The Peak Oil Crisis: It‘s All Around Us

Ten years ago peak oil was assumed to be a rather straight forward, transparent process. What was then thought of as "oil" production was going to stop growing around the middle of the last decade.

Shortages were going to occur; prices were going to rise; demand was going to drop; economies would falter; and eventually a major economic depression was going to occur. Fortunately or not, depending on your point of view, the last ten years have turned out to a lot more complicated than expected. Production of what is now known as "conventional" oil did indeed peak back around 2005, and many of the phenomena that were expected to result did occur and continue to this day.

Oil prices have climbed several-fold from where they were in the early years of the last decade – surging upwards from $20 a barrel to circa $100. This rapid jump in energy costs did slow many nations’ economies, cut oil consumption, and with some other factors set off a "great" recession. Real economic hardships have not yet occurred

What is so interesting about all this is that a temporary surge in what was heretofore a little known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation

Much of this is due to the reaction that set in from high oil prices and increased government intervention into the economy. In the case of the U.S., Washington turned on the modern day equivalent of the printing presses and began handing out money that was used to develop expensive sources of oil and gas. The high selling price per barrel, coupled with cheap money led to a boom in U.S. oil production where fortuitous geological conditions in North Dakota and South Texas allowed the production of shale oil at money-making prices provided oil prices stay high.

U.S. unconventional oil production soared by some 3.3 million barrels a day (b/d) in the last four years, and, if the US Energy Information Administration is correct, is due to climb by another million b/d or so in 2015. While this jump in production was unexpected by most, it was just another phenomenon resulting from unprecedentedly high oil prices, which in turn resulted from the lack of adequate "conventional" oil production. As is well known, economic development can have major reactions and feedbacks

What is so interesting about all this is that a temporary surge in what was heretofore a little known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation. The simple answer is that except for the U.S. shale oil surge almost no increase in oil production is taking place around the world. No other country as yet has gotten significant amounts of shale oil or gas into production. Russia’s conventional oil production seems to be peaking at present, and its Arctic oil production is still many years, or perhaps even decades, away. Brazilian production is going nowhere at the minute, deepwater production in the Gulf of Mexico is stagnating and the Middle East is busy killing itself. On top of all this, global demand for oil continues to increase by some million b/d each year – most of which is going to Asia.

If we step back and acknowledge that the shale oil phenomenon will be over in a couple of years and that oil production is dropping in the rest of the world, then we have to expect that the remainder of the peak oil story will play out shortly. The impact of shrinking global oil production, which is been on hold for nearly a decade, will appear. Prices will go much higher, this time with lowered expectations that more oil will be produced as prices go higher. The great recession, which has never really gone away for most, will return with renewed vigor and all that it implies.

An additional factor which has grown considerably worse in the last ten years is climate change, largely brought about by the combustion of fossil fuels. We are already seeing global weather anomalies with record high and low temperatures and record floods as well as droughts. This too will take its toll on economic development as mitigating this change will soon become enormously expensive. We are already seeing migrations of restive peoples. Thousands are dying in efforts to get from the Middle East and Africa into the EU. Millions are already homeless across the Middle East and recent developments foretell hundreds of thousands if not millions more being added to ranks of refugees as decades and even centuries-old political arrangements collapse.

All this is telling us that the peak oil crisis we have been watching for the last ten years has not gone away, but is turning out to be a more prolonged event than previous believed. Many do not believe that peak oil is really happening as they read daily of surging oil production and falling oil prices. Rarely do they hear that another shoe has yet to drop and that much worse in terms of oil shortages, higher prices and interrupted economic growth is just ahead.

We are sitting in the eye of the peak oil crisis and few recognize it. Five years from now, it should be apparent to all. More

 

© 2014

Geothermal Power Approaches 12,000 Megawatts Worldwide

In 2013, world geothermal electricity-generating capacity grew 3 percent to top 11,700 megawatts across 24 countries. Although some other renewable energy technologies are seeing much faster growth—wind power has expanded 21 percent per year since 2008, for example, while solar power has grown at a blistering 53 percent annual rate—this was geothermal’s best year since the 2007-08 financial crisis.

Geothermal power’s relatively slower growth is not due to a paucity of energy to tap. On the contrary, the upper six miles of the earth’s crust holds 50,000 times the energy embodied in the world’s oil and gas reserves. But unlike the relative ease of measuring wind speed and solar radiation, test-drilling to assess deep heat resources prior to building a geothermal power plant is uncertain and costly. The developer may spend 15 percent of the project's capital cost during test-drilling, with no guarantee of finding a viable site.

