning to the graphs in the WEO itself ..


They expect that China and India to continue undergoing rapid expansion of energy use while OECD countries have a rather modest increase in energy use.



Projected oil production is presented differently this year than last but still has the same interesting attributes. (See TechnoSanity #30: Peak Oil and the UKERC Peak Oil report) For both oil and natural gas a large percentage of 2030 supply is expected to come from fields that are yet to be developed or yet to be found. They expect fully 40% of oil production to come from fields yet to be developed or yet to be found. They expect 60% of natural gas production to come from fields that are yet to be producing. In the U.S. they expect that 60% of U.S. natural gas use to be from "unconventional" natural gas sources.




To reach the 450 ppm target the numbers are a little different. Over 30% of fuels must be "zero carbon fuels". There must be a 16 million barrels per day reduction in oil use. That decrease in oil use will cause OPEC revenues to decrease.

The following is from the World Energy Outlook 2009 fact sheet.

WORLD ENERGY OUTLOOK 2009 FACT SHEET: Why is our current energy pathway unsustainable?

• Global energy use is set to fall in 2009 — for the first time since 1981 on any significant scale — as a result of the financial and economic crisis, but demand is set to resume its long-term upward trend once the economic recovery gathers pace. By 2030, the Reference Scenario, which assumes no change in government policies, sees world primary energy demand a dramatic 40% higher than in 2007.
• Collectively, non-OECD countries account for over 90% of the increase, their share of global primary energy demand rising from 52% to 63%. China and India represent over 53% of incremental demand to 2030. Coupled with strong growth from ASEAN, this is contributing to a refocusing of the global energy landscape towards Asia. Outside of Asia, the Middle East sees the fastest rate of increase, contributing 10% to incremental demand.
• Fossil fuels remain the dominant sources of energy worldwide, accounting for 77% of the demand increase in 2007-2030. Although oil demand is expected to drop by 2.2% in 2009 as a whole, following a drop of 0.2% in 2008, it is projected to recover from 2010 as the world economy pulls out of recession, rising from around 85 million barrels per day in 2008 to 105 mb/d in 2030, an increase of around 24%. In 2007-2030, demand for coal grows by 53% and demand for natural gas by 42%.
• Electricity demand grows by 76% in 2007-2030, requiring 4 800 gigawatts (GW) of capacity additions – almost five times the existing capacity of the US Coal remains the dominant fuel of the power sector, its share of the global power generation mix rising by 2 percentage points to 44% in 2030. But higher fossil-fuel prices, as well as increasing concerns over energy security and climate change, boost the share of renewables-based electricity generation from 18% in 2007 to 22% in 2030.
• The world’s energy resources are adequate to meet the projected demand increase through to 2030 and well beyond. But these Reference Scenario trends have profound implications for environmental protection, energy security and economic development. The continuation of current trends would have dire consequences for climate change. They would also exacerbate ambient air quality concerns, thus causing serious public health and environmental effects, particularly in developing countries.
• While the OECD imports less oil in 2030 than today in the Reference Scenario, some non-OECD countries, notably China and India, see big increases. Most gas-importing regions also see their imports rise. As non-OPEC conventional oil production peaks around 2010, most of the increased output comes from OPEC countries. The increase in natural gas exports comes mainly from Russia, Iran and Qatar.
• The Reference Scenario projections imply a persistently high level of spending on oil and gas imports by almost all importing countries. China overtakes the US soon after 2025, to become the world’s biggest spender on oil and gas imports, while India surpasses Japan soon after 2020 to take third place. Cumulative OPEC revenues from oil and gas exports increase to $30 trillion between 2008 and 2030, almost a five-fold increase on earnings over the past 23 years.
• In the Reference Scenario, 1.3 billion people still lack access to electricity in 2030 compared with 1.5 billion people today. Universal electricity access could be achieved with additional power-sector investment of $35 billion per year in 2008-2030 and with only a modest increase in primary energy demand and related CO2 emissions.

WORLD ENERGY OUTLOOK 2009 FACT SHEET: ENERGY INVESTMENT: The Impact of the financial crisis

• Energy investment worldwide has plunged recently in the face of a tougher financing environment, weakening final demand for energy and falling cash flows — the result, primarily, of the global financial and economic crisis. Energy companies are drilling fewer oil and gas wells, and cutting back spending on refineries, pipelines and power stations. Many ongoing projects have been slowed and a number of planned projects postponed or cancelled. Businesses and households are spending less on energy-consuming appliances, equipment and vehicles.
• In the oil and gas sector, most companies have announced cutbacks in capital spending, as well as project delays and cancellations. We estimate that global upstream oil and gas investment budgets for 2009 have been cut by around 19% compared with 2008 — a reduction of over $90 billion. Since October 2008, over 20 planned large-scale upstream oil and gas projects, involving around 2 mb/d of oil production capacity, have been deferred indefinitely or cancelled. The bulk of these projects are oil sands in Canada. A further 29 projects, involving 3.8 mb/d of oil capacity, have been delayed by at least 18 months.
• Power-sector investment is expected to be severely affected by financing difficulties, as well as by weak demand. Global electricity consumption is projected to drop by 1.6% in 2009 — the first annual contraction since the end of the Second World War. Weakening demand is reducing the immediate need for new capacity. In late 2008 and early 2009, investment in renewables-based power generation fell proportionately more than that in other types of generating capacity. For 2009 as a whole, it could drop by close to onefifth. Without the stimulus provided by government fiscal packages, it would have fallen by almost 30%.
• Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious effects on energy security, climate change and energy poverty. Any prolonged downturn in investment threatens to constrain capacity growth in the medium term, particularly for long lead-time projects, eventually risking a shortfall in supply. This could lead to a renewed surge in the price of oil and other forms of energy in a few years time, when demand is likely to be recovering, and become a constraint on global economic growth. Weaker fossil-fuel prices are also undermining the attractiveness of investments in clean energy technology. Cutbacks in energy-infrastructure investments also threaten to impede access by poor households to electricity and other forms of modern energy.
• The financial crisis has made it all the more uncertain whether the full energy investment needed in the longer term to meet growing energy needs can be mobilised. The capital required to meet projected energy demand through to 2030 is huge, amounting in cumulative terms to $26 trillion (in year-2008 dollars) — equal to $1.1 trillion (or 1.4% of global GDP) per year on average in the Reference Scenario. Over half of all energy investment worldwide is needed in non-OECD countries, where demand and production are projected to increase fastest. With little prospect of a quick return to the days of cheap and easy credit, financing energy investment will, in most cases, be more difficult and costly than it was before the crisis.

WORLD ENERGY OUTLOOK 2009 FACT SHEET: NATURAL GAS: What role for gas in the global energy mix?

