Won’t New Technologies Make the Decline of Oil a Non-Issue?


  • Outline of the basic issues involved with declining oil production and also the challenges that new technologies and alternatives face in trying to mitigate the negative consequences of a declining supply of oil.
  • Review the fundamentals of global oil supply and demand. Explore the potential ways in which we might compensate for declining oil production.
  • Explain the necessity for a petition that calls upon the National Academy of Science (NAS) and its affiliates to conduct a comprehensive study and make the necessary recommendations to Congress and the President.

This essay deals with the most common arguments that attempt to deny any concerns about depleting oil supplies and the decline in production of conventional fuels like gasoline and diesel. There is little doubt or controversy about the evidence which suggests that the common means of oil production, using traditional technologies, will simply not be able to supply the amount of oil needed to keep world economies functioning in a “Business As Usual” (BAU) fashion. Claims and counterclaims, for keeping our country fueled and running smoothly, are examined. However, this essay does not intend to provide a full evidentiary proof that “Peak Oil” is a very real threat to our nation. This essay is simply a summary of published material on the subject. At the end of this essay, you will find references and links to this material. This author’s conclusion is that our nation is facing a very serious crisis and that the published research validates this position.

The Claims That Technology Will Prevail Against Declining Oil:

Daily TV ads from energy companies promise abundant energy supplies for decades to come. They talk about tripling oil supplies with new technologies for finding and recovering vast new reserves of oil and natural gas and new methods for processing crude oil that was previously locked up in shale and sand. These technologies promise to safeguard costal and arctic areas if the laws are changed to permit exploration.

The US coal industry talks about reserves to supply energy needs for a hundred years or more. The coal industry promotes “Clean Coal” technology and a “Coal to Liquid” process to keep our cars running. Our government subsidizes bio-fuels as another way to meet our gasoline needs.

Beyond fossil and bio-fuels, new alternative energy sources such as wind, solar, ocean tides, etc. promise to drastically reduce the need for fossil fuels. Plus, advancements in nuclear technology suggest that new methods greatly minimize the danger of explosion or waste disposal issues.

In addition to these new technologies, efficiency advancements promise to save huge amounts of fossil fuels. For example, hybrid and electric cars can get greatly improved mpg. In the future, hydrogen fuel cells promise to further increase efficiency. Also, new insulation practices for homes and efficiency measures for industry hold the promise of much lower reliance on fossil fuels.

And beyond efficiency is the promise of conservation – riding a bicycle, car pooling, mass transit, electronic meetings, etc.; all methods that completely avoid using oil and therefore extend the supply for decades to come.

Given all these technological advances, efficiencies and conservation, it seems unnecessary, or at least premature, to worry about issues such as the depletion of oil deposits or the decline in gasoline production. These factors should make depletion irrelevant. Even the projected twenty percent increase in world population or the emergence of China and India as consumer nations should not cause any undo concern. If we can cut in half our consumption of oil; then the oil supply should last twice as long. There is also the idea that global warming concerns will force the efficiencies and conservation that will drastically reduce the use of fossil fuels like oil.

The Counter Argument

The problem with the previous paragraph is that it denies reality. The reality is that oil is the mainstay of our civilization and the supply of it is declining faster than any of these alternatives can compensate. However, the promises that emanate from financially vested interests have much to gain by our continued reliance on conventional fuel sources. They would like us to believe that we have nothing to worry about. Our petition attempts to get a highly credible scientific assessment of all these claims and their actual impact on our energy future. If you already doubt these claims, and want an unbiased analysis, please sign our petition now. However, for the curious and studious, continue reading about our case for getting the NAS involved.

The fundamental question that urgently needs to be answered is: what is the truth about the US energy supply for the next decade or two? The author of this essay believes that the global production of petroleum oil is in irreversible decline and will result in shortfalls of gasoline and other petroleum products in the near future. It is highly unlikely that technology can prevent this outcome. It is critical that these projected shortfalls are anticipated by our government and mitigation plans developed to avoid very serious consequences for our country. The most immediate need is to see the NAS commissioned, within the year 2009, to provide a comprehensive analysis of the decline in global oil production and to guide our government in developing a plan to deal with this decline.

