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

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

Or not.

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

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

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

Russian Oil Production to Peak Soon [Rigzone]

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

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

Citing analysis by Fitch Ratings, the Rigzone article stated:

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

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

And the OilPrice article by John Daly offered this:

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

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

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

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

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

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

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

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

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

NOTE: In an effort to provide another platform for at least some of the insightful and important work being done by many others hoping to make our planet and its citizens a bit safer, healthier, and better-informed about matters affecting us all, from time to time I’ll turn blog space here on Peak Oil Matters over to guests.

Tam Hunt is an attorney specializing in renewable energy law. He is the owner of Community Renewable Solutions LLC, a consulting firm based in Santa Barbara, California.

Tam recently offered another informative essay on the reality of Peak Oil, touching on the too-infrequently discussed topic of net oil exports—specifically those from Saudi Arabia.

I first mentioned this topic here, and followed up with a two-part series on the subject (here and here). Tam’s recent article: “The Saudi Oil Problem” is a terrific, informative, and clearly-explained addition to this overlooked subject. More information is always a good thing, and Tam offers us all a typically well-written account.

I’m delighted to share it here—it’s a great read. My thanks to Tam for giving me permission to post it. Enjoy!

~~~

We’re worried about economic growth, or the lack thereof, presidential elections, and why Europe can’t get its act together. But the big daddy of issues is global net oil exports.

Saudi Arabia is once again the biggest producer of oil in the world, surpassing Russia to regain its title. Saudi Arabia also happens to be one of the most repressive and undemocratic regimes in the world. The Economist magazine ranked Saudi Arabia 161st out of 167 countries in its most recent Democracy Index.

The Saudis have massive economic and demographic problems to deal with, including a pending peak and rapid decline in oil exports. You heard right: Saudi Arabia, the world’s largest producer of oil, is facing a peak in its oil exports and a rapid decline thereafter.

There are solutions, however, to these very large problems, which I’ll discuss further below.

Saudi Arabia’s national oil company, Saudi Aramco, pumped about 11.5 million barrels per day for the last year, up from about 9.5 million in early 2009. The Saudis are pumping more oil now than they have in decades, along with the rest of OPEC, which is at a 23-year high for combined oil production.

Russia held the top spot for oil production for a couple of years, but Saudi Arabia has come roaring back since 2010. The U.S. is a distant third place with about 6 million barrels per day.

Net oil exports, are, however, a very different picture. The U.S. is famously the world’s biggest importer of oil. While our production of oil has taken an unusual upward tick in the last couple of years, spurred by record high prices, and our consumption of oil has declined even further due to increased energy efficiency, conservation and a still-struggling economy, we still import about half of the oil we consume: a massive 9 million barrels of oil per day.

Saudi Arabia exports about 8 million barrels per day (‘mbpd’ from now on), with Russia not too far behind at about 7 mbpd.

So far, this is all fairly familiar data. However, what is not well known is the degree to which Saudi Arabia’s massive oil exports are threatened by its demographics and a probable decline in its aging supergiant oil fields.

A new report from the U.K.’s Chatham House (PDF) examines this problem in detail. They conclude that Saudi Arabia’s oil exports will peak around 2020 and, under current policies, decline to zero by 2038. You read that right: decline to zero. This decline will occur due to the dramatic growth in consumption by Saudi Arabia’s rapidly growing population and increases in per capita energy consumption. Saudi domestic consumption of oil is growing at about 7 percent per year, which leads to a doubling of consumption in just ten years.
Figure 1. Saudi Arabia’s oil balance under “business as usual” projections

(Source: Chatham House)

Now, 2038 is a long time away, under normal circumstances. But oil politics operates in decadal timespans, not normal timespans. 2038 is, in oil terms, not that far away, so if Chatham House’s projections are accurate, we’ve got a major problem on our hands.

What will the world do if fully 10 percent of global oil production, and 20 percent of global net oil exports, is consumed by the Saudis rather than exported?

Saudi Arabia’s governmental revenue will come under extreme pressure if net oil exports decline. The Saudis rely on oil revenue for fully 80 percent of their budget. Many things will have to give if oil exports do dry up. Net oil exports declined fairly dramatically from 2005 to 2010, as Figure 1 shows, but have risen back in the last couple of years. Chatham projects net exports will rise to about 9 mbpd by 2020, and then start a precipitous decline as the Saudis’ demographic time bomb explodes.

Figure 2. Saudi Arabia’s fiscal deficit projections under “business as usual”


(Source: Chatham House)

The global oil exports problem

Saudi Arabia’s problem is not, of course, unique to Saudi Arabia. It is a global problem that afflicts many countries. Jeffrey Brown and Samuel Foucher have developed an “Export Land Model” to predict how the global net oil export situation will unfold in coming years. They found that the top five exporters of oil (Saudi Arabia, Russia, Iran, United Arab Emirates and Norway) decline from about 24 mbpd in 2008 to about 7.5 in 2020 and go to almost zero by 2030. Global net oil exports are about 40 mbpd, so these producers account for more than half of the global export market.

These net oil export projection declines are due to the demographic explosion that the Chatham House report focuses but also to declines in oil production in these countries. Chatham House chose not to discuss the role of declining oil production, choosing instead to believe Saudi projections of steady oil production, but this is a real and extremely serious corollary to the demographic explosion. It’s also the reason why Brown and Foucher project Saudi Arabia and other oil exporters going to zero faster than the Chatham House report. Figure 3 illustrates (with generic numbers) how these two trends work together to cause net oil exports to decline very quickly. Figure 4 shows the result of Brown and Foucher’s modeling for the top five producers.

Figure 3. Brown and Foucher’s Export Land Model

Figure 4. Brown and Foucher’s 2008 projections for the top five global exporters of oil

This data should provoke a “holy crap” moment in all readers. It’s a very big deal.

Currently, we’re far more worried about economic growth, or the lack thereof, presidential elections and why Europe can’t get its act together. These are all important issues. But the big daddy of issues is this one: global net oil exports.

I’ve written about these issues before, in the last go-round of record high oil prices in 2008. This time around, four years later, we’re seeing much the same phenomena unfolding. We’ve just been through yet another super price spike, which hurt Europe more than us because they hit new record highs for oil prices, whereas we in the U.S. didn’t see prices as high as we did in 2008.

Europe is now being pushed back into recession in part because of the new record high prices (every recession in the last 30 or more years has been preceded by an oil price spike). And we are now seeing oil prices decline again (oil is currently about $83 per barrel for U.S. WTI crude and just under a $100 for European Brent crude, down from the recent peaks of $112 and $127, respectively) rather quickly as European growth stalls, U.S. growth struggles and oil storage numbers reach recent highs here in the U.S.

A recent article extends the original Export Land Model, shedding additional light on this singularly important issue and providing strong support for Brown and Foucher’s initial projections.

The Saudi solar solution

There are solutions. I’ve written recently about the tremendous growth in renewable energy around the world and similarly positive trends in energy efficiency and conservation. The picture is far less rosy, however, when we look at transportation fuel as opposed to electricity. There are some similar positive themes in transportation energy, but there are also major problems in shifting away from petroleum as our key transportation fuel because we’re so dependent on oil for transportation. Simply put, this is a many-decades-long process at best.

What we really need is a World War II-level effort to rapidly and massively save energy in all sectors through improved energy efficiency and conservation, and to shift away from oil and coal in transportation and the generation of power.

The Saudis seem to be recognizing the severity of the problems they’re facing. They recently announced a massive renewable energy initiative, designed to bring 54 gigawatts of mostly solar and wind power on-line within 20 years. This will make up about one-third of total electricity consumption at that time, up from almost zero renewables on-line today. This growth will be achieved with a type of feed-in tariff, which guarantees eligible power producers a contract at a long-term fixed rate. Feed-in tariffs are responsible for the large majority of solar and wind capacity installed around the world today.