• The demand for natural gas worldwide is set to resume its long-term upwards trend, though the pace of demand growth hinges critically on the strength of climate policy action as well as on the rate of economic growth. In the Reference Scenario, global primary gas demand rises by 41% from 3.0 trillion cubic metres in 2007 to 4.3 tcm in 2030 — an average rate of increase of 1.5% per year. Over 80% of this increase occurs in non-OECD countries, with the biggest rise in the Middle East. The power sector remains the single largest driver of gas demand in all regions. In the 450 Scenario, in which governments are assumed to take strong action to cut CO2 emissions, world gas demand grows by 17% between 2007 and 2030 (an average annual rate of growth of 0.7%), but is 17% lower in 2030 compared with the Reference Scenario.
• The world’s remaining resources of natural gas are easily large enough to cover any conceivable rate of demand increase through to 2030 and well beyond, though the cost of developing new resources is set to rise over the long term. The long-term global recoverable gas resource base is estimated at more than 850 tcm, of which 45% is unconventional gas (shale gas, tight gas and coalbed methane). To date, only 66 tcm of gas has been produced (or flared) – equal to less than 8% of total recoverable resources.
• The non-OECD countries as a whole are projected to account for almost all of the projected increase in global natural gas production between 2007 and 2030 in both the Reference and 450 Scenarios. The Middle East, which holds the largest reserves and has the lowest production costs, sees the biggest increase in output (and in exports) in absolute terms in both scenarios. Globally, the share of unconventional gas is projected to rise from 12% in 2007 to 15% in 2030. This projection is subject to considerable uncertainty, especially after 2020; there is potential for output to increase much more.
• The rate of decline in production from existing fields is the prime factor determining the amount of new capacity and investment needed to meet projected demand. A detailed, field-by-field analysis of the historical gas-production trends of nearly 600 fields (accounting for 55% of global production) undertaken for WEO-2009 finds that close to half of the world’s existing production capacity will need to be replaced by 2030 as a result of depletion.
• The recent rapid development of unconventional gas resources in the United States and Canada, particularly in the last three years, has transformed the gas-market outlook, both in North America and in other parts of the world. It remains highly uncertain whether this boom in unconventional gas production can be replicated in other parts of the world that are endowed with such resources, as in most cases those resources have not yet been appraised in detail.
• The unexpected boom in North American unconventional gas production, together with the depressive impact of the recession on demand, is expected to contribute to an acute glut of gas supply in the next few years. The under-utilisation of pipeline capacity between the main regions and global LNG liquefaction capacity combined is expected to rise from around 60 bcm in 2007 to close to 200 bcm in the period 2012-2015, as a number of new projects come on stream. Gas suppliers to Europe and Asia-Pacific will come under increasing pressure to modify their pricing terms and cut prices to stimulate demand.

WORLD ENERGY OUTLOOK 2009 FACT SHEET:

What might a low-carbon energy future look like?

• Without a change in policy, the world is on a path for a rise in global temperature of up to 6°C, with catastrophic consequences for our climate. To avoid the most severe weather and sea-level rise and limit the temperature increase to about 2°C, the greenhouse-gas concentration needs to be stabilised at around 450 ppm CO2-equivalent. WEO-2009 assesses the implications for the energy sector of achieving a 450 Scenario.
• In the 450 Scenario, global energy-related CO2 emissions need to peak just before 2020 at 30.9 gigatonnes (Gt) and decline thereafter to 26.4 Gt in 2030 – which is 34% less than in the Reference Scenario. Of the 3.8 Gt reduction relative to the Reference Scenario in 2020, sectoral agreements in transport and industry and national policies generate 2.1 Gt, with the remainder achieved through cap-and-trade in the power and industry sectors in OECD countries (where the CO2 price reaches $50 per tonne), including the use of carbon-market mechanisms to fund CO2 abatement in non-OECD countries (at a CO2 price of about $30 per tonne). National policies and measures in China – already under consideration by the government - would bring about some 1 Gt of reductions by 2020 – or 25% of the total 3.8 Gt – placing China at the forefront of global efforts to combat climate change.
• The 450 Scenario is achievable – but very challenging. It assumes a hybrid policy approach, comprising a plausible combination of cap-and-trade systems, sectoral agreements and national measures, with countries subject to common but differentiated responsibilities. End-use efficiency is the largest contributor to CO2 emissions abatement in 2030 compared with the Reference Scenario, accounting for more than half of total savings. Early retirement of old, inefficient coal plants and their replacement by more efficient coal or gas fired power plants, mainly in China and in the United States, accounts for an additional 5% of the global emissions reduction. The increased deployment of renewables accounts for 20% of CO2 savings, while increased use of biofuels in the transport sector accounts for 3%. Finally, additional carbon capture and storage (CCS) and nuclear each represents 10% of the savings in 2030, relative to the Reference Scenario.
• To realise the 450 Scenario, additional investment of $10.5 trillion is needed globally in the energy sector in the period 2010-2030, relative to the Reference Scenario. But investments in industry, transport and buildings are more than offset by fuel cost savings, which in the transport sector alone amount to over $6.2 trillion over the period. The 450 Scenario also offers important energy security and environmental co-benefits. Oil and gas import bills in OECD countries in 2030 are much lower than in 2008; and in 2030 they are 30% lower in both China and India than in the Reference Scenario. The 450 Scenario also sees a major reduction in air pollution, particularly in non-OECD countries.
• The geographical and sectoral distribution of the abatement and investment in the 450 Scenario does not determine how those actions are financed - that is entirely a matter for negotiation. In the 450 Scenario, the energy sector in non-OECD countries would need around $200 billion of additional investment in clean energy and efficiency in 2020 – including $70 billion for nationally appropriate mitigation actions (NAMAs) and a similar amount to achieve sectoral standards in transport and industry. A portion of this non-OECD investment will need to be co-financed by OECD countries.

WORLD ENERGY OUTLOOK 2009 FACT SHEET: Has the financial crisis changed the outlook for CO2 emissions and the global climate?

• The financial crisis has had a considerable impact on the energy sector worldwide and CO2 emissions could fall in 2009 by as much as 3%. This decline would be steeper than at any time in the last 40 years. The crisis has also led to a deferral of investment in polluting technologies. This would lead to global emissions in 2020 being 1.9 gigatonnes (Gt) or 5% lower - even in the absence of new government policies - than estimated last year in the Reference Scenario of WEO-2008. The impact of the financial crisis and lower growth accounts for three-quarters of this improvement, while government stimulus spending to promote low-carbon investments and other new climate policies account for the remaining quarter.
• Despite the impact of the financial crisis, energy-related CO2 emissions in the Reference Scenario still rise from 28.8 Gt in 2007 to 34.5 Gt in 2020 and 40.2 Gt in 2030. World greenhouse-gas emissions, including non-energy related CO2 and all other gases, are projected to grow from 42.4 Gt CO2-equivalent in 2005 to 56.5 Gt CO2-eq in 2030 – an increase of one-third.
• Non-OECD countries account for all the projected increase in energy-related CO2 emissions. In the Reference Scenario, OECD emissions in 2030 are 3% lower than in 2007. By contrast, all major non-OECD countries see their emissions rise. Of the 11 Gt growth in global emissions between 2007 and 2030, China accounts for 6 Gt, India for 2 Gt and the Middle East for 1 Gt. However, while non-OECD countries today account for 52% of the world’s annual emissions of energy-related CO2, they are responsible for only 42% of the world’s cumulative emissions since 1890.
• The power-generation sector accounts for over half the increase in emissions in the Reference Scenario. This is driven by a 60% rise in emissions from coal-fired generation. The Reference Scenario sees big improvements in CO2 intensity in transport and industry but these are substantially outweighed by increased travel and higher output in the iron and steel and cement industries.
• The rising global consumption of fossil fuels is still set to drive up greenhousegas emissions and world temperatures, resulting in potentially catastrophic and irreversible climate change. Even taking account of the impact of the financial crisis, the projected rise in emissions in the Reference Scenario puts us on a course for doubling the concentration of those gases in the atmosphere to around 1 000 parts per million (ppm) of CO2-equivalent by the end of this century. This would entail an eventual global average temperature increase of up to 6°C.
• The UN Climate Change Conference in Copenhagen provides an opportunity to take prompt action. If the world wishes to limit to 25% the probability that global average temperature will rise more than 2°C, CO2 emissions over the period 2000-2049 must not exceed 1 trillion tonnes. Between 2000 and 2009, the world emitted 313 billion tonnes of CO2.

