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I rarely write about natural gas, mostly because I like to think I’m smart enough to know how much I don’t know, and thus opt out of adding my two cents’ worth to topics with which I have at best marginal familiarity. But there’s no denying its significance.

It’s home-grown, plentiful, and touted as the best way to wean the US off Mideast oil. But there are limits to how far the US can tilt toward a natural gas economy….
Natural gas already plays a major role in the American economy. It’s the primary way more than half of Americans heat their homes and cook their food. It’s also used to generate one-third of the nation’s electricity and is a major component in the chemical and manufacturing industries. Almost daily, its footprint is expanding because of the sudden surfeit of supply and low prices. [1]

In the course of doing some research, I came across a March 2012 article posted at the Energy Collective website. It was written by a Chevron Corporation executive, and seemed all but identical to the carefully manicured arguments offered by those who deny the facts about Peak Oil. Same playbook, no doubt. [Quotes are from this article unless noted otherwise.]

In light of what I do know about shale gas production in the last year or so, I thought it would be helpful to discuss the author’s exuberant assessments about shale gas (“a game-changer”), his near-complete disregard for any unpleasant realities which might rain even a little on his happy parade, and point out where we wind up by allowing these repeated efforts at denying facts, offering at best disingenuous arguments, or in the worst cases, making stuff up to serve as “information” to the public.

If nothing else, citizens should easily appreciate that there are two sides to most stories. Facts (I hope) still matter. The storyline follows the same pattern as do most writings disputing Peak Oil (and climate change, along with too many observations from the Right about President Obama, for that matter. I’m currently running another series on that topic, which began here). It’s not hard to follow the common themes and “strategies” employed.

The primary question remains unchanged: Why do they do this?

In this particular instance, there’s more than a bit of irony in the title: “The Truth About Natural Gas From Shale.” Seems that a fair amount of “truth” went missing in this benign account of “myths associated with this resource and its method of extraction” and the author’s determination to explain “how the process actually works to help demystify it.” It’s a slick way of bypassing those messy facts, too.

The usual parameters offered by all who rely on unconventional resources as the answer to Peak Oil are duly noted here as well. Once again, “more jobs and government revenues” are promised, and is a comment undoubtedly true. I’m still waiting for these deniers to also mention in passing that alternative energy development also provides a healthy share of “more jobs and government revenues.”

So too do we find the careful suggestions that “[n]atural gas from dense shale rock formations … could become a significant new global energy source [my bold/italic].” Doubtful that most casual readers pause for even a moment at such qualifiers to ask appropriate follow-ups. (I offered some thoughts on the “could become’s” more than a year ago.)

Let’s dive in….

According to the Energy Information Administration (EIA), the U.S. has over 2500 trillion cubic feet (Tcf) of recoverable natural gas resources – 33% of which is natural gas from shale.  In just one decade, natural gas from shale has grown to around 25% of U.S. gas production and it will nearly double by 2035.  This is significant as it will continue to provide the United States with reliable, affordable energy and present economic benefits to regions of the country such as Pennsylvania, Ohio and Michigan.

A couple of comments for starters. The “2500 trillion cubic feet” statistic is more than a decade old. One should assume an oil industry executive would know that. One should also assume that information widely reported two full months before the author’s article was published indicated that the U.S. Department of Energy cut its estimate of the Marcellus reserves (the area of shale gas reserves running primarily through Pennsylvania, West Virginia, Ohio, and New York, and the subject matter of this article) from 410 trillion cubic feet of natural gas to 141 trillion cubic feet. Not a small adjustment….

Six months later, Richard Heinberg noted this about-face by The New York Times and one of its principal advocates of the “no energy worries” argument:

‘. . . the gas rush has . . . been a money loser so far for many of the gas exploration companies and their tens of thousands of investors.’ Krauss and Lipton go on to quote Rex Tillerson, CEO of ExxonMobil: ‘We are all losing our shirts today. . . . We’re making no money. It’s all in the red.’ It seems gas producers drilled too many wells too quickly, causing gas prices to fall below the actual cost of production.

And there’s this [ links/other references and sources are in the original article by Sharon Kelly at Grist, from which this quote is taken]:

The oil and gas industry doesn’t like to discuss is how hard it is to find the best places to drill for shale gas. Starting about a decade ago, drillers began offering investors some lofty rhetoric about the productivity of shale wells. They argued that they could pump this stuff in a “manufacturing model” whereby they could drop a well anywhere in a drilling zone (called a “shale play”) and it would be equally productive….
It is now clear that not all areas of shale play perform the same. Investors, small companies, and some landowners who expected sky-high royalties have been disappointed — even in the heart of drilling country….
Many drillers wind up in a tough spot because the contracts they signed with landowners require them to drill wells quickly — if they don’t, they lose their leasing rights. Many of these companies are deeply in debt; in fact, some of them are so leveraged that they’re raising eyebrows among federal and state regulators, who question whether companies broke the law by possibly providing inflated estimates to investors for the amount of gas that they could profitably bring to market.

In a terrific, thoroughly-researched 2011 report by J. David Hughes entitled “Will Natural Gas Fuel America in the 21st Century?”, Hughes pointed this out:

[T]he shale gas industry was motivated to hype production prospects in order to attract large amounts of needed investment capital; it did this by drilling the best sites first and extrapolating initial robust results to apply to more problematic prospective regions. The energy policy establishment, desperate to identify a new energy source to support future economic growth, accepted the industry’s hype uncritically. This in turn led Wall Street Journal, Time Magazine, 60 Minutes, and many other media outlets to proclaim that shale gas would transform the energy world.

Just a few facts, missing from the Chevron executive’s piece, which suggests a more-than-slightly different take on the promise of shale gas. Funny what even a little bit of evidence/reality can do to the no-energy-worries Happy Talk.

My point is not to call attention to the author’s motivations. What’s of much greater significance is that everyday citizens—having neither the time, nor interest, nor expertise, nor knowledge about the details of fossil fuel supply and production—need to understand that fact-free assurances have a downside.

Facts have an annoying habit of demonstrating that.

Just getting started on this.

* My Photo: Le Meridien Cancun Resort & Spa – 02.08.05

Sources:

[1] http://www.csmonitor.com/USA/2012/0422/With-all-this-natural-gas-who-needs-oil; With all this natural gas, who needs oil? by Alexandra Marks – 04.22.12

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Oil plays an essential role in almost everything that touches our everyday lives. From the food we eat to the means by which we transport ourselves, our goods, and our services, to what we grow, build, have, own, need, and do, oil is almost always an important element. But the painful truth now and soon is that the ready supply of oil and gas that we almost always take for granted is on its way to becoming not-so-ready—recent production increases notwithstanding.

What happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? Who delivers that message to the designers and producers and shippers and end users? What’s their Plan B? And how will we respond when decisions are taken out of our hands? Where exactly will the dominoes tumble?

There is nothing on the horizon that will work as an adequate substitute for the efficiencies and low cost and ease of accessibility that oil has provided us. We simply do not have the means to make that happen—not the technological capabilities, not the personnel, not the industries, not the leadership … yet. Clearly, we do not have enough time to do it all with effortless ease and minimal disruptions.