Once built, however, a geothermal power plant can generate electricity 24 hours a day with low operation and maintenance costs—importantly because there is zero fuel cost. Over the life of the generator, geothermal plants are often cost-competitive with all other power sources, including fossil fuel and nuclear plants. This is true even without considering the many indirect costs of fossil- and nuclear-generated electricity that are not reflected in customers’ monthly bills.

The top three countries in installed geothermal power capacity—the United States, the Philippines, and Indonesia—account for more than half the world total. California hosts nearly 80 percent of the 3,440 megawatts of U.S. geothermal capacity; another 16 percent is found in Nevada.

Despite having installed more geothermal power capacity than any other country, the United States currently generates less than 1 percent of its electricity from the earth’s heat. Iceland holds the top spot in that category, using geothermal power for 29 percent of its electricity. Close behind is El Salvador, where one quarter of electricity comes from geothermal plants. Kenya follows at 19 percent. Next are the Philippines and Costa Rica, both at 15 percent, and New Zealand, at 14 percent.

Indonesia has the most ambitious geothermal capacity target. It is looking to develop 10,000 megawatts by 2025. Having only gained 150 megawatts in the last four years, this will be a steep climb. But a new law passed by the government in late August 2014 should help move industry activity in that direction: it increases the per-kilowatt-hour purchase price guaranteed to geothermal producers and ends geothermal power’s classification as mining activity. (Much of Indonesia’s untapped geothermal resource lies in forested areas where mining is illegal.) Even before the new law took effect, geothermal company Ormat began construction on the world’s largest single geothermal power plant, a 330-megawatt project in North Sumatra, in June 2014. The plant should generate its first electricity in 2018.

Indonesia is just one of about 40 countries that could get all their electricity from indigenous geothermal power—a list that includes Ecuador, Ethiopia, Iceland, Kenya, Papua New Guinea, Peru, the Philippines, and Tanzania. Nearly all of them are developing countries, where the high up-front costs of geothermal development are often prohibitive.

To help address this mismatch of geothermal resources and funds, the World Bank launched its Global Geothermal Development Plan in March 2013. By December, donors had come up with $115 million of the initial $500 million target to identify and fund test-drilling for promising geothermal projects in the developing world. The Bank hopes that the experience gained from these projects will lead to lower costs for the geothermal industry overall. This would be good news on many fronts—simultaneously reducing energy poverty, air pollution, carbon emissions, and costly fossil fuel imports. More

 

© 2014

Solar is here

Solar is here.

That's right. You know the solutions to the climate crisis are available today; we simply need the public (and political) will to implement them. Clean energy is urgently necessary, abundant, and becoming increasingly more affordable. That's why on June 21, The Climate Reality Project is joining 12 other organizations in a day of action to support clean-energy solutions and show our commitment to bringing solar power to communities around the world.

If you don't already have plans to take part on Saturday, don't despair! Here are a few last minute ways to get involved:

1. Sign: Send President Obama an email thanking him for putting solar panels on the roof of the White House.
2. Share: Take your own #PutSolarOnIt photo and share it with your social media network.
3. Discover: Check out the Mosaic website to find out if solar is right for you.
4. Participate: Check out OFA's website to find an event near you, some of which are being hosted by your fellow Climate Reality Leaders.

The reality is this: solar is affordable. It's clean. And it's powerful. The cost of solar panels has plummeted 60 percent since early 2011, and the number of installations keeps growing. The United States now has enough installed solar capacity to power more than 2.2 million homes. In several states, solar power is now competitive with other sources of energy without emitting the dangerous greenhouse gases that cause climate change.

Climate Reality Leaders are the first responders to the climate crisis and lead action across the globe. We're proud so many of you will be participating on Saturday by hosting presentations, organizing events, and informing others about the benefits of solar power.

The Climate Reality Leadership Corps Team

Solar Array at Caledonian Bank, George Town, Cayman Islands

 

 

© 2014

Synthesized 'solar' jet fuel: Renewable kerosene from sunlight, water and carbon dioxide

With the first ever production of synthesized "solar" jet fuel, the EU-funded SOLAR-JET project has successfully demonstrated the entire production chain for renewable kerosene obtained directly from sunlight, water and carbon dioxide, therein potentially revolutionizing the future of aviation.

This process has also the potential to produce any other type of fuel for transport applications, such as diesel, gasoline or pure hydrogen in a more sustainable way.

Several notable research organizations from academia through to industry (ETH Zürich, Bauhaus Luftfahrt, Deutsches Zentrum für Luft- und Raumfahrt (DLR), ARTTIC and Shell Global Solutions) have explored a thermochemical pathway driven by concentrated solar energy. A new solar reactor technology has been pioneered to produce liquid hydrocarbon fuels suitable for more sustainable transportation.