WORLD ENERGY OUTLOOK 2009 FACT SHEET: ENERGY PRICE ASSUMPTIONS: Price volatility will continue, but the days of cheap energy are over

• The WEO projections are based on an assumption – not a forecast – that energy prices follow a rising trend through to 2030. These assumptions are based on a top-down assessment of the price levels that would be needed to encourage sufficient investment in supply to meet projected demand. Prices rise faster in the Reference Scenario, in which no change in government policies is assumed, than in the 450 Scenario, in which climate policies depress fossil-energy use and, therefore, prices. These trajectories should not be seen as forecasts, nor should the smooth price paths assumed be interpreted as a prediction of stable energy markets: prices will, in reality, certainly deviate from these assumed trends in response to short-term fluctuations in demand and supply, to exchange rates and to geopolitical events.
• In the Reference Scenario, oil prices are assumed to rebound with rising demand and supply costs. In real terms, the average IEA crude oil import price, a proxy for international prices which in 2008 averaged around $3 per barrel less than WTI, is assumed to reach $87 per bbl in 2015, $100 per bbl by 2020 and $115 per bbl by 2030 (in year-2008 dollars). In nominal terms, prices approach $102 per bbl by 2015, $131 per bbl by 2020 and almost $190 per bbl by 2030. Gas and coal prices are assumed to increase broadly in line with oil prices, reflecting the dynamics of inter-fuel competition and rising supply costs.
• The assumption of rising oil prices is based on our expectation of gradually tightening international oil markets – assuming the world economy recovers steadily. Global oil demand is expected to recover as the economy pulls out of recession, outpacing the growth in capacity, while recent large cutbacks in upstream and downstream investment will have a big impact on supply in the next three to five years as a result of the long lead times in bringing new projects on stream. Although the underlying trend may be upwards, prices are likely to remain highly volatile. In the longer term, the rising marginal costs of supply, together with demand growth in non-OECD countries, will continue to exert upward pressure on prices.
• In the 450 Scenario, oil prices are assumed to follow the same upward trajectory as in the Reference Scenario to 2015 and then remain flat to 2030, due to weaker demand. This means there is less need to produce oil from costly fields higher up the supply curve in non-OPEC countries. The oil price is assumed to plateau at $90 per bbl in real terms in 2020. Gas prices are correspondingly lower. Coal prices are reduced even more, as demand falls much more than for oil or gas. Final prices also take into account carbon prices under the cap-and-trade systems that are assumed to be introduced in many parts of the world in this scenario. The CO2 price in the OECD reaches $50 per tonne in 2020 (which increases the cost of a barrel of oil by $21) and $110 per tonne in 2030 (which increases the cost of a barrel of oil by $46).
• In some countries, end-user prices rise faster than international prices, because subsidies are assumed to be reduced. In most non-OECD countries, at least one fuel or form of energy continues to be subsidised, usually through price controls that hold the retail or wholesale price below the level that would prevail in a truly competitive market. In 2007, energy-related consumption subsidies in 20 non-OECD countries (accounting for over 80% of total non-OECD primary energy demand) amounted to about $310 billion. Most of these countries have policies to reform subsidies, though often the intended timing is vague and the commitment is half-hearted. We assume that these subsidies are gradually reduced, but at varying rates across regions.

TechnoSanity #33: A look at the World Energy Outlook, 2009

Links:  http://www.worldenergyoutlook.org/

Links:  http://www.worldenergyoutlook.org/docs/weo2009/fact_sheets_WEO_2009.pdf

Links:  http://www.worldenergyoutlook.org/docs/weo2009/climate_change_excerpt.pdf

Links:  http://www.iea.org/speech/2009/Tanaka/WEO2009_Press_Conference.pdf

References:  Technosanity #20: World Energy Outlook 2008

References:  TechnoSanity #32: Fudged numbers in the IEA's World Energy Outlook, 2009??

TechnoSanity #32: Fudged numbers in the IEA's World Energy Outlook, 2009??

The World Energy Outlook is a yearly report from the International Energy Agency. It provides data and projections about energy supplies world wide, and is used by nearly 30 countries in planning policies. It is an important report that carries a lot of weight around the world. This year the report is being released on the eve of the Copenhagen Climate Change summit, and this years report has a lot of strong statements about climate change effects of energy use. There is also a controversy over the accuracy of the report.

Why the End May Be Coming for Coal - This isn't about the IEA report but is interesting in the context of this discussion. The article points to growing clamor for ending coal use and most especially mountain top removal. Mountain-top removal is a form of strip mining where they, uh, remove mountains in order to get at the coal. Um, remove a mountain? Is this the world we want to live in? This is utter unmitigated ecological disaster.

Energy costs to soar if no carbon deal, agency says - Unless the leaders at the Copenhagen summit can agree on a deal, the world faces higher energy costs as well as increased negative environmental impact. If no deal is reached that means "business" will "remain as usual". Under business as usual assumptions the IEA report indicates drastic increases in electricity use, in oil use, and in coal use (to generate the electricity). Due to supply problems the oil will be high price, and due to the higher coal use the environmental problems facing us now will be drastically worse.

Current Energy Plans ‘Unsustainable,’ IEA Says in New Outlook - The global recession has caused a decrease in energy use, a significant decrease, and the first since 1981 (another recession year). The IEA assumes that in short order the economic problems will be set right, and that the world economic game will resume its upward climb. The typical economic game results in ever-increasing use of energy and the associated ills mentioned previously.

I rather doubt that the game can continue in the prior pattern. The supply problems look to be more serious than the IEA is willing to admit. (See TechnoSanity #30: Peak Oil and the UKERC Peak Oil report

Electricity demand will grow even faster—by 76% by 2030. That will require the addition of nearly 5,000 gigawatts of new power plants. That’s five times the generation capacity of the U.S. today....And that means coal will become more important—not less important—in the global energy mix. The IEA expects global coal consumption to grow 53% by 2030 in its reference scenario. Natural gas will also become more important, with demand growing 41% over the period—but gas supplies are “are easily large enough to cover any conceivable rate of demand increase through to 2030 and well beyond,” the IEA says.

World needs Canada’s 'dirty oil', says IEA - The IEA report looks to "unconventional oil" like Canada's tarsands as the savior to the oil supply crunch.

This is the 2008 chart, the 2009 chart is very similar. Notice the figures for "Oil fields yet to be developed" and "Oil fields yet to be found". That oil which is yet to be developed or found is a significant chunk of expected future oil supply. Even if they're correct in the estimates of this yet to be developed or found oil supply, it's not enough to satisfy the growing demand. It's expected growth in tarsands oil output which makes up the gap.

World oil demand growth to be led by Asia - IEA - Growth in India and China due to globalization is expected to be a major part of increased world oil use. They expect U.S. oil use to decrease. Globalization means shipping economic activity from factories that had been functioning in the U.S. to factories operating in China or India. That means the energy use which used to occur in U.S. factories is now happening in Chinese factories. It also means larger energy use to ship the stuff across the world.



After the Recession, Will the World Face an Energy Crisis? - Again going over the expected economic recovery means resumption in growth of energy and increasing environmental damage.

