Peak Oil News: Understanding peak oil

Friday, October 28, 2005

Understanding peak oil

Vermont Guardian

By Greg Pahl

In recent months, the term “peak oil” has begun to enter the mainstream, yet most people are not familiar with what it really means. I have been deeply concerned about this issue for a number of years, both as a writer focusing on renewable energy, and in my work with the Vermont Biofuels Association. My conclusion is that it deserves our immediate attention, and here’s why.

Peak oil is now viewed by a growing number of observers as a more imminent danger to human society than global warming. That doesn’t mean that global warming isn’t a serious problem. It is. But the modern global economy is almost totally dependent on enormous quantities of (still) relatively cheap petroleum products or their derivatives. Anything that seriously disrupts the supply or price of oil means big trouble, and the current extreme volatility of oil prices caused by tight supplies and rising demand is already causing problems that are beginning to ripple through the national and global economies. This is just the beginning.

So, what does the term really mean? When we arrive at peak oil, we will have consumed half of the total recoverable global reserves. That might not seem like a big deal, since the other half is still available. But that first half was the easy part to find and exploit, and also represented the highest quality. While the remaining half is still in the ground, it’s generally much lower quality, and is located in much smaller fields in, shall we say, inconvenient places like the Arctic, or under deep water. Consequently, what remains is going to be much harder and more expensive to extract and produce.

Worse yet, serious doubts have recently arisen about the size of reserves claimed by many oil companies and oil producing nations. The massive 2004 accounting scandal involving oil giant Royal Dutch/Shell and the subsequent 22 percent (or 4.3 billion barrel) cut in the company’s petroleum reserve estimates is viewed by some industry experts as just the tip of the iceberg of over-inflated reserve figures for the industry.

The main problem is that after peak production is reached, the global supply of oil will inexorably begin to decline while demand continues to increase. When the descending line on the chart for supply crosses the rising line for demand, we will have reached what is known as the “tipping point.” The huge price increases for oil predicted after we reach that point will unquestionably lead to much higher prices for almost everything, especially food.

Unfortunately, the onset of peak oil may arrive much sooner than most people think. The experts, as always, are divided on when this will happen. One of the most optimistic views, promoted by the U.S. Department of Energy, maintains that oil production won’t peak until 2037. Most observers feel this is far too optimistic, especially considering the huge increase in demand from countries like China, which overtook Japan as the world’s second largest oil consumer in 2003.

Renowned petroleum geologist Colin Campbell estimates that global extraction of oil will peak before 2010, probably around 2007. Geophysicist Kenneth Deffeyes says the date for maximum production will be this November. The current instability in the international oil market tends to confirm that we probably are very close to that point.

The exact date may be somewhat academic. If the rollover point does occur within the next few years, there simply isn’t enough time left to make the massive shift to the renewable energy strategies that would allow for a smooth transition from our present oil-based economy. That smooth transition would have been possible if we had started the process 10 or 20 years ago, as many environmentalists and scientists urged. But it didn’t happen. Now, we are simply unprepared.

According to a Feb. 8, 2005, report prepared for the U.S. Department of Energy, “the world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions were gradual and evolutionary. Oil peaking will be abrupt and revolutionary.”

Unfortunately, we are also facing a similar dilemma with natural gas, which was supposed to be a cleaner and abundant substitute for oil and coal. It turns out that domestic supplies of natural gas are declining almost as rapidly as supplies of oil. And filling the gap with imports from Canada, or liquefied natural gas (LNG) from unstable countries overseas is, at best, a problematic — and temporary — strategy, since natural gas (another fossil fuel) is part of the problem, rather than a long-term solution.

Hurricanes Katrina and Rita, and the damage they have done to the oil and natural gas infrastructure in the Gulf Coast region, have made an already bad situation even worse. There is no question that these hurricanes are the product of global warming. And virtually every responsible scientist says that global warming is the unfortunate (but predictable) result of our excessive burning of fossil fuels.

However, hurricanes aren’t the cause of our energy problems. Rather, the culprit is decades of bad planning and bad choices at the national level. The hurricanes were simply one of the possible trigger events that pushed us over the edge — and into the early stages of what James Howard Kunstler aptly describes as The Long Emergency, the title of his 2005 book.

It’s time to get educated about peak oil and think about local responses that reduce our consumption of fossil fuels. As part of that process, we also need to develop a wide range of locally-based renewable energy strategies that help us to make this vital transition as soon as possible.

Weybridge resident Greg Pahl is the author of Biodiesel: Growing a New Energy Economy and Natural Home Heating: The Complete Guide to Renewable Energy Options. He is also a founding member and current president of the Vermont Biofuels Association. For more information, visit www.postcarbon.organd


At 8:03 PM, October 30, 2005, Anonymous SqueakyRat said...

"There is no question that these hurricanes are the product of global warming."

Now, that is just the sort of statement that is simply going to destroy your credibility. It really is not possible to connect global warming with specific weather events. Yes, conditions like surface temperatures in the Gulf of Mexico have been favorable for strong hurricanes. Is that due to global warming? Maybe. Probably partly. Why do you need to make yourself look like a fool by exaggerating?

At 1:03 PM, November 03, 2005, Anonymous Anonymous said...

With reference to the other comment provided on this blog entry - there are some other points made that are incorrect either in fact or conclusion.

Peak oil is not going to become an influence on policy or public opinion. It is a goofy notion in every respect.

Essentially it says the globe is half way from somewhere to somewhere else. It deals with a progression that is impossible to measure. For example if the idea of reserve inaccuracy were correct, since that is where the proposition of peak point measurement comes from, we could not know if we were anywhere near it.

The point with respect to Shell is not one of fraud or dishonesty. It has to do with timing and economic assumptions. Reserve estimates are like actuarial predictions. If an actuary tells your pension annuity sponsor that you are likely to live until age 76, he did not lie simply because you made it to 80.


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