"Increasing environmental and supply security issues are leading the aviation sector to seek alternative fuels which can be used interchangeably with today's jet fuel, so-called drop-in solutions," states Dr. Andreas Sizmann, the project coordinator at Bauhaus Luftfahrt. "With this first-ever proof-of-concept for 'solar' kerosene, the SOLAR-JET project has made a major step towards truly sustainable fuels with virtually unlimited feedstocks in the future.

The SOLAR-JET project demonstrated an innovative process technology using concentrated sunlight to convert carbon dioxide and water to a so-called synthesis gas (syngas). This is accomplished by means of a redox cycle with metal-oxide based materials at high temperatures. The syngas, a mixture of hydrogen and carbon monoxide, is finally converted into kerosene by using commercial Fischer-Tropsch technology.

"The solar reactor technology features enhanced radiative heat transfer and fast reaction kinetics, which are crucial for maximizing the solar-to-fuel energy conversion efficiency" said Professor Aldo Steinfeld, leading the fundamental research and development of the solar reactor at ETH Zürich.

Although the solar-driven redox cycle for syngas production is still at an early stage of development, the processing of syngas to kerosene is already being deployed by companies, including Shell, on a global scale. This combined approach has the potential to provide a secure, sustainable and scalable supply of renewable aviation fuel and more generally for transport applications. Moreover, Fischer-Tropsch derived kerosene is already approved for commercial aviation.

"This is potentially a very interesting novel pathway to liquid hydrocarbon fuels using focussed solar power," said Professor Hans Geerlings at Shell. "Although the individual steps of the process have previously been demonstrated at various scales, no attempt had been made previously to integrate the end-to-end system. We look forward to working with the project partners to drive forward research and development in the next phase of the project on such an ambitious emerging technology."

SOLAR-JET (Solar chemical reactor demonstration and Optimization for Long-term Availability of Renewable JET fuel) was launched in June 2011 and is receiving financial support from the European Union within the 7th Framework Programme for a duration of four years. In a first step, the technical feasibility of producing solar kerosene was proven. In the next phase of the project, the partners will optimise the solar reactor and assess the techno-economic potential of industrial scale implementation. The outcomes of SOLAR-JET will put Europe to the forefront of research, innovation and production of sustainable fuels directly from concentrated solar energy. More

 

© 2014

“Climate Change War” Is Not a Metaphor

The U.N. Intergovernmental Panel on Climate Change has just completed a series of landmark reports that chronicle an update to the current state of consensus science on climate change. In a sentence, here’s what they found: On our current path, climate change could pose an irreversible, existential risk to civilization as we know it—but we can still fix it if we decide to work together.

But in addition to the call for cooperation, the reports also shared an alarming new trend: Climate change is already destabilizing nations and leading to wars.

That finding was highlighted in this week’s premiere of Showtime’s new star-studded climate change docu-drama Years of Living Dangerously. In the series’ first episode, New York Times columnist Thomas Friedman traveled to Syria to investigate how a long-running drought has contributed to that conflict. Climate change has also been discussed as a “threat multiplier” for recent conflicts in Darfur, Tunisia, Egypt, and future conflicts, too.

Climate change worsens the divide between haves and have-nots, hitting the poor the hardest. It can also drive up food prices and spawn megadisasters, creating refugees and taxing the resiliency of governments.

When a threat like that comes along, it’s impossible to ignore. Especially if your job is national security.

In a recent interview with the blog Responding to Climate Change, retired Army Brig. Gen. Chris King laid out the military’s thinking on climate change:

“This is like getting embroiled in a war that lasts 100 years. That’s the scariest thing for us,” he told RTCC. “There is no exit strategy that is available for many of the problems. You can see in military history, when they don’t have fixed durations, that’s when you’re most likely to not win.”

In a similar vein, last month, retired Navy Rear Adm. David Titley co-wrote an op-edfor Fox News:

The parallels between the political decisions regarding climate change we have made and the decisions that led Europe to World War One are striking – and sobering. The decisions made in 1914 reflected political policies pursued for short-term gains and benefits, coupled with institutional hubris, and a failure to imagine and understand the risks or to learn from recent history.

In short, climate change could be the Archduke Franz Ferdinand of the 21st century.

Earlier this year, while at the American Meteorological Society annual meeting in Atlanta, I had a chance to sit down with Titley, who is also a meteorologist and now serves on the faculty at Penn State University. He’s also probably one of the most fascinating people I’ve ever spoken with. Check out his TEDxPentagon talk, in which he discusses how he went from “a pretty hard-core skeptic about climate change” to labeling it “one of the pre-eminent challenges of our century.” (This interview has been lightly edited and condensed.)

Slate: You’ve been a leader when it comes to talking about climate change as a national security issue. What’s your take on the connection between war and climate?

