Peak Oil Matters

People who like conspiracy theory are well served by the Oil Establishment’s ceaseless quest to present world oil supply as sufficient if not ‘abundant’, denying the evidence of Peak Oil, and accessorily keeping a lid on oil prices. [1]

A Peak Oil Denial Sampler

We who feel an urgent imperative to explain the reality and expected consequences of Peak Oil by doling out facts, evidence, and reality, continue to deal with heaping doses of nonsense volleyed back from the other side of the net. Language from a recent Exhibit A is indicative of the “arguments” from those unwilling to accept the unfortunate facts about oil production (starting with the “good news” first … apparently a new way to measure fossil fuel resources):

We have more than enough of the black stuff to incinerate ourselves several times over….
[S]upply side bounty … offering a second pass at resource riches….
[A] dazzling display of unconventional technologies rapidly increasing kangaroo LNG production.
The North Sea can squeeze out a few more drops; Europe can finally get it’s ‘energy sovereignty’ back….
[T]he Arctic offers Russia untold oil riches….
[T]he new African oil rush….
Higher risk markets … hold undoubted hydrocarbon promise….
Initial trickles of oil will start to flow next year, but the Albert basin has already unearthed a billion barrels of proven reserves, figures that could go significantly higher when surveys are conducted….
Nairobi has struck its own oil. Tullow is plugging away in the Rift Valley; serious offshore plays are being looked at [my emphasis] in the Lamu Basin….
Thirty onshore and offshore areas are already under license, with a further eight
deep-water tracts coming up for auction….while trickier deep-water blocs have been taken….
Like it or not, East Africa has just added another serious swathe of hydrocarbon prospects to the global economy.…an attractive prospect for bullish supply side expectations. [2]

What The Peak Oil Denial Sampler Is Telling Us

Perhaps the author should have his keyboard checked out … other than the Albert Basin’s “billion barrels of proven reserves,” the entire essay was all but devoid of any production numbers amid all of those supposedly-optimistic, pseudo-factual pronouncements. (But we do have eight tracts coming up for auction, and we all know that ‘coming up for auction’ is almost like production by tomorrow … especially when ‘offshore plays are being looked at’ … and not just any offshore plays, mind you, but ‘serious’ ones! Wow! And one can only imagine just how much oil Nairobi has struck! We’re saved!

I think it’s fair to say that it’s entirely possible this information might potentially persuade several key officials that if certain things happen favorably, the oil supply future could very well appear to be bright … perhaps.

I’ll ask the same question I’ve raised before: How does this help us?

Humans don’t want to hear bad news. That’s just the way they’re built, the way they were designed by Nature. That’s the lesson I learned in a nutshell. If they’re not listening, that’s hardly a surprise. Certainly it’s nothing to worry about or get frustrated over. If they’re not listening to the bad news you’re bringing, for God’s sake don’t try harder. They simply don’t care about your carefully crafted, convincing arguments. [3]

It’s hard to dispute Dave Cohen’s perspective, and in fact quite easy to succumb to a healthy dose of despair when nonsense is the standard reply to our efforts to inform. The questionable notion argued by a more than a few deniers—that we derive some perverse pleasure in dispensing gloomy forecasts—seems enough of an excuse to pay no further attention to the information shared. It’s all the more discouraging when prominent media is more inclined to give voice to happy talk about the magic of “human ingenuity” and the Technology Fairy.

Peak Oil Denial Exhibit B

[T]he peak oil model itself shows an inadequate empirical representation of historical patterns. World oil discoveries have peaked at least four times since 1950. Take the United States: here, there has been a major deviation between Hubbert’s projections and real figures of oil production. As economist Daniel Yergin has pointed out, at the end of 2010, US oil production was 3.5 times higher than Hubbert forecast. [4]

Facts Keep Screwing Up Denials

U.S. oil production peaked four decades ago, exactly as Dr. Hubbert predicted! So what’s the point of nitpicking the fact he could not conjure up all of the future technological advances altering the amount of oil produced? The essential issue is that his prediction of the peak was spot-on!

It seems that Hubbert got the timing of the plateau (peak) of oil production almost perfectly, and he was off by a factor of two in the production level. He could not have possibly accounted for the offshore production in the North Sea, Nigeria, Angola, Brazil, deepwater GOM, etc. He had no way of predicting the discoveries and ascent of Cantarell, Tengiz, Majoon, Samotlor, Zakum, Prudhoe Bay, and many other supergiant oilfields….Hubbert’s data said nothing about the impact of 3D seismic, deviated wells, horizontal wells, massively hydrofractured wells, drilling in two kilometers of seawater, etc. Yet, almost 60 years ago, Hubbert was off by a factor of two in the production level and perfect in the timing of the peak. Now think about an economic forecast for the entire world that is this good after mere 10 years….
Hubbert’s prediction is close to a miracle….Hubbert simply did not have enough random variables in his data set, because these variables were still in the future when he plotted his [graphs]. In the intervening six decades, technology created by people like me brought these new random variables (oilfields) to life and doubled the production outcome, but did not change the location of the peak [my emphasis]. [5]

If At First You Don’t Succeed, Just Say Anything!

The same article cited in [4] above goes on to state:

Peak oil theory holds a static view of the world, and its models ignore price effects: lots of oil discoveries and high production mean that prices and profits wane, and incentives for further exploration decline. But ensuing oil shortages then restore these incentives. When incentives exist, the industry will continue to produce and is likely to produce even more…..
Peak oil theorists also neglect the role of technological advances in oil production as a great multiplier. The history of the oil industry reflects an endless struggle between nature and our knowledge. Progress in technology allows both new discoveries and the increase in recovery rate needed to turn non-recoverable or hypothetical resources into recoverable reserves….
Worse yet, peak oil theorists do not take into account the assessment of unconventional oil resources, such as oil shale, oil sands, biomass-based liquids, coal-based liquids and liquids arising from chemical processing of natural gas. These could substitute for conventional oil when new technologies, such as steam injection for oil sands deposits, mature.

Just a few comments on these statements. We can just assume that consumers/we are going to pay the higher prices no matter what? The first option available to most in the face of higher prices is to cut back on usage. So unless the fossil fuel industry has decided that they are going to absorb from profits the higher costs of exploration and production of the inferior substitutes relied upon to debunk Peak Oil, those higher prices get passed on to us, and we’ll react accordingly. Surprise!

When customers aren’t buying, profits decline. When profits decline, business investments aren’t made. Restoring those investments and deciding to resume exploration and production is not an overnight process, so the magic suggested in the first paragraph above isn’t quite as impressive when reality intrudes. And let’s keep in mind that what is being sought and eventually produced is of lesser quality, harder to access (and thus more expensive), and takes much longer to bring to market, among other notable drawbacks. Facts continue to suck!

And the suggestion that we “neglect the role of technological advances in oil production”  and “do not take into account the assessment of unconventional oil resources, such as oil shale, oil sands, biomass-based liquids, coal-based liquids and liquids arising from chemical processing of natural gas” is a flat-out lie! We argue our position on Peak Oil precisely because “technological advances in oil production” and “unconventional oil resources” are woefully inadequate in substituting for the finite conventional fossil fuels we’ve been extracting and using for more than 150 years!

Those conventional oil fields are depleting daily, and these pixie-dust unconventionals are simply not able to keep up with those numbers, let alone meet increasing demand. The truth is that cornucopians just don’t like the production reality facts about these magical substitutes.

Gotta Keep Hammering Away

It’s maddening to deal with so much nonsense helping no one but investors, oil company executives, and corporate bottom lines. Dave Cohen is perfectly justified in throwing up his hands! But throwing in the towel simply cannot be an option for those of concerned about the facts of oil production and what Peak Oil will mean to all of us. If at first (or second, or twenty-third) you don’t succeed, try again. And so I will….

[D]enial which arises out of the innate subconscious urge we all have to adopt views that agree with our tribe, because of the importance of social cohesion, does not seem unethical. That sort of denial is a product of subconscious motivations, to a large measure beyond our free will. But the deniers who are consciously trying to sow doubt, and block action on what could be an existential threat to human life as we know it, not purely as a matter of ideology but to protect their profits and power and personal interests, clearly are behaving unethically, and we should be outraged….
It may take more cognitive effort to think critically and independently rather than just parrot our tribal leaders (like some Limbaugh-ian ‘Ditto Head’) but that simply can not excuse people knowingly and selfishly putting themselves and their self interests above others in their community and as a result putting the rest of us at risk. Whether the community is local or global, and whether the issue is climate change or jeopardizing the economy with ridiculous investments that make you rich, the principle is the same. It is fair to call unethical, and be enraged by, the conscious actions of those who would put the rest of us in serious danger in order to protect their safety and profits and power….[6]

I’ll have some more thoughts on other recent, related “denial” articles in an upcoming post.

