Energy and the Environment with the API
Posted by Robert Rapier on April 21, 2007 - 10:00am
On April 18th, I participated in a conference call with the American Petroleum Institute. The topic of the call was Energy and the Environment. You can download a transcript here or the audio of the call here.
Here was a list of participants, pulled from the call transcript:
Jeff McIntire-Strasburg is from Treehugger and we just went through, briefly, a blog roll. We have on the call Robert Rapier from The Oil Drum and R-Squared; Hank Green of EcoGeek; Tom Fowler of NewsWatch: Energy which is Houston Chronicle; Marc Gunther, Fortune; Mark Gongloff of The Wall Street Journal Energy Roundup; and Carter Wood of ShopFloor.org.
I think they missed mentioning John Gartner from Wired.
Having participated in one of these calls previously, I knew more or less what to expect, so I was prepared. I had solicited questions from readers, and then asked for help prioritizing the list. I had the list in hand, but I was told before the call that they would prefer the questions to remain topical. I tried to make sure that I included an environmental angle on as many questions as was possible, and then I would play the rest by ear (and keep the list until the next conference in case I was unable to ask some questions). I ultimately asked the first question, the last question, and the most questions. Some answers were surprising, and some were…. well, you will see.
Due to the length of the transcript, I will only pull out my questions and answers, and will also include some commentary. There are some typos in the transcript, so if I am saying something that doesn’t seem to make sense (e.g., “can” which should have been “can’t”) then it is possibly a typo.
We have all heard that there are some environmental problems around the development of tar sands. The Washington Post last year painted a bleak picture in Canada Pays Environmentally for U.S. Oil Thirst. That was directly topical, and related to a couple of the questions that were submitted, so I decided to open with a question on tar sands.
ROBERT RAPIER: Okay, this is Robert Rapier coming at you from sunny Scotland. I’ve got a list of 34 questions. I promise not to ask all of them, but I’ve solicited questions from readers at The Oil Drum and at my blog. And they made a list and voted and so I’ve got a few to ask.
First one I wanted to ask about is tar sands. There was an article in the Washington Post last year and – let’s see, the name of it was Canada Pays Environmentally for U.S. Oil Thirst. And it painted a very grim picture in Canada of the oil sand situation. It said, you know, rivers used to be blue are turning brown. And I realize this is the American Petroleum Institute and you guys are not responsible for what happens in Canada, but we are buying their oil and we’re using their oil. So how do you respond to what’s going on in Canada with the tar sands and the environmental issues there?
MR. CAVANEY: Well, I think first of all I’ve had an opportunity on a couple of occasions to go up there and see the operations. Obviously you can’t see them all in the course of just a couple of days. But the first thing I would say is that the scale is immense beyond almost what anybody can believe. And then, number two, there’s a lot of things that you’d on the job learning. You encounter things that you haven’t seen before and work stops and goes forward. There’s no question – I think that there are challenges out there.
The industry has committed to, and if those of you are familiar with it know that typically what we follow when we go into a new area where you’re trying new technology in a new environment you’re committed to sort of continuous improvement. You learn as you go forward. You go through trial and error. You tend to benefit.
And I think nobody that I know of that I’ve talked to from up there feels that the circumstances that you’d find today are going to be the same circumstances you’d find, you know, five, ten years from now as you tend to become more sophisticated, as you tend to learn how to operate.
You know, we’re seeing, for example, more of a focus on the in situ method which is where you’re underground during much of the recovery of the oil as opposed to some of the less sophisticated methods that were sort of first generation – more the open pit mine type of approach.
But I think it is something that ultimately we’re always answerable to the people within the immediate environment in which we operate, and collectively we’re answerable to the regulators and to the general public. So you know, we’re going to meet the demands that are placed on us. We’re going to, in many cases, come up with the solutions and sit down with government and get those worked out.
I think one of the big challenges that we’re already hearing about is as we become concerned about carbon and so forth as you look at the discussions about climate change and the like, one of the things that has to be dealt with up there is, you know, how are we going to manage the carbon part of that equation up there as we try and continue to convert those sands to valuable products that are demanded by the American and Canadian consumers.
I can’t be much more specific than that. Again, we don’t write the regulatory regimes, but we do do the standards for the industry, and lot of the things that we hear come into that process and we’re able to observe it from here in that manner.
I admit that this is not an easy question. But is that a satisfactory answer? It is true that I have not seen the tar sand operations first hand. However, if things are as bad as news reports would indicate, I am not so sure that "we will figure it out" is sufficient. Sometimes we only figure it out after the environmental cost has been too high. And sometimes we don't figure it out. Montana's Berkeley Pit sadly demonstrates that point.
Other participants asked the next few questions, and then Mark Gongloff from the Wall Street Journal asked a question about ethanol. I saw an opening for another question that got a lot of votes:
MR.RAPIER: Hi, Robert Rapier again. I’d like to ask a follow-up on ethanol, if I might.
MR. CAVANEY: Sure.
MR. RAPIER: Given that ethanol usage in the U.S. is now mandated, it’s not entirely clear to me why it still needs a subsidy. But some, like Vinod Khosla have made the argument, that the ethanol subsidy is really an oil company subsidy because they’re the actual recipients of the blenders credit. So how do you respond to that, and what’s your stance on keeping the subsidy?
MR. CAVANEY: First of all, that’s been in there for years and years and years, long before we got involved anywhere near the scale we’re involved right now. We’re agnostic about it; if you want to count the votes, I think you’ll see that most people who live in the political arena think that it’s virtually impossible to take that credit out. In most cases, we are the blenders, yes, so the credit comes to us, but the interesting thing is the price of ethanol without that blenders credit is about 54 or 55 cents more than the equivalent amount of gasoline, so all the blenders credit ends up doing is it makes the price of ethanol, at least currently right now, at about the same price of gasoline, and so therefore, bingo, there it goes.
If you took the blenders credit away, we’d have to pay the full price for the gasoline – we’re certainly not going to sell it at no cost – so what happens is that gets passed along to the consumer, you know, if you look at the way the industry operates, so somewhere along the line, that thing gets introduced, but again, if it was Congress’s intent and design to take that thing away, that’s their prerogative. We typically, on things like tariffs and issues of this nature, we supported it, not in its passage, but we understood the need for having it early on to try and get the industry large enough scale and basically stable enough so that it could serve a national distribution chain, and that interpretation is different in anybody’s eyes. We would say, today, you know, that they’ve pretty much gotten there, at least in terms of corn based ethanol, so –
MR. RAPIER: But again, with the mandate, why is the subsidy needed?
MR. CAVANEY: Well, as I said, we’re agnostic about it. If it’s in – if Congress decides that they want to take that away, you know, we’re still going to use ethanol and we’re going to do it, but obviously, the cost will go up. That’s all. Philosophically, you’re absolutely right, but that’s, as I said, this was put in place before we got involved at this level and we just didn’t deal with the issue. We weren’t asked to, as a matter of fact.
Of course I already knew the answer to this question, but I wanted to be sure to get it on the record and also to have the other participants think it over. With a mandate, the only reason to also have subsidies is to hide the true costs from consumers. And that is what Mr. Cavaney alluded to (and no, I don’t deny that you can make the same argument for oil, although most such subsidies are indirect). The surprising thing to me is that he said that they were agnostic about the subsidy. I know that ExxonMobil a couple of years ago came out strongly against the ethanol subsidy. And of course the ethanol and farm lobby are always arguing to keep it. So, you can be the judge of who really benefits from the subsidy.
I wanted to be sure everyone else had a chance to ask questions, so the next few times they asked for more questions, I was silent. But I also wanted to make sure the call didn’t end before I had a chance to ask more questions:
MR. RAPIER: Yeah, hi, this is Robert Rapier again. I have lots more questions, but I don’t want to hog the time, so if you have a lull, just call on me, because I’ve got lots.
(Laughter.)
MR. LUTZ: Thanks, Robert, let’s actually take – can we see if any of the other folks, John Gartner, Jeff McIntire, that have not had a chance to ask a question have one, and then we can come right back to you?
A few questions were asked by others that covered questions on the list. Someone asked about a carbon tax, which was on the list, and someone asked about greenhouse gas emissions caps. In another surprise to me, Mr. Cavaney said that the API is not against a carbon tax. Of course he also said it had little chance of passing politically, so maybe he knows he doesn't have to be against it. There was also a question about whether the API believes that global warming is human-caused, and he did not give a definitive answer. His answer was more along the lines of, "While it isn't a certainty, we agree that there is enough evidence that we should get on with mitigation."
Then there was a little lull. In answering a previous question, Mr. Cavaney had mentioned "peak oil." So, they called on me and I got to work that question in:
MR. RAPIER: Okay. A very popular question was around peak oil. You mentioned peak oil earlier, and you know, The Oil Drum focuses a lot around peak oil discussions, when peak’s going to happen, and you probably are aware that the General Accounting Office released a report, I don’t know, last month maybe, and it was about the critical need to develop a strategy for addressing a peak and decline in oil production. And it went through and it talked about some of the environmental challenges, and when you look at what is in the pipeline here, it concerns me that we’re probably going to accelerate our greenhouse gas emissions as we do deplete our oil supplies.
I see us likely moving to coal based transportation fuel - coal to liquids. You can count me among those who are not on the cellulosic bandwagon; I don’t think it’s going to deliver in the volumes that are needed to really contribute substantially to our transportation fuel. So I see some real environmental challenges here as oil production peaks, but the question is, what is your position on that? I mean, you guys think we’re not going to peak for 30 or 40 years? I mean, a lot of people want to know that, what exactly you believe as far as oil production peaking and declining.