Highlights from the IEA World Energy Outlook 2009

Key oil figures were distorted by US pressure, says whistleblower - MAJOR CONTROVERSY. A few whistleblowers who refuse to be named are claiming that U.S. Government pressure was placed on the IEA to fudge the numbers in the report. To overstate reserves, to understate demand, and make it look like the situation is better than it really is. To avoid panicking the masses.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

Too fearful to publicise peak oil reality - Did nobody see the peak oil crisis coming? "Apply that question to peak oil and the answer is that many people did see it coming but they were marginalised, bullied into silence and the evidence was buried in the small print."

Take the 2008 edition of World Energy Outlook, the annual report on which the entire energy industry and governments depend. It included the table also published by the Guardian today, and the version I saw had shorter intervals on the horizontal axis. What it made blindingly clear was that peak oil was somewhere in 2008/9 and that production from currently producing fields was about to drop off a cliff. Fields yet to be developed and yet to be found enabled a plateau of production and it was only "non-conventional oil" which enabled a small rise. Think tar sands of Canada, think some of the most climate polluting oil extraction methods available. Think catastrophe.

What made this little graph so devastating was that it estimated energy resources by 2030 that were woefully inadequate for the energy-hungry economies of India and China. Business as usual in oil production threatens massive conflict over sharing it.

Energy body rejects whistleblower allegations of oil cover up - The IEA issues an official denial of there being fudged numbers.

A false picture of world's oil reserves? - An interview on Marketplace about the claims of fudged numbers.

IEA sees gas glut until 2015, rising coal role

Cost of extra year's climate inaction $500 billion: IEA

Energy Watchdog Urges Deal on Climate

IEA "whistleblower" says peak oil nearing: report

TechnoSanity #32: Fudged numbers in the IEA's World Energy Outlook, 2009??

References:  Technosanity #20: World Energy Outlook 2008

TechnoSanity #30: Peak Oil and the UKERC Peak Oil report

In October 2009 the UK Energy Research Centre released an in-depth report on Peak Oil. In this episode of the Technosanity Podcast we go over several articles discussing the report.

Articles discussed in the podcast:-

"Global Oil Depletion" a report on Peak Oil by the UK Energy Research Centre is my summary of the report. Of especial interest is the following two charts.


This shows the rate of oil discovery over the years, and shows that the peak of oil discovery occurred in the early 1960's. The lack of discovering oil is not due to a lack of searching, it is due to a lack of finding. The lack of finding new significant oil discoveries implies strongly that the fossil oil resources on this planet have all been tapped out.



The important wedges in this chart are "Crude oil - fields yet to be developed" and "Crude oil - fields yet to be found". Looking at the chart it appears the IEA expects on the order of 40 million barrels/day will come from those two sources. The first, fields yet to be developed, is oil that's known to exist but hasn't had infrastructure installed to extract the oil. The fields yet to be developed require extensive investment to install that infrastructure.

The fields yet to be found simply aren't known yet. Where are they? We don't know. The IEA is putting a lot of credence in the wish or hope or expectation that those fields will be found. Maybe they'll be found, maybe not.

There needs to be a long lead time to install the infrastructure - something like 10 years to build out an oil field full of oil derricks etc.

• Peak Oil - It's Still Coming, It May Be Delayed Though,
• Whither Resilience and Transition? Why ‘Peak Oil’ Has Yet to Outlive its Usefulness,
• Oil production could peak in 10 years' time,
• Have We Reached Peak Oil? 
• and A post-oil world gets less sci-fi by the day all go over the same UKERC study.

The UKERC study warns that the world society will have to find 64 million barrels/day in production by 2030 to replace the decrease in production they expect by then. This is shown on the above chart. But it's not clear where that oil will come from.

Canadian tar sands? The Canadians doubt they'll ever get more than 3 million barrels/day in production.

There are four key issues about oil production and which together point to a supply crunch sooner rather than later.

• declining output: That's peak oil, once we're past the global oil peak it means oil production is declining
• declining discoveries: Discoveries have been in a decline since the early 60's, it means discoveries do not match the rate of use, and that we're due to run out no matter what
• increasing demand: Population increases and other factors mean continuing demand increases
• insufficient projects in the pipeline: Without oil infrastructure projects to exploit the known fields, the oil production capacity cannot increase even with fields we know about

Reflections from ASPO: Contradiction, EROI, and Future Energy Supplies is a look back at the recent conference of the Association for the Study of Peak Oil. He talks at length about Energy Return on Investment (EROI) in regard to some claims about "Shale Gas" resources. Someone claims there's 200+ years of natural gas available from Shale Gas. However what's missing from that claim is the EROI of extracting that gas, and if it requires a lot of energy to extract natural gas from shale then is it worthwhile to do so?

TechnoSanity #30: Peak Oil and the UKERC Peak Oil report

References:  Beyond Oil: The view from Hubberts Peak

References:  "Global Oil Depletion" a report on Peak Oil by the UK Energy Research Centre

Technosanity #20: World Energy Outlook 2008

The World Energy Outlook is a yearly publication from the International Energy Agency giving the official projection of the future energy outlook. They just released the 2008 report and there are a couple slide decks available giving some hints of what is contained in the report.

WEO 2008 Presentation at COP 14 Side Event

Launch of World Energy Outlook 2008

World primary energy demand in the reference scenario - they say it's "unsustainable" without explaining why. World energy demand expands by 45% between now and 2030, a very rapid rise, an average rate of increase of 1.6% per year, with coal accounting for more than a third of the overall rise.

Demand for coal has been growing faster than any other energy source & is projected to account for more than a third of incremental global energy demand to 2030

World oil production by source is very scary. The IEA figures show a decline in crude oil production from the currently producing fields begining in 2008. er.. That decline has already begun? There is a growing gap in production of the currently producing fields and their claimed future oil production. What makes up that gap is crude oil from fields that are yet to be developed, and this includes use of enhanced oil recovery techniques. They further explain that 64 million barrels per day of capacity needs to be installed between 2007 and 2030, which is six times the current capacity of Saudi Arabia. From where will the money come to pay for this infrastructure even if the oil is there to fill the demand?

97% of the projected increase in emissions between now & 2030 comes from non-OECD countries –three-quarters from China, India & the Middle East alone

OECD countries alone cannot put the world onto a 450-ppm trajectory, even if they were to reduce their emissions to zero

These last two slides show that the problem is coming from the developing countries, primarily China and India. They are of course where the hugest quantity of industrialization is occuring.

World primary energy demand in the reference scenario - they say it's "unsustainable" without explaining why. World energy demand expands by 45% between now and 2030, a very rapid rise, an average rate of increase of 1.6% per year, with coal accounting for more than a third of the overall rise.

Demand for coal has been growing faster than any other energy source & is projected to account for more than a third of incremental global energy demand to 2030

World oil production by source is very scary. The IEA figures show a decline in crude oil production from the currently producing fields begining in 2008. er.. That decline has already begun? There is a growing gap in production of the currently producing fields and their claimed future oil production. What makes up that gap is crude oil from fields that are yet to be developed, and this includes use of enhanced oil recovery techniques. They further explain that 64 million barrels per day of capacity needs to be installed between 2007 and 2030, which is six times the current capacity of Saudi Arabia. From where will the money come to pay for this infrastructure even if the oil is there to fill the demand?

97% of the projected increase in emissions between now & 2030 comes from non-OECD countries –three-quarters from China, India & the Middle East alone

OECD countries alone cannot put the world onto a 450-ppm trajectory, even if they were to reduce their emissions to zero

These last two slides show that the problem is coming from the developing countries, primarily China and India. They are of course where the hugest quantity of industrialization is occuring.