Titley: Climate change did not cause the Arab spring, but could it have been a contributing factor? I think that seems pretty reasonable. This was a food-importing region, with poor governance. And then the chain of events conspires to have really a bad outcome. You get a spike in food prices, and all of a sudden, nobody’s in control of events.

I see climate change as one of the driving forces in the 21st century. With modern technology and globalization, we are much more connected than ever before. The world’s warehouses are now container ships. Remember the Icelandic volcano with the unpronounceable name? Now, that’s not a climate change issue, but some of the people hit worst were flower growers in Kenya. In 24 hours, their entire business model disappeared. You can’t eat flowers.

Slate: What’s the worst-case scenario, in your view?

Titley: There will be a discrete event or series of events that will change the calculus. I don’t know who, I don’t know how violent. To quote Niels Bohr: Predictions are tough, especially about the future. When it comes, that will be a black swan. The question is then, do we change?

Let me give you a few examples of how that might play out. You could imagine a scenario in which both Russia and China have prolonged droughts. China decides to exert rights on foreign contracts and gets assertive in Africa. If you start getting instability in large powers with nuclear weapons, that’s not a good day.

Here’s another one: We basically do nothing on emissions. Sea level keeps rising, three to six feet by the end of the century. Then, you get a series of super-typhoons into Shanghai and millions of people die. Does the population there lose faith in Chinese government? Does China start to fissure? I’d prefer to deal with a rising, dominant China any day.

Slate: That sounds incredibly daunting. How could we head off a threat like that?

Titley: I like to think of climate action as a three-legged stool. There’s business saying, “This is a risk factor.” Coca-Cola needs to preserve its water rights, Boeing has their supply change management, Exxon has all but priced carbon in. They have influence in the Republican Party. There’s a growing divestment movement. The big question is, does it get into the California retirement fund, the New York retirement fund, those $100 billion funds that will move markets? Politicians also have responsibility to act if the public opinion changes. Flooding, storms, droughts are all getting people talking about climate change. I wonder if someday Atlanta will run out of water?

Think back to the Apollo program. President Kennedy motivated us to land a man on the moon. How that will play out exactly this time around, I don’t know. When we talk about climate, we need to do everything we can to set the stage before the actors come on. And they may only have one chance at success. We should keep thinking: How do we maximize that chance of success?

Climate change isn’t just an environmental issue; it’s a technology, water, food, energy, population issue. None of this happens in a vacuum.

Slate: Despite all the data and debates, the public still isn’t taking that great of an interest in climate change. According to Gallup, the fraction of Americans worrying about climate “a great deal” is still roughly one-third, about the same level as in 1989. Do you think that could ever change?

Titley: A lot of people who doubt climate change got co-opted by a libertarian agenda that tried to convince the public the science was uncertain—you know, theMerchants of Doubt. Unfortunately, there’s a lot of people in high places who understand the science but don’t like where the policy leads them: too much government control.

Where are the free-market, conservative ideas? The science is settled. Instead, we should have a legitimate policy debate between the center-right and the center-left on what to do about climate change. If you’re a conservative—half of America—why would you take yourself out of the debate? C’mon, don’t be stupid. Conservative people want to conserve things. Preserving the climate should be high on that list.

Slate: What could really change in the debate on climate?

Titley: We need to start prioritizing people, not polar bears. We’re probably less adaptable than them, anyway. The farther you are from the Beltway, the more you can have a conversation about climate no matter how people vote. I never try to politicize the issue.

Most people out there are just trying to keep their job and provide for their family. If climate change is now a once-in-a-mortgage problem, and if food prices start to spike, people will pay attention. Factoring in sea-level rise, storms like Hurricane Katrina and Sandy could become not once-in-100-year events, but once-in-a-mortgage events. I lost my house in Waveland, Miss., during Katrina. I’ve experienced what that’s like.

Slate: How quickly could the debate shift? How can we get past the stalemate on climate change and start focusing on what to do about it?

Titley: People working on climate change should prepare for catastrophic success. I mean, look at how quickly the gay rights conversation changed in this country. Ten years ago, it was at best a fringe thing. Nowadays, it’s much, much more accepted. Is that possible with climate change? I don’t know, but 10 years ago, if you brought up the possibility we’d have gay marriages in dozens of states in 2014, a friend might have said “Are you on drugs?” When we get focused, we can do amazing things. Unfortunately, it’s usually at the last minute, usually under duress.

This article is part of Future Tense, a collaboration among Arizona State University, the New America Foundation, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, visit the Future Tense blog and the Future Tense home page. You can also follow us on Twitter.

The U.N. Intergovernmental Panel on Climate Change has just completed a series of landmark reports that chronicle an update to the current state of consensus science on climate change. In a sentence, here’s what they found: On our current path, climate change could pose an irreversible, existential risk to civilization as we know it—but we can still fix it if we decide to work together.

