Peak Oil News: When the fossil fuels go extinct

Wednesday, May 25, 2005

When the fossil fuels go extinct


WASILLA - Perhaps Chicken Little should have looked down instead of up: to the peak and subsequent decline of global oil and gas production.

The U.S. Department of Energy predicts demand to rise around 2 percent a year, which means that "soon," it says, we're going to have less than we need. When will production peak? And what do we do about it?

"Soon" means somewhere between Thanksgiving this year and a few decades from now, depending on whom you ask, according to Scott Waterman, director of the state energy efficiency program at the Alaska Housing Finance Corp., who gave a talk Friday evening on the whys and what-nows of the problem known as Peak Oil.

Getting the date right is deeply important, according to a March report prepared for DOE by a team from Science Applications International Corp.

"Waiting until world conventional oil production peaks before implementing crash program mitigation leaves the world with a significant liquid fuel deficit for two decades or longer," the report said.

In 1956, M. King Hubbard, a Shell geologist, modeled the typical life of an oil field to correctly predict that U.S. oil production would peak in 1970. Researchers are now using his methods on a global scale. Discoveries of new reserves, peak-oil pessimists say, have lagged so far lately that it's clear we've found most of the oil there is to find.

Not everyone agrees. A recent report in "The Economist" magazine stated: "Expert estimates on the ultimate recoverable resource base have consistently grown over the past few decades, even though the world has been guzzling oil as if there was no tomorrow."

The Organization of the Petroleum Exporting Companies actually waxes optimistic on peaking oil production.

"The world can rest assured that there should be plenty of oil around for decades to come," said Dr. Adnana Shihab-Eldin, OPEC's research director, in a speech at an industry conference in Dubai this April.

The U.S. Department of Energy's estimate of Hubbard's peak is similarly rosy: 2037. The U.S. estimate, though, is based on published reserves of oil instead of so-called "proven" reserves. The federal Securities and Exchange Commission has fined OPEC nations for inflating reports of reserves by 20 percent to pump up stock prices.

"A fundamental problem in predicting oil peaking is the poor quality of and possible political biases in world oil reserves data," said the SAIC report. "This study indicates that 'soon' is within 20 years."

Whether it's today or in 2025, however, the SAIC report said, "Dealing with world oil production will be extremely complex, involve literally trillions of dollars and require many years of intense effort."

As for Alaska

For the natural gas of Alaska's Cook Inlet region, Hubbard's peak has already come, Waterman said. Enstar has said it can guarantee natural gas for its customers through 2008. Demand will outstrip supply by about 2012.

Waterman outlined some possible solutions for Cook Inlet:

€ Find new gas reserves. Not likely to happen, Waterman said. "It's cheaper for them to go elsewhere and invest elsewhere," he said.

€ Improve power-plant efficiency.

€ A wind farm on Fire Island looks promising, he said, other than the $22 million still needed for undersea cables that makes it cost-inefficient.

€ A pipeline spur from Nenana, which would take five to six years to build and cost around $500 million. Local Native corporations approve, and the rights of way are already designated.

€ A spur from Glennallen to An-chorage from the proposed All-Alaska gas line from the North Slope. There are no designated easements.

€ Store gas in former oil fields at Swan-son River.

€ A "mas-sive, immediate, expensive conservation program."

In Cook Inlet and the rest of Alaska, sustainable alternatives to fossil fuels are really possible, although they probably don't include water power, Waterman said.

"The Susitna River Dam would have been the highest-cost power plant in the world," Waterman said.

Wind shows more potential. The Alaska Village Electric Co-op, which has been conservative about alternative energy sources in the past, has begun seven new wind-power projects.

Solar is still much more expensive than fossil-fuel technology, but villages that are already paying super-high prices for electricity could benefit from photovoltaic supplements, he said.

And geothermal sources - harvesting energy from underground lava flows - could be lucrative, sustainable and clean, he added.

Best not to bank on greener fossil-fuel generation, though.

The clean coal plant built in Healy cost double

the estimates, Waterman said, "and it still doesn't work."

Toshiba has offered to loan a miniature nuclear plant to Galena for a 30-year research experiment. But, Waterman noted, what shall Galena do when the lease runs out?

In the rest of the world as in Alaska, Waterman said, the solution can't be simply to find more oil, though others argue that as-yet undiscovered techno-solutions to oil production will save the day as they always have so far.

He predicted big changes, particularly for Alaskans, once oil becomes more precious. The Wal-Mart economy - low prices based on cheap production in faraway places - won't be sustainable if the price of transportation rises. Localized economies will flourish, and suburban sprawl will constrict.

"We may see ourselves in Alaska similar to the way it was during the Gold Rush," he said.

Waterman argued that the peak oil problem is not just for greens anymore. U.S. Rep. Roscoe Bartlett, R-Maryland, presented the issue to the House of Representatives this year. He's conservative, Waterman said, and he drives a hybrid Toyota Prius.

"This is no longer a partisan issue," he said.

Yet in the current energy bill, Waterman noted, there are far more subsidies for the oil-and-gas industry than there are for renewable technologies, like solar and wind power or hybrid vehicles.

"From the administration's point of view, it's 'Pump America first,'" he said.


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