Piecemeal approaches that address some small aspect of need for some short period of time in some limited geographical area for just a few consumers is in the end a monumental waste of limited resources, time, and effort. We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is. We’re going to have to be much better, much wiser, and much more focused. **

Here’s the latest contribution to my Peak Oil’s Impact series—observations and commentary on how Peak Oil’s influence will be felt in little, never-give-it-thought, day-to-day aspects of the conventional crude oil-based Life As We’ve Known It. Changes in all that we do, use, own, make, transport, etc., etc., are inevitable. A little food for thought….

Last year, shortly after my beloved Patriots lost the Super Bowl to the Team Which I’ll Never Speak Of, [a problem I don’t have to deal with this year, sad to say], I offered a post which began with the same question I’m asking again:

What if there was no Super Bowl game?

As I mentioned in that 2012 post, I’m lucky enough to have attended the Super Bowl a few years ago and can personally attest to the fact that it is indeed quite the event. I also noted this: “I am not nearly versed enough in the intricacies of planning such an event, but it stands to reason that a lot of time, effort, equipment, personnel, machinery, and transportation is needed to turn an American city into the center of the pro football universe.” [See this for a breakdown of what New Orleans has planned.]

Indeed, as noted here [ links are in both of the original articles quoted from below], a fair amount of similar undertakings were involved in prepping New Orleans for this year’s game:

Super Bowl 2013 organizers gave a final briefing on the massive event for New Orleans media Wednesday, covering highlights such as the $13.5 million the local hosting group raised to accommodate the production, the free riverfront festival that will include 49 bands, food from 17 restaurants and 12 parades and the array of public and private improvements and renovations timed to the extravaganza that total an estimated $1.2 billion.…
Host Committee officials outlined money the group raised to pay the rent at the Mercedes-Benz Superdome and other facilities that are key sites in the spectacle, cover staffing at the Dome, reserve hotel rooms for the two teams that will vie for the championship, block out parking spaces for event officials, workers and vendors, coordinate the deployment of 6,000 volunteers, host a party for national and international media, produce business outreach programs and philanthropic efforts and run the Woldenberg Park festival, called the Super Bowl Boulevard….
[The above-referenced riverfront festival] will include dozens of Louisiana musical acts, dozens of dishes from local restaurants, a massive video gaming installation, the opportunity for fans to watch live television broadcasts from a set on the festival grounds and a feature that has grown popular in recent years at Super Bowls, the display of a towering Roman numeral monument for the game’s number, this time XLVII, with video images projected onto it and music playing.
Davis said NFL officials added a twist to the 101-foot-wide numeral display. They will display the numerals on a barge in the river and their arrival will be heralded with fireworks. [1]

Consider the financial implications and expectations of New Orleans’ city officials:

When it was bidding for the NFL’s championship game, the New Orleans Super Bowl Host Committee commissioned the University of New Orleans to devise projections of how much spending will take place with businesses in the city because of the Super Bowl. The result was a prediction that visitors will spend $211 million, which in turn will drive $223 million in spending by businesses stocking up on goods, and employees spending money they make from the extra hours and bigger crowds.
The total, $434 million, has risen from the estimates of $249 million for the 1997 New Orleans Super Bowl and $299 [sic] for the 2002 New Orleans Super Bowl. In 2013, the spending could generate $26 million in tax revenue for local and state agencies.
The number of expected visitors, 120,000 to 150,000, is far less than the masses drawn to the city’s signature annual events of Mardi Gras and the New Orleans Jazz & Heritage Festival. About 70,000 can attend the championship game at the Mercedes-Benz Superdome on Feb. 3. The rest of the visitors work in support roles to the corporate leaders attending the game or participate in the array of other Super Bowl festivities unfolding around the city.
But Jay Cicero, executive director of the Host Committee, said the number of visitors is less pivotal than the high-spending caliber of the visitors. He called it the biggest corporate spending event in the country. [2]

To emphasize the point, the latter article added:

Even more important than how much spending happens the week of the game, said Cicero and other local organizers, is the incalculable value of extended international media exposure, giving the city a chance to herald the progress of a new, post-Hurricane Katrina era. About 5,000 news media members are expected in town.
‘There’s not a value assigned to that, but it’s got to exceed the economic impact,’ Cicero said.
The Super Bowl could plant the idea of visiting New Orleans in the minds of tourists who will arrive over several years, he said. And it’s a huge score in selling the city’s convention and event offerings.

[Worth noting are two articles (here and here) by Travis Waldron offering a different perspective on financial expectations v. the realities of cities hosting events like the Super Bowl.]

All in all, there are incalculable and innumerable benefits and considerations and opportunities tied in to the successful presentation of an event such as this one. There is a ripple effect extending well beyond local governments, major attractions, and large corporations. Street vendors, start-ups, and countless other service providers and companies of all sizes carry their own set of hopes.

As would be expected, among the primary beneficiaries are hotels and restaurants, many of which will dance along the fine line of charging premium prices without toppling into charges of gouging, while making sure that the normal services they provide are not so tied in with an event years down the road that they suffer in the interim between site selection and the game itself.

The mega-event that is the Super Bowl is expected to result in a near sellout of the 50,000 hotel rooms in New Orleans, Baton Rouge, and the North Shore and ripple out as far as the Mississippi Gulf Coast and Lake Charles….
Room availability took an immediate hit three years ago when the National Football League announced that Super Bowl XLVII would be held in New Orleans on Feb.3, 2013. The league then blocked off 90 percent of all the hotel rooms in Orleans and Jefferson parishes for team owners, corporate executives, sponsors and major advertisers at a set rate negotiated with hoteliers. [3]

An interesting observation in this last article cited is that hotels more than three hundred miles away are booking guests planning to attend the game and/or related events!

While it is arguably the grandest entertainment and media spectacle in America, those factors are made no less important. On smaller scales, conventions and major sporting events share similar characteristics and bear similar expectations, as do the local businesses in those venues.

The concluding comments I offered in my 2012 post on the Super Bowl are no less valid today, and so I’ll end this posting with those same considerations:

How do teams (high school, college, the pros) deal with travel issues and schedules when gas is much too expensive to enable teams to transport their players even short distances, or when air travel is severely curtailed and wildly expensive because not enough jet fuel is being processed to meet demand (and airports are shuttered because air travel has diminished markedly), or when the fans cannot afford to put the gasoline in their vehicles that in the past allowed them to attend the games without a second thought?
What happens when half, or a third, or one-tenth the number of fans can afford to attend games because budgeting all that money to drive to an in- or out-of-state stadium no longer makes financial sense? Pure supply and demand: when demand continues and supply is reduced, prices go up.
Where will the revenue to pay players come from when the majority of fans are no longer traveling to see the games either because limited gas supplies are now being allocated or it’s simply become too expensive for ‘frivolous’ trips?
How do owners continue to fund their vast operations (office staff, marketing, scouting staffs, minor leagues, utility services for the stadiums and training facilities, and on and on it goes)? What happens to the vendors and other suppliers when the majority of fans just stop attending … permanently?
What happens when the mind-boggling efforts in planning, preparing, transporting, supplying, delivering, etc., etc. needed to stage this incredible event by countless thousands of individuals and merchants and organizations and government officials are simply no longer feasible because every single entity up and down the supply and service chain is faced with the reality of insufficient availability of ‘affordable’, quality, energy supply to make this extravaganza happen?
How many economic dominoes tumble as a result? How many businesses lose out? How many employees?