But in addition to the call for cooperation, the reports also shared an alarming new trend: Climate change is already destabilizing nations and leading to wars.

That finding was highlighted in this week’s premiere of Showtime’s new star-studded climate change docu-drama Years of Living Dangerously. In the series’ first episode, New York Times columnist Thomas Friedman traveled to Syria to investigate how a long-running drought has contributed to that conflict. Climate change has also been discussed as a “threat multiplier” for recent conflicts in Darfur, Tunisia, Egypt, and future conflicts, too.

Climate change worsens the divide between haves and have-nots, hitting the poor the hardest. It can also drive up food prices and spawn megadisasters, creating refugees and taxing the resiliency of governments.

When a threat like that comes along, it’s impossible to ignore. Especially if your job is national security.

In a recent interview with the blog Responding to Climate Change, retired Army Brig. Gen. Chris King laid out the military’s thinking on climate change:

“This is like getting embroiled in a war that lasts 100 years. That’s the scariest thing for us,” he told RTCC. “There is no exit strategy that is available for many of the problems. You can see in military history, when they don’t have fixed durations, that’s when you’re most likely to not win.”

In a similar vein, last month, retired Navy Rear Adm. David Titley co-wrote an op-edfor Fox News:

The parallels between the political decisions regarding climate change we have made and the decisions that led Europe to World War One are striking – and sobering. The decisions made in 1914 reflected political policies pursued for short-term gains and benefits, coupled with institutional hubris, and a failure to imagine and understand the risks or to learn from recent history.

In short, climate change could be the Archduke Franz Ferdinand of the 21st century.

Earlier this year, while at the American Meteorological Society annual meeting in Atlanta, I had a chance to sit down with Titley, who is also a meteorologist and now serves on the faculty at Penn State University. He’s also probably one of the most fascinating people I’ve ever spoken with. Check out his TEDxPentagon talk, in which he discusses how he went from “a pretty hard-core skeptic about climate change” to labeling it “one of the pre-eminent challenges of our century.” (This interview has been lightly edited and condensed.)

Slate: You’ve been a leader when it comes to talking about climate change as a national security issue. What’s your take on the connection between war and climate?

Titley: Climate change did not cause the Arab spring, but could it have been a contributing factor? I think that seems pretty reasonable. This was a food-importing region, with poor governance. And then the chain of events conspires to have really a bad outcome. You get a spike in food prices, and all of a sudden, nobody’s in control of events.

I see climate change as one of the driving forces in the 21st century. With modern technology and globalization, we are much more connected than ever before. The world’s warehouses are now container ships. Remember the Icelandic volcano with the unpronounceable name? Now, that’s not a climate change issue, but some of the people hit worst were flower growers in Kenya. In 24 hours, their entire business model disappeared. You can’t eat flowers.

Slate: What’s the worst-case scenario, in your view?

Titley: There will be a discrete event or series of events that will change the calculus. I don’t know who, I don’t know how violent. To quote Niels Bohr: Predictions are tough, especially about the future. When it comes, that will be a black swan. The question is then, do we change?

Let me give you a few examples of how that might play out. You could imagine a scenario in which both Russia and China have prolonged droughts. China decides to exert rights on foreign contracts and gets assertive in Africa. If you start getting instability in large powers with nuclear weapons, that’s not a good day.

Here’s another one: We basically do nothing on emissions. Sea level keeps rising, three to six feet by the end of the century. Then, you get a series of super-typhoons into Shanghai and millions of people die. Does the population there lose faith in Chinese government? Does China start to fissure? I’d prefer to deal with a rising, dominant China any day. More

 

© 2014

Former BP geologist: peak oil is here and it will 'break economies'

Industry expert warns of grim future of 'recession' driven 'resource wars' at University College London lecture

A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of "continuous recession" and increased risk of conflict and hunger.

At a lecture on 'Geohazards' earlier this month as part of the postgraduateNatural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008.

Dr. Miller critiqued the official industry line that global reserves will last 53 years at current rates of consumption, pointing out that "peaking is the result of declining production rates, not declining reserves." Despite new discoveries and increasing reliance on unconventional oil and gas, 37 countries are already post-peak, and global oil production is declining at about 4.1% per year, or 3.5 million barrels a day (b/d) per year:

"We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply... New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover – but production is still falling at 4.1% p.a. [per annum]."

Dr. Miller, who prepared annual in-house projections of future oil supply for BP from 2000 to 2007, refers to this as the "ATM problem" – "more money, but still limited daily withdrawals." As a consequence: "Production of conventional liquid oil has been flat since 2008. Growth in liquid supply since then has been largely of natural gas liquids [NGL]- ethane, propane, butane, pentane - and oil-sand bitumen."

