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Peak Oil Matters

A fresh perspective on the concept of peak oil and the challenges we face


Archive for November, 2011

As I mentioned in my last two posts, there are some common threads running through the mostly nonsensical camps arguing against the reality that oil is a finite resource which is now on the downside of its maximum production rates. We fact-based lunatics call that Peak Oil.

I outlined (only partially tongue-in-cheek) some of the initial red flags readers should be alert to when combing through material discussing the pros and cons of Peak Oil. So far I’ve established five separate “criteria” for making a quick determination whether an article discussing Peak Oil deserves more careful attention. Those two prior posts (my most recent efforts on the subject; see here for more) provided examples of what to look for.

Today’s discussion is about something which I’m not entirely convinced is an actual criteria for my modest little test.

Where on the list does one put outright nonsense?

Several weeks ago, Tim Worstall posted an essay at Forbes which left me speechless. I’m sure Mr. Worstall is a very pleasant man who does a great many good and helpful things for others. That being said, his claim that Peak Oil is just so much nonsense, based on the arguments he put forth, has to be among the most bizarre attempts at refuting something I’ve ever read. (It was not his first article attempting to debunk Peak Oil, either. That is a different topic.)

Any article on the topic of energy supply claiming, as does Mr. Worstall, that “[W]e’re discovering entire new planets to explore for the stuff” probably deserves at least a “Say what?” before plunging in.

What’s most noteworthy is that his is not an isolated example, sad to say.

His post is actually a fairly brief piece, and it might be worthwhile for purposes of this one to read it first, so you have your own sense about the points he was trying to make.

Mr. Worstall disputes and denigrates the concept of EROEI. In a must-read article on the subject of energy, peak oil, production, and our future, Jim Quinn describes EROEI as follows (while duly noting that “The concept of energy returned on energy invested [EROEI] is beyond the grasp of politicians and drill, drill, drill pundits.”):

EROEI is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource. When the EROEI of a resource is less than or equal to one, that energy source becomes an ‘energy sink’, and can no longer be used as a primary source of energy. Once it requires 1.1 barrels of oil to obtain a barrel of oil, the gig is up.

To help us understand what Mr. Worstall attempted to explain, let’s use another example from the world of finance.

You have $100.00 to invest, and decide to do so with Trusty Financial Advisor (TFA). After a reasonable period of time during which TFA uses its expertise to provide you with the best (and honest) return possible, you not only get back your $100.00, you get you another $100.00 in addition, while TFA earns a nice commission in the process. Most people, I’m quite certain, would be happy with a return of 100%. As TFA’s specific “basket” of investments becomes more popular, that 100% return will eventually become more difficult to sustain, but over more reasonable periods of time, TFA is still returning at first $50.00, then $30.00, and now $20.00 for every $100.00 you invest. Not as spectacular as that first investment, but who kicks at 20% returns in this economy? TFA’s commissions decline as well: more effort for less of a return, but so far so good nonetheless.

In energy production terms, EROEI is a lot like the principle behind this example.

If oil exploration and production results in finding more marketable oil than is “invested” (the energy quantity of all of the machinery and technology and staffing and transportation and what-have-you) , that’s a good investment. Early on, as others have noted, using the energy equivalent of one barrel of oil in exploration and production netted oil pioneers as many as 100 barrels of oil in return. Now that’s a damned good investment, and dwarfs my little $100.00 return on $100.00 invested example above.

Pretty straightforward, agreed?

What if your $100.00 investment with TFA is now giving back only $3.50? You are still making more than if the $100.00 stayed in a coffee can, but 3.5% is not all that exciting after a run of great returns in the past. TFA is now expending a lot of time and energy just to get you that return and a much smaller commission as well. It’s still on the plus side of the ledger, and a lot of people in this economy might not bitch too much.

But what if we’re down to just a few pennies in return? Incentives to invest become more difficult to justify, and once we get close to you give TFA $100.00 and TFA gives you back $100.15 and that’s it, time to play elsewhere. TFA won’t get rich that way, and long before then TFA will stop expending so much time and effort and expense if that’s the best it can do. And no one is going to play the game if investing $100.00 gets you only $90.00 of that $100.00 back. That game is over long before that’s a likelihood.

We’re not at the “few pennies” stage of oil exploration and production yet, and probably won’t be for quite some time to come, but we’re getting there. Slowly, steadily, surely, the “easy” oil isn’t being found because it just isn’t there any more. That investment has maxed-out, and now we’re investing elsewhere: deep water, tar sands, shale, perhaps the Arctic … not like the those early stick-a-straw-in-the-ground-and-out-it-comes oil finds.