OK, so I made a speech. And he gave a very long reply, which you aren't going to like:
MR. CAVANEY: Well from our standpoint, if there is to be a peak, the first thing that’s I think not much understood, Robert, by many people, is the idea that peak to them, they think of a sharp-topped mountain, where once you’re off the peak, swoosh, you just slide down very, very quick, and you have to deal with the precipitive thing. Most everybody who understands, at least visits the peak oil issue, understands that once you hit that peak, you end up on sort of an undulating plateau, if you will, with a very slow downward curve, and part of that is it’s a result of the fact that technology keeps kicking in and your yield, you know, from existing fields, keeps increasing.
That’s one of the things that people who are peak oil theorists I don’t feel have sufficiently factored in is, two things – the amount of what we would call current-day technology exploration and production, and I’ll give you a couple data points here in a minute, and then the second is the extent to which we apply some of these enhanced oil recovery efforts to some of these fields. We’ve found some fields that have gone up three and four hundred fold in terms of their output as a result of some of the new technology. So we feel pretty comfortable that the government data talks about, that if you took the median point – median or mean, I can’t remember; whichever it is – that they would say, gee, peak oil might be around 2044, but then factor in things like what happens if the tar sands really do become effective? What happens if shale gets developed out in the Rockies area? It could be extended beyond. But whatever that period of time is, I think hydrocarbons are going to continue to play an important role in many of these, many of these areas, and we think we’re going to be able to get them.
Now, one thing that people have to square with, we think, there’s a concern that the price goes up; well, the price of these products goes up in part because so much of the domestic production areas are off-limits to us. For example, in most of the OCS area, particularly all of the areas outside Gulf of Mexico, we don’t even really have a good read on how much of the resource is out there. The government puts out, you know, its own data, but that’s an estimate, so again, I think the way we look at it is, you see, interestingly enough, a lot of the big majors have come back and are starting to do more operations.
Here in the U.S., each of them would have their own reason why they’re doing that, and I think the American public is going to pretty soon, if they continue to be serious about this idea of relying less on imported oil, we’ve got plenty of oil and gas opportunities out there, and we’ve certainly got the technology, as we proved in the Gulf of Mexico, to do it in an environmentally sound way, so that will add another piece to this, is when we start to find out, I think the Chevron and Devon finding last September out in the ultra deep water and what they’ve seen out there was a real eye opener.
And the other thing I would point to is to the surprise of virtually everyone in Washington and many people in the industry, last fall, right before Congress adjourned, there was a bill put forth by a very unusual coalition that ended up opening some more OCS acreage to exploration production, and it was done principally by, not the producers; it was done by the users, and I think increasingly the user community and people are going to see some value, so I think peak oil is an interesting thing to discuss, I think people who raise it, they do it in all earnestness; I just don’t know that there’s a really crisp answer.
I think one little phrase I use, sort of half jokingly, but man left the Stone Age not because he ran out of stones, and someday we will leave the Age of Oil, but it won’t be because we ran out of oil; it will be because some other technologies have come in that have proven to be more cost-effective, more reliable and in various applications they will. So we plan to be around, think we’ll be active, and technology has always ended up, from 1854 I think when the first peak oil theories were propounded, but having this technology has been the tool that’s brought it in.
The other point I would say is if you look at most of the rest of the world where oil is forecast to be, they are so underexplored that it’s not even (laughable–?). For example, only three percent of the exploration that’s taken place in the Middle East, even though they’ve got, you know 70 percent of the proven reserves, in Saudi Arabia alone, which most people would argue has probably got a fair amount of oil there, they had fewer than 300 new exploratory wells that have drilled, and less than 30 of them were drilled since 1995. And so you think of the technology that was around in ’95 and what’s available now, so I think there’s more to come in this area rather than less to come here in the immediate term, in near term.
I don't even know where to start. I guess I could start with the first sentence: "if there is to be a peak". If there is to be a peak? I don't even understand that phrase. It does not parse.
I will let others discuss the specifics of his answer. But I will give you my thoughts as he was giving the answer. I was thinking "How on earth can we be so far apart on this issue?" It seemed that he was suggesting that peak might be "as soon as" 2044, while I am thinking 90% probability within 10 years. There are a number of people who have analyzed this issue and believe we are right at or near peak. So the question in my mind became "Why is there such a divide, and how do we address it?" Because I don't believe we can just afford to write off people who think peak is a long way off. We have to look at our position and their position and figure out what the problem is. If they believe they have credible information that we don't have, they should share it. And where we have challenges to this data, or other criticisms (I meant to mention Cantarell, and the fact that the North Sea peaked prior to expectations) then they should be addressed and incorporated.
I also spent some time thinking "Is it possible that I could be so wrong on this issue?" This is probably something we all wonder from time to time. I personally question and challenge my own positions on a frequent basis. One thing that has influenced my thinking on this issue is Chris Skrebowski's mega-projects list. Skrebowski knows a great deal about world-wide projects that are planned and underway, and he thinks peak inside of 10 years is likely. But is the very nature of it such that peak will always be implied to be 3-5 years away, even if it is 20 years away? After all, there are probably many projects that will come online in more than 5 years that haven't been announced yet. But then I think 1). There aren't many truly big projects that are coming online; and 2). I still think demand is growing fast enough that we simply will not see any excess capacity in any case.
Like the rest of you, I want to know what the heck is going on. I try not to jump to conclusions, but I also don't want to be standing around in a house as it burns down. Peak still looks to me like it is 90% probable within 10 years. But it is deeply troublesome to me that such a great divide exists on this issue. I am trying to get my head around a way to close it.
Anyway, the answer to that question eliminated the need to ask several other questions. Yes, the API considers "Peak Oil theory" to be bunk. Yes, they believe that Yergin is more credible than Simmons. As far as dealing with potential supply shortfalls? They don't believe that we are facing any potential supply shortfalls.
I had one more question to go:
MR. LUTZ: Great. Any final questions, then, from whoever’s on the call?
MR. RAPIER: Yeah, Robert Rapier, one final question from me, and then I won’t ask any more.
MR. CAVANEY: That’s okay, Robert.
MR. RAPIER: I’ll save them for next time.
MR. CAVANEY: Okay.
MR. RAPIER: There was a study released today, just came out, I got it in my email just a little while ago. Professor Mark Jacobson at Stanford, he’s a civil environmental engineering professor, he’s described in the news release as one of the top atmospheric chemists in the nation, and he’s saying that if we go to more ethanol in the gasoline, it is going to result in more deaths from smog. He said he’s done the studies, that we will kill people from smog as we increase our ethanol usage, especially in the big cities. Comments on that?
MR. CAVANEY: I saw that too, and I’ve asked our folks if we can try to get a copy of the study and take a look at it and see where it is. Since the very beginning, when we had our experience with MTBE as a blending agent in gasoline, we agree with the EPA blue ribbon panel that was commissioned by President Clinton back in the late 1990s that came out, and one of their key recommendations was that we ought to look extensively at the environmental and health effects of any fuel or fuel additive before widespread adoption, and we have gone to EPA and gone to everybody, and we said, we’re not here an alarmist, but we really do think that if you’re going to embrace something this big, you need to take a look at it, because the last time Congress did this, when they put in the Clean Air Act amendments in the early 1990s, it was clear to everybody, and we’ve seen the Congressional record with people’s quotes in there, that the additive that was going to be used was going to be MTBE, but yet, what ended up happening was the industry got sued for these things and a lot of class actions and a lot of liability followed from that, and we don’t want that to happen again, and so I think maybe what this Mark Jacobson study may well do is help serve as a bit of catalyst to make sure that we do take a good look at this so we fully understand what the results are going to be, regardless of whether he’s correct or not.
So that’s kind of where we are, and we’ve said that publicly and will continue to say it. We ought to make sure that we know all the potential impacts before we do anything in the fuel system that’s going to be this widespread.
I thought that was a good answer, even if it did involve a 244-word sentence. I have said the same thing before. It is well-known that ethanol raises the vapor pressure of gasoline blends. Since a waiver is granted for ethanol blends, ethanol blends will absolutely have higher evaporation rates. It is not surprising that we have seen some issues with ethanol (e.g., problems with fiberglass tanks on boats) because we are making a pretty significant change throughout the fuel supply chain. That doesn’t mean that I think the results of the study are definitive, or that this closes the book on the issue. It just points out that things can crop up and bite you that you weren't expecting.
With that, I will close. But, I would like an honest answer to a question. Was that worthwhile? Was it disappointing? Mark Gongloff indicated to me that he thought it was worthwhile, and I felt like I got a lot out of it. But I am not doing this for my benefit. I need to know if readers got enough value out of it to warrant future participation.
Also, feel free to extract any of the other questions and answers and discuss them. There was a lot of informative discussion on other issues that I didn't mention.
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Thanks for the great post, Mr. Rapier.
Please -- is the undulating plateau made of stone or sand?
guys it should be SOOOOO obvious what this is REALLY about. This gets your name and blog in the WSJ, you hobknow with the big shots at the API and guess what? You're now much more likely to call them on their bullshit.
YEs, yes, I know. "insert reason why the chimp is mistaken here."
It's basically a not-so-subtle way of buying you off except they're using social status/blog power instead of actual money.