Sources:

[1] http://www.marketoracle.co.uk/Article34137.html; The Magical Decline Of Crude Oil Demand by Andrew McKillop – 04.15.12
[2] http://www.forbes.com/sites/matthewhulbert/2012/04/19/peak-oil-off-great-game-on/; Peak Oil Off: Great Game On by Matthew Hulbert – 04.19.12
[3] http://www.declineoftheempire.com/2012/04/a-peak-oil-update.html; A Peak Oil Update by Dave Cohen – 04.16.12
[4] http://www.chinadialogue.net/article/show/single/en/4885; Rethinking peak oil by Lin Shi and Yuhan Zhang – 04.23.12
[5] http://www.energybulletin.net/stories/2012-04-16/commentary-world-finite-isnt-it;  Commentary: The world is finite, isn’t it? by Tadeusz Patzek – 04.16.12
[6] http://bigthink.com/ideas/42502; The Heartland Institute and “Climate DenialGate” by David Ropeik – 02.16.12

Yet another in the seemingly endless string of cherry-picked story lines attempting to put to rest the “theory” of Peak Oil has found its way onto the internet, completely unremarkable in the talking points offered, which I’ll get to. What was most striking was not so much the uniform lack of understanding on the part of all but a handful of commenters.

The blatant, racist stupidity of several caught me completely by surprise. I didn’t think that offensive nonsense had found its way into the Peak Oil conversation, but Racist Ignorance is alive and well in this arena, unfortunately. But any forum will do, I guess….And the relevance of that conversation to Peak Oil is … what?) In this day and age, that moronic tripe still flourishes … amazing! (And of course, the continuing nonsense about the fascist-socialist-Kenyan-Muslim President out to destroy America hasn’t abated any, judging by some of the other comments.) Ironic that those who lament and fear what this nation is coming to fail to appreciate the fact that the paranoid garbage they parrot is a primary cause and symptom. Each and all of us need to be better than this. We’ll need no less in the years to come.

I probably should not be as stunned (and dismayed) as I was, given the nonsense that passes for mush of the political discourse today, but it is striking to see how many people seem utterly incapable of stepping back and considering a bit of reality, even if it is at the expense of a carefully-tended, fear-based ideology. The commentary tarnished my optimism, but only temporarily. Best not to give that ignorance any more attention….

A sampling of what that article had to offer, beginning with the almost-obligatory snarky comment passing for relevance to the discussion [my bold/italic]:

‘With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,‘ [President Obama] said. ‘Not when we consume 20% of the world’s oil.’
The claim makes it appear as though the U.S. is an oil-barren nation, perpetually dependent on foreign oil and high prices unless we can cut our own use and develop alternative energy sources like algae.

Nice touch … bona fides duly established. But just in case there’s doubt, we start with the magic words [my bold/italic] from Page One of the Deniers’ Playbook [see this]:

[F]ar from being oil-poor, the country is awash in vast quantities — enough to meet all the country’s oil needs for hundreds of years.

And then more selective facts, without context or even a bit of accompanying, vital information to educate and inform. Only a handful of knowledgeable commenters bothered to discuss the claims and provide missing context, given that most of them were much too focused on slamming the aforementioned socialist-Muslim yadda, yadda, yadda. How does perpetuating ignorance and/or lack of understanding help in any way?

A sampling [my bold/italic]:

At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered, according to the government’s Bureau of Ocean Energy Management.

About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.

Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope, says the U.S. Geological Survey.

Up to 12 billion barrels in ANWR, according to the USGS.

As much as 19 billion barrels in the Utah tar sands, according to the Bureau of Land Management.

Then, there’s the massive Green River Formation in Wyoming, which according to the USGS contains a stunning 1.4 trillion barrels of oil shale — a type of oil released from sedimentary rock after it’s heated.

When you include oil shale, the U.S. has 1.4 trillion barrels of technically recoverable oil, according to the Institute for Energy Research, enough to meet all U.S. oil needs for about the next 200 years, without any imports.

For starters, Chris Nelder recently offered a healthy dose of reality about shale.

Even those with no knowledge about oil production whatsoever might find some reasonable answers to these questions: How difficult might it be to find, extract, and then produce oil from near the North Pole? Think there might be an issue or two? Perhaps some weather concerns? Maybe just a bit more expensive? More difficult? Riskier? Might take a while, too.

As for “a type of oil released from sedimentary rock after it’s heated”: kerogen is not exactly the same thing as the oil we’ve all seen gushing from wells. Despite several decades of effort, it’s still not a commercially feasible enterprise. And the “after it’s heated” part is just a bit more complicated that the author bothers to explain. [See this, for example.] But inconvenient facts just get in the way….

Perhaps as remarkable as anything, however, was this statement by the author, which almost all of his commenters failed to mention or apparently even notice:

To be sure, energy companies couldn’t profitably recover all this oil — even at today’s prices — and what they could wouldn’t make it to market for years.

See … that’s kinda the whole problem with being “awash” in “vast” quantities….A bazillion barrels of anything buried underground, or in the Arctic, or otherwise not extracted by conventional means will stay right there if there’s no profit to be made. High prices might of course make some companies willing to go for it, but what wasn’t mentioned is the fact that high costs on their end means higher prices for us consumers (even the ignorant, racist ones). That’s not a good thing, and thus not especially helpful.

Telling someone that within walking distance of their home are millions and millions of dollars in local banks is all fine and well. But if that someone can’t get any of it, the amounts stop being impressive fairly quickly. Vast quantities of inferior, unconventional oil tucked away for many more decades is not any different. Impressive totals, but mostly useless to us. Those kinds of added facts would be ever-so-helpful to the many who clearly do not yet appreciate the challenges of Peak Oil.

And not making it “to market for years” … that’s kinda problematic, too. See, shocking as it is, conventional fields—the ones we’ve been tapping into for decades now—are depleting. Every day. They’re not limitless. Worldwide demand is increasing. More of those conventional crude supplies are also being kept by the producers to satisfy demands in their own countries. More for them, less for us. Easy math!

As I and others in the know point out day after day: the United States uses in the neighborhood of 18 million barrels of oil per day, about half of which we still import. Getting all of these inferior, unconventional supplies (and shale, tar sands, etc. are most definitely not the same as conventional crude) to a point where they will meet just our demands, let alone contribute to world supply, is decades away at best, if ever. And all the while, worldwide demand is still increasing and existing fields are still depleting.

These magical supplies Mr. Merline speaks of are harder to get to (thus more expensive); they require more refining (thus more expensive); their rate of production is much less than the ever-dwindling supplies of conventional crude; the energy efficiency quality is not the same; and in general, much more time, effort, expense, and risk is required to produce what’s left. This is good news?

Here we go again. Every time gasoline prices spike, no matter the reason, Republican leaders and talk radio’s libertarian elite reach for the American Petroleum Institute’s (API) latest talking points and crank up the ‘drill, baby, drill’ rhetoric….
The GOP’s real energy crisis is one of focus. Republican leaders are focusing their energy on keeping America overly dependent on a resource that is far more plentiful outside our own borders. They largely dismiss the strategy of reducing demand and seem content to have us suck our own limited oil reserves dry as quickly as possible. It is a phony solution that they think will play well politically.
Peddling geologic ignorance may score some points with voters who don’t know any better, but it won’t bring the promised relief at the pump. [1]

That quote is almost a year old, but carries no less weight today.

With the GOP now both apoplectic at (1), what our Kenyan-Colonialist-Muslim-Socialist-Martian-Taxaholic-America-hating President (did I mention he’s not a white guy?) is doing to gasoline prices (all by himself, no less, and undoubtedly for non-patriotic, anti-religious purposes … possibly involving contraception and spending of some sort) and (2), relishing the opportunity to blame him for these rising prices (in their economic-fact-free world), I thought it might be useful to trot out an old post of mine, also from a year ago.

Not surprising, the gas prices issue is also giving rise to the same nonsense as was featured in 2011. No need to update with new quotes; they all come from the same Book of Nonsense.

With Newt Gingrich blessing us with revelations obtained from his most recent beyond-Earth’s-atmosphere trip to Planet Delusional Obnoxious Neanderthal that he and he alone will bring the price of gasoline back down to $2.50 per gallon in his Administration (unless some stuff involving reality happens and he … uh, can’t), perhaps we ought to try a different tack and see what facts suggest, just for comparison.

You know what they are, Right? Declining supply; increasing demand; increasing exploration, production, and refining costs; inferior quality substitutes; geopolitical considerations … ring any bells? (Not even Cheerful Newt, with the keen powers only a genuine, incredibly well-paid historian possesses, can prevent any of this.)

So with only a few editorial tweaks, let’s re-visit: “Apparently, Clueless IS A Strategy.”