I’m not anticipating that the NFL will cease production of the Super Bowl anytime in the near future, but the reality of Peak Oil will affect this event and this organization just as it will every other commercial enterprise. It will take an incredible amount of planning and thought to figure out an appropriate Plan B just for this one event … how much more planning and thought will be needed for everything else?

~ My Photo: Patriots-Jets playoff game – 01.07.07

** Opening paragraphs adapted from prior posts:

http://peakoilmatters.com/2010/02/15/looking-ahead-to-peak-oil-transition-part-iv/
http://peakoilmatters.com/2010/02/07/looking-ahead-to-peak-oil-transition-part-i/
http://peakoilmatters.com/2010/12/13/thoughts-on-peak-oil-planning/
http://peakoilmatters.com/2011/02/14/peak-oil-a-new-direction-pt-5/
http://peakoilmatters.com/2010/02/25/peak-oil-infrastructure-more-to-discuss-part-ii/

Sources:

[1] http://www.nola.com/superbowl/index.ssf/2013/01/super_bowl_2013_hosts_laud_cit.html; Super Bowl 2013 hosts laud city’s readiness for massive event by Mark Waller – 01.16.13
[2] http://www.nola.com/superbowl/index.ssf/2013/01/super_bowl_2013_reverberating.html; Super Bowl 2013 reverberating through the New Orleans economy by Mark Waller – 01.18.13
[3] http://www.nola.com/business/index.ssf/2013/01/hotel_rooms_scarce_for_super_b.html; Hotel rooms scarce for Super Bowl, prices increasing by Richard A. Webster – 01.14.13

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Lost in the all the recent news about shale gas, tight oil, technology, ingenuity, etc., etc., have been discussions about production outside of North America.

While it’s hardly an ignored subject, it was easy for media to get caught up in what seems such good news about our own “vast” resources and massive “potential” and “game-changing” technological successes. Energy independence … here we come!

Or not.

I’ve devoted a large number of posts in 2013 [published already and in the queue for posting in the weeks ahead] to discussing and countering the exuberance. As I have stated many times, it’s not because I’m a fan of doom and gloom. I enjoy a very nice lifestyle made possible in no small part by all the products which fossil fuels have enabled my family to acquire and enjoy. The full onset of Peak Oil and its wide-ranging impact will put a big dent in how I and my family live. There’s little in that prospect which I look forward to….

Planning. That’s an important theme of this blog, and the focus hasn’t changed. The other side of the energy abundance/independence stories suggest that we need to keep that strategy in mind.

A couple of recent articles emphasized that need by expanding our focus beyond this continent. Just consider these two headlines:

Russian Oil Production to Peak Soon [Rigzone]

‘Peak Oil’ Impacting Norwegian and Saudi 2013 Production? [OilPrice]

Much like our own production increases in recent months, horizontal drilling and hydraulic fracturing in Siberian fields were prime factors in Soviet production records last year. But all good things must come to an end, and the limits of “fracking”—as I and many others have noted in recent months—are not restricted to only certain political/economic philosophies.

Citing analysis by Fitch Ratings, the Rigzone article stated:

[T]he biggest potential gains from new technology have now been mostly achieved. Existing brownfield sites are depleting rapidly and the Russian oil companies are investing billions of dollars in managing declining rates at these fields….
Meanwhile, new fields are located in inhospitable and remote places, so projects require large amounts of capital….
Fitch reckons they will only compensate for the production lost from mature assets.

Sound familiar? Depletion is likewise not restricted to certain political/economic philosophies. Go figure!

And the OilPrice article by John Daly offered this:

Norway and Saudi Arabia are both facing a murky 2013 as domestic production falls, pushing both nations towards some difficult (and expensive) choices. OPEC’s leading producer Saudi Arabia is facing the twin storms of declining oil production and the rise of global alternatives, threatening its market share.

While duly noting that Saudi decline rates vary depending on who is offering analysis, Mr. Daly cited our own Energy Information Administration’s (EIA) analysis:

One challenge the Saudis face in achieving their strategic vision to add production capacity is that their existing fields experience 6 to 8 percent annual decline rates on average in existing fields, meaning that the country needs around 700,000 bpd in additional capacity each year just to compensate for natural decline.

Depletion occurs there, too? Who would have guessed? (And let’s also keep in mind this annoying fact: Oil exporting nations like Saudi Arabia are increasingly keeping more of their production for domestic purposes. The math thus works out this way: More for them = less for everyone else.)

Worth noting this comment by Mr. Daly from that same piece: “Saudi Arabia seems to be in the process of becoming a victim of ‘peak oil.’”

As for Norway, the EIA was quoted as stating: “Norway’s petroleum production has been gradually declining since 2001 as oil fields have matured.” The OilPrice author then noted: “Norway’s petroleum production peaked in 2004 at 4.54 million bpd, but by 2011 production had fallen to 3.8 million bpd.”

Also worth noting that Norway’s Petroleum Directorate reports that “offshore costs, including pipeline infrastructure in 2013, would hit $36.95 billion.” The Directorate also stated that companies operating in Norwegian waters last year made “14 discoveries totaling 709 million barrels of oil.”

That will supply less than ten (10) days’ worth of demand worldwide.

* My Photo: Casanova’s in Carmel, CA – 08.31.04

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This is a continuation of a series I began here, suggesting/urging that different conversations about our energy future start taking place. The background for this series is stated in that first post *, and I’ll remind those readers that it is inspired by an article from the Wall Street Journal in December on production of and policies dealing with fossil fuels—specifically the shale/tight oil supplies here in America. [Any quotes are those of the author and are taken from that WSJ piece unless otherwise noted. I’ve updated that link.]

* In brief: I single this out strictly because it was so representative of a viewpoint which, from the progressive side of the divide, makes little sense and is a curious contribution to educating the public. Truthfully, nothing from that article cannot be found in any number of others on the same subject. That so many of the typical assessments from those denying we have fossil fuel supply problems appear in this piece, coupled with the commentary offered by readers, makes it a terrific source to help “the other side” appreciate our concerns. I just hope it matters … soon.

The author began this WSJ piece with her own take on the President’s export policy. It was obvious she didn’t think much of it, but that’s a subject for a different day. We’ll begin with the relevant portions on energy policy and supply. (NOTE: my own replies/comments follow the author’s, in bold double brackets [[  ]]):

The obvious export opportunity on the horizon for the U.S. is hydrocarbons—oil, gas and coal. But the economic benefits of American competitiveness in energy haven’t been obvious to this administration.