Of course it could be I'm just upset becasue they failed to addrsss my concerns regarding post-Olduvai cliff loin cloth selection.
Chimpy, I think the problem is the cultural one.
Most people on TOD are trying to get at the truth.
That gives them a disadvantage when up against
people with a background in trade associations and
politics. (http://www.ase.org/images/lib/GEED/Red%20Cavaney.pdf)
If you give Cavaney any credibility over Simmons, well....
But seriously, thanks to RR for his time and trouble.
TCWCD,
"Of course it could be I'm just upset becasue they failed to addrsss my concerns regarding post-Olduvai cliff loin cloth selection."
"LOIN CLOTH? LOIN CLOTH?"
What do you need with a loin cloth when you will be basking in the warm 100 degree endless summer created by the coal to liquid industry in the last great luxury carbon bath!
"LOIN CLOTH? I DON'T NEED NO STINKIN' LOIN CLOTH!"
:-)
RC
API = industry funded think tank. Unfortunately, decent answers were never likely, although it is very interesting to see their responses, nonetheless.
http://www.sourcewatch.org/index.php?title=American_Petroleum_Institute
"You can never solve a problem on the level on which it was created."
Albert Einstein
In other words, at any given moment there is always a price at which supply and demand for oil will be in equilibrium. As the price rises, lower EROEI resources can be tapped to supply a demand that is shrinking as said prices rise.
Might it therefore be possible that we've hit a peak plateau that we'll stay on for quite a while as price increases drive demand detruction? And perhaps the comment about the stone age and oil age was meant to imply a recognition that the price of oil will inevitably be driven so high that the switch to more economical substitutes will eventually render oil an insignificant & expensive niche resource.
Bottom line: We can argue endlessly about when we will hit the peak, but there should be abolutely no doubt at all about the fact that oil prices are inevitably going to go up, and go up a lot.
Stefan: I have yet to see a single prediction for peak oil circa 2030-2045 that is substantiated with even a minor level of detailed analysis. Not one. Every one of these predictions meanders off into discussions of peak oil predictions of 1854, or the giant size of tar sands, or untapped potential of ME, or advanced technology, or "invisible hand". Never is an actual country by country reasonable extraction forecast laid out. This is the reason that any objective observation of this peak oil date question points to sooner rather than later (detailed analysis vs slogans).
When will Yergin get his Cabinet post?
Thanks Robert for the summary and meta-reading.
I think there are at least two discussion of position here: public and scientific.
1) Public debate: their position ("late peak, no peak, undulating long plateau") vs various other PO positions, which are often clumped into one group although they are not one ("peak soon", "imminent decline", "unmitigated disaster")
This is public debate that is very difficult to "win" (and public discussion are mostly won/lost, there often no attempt at arriving at shared truth).
For every sane "let's look at PO risks, date & mitigation" point of view, there'll be tons of extreme viewpoint survival opinions "it's all going to hell in a hand basket, it'll be Mad Max everywhere" to make the WHOLE PO camp look silly. Even if it's not a single homogeneous camp and regardless the fact that the extreme viewpoints could also have some truth in them (nobody can fully disprove it, its all a matter of belief).
So, finding some common ground on this public debate will require:
- lots of more compromising & politicizing (is that a verb?) from the PO vocals, in order to be able to become presentable, acceptable and prime-time friendly with their message. I cant foresee contrarians trying to to come closer to the PO position - at least not in public.
- waiting in the trenches and seeing if PO will push the contrarians towards the "peaking soon" position or accept that fact that as time goes by, PO peakers will be pushed towards the position of the contrarians.
2) Scientific position on the peak date (probability), shape of peak, decline rate, risks of oil availability.
This is about finding the truth and subjecting all analysis and data to open scientific peer review, which requires public disclosure.
Its not about winning the debate, its trying to find the real data and drawing the most sound scientific conclusions from it. And then making it a debate about political response to peak - if any (i.e. back to public debate domain).
However, I don't see real scientific discussion happening.
Reasons:
1) CERA, ExxonMobil, API and other contrarians only give their position, but refuse to divulge their data, calculations and models.
2) AFAIK, no contrarian has come forward and tried to prove scientifically that either the data or the calculations from the "peak soon" camp is incorrect. Contrarians have again stated their position: "peak oil believers are wrong", but given no tangible proof that would enable one to verify their position.
As long as this continues, the scientific discussion will continue as it is: one side trying to calculate, ask for peer review and admit the incompleteness of data. The other side basically hand waving and denying peaking soon, but refusing an open scientific debate.
Please note that my analysis does not assume "peak now" or "late peak" or even "no peak" position.
This is just my reading of the discussion as it has been unraveling now for some years.
As such, I remain a little skeptical about addressing the divide, esp. in the public view.
However, progress can be made on the local level, municipal level or a in limited scientific circles.
I think people should consider concentrating on those, if they are interested in continuing the debate (in addition to actually responding through actions like ELP).
I think this is important (addressing the divide).
Two ways:
What do people generally agree on? Can we go country by country, province by province, oil type by oil type, or however and 'check off' areas where the two camps (are there more camps ?) agree ?
Why do we care about agreeing ? For me, its because we need to do things. What, if anything, can we get agreement on - in terms of mitigation strategies - that all sides can support?
Yeah, it is interesting to note the dismissive comments about PO concerns with what amounts to anecdotal counter-evidence ("new reserves, better technology will allow as to continue as normal"). It reminds me of a Ghandi quote I have seen on this site: "First they ignore you, then they laugh at you, then they fight you, then you win."
Are we somewhere in between the laughing and fighting stages?
"You can never solve a problem on the level on which it was created."
Albert Einstein
I think the optimists see two things differently:
1) The ability of price to drive supply. Conventional economics is based on both a demand curve and a supply curve. Most TODers seem to treat supply as strictly a product of geology. You take what the ground dictates, like it or don't. You won't find "price" in any of the HL or shock models. Personally, I side with the optimists, at least to an extent. Supply is the intersection of geology and price. There's still a lot of oil in the world. And there's a lot that wasn't worth going after for $25/barrel, but that's being re-examined with prices above $60 (and likely to stay there or go up more). And while there are certainly limitations to the rate at which production can be increased, I think sustained high prices will drive the investment (more rigs, bigger GOSPs, platforms in deeper waters, etc) to keep production up.
2) Technology. It's obviously unwise to assume that, "Of course technology will save us, there's nothing to worry about." However, it's also true that previous advances in technology have expanded the supply of "available oil" several times, making previously inaccessible oil available, or simply improving the efficiency with which marginal reserves can be tapped. Some of that is likely to continue.
Personally, I think we may be at or near the conventional peak, but I expect a slow decline or even a plateau; at the least, I believe there's more fat in the tail than most doomers seem to. And unconventionals, more deepwater, NGLs, and some biofuels can probably make up the difference in total liquids for a while.
peace,
lilnev
Was this worthwhile? I think so, but perhaps mostly because I want it to be worthwhile.
I am suspicious of the corporatist mindset and complete lack of good faith as exhibited by corporatist behaviour.
For example, BP not doing maintenance on pipelines in Alaska. For example, Exxon/oil industry and oil spills and other (currently the tar sands?) environmental issues.
What about use of US military in Columbia to protect oil pipelines? What about the use of US military to grab oil resources? What about oil industry payments to the brutal government in Nigeria in exchange for brutal "security services" from the Nigerian military, and so forth?
All of these behaviours make me believe that the whole discussion takes place in a context of bad faith. This undermines the discussion considerably.
So what do we have? A self-serving "fireside chat" with another El Diablo clone? I mean that to be a humorous way to ask a serious question.
What do we really expect from such a conversation? Carefully spun replies to carefully asked questions which reveal nothing and hide the real crimes being committed?
I note the focus on the American consumer and the American status quo as though our current arrangement of human settlement with reliance on liquid fuels will continue for the foreseeable future.
I think our energy needs to be spent on reorienting our pattern of human settlement -- which will be rearranged anyway by resource depletion and global climate change and resource wars.
Any room for questions of this sort? "How can we in the USA radically alter our patterns of human settelement so that we consume less than one-quarter of the oil that we use now within 10 years?"
Isn't this what economists call "externalized" costs? Or what some people would refer to as "hidden subsidies?" What is the true cost of oil right now, given that all this bad-faith behavior is paid for by the consumer -- if not at the pump nozzle, then in taxes or higher prices elsewhere? Certainly, the concept of a "free" market, with the various participants in the market exchanging their products on a level playing field is a cruel hoax.
The cost is even worse: Deficit spending by the govt and individuals and a trade deficit passing the bill on to future generations.
WAAAAAY OFF TOPIC, BUT WOTTHEHELL...
What about use of US military in Columbia to protect oil pipelines?
If you're genuinely concerned about US policy towards Colombia, please will you spell the country's name correctly? And maybe educate yourself a little before posting outdated myths? Los gringos are minority players in Colombia - the largest producer(by far) and largest refiner/distributor is the national oil company...
http://www.ecopetrol.com.co/contenido.aspx?catID=30&conID=36274
Classic declining production/increasing domestic consumption exportland, by the way - and guess who their biggest customer is...
FLAME OFF - FOR NOW
Colombia,,,,Wah wah wah. he said...."if your gonna type spell the name right" Wah wah.
Seriously though. Besides our coke the US is overlooking ColOmbia.
matt
Used to work there ....great nation. Every woman in Cali is hot.
RE: US military involvement in Colombia related to petroelum.