More effort; more costs; more time; more difficulties in general; less inclination for countries to give up all they have left; increasing demand; less supply day-by-day simply because we’re taking out something that isn’t being replenished … all those factors add up to investing more to get less. That’s not good math.

This is all a long preface to get to the complete nonsense the good Mr. Worstall offered readers in attempting to rebut the reality of what I’ve just described.

In his own words as he first addresses EROEI (“That is, as far as I understand it, the argument.”) we get this [my commentary added]:

Basically, what is being said is that as oil gets deeper, more difficult to pump up, perhaps with tar sands we’ve got to use more energy to purify the stuff, then at some point we hit a boundary, a system boundary [Not the terms I’d use, but okay so far]. We’ll be using more energy to get the oil out than we’ll get energy from the oil we get out. [By Jove, I think he’s got it!] Which, self-evidently, is nonsense, [perhaps I spoke too soon] that’s like the internet companies losing money on every transaction and they’ll make it up in volume. [Huh?! Someone took a sharp right turn off of the I-get-it highway]

In the very next paragraph, there’s hope that this last comment was just a brief detour. Got lost, back on the right road: “… it does work in certain special situations. It would indeed be self-evidently absurd to use 10 barrels of oil at one site to pump up one barrel of oil. [Yes! He’s got it!] Better, obviously, to use one of the 10 you have and have 9 left over.” [Damn. So close! That is, as far as I understand it, the argument: if you keep using up what little you have left because you can’t get more, and are no longer trying, then … uh … uh, at some point, you kinda get to the point where nothing is left. Perhaps that’s not the wisest course of action? Just saying….]

What follows after he makes this statement: “But let’s really go wild here and think about something very different indeed,” is a interesting journey to say the least; more an indication that we have now officially lost contact with reality, and a search party is in order.

If you haven’t read what Mr. Worstall discusses next, he decides to use the growing and producing of wheat (for bread: “the staff of life”) as his way of refuting EROEI. He sets aside other energy components required in growing the wheat (fertilizer, transportation, etc.—all perfectly reasonable to do for these purposes) and claims—I assume accurately—that we expend far more energy in creating a loaf of bread than the energy we get from it. I’ll give him that, and since he is obviously far more skilled mathematically than I am, I won’t dispute his computations as to how much energy is expended and “wasted.”

He decided to focus on just one of the essential elements required in growing wheat: fresh water. His premise is that 1000 tons of water are required to grow a ton of wheat. I’ll buy that, no questions asked. (Keep in mind that for his purposes we’re setting aside all of the other energy components needed.) Mr. Worstall concludes that the solar energy required to evaporate the ocean water which must then fall back to earth as fresh water works out to 35 times the amount of energy (calories) we get back from a ton of wheat.

I’ll go along with that, but immediately after we come to a fork in the road. I’ll go left, and Mr. Worstall apparently beams himself directly to Planet Rational Thinking Not Necessary:

And we’re quite happy with this. We don’t think it odd at all. And we most certainly don’t say that it’s unsustainable because it doesn’t pass the ERoEI calculation.

The reason we’re not worried about it is because we’ve got vast amounts of energy coming to us as sunlight. Huge, massive, great big gobs of it. And we’re entirely happy to use it copiously, waste huge amounts of it, because there is so much. We want that energy in a form that can be used by our bodies and we’re just delighted to waste 97% of the energy in order to get a bit in the form we can use….

And the reason that ERoEI doesn’t mean very much is that we’re not, an any kind of human scale, limited by the availbility [sic] of energy. The Sun simply pumps in so much energy that total energy availability simply isn’t a binding constraint upon us. What we’re interested in is usable energy and we’re quite happy to waste total energy in order to get usable.

So there you have it. We have lots of energy from the sun (no doubts there); we waste a lot of it to grow wheat (okay, I’ll buy that); and since we’re happy eating the bread and wasting the sunlight, EROEI as it relates to finite amounts of oil in the ground is “still nonsense.”

(There’s very little rational comparison between quantities and characteristics of these two vastly different energy sources, but why interject reason into the conversation now?)

Fairly certain that I don’t need to say one more word except … WOW! (and point out this was in Forbes online, not Mr. Wacko’s Wild World Of Online Crazy magazine … WOW! Again.)