[[ Why is this “obvious”? Might there be an issue or two worth contemplating first? Hard to imagine, but is it possible that there might be some considerations to an undertaking of such scope and complexity other than automatically catering to the oil industry’s agenda? ]]

Since becoming president, Mr. Obama has treated hydrocarbon production like an infectious disease to be eradicated.

[[ Really? That is a great red meat sound bite; snarky as hell, but … that’s it? Any specifics? How about a “for instance?” Anything? The facts contained here and here suggest otherwise. ]]

His administration had to commission a study to learn, as announced last week, that allowing American companies to export liquefied natural gas would be beneficial to the U.S. economy.

[[ This is a bad idea? “… had to commission a study.” Is this a suggestion it’s never been done before? Or is it a snide jab at the Administration for not knowing all of the considerations, facts, scenarios, and outcomes in the first place? That’s a hell of a standard insisted upon!
[[ It took me less than sixty seconds on the internet to discover, for example, that the Bush Administration conducted a study on snowmobiling in national parks. I’ll take a wild guess and assume that was not the only study commissioned during President Bush’s eight years in office. In fact, I’d be willing to bet that commissioning studies before implementing policies affecting tens of millions of people and/or spending tens if not hundreds of billions of dollars is fairly routine—and not just in government.
[[ But this study by the Administration was singled out with not so much as a word of context or explanation. All that seemed missing was the “Duh” at the end of that quoted sentence. Just fire off a snarky jab and the work is done! The CEO of Dow Chemical found the report flawed, and objected to the recommendations. Imagine that: someone of such stature in industrial society objecting! ]]

Just for the hell of it, there was also this:

A former high-ranking Mobile Oil executive has joined more than 100 scientific and medical professionals in urging the Obama administration not to approve several proposed liquefied natural gas exporting facilitates that would expand the domestic demand for natural gas produced by the controversial, high-volume gas drilling technique known as ‘fracking.’
The development of the massive natural gas export facilities would require a ‘rapid increase’ in fracking operations, which have been linked to water, air and soil pollution as well as health problems in communities near the drilling rigs, according to a petition filed with the White House last week by Physicians, Scientists and Engineers for Health Energy (PSE).
The scientists and medical professionals warn against creating international demand for gas produced by the already rapidly expanding fracking industry, without first conducting widespread environmental and health impact studies to ensure the American public is safe.
‘The question here is very simple. Why would the United States dramatically increase the use of an energy extraction method without first ensuring that the trade-off is not the health of Americans in exchange for the energy demands of foreign nations?’ said Seth B. Shonkoff, PSE director and environmental researcher at the University of California at Berkeley. [1]

[[ So now the new White House policy (Dems only, of course) should be: No considerations at all—economic, political, practical, legal—no matter how complex the international undertaking. Just wing it is our new Wall Street Journal-approved MO and slogan!
[[ Not that this is important or anything, but the study/process found to be so objectionable was commissioned to assess the impact on domestic energy markets—and on consumers, if that matters—in the areas of consumption, production, and prices, resulting from increased natural gas exports. Those objectives were detailed under more than a dozen specified scenarios.
[[ Curious that this information didn’t find its way into the article. If those facts had been presented, the not-so-subtle insult to the Administration wouldn’t have been nearly as “effective.” Good to be fact-free! This helps readers understand the issues … how?
[[ I’m not a big-shot energy executive, but I’m confident that if I were, long before I committed my company to who knows how many tens/hundreds of millions of dollars investing in new opportunities, I’m thinking I might like to know if it’s worth it in … you know, reality. ]]

Still, the Department of Energy says it can’t make ‘final determinations’ on export applications until it hears from those who object. So much for property rights.

[[ What does that mean? Whose property rights? Corporate only? Great buzzword! Feeds paranoid fears about government takeovers, etc. … all very nice, especially if one can just toss it out with absolutely no accompanying context. Easier to parrot that objection, of course. Who cares what it means, if anything, as long as it presses the Right buttons, right? So no discussion at all of what the objections or concerns might be, including those by property owners not beholden to shareholders or the bottom line? Just lash out on shaky ideological principle, facts and integrity be damned, right? If it demonizes President Obama even a bit more, mission accomplished!
[[ We have this annoying democracy/public policy thing, where people/organizations who may be impacted economically or otherwise actually get a chance to express those concerns to the people they elect, rather than immediately genuflecting in the direction of the great corporate gods. A pain in the ass, of course, but whatta ya gonna do? ]]

Worth noting two of the conclusions from the study in question [my bold/italic]:

… benefits that come from export expansion more than outweigh the losses from reduced capital and wage income to US consumers, and hence LNG  exports have net economic benefits in spite of higher domestic natural gas prices. [2]

[O]verall, both total labor compensation and income from investment are projected to decline, and income to owners of natural gas resources will increase….
Some in the manufacturing sector fear that directing large quantities of domestic natural gas out of the U.S. market will drive up domestic supply costs, negatively affecting manufacturing and jobs creation during the fragile economic recovery. [3]

Sounds good anyhow, Right?

More on the way….

~ My Photo: Myrtle Beach, SC – 09.28.12

Sources:

[1] http://truth-out.org/news/item/13413-former-oil-executive-doctors-and-scientists-urge-obama-to-halt-fracking-exports; Former Oil Executive, Doctors and Scientists Urge Obama to Wait on Fracking Exports Plan by Mike Ludwig – 12.19.12
[2] http://www.lexology.com/library/detail.aspx?g=7f0dad0c-c3ea-4bbc-8031-7d67dde52ec4; Update: US LNG exports — US DOE releases LNG export study supporting increased LNG exports by Latham & Watkins, LLP; Kenneth M. Simon, Michael J. Gergen, Michael J. Yoshii, Joseph A, Bevash, and Hiroki Kobayashi – 12.10.12
[3] http://www.renewableenergyworld.com/rea/blog/post/2012/12/doe-commissioned-study-endorses-lng-exports-says-u-s-economy-will-benefit; DOE – Commissioned Study Endorses LNG Exports, Says U.S. Economy Will Benefit by Nancy Nguyen – 12.10.12 (Posted on December 7, 2012 by William H. Holmes on the Stoel Rives Renewable+Law blog.)

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Peak oil deniers always talk about reserves, not production rates, for the same reason a squid squirts ink when it is threatened. Either they haven’t the foggiest idea what ‘peak oil’ means, nor a grip on production data (let alone the key production/reserves ratios). . . or clouding the issue, and painting peak oil analysts as Chicken Littles, is their explicit intent. After a decade of observing this behavior, particularly in publications which should know better, I’m now inclined toward the latter view. [1]

It’s just not that difficult to understand!

The latest in the seemingly never-ending efforts of some to confuse the public about the state of our fossil fuel supplies comes courtesy of this Reuters article entitled “Peak oil and other fallacies.” [Quotes taken from that article unless noted.]

Why?