The Fundamentals:

Some basic definitions and readily available facts.

Here is the basic formula for understanding oil production:

85mbd + spare capacity + ((known reserves + new discoveries) – depletion rate))

  • Global oil supply (and oil equivalents), for the past few years, fluctuated around the 85 million barrel per day (mbd) mark. Current economic conditions have reduced this to around 83 mbd. The International Energy Agency (IEA) estimates that demand for oil will rise to 110 mbd, or more, over the next 20 years as global population increases and 3rd world economies industrialize.
  • Spare capacity (from producing wells) for supplying oil has been in the 3 to 4 mbd. This spare capacity is the single most important factor for keeping oil prices in a modest range. If the demand for oil recovers from the recessionary levels seen since mid 2008, then oil will rise in price until more supply is brought on line. However, the 3 to 4 mbd of spare capacity might easily shrink to zero. That is when oil prices will spike higher (as they have in the past).
  • Beyond spare capacity from producing wells, we have two competing forces: the rate of oil well depletion versus the development of new oil sources from “known reserves” and “undiscovered reserves” of oil. References will be provided for detailed studies of these depletion rates and reserves. However, even in spite of the secrecy and sometimes deception surrounding these factors, the bottom line is that there appears to be a significant shortfall of oil supply if the projections of growth in demand are weighed against depletion rates and development of reserves.
  • The optimistic thinking is that this shortfall will not occur because exploration will discover new sources of oil as oil prices rise. This thinking hopes that these “undiscovered reserves” will more than satisfy the shortfall mentioned above. The IEA has estimated that obtaining adequate new reserves will require the discovery of oil fields which are the equivalent of 6 new Saudi Arabia oil fields.

It is highly probable that a BAU approach to consumption of oil products will result in a shortfall of gasoline and other oil based products within the next few years – certainly far less than the 20 year horizon that is often suggested. On one hand, the growth in demand for oil will surely rise due to the increased consumerism in China, India, and other places in the world. On the other hand, there is no convincing argument for the supply side being able to meet this demand.

Oil and Gas Projection

The above chart, from the Association for the Study of Peak Oil (ASPO) provides a general view of fossil fuel production since 1930 through current times and then projected to the year 2050. Obviously, the projected part has an element of uncertainty. However, this appears to be the general view of most scientists who study oil supplies.

Oil and Gas Projection

The above chart from the Energy Watch Group shows the heart of the problem. The red line is the World Energy Outlook (WEO), from the International Energy Agency (IEA), which predicts the demand for oil will rise from the 85 mbd range to nearly 120 mbd range around 2030. This is the fundamental disconnect: a projected demand by consumers of 120 mbd and a projected supply by the producers of only 1/3 of that amount. Once again, projections like this involve a lot of assumptions and no small amount of guess work. However, this disconnect is so large that any rational observer would want to see impartial experts render an assessment of the situation. After all, what hangs in the balance is just “life as we know it”. Our petition calls for an impartial assessment by the NAS.

Technologies that claim to supplant the need for petroleum:

• Clean coal and coal to liquid
• Natural gas and liquefied NG
• Advanced drilling techniques
• Shale and tar sands
• Bio-fuels
• Nuclear
• Hydrogen
• Wind & Solar
• Other

The detailed analysis of each of these technologies can be found in the list of references. The goal here is to outline the broader argument for why these technologies will NOT provide for a BAU lifestyle in the US for decades to come.

The first and most important point is to understand that the Government Accounting Office (GAO) has flatly stated that it will take 20 years to prepare for a smooth transition to an ever diminishing supply of oil once the reality of Peak Oil is reached. We don’t know for certain if the peak in oil supply has already occurred or will occur in the next few years – only the history books will know for sure. However, we do know that no rational or impartial observer could conclude that we still have 20 years of preparation time. This is an urgent issue that urgently requires action. Our petition is simply a plea for our best scientists to study this issue and report to Congress and the President on a prudent course of action.