As I mentioned in my last post, there are some common threads running through the mostly nonsensical camps arguing against the reality that oil is a finite resource which is now on the downside of its maximum production rates … Peak Oil.

[NOTE: If you have not yet read this terrific article by James Quinn and you have even the remotest interest in the realities of our energy future, take a few minutes to do so.]

I outlined some of the initial red flags readers should be alert to when combing through material discussing Peak Oil. If an article contains some or all of the following buzzwords, it’s a good chance that the argument offered against Peak Oil is likely going to be an at-best disingenuous collection of partial truths with all the damning facts contradicting the assertions neatly omitted; or the “facts” within are not exactly the type of facts used by people here in reality.

(1) Peak Oil proponents/doomers are constantly spreading falsehoods that we will soon be “running out of oil.” [The deniers keep saying we are making those claims, when in fact only they are! We know that is not true, but it’s also not the issue!]

(2) We still have “vast” resources [or “giant”; “immense”; “entire new planets of”, etc. … the kind of “facts” you can’t assign numbers to.]

(3) Failure to put genuine facts in any kind of truthful context. [As cited in my last post, mentioning a find of 250 million barrels of oil as yet another sign that we Peak Oil nutcases are full of it conveniently fails to point out that a find like that one will meet three days’ worth of oil demand, and thus loses a fair amount of its impressive-sounding luster.] *

(4) The newest talking point: “The now-discredited theory of Peak Oil.” [Each time that assertion is offered, any credible authority substantiating that claim never gets mentioned, curiously enough. So the “now-discredited” part is actually the writer’s own fact-free assessment. Does save research time!]

* A glaring recent example of this comes from David Holt, President of the Consumer Energy Alliance, arguing in favor of more drilling in the Arctic [my emphasis added]:

Energy exploration in Alaska’s OCS, in both the Chukchi and Beaufort Seas, is expected to produce 25 billion barrels of oil over the next 40 years. This is the equivalent of 2010 imports from Iraq and Russia combined. That production will also spur nearly $200 billion in government revenue from royalties and taxes, and 55,000 new jobs per year for generations.

Two comments on this disingenuous-at-best effort to inject meaningful facts into the dialogue:

(1) Take your handy calculator and do the math to discover just how many barrels per year Mr. Holt’s assertions will add to our energy supply (assuming full production at some distant point on the time horizon, while keeping in mind what might be involved in Arctic oil production; and the inconvenient fact that we use approximately 85 million barrels of oil per day);

(2) In reading the jobs claims Peak Oil deniers tout repeatedly, it would appear that only fossil fuel production and exploration produces tax revenue and creates jobs … go figure! (The comparison to imports from Russia and Iraq is important for apparently secret reasons.)

One of the “best” examples of Test Criteria # 5 comes from the same Clifford Krauss (New York Times) I mentioned in last week’s post (and more thoroughly here). In his most recent Peak Oil-related work, Mr. Krauss offered this gem of certainty [emphasis is mine]:

The United States may now have the means to reduce its half century of dependence on the Middle East. China and India may have the means to fuel the development of their growing middle classes. Japan and much of Europe may have the chance to reduce dependence on nuclear power. And, at least theoretically, poor African countries might be able to lift themselves out of poverty.

I may have a winning lottery ticket in my shirt pocket and thus may have the means to purchase my own private island and accordingly may have the chance to reduce my dependence on anyone else to provide anything for me at all; and at least theoretically, I might be the richest man on Earth (and while we’re at it: at least theoretically, pigs might start flying tomorrow).

The tap dance required by these advocates (of an apparently limitless supply of worry-free fossil fuel resources) to make claims with such certainty about complete uncertainties is exhausting to behold. If they weren’t doing so much harm to so many who do not and cannot be expected to have knowledge on this subject, the effort would be Monty Python-esque hilarious!

This kind of physics-defying contortions to make bold claims about nothing is not limited to Mr. Krauss (who, to be fair, has also written many fine pieces for the Times).  In one of several prior posts of mine, I highlighted this CNNMoney-Fortune Hall of Fame effort [emphasis added is mine]:

“There are many oil reserves around the globe that remain untapped, and explorers continue to discover new fields deep beneath the earth’s surface. Depending on how the controversy surrounding the Arctic National Wildlife Refuge turns out, the U.S. could exploit oil reserves in the area, despite potentially grave environmental consequences.”