[NOTE: This is the latest installment in a new PeakOilMatters series (which started here). It’s about finding a new and better vision to get to, through, and beyond Peak Oil and its widespread impact on what we produce, how we produce, and how we live. We won’t be falling off a cliff tomorrow, and the full brunt of Peak Oil’s effects won’t be experienced all at once, either. Gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt.
Gradually, but inexorably, changes will be in the offing, however. We need to come to a better understanding of this, and start preparing ourselves now for the lengthy transition and just as lengthy ongoing impact of Peak Oil on all of us. Many issues must of necessity be considered, and I hope to make a contribution to the public dialogue we need to have. I hope you’ll find these objectives enjoyable as well as beneficial. We have more of a voice than we think we do. Finding that voice just might be our best hope.]

~~~

We’re blindly focused on searching for answers within our old paradigm of energy and it’s a vision that really needs to shift. [1]

I began a multi-part series entitled Clueless Is Not A Strategy (first post here) whose primary purpose was to argue that in the face of growing oil production challenges, we need to start having serious, adult conversations about what we’ll all soon be facing (yes, even those who deny the reality of Peak Oil). Remaining ignorant of the facts about oil production, oil supply, and increasing demand; or relying on ignorant or at best disingenuous arguments which urge us not to worry and be happy about our energy resources (if only we can stop our nefarious President with his socialist policies from implementing evil, job-killing regulations … have I covered most of the Buzz-Words of the Day?), is, I proposed, not our best approach.

It would appear, (unfortunately), that some of our fearless “leaders” haven’t gotten the strategy memo—or they are still working from the wrong one. Clueless reigns supreme in some corners of Congress—yet another display of the remarkable ability of some to completely ignore facts and simultaneously plan as far ahead as early next week.

Where is the president’s plan for rising gas prices? – Sen. John Barrasso (R-WY)

Now is the time to be asking what we can do to increase domestic energy production, not proposing ways to squeeze American families even more,’ -  Republican Senate Minority Leader Mitch McConnell (R-KY)

‘My message today simply is the higher gas prices are simply a product of this administration’s goal [to enact a cap-and-trade plan to curb emissions of greenhouse gases].’ – Senator James Inhofe (R-OK) *

‘Since this administration has taken over, they have done everything to block energy development in this country,’ – Rep. Doc Hastings (R-WA)

Seriously? Must be part of the Socialist-Alien-Kenyan-Muslim-Not Exceptional-Completely-Ruin-The Country-Just-For-The-Hell-Of-It strategy Obama obviously began pursuing nefariously with his nefarious parents since shortly after his birth on a still-undetermined planet somewhere in our solar system.

Imagine that: an opposition party assailing the President because he (with his magical superpowers over all of commerce and industry) simply has not ordered prices to drop. If only he would stop pursuing regulations that raise gas prices just for the hell of it. What is Obama waiting for? (And while I have his attention, still waiting on lowering college tuition costs for our two daughters….)

Just how clueless are they, and how much of their nonsense will we permit to guide policy in the weeks ahead? They still don’t get it….We have leaders (including Democrats) still making the same pointless pronouncements about “weaning ourselves off of/ending our foreign oil dependency” while they now consider opening up our Strategic Petroleum Reserve because gas prices are high … and still doing absolutely nothing about the underlying causes. (And sorry, Ms. Palin and your loyal followers, “drill, baby, drill” is still as dumb and useless a policy as it was two years ago. See this for more information.)

To his credit, Representative Fred Upton (R-MI), House Energy and Commerce Committee chairman, said that the petroleum reserve should be left untouched absent a severe disruption in supply or other emergency. Hard to believe I know, but higher prices at the pump should not qualify as an “emergency.” (Jim DiPeso offered a terrific summary of the reasons against opening up the Reserve.)

As I noted in another post (echoing the realities explained by others much more knowledgeable than me): “For all the talk of the ‘massive’ amounts of oil offshore and in Alaska and the ‘obvious’ need for us to just ‘drill, baby, drill’, we’re several decades away from full production in those regions, and the amounts anticipated will wind up meeting far less than even 5% of our needs. None of it will come cheaply. Drilling in the Arctic is a wee bit more challenging than punching a hole in the ground in Texas, and one does not require an engineering degree to understand that. The ‘drill, baby, drill’ crowd never gets around to spelling any of that out for us. Magical thinking is nice, as is a denial of pesky truths, but on the planet we occupy, it’s a fairly useless exercise.”

Oil is produced and consumed in particular places, but there’s a single worldwide price of oil that’s determined by global supply and global demand. It’s not possible for one country to unilaterally alter the price its own citizens pay at the pump by altering the quantity of oil it produces. A new well in the United States has exactly the same impact on global prices as a new well in Norway or Venezuela or Saudi Arabia and thus the exactly the same impact on the price American consumers pay.
And yet turn it into a political story and suddenly all this knowledge drops away. [3]

Gas prices are higher, and that’s not going to change much in the weeks and months and years to come absent recessions—and it’s best if we not actually plan on falling into another one of those. It may tick off a significant segment of the population and those leaders who seem to think that we are just entitled to lower gas prices because we’re … you know … special, but here’s the message: Grow up and get used to it! We’re better than that, and we need to demonstrate it now. Our future well-being demands no less than recognition of facts and reality. Ideology is nice and serves its own purposes, but it ought to have a much more limited role going forward.

We have a problem with oil production now—not just here in the United States—and it is not going to get better. Demand is increasing, and the amount of oil now being produced will not keep up with that increasing demand. Unfortunately for those who don’t like hearing that kind of news, we Americans do not live in protective bubble. Billions of other people in less-developed nations are eagerly and diligently working to elevate the quality of their lives, and they all need energy to make that happen … the same energy sources we use. More demand for shrinking supply = less for everyone, even we exceptional Americans. Higher prices are part of the ride. Reality.

It is not rocket science. It is not another in a long line of delusional nefarious, Muslim-supporting, job-killing, regulation-creating, socialist conspiracies, despite the best efforts of some self-serving, narrow-minded politicians and media personnel looking to score points with a select group of citizens who also don’t seem to get it. They’re better than that, too.

Higher prices are one noteworthy consequence of a finite resource that can no longer be extracted in amounts, in time, in the right conditions, at optimum quality, and at prices sufficient to meet ever-increasing demand. Facts. Yes, Middle East turmoil has something to do with those price hikes right now—perhaps most of it. But above and beyond this particular geopolitical constraint, we’re now entering a stage on the historical time line of fossil fuel production where supply will not meet demand. Period. It is just that simple. That basic economic problem carries with it a host of consequences and outcomes.

As demand grows in the next decade, we will not have the oil production capacity we will need to meet demand. Supply will then have to ration demand, and prices will skyrocket – with the likely outcome of bringing the world’s economy to its knees. - John B. Hess, chairman and chief executive of the Hess Corporation [4]

Republican House Speaker John Boehner offered his energy insights:

‘As gas prices go up, so does the cost of everyday life,’ [he] told reporters as he unveiled a campaign dubbed the ‘America Energy Initiative’ to increase supplies and roll back regulations.
‘It costs more to drive to work, to buy groceries, or just to get the kids to school. And at a time when our economy already isn’t creating enough jobs, rising gas prices hurt the very people we need to lead us out of our economic crisis: Small businesses,’ he said.

Coming from leadership whose insane and shortsighted budget-cutting proposals are derided by not just Democratic economists but also independents, Wall Street analysts, and John McCain’s own Presidential campaign economic advisor (among others, here) as doing nothing but costing hundreds of thousands of more jobs while pushing us closer to another recession, the Speaker’s concerns about creating jobs rings a tad hollow (although nice job on getting another buzz-phrase: small business, into the comments!). But should we be surprised? It’s all about the sound bites and not the unpleasant truths….We deserve better.

Not to be outdone, Senator McConnell was quoted as saying that we will all be dependent on fossil fuels for “decades to come.” If I were to tell you that your ears will bleed for decades to come, is that the beginning and end of my conversation with you? Might there be at least one moment when you pondered a couple of things in response? “Is this a good thing? Why is that? Would it make sense to change the behaviors or factors causing my ears to bleed?” Just wondering….

Another unpleasant and sure-to-tick-off some truth is that we—you and me—share blame as well.

The success, to date, of fossil fuels being able to meet energy demand any time required has led to a feeling of society wide unrealistic entitlement. This translates into a belief that whatever we want we can always have whenever we want it. This of course is leading to problems as it patently can no longer be maintained. [5]

We will need to be better and wiser than that. We are, so let’s prove it.

There’s no disputing that higher gas prices put a strain on most budgets, both personal and business. That in turn sets all kinds of financial dominoes into motion, with few of them leading to pleasant results. But unless and until we can individually and collectively wrap our minds around the fact that this is just the beginning stages of an entirely new way of living, transporting, producing, and consuming, we’ll continue to look for the same band-aid solutions that will only defer more pain until a bit later on, making the problems all the more difficult to contend with. That’s not much of a strategy. At some point, we need to find our courage and our wisdom so that we make new choices, have new plans and policies, and deal with a future that will be unlike the past in more ways than any of us probably realize.