At the same time, the Saudis need to focus on energy efficiency and conservation. Saudis consume the most oil per capita of any major economy in the world. I have considerable faith that, as government revenues shrink from declining net oil exports, the Saudis will find economically compelling incentives and/or mandates to reduce domestic consumption of oil.

Conclusion

The problem of “peak oil exports” is the even more scary sibling to “peak oil.” Peak oil is, by itself, a massive problem, but peak oil exports highlight the problem even further, particularly for major oil importers like the U.S., Japan, China and Western Europe. The Saudis and other nations experiencing a demographic explosion will suffer greatly from reduced revenue from oil exports, but they will at least have the energy resources to maintain their economies. Countries that are net importers of oil will suffer in their own way, primarily from much higher prices for oil and possible shortages of oil as demand far outstrips supply.

As the world’s biggest importer of oil, by far, the problem of peak oil exports highlights the need for the U.S. to get off oil as quickly as possible.

The package of solutions to achieve this shift away from oil must include major and ongoing investments in energy efficiency and renewables. Energy efficiency is steadily improving with new technologies and higher fuel prices. Similarly, conservation (behavior change, as opposed to technological improvements that foster energy efficiency) will occur automatically with higher prices.

We also need to ensure that the exponential growth in renewable energy over the last decade continues. Luckily, the cost of renewables has plummeted in recent years, so this transformation away from fossil fuels can be done cost-effectively when it comes to electricity.

Transforming our transportation energy sector is far less easy, however. Conservation through carpooling, better mass transit and low-tech solutions like bikes and walking, will be major parts of the solution. Smaller vehicles, higher mileage vehicles, hybrid cars and electric cars must lead the way in terms of new technologies. Electrification of transportation, while still fairly expensive with today’s technology, is still the most promising long-term solution, because electric vehicles offer a readily available technology for entirely eliminating dependence on oil.

 

 

This is a follow-up to my (only slightly) tongue-in-cheek post from last week regarding the Export Land Model [ELM) designed by petroleum geologist Jeffrey Brown and Dr. Samuel Foucher, a subject I first broached here.

Yet over and over again -- on the radio, on TV, in print, in the blogosphere, and all over Washington -- political ideology is   substituting for thought. [1]

And when our leaders and influential voices aren’t thinking, when facts and science become nothing more than carelessly-dismissed casual opinions, problems are sure to follow. The onset of Peak Oil and the mounting evidence of global warming are but two casualties to facts, evidence, and truth as partisan (ignorant) ideology trumps … well, you know … the facts!

ELM is a fairly straightforward and actually quite logical mathematical concept. One can quibble until the cows come home that this percentile or that mathematical construct is incorrect/fails to take into account/yadda yadda yadda. But the basic premise is little more than common sense, a point I tried to drive home using the only slightly-embellished water bottle analogy in the first part of this series.

An owner of a resource of any kind, one beneficial not only to buyers/users but to the owner itself, will of course make use of that resource to grow or otherwise benefit its own standing. Simple enough. Growth inevitably follows, and with growth comes an increase in demand, and thus an increase in the amount of the resource retained by that owner. First-grade math will then demonstrate that if I keep more of what I own rather than give to you, the end result is that you get less from me.

Not really all that difficult to follow … even the most mathematically-challenged denier shouldn’t have much cause for dispute. But then again, when reality doesn’t matter at all if it conflicts with one’s delusion and denials, then I guess I could be wrong about that! Facts are damned inconvenient at times….

Even more significant is a corresponding factor to the basic tenet of the ELM, as noted in this post.

An ELM Key Insight is that the domestic consumption of oil exporting nations will, over long time periods, tend to grow faster than the domestic oil consumption of oil importers because of the windfall effect of oil revenues, and will tend to continue to grow even past the   production peak, especially whilst net exports are positive.

In other words, in my example above, “owner’s” rate of consumption of the resource will be greater than the rate of growth exhibited by that of the established “buyers/users.” The more revenues “owner” acquires and plows back into growth or similar improvements to its own standing, the greater the “momentum” of that growth or increase … and thus the more of those resources “owner” must retain for itself to support the rapidly-expanding rates of growth. The end result is that the rate of export decline accelerates. Getting less, faster, is not good math.

A nation only exports the surplus of its vital resources. Following a peak in oil production, a nation is flush with capital after exporting more oil than ever in its history—oil that is often sold at previously unreached high prices as well–and its economy responds with growth. But with an expanding economy comes growing demand for oil, causing the nation’s domestic oil needs to cut into a supply that recently began a steady decline. These two sources of pressure on the nation’s oil surplus cause it to deplete at an ever-faster rate. Unless the nation does the unprecedented and keeps its rate of domestic consumption always at or below its exponentially declining rate of production, the surplus vanishes and exports stop. [2]

And so as our first-grade math quiz above convincingly demonstrated (complex though the concept may be), if owner keeps more for itself, less is available to everyone else, and “less” is proceeding along much quicker. Deniers should feel free to rest here if this is too much to absorb all at once.

So when this story appeared on news feeds recently (and has gotten precious little attention so far as best I can determine) and opened with this remark:

The world may have to live on a lot less Saudi Arabian crude towards the end of this decade as rampant internal demand eats into oil exports and the kingdom’s alternative energy plans may prove too little too late.

Followed a few paragraphs down by these tidbits:

‘Domestic consumption has been growing very fast as a result of rapid demographics, steady economic growth and heavy subsidies, with the latter leading to excess demand, said Ali Aissaooui, head of economic research at Arab Petroleum Investments Corporation in Saudi Arabia….

Excess demand could affect the capacity of some countries, such as Saudi Arabia, to maintain the spare capacity needed to provide flexibility to the global oil market.

The head of state oil firm Saudi Aramco admitted last year that unless internal demand is controlled the amount of oil left for export could fall by 3 million bpd to less than 7 million bpd by 2028.

But Jadwa expects exports to fall far more dramatically, with less than 5 million bpd escaping onto the global market by 2020, thanks to a 60-percent surge in internal demand to nearly 4 million bpd and barely enough new production to offset declines from older fields.

added these statistics:

According to analysts at Riyadh-based Jadwa Investment, oil demand in the kingdom rose by 22 percent between 2007 and 2010, out pacing the Chinese oil demand growth rate despite China’s economy expanding almost three times faster.

Official data shows Saudi oil consumption rose by more than 5 percent a year from 2003-2010 to an average of 2.4 million   barrels per day (bpd) in 2010. BP statistics put it closer to 2.8 million bpd last year, up 7.1 percent from 2009.

A simultaneous subsidy-driven fuel demand boom and natural gas shortage could see oil consumption hit 6.5 million barrels per day (bpd) by 2030, or over half Saudi’s current production capacity, according to a report by Jadwa published in July.

and finally offered this kicker:

The country’s domestic consumption of energy, especially oil, at very cheap prices, is also likely to rise rapidly, sharply reducing the amount of oil available for export.

It all adds up to a whooper of a problem, one surely not limited to this oil-producing nation. Any reason to think this isn’t happening in other exporting nations now seeking to provide greater opportunities for their own citizens? The end result (as that article noted) is not much of a surprise for those of who living in Fact-Land:

It’s because the decline in oil exports accelerates that the bottleneck in oil made available to importing nations occurs as a  ‘crash,’ not the steady decline, or ‘long gradual tail’ so often pictured by authorities like the IEA.

Hello!

For all the disputes and conflicts and name-calling and finger-pointing that dominates much of the (still-too-limited) public dialogue about our future supplies of fossil fuels, the clarity (and distress) of the Export Land Model is a bit much to ignore. When you add it to the mix of the other facts* suggesting we’re already past the peak in rates of oil production—the nonsense disputing evidence notwithstanding—(as I’ve discussed in recent posts), perhaps it’s time we start engaging in a much more serious, ongoing discussion about what we should be planning and thinking about and doing?

Now would be a very good time.

* As I noted in this post last December: “[E]xploration (deep water or tar sands, anyone?) and production has become more difficult and certainly more expensive, to say nothing of the resource quality. The primary exporters of oil are experiencing increasing domestic demand, and so naturally they are keeping more oil for their own national use. Hard not to understand that that just means less for everyone else. The majority of large producing oil fields are experiencing an inexorable decline in production. A poor worldwide economic environment has restricted investment in exploration and production, and there quite clearly will not be a ramp-up quickly or inexpensively. China is leading the way in higher demand for oil. On and on it goes….”

Sources:

[1] http://robertreich.org/post/11410402042; The Triumph of Dogma, and a Sad Goodbye to David Frum By Robert Reich – October 14, 2011