Read "Blood and Oil: the Dangers and Consequences of America's Growing Dependency on Imported Petroleum" by Michael T. Klare.
Stop by a bookstore and check for "Colombia" in the index.
For 30 years Colombia has been "lacerated" by a 4-way civil war. The US has been very involved in this, first under the cover of the "War on Drugs" and now explicitly to provide security for petroleum infrastructure.
In addition to billions of dollars earmarked for "Plan Colombia" Bush required another $98 million for protection of one of Occidental's pipelines in 2002, and another $147 million in 2004. In addition, US Special forces train Colombian forces during actual military missions.
The US troops are deployed in active combat zones, and together with other US military operations around the world are part of the (at minimum) $150 billion annual cost of direct military expenditure to sieze or secure petroleum.
Of course we do not know the additional "off the books" costs or programs to secure oil and drug supplies, but my guess is that they are substantial. (Read "White Out" and other studies related to the USA as drug dealer.)
The US involvement in Colombia, like that in the Middle East, involves propping up corrupt and brutal elites who represent the interests of multinationals against the people of their country.
A swell way to win hearts and minds in Latin America.
Actions speak far louder than words, do they not?
I know that RR and other good folks do not want to acknowledge the staggering duplicity of the petrofascists, but there it is -- pretty plain for all to see.
To ignore this duplicity is to support it.
Remember MLK's later speeches -- the ones conveniently expunged from official observances of his contributions to our political and cultural life.
Give old US Supreme Court Justice William O Douglas' "Points of Rebellion" (1968?) a read. I'm pretty sure it is available online.
Or check out Michael Parenti's superb talk here:
http://www.informationclearinghouse.info/article11635.htm
I love this quote in particular:
"Globalization is an attempt to extend corporate monopoly control over the whole globe. Over every national economy. Over every local economy Over every life."
Parenti minces no words regarding the criminal nature of our petrocolonialism around the globe.
Colombia will see far more US military involvement, as will the rest of Latin America: resource war,
I think at the next conference call the API should be asking the questions of the peak oil community. If the industry response to a question about peak oil at this late date is a veiled attempt to raise OCS political issues, ie a domestic supply response, obviously they have little to offer to the Big Debate. These conference calls only seem useful to me in a very limited sense of getting the industries take on a few, limited issues. For example, I would have liked to hear what they had to say about the Brent/WTI price inversion, that might have been fruitful
Maybe there is oil and gas out there.
So how long will the oil satiate the US if demand keeps growing? At the moment how many drilling platforms haven’t left for the Middle East? How much nastier will hurricane seasons get?
These industry reps are the types who think gee the Polar Regions haven’t been adequately explored and when the icecaps melt away it is all good (less icebergs hitting their platforms). I can't remember who was quoted on the Documentary Crude Awakening saying it was important to keep us all hooked for as long as possible, but boy that stuck out.
For them, the subject of peak oil is merely an opportunity to advocate for more demand and for more cheap supply from public lands. I noticed he used the term 'undulating plateau' which is CERASpeak. I do think these chats with the API are valuable in that we are apprised of where they're coming from.
I'm reminded that 21st-century North America is a society steeped in denial. Just look at that war in Iraq: 70% of the American populace were convinced this was the correct course. Look at how long before the powers that be were convinced the subsequent occupation was in trouble.
So, the petroleum industry doesn't believe peak oil is here or coming soon. They're comfortable in CERA's assurances. They want to believe in an abundant future -- so they do.
Hi Robert,
Thanks for putting the Tar Sands right up there on top. Very neighbourly of you.
Unfortunately this discussion with the API only leads to the thinking that before any substantial action is taken, the road to James Lovelock's vision of the future will be unstoppable.
From Lovelock's 'Revenge of Gaia': Past and present atmospheric pollution with carbon dioxide and methane is similar to the natural release of these gases fifty-five million years ago, when comparable quantities of carbon entered the atmosphere. Then the temperature rose about 8º C in the temperate northern regions and 5º C in the tropics; the consequences of this heating lasted 200,000 years.
Alfred E. Newman is alive, well and living in the API.
Good work, Robert.
I think my outsider perspective might let me translate a bit between your and his position. In particular:
Read "peak" as "involuntary peak".
The fact that a date of maximum oil extraction will exist is a tautology, and not particularly useful outside of perhaps a climate change context. In terms of energy, the interesting situation is an involuntary peak, and such a thing need never occur (at least in theory).
API's position is that climate change mitigation efforts should happen, and oil consumption is a contributing factor to climate change; ergo, it's possible their view is that we'll increasingly transition from oil to other energy sources in the coming decades. If one has the view that there are 40 years before an involuntary peak, it's not such a stretch to imagine our energy consumption patterns changing over the next 40 years to make the peak voluntary instead.
And that's why your posts tend to be more objective, analytical, and useful than many.
One possibility is that of knowledge. You've mentioned, if I recall, that you don't believe there will be a peak within the next 2-3 years, due to proprietary knowledge you're not permitted to share. It's possible - although I have no idea how likely - that as one goes higher up the hierarchy, more of this proprietary knowledge becomes available, giving a more complete picture and allowing future oil production rates to be more completely determined. (In contrast to our situation, where anything we don't know about we have to count as non-existent.)
So there is a little evidence that he could be right. There's also evidence that he could be mistaken - the early North Sea peak, for example - and relying on an authority figure saying "trust me" has not proven uniformly wise in recent years, so a very healthy level of skepticism is certainly justified.
It's justified in both directions, though, and the recent tone of discussion here has contained far too much false certainty. Reasoned and prudently-skeptical analyses like yours, though, may keep me from giving up on this site entirely. Nicely done.
Seems like there is another issue that rarely is examined -- that of perspective.
From the point of view of the elites, there will never be an energy peak -- they will always command what they need, and more.
The trick is to marginalize and render invisible all the people and the environmental factors that are inconvenient, and yet make everyone believe such things don't matter. To make everyone invisible to everyone else and yet each believe they are in possession of the "facts" about the "world" because they watch the "news" or read the internet -- masterful.
Depending on your perspective, a majestic peak can disappear behind an insignificant undulation on the stony plateau
Dear NeverLNG,
This idea of differing "perspectives" is crucial in my opinion.
The elite perspective its of fundamental importance to "externalize" the costs and economic consequences of their rule and it's always been like that. "Costs" are, historically "dumped" years into the future, if not decades.
For the elite the "Costs" are indeed "invisible" "marginalized" and "externalized". Not only that, the elite have constructed a society and dominant socio/economic, cultural, model, that even precludes any meaningful "political" discussion of these costs. This is, indeed, convenient. It's almost a kind of "magic". Adam Smith's invisible hand, is the hand of a conjurer.
So the elite have an ideology which not only insulates them from any unpleasant pangs of concience about the "true" nature of their enterprise, but at the same time it disenfranchizes the masses from recognizing just how effectively they are being "screwed".
"Costs" are "externalized" whilst the ruling ideology is "internalized" by almost everyone, rather smart in fact.
It would appear a "natural order" has been created which satisfies everyone, both elite and mass. Until a socio/economic paradigm shift begins to take place, then things can get nasty, which seems to be happening now. Peak Oil will shake the "system" to its foundations.
How will the elite react? Well, unless we rise up and sweep them away and establish a new order, the elite will just develope a new set of ideas and institutions to perpetuate their rule and disquise its true nature.
Gore Vidal has just written a new peice about the Iraq war and the Bush regime. He appears to believe Bush and his henchmen are destroying the Republic in order to protect themselves, and their rule, at least I think that's what he means! However, some people can express themselves more concisely.
In 1951, in "The Origins of Totalitarianism" Hannah Arendt wrote the following, which I think is a good and short example of the elite may respond to the shock of Peak Oil.
"Although tyranny, because it needs no consent, may successfully rule over foreign peoples, it can stay in power only if it destroys first of all the national institutions of its own people."
Hear, hear, Pitt the Elder. I enjoy your posts as much as Robert's for the same reason-it's clear there is rational thought behind them and not a rush to interpret data from the most negative perspective possible.
I only wish the ratio of rational discourse to die-off crackpots on this site were a bit higher. :)
Ener Ji, Pitt the Elder,
Where is the rational discourse from the non-die off/plenty of oil side? Are you suggesting its their arguments using strawman, plea's to authority, weasel words, and all other sources of non scientific reasoning. Is that the same as using data from their own graphs, words, statements, video, and everything else at a researchers disposal. Where is the solid facts they can produce to dispute the claims. The oil side presents no evidence to back up their claims, and they do not discuss the evidence that is presented against them (ala A. Gonzales). Its a form of reasoning and discourse based on something other than the truth.
Quid Clarius Astris
Ubi Bene ibi patria
Ahh, the rational discourse is there, it's just being drowned out by the die-off crowd.
Still, you make my point PrisonerX. There are no 'sides' here. The only side is truth, and the way to get there is not by fervent belief that routinely dismisses contradictory evidence. The way to get there is by iteratively building models, integrating new evidence as it arises and keeping an open mind to the model's assumptions and limitations.
Changing the assumptions and keeping an open mind to the differing conclusions they imply is crucial to any scientific study. Unfortunately, plenty of people here are blind to possibilities which do not already fit their world view. As someone else stated elsewhere in this thread, for some people peak oil is beginning to look like religion.