I then noted that: “‘Depending’; ‘could’ … along with ‘might potentially’, ‘if’, ‘could be possible’, and an array of similar, carefully-worded utterly-lacking-in-certainty phrases are the apparent stock in trade for those denying those annoying facts about declining world oil production.’” (Glossing over “potentially grave environmental consequences” is in a category all by itself.) And perhaps an explanation as to what’s involved in getting to “new fields deep beneath the earth’s surface” might be a good idea?

That article is the poster child for denier nonsense, as I took pains to detail in that February 10, 2011 post. I can only assume that the purpose or intent is to offer semi-plausible assertions to those whom the authors fully expect to accept their claims unquestioningly, thus protecting whatever their ideological, financial, or business interests might be, and all with only the most minimal of efforts at sharing the truth.

Even if they were right and we do have at least several more decades of plentiful, easily-obtained, relatively inexpensive supplies of fossil fuels (which we don’t!), by what perverse notion of long-term thinking are they content to do absolutely nothing to begin the beyond-description complex transition away from fossil fuel dependency?

Anyone looking out their window and/or taking a quick peek at all the gizmos and gadgets inside would have to be completely delusional in failing to realize that almost everything we have, own, use, depend on is in some measure large or small a product of fossil fuel.

Just how much effort, time, money, planning, trial-and-erroring, marketing, producing, implementing, and transitioning to something other than fossil fuel dependency do these deniers think might be involved in swapping out this way of living for a non-fossil fuel existence? Full-blown denial and misrepresentation is their idea of contributing to our collective well-being (and their own)? Seriously?

The Hirsch Report (see this and also my series beginning here) is among the most influential energy studies undertaken in the past decade. A major conclusion reached by the authors left little doubt as to the depth and breadth of challenges we will face (deniers included).

The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
Mitigation will require an intense effort over decades. This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities.  Our scenarios analysis shows:

• Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades.

• Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.

• Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.

The obvious conclusion from this analysis is that with adequate, timely mitigation, the economic costs to the world can be minimized. If mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction (shortages), which would translate to significant economic hardship.

There will be no quick fixes. Even crash programs will require more than a decade to yield substantial relief.

Is it really in anyone’s best interests to instead rely upon a host of head-in-the-sand “mights” and “possiblys” and “may haves” and “coulds”?

Worth pondering?

More to come….

Happy Thanksgiving!

I have written a number of posts (most recently here, with other links therein) about the follies of those who do their damnedest to debunk the reality of Peak Oil with what can be charitably described as almost-factual claims. Common themes and buzzwords seem to populate most of the efforts, as if they are all working from the same playbook of right-wing nonsense.

Erik Curren touched on this theme recently, wondering aloud about the lack of coincidence in the disinformation campaign revving up once again. Erik cited a recent Steve Levine Foreign Policy post about the “cottage industry” developing in recent weeks about how we’re on the verge of that elusive “energy independence.” Both are typically good reads from these two writers.

I’m thinking that we now have an almost-official test to decide if one should pay any attention to the kool-aid-sipping advocates of “peak oil nonsense” and its relatives.

The playbook used has few components, given the limited facts* supporting their contentions [* a term used loosely in quantifying their arguments, since they are predominantly fact-free). But it’s become commonplace to find most if not all of their limited buzzwords and claims in every pseudo-argument put forth.

I recently posted (here and here) about the deniers’ repeated assertions that “Peak Oil advocates believe we are soon running out of oil”, despite the fact the fact that no credible Peak Oil proponent EVER makes that farcical claim. Anyone imputing that statement to Peak Oil proponents demonstrates a complete lack of understanding about the simplest aspects of this subject.

But bless ‘em, they keep trotting out that same nonsense over and over. I guess when you don’t have facts to support your claims, using the same sincere-sounding terms is as good a Plan B as one can have. It’s on Page One of the Faux News Bible.

A second test is just as to employ. If you are reading anything which purportedly calls into doubt the inevitability and reality of Peak Oil, and the writer makes the claim of “vast” resources/reserves/supply/Whatever as a point of rebuttal, you can stop reading. Anything subsequent to that claim (alone or in combination with the “running out of oil” nonsense), will only further demonstrate the non-serious nature of the argument offered. Why waste your time?

As for “vast” … what exactly does that mean? Sounds impressive as all get-out, doesn’t it? Vast is almost unquantifiable; it’s a ginormous, huge-like plentifulness which almost makes questioning it at all an exercise in its own foolishness. Who wants to doubt anyone who asserts we have a vast anything? How do ever run out of vast? If we have vast, we have enough….