[2] http://www.heatingoil.com/blog/another-take-on-peak-oil-exports-not-production-indicate-crisis224/; Another Take On Peak Oil: Exports, Not Production, Indicate Crisis by Zoe Macintosh on February 25, 2010

(A continuation of my two posts from last week)

In this third and final part of my look at The Hirsch Report, a series of “Wildcards” (all from p. 63) were offered which the authors believed might have the effect of either minimizing the adverse consequences of Peak Oil (“Upsides,” which were covered in my last post), or making it much worse (“Downsides”). I’ll offer a comment or two on the “Downsides” today, as they apply to current conditions.

“World oil production peaking is occurring now or will happen soon.”

Two words: Already there.

“Middle East reserves are much less than stated.”

As I wrote in Part 2 of this series on The Hirsch Report: “After decades of already-questionable representations and a complete inability for outside sources to verify those stated reserves, we shouldn’t be counting on more magical discoveries or even a half-rational explanation as to how Middle East reserves magically increased by substantial amounts when OPEC production quotas were changed in the 1980s to tie in with stated reserves: higher reserves = more oil allowed to be sold = more revenue.” What’s the more likely and logical answer? Seems pretty obvious to me….

“Terrorism stays at current levels or increases and concentrates on damaging oil production, transportation, refining and distribution.”

Terrorism is of course always an issue, sad to say. Given the current political turmoil throughout the Middle East, it may be a more pronounced consideration than it has been in recent years. More likely, however, the general discord in that region is cause enough for concerns about oil production and related issues. Recent price spikes are but one indication of how fragile our supply sources have become.

“Political instability in major oil producing countries results in unexpected, sustained world-scale oil shortages.”

Hello! As of this writing, significant sustained shortages are not an immediate concern, but there’s no doubt that if the upheavals in the Middle East spread into Saudi Arabia in particular, we may very well be dealing with that kind of a crisis very quickly.

“Market signals and terrorism delay the realization of peaking, delaying the initiation of mitigation.”

The same considerations stated above would apply here as well, although evidence that we’ve reached peak seems clear enough. Whether our leaders and the majority of citizens realize (or at least acknowledge) it is a different issue. Initiating mitigation is not a concern because we haven’t even gotten there, yet, and that is a problem having nothing to do with market signals or terrorists.

“Large-scale, sustained Middle East political instability hinders oil production.”

I’m thinking there isn’t a need for me to say much about this….

“Consumers demand even larger, less fuel-efficient cars and SUVs.”

There are indications that this is exactly what is happening now. I don’t think we’re prepared yet to underestimate the sense of entitlement which governs much of our behavior—notwithstanding a solid body of evidence about climate change and the ongoing challenges we face in providing adequate energy resources for increasing demand.

“Expansion of energy production is hindered by increasing environmental challenges, creating shortages beyond just liquid fuels.”

This is certainly within the realm of possibility. Increases in oil shale production here in the U.S., along with increased production from the tar sands of Canada notwithstanding, the amounts available now and for a number of years to come is not going to meet demand. Oil depletion from existing fields marches on, and just maintaining current levels of supply is challenging enough.

I won’t bother reiterating too many of the points I and others have raised in recent months about current oil supplies and future prospects. Suffice it to say, demand has exceeded discovery for several decades now; “giant” oil fields discovered in recent years aren’t even close to matching the giant oil finds of forty, fifty, and even seventy years ago. The fact that we continue to rely on those giants many, many decades after their discovery ought to raise at least one obvious question: How much longer can they produce at current/past rates? (See this good summary.)

I wrote this more than a year ago, and it’s safe to assume the situation is not any better today: “Cantarell in Mexico has long been considered of the supergiant oil fields on the planet. As recently as 2004 it was producing about 2.5 million barrels a day of oil, and about half of that was shipped here. Production has fallen off a cliff since then, and in 2 – 3 years, it’s expected that production will have declined by close to 80%. Aside from the enormous financial, political, and social problems that will create for our neighbor south of the border (Cantarell was the major source of income to the Mexican government), this also poses a dilemma for us. Where and how do we make up that shortfall?”

“According to the report [the International Energy Agency’s World Outlook 2010], 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.
“Undeveloped or undiscovered oil fields, growth in tar sands production and increased reliance on natural gas liquids account for all the expected growth in world oil production over the next two and a half decades.” [1]

‘Nuff said.

Spin is good only for so much and for so long. The sooner we recognize the challenges we’ll be dealing with in the not-too-distant future, the sooner we can start having an intelligent, meaningful, and productive national dialogue about what we need to do. Now is as good a time as any, because later won’t be a better alternative.

Sources:

[1] http://www.huffingtonpost.com/jeffrey-rubin/even-the-international-en_b_787450.html; Even the International Energy Agency Forecasts Peak Oil by Jeffrey Rubin – November 23, 2010

I’m well aware that there is an unfortunately successful and all-too-often-employed strategy (lack of integrity aside) used most often in politics but certainly in discussions about Peak Oil and global warming, where the frequent repetition of any combination of lies, half-truths, misstatements, misrepresentations, and disingenuous propositions eventually leads to belief on the part of far too many people.

I’ve mentioned in prior posts (here and here, for example) that I think it’s important to challenge widely-disseminated examples of peak oil denial rather than letting the disingenuous arguments take root. The decline in oil production is a big enough problem as it is; creating doubt for reasons having no discernible value is at best questionable and should not go unchallenged is possible.

To that end, I came across two articles last week that caught my attention. Predictably, the same patterns of “explanations” and offerings cropped up there just as they have in other articles I’ve highlighted before. I guess if you cannot deal with facts, there’s not a whole of room for much creativity when addressing fossil fuel production. I’ll deal with the first article today, and save my discussion for the other one for an upcoming post.

First up is a piece from Jeremy Bowden, whose first paragraph touts one of the more popular terms in denial-land: the finding of “massive” oil fields. Whenever I read that, the antenna goes up and into full lock mode. Usually accompanying glowing exhortations about these magical fields where solutions to all our problems reside are phrases touting the wonder of technology and ingenuity. Bowden does not disappoint.

This article of necessity raises the specter of OPEC’s role in world production: “It is the technical expertise and project management skills of the most dynamic multinational and independent oil companies that hold the key to these new hard-to-get-at reserves, rather than the whims of Arab dictators or the level of OPEC budget deficits.” Always good to have an enemy to whip out at a moment’s notice (not that I’m an OPEC fan, mind you.)

I’m still not entirely clear on why quotes like this are supposed to be persuasive, but they do frequent writings which dispute peak oil:

“James Burkhard, a managing director at energy consultancy IHS CERA, says the recent upstream developments mean oil and gas will continue to be pillars of global energy supply for decades to come. ‘The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years,’ he added.”

He’s absolutely correct. There are no readily available substitutes, but that’s the problem! Saying that oil is currently our one and only is not even a bit helpful. All it does is to emphasize how utterly dependent we are on this finite resource—a resource that by all reasonable indications peaked several years ago and will continue a steady path along a not-always smooth or linear slope of decline … and we are woefully unprepared. (This recent post is only the latest in a lengthy list of concise and easily-understood explanations about Peak Oil.)

So what comfort does it offer us to indicate that all we have is all we have, when more of it is being demanded and less of it is being produced?! That math just doesn’t work.

Bowden also points out that Canadian oil sands now provide us with more oil that does Saudi Arabia. And….?

Saudi supply is being counted out by many other nations whose fossil fuel demands are only increasing; Saudi production is also being increasingly diverted to and for its own uses, and its fields are not immune to the same rates of depletion as are most other older fields, so … what’s the point here? Like most other articles which promote Canadian tar sands as the Great Salvation, no mention whatsoever is made here of the environmental degradation; the poisonous tailing ponds left behind; the immense demands on water; the costs, effort, and/or time involved in extraction, or the fact that production rates aren’t all that spectacular to begin with!

But why deal with any of those facts? They simply get in the way of a good insincere argument. (And Bowden also makes it a point of stating that U.S. oil production increased “for the first time in decades.” Our production peaked more than forty years ago! A slight one year uptick—from shale, which has its own set of environmental, cost, effort, and resource usage issues, also conveniently overlooked—is not exactly encouraging.)

Speaking of U.S. shale production, Bowden points out the following:

“… the Bakken shale field is now the country’s fastest-growing major oil field. Production has reached about 350,000bpd, from 100,000bpd a decade ago. In a recent report, consultancy firm PFC Energy projected production would climb to 450,000bpd by 2013. ‘The technology producing these resources has absolutely made the difference,’ Mr Marvin E Odum, President of Shell Oil, said. ‘It’s the same with the Arctic, with the shale oil, all over the world. Technology is the key.’”

Give or take a bit, the United States uses somewhere in the neighborhood of 7 billion barrels of oil per year … billion with a “b”. I’m definitely not a math whiz, but my trusty calculator tells me that 450,000 barrels per day times 365 days equals an impressive-sounding (approximate) 165 million barrels per year. I’m pretty certain that 165 million is a whole lot less than 7 billion. Rounding up to the approximate 20 million barrels of oil this nation uses each day, that means we’ll soon be producing enough to get us through sometime next week! Fantastic!

Another forty or so examples like that and we’re all set (and to hell with the rest of the world and their needs or demands).

This author also made it a point of using the same vague, subject-to-multiple-interpretations stock language others employ is discussing the magic of potential future technology, including this:

“A recent forecast produced by Shell suggests that Arctic production from North America, Europe, and western Russia – much of which will be deep offshore – could make up a quarter of global production within 20 years, provided that remaining technical, political and environmental challenges are met.” [My emphasis]

“… provided that remaining technical, political and environmental challenges are met”? Seriously? That’s what we’re supposed to derive great—or any—comfort from? And within 20 years? Wow! That’s not asking for too much, is it? A few pesky “technical, political and environmental challenges” met and we’re good to go!

And there’s this:

“Advances in directional drilling allow well operators to steer and carve through hard shale to expose more and hard-to-reach rock, and it also makes possible drilling under cities or into environmentally-sensitive areas….
“Faced with falling reserves and barred from acquiring fresh production in areas such as the Middle East, [nice to just skip past this – my comment] international oil majors began to search for new large deposits in the deep waters of the Gulf of Mexico….Exploration and drilling below 10,000ft of water and through miles of hard rock, thick salt and tightly-packed sands required the development of supercomputers and three-dimensional imaging techniques as well as equipment that could withstand the heat and pressures common at such depths, not to mention submarine robots to make repairs.”

Others have also pointed out these types of impressive displays of innovation and truly astounding technology. But why is this a good thing? That anyone has to go to these lengths and expenses and risks to find oil shouldn’t require any advanced technical degrees to understand that we’ve got some problems!

It would be nice if even some of the energy and effort expended in trying to prop up the dismal truths of oil production could instead be directed to conveying a more accurate and complete picture of what we face now and will have no choice but to deal with in the years to come. That might be a bit more helpful.

There’s always hope….

In conjunction with the recent ASPO annual conference in Washington, two articles (here and here) were offered on the subject of getting the Peak Oil message out, and what some of the strategies might be, given that, as the article by Molly Davis suggested: “… almost all of the messaging experts say the movement’s narrative has failed to influence policymakers — or even the major environmental groups.”

Certainly the level of bipartisan political hostility—as we were reminded of in that piece—contributes to the messaging problems. Others advised that finding an “enemy” might be the most effective strategy. The accepted target was the fossil fuel industry. One rationale offered is that facts alone are not enough (true, sad to say), and by demonizing an easily-demonized entity, the peak oil movement may find more sympathetic listeners. I can’t argue with the rationale, but I wonder if the convenience and expediency of targeting the usual bad-guy is the best choice.

I’d like to offer a different enemy—one also easy enough to aim at for a variety of reasons, but critical to those of us who carry legitimate concerns about what life will be like in the years to come as declining oil production becomes apparent. Explaining that we may not really start to feel the pinch of declining oil production for a few—or more—years down the road is a message that needs to be brought home more vividly and urgently. “Peak Oil” won’t show up in the headlines next week, but that provides us with all the motivation we need to help others understand why now it must become a cause célèbre long before its impact begins.

The extremist right-wing is an easy target for those of us who value things like integrity and facts and reality. My favorite blogger, Steve Benen, offered a piece on this topic (here) yesterday, and after I’d completed my first draft of this post, I came across Ron Chusid’s post offering his own take on the same theme.

In his piece, Chusid quoted Michael Hirschorn’s article in The Atlantic:

“Daniel Patrick Moynihan famously said (or is famously reputed to have said) that we may each be entitled to our own set of opinions, but we are not entitled to our own set of facts. In a time when mainstream news organizations have already ceded a substantial chunk of their opinion-shaping influence to Web-based partisans on the left and right, does each side now feel entitled to its own facts as well? And thanks to the emergence of social media as the increasingly dominant mode of information dissemination, are we nearing a time when truth itself will become just another commodity to be bought and sold on the social-media markets?…More far-reachingly, how does society function (as it has since the Enlightenment gave primacy to the link between reason and provable fact) when there is no commonly accepted set of facts and assumptions to drive discourse? [1]

Why not go after those for whom facts are mere inconveniences to be disregarded when they conflict with a narrow-minded and clearly self-serving agenda? At the risk of starting a cat fight where truth may too quickly become a casualty, why don’t we more forcefully challenge those who deny peak oil (and global warming) and who do so for reasons that generally ignore reality in favor of narrowly-defined interests? Those motivations will ultimately do nothing but promote more eventual harm by denying the truths to those who clearly need them the most.

What causes me more despair than perhaps anything is not the stupidity exhibited by politicians who clearly have forsaken integrity (remember when that mattered?) and truth in order to pander to the least enlightened among us. That groveling for short-term gratification in November is endemic in our political system. The dysfunctions exhibited regularly as indicative of the political norm are certainly discouraging enough. (How does Georgia Senator Richard Shelby, for example, manage a straight face when placing a hold on a Fed Reserve nominee because the man is “not qualified” … when the Nobel Committee has seen fit to award that nominee this year’s Nobel Prize in Economics? If it didn’t affect all of us, this kind of disgraceful nuttiness would just be laughable. Hypocrisy is now high art.)

The shamelessness of politicians is now sadly all-too-routine, but the fact that there are so many among us who manage not much more than a shrug is perhaps even more disheartening.

A recent online opinion published on a notorious right wing website (my first—and I hope last—exposure to that particular mainstay of barefaced nonsense) demonstrated what has now become the usual level of factually challenged, paranoid-laden, and depressingly shortsighted commentary about the energy crisis. I then forced myself (a distinctly unpleasant experience, I might add) to read through several dozen comments in support of the author’s inane pseudo-factual tripe about electric cars and fossil fuel resources. The narrow-mindedness those contributors likewise exhibited in marching lock step with the author, replete with their own brand of paranoia; snarky, self-righteous drivel; and an utter disregard for anything even in the vicinity of truth or rational thought, is breathtaking in its scope! I know all too well this wasn’t an isolated incident.

I won’t dignify the commentary or increase traffic to the site by providing the link here (I’ll do so upon request so you can read it yourself), but that pseudo-factual essay suggested (as have others who don’t really understand the problem, and don’t understand that they don’t understand) that we should just expand our oil “imports from friendly nations” as a solution to the problems of reliance on oil from nations whose politics and policies we oppose.

Just like that!? So … what needs to be done? A phone call … will that take care of it? (Gee, why didn’t we think of that sooner?) So what if these friendly nations have to break their agreements with other nations? We’re Americans … we’re entitled to get what we want! A wave of the wand and presto! More imports!

The far right all-too-consistently tosses out these oh-so-helpful hints without bothering to discuss all the (or even any) facts which, in the real world we inhabit, make their suggestions ludicrously impossible to fulfill. Of course, we run the risk of getting bogged down in he said/she-said arguments that quickly devolve into the lowest forms of “debate”, but why let those types of offerings go unchallenged? They feed on themselves, and it is tiresome and time-consuming to have to rebut all the nonsense. But if we don’t, uninformed readers and listeners have no reason to at least consider the possibility that there may indeed be other facts out there that should at least be examined in order to make informed assessments, rather than accepting the words of the few. More information is rarely a bad thing, and giving everyone the opportunity to examine the facts and engage in rational discourse as a means of seeking common ground makes for a healthier and more productive society.

Seems like a decent enough concept….

This same author also helpfully urges us to just boost our domestic production, conveniently neglecting to offer even one fact as to how that’s to be accomplished in a nation that reached peak forty years ago! The strategy of “just utter it and hope no one asks” has been very effective, but it’s hard to find legitimate defenses for that approach if one genuinely cares about the well-being of our fellow travelers.