Despite repeated efforts by those of us whose reliance on facts—the appealing ones and the disturbing ones—guide our efforts, the author is yet another in a long line of commentators who seem to think that just offering large numbers about resources and/or reserves puts an end to all this talk about peak oil. (The other part of this disingenuous approach of using cherry-picked information is the failure to mention anything at all about some of those annoying facts which tell a decidedly different story about the actual production from those reserves.)

In the most recent case, horizontal drilling and hydraulic fracturing have resulted in a big upward revision in reserves and ultimately recoverable resources. The shale revolution has already doubled estimates of global gas resources and will probably have the same impact on the oil industry.
Peak oilers emphasise the total amount of oil and gas below ground is fixed. While that is true in a fundamental sense, the volume of hydrocarbons is so vast it will last for centuries.

Given how often the same term is used, it’s safe to say that “vast” is the go-to word of choice for those who find difficulty dealing with Peak Oil facts. It’s safe, impressive, and entirely unquantifiable. But perhaps I’m being unkind. If you can’t rely on estimates that will probably double, then what can we rely on?

In fact, reserves/production ratios have actually been rising strongly in recent years as the industry adds new reserves faster than it depletes old ones. Buoyant oil prices and strong corporate cash flows have certainly sharpened the incentive to do more exploration activity….
Proved reserves have continued to rise steadily over the last 30 years, even as record amounts of oil have been produced from new and existing fields. Proved reserves hit a record 1.65 trillion barrels at the end of 2011, up from just 683 billion barrels in 1980, according to the BP ‘Statistical Review of World Energy’….
High prices and the continuing lack of access to the major Middle Eastern fields have encouraged oil companies to turn to other areas to add reserves: shale, deepwater and the Arctic. Recent exploration and production activity has begun to add reserves much faster in other areas, especially North America, Latin America and Africa.

Not one single word in the entire Reuters article to explain the difference between and significance of the terms “reserves” and “resources.” I wonder why?

Not one single word in the entire Reuters article to explain anything at all about whether or not reserves/resources can actually be extracted. I wonder why? Until they are produced, they’re just fancy—empty—numbers.

Not one single word in the entire Reuters article about the rapid depletion rates of tight oil reserves now being produced. No mention about the inferior quality, and no mention about the greater expenditures of energy to acquire the newer sources, either. I wonder why?

Not one single word in the entire Reuters article about depletion rates of existing crude oil fields. I wonder why?

Not one single word in the entire Reuters article to explain that until current production rates exceed current depletion rates, Happy Talk about “vast” anything is more nonsense. I wonder why?

Not one single word in the entire Reuters article to explain anything at all about the “record 1.65 trillion barrels.” Every fact-free commentary about the “myth” of Peak Oil which alludes to the trillion-plus resources total neglects to mention the annoying fact that at least 1 trillion barrels of that total are the estimated amounts of oil shale. The same oil shale which has not yet been successfully produced commercially despite more than a century’s worth of efforts. The same shale oil which isn’t really oil at all, but rather, a pre-cursor called kerogen which requires an astonishing input of energy to convert it into something approximating crude oil’s density and efficiency. [Kurt Cobb has a nice summary here.] Oil shale is every bit as beneficial to us right now as is oil inside of Neptune.

The number attached to the reserves total and/or the resources total don’t matter at all—at all—if they cannot be produced economically. As I noted previously [echoed by many others much more knowledgeable than me]:

‘Reserves’ do not equal available supply; not by a long shot. Quintuple the proved reserves figures if it floats your boat, but what might arguably be buried beneath the Earth’s surface offers exactly zero assurance it will in fact be produced economically, practically, or efficiently….And let’s not forget amid all of this great news the fact that we have been using for decades is being drawn down each and every day, and so much of what will be produced going forward will first have to match depletion rates before we marvel at their substitute potential … while billions around the world strive to improve their conditions … using more of the energy resources still available but depleting by the day.

And as Chris Nelder offered in that same article of his referenced above:

It is not about oil reserves (oil that has been proved to exist and to be producible at a profit), or resources (oil that may exist in the ground, irrespective of its potential to be produced profitably). Those quantities do play a role in estimating the peak, but do not determine it in any way….
[I]f you’re not talking about data on oil production rates, or the general topic of reaching the peak rate, then you’re not talking about peak oil.

Not one single word in the entire Reuters article about production rates, either. I wonder why?

That information is not exactly a state secret, so why is it that none of those details found their  way into the article? What’s the point of making half-baked arguments? Who benefits?

Chris Martenson nails it:

So shale oil discoveries may be massive in terms of the total number of barrels of oil–but what they lack are high and sustained flow rates. And there’s a lot of confusion out there in the press right now, with several analysts that should know better, waving their hands at increasing reserves and then making the utterly wrong conclusion that peak oil is a defunct theory.
Now, to illustrate this, imagine we just found a trillion barrels 40,000 feet down. Yeah, that would awesome, right? No more peak oil, at least for a long time, right? Well, what if due to technological considerations, we could only get a few wells installed, and the max flow rate we could get from that reservoir was 100,000 barrels per day. Oh, that’s it? Well, that’s nice, but it doesn’t really help the overall situation, where we’re experiencing roughly 4,000,000 barrels per day,per year declines in existing conventional crude oil fields. That is, reservoir size and flow rates were well-correlated several decades ago, because the stuff just flowed out of the ground so easily, but now that we have to drill tens of thousands of feet to achieve a single well flow rate on the order of 100 barrels per day/per well in the shale plays, or we even have to scoop up tarry sand in giant machines and then power wash the bitumen off of it, oil just don’t quite flow quite like it used to.
There’s a new relationship between reserves and flow rates, and it’s a fraction of the old rate. And it’s an entirely new world, and this has been missed by the less insightful analysts and commentators out there. [2]

And then there’s this curious comment from the Reuters article:

Once reserves are understood to be a created inventory, not a natural endowment, several other fallacies about the outlook for the oil industry explode.

So if reserves are “a created inventory, not a natural endowment,” then what exactly is the point? Why stop at a few hundred billion barrels of “created inventory?” If the argument isn’t intended to communicate factual information designed to help readers understand, then don’t be so chintzy with the numbers. Six quadrillion barrels of “created inventory” … that’s impressive! (That would be enough to supply us all for almost two million years, by the way.)

The author then goes on to argue that a related “fallacy” about peak oil “is that oil will become ever more expensive in future as reserves run out and oil production shifts to ever more marginal and expensive fields.”

I will be the very first person to admit that my understanding of economics is marginal at best. Simple concepts for many; not so simple for my tiny brain. Having said that, doesn’t basic supply and demand inform us that if the supply of something diminishes (and/or is more costly to provide) and demand persists or even increases, the price will go up? When you include the added comment that peak oil “also assumes new oil is much harder to find and develop than the reserves it replaces,” I’m left with a giant WTF!?

The primary reason we’re seeing a rise in production is because oil prices are high enough to justify the expenditures by the oil industry. Tight oil is not a recent discovery; it only became feasible to produce when prices rose. (High prices aren’t exactly a good thing for consumers.) See how long production continues at its current pace if benchmark oil prices decline. One need only look at gas production in the past year as Exhibit A.