Dr. Miller is co-editor of a special edition of the prestigious journal,Philosophical Transactions of the Royal Society A, published this month on the future of oil supply. In an introductory paper co-authored with Dr. Steve R. Sorrel, co-director of the Sussex Energy Group at the University of Sussex in Brighton, they argue that among oil industry experts "there is a growing consensus that the era of cheap oil has passed and that we are entering a new and very different phase." They endorse the conservative conclusions of an extensive earlier study by the government-funded UKEnergy Research Centre (UKERC):

"... a sustained decline in global conventional production appears probable before 2030 and there is significant risk of this beginning before 2020... on current evidence the inclusion of tight oil [shale oil] resources appears unlikely to significantly affect this conclusion, partly because the resource base appears relatively modest."

In fact, increasing dependence on shale could worsen decline rates in the long run:

"Greater reliance upon tight oil resources produced using hydraulic fracturing will exacerbate any rising trend in global average decline rates, since these wells have no plateau and decline extremely fast - for example, by 90% or more in the first 5 years."

Tar sands will fare similarly, they conclude, noting that "the Canadian oil sands will deliver only 5 mb per day by 2030, which represents less than 6% of the IEA projection of all-liquids production by that date."

Despite the cautious projection of global peak oil "before 2020", they also point out that:

"Crude oil production grew at approximately 1.5% per year between 1995 and 2005, but then plateaued with more recent increases in liquids supply largely deriving from NGLs, oil sands and tight oil. These trends are expected to continue... Crude oil production is heavily concentrated in a small number of countries and a small number of giant fields, with approximately 100 fields producing one half of global supply, 25 producing one quarter and a single field (Ghawar in Saudi Arabia) producing approximately 7%. Most of these giant fields are relatively old, many are well past their peak of production, most of the rest seem likely to enter decline within the next decade or so and few new giant fields are expected to be found."

"The final peak is going to be decided by the price - how much can we afford to pay?", Dr. Miller told me in an interview about his work. "If we can afford to pay $150 per barrel, we could certainly produce more given a few years of lead time for new developments, but it would break economies again."

Miller argues that for all intents and purposes, peak oil has arrived as conditions are such that despite volatility, prices can never return to pre-2004 levels:

"The oil price has risen almost continuously since 2004 to date, starting at $30. There was a great spike to $150 and then a collapse in 2008/2009, but it has since climbed to $110 and held there. The price rise brought a lot of new exploration and development, but these new fields have not actually increased production by very much, due to the decline of older fields. This is compatible with the idea that we are pretty much at peak today. This recession is what peak feels like."

Although he is dismissive of shale oil and gas' capacity to prevent a peak and subsequent long decline in global oil production, Miller recognises that there is still some leeway that could bring significant, if temporary dividends for US economic growth - though only as "a relatively short-lived phenomenon":

"We're like a cage of lab rats that have eaten all the cornflakes and discovered that you can eat the cardboard packets too. Yes, we can, but... Tight oil may reach 5 or even 6 million b/d in the US, which will hugely help the US economy, along with shale gas. Shale resources, though, are inappropriate for more densely populated countries like the UK, because the industrialisation of the countryside affects far more people (with far less access to alternative natural space), and the economic benefits are spread more thinly across more people. Tight oil production in the US is likely to peak before 2020. There absolutely will not be enough tight oil production to replace the US' current 9 million b/d of imports."

In turn, by prolonging global economic recession, high oil prices may reduce demand. Peak demand in turn may maintain a longer undulating oil production plateau:

"We are probably in peak oil today, or at least in the foot-hills. Production could rise a little for a few years yet, but not sufficiently to bring the price down; alternatively, continuous recession in much of the world may keep demand essentially flat for years at the $110/bbl price we have today. But we can't grow the supply at average past rates of about 1.5% per year at today's prices."

The fundamental dependence of global economic growth on cheap oil supplies suggests that as we continue into the age of expensive oil and gas, without appropriate efforts to mitigate the impacts and transition to a new energy system, the world faces a future of economic and geopolitical turbulence:

"In the US, high oil prices correlate with recessions, although not all recessions correlate with high oil prices. It does not prove causation, but it is highly likely that when the US pays more than 4% of its GDP for oil, or more than 10% of GDP for primary energy, the economy declines as money is sucked into buying fuel instead of other goods and services... A shortage of oil will affect everything in the economy. I expect more famine, more drought, more resource wars and a steady inflation in the energy cost of all commodities."