This writer also cites the U.S. Geological Survey estimate that the Arctic National Wildlife Reserve in Alaska has “10.4 billion barrels of oil.” Wheeee! We just found about 16 months worth of oil, just like that! (And of course we’ll hoard it all for ourselves, right? I didn’t catch any suggestion that it would go to market.) And what … two, maybe three weeks of drilling on a tiny plot of land oughtta take care of that, correct? Curious that the facts regarding the costs and efforts and time and consequences of drilling in ANWR somehow didn’t make it into the article. (Space restrictions really suck, don’t they?) Disingenuosly (I’m trying to be kind here), he then mentions that this “will replace imports from Saudi Arabia for 20 years” … conveniently omitting the fact that Saudi is just one of our suppliers—and not our leading provider, by the way, so not-so-subtly painting the Saudis as one of our bogeymen may not be quite as effective as he’d hoped. (Damn those facts!)

Using his math—unchallenged—that means in his world we get about 500 million barrels of Saudi oil per year, or about a month’s worth, give or take. (Rounded up, we currently use about 20 million barrels per day here in the U.S. The rest of the math is easy.)

“Saudi Arabia sends 360,934,000 barrels of oil per year (989,000 barrels per day), 20 percent of its total oil exports, to the United States, according to the EIA.”[2]

But what’s a 150 billion barrel exaggeration/40% overstatement of facts among friends, right? It makes the story better, and isn’t that all that really matters? Why worry about the veracity of the narrative when you don’t really care about the present and future plight of your readers and listeners?

As for other suggestions? He did offer that Canada and Mexico could help out by exporting more to the U.S. … the same Canada whose tar sand production shows no indication of reaching a level anywhere near enough to satisfy just our own demands let alone worldwide increasing demand anytime this century; and the same Mexico whose production levels from its largest oil field, Cantarell, has fallen off the cliff in the last few years.

“Pemex says it is getting Cantarell under control, noting that the field’s decline has stabilised at 12 per cent per year – a number many analysts find difficult to believe.
“Cantarell’s production peaked seven years ago at 2.2m barrels a day. Today the field struggles to produce a quarter of that.”[3]

And, oh, by the way:

“Canada reigns as the United States’ leading oil supplier, exporting some 707,316,000 barrels of oil per year (1,938,000 barrels per day) —a whopping 99 percent of its annual oil exports, according to the EIA” [4]

I’m guessing there’s not a lot of room for Canada to do much more than 99%, but why let reality get in the way of some pretty good nonsense. Tweak a few numbers, and our wonderful neighbors to the north should be able to get us somewhere around … what … maybe 162% of their exports? That’s a good number! (If you’re going to make stuff up, try not to go too far over the top.)

Those suggestions oughtta work out just dandy! Thanks!

And just to round out the nonsense (all in one paragraph, mind you) this same writer also informs us that the “continental US has 163 billion barrels of unproven reserves.” Unproven? Why not 163 kajillion barrels; that’s unproven too! He’s relying on “unproven” reserves to bolster his argument? Seriously? Are any of his readers paying any attention at all? Yikes!

The fears of many who feel woefully out of touch and helpless in the face of the current economic crisis (and certainly not without good reason) make it easy to latch onto these “facts” without once taking a deep breath to consider the validity or logic behind the utterances—especially when they’re extended by those in seeming positions of authority or knowledge (and who coincidentally share—and play to—their same intense dislike for government and liberals and assorted other popular bogeymen). To what end?

What is this nonsense designed to accomplish? How does this help us in any way? It would be so helpful if integrity still counted for something when dealing with issues that require a broad consensus (and understanding) for resolution. How can we effectively help enlighten and prepare others who do not have the means or opportunities to learn the truth, especially when one side seems so intent on obliterating it? Where’s the honor in that? So I’ll ask again: How does this help?

How can we as a society hope to properly address the challenges we’ll face when the lack of knowledge in a sizeable portion of our society is so rampant and is so consistently encouraged by a not-insignificant segment of public officials and their sycophant media counterparts?

How do we reach those who clearly need a greater understanding? Peak Oil is not a progressive or liberal agenda. It’s about the facts on and in the ground—facts that affect (and benefit) all of us now, even Tea Partiers and the right-wing machine that works so hard and effectively to cloud the truth. Peak Oil’s impact will also just as surely and adversely affect ardent deniers when the consequences of declining oil production and a warming Earth begin to make their inevitable appearance. By then it will be much too late….

How do we convince the currently un-/ill-informed to empower themselves, to learn that there is in fact other evidence about peak oil that is not (surprise!) about conspiracies, or liberal evil, or an alien, black, Muslim-loving, Socialist-leaning, apologist Martian President? That evidence is what it is: the disturbing truth about our fossil fuel resources and the declining production coupled with increasing demand which will in the years to come make our lives a lot more challenging than we’re prepared to acknowledge or deal with. That’s not pleasant for peak oil proponents either!

What can we do and say to help them understand that peak oil and the climate crisis are not figments of their imaginations easily scorned, but real-life conditions based on real-life facts in a real-life world that will have real-life consequences in their own real lives … much sooner than they’ll be prepared for? We’re all in this, and one’s political leanings or thoughts about government and all the rest will not matter. Peak Oil is not going to single out the fear-mongering, sky-is-falling, loony liberals and preserve the rest!

What help can these citizens expect then from their so-called leaders who so artfully disseminated their fact-free nonsense at a time when genuine leadership and integrity were most needed? Conducting themselves in this manner in crystal-clear reliance on their hope and belief that their followers simply lack the ability or inclination to ferret out the truths for themselves is beyond appalling! And we let it happen! What kind of a nation do we choose to be?

How do you look at a broad swath of an industrial or urban landscape in these times (knowing that there are literally tens of millions of identical scenes playing out across our planet) and honestly believe that the products and production spewing smoke and carbon and exhaust and pollutants into the air—all flowing from our genuinely magnificent innovations and creativity and skill and dedication—have no effect on our atmosphere—cumulatively or otherwise? What kind of delusions are needed to honestly believe that our astonishing levels of progress do not simultaneously carry with them the risks so obvious to so many others among us? What kind of denial mechanisms do these people have in place that allow them to just simply ignore the truth and facts and irrefutable evidence?

Why is the decline of oil production so hard to imagine when we’ve all been exposed to shortages of one kind or another along the way, especially when in this case we are dealing with a finite resource being used with greater demand than ever before? Take a look at those same urban/industrial vistas and ask yourself how can we possibly continue to supply ourselves with enough fossil fuels to keep it all going effortlessly and endlessly—especially when so many millions more seek to emulate our lifestyles in years to come?

How deep must one’s fears and sense of helplessness be that they allow themselves to be manipulated by those who prey on those same fears in order to exploit them for their own selfish gains? How can we help those so clearly in need of truths about our future find their better selves, in the process enabling them to offer their own needed contributions to the dialogue we must continue to engage in?

More worrisome still: How difficult will it be for these people to adjust to declining supplies of energy and the consequences of our warming planet when the people they rely on most have been at best disingenuous, but more truthfully complicit in the slow and steady damage to our society and civilization by exploiting the lack of understanding across the citizenry for their own economic or political gain? These are the people revered as patriots and leaders? How can we expect them to be of any help at all?

Now is the time when citizens need to understand what is at stake. Once we’re up to our eyeballs in declining production and its myriad impacts it’s way, way too late to only then start becoming aware and wonder what to do.

The “What’s The Matter With Kansas Syndrome” has to be among the most disturbingly fascinating themes of modern society. Tens of millions of followers routinely elect officials or hang on the words of those who so clearly do not have their best interests at heart! It’s almost comical in its brazenness now. And come November, we’re likely to see even more demonstrations of this phenomenon. That so many allow themselves to be persuaded of “facts” that are so clearly detrimental to their self-interests, and that they are so unwilling to take time to exercise their own independent gift of thought and reason as we all move closer to cliffs of our own making is amazing! I just wish it were happening in some other place at some other time in history, rather than on my dime!

So what do we do? What kind of nation do we honestly choose to be?

How do we get the message across to so many who are blindly heading for the cliffs?

Sources:

[1] http://www.theatlantic.com/magazine/archive/2010/11/truth-lies-here/8246; Truth Lies Here: How can Americans talk to one another—let alone engage in political debate—when the Web allows every side to invent its own facts? By Michael Hirschorn