It was worthwhile to the extent that it doesn't hurt to hear what the industry is either thinking or purporting to be thinking. The context, of course, is that they will always analyze these things from their point of view, which is maximizing profits from what they do, which is mostly produce, refine, and sell oil products. As to actually learning very much about the true reality of oil and ethnaol, it is probably not very useful. This is not a discussion that will yield what people honestly think about these issues.
It would be nice if the industry were fully on board politically to get congress to eliminate the ethanol subsidy, but as long as they are mandated to sell it they will want the ability to pass on their costs. One can not expect any support from the industry in this area, but it should not make a difference. To the extent it does make a difference, it just means that congress is still substantially in the pockets of the oil industry. I would hope that the new congress can make decisions without ensuring that the oil industry supports it first. This is the case with people like Inhofe, but not Boxer, so there is some hope in this area.
The industry still purports to believe that environmental considerations are significantly restricting their ability to provide all the oil this country "needs". They still seem to push the meme that if it weren't for the environmentalists, we would have all the oil we need. This is not surprising, but misses the point. We need to reduce our dependence upon oil and other fossil fuels regardless of whether we might have the ability to increase production significantly. Open up all those areas like ANWR and the gulf and you might just delay the problem a few years. These facts, gathered from your questions and answers, are not new or particularly enlightening. They just reinforce what we already knew.
The danger in swallowing the industry line about peak oil is that it might encourage complacency. We should neve forget that there are a myriad of reasons to cut our oil consumption. We do not have the luxury of continuing this debate for the next decade. Unless peak oil becomes very clear very soon, we will waste the next decade in that debate.
Funny, he used the line about the stone age ending. Too bad he didn't see the big discussion here in the last couple of days about that apparently flawed analogy. In any event, we need public policy that helps us move to the point where we substantially end the oil age, at least as far as it pertains to fuel uses. The oil industry,obviously, will do everything in its power to prolong the age of oil. In their eyes, they've got a good thing going and are not going to be a party to ending that anytime soon.
In short, I don't know whether this was worthwhile. I do,however, appreciate your objectivity and your efforts to broach these important questions. You are part of the oil industry and yet you seem to have a much broader perspective on this than one would expect from the typical oilman. My cousin is an oilman and I can assure you he has a much narrower, shorter term, and self interested perspective on these issues.
Fresh from reading Guns, Germs, and Steel here is my interpretation of a proper response to this statement in this context.
jbunt
Moving on to something better will happen just as soon as the majority agrees that something better has arrived.
Well he gave a couple of clear reasons, the first you pointed out was an inability to even accept the fact that at some point global oil production will peak.
Second, he claimed new technology "enhanced oil recovery efforts to some of these fields," implying greater availability, while there's pretty compelling evidence that it only temporarily increases production and leads to more rapid decline.
Third he states "you end up on sort of an undulating plateau," which is against the facts of Texas, North Sea, and most recently Canterall.
Finally, he gets into the least compelling industry line, we just need more exploration which goes against another fact that discoveries have been on a downward slope for a long time. He ends with industry's now 30 year old propaganda that opening closed areas in the US will lead to significant new reserves.
So, I think you can see here where disagreements arise, yet it seems from the publicly available data, the points he makes are at the very best problematic and that its up to the industry to provide real data, if they want to make any other case.
The Big Lie:
http://en.wikipedia.org/wiki/Big_Lie
Of course, that was attributed to Hitler's propaganda machine, not something "we" would do in a democracy.
However, if there were to be a big lie-- I'm not saying there is, but it seems clear to me that there is some major tweaking going on-- then the people would more likely believe that rather than some inconvenient truth. And the longer the lie goes on, the more people have invested in it, and the less likely they are to voluntarily give it up.
Orinoco! Orinoco! Orinoco!
Why is this subject entirely ignored? It can only be by design. Can you postulate what may be compelling reasons for Orinoco to be taboo?
The heavy-oil field is certainly "Supergiant" category. Venezuela's Chavez has openly stated the expensive cost to extract would be acceptable if there were a $50/bbl floor on the crude to justify the huge investment needed to
extract.
There have been muliple coup attempts in Venezuela to, obviously, bring such a prize back under US hegemony;
or more precisely, BigOil control.
There is not a single instance of a large oil producer, or potential producer, being allowed to INDEPENDENTLY develop and market their petroleum guided by their own best, national interests and worldview.
Orinoco threatens the Octopus Oil Company hegemony. Orinoco's independent development must be suppressed or acquired, by any means, before the prize becomes such popular knowledge that covert war or open war cannot be sold to "the people". BigOil is desperate as they watch Chevez succeed.
BigOil will continue to attack Venezuela's sovereignty, and must needs the affair kept taboo in all media. Of course, they will use the forces of the US gov and others to accomplish this.
Is this post just folly?
I think the post is mostly folly. It's unwise to accept uncritically Hugo Chavez' self-interested talking points as it is unwise to accept Daniel Yergin's.
Orinoco threatens the Octopus Oil Company hegemony.
What exactly does this mean? 'Hegemony', in what way, how?
(Constrain to last 3-5 years for the moment).
So far, evidence seems to be that Chavez is able to do whatever he wants, and the external (and even internal) oil companies are subject to going along with whatever he wants.
I see no hegemony except Chavez' internal political power.
BigOil is desperate as they watch Chevez succeed.
Succeed in what? Increasing production in technologically difficult areas without BigOil's knowledge and technology?
If they can do so, then good for them, but success in that area doesn't seem to be happening from a numerical point of view.
Oil companies want contracts to do oil business things. This is not unusual.
The deal here appears to be simple: external oil companies have more knowledge but dont' have access to territory. Venezuela pays them for assistance and technology, and so sells more oil from difficult production. It's just a business deal, which ought to be mutually beneficial, and it should stay that way.
BigOil will continue to attack Venezuela's sovereignty, and must needs the affair kept taboo in all media. Of course, they will use the forces of the US gov and others to accomplish this.
Over the last two or three years, the Bush Administration (which I loathe) seems to have not said very much about Hugo Chavez and done nothing but Chavez has been ranting on and on.
In any case I don't see your precise point anyway. In a nutshell, what is it?
Great work RR, the API is in a state of denial, not suprisingly. As I see it, major energy conservation efforts are needed to address the peak and GW, two for the price of one. As a long time builder of very energy efficient new and retrofitted residences, I can't believe
the lack of discussion on the demand side. If I can cut the energy use for my home in half, with a handsome return on investment, what is the downside? As long as the energy industry writes the rules and gets the lions share of federal subsidies, nothing will change. For me, peak oil cannot come soon enough.
This API guy is probably just lying.
I wonder where are the examples where new technology increased recoverable oil by 400%. The guy seems to believe that, and also he clearly believes that sources like oil sands or shale can delay the peak, focusing only on resources without consideration of extraction rates. I continue to be amazed at the level of ignorance about their own business displayed by American managers.
actually he said (according to the transcript) 300 to 400 fold that would be 30,000 to 40,000 %
Thank you, Robert.
When you question your own beliefs though, remember the discovery curve. No amount of hand waving can change the discovery curve. Yes more oil can be extracted, often than we anticipated, but we've done exactly that on the existing fields. And further, 65% of the world's reserves and 60% of its total production comes from 1% (507) of its fields. Almost all of these fields are now in decline. How do we replace these giants and super giants? Replacing them with average sized fields is not feasible. You can do the math yourself to see what size the other 49,500 fields are when they hold 35% of the world's reserves. How many of these are needed to replace each of the 507 giants?
That question, to me, is the sticking point on the practicality problem. Increasing complexity for less and less payback such that we may be at the point where even more complexity yields less payback. This is precisely the point where prior empires collapsed - when the investment in existing infrastructure yields less and less rather than more and more.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Yes, Yes...
We need a new giant each and every 6 days. 5 new giants each and every month. 60 new giants each and every year.
JUST TO TREAD WATER. March in place. Break Even.
Man this sux.
Just when you think there might be some sliver of hope, an opening to influence powerful minds, a ray of consciousness...
...Now where did I put that "Olduvai loincloth"...?
I read TOD because it's a bellwether. (http://en.wikipedia.org/wiki/Bellwether)
What hope there is will in part be inspired by this site.
Its interesting that a lot of people miss the impact of world peak on our ability to use technology to even maintain our oil supply much less increase it.
Next I love the way the oil industry equates extraction rates with URR so if we figure out how to pull the oil out of the ground faster this means we have enhanced recovery
those two are not the same but I've seen this mixing of concepts many times in public statements by various members of the oil industry.
Next in discussing technology they generally fail to mention what the production rate of the field was before advanced methods where used. Generally production is a order of magnitude higher under primary/secondary extraction than that obtained once a field is under these additional extraction methods. So again their is a subtle but important distinction are advanced methods used for initial production or old field recovery.
And they never mention the price floor required to support the cost of these technologies.
The ability to sweep these important details under the cover because of the sound byte nature of modern news is interesting they would have to make a point of expressing them.
You know this. I know this (former English major). So, of course, they know this.
When is someone going to call these f*ckers onto the carpet?
They're liars.
And/or they are in denial.
Once more, with gusto:
We have had some minor, but IMO not material, restrictions on drilling in the Lower 48, and I am not aware of any drilling restrictions in the North Sea.
Prior to their respective peaks, the Lower 48 and North Sea showed rock solid HL patterns, and both regions peaked right at the 50% of Qt marks.
The world, based on Deffeyes' (rock solid) HL plot, in 2006 was at the same stage of depletion at which the Lower 48 and the North Sea started declining, and world crude oil production is down by about one mbpd from its 2005 peak (EIA). As they say, this is not rocket science.