Unfortunately, some of us are actually obliged to live on a planet where facts matter. Rational discussions and attempts at finding worthwhile solutions thus necessitate full and fair consideration of those damned annoying truths. No doubt: a solid fact can ruin a nonsensical argument in no time, which is why it’s apparently best not to even dwell on them at all if you can instead put forth weighty phrases which sound so much more meaningful instead.

Facts are boring; but an embellished and unquantifiable non-truth? Now that’s worth reading!

Calling it the “seventh-largest oil or gas find” of 2011, the New York Times’ Clifford Krauss* recently explained that explorations hundreds of miles north of the Arctic Circle (hello!) resulted in “an estimated 250 million barrels of retrievable” oil found in the Skrugard field. (* I discussed a previous report by Mr. Krauss just under one year ago.)

At the risk of confusing our ardent Peak Oil debunkers, world-wide energy demands require approximately 85 million barrels of oil per day (i.e., 24 hours; one-seventh of one week; one thirtieth of one month).

So the complex calculations needed to understand this in terms all of us can appreciate requires that we:
(1) Take the 250 million barrel figure cited;
(2) Take the 85 million barrel per day figure I used;
(3) divide 250 million by 85 million [or if that is too difficult, then divide 250 by 85 and then add lots of zeros after)

The result is how long that vast find will last energy users here on fact-based Planet Earth.

If the result was too difficult to compute, I’ll save you the trouble. That 250 million barrels of oil, if fully developed and brought to market at some distant point in the future, would get us through a whopping seventy-some hours! [As in: today is Tuesday, so all of that field would be bone-dry by Friday.]

As I’ve noted previously (one example here), these are the types of supporting “facts” routinely used by our denier counterparts in attempting to persuade readers that Peak Oil is just so much hooey. It’s another sure sign that we’re dealing with a peculiar kind of proposition–one that relies on as few facts as possible.

Now, however, the crop of deniers have apparently been instructed to add the following statement to their stable of non-existent- or half-truths. When assessing the value of information being offered, Test Criteria # 4 now in place [my emphasis]:

Peak oil, the belief that the US is running out of domestic oil or natural gas, is increasingly being discredited…. [1]

The technological breakthroughs in seismology and fracking are allowing access to reserves unknown just a few years ago, putting the lie to the now-discredited theme of ‘peak oil’…. [2]

In truth, the “now-discredited” Peak Oil “theory” is being discredited only by those fact-free, disingenuous voices, but perhaps I’m being too nit-picky. “Now-discredited” sure as hell sounds good! Who cares if the non-discrediting is being done by the ill-informed?

It’s not a hell of a lot different than the “running out of oil” claim which curiously enough is made only by those denying Peak Oil. Using their lack of understanding and instead attributing it as an assertion made by us liberal-atheist-socialist-doomer-unpatriotic scumbags is an admittedly good trick! Not high on the integrity or character scale, but a good trick nonetheless.

More recently, Erik Curren raised some necessary questions directed to those of us on the factual side of the Peak Oil fence as to how we go about educating the public. I maintain (and frequently post accordingly) that one of the ways we must do so is to continue pointing out the fallacies, disinformation, and outright nonsense spouted by those with a vested interest in making certain that the fossil fuel industry remains front and center in supplying our energy needs well into the  future … facts be damned!

I first raised this issue more than a year ago, and remain just as committed to it now as I was then. The nonsense helps only a few (and I have yet come to a logic-based understanding as to what motivates people to deny reality, avoid taking steps to help prepare others for a more secure future, and why they have decided that this ought to be their contribution).

If peers in the “pro-”Peak Oil camp continue their efforts not for self-serving reasons but to awaken the public to the challenges we’ll all face (as they clearly do), then we must continue to point out the “rubbish, gibberish, claptrap, balderdash, blarney; informal hogwash, baloney, rot, moonshine, garbage, jive, tripe, drivel, bilge, bull, guff, bunk, bosh, BS, eyewash, piffle, poppycock, phooey, hooey, malarkey, hokum, twaddle, gobbledygook, codswallop, flapdoodle, hot air; dated bunkum, tommyrot; bullshit and crap” [courtesy of my Macbook] which gets peddled by too many who so obviously have very little concern for the long-term well-being of their fellow citizens.

How sad….

I’ll speak more on this the next time.


[1]; Why Peak Oil is Nonsense: A Look at Small and Mid Cap Domestic Oil Stocks by John Udovich, November 13, 2011
[2]; The Oil Map of the World Is Shifting to the West by Bob Adelmann, November 1, 2011