Current energy trends are patently unsustainable —socially, environmentally, economically

Oil will remain the leading energy source but...

• The era of cheap oil is over, although price volatility will remain
• Oilfield decline is the keydeterminant of investment needs
• The oil market is undergoing major and lasting structural change, with national companies in the ascendancy

To avoid "abrupt and irreversible" climate change we need a major decarbonisation of the world’s energy system

• Copenhagen must deliver a credible post-2012 climate regime
• Limiting temperature rise to 2°C will require significant emission reductions in allregions & technological breakthroughs
• Mitigating climate change will substantially improve energy security

The present economic worries do not excuse back-tracking or delays in taking action to address energy challenges

Technosanity #20: World Energy Outlook 2008

Links:  World Energy Outlook

Links:  International Energy Agency

Links:  WEO 2008 Presentation at COP 14 Side Event

Links:  Launch of World Energy Outlook 2008

Technosanity #18: Matt Simmons discussing oil supply disruptions

Matt Simmons is Chairman of Simmons & Company International, a specialized energy investment banking firm. Mr. Simmons' recently published book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy has been listed on the Wall Street Journal's best-seller list. He has also published numerous energy papers for industry journals and is a frequent speaker at government forums, energy symposiums and in board rooms of many leading energy companies around the world. Mr. Simmons is married and has five daughters. His hobbies include watercolors, cooking, writing and travel.

His presentation is to warn of a 'run on the bank' as it applies to oil supplies. He warns of how this can cause a major disruption very quickly and which is a gravely serious problem. There's an analogy to how quickly the financial system melted down.

Slides: http://www.aspo-usa.org/aspousa4/proceedings/Simmons_Matthew_ASPOUSA2008.pdf

The meltdown demonstrated various flaws in the financial system which had been built. The lack of regulation, the high leverage figures, it all made for a nonresiliant system which collapsed like a house of cards. There was an illusion that the bigger the financial institution the more it was too big to fail, but we saw giants fall.

Risk is a very real thing. Leverage can be dangerous. Audited financial numbers do not always represent genuine reality.

In the oil industry there is even less knowledge about the true situation. In the financial system there is regulation and required disclosures, even as much of that system has been deregulated. In the oil industry there is no regulation, there is no federal reserve, no watchdogs, etc.

Just like the quick collapse of the financial system, can the oil industry also go through a quick collapse and what is the effect if it does? The question to be concerned over is how resiliant is the oil delivery system to disruption. How easily can oil supplies be disrupted? How much cushion is in the system to even out disruptions? What alternatives do we have if oil supply is disrupted to us? What is the effect on our daily life?

The system collapsing means we could still have oil in the ground but have a society unable to function to the level required to deliver it to market as a finished product.

Energy Oxymorons:

"We need Energy independence" -- 100% impossible to create

"Technology is a game changer" -- Technologies have zero impact on these risks

"Drill our way out of this mess" -- No spare rigs and no places to drill where oil can be retrieved easily

"Energy system is efficient and transparent" -- Much hidden data rather than the great transparency of the financial system

Technosanity #18: Matt Simmons discussing oil supply disruptions

Links:  Matt Simmons bio

Links:  http://www.aspo-usa.org/aspousa4/proceedings/Simmons_Matthew_ASPOUSA2008.pdf

Technosanity #17: QA session with Ken Verosub, Jeremy Gilbert

Q&A session with Ken Verosub and Jeremy Gilbert immediately following the presentations they gave and which were broadcast in immediately prior Technosanity Podcast episodes.

Technosanity #17: QA session with Ken Verosub, Jeremy Gilbert

Technosanity #16: Peak Oil Global Overview, An American Wake Up Call

A presentation at ASPO-USA 2008 by Mr. Jeremy J Gilbert, Managing Director, Barrelmore Ltd Jeremy Gilbert. Jeremy is the recently retired Chief Petroleum Engineer from British Petroleum (BP) where he was responsible for the company's worldwide petroleum engineering performance and associated research and development program. He joined BP in 1964.

His topic is a general overview of Peak Oil, specifically focusing on why it is time for America to wake up to Peak Oil. There have been a series of wake up calls, but has much changed?

While America has slept on: 2001: Discovery rates continue decades-long fall; Calculations suggest reserves can’t meet demand projections; Some recognition of political, investment risk in developing resources. 2008: No improvement in resource situation; New, more accurate, calculations of supply define earlier and clearer peak; Political will to increase supply clearly absent; prices not stimulating investment to increase supply

There are three problems: Geology, Investment, Policy of main producers. These, taken together, make the future of oil very difficult

Why are there still political leaders like Newt Gingrich or Henry Kissinger continuing to say there is no problem.

It's not a problem which higher oil prices will fully solve. According to these leaders or to most economists it is a simple problem of supply and demand. Higher demand will cause a higher price and it will do two things, incentivize customers to cut back, and incentivize energy producing countries to look for more oil or to use alternative methods. But this ignores a deeply serious problem, that in oil field after oil field it has been observed that oil production reaches a peak at the midway point, and then inevitably goes into a production decline. No amount of money will change the issue that the planet cannot provide more oil.

Technosanity #16: Peak Oil Global Overview, An American Wake Up Call

Links:  http://www.aspo-usa.org/aspousa4/proceedings/Gilbert_Jeremy_ASPOUSA2008.pdf

Links:  Mr. Jeremy J Gilbert, Managing Director, Barrelmore Ltd

Technosanity #14: Petroleum & Peak Oil 101

Petroleum 101

Mr. Ken Verosub, Geology Professor, University of California, Davis

http://www.aspo-usa.com/aspousa4/ConfirmedSpeakers.cfm?bid=522

slides: http://www.aspo-usa.org/aspousa4/proceedings/Verosub_Ken_Petro_101_ASPOUSA2008.pdf

Specialist in paleomagnetism of sediments, the history of the geomagnetic field. He presents an introductory lecture in Petroleum Geology giving an overview of how geology & biology came together to create the gift of oil.

For the planet to create oil requires that a quantity of dead sea organisms get trapped beneath a sandy "reservoir rock" by a solid "cap rock". The decay of those sea organisms becomes oil. It takes special conditions to do this and geologists have pretty much mapped out the planet for these resources.

A salt dome is one common trap for oil to form in. And it's the easiest to find. Salt domes produce localized gravity or magnetic deviations and in some cases you can simply fly over them and see them.

Generally geologists study the subsurface conditions using "Reflector Seismology". The modern technique uses a 'thumper truck' which bang the ground real hard, and then "geophones" are used to pick up reflected sound. The pattern of reflections tells them a lot about subsurface conditions. A similar method is used at sea, with a ship towing geophones through the water.

They're able to gather 2-D and 3-D pictures of subsurface conditions which make for interesting maps of what had previously been mountain ranges, coastal planes, ocean floors, etc.

The history of an individual well is a play in three acts. Act one is the initial discovery, drilling, and development of the oil field. Act 2 is a long plateau of extracting oil. Act three is a diminishment with an inevitable decline in oil extraction.

The model behind peak oil comes from taking the production curves of a group of oil fields .. and summing them together. For example take all the fields in a given region or country, sum their production curves, and it comes close to a bell curve. M. King Hubbert put this model together.

Hubbert's prediction for U.S. oil production was made in 1956. He had the distinction of being very close to the actual results.

Discoveries lead production. Because it takes 10 or more years to develop an oil field into production, the rate of discoveries is a predictor for future oil availability. The rate of oil discoveries peaked in the early 1960's and new oil field discoveries has been in a decline ever since. If there are little or no new oil field discoveries then ultimately oil production has to decline as the existing fields peter out.