According to another study in the Royal Society journal special edition by professor David J. Murphy of Northern Illinois University, an expert in the role of energy in economic growth, the energy return on investment (EROI) for global oil and gas production - the amount of energy produced compared to the amount of energy invested to get, deliver and use that energy - is roughly 15 and declining. For the US, EROI of oil and gas production is 11 and declining; and for unconventional oil and biofuels is largely less than 10. The problem is that as EROI decreases, energy prices increase. Thus, Murphy concludes:

"... the minimum oil price needed to increase the oil supply in the near term is at levels consistent with levels that have induced past economic recessions. From these points, I conclude that, as the EROI of the average barrel of oil declines, long-term economic growth will become harder to achieve and come at an increasingly higher financial, energetic and environmental cost."

Current EROI in the US, Miller said, is simply "not enough to support the US infrastructure, even if America was self-sufficient, without raising production even further than current consumption."

In their introduction to their collection of papers in the Royal Society journal, Miller and Sorrell point out that "most authors" in the special edition "accept that conventional oil resources are at an advanced stage of depletion and that liquid fuels will become more expensive and increasingly scarce." The shale revolution can provide only "short-term relief", but is otherwise "unlikely to make a significant difference in the longer term."

They call for a "coordinated response" to this challenge to mitigate the impact, including "far-reaching changes in global transport systems." While "climate-friendly solutions to 'peak oil' are available" they caution, these will be neither "easy" nor "quick", and imply a model of economic development that accepts lower levels of consumption and mobility. More

 

Richard Heinberg's Museletter - The Climate-PR Puzzle

How do we effectively communicate an important but difficult message, even as it appears to fall on deaf ears? The first essay in this month's Museletter addresses this thorny issue, one which I face every day in my work here at PCI, and which will be familiar to many of you. The second essay is a reminder that in some places the message is getting through and that change does happen. Richard hopes that you will find some hope in his report from a recent visit to Seoul, Korea.

The Climate-PR Puzzle

If we hope to avert climate apocalypse in the decades ahead, we must make fundamental changes to industrial society. Before those changes can be approved and implemented, citizens and policy makers must first come to understand they are essential to our survival. Public relations—the management of the spread of information between an individual or organization and the public—will be an unavoidably necessary tool in the process.

But a PR message capable of persuading policy makers and citizens to end society’s environmental rampage remains elusive. In this essay I hope to explore why an effective PR message is so hard to formulate, and how the whole project might be reconsidered.

Let’s start with what needs to be conveyed. After years of research and thought, I would summarize our dilemma with three general conclusions:

1. Energy is the biggest single issue facing us as a species.*

Global warming—by far the worst environmental challenge humans have ever confronted—results from our current fossil-fuel energy regime, and averting catastrophic climate change will require us to end our reliance on coal, oil, and natural gas. Ocean acidification is also a consequence of burning fossil fuels, and most other environmental crises (like nitrogen runoff pollution and most air pollution) can be traced to the same source.

Therefore ending our addiction to fossil fuels is essential if we want future generations of humans (and countless other species) to inherit a habitable a planet. But these energy sources are “unsustainable” also in a more basic, economic sense of the term: oil, gas, and coal are depleting, non-renewable resources. Already, depletion of the easy-and-cheap sources of petroleum that drove economic growth in the 20^th century has led to persistently high oil prices, which are a drag on the economy. We have picked the low-hanging fruit of the world’s petroleum resources, and as time goes on all sources of fossil energy will become more financially costly and environmentally risky to extract. This is a big problem because the economy is 100 percent dependent on energy. With lots of cheap energy, problems of all kinds are easy to solve (running out of fresh water? Just build a desalination plant!); when energy becomes expensive and hard to get, problems multiply and converge.

One way or another, whether our concern is the environment or economic growth, it’s mostly about energy.

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*Arguably, overpopulation is as big an issue as our energy-climate conundrum. I’ve chosen not to focus on it here merely to streamline the narrative. There are many feedbacks between population, energy, and climate, and these deserve discussion elsewhere.

2. We are headed toward a (nearly) all-renewable-energy economy one way or the other, and planning is essential if we want to get there in one piece.

If society is to avoid civilization-threatening levels of climate change, the use of fossil fuels will have to be reduced proactively by 80-90 percent by 2050.

At the same time, despite the claims of abundance of unconventional fuels (shale gas, tight oil, tar sands) by the fossil fuel industry, evidence overwhelmingly shows that drillers are investing increasing effort to achieve diminishing returns.

Either way, fossil fuels are on their way out.

Most nations have concluded that nuclear is too costly and risky, and supplies of uranium are limited.

That leaves renewable energy sources—solar, wind, hydro, geothermal, tidal, and wave power—to power the economy of the future.

3. In the process of transition, the ways that society uses energy must change at least as much as the ways society produces energy.

