Why Energy Matters “ Energy is at the core of virtually every problem facing humanity. We cannot...
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Why Energy Matters “Energy is at the core of virtually every problem facing humanity. We cannot afford to get this wrong. We should be skeptical of optimism that the existing energy industry will be able to work this out on its own.” Dr. Richard E. Smalley, Director of the Carbon Nanotechnology Laboratory, to the Senate Committee on Energy and Natural Resources
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Transcript of Why Energy Matters “ Energy is at the core of virtually every problem facing humanity. We cannot...
Why Energy Matters“Energy is at the core of virtually every
problem facing humanity. We cannot afford to get this wrong. We should be skeptical of optimism that the existing energy industry will be able to work this out on its own.”
Dr. Richard E. Smalley, Director of the Carbon Nanotechnology Laboratory, to the Senate Committee on Energy and Natural Resources
Is There an Energy ProblemWhy is it so hard to communicate the Peak Oil
message?
• The Boy Who Cried Wolf … “we’ve heard that before”• “They’re always finding more oil!” (true, but …)• Reserves/production = “40 years, at present rate of
use”
Acknowledging Peak Oil is only the first step toward understanding the problem:
• “Market forces will ensure adequate energy for everyone – when prices go up, people will find alternatives!” (free-market theory)
• “But we’ve got 40 years for science and technology to come through with something!”
Huge Disagreement!
1920 1940 1960 1980 2000 2020 2040
OPEC
USA
ROW-Russia
World
0
100
80
60
40
20
120
URR Accordingto ASPO
URR Accordingto USGS, IEA, …
URR = ~2 Trillion Bbl1+ Trillion Remaining
URR = 3 Trillion Bbl2+ Trillion Remaining
Energy Future According to ASPOEnergy Future According to USGS
How can something this important have so much uncertainty? (+/-100%!)
1) No Agreement on Crude Oil URR
• Unreliable, missing, or unbelievable reserve numbers
• Variable estimates for “reserve growth” applied at global level
• How much “Yet to Be Discovered” exists?• Disagreement on impact of new technology• Uncertainty re. relation of price to exploration,
discovery, and extraction rates• Wildly-varying estimates for future production rates
and URR for tar sands, Venezuela heavy, shale oil
2) More Reasons for Confusion and Complacency
For every Fossil-Fuel alarmist, there is another expert saying “No problem”
Opinions run the gamut:• Utopian scenarios of fusion-enabled hydrogen-
fueled industry, transport, and agriculture• Magical reversion to 18th-century way of life• Cataclysmic scenarios of war, starvation, death
Without science or numbers behind them, all opinions are equally valid
Oil Demand Exceeding Expectations
Population – world population projected to continue rising past 2050 or later (9-10 B)
Industrial development – China’s oil imports rose 30+% in 2003, surpassing Japan; India and rest of SE Asia also exploding demand
Middle-class aspirations in China, India
Although losing industry, N American demand continues to rise – transport, electricity, gas
Rest of world coming out of recession – EIA repeatedly raising estimates of demand
Agriculture Agriculture was once very labor-intensive in human and animal power; what will substitute for fossil fuels now that we number 6.4 billion (heading for 9 to 10 billion) ?
US horse population peaked in 1915 at 25 million; 20% of all arable US land was used to feed horses. US humans numbered 100 million. In 2015, expect 300M people.
There is no model for feeding 9 billion people without fossil fuel!
The Big Picture – Oil Production over History
1920 1940 1960 1980 2000 2020 2040
OPEC
USA
ROW-Russia
World
1920 1940 1960 1980 2000 2020 2040
OPEC
USA
ROW-Russia
World
20601920 1940 1960 1980 2000 2020 2040
OPEC
USA
ROW-Russia
World
20601920 1960 2000 2040
OPEC
USA
ROW-Russia
World
20801880 2000
OPEC
USA
World
21001900
ROW-Russia
2000 210019001800 22002000 210019001800 22001700 23000
100
80
60
40
20
M bbl/day
?
Understanding Net Energy• All energy sources require up-front
investment in energy, as well as $ capital and human effort, to yield a return on that investment
• NET ENERGY: Energy Returned on Energy Invested = ERoEI
• Some investments are better than others
• Some investments are energy losers!
• How can we know which ones to invest in?
History and Future of Oil Supply
Oil & NGL’s, from ASPO You are here
Supply-Demand Mismatch
• No near-term substitute for oil
• The Hubbert Peak
History of the Hubbert Peak• In 1956, Shell geologist Dr Marion King Hubbert
predicted that US domestic oil production would peak in the early 1970s and then begin an irreversible decline.
• Hubbert's prediction was the subject of water-cooler confabs in every oil company office in the US and - because US production was growing exponentially at the time - it was laughed off.
• Hubbert was fired.• 15 years later (1971), US oil production peaked
and began an irreversible decline. The phenomenon is now called “Hubbert's Peak”
• The 1973 “Arab Oil Embargo” tripled the price of oil.
• Since the US couldn’t supply its own oil demand anymore, the US intensified its search for oil, and there was serious effort at conservation (smaller cars, 55mph limit, CAFE).
• In 1979 there was a real “Oil Shock” (the Iranian Revolution) and another in 1980 (the Iran-Iraq War). As new oil fields discovered in the 1970s came online, prices fell to $10/barrel by 1998. Concerns about limited supply were dead. By 2004, 50% of vehicles sold were “light” trucks and SUVs. But U.S. production never regained 1971 levels.
The global rate of oil production mustpeak out and then start to decline.
Projected World Oil Consumption By Region
Oil Transited at Major Strategic Locations, 2004
0 2 4 6 8 10 12 14 16 18
Strait of Hormuz
Strait of Malacca
Bab el-Mandab
Suez Canal & Sumed Pipeline
Bosporus
Panama Canal & Pileline
Million barrels per day
Strait of Hormuz
24 May 2004 World Energy Modeling