Newt Gingrich's "Drill Here, Drill Now, Pay Less" plan is shown as an example of poppycock solutions being pushed.

Finding or getting to the new oil is not easy or cheap. Offshore oil rigs cost over $1 billion apiece.

Finding big fields is unlikely. Oil company geologists have been all over the planet and their continual quest for new oil still hasn't reversed the decline in oil discoveries.

Even if new fields were to be drilled it takes 10-20 or more years to bring a field online. If we enter a decline in oil production soon, then new fields will only help in 2020 or further into the future.

The U.S. has 20 billion bbl of oil reserves. Total U.S. daily consumption in 2005 was 20.7 million per day, and we import 11.7 per day. That's approx 7 years of supply.

Major crisis due in 2015ish perhaps. 2008+7=2015. The U.S. oil production is going to be declining and the ratio of imports to usage will simply be ever-increasing. As the ratio becomes higher it makes the U.S. economy weaker and weaker, and the U.S. ever more desparate for oil.

But this guys presentation is only one set of figures. The USGS and others have different projections of future oil. They're claiming a peak further out into the future than ASPO projections say.

Another aspect is it isn't just a U.S. problem. Other countries are in on this. In particular the former-3rd-world countries which are industrializing mainly China and India are increasing their ratio of energy use. Globalization of production makes for higher transportation costs, and higher fuel usage. From that viewpoint also, in about 7 years demand for oil will exceed maximum total oil production.

What happens then?

Technosanity #14: Petroleum & Peak Oil 101

Links:  http://audio.davidherron.com/technosanity/episode-14-petroleum-101.mp3

Links:  http://www.aspo-usa.com/aspousa4/ConfirmedSpeakers.cfm?bid=522

Links:  http://www.aspo-usa.org/aspousa4/proceedings/Verosub_Ken_Petro_101_ASPOUSA2008.p...

Technosanity #12: Peak Oil and the Media (from Radio Ecoshock)

Republished from http://www.ecoshock.org/2008/08/peak-oil-and-media.html -- a panel discussion about Peak Oil and its coverage in the Media. What we can do. Vancouverpeakoil.org presents a panel of 5 journalists: Rex Weyler, Barbara Jaffe, Charlie Smith, Sara Robinson and Alex Smith. How to organize, use media, bypass the mainstream.

It is production that has peaked. It doesn't matter if there are trillions of barrels of oil left, what matters is to get that oil and bring it to market. There are only a couple rigs capable of drilling oil in the Arctic and it costs $1billion apiece to build new oil rigs. Somehow tapping Arctic oil would require building new rigs, new oil pipelines, etc, and is there money to do all the required investment? Or even is new oil something we want to invest in, given the negative environmental impact.

Energy Return on Investment (EROI) is another factor.. The peak net EROI occurred 30 years ago. Deposits like the tar sands have an EROI of 1:1 meaning you extract the same energy from the tar sands that you put in. It's not profitable by any measure yet they're committing ecological catastrophes in the name of mining it. And it requires government subsidy to even get what little profit there is.

Price isn't determined, any more, by the old style price/demand equations. Price isn't being set by the world market. Instead it is access. The Iraq war is being fought to establish access. The term is "off-take deals" referring to special deals like "We'll give you $n billion and take everything in sight". The Chinese especially are doing this, rather than doing war. Resources controlled by off-take deals never get to market and the price is not the market price but whatever was negotiated in the deal.

The strength of empires has been determined repeatedly by the energy resources. The most recent was England whose strength came from their coal deposits. When their coal became eclipsed by American coal, they were eclipsed, and again when Americans discovered oil, that doubly eclipsed the British Empire.

We're talking about a finite resource and the math isn't very simple. A great analogy was made to what happens if you repeatedly take food out of a refrigerator. Eventually you run out and go to the store to buy more. In this case the refrigerator is the oil deposits, but there is no store to go to.

Technosanity #12: Peak Oil and the Media (from Radio Ecoshock)


Links:  PEAK OIL AND THE MEDIA

Links:  http://www.vancouverpeakoil.org/

Links:  http://www.thetyee.ca/

Links:  http://www.ecoshock.org/

Links:  http://www.ecoshock.net/eshock08/ES_080829_Show.mp3

Technosanity #7: Solfest 2008

I recorded this a couple weeks ago during the Solfest. Solfest is a yearly gathering sponsored by Real Goods and the Solar Living Institute, it focuses on solar energy, off the grid living, appropriate technology, and much more. This was my first time attending the Solfest and I had a great time. The episode is pretty long but it covers a lot of things.

SolFest http://www.solarliving.org/display.asp?catid=17 -- SolFest is the world’s premier two-day celebration of renewable energy and sustainable living. Since SolFest was born in 1996 over 100,000 people have learned how to change the world while having fun. Each summer SolFest transforms the rural hamlet of Hopland, California, into the global epicenter of green living.

Solar Living Institute http://www.solarliving.org/ -- "mission is to promote sustainable living through inspirational environmental education. The Institute provides practical, education by example and hands-on workshops on renewable energy, green building, sustainable living, permaculture, organic gardening and alternative, environmental, construction methods."

Real Goods http://www.realgoods.com/

I made a few blog posts about the Solfest 2008 as well as found some interesting companies and other web resources.

Green Career Conference -- http://www.solarliving.org/store/product.asp?catid=13&pid=1652 -- http://solarliving.org/store/product.asp?catid=13&pid=1913 -- -- http://old.7gen.com/website/green-career/24878-green-career-conference -- Want a job in the 'Green Economy'? This is the place to go.

West Coast Green -- http://westcoastgreen.com/ -- A green building and technology conference scheduled to occur in San Jose, CA in September 2008

Climate Code Red -- http://www.7gen.com/website/climate-change/24879-climate-code-red -- A book making the case that our climate is at an utmost emergency crisis state. CODE RED EVERYBODY DROP WHAT YOU'RE DOING!

Grid Beam -- http://www.7gen.com/website/grid-beam/24872-grid-beam -- It's a very interesting idea for rapidly constructing things like furniture, shelves, beds, electric cars, or nearly anything else. Sol Man -- http://www.7gen.com/website/solar-electricity/24860-sol-man -- offered a very interesting portable solar power station, built using grid beam technology.

Avalon Springs -- http://www.7gen.com/website/intentional-community/24863-avalon-springs -- A new intentional community just started in Sonoma County.

David Blume, Alcohol Can be a Gas, at SolFest 2008 -- http://www.7gen.com/blog/20080829/24851-ethanol -- An amazingly interesting talk about using Ethanol as a fuel to power cars, airplanes, etc. The guy was phenomenal, had a lot of eye-opening things to say about the subject, to show how ethanol production isn't about food diversion but the food diversion story is more of an oil industry scam, etc. He's written a book, Alcohol Can Be a Gas!: Fueling an Ethanol Revolution for the 21st Century that goes into this deeply.

Greening Mass Media

A talk presenting thoughts on bringing 'green' thinking, ideas, perspective, etc to mass media. The green perspective is a niche viewpoint and it's easy for niche ideas to have a hard time being widespread in mainstream society. But there is a need for this viewpoint to be more widely accepted and enter mainstream society, and one way to do this is by having the green perspective regularly presented in the mass media. The talk was presented by Deborah Lindsey

She is not a professional journalist but came into being a talk show host & author from her desire to tell the story of green living. She got her start through finding a newly started radio station on which she could buy radio time. Over some time she'd built up a body of work that allowed her to build her career to a bigger scale. Now she podcasts, appears on a couple radio stations, writes articles for magazines, etc.

