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This is a second look at a recent Reuters article by John Kemp, which got me thinking that those who deny peak oil ought to be magicians.

The tactics are standard by now: Toss out some carefully massaged facts bearing the imprint of near-truths but without context (just to be safe), engage in a pattern of irrelevancies to help muddy the waters, toss in some meaningless numbers while carefully shielding the important ones from the discussion, and presto! No more peak oil theories.

If would be a great show were it not for the ending: reality.

But first, a little science [quotes from the Reuters article unless noted otherwise]:

New accumulations of fossil fuels are being laid down all the time, especially in organic rich depositional environments like the Mississippi and Niger deltas.
But the current massive fossil fuel reserves were laid down over 500 million years and the current rate of exploitation probably exceeds the rate at which new oil, gas and coal are being created.

Probably”?!? Unless we’re extremely patient in ways beyond all definitions of patient, I’m fairly certain that waiting several hundred million years is not a sound energy policy. And given the time lag between laying down “accumulations” and that same several hundred million year window … yeah, we’re probably exploiting reserves a bit quicker than that.

Skipping past the issue of oil and gas reserves as discussed by former Shell geologist M. King Hubbert, generally credited with formulating the peak oil “theory” (but not other “theories” of like kind, such as the one about relativity and the one about gravity), Mr. Kemp offers this affirmation that we have more than enough fossil-fuel based energy resources available to us:

Coal, kerogen and even biomass can be converted into oil and gas using the well-established Fischer-Tropsch process.

Well-established”?!? If by “well-established” he means “fairly useless,” then he’s absolutely correct.

Conversion of coal to liquid fuels using the Fischer-Tropsch process has been used for decades in South Africa and to a lesser degree elsewhere. More recently, gas-to-liquids plants have been constructed in Qatar and are proposed in the U.S. The conversion of both fuels to liquids suffers from several intrinsic problems:
    *  the infrastructure is very expensive.
    *  the process is very energy intensive and produces disproportionate amounts of CO2.
    *  the process is uneconomic unless gas and coal prices are very low relative to oil. 
Exxon Mobil expressed some of these issues recently on gas-to-liquids: 
‘The reason you see so few [gas-to-liquids] plants is the economics are challenged at best,’ said William M. Colton, Exxon Mobil’s vice president of corporate strategic planning. ‘We do not see it being a relevant source of fuels over the next 20 years.’ 
Bartis et al. point out the infeasibility of scaling up coal-to-liquids (CTL) production: ‘CTL development at a scale of three million bpd by 2030 would require about 550 million tons of coal production annually.’ This would require scaling up coal mining in the U.S. by 50 percent. The collateral environmental impacts of coal mining are well known, and scaling by anywhere near this amount is likely impossible from logistical and reserve-availability standpoints. And, even if it were possible, 3 mbd is not that significant in the face of total consumption. (links/citations in original) [1]

Years before, the same topic was similarly dismissed. (Perhaps its “well-established” nature back in 2007 was already clear):

COAL-TO-LIQUID fuel is being touted in the Senate energy debate as a key to overcoming America’s dependence on foreign fuel. The argument is understandable, considering that the United States sits atop the largest coal reserves in the world, by one estimate a 200- to 450-year supply. But unanswered questions and environmental concerns raise the prospect that the price for this brand of energy independence may be too high.
To turn coal into liquid fuel it must be fired up to 1,000 degrees and mixed with water. Then the gas that’s created is transformed into fuel that can be used in cars and jets. Unfortunately, creating CTL, as it is known, is a very intensive process requiring coal, water and cash. To wean the United States off of just 1 million barrels of the 21 million barrels of crude oil consumed daily, an estimated 120 million tons of coal would need to be mined each year. The process requires vast amounts of water, particularly a concern in the parched West. And the price of a plant is estimated at $4 billion.
The most troubling aspect of CTL is that producing it will roughly double climate-changing greenhouse gas emissions. That’s because liquefying coal releases huge amounts of carbon dioxide in the atmosphere. Proponents of CTL say that could be remedied by capturing and storing the carbon underground. Yet this new technology is so untested on a large scale that the Senate energy bill seeks to conduct demonstration projects across the country to answer some vital questions, such as whether the carbon dioxide, once stored in a variety of geological settings, will remain there. And once past production questions, there’s another obstacle: Tailpipe emissions from cars using CTL would be only slightly better (or no better at all, depending on whom you ask) than from gasoline.

Facts suck when one is trying to make a gilded point.

But if twisted just so, they can support a theory or two. Prices, for instance.

Production rates have been sustained and are now rising again, but only by exploiting new resources such as offshore deepwater fields and shales, most of which are much more difficult and expensive to produce than the conventional fields Hubbert was analysing. Output has been sustained, but only at an increasing cost and price.
British economist William Jevons made similar predictions in the 19th century about the rising cost of coal production from Britain’s coal fields as seams near the surface were gradually exhausted and miners were forced to delve deeper.
In this form, the theory is true, but not meaningful.

It’s not?! Consumers beg to differ. High prices enable the industry to pursue “offshore deepwater fields and shales.” Consumers pay those high prices. When they stop (and with investors pulling back on their boundless enthusiasm about fracking, see this with links therein), so doesn’t the runaway production train.

Costs and prices are as much a function of technology as output. It is simply not true to say prices (in real terms) must rise in the long term as easy resources are exhausted because that too depends on changes in technology.
‘No mineral, including oil, will ever be exhausted. If and when the cost of finding and extraction goes above the price consumers are willing to pay, the industry will begin to disappear,’ according to MIT professor Morris Adelman.
If oil becomes too expensive it will be replaced by other forms of energy, just as coal replaced wood in the 19th century, and oil replaced coal in the middle of the 20th century.
In that sense, Hubbert’s theory is technically correct but practically meaningless because it rests on an essentially static view of technology.

That may not be quite nearly as reassuring as the writer intended. While technology has improved and no doubt will continue, the fact remains that the easy and relatively inexpensive conventional crude oil supplies are now on the downside of the slope, and have been for nearly a decade. Prices may indeed fluctuate just as has been the historical trend, but advanced technologies—from envisioning to mass utilization—is not a weekend project nor is it inexpensive no matter how generous the definition.

And given the resources Mother Earth is now offering up, higher prices will be the norm. That’s how the great god of free market enterprise designed it. Consumers will have their say on that issue as well. None of it bodes well for a trouble-free energy supply future.

It would be nice if some of those realities factored in to public discussions so that the public might be better-informed and better-served. A thought….

~ My Photo: Good Harbor Beach, MA – 10.11.09

 

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       * The Middle Age Follies

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Sources:

[1] http://www.postcarbon.org/drill-baby-drill; Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance? by J. David Hughes [Feb. 2013] © 2013 by Post Carbon Institute [Santa Rosa, CA]