And an aspect of courage easily overlooked or simply ignored is that regardless of one’s political philosophy, when leadership pursues policies clearly at odds with our long-term interests—even though the policy is entirely consistent with the ideology—something has to give. Since when is shooting ourselves in the foot a noble principle? We all pay a price when we meekly accept an absence of integrity and honesty in political discourse or policy-making itself.

This is not doom-and-gloom for next week or next month, but the process of stagnating if not outright declining oil production has begun. It will unfold over a considerable period of time, and in that regard we’ll have at least some opportunities to “adjust.” But that cannot be our salvation nor can it be the guiding principle for what we need to do as individuals, in our communities, and through our government.

“No plans = unnecessary chaos.” – Chris Martenson

We have both the opportunity and the capabilities to create a recognizable future for ourselves. Failing to take advantage leaves us at the mercy of a fossil fuel tidal wave that will in time change the landscape beyond anything we can envision now. I’d like to believe none of us thinks that that is our best strategy.

More to come….

* See the terrific Steve Benen discussion of the bizarre “reasoning” behind this comment.

[NOTE: I’ll be traveling the rest of this week. Please look for the 3rd and final installment in my series: Peak Oil Denial: Alive, Well, Still Not Helping next Monday.]

Sources:

[1] http://peakoil.com/consumption/the-energy-prophet/; The energy prophet – Peter Tertzakian’s conversation with Derek Brower, October 28, 2010 (original article at http://www.petroleum-economist.com/default.asp?page=14&PubID=46&ISS=25702&SID=727276
[2] http://news.yahoo.com/s/afp/20110310/pl_afp/mideastunrestuseconomypoliticsoil; US Republicans assail Obama as gas prices rise – March 10, 2011
[3] http://yglesias.thinkprogress.org/2011/03/oil-a-commodity-traded-on-a-global-marketplace/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+matthewyglesias+%28Matthew+Yglesias%29; Oil: A Commodity Traded On A Global Marketplace – March 11, 2011
[4] http://green.blogs.nytimes.com/2011/03/08/a-dark-warning-on-global-oil-demand/#more-94428; A Dark Warning on Global Oil Demand By Clifford Krauss – March 8, 2011
[5] http://www.energybulletin.net/stories/2010-11-25/how-sustainable-renewable-energy; How sustainable is renewable energy? by Roger Adair – November 25, 2010

A few more of those annoying facts to keep in mind as we (don’t) prepare for looming energy challenges, courtesy of three recent and excellent articles/interviews well worth the time to review in full [see Sources below for the links]:

Nothing can replace oil as the lifeblood of our culture and there is no domestic supply source which will eliminate or even reduce our dependence upon the 10 million barrels per day we import from foreign countries. There are some hard truths that are purposefully ignored by those who want to mislead the public about the grim consequences of peak cheap oil:
* The earth is finite. The amount of oil within the crust of the earth is finite. As we drain 32 billion barrels of oil from the earth every year, there is less remaining within the earth. We have drained the cheapest and easiest to reach 1.4 trillion barrels from the earth since the mid 1800s. The remaining recoverable 1.4 trillion barrels will be expensive and hard to reach. [1]

While it is critical we invest our current resources to finding solutions to the approaching energy gap, it’s also essential we approach the situation realistically and with as little magical thinking as possible. Currently, the US is consuming 10 million barrels per day more than it produces domestically….The short of it is there is going to be no single fuel source that replaces oil, and the transition to a post-Peak Oil future is going to involve a period of “less energy” for society for an undetermined period of time. [2]

We tend to have self-confidence in our ability to solve any problem. But we have no historical analog to the peak of fossil fuels, without a clear (and superior) replacement on the horizon. As a result of our fossil fuel binge, we have unprecedented problems in population, water, agriculture, fisheries, pollution, climate change, and so on. Our moment in history is rather special. It is dangerous to assume that we’ll gracefully handle problems at this scale, because such assumptions amount to dismissals and concomitant inaction. Unacceptable.
It bothers me that we don’t have a plan. It scares me that we (collectively) don’t think we even need a plan. Faith in the market to solve the problem represents a high-stakes gamble. We can and should do better. [3]

Another in the body of recurring themes of Peak Oil Matters is that we do ourselves no favors by denial and delusion. The psychological purposes they serve are no match for the potential harm we’ll cause ourselves over a much longer period of time by ignoring, hoping, or wishing. Strategies available to us, of course, but their usefulness—such as it may be—is completely useless at this point.

The authors above each discuss similar themes raised in prior posts of mine and by any number of others doing their best to put us all on notice that we need to start thinking about the energy issues at hand, and then thinking differently about how to address the challenges. More importantly, planning should be among our top priorities starting about ten years ago. We’re a wee bit behind.

Echoing proposals I offered several months ago (as have others), Jim Quinn boils it down succinctly:

If our society acted in a far sighted manner, we would be creating communities that could sustain themselves with local produce, local merchants, bike paths, walkable destinations, local light rail commuting, and local energy sources.

And Tom Murphy bolsters that theme, citing the much-discussed and highly-respected The Hirsch Report (a subject I’ve covered in a number of prior posts; see the Category in the sidebar):

The bottom line was that initiating all such crash programs in parallel 20 years ahead of the peak (or more to the point, 20 years before the start of decline) may be sufficient to avoid major hardships. Waiting until 10 years before the decline would result in major disruptions as the efforts struggled to establish a large enough foothold in time for the decline. Initiating the crash program at the moment the decline starts was characterized as having catastrophic repercussions. Not treated was the more politically realistic scenario of waiting until 5 years after the start of decline while we bicker about the fundamental cause of our woes and strategies for mitigation….
Because we will more likely wait until the pain of decline has made itself clear, we may find ourselves handicapped by recession and debt, hampering our ability to act boldly….
… [S]tarting a crash program toward replacement of finite fossil fuels too early has great up-sides and marginal downsides (opportunity cost); but failure to act has enormous downside for marginal upside.

What exactly are we waiting for? For all the happy talk about the “potential possible if only we do X and Y might work” options discussed by others [as I’ve cited ad nauseum in the many “Denial” posts], too many of us have been lulled into a false sense of security that the problems—if any—are being handled.

Jim Quinn wasn’t as “kind” in his assessment (but he’s right) while pointing out a serious consequence of this pattern of deceptions and half-truths offered up by not only politicians but also by many in the oil industry who know better (and, as I’ve also emphasized repeatedly, by our own failure so far to learn more):

American presidents have propagated the Big Lie of energy independence for the last three decades. The Democrats have lied about green energy solutions and the Republicans have lied about domestic sources saving the day. These deceitful politicians put the country at risk as they misinform and mislead the non-thinking American public….
The propaganda blared at the impressionable willfully ignorant American public has worked wonders. The vast majority of Americans have no clue they have entered a world of energy scarcity.

For all the talk about the magic of Technology riding to the rescue, almost all of the research, planning, testing, marketing, etc., etc., etc required before establishing various Plan Bs as solutions require fossil fuels to make the processes happen from A to Z. What gets prioritized in a future with fewer of those resources available to begin with? Just how quickly will these various, successfully-tested and fully-implemented Plan Bs be showing up on our doorsteps?

Does anyone have a full appreciation for just how much and how many (processes, productions, transportation plans, products, etc., etc.) will have to be effectively and efficiently converted/prepared/tested for successful utilization of these Magic Technology Saviors (while fossil fuel reserves continue their steady march down the Depletion Slope)?

As Tom Murphy so nicely summed up: “Even though energy may represent something like 10% of GDP, it’s what makes the other 90% possible.”

Is anyone paying attention to the energy “quality” of all the alternatives being considered/hoped for? There’s not a single unconventional (tar sands, shale) or alternative (wind, solar, etc) energy resource that comes close to matching the energy density and efficiency of the hundreds of billions of barrels of crude oil we’ve consumed in the last century and a half. Hello! One need not be schooled in quantum physics, advanced algebra, or geology to appreciate that replacements which are for starters less efficient and more costly are not going to actually “replace” crude oil’s extensive benefits. They’re at best poor substitutes, and how might the consequences of that fact play themselves out for the billions of people with their trillions of products and demands and needs currently supplied by crude oil? Hello again!

With almost all of the major oil fields now on the downslope of their own production peaks, how much stock should any of us be putting in the still-rosy assessments of ramped-up production from those same fields over the next few decades? How does that math work? (We’re of course blindly assuming that these primary oil exporters will of course continue to serve the needs of Americans before … their own citizens? Seriously? Who gets to deliver that message? Safe to assume there might be a complaint or two?)

The most optimistic, arguably-realistic assessments about production potentials of the various unconventional and alternative resources will barely match current depletion rates. It’s now been several decades since we were finding more oil than was being consumed. Given that these crude oil wannabes aren’t as efficient, what kind of math is     being passed around to make this all seem acceptable and not worth a moment’s worth of concern?