Management has specific goals -- to get advertising because it's advertising that pays the bills and satisfies managements duty to the shareholders. Over the history of mass media they've learned that "Tension" sells advertising. This is why journalists are always looking for the controversy and it seems that they sometimes create controversy where it doesn't exist.

If you're in the media industry let's be real, you're really in the advertising industry. Essentially all media is paid for by advertising.

It's a business and if it's going to be a sustainable business then you need to earn a living at it. She offered several ways to earn a living

• Being hired by a corporation
• Sponsorship or Endorsements
• Independent, and selling advertising
• Membership access to special content
• Commissioned articles (by the word)
• Grants

Technosanity #7: Solfest 2008
Links:  http://audio.davidherron.com/technosanity/e000006.mp3

Technosanity #4: Review: A Crude Awakening

This is a very deeply interesting documentary about oil, oil supplies, the peak oil phenomenon, and the coming looming disasters which await us. The documentary is not "balanced" in that they gave no voice to the other points of view, but I suppose they think those other points of view are so far out of truth to not be worth addressing.

It starts with some assertions of truth: Oil is the Blood of the Dinosaurs, Oil is the Bloodstream of the Global Economy, Oil is the Blood of the Earth

Our arrangements of using Oil is making ourselves dependent on unstable regimes in nasty parts of the world. This isn't covered in the documentary, but I wonder how much of that instability is due to geopolitical machinations launched by the U.S. to secure the supply of oil. In any case it's obvious from the daily news that the middle east is unstable, and this is where our oil is coming from.

Assertion: It's important (to some) to keep us dependent on oil for as long as possible.

It would be in the business interests of the oil companies to keep the world dependent on oil. Clearly if the world continued its dependence on oil, the world will continue to ship money to the oil companies.

Most people have no inkling of the problem we're facing. The looming crisis includes unemployment, bankruptcy, starvation.. all this is the normal behavior of a collapsed society.

Assertion by Colin Campbell: The bulk of the worlds oil was formed in two periods of extreme global warming, 90 million years ago, and 150 million years ago.

If this is correct it makes oil a one time resource which will "never" be recreated on this planet. I'm a little surprised and will need to double check this assertion by Dr. Campbell. I always thought there was a continuing process of creating new oil, it's just that the planet takes a long time to do the process.

The work value of oil is phenomenal. Scientists can equate units of human labor to the energy, and the energy content of $1 worth of oil contains the energy equivalent to 25,000 hours of human labor. In other words the drive to my job, 10 miles, uses energy equivalent to 40,000 hours of human labor. But I know from personal experience I can ride a bicycle for that same distance, it takes me 45 minutes to ride, so there's a huge wastage of energy (40,000 hours of human labor to drive my car versus the 45 minutes of human labor it takes me to ride my bicycle).

Assertion: "Oil is our God" and that whatever religion we profess to, what we really worship is oil. Eh? What do they mean by "worship"?

70% of oil is used for transportation fuel
98% of transportation energy comes from oil

Constructing products like cars or computers or food, all these things by modern production methods require more weight in oil to produce the thingy than the thingy itself weighs. In Agriculture, for example, it's widespread to use petroleum based fertilizer. Oil makes plastics, insecticides, cosmetics and more.

"They're not making a lot of dinosaurs any more"

"Oil is a magnet for war. Oil starts wars." This speaker goes on to claim the conflict in Darfur is really about oil. There are oil supplies in southern Sudan, recently found. The Sudanese government (based in the north) wants to control the oil, and are therefore ethnically cleansing southern Sudan so the northern Sudanese can control the oil.

However this "Oil starts all wars" is a strange short-sighted statement. What about the wars which begun before Oil was discovered and brought into use by humans? There were many wars fought before the age of Oil, and clearly those wars were not fought over oil resources. However it's ominous that she claims World War I was really about oil (??Was it??). Many events in World War II were affected clearly by oil supplies, especially the German attack into Russia so that Germany could gain control of the Baku oil fields.

The first war purely about Oil was the Iraqi invasion of Kuwait. This was absolutely and fundamentally about a dispute over an oil field.

In the more recent U.S. stupid illegal invasion of Iraq, the U.S. military did not secure the WMD areas. Supposedly the war was to control WMD's, so why didn't they secure Iraq's military depots? By not securing Iraq's depots the arms and other military supplies in there instead were looted and were made available to the insurgents, who have been blowing up U.S. troops ever since. Anyway, instead of securing the WMD depots the U.S. military secured the oil fields. Instead of securing the museums in Baghdad, the museums which contained the original records of human civilization, the museums which contained the cuniform tablets that are the earliest form of writing, instead of securing the museums which were looted, the U.S. military secured the oil ministry.

We're "Always just a drill bit away from a major new discovery" but it's been a very long time since the last significant discovery.

Extracting oil from tar sands and other heavy deposits, it's technically possible however it requires more energy to do so than you get from the resulting oil. The Fischer-Tropsch process was invented by German scientists before World War II and is how the Germans were able to fuel their war machine while not having a supply of oil. They converted coal into oil using this process.
Use of this process is only feasible as a last resort, because it's so expensive to do.

"Sustainable peak supply" -- what does this phrase mean?

They assert that oil allowed world human population to explode. At time of christ, 300mil, by 1700's it'd doubled to 600mil. But as soon as oil was discovered the population exploded to the 6billion it is now. They're saying population increase came as a direct result of better energy supplies. Maybe so, but weren't there other effects? Better medicine? Also better food supplies, though better food is due to better oil supply.

Richard M. Nixon: If our energy resources are sensibly developed they can provide for us for centuries to come

There's a belief many have had that oil is limitless and will always be cheap. Businesses have written into their assumptions that oil will continue being supplied as it is today. Again most people are clueless as to what's about to happen.

A 30-40-50 mile commute only makes sense when there's cheap oil. In the U.S. we've reconstructed the cities to make for 30+ mile commutes, with people driving everywhere, the cities are organized for the convenience of drivers, and there is resulting very little mass transit. This is short sighted thinking which led us to suburbanize U.S. cities under the belief that there would always be cheap oil and gas.

The U.S. evolved our cities for cars. The end of cheap oil means we'll have to rebuild our cities from scratch to a denser style. Perhaps.

e.g. riding bicycle's would be the kind of adaptation people will have to make. But most people are unwilling to ride bicycles for any serious amount of riding.

There are two options: a) militarize the taking of oil by force, b) prepare properly for the coming end of cheap oil

Technology can come to the rescue. Natural resources can be exhausted, but human ingenuity is inexhaustible.

Projections of current trends in energy demand say the human population will require 14 terawatts of energy in 2050. This is tremendous. It would require thousands of new nuclear plants (for example) and by doing this with nuclear power would mean the uranium supplies would reach their peak uranium production very quickly.

Living in the style to which we have become accustomed is not sustainable. It is going to create for us a crisis. How will we get through this?

Technosanity #4: Review: A Crude Awakening

Links:  http://audio.davidherron.com/technosanity/e000004.mp3

Links:  Peak Oil Links

Technosanity #3: Peak Oil

Today I want to talk about the Peak Oil situation and do an overview of some of the current news related to this.

Let's start with a quick primer on what this is.