And the reason oil companies are attempting to extract oil from the Arctic, or relying on fracking, or looking miles below the oceans, are because oil today “is much harder to find and develop than the reserves it replaces!” Sorry, but … Duh!

But I’ll end this by actually agreeing with at least one part of this author’s commentary: It is time for analysts and policymakers to concentrate on real problems.

Peak Oil is one of the big ones—assuming facts matter, that is.

~ My Photo: Morro Bay, CA – 02.13.07

Sources:

[1] http://www.smartplanet.com/blog/energy-futurist/the-politics-of-peak-oil/326; The politics of peak oil by Chris Nelder – 02.01.12
[2] http://oilprice.com/Interviews/Dont-Fall-for-the-Shale-Boom-Hype-Chris-Martenson-Interview.html; Don’t Fall for the Shale Boom Hype – Chris Martenson Interview by James Stafford – 12.18.12

 

 

 

 

Oil plays an essential role in almost everything that touches our everyday lives. From the food we eat to the means by which we transport ourselves, our goods, and our services, to what we grow, build, have, own, need, and do, oil is almost always an important element. But the painful truth now and soon is that the ready supply of oil and gas that we almost always take for granted is on its way to becoming not-so-ready—recent production increases notwithstanding.

What happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? Who delivers that message to the designers and producers and shippers and end users? What’s their Plan B? And how will we respond when decisions are taken out of our hands? Where exactly will the dominoes tumble?

There is nothing on the horizon that will work as an adequate substitute for the efficiencies and low cost and ease of accessibility that oil has provided us. We simply do not have the means to make that happen—not the technological capabilities, not the personnel, not the industries, not the leadership … yet. Clearly, we do not have enough time to do it all with effortless ease and minimal disruptions.

Piecemeal approaches that address some small aspect of need for some short period of time in some limited geographical area for just a few consumers is in the end a monumental waste of limited resources, time, and effort. We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is. We’re going to have to be much better, much wiser, and much more focused. **

Here’s the latest contribution to my Peak Oil’s Impact series—observations and commentary on how Peak Oil’s influence will be felt in little, never-give-it-thought, day-to-day aspects of the conventional crude oil-based Life As We’ve Known It. Changes in all that we do, use, own, make, transport, etc., etc., are inevitable. A little food for thought….

My wife is in sales … the real estate/financial services industry, and she’s quite good. Quite successful, too. Top ten nationally, as a matter of fact, for a company whose name is instantly recognizable to anyone who’s ever done any banking or purchased real estate.

One of her holiday-season rituals, when her daily responsibilities decrease ever so slightly as the holidays near and thus allow her more time outside the office than is usual, is to become Santa’s cookie elf. Dozens upon dozens of favorite treats from a friend’s bakery—unfailingly a hit in every office she visits—are her calling card as she makes the rounds to the real estate and law professionals in the area with whom she does business. The contact with peers she much-too-infrequently meets with in person is a welcome assignment.

Re-establishing the personal friendships is the biggest bonus for professionals like these whose normal working hours afford them almost no time to nurture those important relationships. So too do the relaxed, friendly gatherings afford them all the opportunity to solidify their business relationships. The benefits are reaped every time a referral call is made over the course of the next twelve months.

The cookies my wife purchases are always an important door-opener, and they always work. They are far from her only marketing effort of course, but the personal touch and thoughtfulness go a very long way in having made her one of her company’s leading professionals for more than a decade.

The owner of the bakery likewise appreciates the large sum of money my wife spends out of her own pocket each year. Although the holiday season is the time when my wife makes her largest purchases there, she also makes use of those treats on other occasions during the year.

Customers like my wife are invaluable assets for the owner. The staff she maintains are no less dependent on that business. Her suppliers, the drivers who make deliveries to her store, the various service technicians who keep her kitchen equipment functioning or replaced as need be likewise draw indirect benefits from the bakery store clientele.

The ovens, miscellaneous kitchen supplies, paper goods, wrapping, cookie containers, and all the other items on what is no doubt a long list of supplies do not magically appear inside the bakery. Companies hire suppliers to build/manufacture/maintain/replace the items on that list, and they too depend on transportation up and down their own supply chains. Every employee up and down that line is also a beneficiary of the bakery owner’s success, as are the countless other small and large businesses in that industry who supply us all with treats as well as nutritional necessities.

As evidenced by the good will my wife maintains with her fellow professionals, there are vital intangible benefits to the process as well. Having an SUV makes it much easier for my wife to cart around her deliveries. That isn’t powered or maintained on good will, needless to say.

And so I’ll ask the very same question I’ve asked before: When the supply of depleting conventional crude oil continues to decline, and reliance turns to the inadequate supply of inferior quality, more expensive, harder to come by unconventional sources such as the tight oil formations in the U.S. and the Canadian tar sands cheered on by certain factions of the energy and media industries, what gets prioritized in such a way that every cog of these multiple supply chains are still supplied at current levels and relative costs?

If that does happen, what gets sacrificed as a result?

How much more difficult is it going to be in the years to come to sort all of this out and develop alternative means of providing these goods and services if we’re not having the conversations now with real-life facts to guide us—before we’re having serious problems? Waiting is a strategy, but it’s usually not a very good one.

~ My Photo: A quarry at Halibut Point, on the MA north shore – 09.10.05

** Opening paragraphs adapted from prior posts:

http://peakoilmatters.com/2010/02/15/looking-ahead-to-peak-oil-transition-part-iv/
http://peakoilmatters.com/2010/02/07/looking-ahead-to-peak-oil-transition-part-i/
http://peakoilmatters.com/2010/12/13/thoughts-on-peak-oil-planning/
http://peakoilmatters.com/2011/02/14/peak-oil-a-new-direction-pt-5/
http://peakoilmatters.com/2010/02/25/peak-oil-infrastructure-more-to-discuss-part-ii/

 

 

IMGP0675

 

 

 

 

 

Last year, I posted a six-part series* here on Peak Oil Matters, discussing the liberal/progressive take on some of the more common and “curious” perspectives offered by some on the subjects of peak oil and U.S. energy policy in general. It was also a lament.

As I suggested back then:

Peak Oil (and climate change) are—to those of us who do accept the evidence and expert assessments—serious, fact-based realities which will soon enough impose some rather unpleasant, widespread, and irrevocable changes on how we live and work … all of us, even those on the Right who presently find almost nothing about either topic to be worth contemplating at all. That poses a dilemma….
When ‘dialogue’ about a contentious topic features facts on one side [coupled with] a genuine desire to find solutions, and fear-based irrelevancies and/or half-truths and/or misrepresentations on the other side, how can anyone expect meaningful exchanges and acceptable solutions? What’s the benefit in not having solutions to urgent challenges because ideologies must be protected first…?