The oil industry has been unable to reverse the Lower 48 and North Sea declines--despite both areas being developed by private companies--so why will the oil industry be able to reverse the decline in conventional world crude oil production?
In post-peak areas, the function of oil companies is to slow the rate of decline of production. We do not stop finding oil fields, but we can't offset the declines from old, larger oil fields.
When I debated ExxonMobil, et al, regarding Peak Oil, I could not even get the ExxonMobil guy to admit that Cantarell was declining. He claimed to have "no knowledge" of Cantarell's status.
If you want a visual image of ExxonMobil, CERA and the API, look up "Hear No Evil, See No Evil, Speak No Evil" for a visual image of three simians: http://en.wikipedia.org/wiki/Image:Hear_speak_see_no_evil_Toshogu.jpg
IMO, these groups are a far bigger threat to the US oil and gas industry than the Democrats are. At least the Democrats aren't promising trillions and trillions of barrels of remaining reserves.
Well, you know, we didn't leave the dark ages because we ran out of dark, and we won't leave the information age until we run out of information, so since we've entered the space age and don't seem to be running out of space, then, um, what was your question again?
LOL!
"You can never solve a problem on the level on which it was created."
Albert Einstein
He gave you a vague unscientific answer. Pure PR.
I don't think you can learn much on the question of peak oil in this setting.
My preferred route to "truth" is to look at the USGS and EIA forecasts, and then see if they are believable.
It's also good to look at such forecasts from a few years ago and see where they went wrong and why. In particular for countries where the data is very reliable, for example the North Sea.
It would be interesting to see representatives of the EIA and USGS defend their over optimistic forecasts that have been shown to be wrong almost before the ink was dry on the paper.
This is a source of frustration for me. We've all seen what a formidable debater RR can be (ad nauseum, in fact). But he at times has seemed more energized by debating the peak with peakers than pushing back against pricks like CERA, API and EXXON-MOBIL.
I wish he'd have THE COURAGE OF HIS CONVICTIONS instead of retracing the doubting/skeptic path, Hamlet-like, continuously.
To hear him say "Is it possible that I could be so wrong on this issue?" is NOT very encouraging.
If someone of his intellect is still stuck in such swamps of doubt, then what the hell is any of us doing here?
There are times and places appropriate for doubt; the possible "end of the world as we know it" is not one of them.
A scientist should always integrate new information to challenge ones convictions. The people who have the 'courage of their convictions' and see no need to integrate new information even if it challenges their beliefs become zealots. Is that what you want?
No, I think you're way off.
I don't think that double-checking your own systems and conclusions is the same thing as 'being stick in swamps of doubt'. We see enough blind confidence and rigorous bluster from the Oval Office to know that the assertion of such proudly unwavering certainty is hardly a sign of a healty and self-correcting thought process. RR put in a little aside at the end to share with you and I the part of the negative feedback that keeps him from losing the chance to see the other side of the debate for a second, to see if there's something he's overlooked.
I'm glad he is as dogged as he is, but to answer his question of 'was it worth it?', I would have to say 'Sure, but there's really no need to go back again, unless an absolutely brilliant new angle of questioning occurs to you.' We've heard where they stand and how they see the world. Not such a big surprise, and as with the Westexas interchanges, at some point you have to call the stalemate and decide what really has to happen instead. The argument of 'is it now, is it soon, do you believe in the Peak?' Seems securely ineffectual. If any of you are personally convinced that an energy downslide is likely in the next 20 years, to be expansive with it, then you will probably agree that all there is to be doing is determining what preparations you can be starting, at the Home-level, the Community, the Region, Country etc.. What other ways might there be to lay the groundwork for a Railway Buildout, for a revitalized Small Farming and Yard Gardening movement to grow? What can you do with your City Council or Nearest Schools, Emergency Managment Offices or Water District to both learn what is currently in place, and be part of what should be there in its place?
What's in your tank?
Obey your thirst!
Bob Fiske
You echo the common sentiment that courage of conviction is preferred over self-doubt. That is why so many people like George W Bush. He may be a total moron, but he is absolutely sure he is right - a heroic moron. People do not want to hear him say "maybe it was a huge mistake", they want to hear "the loss of life was definitely worth it".
RR is right to question himself. Self-doubt is what makes the scientific process so successful. Without self-doubt, you end up with religion. It is unfortunate though, that science can always be seen as uncertain, and therefore inferior to religion which provides absolute certainties.
In fact what we need is not more dogmatic opinion, but more self-doubt from the likes of Mr Caveney, as well perhaps from some of those on the other side.
Comparing RR's doubt and the self conviction of GWB is not a good comparison. His politics and his convictions you can't possibly know. Which one(s), religion, oil, greed, etc. To use the type of self conviction for GWB and compare it to RR, then you're on very shaky ground wanting us to take a GWB thought process and use it for RR. ;)
Here the question seems valid. Does Robert have valid reasoning for self doubt now? Having private self-doubt is not the same as bringing those same self doubts into the public view, and use them to sway public opinion.
Self doubt in private is one thing, when you present it to the public, you should explain exactly why, and should be able to convince others or give them reason to accept your reasoning. Where is that? What is available from this session that made RR have self doubts, but not anyone else. Cheers from a "club" is not evidence.
Quid Clarius Astris
Ubi Bene ibi patria
It's exactly the right comparison. The President uses uncertain and invalid information and comes to unwavering conclusions, then boldly asserting that any kind of challenge or reevaluation of his policy is a sign of weakness and a boost to our 'enemies', even when the plans are failing abysmally and costing us dear.
A lot of guys have been taught that if you show any sign of weakness or vulnerability, they'll come and get you. Makes it a tough one to try and test out, doesn't it? I think the guy who has the pills to say, 'I could be wrong.. tell me if you see a mistake here' is more powerful and courageous than the one who goes 'I'm right, I don't need to check the math, I don't need to review the assumptions.. I'm just right.'
How is he 'swaying public opinion' with this? He's saying he's human, that the information is scant and is being read very differently by other very smart people.. Why?
To cut the knot,The guy is a F###in liar.His job is to keep the boat on the same course,regardless of the eventual outcome.Why,you ask? Because his company/industry is makeing a ungodly amount of money,and in evolutionary terms,insureing his seed survives the comeing dieoff.
Thank you Robert for your efforts.
The transcripts make it pretty clear that there remains a large gulf between the API public positions on the subject(s) and those of TOD activist/enthusiast community.
As a private concern the API must be self serving. To me that is not inherently evil - all of us have our own best interests as a top priority. It is not to API's (or Mr. Cavaney's) best interest to admit that their product is disappearing when they don't have a viable alternative product to sell. Both the biofuel and coal industries are competitors to the API. However, perhaps in the future we will see the merging of petroleum/gas companies with more coal and even ag companies - perhaps the story might change then.
If you have another chance at a similar situation you might try speaking to executives on their own terms - use economics. That is why I liked Alan's natural gas question, as it directly affected questions of the enivironment (as coal is the replacement for NG in some important uses) but was phrased via diminishing returns (wrt efforts to drill for NG.)
The industry may never admit that they are geology-bound. However, they are capital bound - yes, even with billions of dollars in the bank, the physical capital (people, machines) is limited. That is why I think Mr. Simmons has been brilliant - he never built his peak oil talks purely on geology but also the limits of production due to lack of people and equipments also. If he can't reach his audience with geology he can still reach them with economics.
The API may never admit they are geology-bound but they might agree with you that they are capital-limited (not enough people, not enough equipment.)
The API may never admit they are geology-bound but they might agree with you that they are capital-limited (not enough people, not enough equipment.
I predict this is exactly what they're going to say all down the slide: we're not limited by geology, we're just limited by capital and environmental regulations!
Of course the capital costs are driven by geology. And so are the restrictions from environmental regulation---why did geology put the last bits of oil under ecologically sensitive geographies. Why not go out and find the oil back in someplace where it isn't regulated? Pesky geology again.
Let's all remember that in the end it's always (theoretically) going to be limited by capital costs.
Consider, how much LPG is there on Titan? Plenty. It's just a matter of some wee investment.
UAE Paper Oil Reserves
The UAE increased their reserves by 295% in 1986. There were no major field discoveries in that year.
Back in 1985 they were reporting about 31 billion barrels of oil. They currently claim about 97.8 billion barrels of oil. They have produced more than 15 billion barrels in the interim.
In 1991 the UAE announced they would produce 4 mbod by the
mid-1990s.
http://countrystudies.us/persian-gulf-states/85.htm
In 2007 they stated their capacity to be 2.9-3 mbod (liquids)for 2006 and would like to boost their capacity to 4 mbod in the next few years.
http://uaeinteract.com/news/default.asp?ID=221
It is assumed they might have 55 TCF of natural gas (US/DOE).
They have outlined details of switching from exploration to boosting their oil field production through drilling production (MRC?) and injection wells, gas injection, and boosting condensates production. They admited that they may succeed in producing a peak, but the peak will not be sustainable. The current goal is 3.7 mbod (including condensates) in 2010. Since there have been no major oilfield discoveries in some time, they have their mature oil fields and then their gas projects as a legacy.
http://www.pipelinedubai.com/focus/2006/cf0107.html
UAE is a mature oil province a bit smaller than the state of Maine, U.S.A.
Hi Robert,
Great work again. Thanks for including everyone in the question choices.