As Tom Murphy again summed up for us:

The geological upshot is that oil is not a lake into which we thrust a straw, slurping as fast as we wish. Rather, oil is a viscous fluid in porous, permeable rock that resists rapid recovery. It’s not a spigot or valve that we can turn at will. Nature has a say in how fast we can claim the oil….
The lesson is that we don’t have full control over oil production. If previous discoveries are in decline, and we are not adding new fields at a replacement rate, we should expect aggregate decline.

Each of the three referenced authors do us all a great service by discussing these and other relevant considerations (economic and geopolitical, for example) which put a bit of a crimp in the blind happy talk which gets far too much airplay … at our expense.

I think I can safely speak for each of them, and almost every other proponent of Peak Oil, when I say that I would LOVE to be wrong about all of this! But the harsher truth is that there are just too many warning signs in too many aspects of fossil fuel exploration, discovery, production, cost, quality, and supply to ignore it all and expect that hope, wishes, good thoughts, and crossed fingers are all we need.

The potential exists, therefore, for major disruption to our accustomed ways of life. We will become viscerally aware of how fundamentally important oil is to all that we do.. It’s not just another commodity like sneakers or widgets. Curtail transportation and watch the grocery store shelves struggle to stay full. See food prices escalate and cause immediate hardships around the world. Find out how far-flung about the globe the material resources are that comprise a cell phone. [Tom Murphy]

So, assuming the Peak Oil camp is on to something, what’s the likelihood for a disruption-free transition to another energy source that can replace the energy output we currently enjoy from oil? … How realistic are these hopes?
Not very. [Martenson and Rapier]

Shouldn’t we at least be having broader and more meaningful discussions starting right about now?

Sources:

[1] http://www.marketoracle.co.uk/Article31542.html; U.S. Energy Independence – The Big Lie by James Quinn – 11.15.11
[2] http://www.chrismartenson.com/blog/robert-rapier-scientific-challenges-replacing-oil-renewables/65387; Robert Rapier: The Scientific Challenges To Replacing Oil with Renewables [interview with Robert Rapier by Chris Martenson, posted by Adam] – 11.26.11
[3] http://physics.ucsd.edu/do-the-math/2011/11/peak-oil-perspective/; Using physics and estimation to assess energy, growth, options by Tom Murphy – 11.01.11

Claiming there is an oil limit on the economy and why peak oil is inevitable is usually talked down by saying its an unsure theory at best, and controversial, fear mongering or defeatist at worst. The totally simple numbers which prove it are however not
Einstein-type mathematics and are not impossible to understand – - only by the badly intentioned or plain stupid. [1]

Not my words, but for anyone who has spent enough time considering the facts about crude oil production/Peak Oil, it is difficult to come to grips with not only the level of denial exhibited by too many, but to understand what benefits to society at large might they think exist by the false claims, misrepresentations, and fact-free statements repeated ad nauseum, despite the clearly incorrect nature of their offerings? (Upcoming posts and a series devoted to the topic will explore the issue in more detail.)

I understand that those profiting from maintaining a status quo in fossil fuel production will do their damnedest to make sure we’re not devoting resources and efforts to alternatives. The fear and agitation they use as primary props suggests their good intentions and beneficent character could use some fine-tuning.

But the repetition of the same nonsense day after day is almost comical at this point, and would be just that and no more if it weren’t for the harm misinformation and half-truths leave scattered in their wake. If citizens who, through no fault of their own, are not being supplied with the truth, how can they expect policies and measures to effectively address their needs and concerns?

But like clockwork, the same sets of misleading statements and disingenuous arguments continue apace.

James Delingpole’s Commentary review offers plenty of criticism of Daniel Yergin’s 800-page book, The Quest: Energy, Security, and the Remaking of the Modern World. But Delingpole praises Yergin’s chapter on peak oil as the one ‘that performs the greatest public service.’
It matters because so much dangerous political nonsense — especially in the environmental movement — depends on it. If you believe, as peak-oil theorists do, that global oil reserves are about to run out, then clearly it makes more sense to go down the road many greens have long been urging us to take: Rein in energy consumption; tax fossil fuels; encourage renewables; ration air-conditioning and hot showers; deindustrialize. [2]

Rationing showers? Seriously? As I discussed in a series (first of five posts here) this past November and December, an immediate red flag goes up as soon as a purported debunking of the “myth” of peak oil (wouldn’t it be nice if facts continued to be treated as facts? What a concept!) suggests that Peak Oil proponents believe or advocate that we’re “running out of oil/reserves.” (I—among others—addressed that specific point here and here.) It’s a numbingly idiotic statement to make in light of our continuing assertions and facts to the contrary, but when you have no rational or legitimate argument to make, then I guess that making stuff up is your best Plan B. Certainly sounds plausible to the undiscerning uninformed….

The same blogger then praises Yergin’s Commentary reviewer for pointing out what must surely be the piece de resistance: “Yergin runs the figures, and they are amazing: In 2009, for example, after a year’s worth of oil production at around 90 million barrels per day, the world’s proved oil reserves were greater at the end of the year (1.5 trillion barrels) than they were at the beginning.” Holy Misdirection, Batman!

Chris Nelder said it best:

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. [3]

To what end?

“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. (A more thorough fact-based discussion of Mr. Yergin’s assertion—with additional links and commentary—can be found here.) 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.

The writer then offers this:

But such is the sophistication of the energy industry. Today it is worth $65 trillion, and in two decades it will be worth $130 trillion — more than enough incentive for entrepreneurs, scientists, and big business to develop increasingly imaginative ways of locating and exploiting the world’s resources. In the case of oil, this means learning how to drill in more hostile terrain, such as the deep-ocean sites off the coast of Brazil and in the Gulf of Mexico.

What does the estimated worth of an industry two decades from now have to do with the fossil fuels available to us on demand at reasonable prices now and in the intervening years? “Incentive” is all fine and well, but while conventional oil fields continue their daily depletion, how much “incentive” will fill your gas tank? How many products can be transported by the freight industry—or manufactured by industries dependent on crude oil to provide supplies or power their own processes—using “increasingly imaginative ways”? And I’m not all that comforted by “learning how to drill in more hostile terrain.” What does that suggest about the quality and availability fossil fuel supplies? Not cheap, either.

It’s possible that if you search through enough sofa cushions you’ll find enough spare change to retire on, but that’s not really much of a financial strategy, is it? Oil exploration is getting too close for comfort to the sofa cushions stage.

We’re better than that, and we need to demonstrate it. It will take our best if we’re to have any reasonable possibility of successfully adapting to a future with different quantities and quality of energy sources to power us all. These dopey comments aren’t demonstrating much in the way of “better.”

Citing an “excellent” article by economist and professor of energy policy Dieter Helm, another recent entry into the curious world of peak oil opponents offered this:

Helm rightly asserts, ‘The Earth’s crust is riddled with fossil fuels’ adding ‘there is enough oil and gas (and coal too) to fry the planet several times over.’ And his words echo Huber and Mills‘ definitive quote on the subject, ‘Energy supplies – for all practical purposes – are infinite’. The issue is not (and never has been) too much or too little of a given resource. It has always been whether prices are too low or too high to make extraction viable. Today, the shale gas and oil “miracle” – or rather man’s ingenuity in finding new ways to tap previously unrecoverable resources – has yet again blown a gaping hole in the peak-ist argument; as the end of year figures make only too plain. [4]

Where does “fry the planet” fit on the Right’s quantity scale: Is it more than “massive” but less than “vast”? How many barrels of conventional crude oil in “riddled”? And as for “infinite” supplies of energy (the “definitive quote” no less!) … I guess that depends on one’s definition of “for all practical purposes.”

If it’s the fact-based one used here on Planet Earth, our energy supply’s availability is not quite so infinite. But in a fact-free world … sure, why not? But if our energy supply is so infinite, why are we even having discussions about Peak Oil? Shouldn’t it be obvious that oil companies should just be going around and sticking giant straws in the ground so they can pull out some of those infinite supplies and keep oil priced at … oh, how about five cents per gallon? Sound good? Why are we going after shale oil and tar sands and deep water resources instead? What does that basic fact suggest to all but the most delusional?

In another discussion of this same “excellent” article, the author discusses several supply and demand arguments presumably serving as the foundation for Peak Oil proponents. Others more qualified than me have discussed oil reserve calculations and enhanced recovery methods, so I’ll take a pass.

But two other frequently raised topics (flaws in proponents’ arguments) are put forth. (And let’s not forget the all-encompassing magic of “Technological advances could potentially extend depletion rates of existing wells and new reserves.” Ah yes, the could potentially perhaps might if only meme):

Oil is not fungible: This is among the most serious flaws in the argument. History is replete with examples of fuels being replaced by other fuels. Power is now generated using gas and renewable energy in Europe, which has diminished the importance of coal and oil. Electric trains have largely replaced steam and diesel. Seen in this light, replacing oil with other fuels could mitigate spikes in oil prices.