I’ll say again: I’m willing to wager that almost all Peak Oil proponents would be delighted to be proven wrong so that we don’t have to endure the inevitable magnitude of changes our beliefs suggest. As I have also expressed repeatedly, I’m not the poster child for Peak Oil. I take absolutely no delight at all that the comfortable lifestyle my family enjoys (7 bedroom second home by the ocean on Massachusetts’ North Shore, two luxury vehicles, lots of travel, lots of electronic toys) will be severely disrupted in the years to come. I like optimistic assessments! But there are other facts which must be taken into account, and there’s no reason why Peak Oil [and climate change] should be exempt from that fundamental concept.

I’d like to know that we’re all working together to find reasonable adaptations and develop sensible plans so all of us—and our children—can enjoy some semblance of prosperity and well-being in the days to come.

But what worries me and peers urging more awareness of Peak Oil is the fact that the problems will be of such scope, impact, and complexity that we feel an urgent need for planning to begin  now—by all of us, both Left and Right. We’re not seeing enough honest, intelligent, rational analysis from those whose contributions will be every bit as important and meaningful as our own. The ideology sponsoring practical and effective adaptations and solutions won’t matter to us if they work. We just don’t think it’s all that unreasonable to expect that the contributions are grounded in the realities of what we face. Optimism has a place, but it cannot be all that one side brings to the table.

To us, completely ignoring the great body of factual evidence about our fossil fuel supplies (and this warming planet, although I’ll leave that discussion to others) is like denying that oceans have water in them! How do you have a dialogue with someone unwilling to accept any facts on a subject?

What has prompted the newest additions to that series was an article in the Wall Street Journal last month (“The North American Gusher” – link updated), on production of and policies dealing with fossil fuels—specifically the shale/tight oil supplies here in America. I found the article to be another in a long list of writings cheerleading oil industry efforts while bypassing a healthy measure of information/facts which paint a very different story. The next three posts in this series will examine the Journal article at greater length.

I single this out strictly because it was so representative of a viewpoint which, from the progressive side of the divide, makes little sense and is a curious contribution to educating the public. Truthfully, nothing from that article cannot be found in any number of others on the same subject. That so many of the typical assessments from those denying we have fossil fuel supply problems appear in this piece—in a prominent national publication—coupled with the commentary offered by readers, makes it a terrific source to help “the other side” appreciate our concerns. I just hope it matters … soon.

The article’s exuberant assessments of an energy-independent future (which I have also discussed in other posts, as have others) is thus a perfect example of the cherry-picking utilized to embellish the story well beyond what the full scope of facts suggest—as seen from the progressive viewpoint. Accordingly, the article and comments served as an “ideal” display of the very reasons why (and how) our hyper-partisan political climate makes it almost impossible to engage in meaningful dialogue to address serious problems. That’s a problem for everyone.

I approach this series with the recognition that it may be a fool’s pursuit. Neither camp seems much interested in hearing about the perspective from the “other side”, having long been convinced that the opposition [evil incarnate] has taken leave of its senses and reality itself. But until we shed more light on not only our point of view but on how we react to and interpret observations and viewpoints from those with whom we disagree—giving them the opportunity to teach us—stalemate ensues. We’ve had more than enough of that, thank you very much. It’s becoming increasingly risky to rely on that “strategy” and/or accept it as status quo, given the challenges ahead.

We need to learn how to listen to others with different viewpoints, and we all need to consider that the mere possibility of diminishing energy supplies merit much more serious and honorable conversations than we’ve demonstrated to date. Solving them together is the only way problems of such scope can be solved. Different conversations with different ground rules might be worth considering.

Not addressing them at all really should not be an option.

~ My (wife’s) Photo: Long Beach, Rockport, MA – 09.29.07

* links:
http://peakoilmatters.com/2012/04/12/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-1/
http://peakoilmatters.com/2012/04/19/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-2/
http://peakoilmatters.com/2012/04/26/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-3/
http://peakoilmatters.com/2012/05/03/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-4/
http://peakoilmatters.com/2012/05/10/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-5/
http://peakoilmatters.com/2012/05/17/peak-oil-denial-the-liberal%E2%80%99s-dilemma-pt-6/

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The ongoing saga of Royal Dutch Shell’s efforts to move the crippled drill rig Kulluk were summed up in a very nice piece written last week by Dan Joling at the Huffington Post.

Explaining that the efforts are taking place during “the worst of the North Pacific’s fury” is probably all you need to know. But since the reality of our fossil fuel exploration challenges has not turned on all the light bulbs in some quarters, it’s worth mentioning a few other tidbits Mr. Joling offered. [And let’s keep in mind this is being attempted near the Arctic, in the ocean, in January. The “rescue efforts” were in fact successfully completed a few days after Joling’s article.]

If the drill ship can be pulled from the rocks off Sitkalidak Island, it will be towed 30 miles to shelter in Kodiak Island’s Kiliuda Bay, a cove about 43 miles southeast of the city of Kodiak.
The Kulluk is a circular barge 266 feet in diameter with a funnel-shaped, reinforced steel hull that allows it to operate in ice. One of two Shell ships that drilled last year in the Arctic Ocean, it has a 160-foot derrick rising from its center and no propulsion system of its own.

I’ll be the first to admit I know absolutely nothing about towing drill rigs, or towing anything at all, actually. If pulling my two-year old daughter in her red wagon a couple of decades ago counts, then I have some towing experience, but that would pretty much be all of it. Notwithstanding, none of what Mr. Joling explained strikes me as anything other than immensely complex and risky.

The article explains that the rig was en route to Seattle when the anchor line broke. Four re-attached lines running from the Kulluk to several ships “also broke in stormy weather.” To uniformed me, that would suggest some serious travel issues. Four lines broke? Just to help matters along, four engines failed in the ship originally charged with the tow. That same ship was back for round two. That must have been a lot of fun, during “the worst of the North Pacific’s fury” … near the Arctic, in the ocean, in January.

Can’t imagine that a rig stuck on a “rocky bottom” would pose all that much trouble, in … “the worst of the North Pacific’s fury,” near the Arctic, in the ocean, in January. The good news is that “More than 600 people [are] working on the recovery.” All for one rig mind you. Must be nice to have so many extra hands on deck, so to speak. Can’t imagine the costs involved in all that manpower would run more than a few thousand dollars or so, right?

Quoting Dan Magone, president of Magone Marine, who expressed doubts that the efforts will be a simple matter by any definition, and whose company’s own salvage efforts for two other disabled vessels are on hold for several more months:

‘The insurance company doesn’t want to pay any more money than they have to to get the wrecks out of there, so why risk our equipment and our crew and spend a thousand percent more money playing around in the wintertime when you can just wait until the weather’s good and do it then?’

Magone also added:

‘Of course with a big fiasco like this, there’s all kinds of pressure and everything. But there’s a limit to what you can do.’

Can’t argue with that logic or his expertise. So what does that say about the efforts required for the Kulluk?

And just to add a tiny concern, Mr. Joling offered this:

Shell has reported superficial damage above the deck and seawater within that entered through open hatches. Water has knocked out regular and emergency generators, but portable generators were put on board Friday.
The condition of the hull will be key in determining whether the Kulluk can be refloated.