• Coal – the worst consequence of declining oil production would be the increase in using coal because of global warming concerns. The use of coal emits more CO2 than most other fossil fuel sources. However, beyond global warming is the very real issue of how viable is coal as an oil substitute? You will learn in the reference section that coal has many limitations: coal-to-liquid fuel is very expensive and demanding of other natural resources; coal mining produces enormous environmental impacts; the era of high grade coal is gone – today we are using coal that is much more expensive to process and much more damaging to the environment.

• Natural Gas (NG) and Liquefied Natural Gas (LNG) have many of the same concerns as oil. NG is a depleting resource that will experience the same productions declines as oil – just later. Also, LNG has significant problems associated with transportation costs and security of storage facilities. However, NG and LNG could play an important role in mitigating the worst consequences of declining oil production. It could act as a “bridge” agent in getting to truly sustainable energy sources. Exactly how this precious resource is used is far from certain. Without a comprehensive, rational, national plan its potential may easily be squandered. More on this in the reference section.

• Advanced drilling techniques. Most likely, there are a few more large oil deposits to be discovered. However, the latest large discovery in Brazil is a good example of why new discoveries are not going to change the basic problem of declining oil production. Extraction of this oil will require very sophisticated and expensive methods – certainly today’s oil prices will not support these techniques. In any case, the overwhelming evidence is that the rate of new discoveries has almost no probability of compensating for the rate of depletion of existing sources of oil. Although “Drill Baby, Drill” is a popular slogan, the reality is that a greatly expanded exploration program has a very limited potential for actually delaying the point of reaching Peak Oil production. Although the research data generally supports this position, there is a lot of popular opinion to the contrary. Once again, our petition asks to resolve this debate.

• Shale and tar sands. Once again we are looking at two key issues: cost and environmental damage. These sources of oil can often require twice (or more) the cost of extracting conventional oil. In most cases the technology used to actually produce a barrel of oil requires both oil and water. Significant amounts of oil are needed to process the raw material. The water requirements are often a serious environment issue. This is an area where companies with a vested interest in maintaining a BAU dependence on oil, use the popular media to conduct a disinformation campaign. Thier goal is to make us believe that extensive supplies of oil are available if we are simply willing to pay a bit more and relax some of our environmental regulations.

• Bio-Fuels. These fuels have two fundamental trade-offs. The first is called “Energy Returned on Energy Invested” (ERoEI). Some Bio-Fuel processes require so much invested energy that the ultimate yield of energy is very small – other processes have slightly better yields – the economic sustainability of these processes is often called into question. The second trade-off is the diversion of crop land from food production to fuel production. Many critics argue that it is simply immoral to put a priority on driving an SUV over feeding poor people. Although bio-fuels can play a role such as powering farm tractors with site produced fuel, there is little evidence that this source of fuel could provide for a continuation of the current private motor vehicle paradigm.

• Nuclear energy does have some promise for the generation of electricity that could, in turn, power an electric motor vehicle; and hence, reduce the need for oil. The devil is in the details. The first issue with nuclear power is simply the cost and time associated with constructing power plants. Even if we are willing to pay the cost (a big “if”), the realities of constructing these plants precludes any timely contribution of energy that can offset the decline in oil. However, nuclear does have the potential of new technological discoveries and innovations that could supply significant amounts of energy. The problem, again, is that there is near zero probability that any new nuclear technology could mitigate the decline in oil in any kind of useful time frame. Hoping for a miracle, does not constitute a rational national energy plan. A rational plan for nuclear is to keep investing an appropriate amount of resources into research efforts and hope for an eventual payback.

• Hydrogen is another one of those “hopeful” technologies that may someday provide an abundant source of cheap energy. We should continue a research effort. Admittedly, there are some practical ways that hydrogen can be used today to contribute to our overall energy needs. However, this is another case where the scale of energy contribution that hydrogen can realistically offer in the near future, pales in comparison to the shortfall of energy due to declining oil production.