Insatiable demand from China and India: Helm argues that peak oilers see China and India’s growth as exogenous to global economic performance. In reality, China’s growth depends largely on U.S. and European consumption, fueled by their prosperity. Turn the switch off, and the slower economic growth could ease any supply pressure on oil. [5]

One omission in the assertion contained in the first paragraph (aside from the “could mitigate” comment): Facts. Remember them? “Replacing oil with other fuels” … which fuels? How? How quickly? How much? How effective? How soon? By whom? And those are just off the top of my head. Great sound bite, but it leaves much to be desired if meaningful, factual content is your thing.

These other products are useful, but they are not as energy-rich, versatile or easily transported as oil. Our current infrastructure is heavily dependent on oil inputs with no real substitutes available in the quantities required….
The hard-to-get oil resources are large, but they take a long time to develop and require strenuous, expensive and energy-intensive methods to extract. All this, when combined with the relentless depletion of existing fields, spells little or no growth in the worldwide rate of oil production in the coming years. [6]

As for the China-related comment in the second paragraph above: “Turn the switch off, and the slower economic growth….:” So, if China stops buying our goods, then American businesses lose revenue, which means that they aren’t making as much money, which means they can’t purchase from their suppliers, and of course they can’t maintain the staffing levels they have when they are selling to China, which means workers lose jobs, which means they don’t have enough money to buy from other businesses, which means.…

Stop me when this turns into good news.

Sources:

[1] http://www.marketoracle.co.uk/Article32402.html; There Will Be Oil – Versus – Peak Oil Now by Andrew McKillop – 01.01.12
[2] http://lockerroom.johnlocke.org/2012/01/03/another-blast-against-the-peak-oil-myth/; Another blast against the ‘peak oil’ myth by Mitch Kokai – 01.03.12
[3] http://www.smartplanet.com/blog/energy-futurist/the-politics-of-peak-oil/326; The politics of peak oil by Chris Nelder – 02.01.12
[4] http://www.energytribune.com/articles.cfm/9497/A-Shale-Fuelled-Economic-Miracle-for-2012; A Shale-Fuelled Economic Miracle for 2012 by Peter C. Glover – 01.05.12
[5] https://www.gplus.com/oil/insight/helms-critique-on-peak-oil-why-post-oil; Helm’s critique on peak oil: Why post oil prosperity is feasible – Analysis of Peak Oil and energy policy – a critique by Ricardo Barcelona [Managing Director, Barcino Capitas Limited] – 01.05.12
[6] http://www.aspousa.org/index.php/2012/01/fossil-fuels-vs-renewables/; Fossil Fuels vs. Renewables: The Key Argument That Environmentalists are Missing by Kurt Cobb – 01.23.12

Ten months ago, I offered this observation:

This is the reality: we’re NOT running out of oil, and we won’t for several more decades. But that is not the point and never is when discussing peak oil. Peak oil is about the rate of production, the quality of oil, the ease of access, refinement, availability, and affordability. Each of these production elements are now more challenging to meet, and is now happening when worldwide demand is ratcheting up. Finding fewer and smaller fields that consistently fail to keep up with depletion rates, producing less oil, often inferior in quality, more slowly, at greater expense, with much more effort required to satisfy increasing demand (just for starters) is not a recipe for success, profitability, and availability. And it’s not going to get any better. The steady march down the back slope of oil production is soon upon us, and very little that we produce, use, or depend on will remain unaffected by that truth.

Reality can be incredibly inconvenient, but we do ourselves no favors now, short-term, and especially long-term by either falling for the fact-free, feel-good nonsense offered by too many; deluding ourselves into thinking “someone else” is working on this and so we need not be concerned; or perhaps worst of all: simply refusing to educate ourselves about what we’ll soon enough be facing.

With that in mind, I thought it might be best to offer up some inconvenient truths about our fossil fuel supplies we would all do well to keep in mind. How we respond to the realities at hand is absolutely critical to the different future we’ll find ourselves in before too long. Preparation is a good thing; knowledge even better.

A little more than a year ago, Jeffrey Rubin offered commentary on the International Energy Agency’s then-current World Energy Outlook. His sobering take:

Output from currently producing fields is projected to fall precipitously, looking ironically like the steeply declining trajectory of peak oil’s Hubbert curve. (I say ironically because the IEA has historically denied the existence of peak oil.) According to the report, by 2035 three quarters of currently operating oil fields won’t be producing anymore. In fact, current fields are only expected to account for less than one fifth of that     year’s production.
That leaves over 80 per cent of the IEA’s 2035 production projection coming from new oil fields, ones that either haven’t yet been developed or haven’t even been discovered. And the contribution from that undiscovered category alone is still far greater than the one from currently producing fields. That’s a tall order for new field discovery. especially since almost none of it is cheap or easy….

Take that in for a moment. Those projections offer comfort about the future availability of high-quality crude oil only if Major Denial is your standard MO and/or happy, fact-free optimism is your preferred glide path through life.

With all indicators suggesting that we reached Peak Oil production rates more than five years ago (see this as just one observation on the issue), how we pull ourselves out of these difficult economic conditions and restore ourselves onto the path of continuing growth (along with those same expectations from several billion other inhabitants on the planet) demands some consideration from all of us.

If that didn’t get your attention, how about this:

In the 2011 World Energy Outlook by the IEA the Production of Crude Oil from the oil fields that produce oil in 2010 in expected to drop by over Two-Thirds by 2035. Quote: ‘We project that crude oil production from fields that were producing in 2010 will drop from 69mb/to 22mb/d by 2025 – a fall of over two-thirds’. But the IEA still expects the crude world production to remain at 67,9 mb/d per day 2035 from Crude Oil Yet to be found and Yet to be developed (WEO 2011: 122-123)….
The World’s Largest Oil Fields play a very important part for supplying the world’s energy demand. The Top Ten Fields produced 14,26 mb/d; around 20% of the World’s Total Oil Production. If the next ten fields were added the figure was around 25%. In total there was around 70.000 Oil Fields producing oil in 2007 and 20 of these fields produced a fifth of all the oil (WEO 2008: 225-226).
Another fact also stands out very clear; none of these fields has been discovered recently; the ones that was discovered the latest was discovered in 1982 and 1985. Only two of these fields hadn’t reached their Peak in production in 2007; the rest where on decline. During the summer of 2011 there were big headlines concerning an unusually big oil find outside the coast of Norway that is expected being able to produce up to 500-1200 million barrels of oil. Ghawar with its production of 5 million barrels of oil per day produces this amount of oil in 100-210 days. The trends of smaller and smaller findings are something often stressed by researchers within the Peak Oil movement; smaller and smaller fields of oil are being discovered even though the technological tool available to search for new fields constantly develops. [1]

This author’s conclusion states an obvious and painful truth: “[W]e will either have to be very lucky in our explorations or find an enormous amount of small fields.”

Despite putting their best foot forward, those in denial about Peak Oil, who laud the potentials of the tar sands and shale oil (and even those advocating the very necessary focus on alternative sources of non-fossil fuel resources) are unable to come up with any scenarios where production of these unconventional and alternative reserves make up what will be lost over these next few decades from the conventional oil fields we’ve long depended upon.

Denial remains an option, but its utility diminishes by the day. We need to be better.

If subtlety is not your thing, Henry Blodget offers us a more direct assessment:

Oil is at $100 not because of some world war or supply shock or other Black Swan, but because the world’s emerging economies are demanding more oil while the world’s oil producers are producing pretty much the same amount of it….
We’re highly dependent on a finite fuel source controlled by crazy people who hate us
We’ve done next to nothing about this problem for four decades
In some places, this inaction on our part would be referred to as insanity. Or at least gross stupidity.
In other places, it would just be called denial. [2]

And in a recent post by Brad Plumer, more sobering assessments were offered for those still struggling with facts and reality:

Most of the older, easier-to-drill oil fields appear to be running near full capacity, while newer supplies often prove costly and difficult to drill….
But here’s another way to look at it. As a chart from ExxonMobil’s new 2012 Outlook for Energy (via Gregor McDonald) shows, the vast bulk of our oil comes from those older, easier-to-drill fields, with more recently discovered supplies playing a smaller and smaller role:
As ExxonMobil details in its report more than 95 percent of today’s oil comes from fields discovered before 2000. About 75 percent comes from pre-1980 discoveries. While many massive, older fields can keep gushing for decades — Saudi Arabia’s Ghawar field, first tapped in 1951, still hums along at 5 million barrels per day — they seem to be dwindling overall. As Exxon’s chart shows, reserves discovered in the 1960s and before maxed out around 1980 (even as oil companies are trying to recover additional oil from older wells with better technology). What’s more, it seems to be getting tougher to squeeze oil out of newer finds. [3]

This is what confronts us: do we choose to spin it so it sounds better, or do we accept it and then work collectively to meet the challenge?

Simple choice … monumental ramifications.

Sources:

[1] http://www.americanpreppersnetwork.com/2011/12/peak-oil-and-our-mental-models.html; Peak Oil and Our Mental Models – The WikiLeaks Cable and The Worlds Largest Oil Fields, from  http://sibitotique.blogspot.com – 12.15.11
[2] http://www.businessinsider.com/middle-eastern-oil-addiction-2011-12; It’s 2012–It’s Just Absurd That We’re Still Addicted To Middle-Eastern Oil by Henry Blodget, 12.28.11
[3] http://www.washingtonpost.com/blogs/ezra-klein/post/most-of-the-worlds-oil-comes-from-aging-fields/2011/12/13/gIQAaM6CsO_blog.html?wprss=ezra-klein; Oil’s getting harder and harder to come by – Brad Plumer, 12.13.11