Adapted from: http://en.wikipedia.org/wiki/Peak_oil
http://www.7gen.com/website/peak-oil/23988-peak-oil

Peak oil is the point in time when the maximum rate of petroleum production is reached. The peak oil occurs at every level, for each oil field, for each country, and for the global production. After the peak oil point is reached, the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, an energy crisis may develop because the availability of conventional oil will drop and prices will rise, perhaps dramatically. M. King Hubbert first used the theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His model, now called Hubbert peak theory, has since been used to predict the peak petroleum production of many other countries, and has also proved useful in other limited-resource production-domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.

The same pattern happens for other limited resources. There will be a copper peak, a coal peak, a natural gas peak, a fish peak, etc. In each case there is an increasing demand for a resource, and a fixed maximum capacity to deliver that demand, and once the capacity is reached it damages the resource such that it can no longer produce as it did before.

Oil is the most critical resource for our societies existence and it is with oil that this Peak Resource phenomenon was discovered.

Oil is the key to transportation. Current transportation technologies generally require liquid fuels, and society has chosen that the only way to get liquid fuels is to use fossil oil. The direct result of tight oil supplies will be expensive transportation, and that will contribute to several secondary results to be covered later.

The ever-increasing demand for oil partly occurs as a natural byproduct of rising population. Each person who exists is responsible for consuming resources, so of course the more people there are the more resources which are used. Another cause is a shift from manual technologies like bicycles or horse drawn carts to mechanized technologies like cars and trucks. Some countries, especially India and China, are industrializing and are causing an increased rate of demand. As countries industrialize the amount of resources consumed per person raises as well.

Peak Oil
http://www.7gen.com/article-summary/peak-oil/23991-peak-oil
http://www.cbc.ca/news/background/oil/peak-oil.html

An interview with the authors of Transport Revolutions: Moving People and Freight Without Oil they suggest the U.S. might become so desperate for oil they would invade Canada to get its oil. Maybe the NAFTA is at least partly due to the need to have ready access to Canadian oil.

"The likely outcome of not dealing with this issue is not an environmental catastrophe. It's an economic and social catastrophe that may leave us unable to deal with the environmental catastrophe," Richard Gilbert said in an interview. The effects brought by oil in our society are so critical and fundamental to how we live, that without cheap oil we face starvation, riots, collapsed economies, more wars, and more.

The gushers are gone - "It's the end of the Beverly Hillbillies oil. The kind of oil that you stick a hole in the ground, and it starts squirting a gusher out under its own power." - All the big discoveries have already been made. There are two peaks in oil supply, the first peak is the peak in the rate of discovery of oil, and the second peak is the peak of oil production. The peak of the discovery rate has to precede the peak of production, and the peak of oil discovery is long past.

There's more in this article but we're focused on understanding peak oil here.

World Energy Outlook
http://www.7gen.com/website/government-and-environment/23994-world-energy-outlook
World Energy Outlook 2007 Edition
http://www.7gen.com/website/energy-policy/23996-world-energy-outlook-2007-edition

As Dr. Fatih Birol, Chief Economist of the International Energy Agency, said in testimony to Congress in January 2007: "The world is facing twin energy-related threats: that of not having adequate and secure supplies of energy at affordable prices and that of environmental harm caused by its use. " Not only is the supply threatened, the use of fossil fuels is threatening us all from environmental harm. The burning of fossil fuels releases poisons which directly cause a wide range of diseases. The burning of fossil fuels release greenhouse gasses which are directly causing climate change to be worse. Purchasing fossil fuels results in large capital flows into the Middle East.

"Oil supply is increasingly dominated by a small number of major producers, most of them in the Middle East" which then connects to a variety of global geopolitical manipulations. The oil industry needs to do massive investment in developing oil fields and infrastructure, a total of $4.3 trillion dollars between 2005-2030. However it is uncertain whether the key Middle East countries will actually do so, and it's possible they will deliberately keep investment lower than predicted. Why should they increase production when keeping production low keeps the price high? Or it's possible that a credit crunch might prevent producers from expanding capacity due to a lack of money to pay for the investments.

The U.S. imports more energy than the next 2 highest importers. Most of U.S. imports come from shaky or unfriendly suppliers. Many of the key suppliers are 1-2 months travel time away. There are many scenarios in which "energy" (a.k.a. oil) supplies to the U.S. can be disrupted. One of these unfriendly suppliers could turn downright nasty and cut off oil to the U.S. Or storms could wreck shipping facilities, refinery facilities. Or a war with Iran could block the mouth of the Persian Gulf, preventing shipment of oil from the Middle East.

In other words we have to be smart enough to realize the game is changing. That we can no longer continue life in the style to which we have become accustomed. We have to change our ways.

The Shape of Oil to Come

http://www.7gen.com/article-summary/peak-oil/23980-shape-oil-come
http://www.theoildrum.com/node/3060

There are approximately two thoughts to how the peak oil phenomena plays out. The "sharp peak" model says production reaches a peak and rapidly declines. Nobody who has studied this carefully says we will "run out", instead the debate is in how quick is the decline. There are those who think production will, instead, "plateau" for a long time for one reason or another.

Oil megaprojects
http://www.7gen.com/website/oil-industry/23982-oil-megaprojects
http://en.wikipedia.org/wiki/Oil_megaprojects

On Wikipedia the Oil Megaprojects page tracks the known huge oil projects. It's a useful resource to look at and ponder.

The rise of the new energy world order
http://atimes.com/atimes/Global_Economy/JD17Dj04.html
http://www.7gen.com/article-summary/peak-energy/24136-rise-new-energy-world-order

The world energy crisis is upon us. Dwindling supply and rising demand leads to a simple economics lesson, rising cost. The old equation was cheap energy lead to untold wealth. The new equation is gonna lead to a totally different world power structure.

Technosanity #3: Peak Oil


Links:  http://en.wikipedia.org/wiki/Peak_oil

Links:  http://www.cbc.ca/news/background/oil/peak-oil.html

Links:  http://www.theoildrum.com/node/3060

Links:  http://en.wikipedia.org/wiki/Oil_megaprojects

Links:  http://atimes.com/atimes/Global_Economy/JD17Dj04.html

Links:  http://audio.davidherron.com/technosanity/e000003.mp3

"America is addicted to oil" - Looking back at the State of the Union, 2006

Given todays crisis with the rising prices for oil and the rising prices for food, I thought it would be interesting to look back at George W. Bush's statement "America is addicted to Oil". As astonishing as it was for GW to be so honest as to admit the national addiction, as I reread the State of the Union speech this statement was embedded among some interesting promises related to freeing the U.S. from dependence on oil. But in the end I think of those as hollow promises because in the end this is President Enron, Vice President Halliburton, and the rest, who have lied us into a war meant to capture control of the Iraqi oil, and how honest could he really be to actually propose that the U.S. stop spending money on Oil?

What does America is addicted to Oil mean? To me it refers to all the ways in which Oil use is taken for granted as the only way we can conduct business in the U.S.A. The default method to move your body from one location to another? Why, it's to hop in your car and drive. And for 99.999% of Americans that means burning oil. There are a few, like me, who have gone through the steps to have vehicles which don't require burning oil.

Here is the full context of what GW Bush said: (full transcript, State of the Union 2006)

Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, and more reliable alternative energy sources -- and we are on the threshold of incredible advances.

So tonight, I announce the Advanced Energy Initiative -- a 22-percent increase in clean-energy research -- at the Department of Energy, to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy. (Applause.)

We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years. (Applause.)
Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. (Applause.) By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past. (Applause.)

He's not proposing any fundamental reform. He's simply proposing finding a way to keep business as usual (cheap energy allowing Americans to be fully wasteful) ... bleah.