• Wind, Solar and Other. There is no doubt that the sunshine raining on the earth every day produces vast amounts of energy in the form of direct sunlight, wind, tides, currents, rainfall, etc. In theory, much of this energy could be harnessed for conversion to electrical, chemical and mechanical energy. Once again, the devil is in the details. Wind, for example, currently supplies less than 1% of our energy requirements. In order to scale up wind to a meaningful level of contribution will require the construction of several hundred thousand wind turbines. Producing the raw materials needed for this effort (steel, copper, etc) will greatly stress our supply of such materials. The same is true for solar and other sun based technologies. On one hand, these technologies have great potential; on the other hand, the commitment of national treasure to implement these technologies will not happen unless there is a sea change in the thinking about oil and its availability.

For a more indepth discussion of these alternative means of energy generation, please see the references at the end of this essay – Clifford Wirth published a report that deals with each of these technologies in detail.

Can efficiency, conservation, and GW measures render Peak Oil a moot point?

• Efficiency is a great idea that most people will accept if it does not inconvenience them very much. Efficiency has the potential to significantly delay the onset of Peak Oil issues. The compact fluorescent light bulb is a great example of efficiency that has generally been well accepted. On the other hand, the idea of the government mandating a 100 mpg personal automobile is pretty much “dead on arrival”. The idea of a 100 mpg vehicle conjures up a vision of a small, unimpressive car that is devoid of many of the attractions afforded by today’s cars. And yet, a small vehicle (electric or not), from a strictly rational point of view, is all that is needed for the vast majority of commuting and shopping needs. However, the average American consumer will not accept efficiency measures that impinge upon the lifestyle to which they feel they are entitled as American citizens. More on efficiency in the reference section.

• Conservation is a superb idea that could easily save the planet from peak oil and global warming concerns. The single greatest form of conservation is to support family planning as the ultimate means of reducing the global population of humans. Riding a bicycle up to 15 miles to get to work or shopping is very realistic – even in northern states. Eliminating all non-essential plastic products is very realistic. Using passive solar in building design can eliminate the need for huge amounts of energy from fossil fuels. Relying on locally grown foods eliminates vast networks of energy intensive transport systems. There are many ways that true conservation can simply eliminate the need for many fossil fuel consuming activities. However, the simple fact is that true conservation practices that eliminate the need for fossil fuels have generally been rejected by the American public. Funding for automobile accommodating facilities vastly exceeds the amounts budgeted for family planning, bicycle-pedestrian accommodations, local food production, mass transit, etc. Although there are individuals who religiously engage in real conservation activities, most people will only consider these practices seriously if the government mandates them.

• Global Warming (GW) legislation which will reduce the use of fossil fuel is a great idea. Unfortunately, there is little evidence that legislators will force this issue and enact laws which will reduce the use of oil to any appreciable degree. We acknowledge that GW is a very serious issue. However, it is highly doubtful that any legally enforced measures to abate GW will be sufficient to avoid the consequences of declining oil production in a useful time frame. Indeed, the nightmare scenario is that we will use increasing amounts of coal to offset decreasing supply of oil. We will then have the dual problems of decreasing energy supply and runaway GW.

The chart below attempts to outline the basic scenarios that might be followed in the coming years:

Energy Scenarios

The above chart provides a rough framework for how events are most likely to play out in the next few decades:

1. Business As Usual (BAU). In this scenario, the American people remain complacent about our energy future and the supply of oil in particular. We generally believe media promises of a solid energy future. We don’t see any government leadership that casts much doubt on the general media outlook. We look around our world and simply cannot image that all of these food and transportation systems are in jeopardy. Eventually, an oil crisis evolves slowly, or emerges suddenly due to some other crisis, and we find ourselves in a situation where it is too late to remedy the situation. Perhaps the oil shortfall is a third of what we need to keep our world running. We will probably burn a lot more coal as a stopgap measure and thereby increase global warming. There can be many different adverse consequences – but they will most certainly cause severe hardship for our citizens.