What would the New Year be if we didn’t have an offering of more half-truth, delusional nonsense about our fossil fuel status?

Amy Myers Jaffe (nice takedown here) wrote an article for Foreign Policy a while back, serving up another example from the playbook of denial nonsense. As I suggested in a series of posts at the end of 2011 [first one here], it’s high time we start recognizing the strategies of half-truths employed by those whose primary vested interest appears to be their own wallets much more so than the well-being of our nation. But this is a free country, and if nonsense is what you choose to spout, there are forums everywhere.

Just a sampling from that article of what continues to pass for the valuable exchange of information, with my commentary in the [ ] following:

Geologists have long known that the Americas are home to plentiful hydrocarbons trapped in hard-to-reach offshore deposits, on-land shale rock, oil sands, and heavy oil formations….The problem was always how to unlock them economically.
But since the early 2000s, the energy industry has largely solved that problem. With the help of horizontal drilling and other innovations, shale gas production in the United States has skyrocketed from virtually nothing to 15 to 20 percent of the U.S. natural gas supply in less than a decade. By 2040, it could account for more than half of it.

[Facts—damn them!—suggest that the energy industry hasn’t exactly “solved” the problem, and “could account” is not the assurance we should be counting on. Chris Nelder—damn him—took this proposition apart in a very nice post. Nelder had the audacity to use facts, calculations, statistics, reports and assorted other so-called evidence to rebut this now-familiar claim about our natural gas potential, when he could have played by the same rules and tossed in a few “might possibly’s” and “if only’s” … but no, he had to use actual information. I hate that!]

… analysts are predicting production of as much as 1.5 million barrels a day in the next few years from resources beneath the Great Plains and Texas alone — the equivalent of 8 percent of current U.S. oil consumption. The development raises the question of what else the U.S. energy industry might accomplish if prices remain high and technology continues to advance. Rising recovery rates from old wells, for example, could also stem previous declines. On top of all this, analysts expect an additional 1 to 2 million barrels a day from the Gulf of Mexico now that drilling is resuming. Peak oil? Not anytime soon.

[A couple of questions come to mind: Which analysts? Using what evidence? “predicting … as much as” means what, exactly? As for “what else the U.S. energy industry might accomplish if prices remain high and technology continues to advance”: I believe that “if prices remain high” is good for oil company executives and … that’s about it. So that’s not necessarily a good thing for most of us, but if “technology continues to advance”, why then, we might perhaps possibly have some potential good news in the future. Fantastic!]

The picture elsewhere in the Americas is similarly promising. Brazil is believed to have the capacity to pump 2 million barrels a day from “pre-salt” deepwater resources, deposits of crude found more than a mile below the surface of the Atlantic Ocean that until the last couple of years were technologically inaccessible. Similar gains are to be had in Canadian oil sands, where petroleum is extracted from tarry sediment in open     pits. And production of perhaps 3 million to 7 million barrels a day more is possible if U.S. in situ heavy oil, or kerogen, can be produced commercially, a process that involves heating rock to allow the oil contained within it to be pumped out in a liquid form. There is no question that such developments face environmental hurdles. But industry is starting to see that it must find ways to get over them, investing in nontoxic drilling fluids, less-invasive hydraulic-fracturing techniques, and new water-recycling processes, among other technologies, in hopes of shrinking the environmental impact of drilling. And like the U.S. oil industry, oil-thirsty China has also recognized the energy potential of the Americas, investing billions in Canada, the United States, and Latin America.

[Where in our planning for the future should we put “similarly promising”? As regards the second sentence about Brazil, who is doing this “believing” about that nation’s capacity? When might this happen? I didn’t note anything about the actual costs or process of extracting this crude “more than a mile below the surface” of the ocean … I’m assuming some facts might be available to instruct us as to what’s involved and what we     can expect? This nonsense—emphasis mine—speaks for itself: “And production of perhaps 3 million to 7 million barrels a day more is possible if U.S. in situ heavy oil, or kerogen, can be produced commercially, a process that involves heating rock to allow the oil contained within it to be pumped out in a liquid form.” Perhaps it’s possible if? This is the basis for the happy-talk about our fossil fuels? Seriously? I didn’t happen to catch any details about what’s involved in “heating rock.”     The facts would spoil all that optimism, and God forbid we be obliged to deal with reality….And that kerogen deal: they’ve been trying for a few decades now….]

And then there’s this bit of almost-factual opinion from Robert Bradley, touting his very own Institute for Energy Research’s report on our energy “inventory.”

The first red flag is right there in the title of his Forbes piece: “America’s Massive Energy Potential Awaits, Mr. President”

As I noted in that above-referenced November 15 post of mine, “massive” and “vast” are straight from Page One of the right-wing handbook on misdirection and half-truths: use impressive (but unquantifiable) terms to bolster your claim … and hope readers aren’t curious enough to ask how much?

The real problem is that much of our resources are not being developed because of antiquated, heavy-handed government regulations. As a consequence, the American economy is being deprived of significant job creation and new investments….
The blame rests largely on unnecessary and onerous government regulations. Many offshore reserves are still blocked by outdated moratoriums no one is taking the time to reform. New permit applications are almost always subject to massive bureaucratic delays. Existing energy operations have to navigate labyrinthine — and costly — regulations. And regulators themselves are largely free to impose new controls on energy development with little to no congressional check.

This tiresome rant from the Right just isn’t adding much to the discussion any more. It’s a great red-meat sound bite, but devoid of any factual content, its benefits to our well-being are, well, non-existent. (But if you use “liberal”, “taxes,” and “regulations” in a sentence, you earn bonus points!)

Why are these regulations “unnecessary”? What “massive bureaucratic delays” (unique to this issue) and “labyrinthine [sure sounds awful!] — and costly — regulations” are involved? What might happen absent these socialist-liberal-Martian-tax-crazed regulations? “[R]egulators themselves are largely free to impose new controls on energy development with little to no congressional check.” Sounds awful! How about a “for instance” unique to this situation (with context, of course, which I realize violates a basic rule of the playbook)?

Seriously? “Regulations” are all that stand in the way of a limitless bonanza of energy resources for us? These johnny-one-note offerings suggest nothing more than a failure of both imagination and willingness to engage in meaningful and honest conversations.

I remain at a loss to understand why so many insist on tactics like these which have almost no relevance to legitimate, long-term solutions. Sure would be nice to toss some integrity into the mix now and then.

The author then offers this impressive-sounding collection of statements:

Total recoverable oil in North America exceeds 1.7 trillion barrels, which is more oil than the entire world has used over the last 150 years. And that amount alone could meet the energy needs of the United States for the next 250 years.
An estimated 1.4 trillion of those barrels are buried under American soil. For some perspective: the total proven reserves in Saudi Arabia is just about 260 billion barrels.
And even that 1.4 trillion figure might be an underestimation. Future technological innovation may well lead to improved detection techniques, helping us locate oil deposits currently uncovered. Or innovation could improve extraction techniques, enabling us to tap into reserves previously thought unreachable.

I can’t help myself [my emphasis]: “Future technological innovation may well lead to improved detection techniques, helping us locate oil deposits currently uncovered. Or innovation could improve extraction techniques….” Really? More Page One happy talk about all of the “could possibly perhaps” and “just might if” justifications (I use that term loosely). When do we declare a winner in the Happy Talk v. Facts competition?

I don’t recall seeing much in the way of an explanation or facts about all of these magical totals. Costs? Quality? Environmental concerns? Time factor? Return on energy investment? How about depletion from existing fields as a factor?

Robert Rapier offered a damning rebuttal to this author’s propositions, starting with a big hint in the title of his piece: Why Some Republican are Delusional About Oil and Energy Policy. (To be fair, he also offers criticisms of some of the positions offered by Democrats, and commends each party as well for certain other approaches.)

Like Mr. Nelder above, Mr. Rapier wasn’t content to just toss out a fact-free statement and end the discussion there. No, he had to go and conduct an investigation, and then analyze the facts offered above. Damn him! (Another hint Rapier offers comes from a sub-heading discussing the very same report prepared and cited by Robert Bradley: “Misleading Study Obfuscates Recoverable Reserves.”)

Rapier begins his analysis with this: “I find these sorts of reports highly misleading, for the following reason” and then quickly dismantles Mr. Bradley’s contentions in the next few paragraphs.

He then concludes:

The truth is that it will always take too much energy to produce some of those oil resources, placing some of them forever out of reach. But, the magical thinking from many Republicans here is that the oil is there if the political will is there for taking it. The danger in this kind of thinking is exactly the same as the danger in thinking we can smoothly transition to renewables: It diminishes the urgency of our energy predicament. After all, if people believe that renewables will save us, or that more drilling will save us — we are going to put off making the tough decisions that could really save us in the long run.

All of us—conservatives, liberals, whatevers—would do well to heed his advice.