[2] http://www.globalpost.com/dispatch/100726/top-7-us-oil-importers; Top 7 suppliers of oil to the US. Really big oil: Where does the US get its crude? Here’s what you need to know. By News Desk — GlobalPost Editors, Published: July 28, 2010

[3] http://money.ninemsn.com.au/article.aspx?id=1033627; Mexico’s Pemex wrestles with oil decline By Carola Hoyos in Campeche, Mexico , Financial Times, 29 Mar 2010

[4] http://www.globalpost.com/dispatch/100726/top-7-us-oil-importers; Top 7 suppliers of oil to the US.

I haven’t touched on too many geopolitical issues (but see here and here for examples) as they bear upon Peak Oil, but that is a result of choices made, and not a determination that the subject is unimportant.

The recent publication of both German and Australian reports on Peak Oil (here and here—the subject of an upcoming post) have sparked a great deal of interest and chatter on the internet, and deservedly so. Coming on the heels of several other high profile reports this year, such as the United States Joint Forces Command’s Joint Operating Environment (JOE) report and a Lloyd’s/Chatham House white paper, keeping government concerns about Peak Oil away from public attention is becoming increasingly difficult.

The report from Germany cited above suggests that Peak Oil will happen this year, and it paints a disturbing picture of potential foreign relation and energy supply problems that will surely not be limited to Germany. The JOE report is not much more sanguine about future international challenges and potential conflicts, although it did not assert a specific date for Peak Oil (but did express serious reservations about the stability and availability of adequate supplies beyond the next few years).

As oil supplies diminish over time, the relative importance of oil-producing nations will likely increase, and with that added influence and power will be the likelihood that U.S. and other Western nations may find their preferences and “values” playing second fiddle to the preferences and values of those foreign suppliers—not all of whom share our ideals and objectives. It’s not at all far-fetched to consider the real possibility that active resistance to the growing political and economic might of these new international power players may result in a swift curtailment of oil supplies. That’s a powerful club for the Russias and Venezuelas and Saudi Arabias of the world to suddenly wield.

Seven of the fifteen largest suppliers of oil to the United States are on the State Department’s Travel Warning List, for their “long-term, protracted conditions that make a country dangerous or unstable.” [1] Who knows how the internal politics of those nations will play out in the years to come, and what the international/energy supply and security ramifications might be? Saudi Arabia, long-recognized as the leading oil exporter, has its own set of internal issues to contend with, as both Matthew Wild and this article make clear. We cannot passively assume that our primary suppliers of oil will remain so.

Relying on potentially unstable suppliers is not the most optimistic strategy, and we don’t have too many alternatives right now. Ignoring these geopolitical considerations is even less prudent.

Furthermore, the declining availability of fossil fuels will just as likely limit the opportunities we have to export our preferences and values to other nations in need of our assistance. Diminished influence in the international arena will carry its own set of consequences.

Coupled with the loss of political influence is the likelihood that our ability to project military might and protection will also be lessened. The military is the largest consumer of fossil fuels. If we continue to allocate the same percentages of energy supplies to our military, what happens to the rest of us? How will an even smaller pie be divided? And if we allocate fossil fuel supplies in the same proportions now, what happens to the comfort and security we derive from our then-decreased military capabilities? (The flip side, of course, is that proactively decreasing our dependence on fossil fuels lessens the need to project our military all over the world and at exorbitant costs—financial and otherwise.)

And let’s also not forget that diminishing supplies with the onset of peak oil production means that other nations will vie more aggressively for their fair share of oil supplies. The United States may find itself playing an international game it is not at all accustomed to playing—or prepared to play at all. Acceding to the types of political, economic or ideological “favors” that future suppliers may insist upon could prove a very difficult pill for this country’s leaders and citizens to swallow.

A sampling of headlines from just a few articles over the past few months about China’s aggressive acquisition of future oil supplies suggests another problem. They have the means to tie up a good chunk of future supply, and that behavior may be indicative of how future energy transactions take place, as the German report suggests.

“China Global Oil Shopping Spree” [2]

“China’s Global Shopping Spree” [3]

“Saudis Tighten China Energy Ties to Reduce U.S. Dependence” [4]

“China Looking To Make More Loan-For-Oil Deals – report” [5]

“China Now Controls Majority Of Canada’s Athabasca Oil Sands Corp” [6]

The longstanding practices of free market purchase and sale may not prove to be as enduring as we would expect. As the German report noted, “[b]ilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore.” Suffering as we do from our arrogance and sense of entitlement because we’re Americans, the change in oil market practices in coming years will prove to be a distinct and unpleasant shock to our political and economic systems, with consequences spreading far and wide. We won’t be the only nation suffering, either, but that will be of little consolation.

Let’s also not ignore the fact that as supplier nations’ populations increase (Matthew Wild suggests that Saudi Arabia could have as many as 45 – 50 million people in twenty years’ time, more than double its 2000 population [7]), the needs of their own citizens will surely take precedence of those in other countries. Exports are usually derived from excess production after domestic usage is accounted for. (Mexico—one of our primary suppliers—has seen its oil exports to us decline by more than a third in just five years. That trend won’t be reversing course. That’s not encouraging.)

With hundreds of millions of citizens in less-developed parts of the world seeking their own version of the American Dream, where will that leave the gluttonous U.S. demand to be satisfied? (“Should China’s total per capita oil consumption reach the level of the United States, they will require basically all of the world’s current oil production. While it is highly unlikely that China’s per capita oil consumption will reach that level, even if it reaches half of the current U.S. level, they will require 40.7 million BOPD.” [8] That’s almost half of the world’s daily usage … not comforting.)

We’re beyond foolish and ignorant if we think that we’re always going to be first in line when oil is passed out just because we’re America.

Any sense that these are issues “out there” and not really affecting us in our daily, personal lives is a risk we should not be taking. What happens out in the real world oil markets has a direct impact on each and every one of us. The more information and understanding we possess, the better our chances of doing something to help mitigate the very real impact and consequences of declining oil production and supply. It’s understandably far more preferable to let “others” work on these issues, but we must give voice to our own concerns so that decisions and practices eventually implemented will have some marginal comfort and familiarity to us.

We are probably beyond the point where we can fully and properly prepare for effortless accommodations and transitions away from fossil fuel dependency, but having a say in how we all must deal with the effects of Peak Oil will help make those transitions more palatable.

Small consolations indeed.

Sources & References:

[1] http://www.energybulletin.net/stories/2010-09-03/exponentially-purpose-century-and-half-ignored-warnings – Exponentially on purpose: a century-and-a-half of ignored warnings – Published by Peak Generation on Fri, 09/03/2010 by Matthew Wild

[2] http://www.energytribune.com/articles.cfm?aid=3356; Posted on Mar. 02, 2010 By Michael Economides, ET editor in chief, and Xina Xie, ET China correspondent

[3] http://www.energybulletin.net/node/52256; 04/01/2010

[4] http://www.bloomberg.com/apps/news?pid=20601207&sid=afA7qKyLK44s

[5] http://www.forexyard.com/en/news/China-looking-to-make-more-loan-for-oil-deals-report-2010-05-17T101708Z

[6] http://www.treehugger.com/files/2010/01/china-now-controls-majority-canada-s-athabasca-oil-sands-corp.php

[7] http://www.energybulletin.net/stories/2010-09-03/exponentially-purpose-century-and-half-ignored-warnings (full cite above)

[8] http://oyetimes.com/views/columns/5880-have-we-passed-the-point-of-peak-oil – Have we passed the point of Peak Oil? by Glen Allen

{A reminder to my readers: I was down South recently to set up my daughter for her senior year of college, and next week we travel to New York for several days to set up our other daughter for her sophomore year. We’ll return at the end of next week just long enough to get ready for a ten day vacation, so it’s entirely possible that this will be my last post until after Labor Day. Thanks for your patience and continuing interest!}

I’ve written on several occasions (see this recent post, for example) about the difficulties we’ll face in transitioning from our fossil fuel-based way of life to “something else” … that something else not yet certain. To that end, some recent articles (links provided at the end of this post) address this same issue by pointing out some of the more precise difficulties we’ll be encountering as we attempt to transition away from our fossil fuel-dependent economic and personal lifestyles. As it stands now, there is no effective and clear-cut choice for Plan B, and thus the problem.

“The time for smooth, convenient solutions was decades ago, when scientists first began to raise the alarm about the greenhouse effect and peak oil, and the twin approaching disasters of a changing climate and an energy crunch. By now, the most we can do, and the least we have to, is to scramble however we can. Yes, even during a global recession, and even during the next ones. If you think upgrading the energy foundations of a planetary civilization is hard during an economic recession, imagine how hard it’ll be with a fraction of the energy available, and climate-related disruptions erupting everywhere.