2. Muddle Through Scenario. This is a time honored method for dealing with complex problems that unfold slowly. In this case, various pressure groups succeed in getting a patchwork of energy strategies implemented – usually in the face of an imminent crisis. However, the scope of the problem, the required lead times, and the needed level of resource commitment, simply overwhelm these efforts and our nation still suffers serious consequences.

3. Rational Scenario. Millions of people sign our petition. The President and Congress are presented with a highly trusted assessment of the problem and the steps needed to mitigate the worst consequences. We adjust to a lower energy world and humanity succeeds in achieving both a balance with the planet’s biosphere and enjoying a more satisfying life. Well, this may be a bit much for our petition to accomplish – but it sure is a good place to start making changes.

The bottom line is that the production of oil is declining and cannot meet the energy needs being projected by most of the agencies that make this type of forecast. All of the technologies that promise to replace oil have serious challenges that will prevent the promises from becoming reality. Efficiencies and conservation have great potential, however they seriously challenge the life styles of the average US citizen. It is highly doubtful that any amount of individual efficiency and conservation measures will forestall the coming crisis of Peak Oil. We urgently need government leadership based upon the best scientific analysis and planning.

We hope you will come to the same conclusions we have about this impending crisis and will sign our petition.

Reading Material – Books (all available on Amazon)

General Insight:

• Plan B 3.0 – Brown
• Collapse – Diamond
• The Dominant Animal – Ehrlic
• A Short History of Nearly Everything – Bryson
• Six Degrees – Lnyas
• The weather Makers – Flanney
• The Bridge at the end of the World – Speth
• The Transition Handbook -Hopkins

Political Background:

• The Shock Doctrine – Klein
• 3 Trillion Dollar War – Bilmes &Stiglitz
• Nemesis – Johnson
• Assault on Reason – Gore

Energy Specific:

• Long Emergency – Kunstler
• Cliffford J. Wirth – Peak Oil – Alternatives, Renewables, and Impacts
• Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy – Simmons
• The Party’s Over: Oil, War and the Fate of Industrial Societies – Heinberg
• Oil Depletion Protocol and Power Down – Heinberg
• End of Oil – Roberts
• Beyond Oil – Deffeyes
• Oil 101 – Downey
• High Noon for Natural Gas – Darley (with forward by Heinberg)
• Hydrogen – Hot Stuff, Cool Science – Ewing

Reference Material:

• Wikipedia – Peak Oil http://en.wikipedia.org/wiki/Peak_oil
• Association for the Study of Peak Oil (ASPO) http://www.peakoil.net/
• Energy Bulletin http://www.energybulletin.net/
• The Oil Drum Overview – http://www.theoildrum.com/tag/overview
• International Energy Agency (IEA) http://www.iea.org/index.asp
• Energy Information Administration (EIA) http://www.eia.doe.gov/
• Government Accounting Office (GAO) http://www.gao.gov/new.items/d07283.pdf

Web Sites:

• The Oil Drum – Check their BlogRoll and List of Primers http://www.theoildrum.com/
• Peak Oil News and Discussion http://peakoil.com/index.php
• Colin Campbell
• Richard Heinberg – http://www.richardheinberg.com/Home.html
• James Kunstler http://jameshowardkunstler.typepad.com/
• Boone Pickens Plan – http://www.pickensplan.com/theplan/
• Oil Depletion Analysis Centre – http://www.odac-info.org/peak-oil-primer
• Discussion site – http://www.wtdwtshtf.com/


One Response

  1. A book that is a must for people looking into future energy production is “Sustainable Energy – without the hot air” by David JC MacKay. This book covers some of the engineering realities that haunt each of the technologies being proposed to cure our energy problem. Written by a Professor, but without the need for heavy math skills this book can be read by anyone. http://www.withouthotair.com/


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