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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!

[NOTE: Back in April, I followed-up on a series of posts which I first began a year ago and last discussed back in April ([links below*). In that series, I’ve discussed the apparently limitless ability of too many to either ignore facts about oil production entirely, or who instead resort to efforts where disingenuous arguments and/or half-truths serve as sole support for their positions. The net effect is that these attempts do little more than confuse their followers, who likely do not have the time, interest, or inclination to explore the truths on their own (perfectly understandable ... life tends to interfere with lots of options). This post is a second another follow-up.

For starters, I’ll offer some familiar and popular contrasting views on the topic of Peak Oil and oil supply (the misleading, incorrect claim made in the first sentence below was addressed in the first of my two prior posts):

“The theory known as ‘peak oil’ has at its core the belief that we are rapidly running out of oil....

“When it comes to our day, the philosophy of scarcity comes full circle in the peak oil theory.  At its heart this philosophy of scarcity utterly fails to take into account human ingenuity, economics, technology and other important factors.  In other words, long before oil actually ran out, the price would go up so much that people would cut back on its use, find alternatives and seek out new sources of supply.” [1]

“Our abundant and rich lifestyle is all made possible from cheap and abundant energy. Our farmers use fertilizers made from natural gas. The tractors and combines burn diesel fuel as do the trucks that transport our food to either processing plants or the grocery store. Our stores are stocked with goods that are either made here or abroad. The goods arrive by planes, trains, boats or trucks that also burn fossil fuels. Everything we eat, consume, or enjoy is made possible through the production of energy. Liquid fuels have created new landscapes of concrete and asphalt highways, parking lots, shopping centers and endless urbansprawl.

“This is all made possible because of oil, the single most important source of primary energy in our world. Crude oil has changed the very tempo of modern life. Oil has increased the productivity of modern economies. It has accelerated as well as deepened the process of economic globalization….

“Oil has changed and transformed the landscape of the world.” [2]

As to the comments offered in the first quote above, I’m always struck by the glib dismissal of any consequences of declining oil production because of some combination of “human ingenuity, economics, technology and other important factors.” Economics has no impact on geology, so no matter how diligent one is in expounding economic principles, they will not create more fossil fuels. That supply is finite … period!

Certainly human ingenuity can always be counted on. Civilization has advanced to this date and in the manner it has because of that remarkable capacity demonstrated since the very dawn of mankind. And we cannot rationally dismiss the tremendous impact of technology working hand-in-hand with human ingenuity to create the marvels of this day and age.

But it is the author’s follow-up comment, repeated by too many others who discount the reality of our finite supply of economically feasible fossil fuel resources, which continues to astound me. “In other words, long before oil actually ran out, the price would go up so much that people would cut back on its use, find alternatives and seek out new sources of supply.”

The statement or a close approximation thereof is almost always uttered with the same assurance one has in stating that the sun will rise in the East tomorrow morning. Basic economic theory is absolutely correct that when the price of something goes up, almost always demand decreases until some other price equilibrium is reached or a less expensive substitute is found to be adequate. That’s not the bone I’m picking.

It’s the same glib certainty that “… people would find alternatives and seek out new sources of supply.” Just like that? I’ve yet to see any person challenging the reality of Peak Oil make a similar if not identical pronouncement who then explains in any detail whatsoever just how we go about finding these alternatives in any manner such that a transition from fossil fuel usage to the “alternatives” is achieved without considerable disruptions to our ways of living and producing.

Given the truthfulness of the second quote I offered above, do these dissidents have any conception at all of what kind of massive, monumental, nearly-inconceivable (take your pick) effort will be required to even approximate a seamless transition away from fossil fuels? Costs? Time? Research? Production to scale? Testing? Marketability? Resources? Expertise? Public understanding? Infrastructure? Pricing? Supply? Demand considerations? Just a few of the many questions that must not just be asked, but answered, before we’re all comfortably making use of “alternatives” and “new sources of supply.” And let’s not forget one of our major political parties’ relentless, shortsighted, narrow-minded efforts to cut back on investments in our future and in those very alternatives. Apparently waiting until we’ve fallen over the cliff before addressing the problem on the scale needed is the strategy du jour for some of our “leaders.” Great!

This flippant assertion that we’ll just simply move on to something else just like that does as much disservice to the future well-being of our citizens as anything I can think of. And in a too-crowded field of nonsense, that’s quite a determination! Listeners who have neither the time, nor interest, nor awareness, nor inclination to examine the matter further are then left with the “comfort” of knowing there’s nothing to be concerned about now, or any foreseeable point in time because some combination of magic “out there” by “others” will take care of this challenge before we know it! Does anyone on that side of the Peak Oil fence have any concept about the necessity of long term planning, integrity, or honesty in dealing with a challenge that will take us decades to fully adjust to? Is “get-what-I-can-today-consequences-tomorrow-be-damned” the strategy?

One final observation on this author’s recent post: “Just in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added.” Wonderful, except that those are not the same issues. Produced oil is not replaced by an accounting adjustment. An explanation of that accounting “trick” which created the “new reserves” is conveniently omitted from discussion. Of course, if you are going to make an argument in which truth will disprove your points as soon as the words start flowing, it sounds better if you skip the facts entirely! (See this explanation and refutation of this misleading “new reserves” meme; and read Mason Inman’s entire series on the Daniel Yergin essay in the Wall Street Journal—links provided in the article I’ve just referenced—it is well worth the read.)

The real issue is much simpler:

“… our Peak Oil problem is a case of simple mathematics.

“We stopped finding large oil fields 40 years ago. The production from those fields decreases every year and we simply can’t bring enough smaller fields on fast enough to offset those declines and grow daily oil production….

“The demand side of the equation is no help either. Population grows every year. And the most populous countries in the world grow per capita oil production every year as well. When you consider how many people are in China, India and other emerging countries and then consider how little oil each of them uses, it isn’t hard to see that changes in their lifestyle to include more oil consumption will make a big difference.” [3]

And if that won’t convince you, here’s a bit more:

“Global oil production (crude + condensate + natural gas liquids: C+C+NGL) has been on an 82 million barrel per day plateau for 7 years despite record high oil price, deployment of technology such as horizontal wells and 3D seismic, the development of new oil provinces such as offshore Angola and unconventional play concepts such as the Bakken shale in North Dakota. Oil production rose during the great oil bear market from 1980 to 1998 but has largely stagnated during the great bull run ever since….

“Any discussion about peak oil should begin with decline rates. Yergin’s organisation CERA is well aware of this fact having produced an excellent report on the subject a few years ago.

“Decline is the natural process whereby production rates fall as a result of depressurisation of the reservoir combined with water ingress into the oil-bearing strata. Oil production companies go to great lengths to mitigate for decline by injecting water or gas to maintain pressure, well maintenance programs (work overs) and by drilling new wells. Observed declines are therefore much less than natural declines but nevertheless run at a globalised average of around 5% per annum.

“With global C+C+NGL production running at 82 mmbpd, 5% observed net declines will wipe out 4.1 mmbpd capacity every year. What this means is that the oil industry must add 4.1 mmbpd new capacity every year from new field developments just to stand still. And this new capacity has to be derived from a stock of second-tier assets such as deep water Gulf of Mexico, heavy sour oil in Saudi Arabia, Arctic oil or the Bakken Shale since most of the favoured tier-one assets have already been produced.”

Just when ya think you’ve got the “farce” of Peak Oil pinned down, more of those damned facts pop up at the most inconvenient time!

* http://peakoilmatters.com/2010/10/18/more-on-the-message/

http://peakoilmatters.com/2010/07/12/peak-oil-more-fuzzy-math/

http://peakoilmatters.com/2010/11/22/still-dealing-with-peak-oil-denying-nonsense/

http://peakoilmatters.com/2010/12/20/the-stubbornness-of-denial/

http://peakoilmatters.com/2011/02/03/the-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/02/10/more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/04/27/even-more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil/

http://peakoilmatters.com/2011/09/26/still-more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil-pt-1/

http://peakoilmatters.com/2011/10/03/still-more-never-ending-efforts-to-skate-past-the-facts-of-peak-oil-pt-2/

~~~

Sources

[1] http://blogs.marketwatch.com/fundmastery/2011/09/19/peak-oil-daniel-yergin-impending-doom/; Peak Oil, Daniel Yergin & Impending Doom By Kurt Brouwer

[2] http://www.financialsense.com/contributors/james-j-puplava/peak-oil-chronicles-when-giants-run-dry; The Peak Oil Chronicles, Part I: When The Giants Run Dry by James J Puplava CFP 02/04/2011

[3] http://seekingalpha.com/article/295546-hess-ceo-an-oil-insider-not-willing-to-sugarcoat-our-peak-oil-problem; Hess CEO: An Oil Insider Not Willing To Sugarcoat Our Peak Oil Problem by Devon Shire, September 23, 2011

[4] http://www.theoildrum.com/node/8391; Peak Oil – Now or Later? A Response to Daniel Yergin – Posted by Euan Mearns on September 21, 2011