“We need to make extraordinary advances in energy sources, and we have to do if fast, or, to put it simply, the 22nd century will look like the 17th. We need to constrain our use of fossil fuels as much as possible….We are in this fix because a few short decades ago we did nothing. If we do nothing, or even if we just don’t do enough, the fix we’re going to be a few short decades from now will be much, much worse.” [1]

Despite the occasional nincompoop who insists that our supply of oil is infinite, the truth is that oil is a geologically finite resource (as are the other fossil fuels), and increasingly harder to come by. I and many others have posted frequently explaining this basic fact which some still seem incapable of accepting.

(It doesn’t help when others offer truly fanciful assessments about the remaining reserves of oil and gas. Saudi Aramco President and CEO Khalid A. Al-Falih was recently quoted as having said that we can still expect to have available between 6 and 8 trillion barrels of conventional oil and natural gas liquids and about 7 trillion barrels of unconventional oil. [2] Not exactly the most objective source of information….I’m guessing that pixie dust is also in ample supply for those making such assessments.)

Just last week, Fatih Birol, the International Energy Agency’s chief economist, once again expressed his concerns about the future availability of oil:

“The era of cheap oil is over. Each barrel oil that will come to market in the future will be much more difficult to produce and therefore more expensive. We all – governments, industry and consumers – should carefully choose the type of car we want to buy in the future and should be prepared for oil prices being much higher than several years ago.” [3]

In its simplest terms, this acknowledgement is a clear recognition that at some point in the not-too-distant future (and we’re past the point where it matters that that date may be next week, three years, or fifteen years from now; we’re too late to effect a painless transition away from oil), we are going to have to endure the disruptions, changes, and yes, the hardships of not having enough fossil fuels at the ready to meet our demands and expectations. We can hope that the changes in business practices, industrial production, and personal lifestyles will be effortless, but that will likely remain just that: a hope.

As the authors of the articles mentioned above explained, history is such that the transition from one dominant source/supply of energy to another is not a simple or easy process. It is a multi-decades long effort, as not only must the supporting infrastructure (transport modes, utilities, public services, etc.) be changed or adapted to new energy sources, so too must industry revise what goods and services it produces—and how. And then, the end users must be willing to accept what is then offered in the market place, necessitating that they in turn then adapt their own lifestyles to these “new” products and services. That’s going to take a good long while.

So too must we recognize the fact that effecting the transition from fossil fuels to whatever alternatives ultimately prove to be the most efficient and cost effective (we’re still waiting on that) will itself require massive amounts of fossil fuels in order to create, build, produce, and then supply into the marketplace the new infrastructure and products fashioned from some other energy source.

Perhaps the key stumbling block remains as yet unresolved: no alternative source of energy has yet proven to be as efficient, effective, readily available, or commercially viable as oil. Anything else will thus be … less, and more expensive.

So what’s the solution?

“Now, all sides are counting on a Green Economy: it seems that we all just have to firmly believe that researchers and engineers worldwide will develop alternative energies into marketable products that are similarly fungible as crude oil at precisely the right time; in this way people in the old industrialized countries would not have to abandon their lifestyles, and the middle classes in the newly industrializing countries would not have to give up their hope of comparable prosperity.” [4]

Good luck to all of us!

We may very well (and I hope we do) develop alternative sources of energy that prove to be perfectly capable of meeting our future demands, but those who are counting on that as a given are taking enormous chances.

Hoping is not the strategy we should be relying on.

Sources:

[1] http://ieet.org/index.php/IEET/more/rinesi2010725 – Peak Oil and Climate Change: Between Too Soon and Not Soon Enough by Marcelo Rinesi
[2] http://www.ibtimes.com/articles/42230/20100810/petroleum-oil-energy-reserves-peak-oil-aramco-reserves-oil-futures.htm
[3] http://www.energybulletin.net/53805 – IEA: ‘Cheap oil is over’ as demand approaches new record by Matthew Wild
[4] http://peakoil.com/generalideas/peak-oil-yet-another-inconvenient-truth-2/ – Peak Oil – yet another Inconvenient Truth by Dr. Jürgen Wiemann

Links on energy transition referenced above:

http://www.energytribune.com/articles.cfm/4964/Wood-to-Coal-to-Oil-to-Natural-Gas-and-Nuclear–The-Slow-Pace-of-Energy-Transitions – Wood to Coal to Oil to Natural Gas and Nuclear : The Slow Pace of Energy Transitions By Robert Bryce

http://www.sciencemag.org/cgi/content/full/329/5993/780 – Do We Have the Energy for the Next Transition? Richard A. Kerr

http://www.theoildrum.com/node/6743#more – Lloyd’s ‘Sustainable Energy Security’ White Paper – Some hits; some misses by Gail the Actuary

I’d like to shift gears just a bit in these next few posts and discuss some “behavioral” perspectives and considerations related to how we’ll need to deal with Peak Oil—a follow-up to one of my initial posts (here).

First up: Just a few of the things we know for certain about oil production, taken from an earlier post (here):

  • Just 20 years ago, 15 oilfields were able to supply at least one million barrels of oil per day (the world now uses approximately 85 mbpd). Now there are only 4 such fields. [1]
  • The world began using more oil than it was finding nearly thirty years ago. Nothing has changed since. In 2009 we were on pace to discover nearly 20 billion barrels of oil. Sounds great up until the moment you learn that the world uses approximately 30 billion barrels per year, and that roughly 80% of the Earth’s population is just starting to use energy as we do. [2] China and India, among others, are making their ambitions clear.
  • A substantial majority of petroleum geologists agree that about 90% of all the conventional, recoverable oil on the planet has now been located. [3] Most of the Earth’s favorable geological formations conducive to oil formation have been identified.
  • Here in the United States, we reached peak oil production almost forty years ago, at about 9.5 million barrels per day. We’re down to about 5 million now. We’re not alone.
  • One third of global oil supply comes from 20 large fields—all discovered more than thirty years ago. Production rates for each of those 20 fields have now peaked. [4]
  • To offset depletion in existing oil fields, Fatih Birol of the International Energy Agency has stated that we will need the capacity equivalent of four new Saudi Arabias by 2030 to counter that decline, just to keep up with existing demand [5].

Given that we’re not finding any truly gigantic new oil fields, and unconventional resources (here) and (here) aren’t exactly a solution, we have some supply and production issues to contend with.

Our infrastructure (roads, bridges, train tracks, water and sewer pipes, power lines, etc.) does not exist in current form without the ready availability of inexpensive oil. Indeed, our modern society was created and is sustained in large part because we have that readily available, inexpensive oil.

We’re perfectly free to ignore these facts entirely (this is not exactly an ideal time to be spelling out more potential economic and societal woes). In the alternative, we can choose absolute panic over these conditions; or, we can decide to dwell in the vast middle ground where we acknowledge these facts and plan intelligently and carefully as we work to rebuild our economic ways of life.

We have choices now … more than we’ll likely have when Peak Oil is upon us in full force. Do we seize the opportunities now, or do we wait with fingers crossed?

To rely on “the sentimental belief that the things we fear will never really happen.” [6] is not much of a plan.

Hoping that Peak Oil’s onset and its unfolding impact will take a lot longer than we think may be someone’s strategy, but it cannot be ours.

What we do have to consider is this: In light of current and projected oil production factors, what happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? And how will we respond when decisions are taken out of our hands?

The truth is that this is not going to happen “soon.” But it will happen soon enough … later this year? 2012? 2015? 2020? Depending on the source, those are all reasonable estimates as to when we are going to begin to feel the irreversible and powerful impact of Peak Oil on our everyday lives. If you’re a betting person, perhaps you’ll take the long view and decide we’re 8 – 10 years away, so why worry now?

Peak Oil is not an event that’s just going to show up one morning several months or years down the road. We’ll soon start seeing signs that increasing demand is crashing against the wall of declining availability. Prices will rise, for one, and the effects and consequences will ripple through our economy, just as oil and gasoline price hikes have always done. Perhaps we won’t feel the real first bite for some time after prices begin to climb, but it won’t take long for the effects to begin filtering through our economy and our ways of life. Things are going to change long before we reach the stage where Peak Oil is clearly recognized as drastically affecting almost … well, everything!

Technological advancement is a wonderful attribute, and a hallmark of our nation’s prosperity and greatness. But blind reliance that somehow, some way, and at some point we’ll just find the “right” solutions is placing the livelihood and well-being of hundreds of millions of people on a wing and a prayer. I’m already on record as being a proponent of optimism over pessimism, but reality often dictates that we anchor our plans on what is now the truth rather than what we’d like or hope it to be at some undefined point in the future.