After reading the transcript the second time, I find myself wondering what they expect to achieve by having these sessions. Their answers are nothing more than hand waving in most cases.
Do they think the Blogosphere(sic) is not going to notice this? CERA does a better job of spin, since they provide the challenge to disprove them, API is just waving hands and mumbling.
They would probably be better off staying silent.
Robert, I thought you did a good job. Several reflections and a question.... First of all, I was stunned by how ill-informed and unprepared were the other bloggers on the call. [Suggestion: Kunstler, Simmons, Archdruid and Robb are bloggers - get them on the next call. Right!]
Second, I thought the answers were fairly good, all in all. Whether "peak" has happened or will happen by 2040 is not that important; the effects are there now. Whether the call for mitigation makes sense or not doesn't matter if the public is starting to demand it; we all know they are not demanding enough. Subsidies keeping the price of ethanol and thereby gasoline down, what's new? Agnostic? I dunno; I think it is a cost shift necessary to keeping our way of life going. I spent today in the garden doing work that is specifically deprecated by that cost shift. It's not only that it keeps our current way of life going; it makes other alternatives dollar-and-cents absurd. Almost no one will see that outside TOD.
Finally
That stuck out like a sore thumb when I listened. What's that about?
cfm in Gray, ME
Robert,
Discussions like this are really not intended to discuss anything, or to identify some sort of middle ground.
I think the idea that an open discussion with people from API or CERA for that matter are an illusion. These people are not interested in telling what actually is happening. It is their job to keep up the 'bussiness as usual' scenario. That's what they get paid for.
All these people want is to be able to say: "We represent the middle ground in the oil debate, we talk to everybody and so far everything is ok." That is the goal of these calls. It's more a PR thing, to make them appear more balanced and neutral than just representing the oil industry interest.
I really think you should reconsider participating in these kind of discussions.
Thanks, Robert,
First up,
re: "...man left the Stone Age not because he ran out of stones, and someday we will leave the Age of Oil, but it won’t be because we ran out of oil."
So, stones are combustible?
Combustible stones? Sure. Why not?
You bring up a good point, Aniya. Stone Age does not equal Oil Age.
My question is related: did we really leave the Stone Age? Have we really left the Middle Ages?
We wield our godlike technology with such beligerance and hatred that I question our notions of progress
Some have become quite comfortable for a relatively short while, but that's about all we can claim.
Meanwhile, resource depletion and global climate change show us that our magnificent edifice is no eternal tower to Heaven, but a very temporary house of cards.
Hi again, Robert,
Just to go over a couple of things...
1) re: "But it is deeply troublesome to me that such a great divide exists on this issue. I am trying to get my head around a way to close it."
Can you articulate what the most troubling aspect of this "divide" is for you?
Eg., What need of yours is not being met?
May I guess? Your need for safety - for yourself, your family...(for the majority of the earth's population, who lack information and hence, will be caught unawares?)
And is this - great? greatly important? Or no? moderately?
In other words, what are your feelings and needs?
Are they personal? Your desire to trust someone who is representing your very career? A desire to trust your own analysis?
I have suggestions of how to "close the divide". Still, perhaps when your own needs are more clear, the "ways" might also be. Just my thoughts.
2) "Anyway, the answer to that question eliminated the need to ask several other questions."
I'm curious about why you thought this - ?
Actually, to me, what Red Cavaney said, his literal words, were not the same as saying (the way you put it) "Yes, the API considers "Peak Oil theory" to be bunk."
In fact, I'd say if he'd said "Peak oil theory is bunk" - we'd really have something to work with.
He knows it's not. (My guess.)
Do you see what I'm saying? There are his literal words - okay, then it's your turn.
For example, one line of inquiry might be to take any particular part of his long speech, and question him further.
So, for example,
a) "they think of a sharp-topped mountain, where once you’re off the peak, swoosh, you just slide down very, very quick, and you have to deal with the precipitive thing."
Is this, in fact, the case? Who hold this? Perhaps ask him specifically - Are we talking about specific analysts? Who?
Who is in the group of people he calls "many people" when he says "not much understood, Robert, by many people"?
Does he know Bakhtiari? (wait while I hunt up the list of names?)
What is a "swoosh"?
Could he put a number on what a "swoosh" is, as opposed to what a "slow downward curve" looks like? What numbers would he assign to each?
A "swoosh" is anything greater than 5%?
Okay, and in KSA we now have...?
3) "I felt like I got a lot out of it."
Could you possibly elaborate? (I'm sincerely interested.)
After reading here for about six months, I think that there are several regular commenters that think that within 5 to 10 years we are going to be back in the stone age. In fact their unstated position is to welcome it. I don't believe there is many here that think that, certainly not a majority. My position is that there is going to be changes in the 5 to 10 year period that will gradually shift us away from the present light sweet crude + condensate era to a more electic mix of fuels. Ethanol, certainly, biodiesel, you bet and some that maybe no more than a twinkle in somebodys eye. What is happening here is that the choir is singing but we are all singing bass. We need some tenors too. Can anyone play devils advocate and talk the side of "no peak until 2040"? They would take a lot of fire, but I for one would praise them to the heavens if they could lend a counterweight to to memmel and Kebah.
Hi Rich,
Thanks for your response. (It's under my post, though I'm not sure if you meant it to be for me.)
re: "Can anyone play devils advocate and talk the side of "no peak until 2040"? "
As far as I can tell, no one is volunteering to do this. Are they?
If Red Cavaney has this as his position, I'm sure he'd be most welcome to post here and to explain. My point was more that he really didn't make his position all that clear, as far as I could tell. I kind of had a different take on it than Robert did, perhaps.
2) re: "My position is that there is going to be changes in the 5 to 10 year period that will gradually shift us away from the present light sweet crude + condensate era to a more electic mix of fuels. Ethanol, certainly, biodiesel, you bet and some that maybe no more than a twinkle in somebodys eye."
If you'd like to present some analysis showing why this might be the case, I'm also sure it would be welcome.
As far as I can tell, we need specifics and evidence to back up looking at different scenarios, otherwise...simple speculation.
We need evidence-based work - and people would welcome it, too, it seems.
Aniya: "we need evidence based work.."
Yes. I think we have been getting that from RR, Westexas, Khebab (sp?) and others here.
Do you mean evidence based work from people like API?
What kind of evidence? Field-by-field numbers? Historic analysis? New fields found in the past/next three years?
I am confused as to what evidence we need. Also as to what evidence we can get.
We seem to have plenty of logic chopping and reasoned analysis along with considerable evidence, but still two very different views of peak oil.
Another topic. Why bother? Is it worthwhile?
Why do you engage in the discussion, Aniya? I know that I am searching and feel some need to nurture another generation and perhaps leave a generation or two with a less violent world in terms of relationship to the planet, other people, and geopolitics. Beyond that, it sort of gets hazy for me.
Why do we animals do anything that we do? At least I think we have some basic instinct to nurture another generation along. That relates directly to depletion and pollution issues.
I also suspect that we are (I am) very deeply attached to our planet. Even though we often see nature as a threat to our safety, we were also born from the earth, depend upon it for sustenance, and will return to it in some very physical way.
I think we mourn (I know I do) for the terrible violence we've done in depleting and polluting "The Creation" as E. O. Wilson describes this planet we are so intimately knit together with. But were we meant to behave just as we have? To fill our bellies full and have babies and then face mortality and even to contemplate the eventual extinction of our species?
For me Peak Oil and Global Climate Change represent the very edge of my efforts to understand what it means to be a human animal. Why are we here? What will I do between now and whenever I die? How will I choose? The Carbon Twins are very physical and visceral manifestations of how we relate to all of the Creation. (Of course, we all know that we are here to help each other through whatever this is and also to fart around. And so it goes, Mr. Vonnegut)
Why do we bother to talk about peak oil, Aniya -- why does RR? -- why do you? -- others?
Hi beggar,
Thanks for your comment. To keep mine short and to clarify,
when I referred to "evidence-based work", I was responding to what Rich said, namely,
Rich:
"My position is that there is going to be changes in the 5 to 10 year period that will gradually shift us away from the present light sweet crude + condensate era to a more electic mix of fuels. Ethanol, certainly, biodiesel, you bet and some that maybe no more than a twinkle in somebodys eye."
In short, I was suggesting that he might write up some references and support (evidence) for his position and share it with us.
sorry rich
if you don't like the tod facts stop reading. saudi has peaked, the world has peaked and it's all over, end of discussion.
start hoarding obsidian and perfect the art of stone tip tools and arms now, before it's to late.
ok, everyone, out of the hand basket we're here.
doomerism is as bad as child abuse
many have argued the other side of this and all have been chased off like syphilitic whores. ask rr or cry wolf.
some have called tod a meat grinder, I'd call it a bell jar
done
Hi earl,
Thanks, and I replied to Rich because he posted under my comment. I'm not sure whether or not he was responding to my post.
Speaking for myself, I'm open to any facts anyone presents. (It's easier for me if there are references.)
I was glad Robert shared so much with us - I still am. I was replying to his post, and then Rich commented under mine. I'm just trying to keep track of what's going on.
you are a very calm voice here and one I've appreciated. thank you
as far as what's going on, group think at tod. any real argument here is over. bums me out.
you are going to get one side at tod; we've peaked, hope you've read enough martha stewart to turn your drapes into something that looks like rachel welsh's getup in that cave person movie from the 70's. other wise you won't have any social capital.
aniya I come to tod for good debate about "energy and our future".it seems this place should be left behind for the doomers and maybe we could find a new place to talk about this very important issue "energy and our future"
WHy not you Rich, if the evidence is available, show it. Asking others to go get the evidence for you, well if they had it they might have showed it here by now.