Every energy source possesses a unique set of characteristics: some sources are more portable than others, or more concentrated, intermittent, scalable, diffuse, renewable, environmentally risky, or financially costly. We have built our current economy to take advantage of the special properties of fossil fuels. The renewable energy sources that are available to replace oil, gas, and coal have very different characteristics and will therefore tend to support a different kind of economy—one that is less mobile, more rooted in place; less globalized, more localized; less when-we-want-it, more when-it’s-available; less engineered, more organic.

At the same time, the sheer quantity of energy that will be available during the transition from fossil to renewable sources is in doubt. While ever-more-rapid rates of extraction of fossil fuels powered a growing economy during the 20^th century, society will struggle to maintain current levels of total energy production in the 21^st, let alone grow it to meet projected demand. Indeed, there are credible scenarios in which available energy could decline significantly. And we will have to invest a lot of the fossil energy we do have in building post-fossil energy infrastructure. Energy efficiency can help along the way, but only marginally.

The global economy will almost certainly stagnate or contract accordingly.

There it is. It is a complicated message. I’ve just conveyed it in 661 words punctuated by three short summary sentences (here’s a summation of the summation: it’s all about energy; renewables are the future; growth is over.) However, only readers with a lot of prior knowledge will be able to truly understand some of these words and phrases. And many people who are capable of making sense of what I’ve written would disagree with, or dismiss, much of it. The message faces a tough audience, and it flies against deep-seated interests.

Many economists and politicians don’t buy the assertion that energy is at the core of our species-wide survival challenge. They think the game of human success-or-failure revolves around money, military power, or technological advancement. If we toggle prices, taxes, and interest rates; maintain proper trade rules; invest in technology R&D; and discourage military challenges to the current international order, then growth can continue indefinitely and everything will be fine. Climate change and resource depletion are peripheral problems that can be dealt with through pricing mechanisms or regulations.

Fossil fuel companies may understand the importance of energy, but they have a powerful incentive to avoid acceptance of the message that “renewables are the future.” If humanity is headed toward an all-renewable energy economy, then their business has no future. The industry’s strategy for diverting the general public’s buy-in to conclusion 2 is to claim that there is plenty of oil, gas, and coal available to fuel society for decades to come.

Some policy wonks buy “it’s all about energy,” but are jittery about “renewables are the future” and won’t go anywhere near “growth is over.” A few of these folks like to think of themselves as environmentalists (sometimes calling themselves “bright green”)—including the Breakthrough Institute and writers like Stewart Brand and Mark Lynas. A majority of government officials are effectively in the same camp, viewing nuclear power, natural gas, carbon capture and storage (“clean coal”), and further technological innovation as pathways to the solution of the climate crisis without any need for curtailment of economic growth.

Other environment-friendly folks buy “it’s all about energy” and “renewables are the future,” but still remain allergic to the notion that “growth is over.” They say we can transition to 100 percent renewable power with no sacrifice in terms of economic growth, comfort, or convenience. Stanford professor Mark Jacobson and Amory Lovins of Rocky Mountain Institute are leaders of this chorus. Theirs is a reassuring message, but if it doesn’t happen to be factually true (and there are many energy experts who argue persuasively that it isn’t), then it’s of limited helpfulness because it fails to recommend the kinds or degrees of change in energy usage that are essential to a successful transition.

The general public tends to listen to one or another of these groups, all of which agree that the climate and energy challenge of the 21^st century can be met without sacrificing economic growth. This widespread aversion to the “growth is over” conclusion is entirely understandable: during the last century, the economies of industrial nations were engineered to require continual growth in order to produce jobs, returns on investments, and increasing tax revenues to fund government services. Conclusion 3, which questions whether growth can continue, is therefore deeply subversive. Nearly everyone has an incentive to ignore or avoid it. It’s not only objectionable to economic conservatives, it is abhorent to many progressives who believe economies must continue to grow so that the “under-developed” world can improve standards of living.

But ignoring uncomfortable facts seldom makes them go away. Often it just makes matters worse. Back in the 1970s, when environmental limits were first becoming apparent, catastrophe could have been averted with only a relatively small course correction—a gradual tapering of growth and a slow decline in fossil fuel reliance. Now, only a “cold turkey” approach will suffice. If a critical majority of people couldn’t be persuaded then of the need for a gentle course correction, can they now be talked into undertaking deliberate change on a scale and at a speed that might be nearly as traumatic as the climate collision we’re trying to avoid?

To be sure, there are those who do accept the message that “growth is over”: most are hard-core environmentalists or energy experts. But this is a tiny and poorly organized demographic. If public relations consists of the management of information flowing from an organization to the public, then it surely helps to start with an organization wealthy enough to be able to afford to mount a serious public relations campaign.

This is all quite discouraging, to the point that a fourth conclusion seems justified: More