Finding the right technologies or alternative energy sources that could be implemented everywhere, efficiently, effectively, and quickly enough to mitigate any decline prompted by Peak Oil would be a magnificent statement about our ingenuity and creativity. But right now, that belongs in the “miracle” category and we cannot afford to place our hopes on Divine Intervention.

If we don’t start planning several years ago, we’re going to eventually have some problems. Trouble is, we don’t seem to be in much of a hurry to get anything done right now, either. That must change. We must change.

We can choose to fear what Peak Oil may do to our society and our ways of life. That’s certainly an option. But so too do we have the choice to view the challenges of Peak Oil as opportunities to fashion new successes for ourselves, new definitions of prosperity, new ideals of community, and new ways of projecting humanity into a future of hope and progress. The definitions and examples will indeed be different than those crafted as a result of the many benefits of readily available crude oil and its countless products, but there is no reason to lament that those descriptions will be less worthy or satisfying. We own that choice, too.

While we may fervently wish for a return to “things as they were not too long ago” and/or “business as usual,” the stern truth is that those options are no longer available to us. This Great Recession has compounded the difficulties of ever hoping to return to what we had perceived as a “normal” state of economic and civic affairs. Peak Oil will drive home that message for those who choose not to acknowledge it now. Adapt we must, and the sooner we begin the less imposing adaptation will be. No guarantees of course; but doing nothing guarantees an eventual measure of hardship we should not have to face.

But that is only a harsh sentence imposed on our society if we choose to treat it as such. Change will not be easy, given the magnitude of what we will all have to accept and undertake (see this and this post also) . But we do own the choice of taking a longer-term view of our individual and collective futures and deciding that it will be one of hope, fulfillment, and prosperity—different though the definitions may be. It’s up our leaders, and it’s up to us working in tandem with them. Lots of choices….

I’m going to devote the next few posts to discussing this in greater detail. Awareness and understanding of why we must begin planning now—and why we need to develop different attitudes and beliefs about Peak Oil’s arrival—will go a long way to determining how well we negotiate the challenging journey through Peak Oil’s unending influence on life as we know it, and business as usual.

Next: Part II

Sources

[1]: http://www.canada.com/story+glimpse+future+chapters/1333692/story.html ; The oil story and a glimpse at future chapters – Ray Grigg, Courier-Islander February 27, 2009
[2] http://www.oildecline.com/
[3] ibid
[4] Earth Policy Institute: Is World Oil Production Peaking? Lester R. Brown www.earthpolicy.org/Updates/2007/Update67_data2.htm
[5] Peak Oil News (http://www.aspo-usa.com/) November 12, 2008, citing:  WORLD NEEDS FOUR NEW SAUDI ARABIAS, WARNS IEA  – Robin Pagnamenta Energy and Environment Editor; The (London) Times November 12, 2008 http://www.timesonline.co.uk/tol/news/
[6] Admiral Hyman G. Rickover, courtesy of http://www.dallasnews.com/sharedcontent/dws/dn/opinion/points/stories/DN-dreher_17edi.ART.State.Edition1.adb331.html – Rod Dreher: Peak oil is coming, and we’re unready; August 17, 2008

There is no question that peak oil is a contentious issue among those familiar with the discussions and considerations. Some adamantly deny that we are even close to producing the maximum rates of oil, while others ardently insist we are—or that we have already passed that point.

Let me start with just a few basics, to give you an idea as to why proponents like me think that we’re already at the point (or soon will be) when we have maxed out the rate of oil that is produced on this planet, and are just looking at declining amounts of oil production from here on in.

My next post will weigh in with an initial discussion of the opposing viewpoint.

Keep in mind that this is just a small sampling of facts supporting the imminent challenges of peak oil. Future posts will discuss the evidence in greater detail (but without getting bogged down in the heavy technical aspects. The Oil Drum and Energy Bulletin do a significantly better job at that than I could hope to, and they have access to better sources of expert opinion. See the links for each in my Blogroll.)

What the following facts each and collectively suggest seems fairly evident without the requisite professional expertise, but I’ll leave that to you to decide.

  • Just 20 years ago, 15 oilfields were able to supply at least one million barrels of oil per day (the world now uses approximately 85 mbpd). Now there are only 4 such fields. [1]
  • The world began using more oil than it was finding nearly thirty years ago. Nothing has changed since. This year we are on pace to discover nearly 20 billion barrels of oil. Sounds great up until the moment you learn that the world uses approximately 30 billion barrels per year, and that roughly 80% of the Earth’s population is just starting to use energy as we do. [2] Make no mistake: they will be looking to use more.  (Think China and India, for starters.)
  • A substantial majority of petroleum geologists agree that about 90% of all the conventional, recoverable oil on the planet has now been located. [3] Most of the Earth’s favorable geological formations conducive to oil formation have been identified.
  • Here in the United States, we reached peak oil production almost forty years ago, at about 9.5 million barrels per day. We’re down to about 5 million now. We’re not alone.
  • One third of global oil supply comes from 20 large fields—all discovered more than thirty years ago. Production rates for each of those 20 fields have now peaked. [4]
  • The International Energy Agency [IEA] is an organization which serves as an energy policy advisor to its 28 member countries, including the U.S. Its recent studies prove that the oil produced from 580 of the largest 800 fields is declining [5]
  • The largest oil field in the world is Ghawar in Saudi Arabia. It was discovered in 1948 and reached its peak production rate of 5.6 million barrels per day in 1980. It now produces 5 million barrels per day [6], and when oil prices shot through the roof last year, at a price nearing $150 per barrel, Saudi production levels did not increase.  (What greater incentive to get more oil out of the ground than such sky-high prices, especially when you can produce it as  inexpensively as the Saudis? That didn’t happen because it couldn’t.)
  • Back in the 1960s, more than 25 giant and super-giant fields were discovered. Super-giants are identified as those with “5 billion barrels of initial proven and probable reserves.” (The number is 500 million for “giant” fields). [7] By contrast, super-giant Ghawar had tens of billions of barrels of proven and probable reserves. Impressive, certainly, but the number of such finds has declined steadily over these past 40-plus years.
  • We’re at a grand total of two such discoveries so far this decade (although none come close to matching Ghawar).

It’s probably safe to assume that the intensive and technologically-advanced explorations in these last few decades have not been designed to hunt for tiny fields. The giant/super-giant fields aren’t being found because there aren’t any. 8-10 billion barrel fields are now being touted as the “huge” finds of our time, and we’re not discovering nearly enough of them.

This does not mean we’re running out of oil next Tuesday, or next month, next year, or maybe even five years from now. “Running out” is not what Peak Oil is all about. Peak oil is about the rates of oil production, and declining rates mean declining supplies at a time when demand is and will be increasing significantly in certain parts of the world.

If the facts stated above are true, then waiting until it’s too late to do anything probably isn’t the best strategy.

Many developing nations feel entitled to seek levels of prosperity once enjoyed almost exclusively by Americans. By what right can we deny them? “We’re Americans so we get to do anything we want first” isn’t likely to get us very far in this day and age, much as some wish it were otherwise.

China, India, and other rapidly-developing economies are not going to sit on their collective hands while the United States and others make certain they are taken care of first.

What this does mean is that we are now on a slippery slope. Competition for diminishing supplies in the next few decades will become our reality as the demand for oil in the developing nations increases.

It’s important that we understand what this means, and how it will affect each and every one of us in our daily lives. Changes are in the offing.

I’ve designed this blog to help readers understand what those changes will be, what they mean, and how we turn a potential catastrophe into opportunities to revitalize our economies, our industries, and our way of life.

It will be a crisis only if we let it be, and that will happen because we all decide to … wait until some undefined “later” to start doing something/anything.

We’ll never be able to restructure our petroleum-based economies overnight, and without some planning now, attempting that is precisely what we’ll be faced with.

That approach won’t work, so let’s find better ways.
 
Next: What the opponents of peak oil have to say

Sources

[1]: http://www.canada.com/story+glimpse+future+chapters/1333692/story.html; The oil story and a glimpse at future chapters -  By Ray Grigg, Courier-Islander February 27, 2009
[2] http://www.oildecline.com/
[3] ibid
[4] Earth Policy Institute: Is World Oil Production Peaking? Lester R. Brown www.earthpolicy.org/Updates/2007/Update67_data2.htm
[5] http://www.energybulletin.net/node/48582; The IEA warns of shortages – “The next oil crisis is coming” by Michael Kläsgen
[6] http://seekingalpha.com/article/130145-200-oil-is-coming-while-we-waste-a-perfectly-good-crisis-part-2
[7] Running Faster To Stand Still – By: John Kemp http://blogs.reuters.com/great-debate/2008/11/24/running-faster-to-stand-still/