So before the public signs off on the Happy Talk oil industry officials and their media shills offer them about the “vast” this or that in the Arctic and elsewhere that is ours but for federal regulations and the nefarious motivations of our America-hating-out-to-destroy-us-all-just-for-kicks President and his Administration, it might be worth asking:

This is what the oil industry is resorting to in order to supply us with oil? I wonder why?

Answers—the ones supported by facts and reality—aren’t all that hard to find.

~ My Photo: a slightly calmer winter ocean at Long Beach, MA 03.17.10

 

 

 

 

Oil plays an essential role in almost everything that touches our everyday lives. From the food we eat to the means by which we transport ourselves, our goods, and our services, to what we grow, build, have, own, need, and do, oil is almost always an important element. But the painful truth now and soon is that the ready supply of oil and gas that we almost always take for granted is on its way to becoming not-so-ready—recent production increases notwithstanding.

What happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? Who delivers that message to the designers and producers and shippers and end users? What’s their Plan B? And how will we respond when decisions are taken out of our hands? Where exactly will the dominoes tumble?

There is nothing on the horizon that will work as an adequate substitute for the efficiencies and low cost and ease of accessibility that oil has provided us. We simply do not have the means to make that happen—not the technological capabilities, not the personnel, not the industries, not the leadership … yet. Clearly, we do not have enough time to do it all with effortless ease and minimal disruptions.

Piecemeal approaches that address some small aspect of need for some short period of time in some limited geographical area for just a few consumers is in the end a monumental waste of limited resources, time, and effort. We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is. We’re going to have to be much better, much wiser, and much more focused. **

Here’s the latest contribution to my Peak Oil’s Impact series—observations and commentary on how Peak Oil’s influence will be felt in little, never-give-it-thought, day-to-day aspects of the conventional crude oil-based Life As We’ve Known It. Changes in all that we do, use, own, make, transport, etc., etc., are inevitable. A little food for thought….

Most companies large and small, I imagine, indulge in the long-standing tradition of the holiday party. A pleasant meal at a local restaurant, perhaps some awards or recognitions for various achievements over the past year, and general good will—and fun—are the primary motivations for events like these. My wife and I attended one for her company [local branches] and one for the office of the mutual friend responsible for introducing us to each other. My wife has also attended several other similar events on her own. I assume many of you attended similar functions.

Nearly two years ago, I wrote a post about the national sales conference. While the scale of most of these local gatherings is much smaller than the conferences which I discussed then, many of the issues and considerations are the same. While these holiday gatherings are typically much more of a social event that a combination of business and pleasure as they tend to be at the national level, there are professional benefits nonetheless.

The atmosphere affords employees at all levels to mingle with peers and management from other local offices in relaxed, congenial settings. Opportunities to address concerns either set aside or never voiced during the normal day to day bustle (for any number of reasons) frequently find a healthy forum at these events. Solidifying personal relationships no doubt make the more typical business interactions more fruitful.

So too do the upper level professionals derive benefits from meeting their local peers and exchanging ideas and information, strategies, marketing techniques, and a host of other brain-picking opportunities they rarely get a chance to experience. As is true of conferences on a grander scale, the free exchange of information plays a vital role in the successes these individuals enjoy.

Their successes provide boosts to management, staff, and the companies themselves. Better service ideas for customers exchanged at gatherings like these directly benefit their clientele. Those benefits cannot be readily quantified, but there’s little doubt that the social perks from these events are matched by the professional advantages gained by the exchange of ideas.

Will they manage to carry on without holiday gatherings? Of course! But when inevitable fossil fuel availability is more tangibly on the decline, how much longer will functions like these be budgeted for? The costs for hosting these events, along with the food, beverages and whatever entertainment might be featured will all rise as the cost and availability of supplies increase. Hard to imagine that ancillary events like holiday parties will maintain any sort of priority.

As I noted in that earlier post:

When industry after industry must deal with the elimination of these and similar business gatherings and the personal exchanges of information, a diminution of quality will creep onto the landscape. To the outsider, few tears will be shed, but when quality in all its manifestations declines, the effects are not restricted to only the industry or company in question.

The establishments hosting these functions will suffer business losses as well. The employees and suppliers will likewise be affected, as will the suppliers to the suppliers, and on and on the dominoes tumble.

As with most of the topics in this Impact series, these are not earth-shaking changes. But they will be part of the fabric of everyday lives adversely affected when the energy sources we’ve used and relied upon for decades are no longer as affordable and available. And as with every other feature of modern life dependent in some manner on the availability of affordable, quality fossil fuels, changes will either be settled upon in advance or forced upon us.

Planning ahead will help.

~ My Photo: winter day at Good Harbor Beach, MA – 01.14.11

** Opening paragraphs adapted from prior posts:

http://peakoilmatters.com/2010/02/15/looking-ahead-to-peak-oil-transition-part-iv/
http://peakoilmatters.com/2010/02/07/looking-ahead-to-peak-oil-transition-part-i/
http://peakoilmatters.com/2010/12/13/thoughts-on-peak-oil-planning/
http://peakoilmatters.com/2011/02/14/peak-oil-a-new-direction-pt-5/
http://peakoilmatters.com/2010/02/25/peak-oil-infrastructure-more-to-discuss-part-ii/

 

 

 

 

 

 

An observation worth noting … and pondering, from Kurt Cobb:

No one–not the fossil fuel industry, not government, not private forecasters–can know for certain what our future supplies of fossil fuels will be. If those supplies are constrained as current trends and data suggest, then we will be forced to make an energy transition whether we want to or not. If fossil fuels turn out to be more abundant than current trends portend and we make a rapid transition to renewable energy starting now, the worst that can happen is that we will have completed that transition a little earlier than was absolutely necessary.

All things considered, that’s not such a bad deal … for all of us.

Fervent protests and denials notwithstanding, we are going to be making a transition at some point – voluntarily or otherwise [“otherwise” is not the preferred option]. For all the talk about our “vast” resources, etc., etc., the facts about extraction and production of our unconventional fossil fuel resources tell us that the promised abundance and elimination of energy supply concerns are not nearly as certain as some may wish … not even close.

For the umpteenth time I’ll state that no one outside of the few poor souls who delight in misery welcomes the thought that life as we’ve known it for decades will all-too-soon become something far different than our optimistic expectations for the future. A diminished supply of the very energy resource which made life as we’ve known possible in the first place makes that inevitable. It really doesn’t matter when, either.

The reality is that almost everything we use—personally or commercially—has always been dependent on everyone up and down the supply chain having readily available and affordable fossil fuel at the ready to design, test, manufacture, transport, supply, acquire, and then use the products and services we’ve long taken for granted.

So when the supply we’ve all been drawing from shrinks, and more of us are demanding the same benefits—if not more—math tells us we’ll have some issues.

Starting to think about, preparing for it, and then implementing the myriad Plan B’s we’ll all depend on at some point down the road ought to be taking place right about now. If, as Kurt Cobb suggests, the worst that will happen is that life under Plan B starts a bit sooner, we’ll all be the better for it.

It remains, as always, a choice….

* My Photo: Key West, FL – January 2006