Quid Clarius Astris
Ubi Bene ibi patria
In my reply to Aniya (hat tip) I ask if there was anyone who could argue the "no peak until 2040" position that was suggested in the API conference call. I wish that I could contribute either pro or con, however as a retired hard rock mining engineer I would have little in the way of a knowledge base or access to sources that would give me any credibility for whichever position I took.
What I suggested is rooted in substitution economics which applies across many fields. That says that as a commodity becomes scarcer because of rising demand or declining supply, there will appear more and more substitutes. Right now this picture is clouded because of taxes and tax credits here in the U.S. This of course pertains to transportation fuels in the main. As the true cost rises there will be both a decline of demand and a rise of substitutes such that there will be an overall balance. To put in place the needed infrastructure to support and supply these substitutes will require time and effort and will cause some disruptions no doubt. One of these disruptions is the rising cost of corn flour in Mexico.
Liquid transportation fuels of whatever kind are going to be with us for a long time. The rising cost of those fuels will shift the distribution of goods from trucks to rail but not completely. (An example of declining demand.) It is unlikely that every farm town will be served by rail but the products of those farms will be distributed to the end user no matter how far or near that may be.
Those fuels will be made up of blends of petro based liquids, biosubstitutes and probably CTL materials. Oil shale may enter into the mix but from my experience of moving rock from here to there it will be a lot further out than most believe.
Let it be understood that I am not predicting more than my original 5 to 10 years time line. If someone wants more than that, they should sacrifice to Oracle of Delphi and try to figure out their own answer.
Just my take on it, make of it what you will.
jbunt
Subscribe to the weekly "Oil & Gas Journal" out of Tulsa, Oklahoma for the most accurate information (it is a very inexpensive publication).
The mideast will struggle to hold its own, because of the inflated reserves that they claim. Russia has been increasing substantially, but now that they are on their feet and they realize that oil will be more valuable in the future, both economically and politically, I believe that they have clearly started to stretch out their exploration programs. Angola has come out of nowhere to now an OPEC member exporting well over 1 million bbl/day. Nigeria has been steadily increasing. Libya is now kind of okay politically and has stepped up its production quite a bit. A lot of you do not like it, but the US has many untapped areas, including offshore CA, which has proven reserves. Brazil has increased production by a lot in the last 10 years. Kazakhstan has increased production substantially. Canada has increased production substantially.
I believe in peak oil, but it is going to be mitigated (level off for a period due to these, and other projects).
The REAL problem is demand. By 2040, China will be the worlds largest economy. They currently have less than 40 autos for each 1,000 people. In the US it is over 700 per 1,000 people (obviously some people have 3 or 4 cars and can only drive one at a time). But, when China (plus India, Indonesia, Pakistan) have 100 or 200 cars per person, there is no way that everybody can run on oil.
I am still a bit confused, but on a higher level.
For my personal preps i go for peak NOW, but hope it will be later.
Can anyone play devils advocate and talk the side of "no peak until 2040”
Oil Industry spokesperson mentally: “Peak? Peak? We don’t care about peaks. Peaks are a lot of BS. We had the per capita peak, world oil discovery peak, a US peak, North Sea peak, plenty peaks, they’re going on all the time, and we are still in the money.”
(Bit fanciful!)
So, it is not so much a question of ‘no peak’ (or any combination of misty dates and far off wavy plateaus) but that the industry will manage ‘peak’ and ‘post peak’ as they see fit. That a pesky part of the public suddenly seems steamed up about ‘peak oil’ is something that requires massaging and spin. Of course, they have all the facts, and they understand why some in the US are worried - because this peak is going to affect the economy (I sometimes think it already has - globalization, etc.), but it does not necessarily affect them, or not obviously so, superficially examined, or in a shortish time span, negatively, that is. I know someone who works for a big industrial baker. Believe me, the owner is not worried about grain reserves or hunger in the third world. As pointed out above, it is a question of perspective, and the PR is PR, certainly; but it is kinda genuine as well, as it represents a certain facet of their *own* presuppositions, little bits that are part of the belief system they use in their work. Naturally, they want to keep the upper hand, and so the non-scientific, but rather political discourse they offer ‘doubters’ or ‘pests’ also serves to obfuscate and keep information covert, so that fits nicely together.
In fact, it is not really up to them to address or discuss peak oil - that is the Gvmt’s job, through a reasoned energy policy and their relations with the petro people (eg forcing them to give up data.)
thx to RR for the work.
Hi Robert,
Great work; very definitely worthwhile. It's important that API and others are required to publicly answer these kinds of questions. The more detail they have to provide the better.
Hearing other senior oil industry folks so confidently dismiss near-term peak oil also prompts me to question my own view, but each time I reach the same conclusion. I'm convinced I'm right everytime people refer to Chevron's "Jack" as evidence against peak oil. For me it is exactly the opposite.
Closing the gap is something I'm trying to do as well. I think there are three lines of arguments to pursue (some also mentioned above):
1) Why have the 'no-peak' arguments not worked in the USA, UK, Norway, Mexico and so many others? Why did Chevron say 33 countries are past peak production? Why does deMargerie (head of Total) say we will "never ever" produce 120 million bpd? Why does say AAPG say peak will only be 90 million bpd?
2) Tackle the technology/reserve growth issue (which Khebab has also said we need to focus more on). It's not reasonable to multiply 44% times all past production and currently claimed reserves and suggest that there is that much reserve growth potential, just because that 'appears' to be the case in the US. But the USGS do exactly that (and CERA similarly). I have a post on this topic but it may also appear in print so I'm not sure I can publish it yet.
3) Why did the oil industry fail to anticipate peak in the USA and the North Sea? Becuase of the balance between new/expanding production and depletion/declines. Yes there's expanding production in Brazil, Angola & Canada, but there are declines in USA, UK, Norway, Mexico and a dozen other major producers. We're losing 2-4 million bpd to depletion each year, so we need that much new production every year just to hold production flat. For how long can we make the sums add up?
When we get API and others to put numbers down on paper (especially for #3, then it becomes easier to see the differences). ASPO-USA had a good newsletter recently (26th February) showing how CERA's own forecasts were being consistently revised down as production fell short of their expectations (even over short six month predictions). This is precisely because they underestimate depletion eating away at new production.
Hope that helps.
cheers
Phil.
jbunt
EIA basically gets all of their info from API members. Go to their website - a wealth of info. Here, e.g.:
Topics for Crude Reserves and Production
Crude Oil Production
by U.S., PAD District and State (monthly, annual).
Crude Oil Proved Reserves, Reserves Changes & Production
by U.S., Region, and State (annual).
Reported Reserves of Crude Oil in Nonproducing Reservoirs
by U.S., Region, and State (annual).
Gulf of Mexico Federal Offshore Production
Production of crude oil, natural gas wet after lease separation, natural gas liquids, dry natural gas, and lease condensate. (annual).
Crude Oil and Natural Gas Drilling Activity
Rotary rigs in operation, footage drilled, and active well service rig counts (monthly, annual).
Crude Oil and Natural Gas Exploratory and Development Wells
Exploratory and development wells drilled for crude oil, natural gas and dry holes; total footage drilled (monthly, annual).
Footage Drilled for Crude Oil and Natural Gas Wells
Footage drilled by exploratory and development wells and by crude oil, natural gas, and dry holes (annual).
Average Depth of Crude Oil and Natural Gas Wells
Average depth of wells drilled by exploratory and development wells and by crude oil, natural gas, and dry holes (annual).
Costs of Crude Oil and Natural Gas Wells Drilled
Per well and per foot costs of crude oil, natural gas, and dry hole wells (annual).
Maximum U.S. Active Seismic Crew Counts
by onshore/offshore/Alaska and dimension (monthly, annual).
This Week in Petroleum
Analysis, data, and charts of the latest weekly petroleum supply and price data.
Weekly Petroleum Status Report
The petroleum supply situation in the context of historical information and selected prices.
Crude Oil Production Overview
Petroleum Reserves Overview
Petroleum Basics
Analysis of Crude Reserves & Production
... more
Operator Data by Size Class
Proved reserves and production by class size.
Distribution and Production of Oil & Gas Wells
State level tables and graphs (monthly, annual).
Top 100 Oil and Gas Fields
Estimates of the proved reserves and production of the top 100 oil and gas fields.
Maps
Exploration, Resources, Reserves, and Production
International Petroleum Reserves & Resources
Environment
Forecasts
Includes natural gas and petroleum forecasts of consumption, production, prices, and sales.
Natural Gas Exploration & Reserves
THOUGHTS ON ROBERT RAPIER'S QUESTION: CAN I BE SO WRONG?
CORRECT QUESTION: HOW WRONG WILL I BE, AND IN WHAT UNPREDICTABLE WAY?
Robert Rapier,
Excellent insertion of the questions, and a good forum. It did give us some clarifying views of where the API stands on several issues, and where “we” (the energy aware and more broadly, the public at large) stand on several important fronts. Let’s see what we gleaned clearly:
Peak Oil: The API obviously does not take it as a serious threat, not in the near future. This led to your (R.R’s) very serious line of self questioning:
“It seemed that he was suggesting that peak might be "as soon as" 2044, while I am thinking 90% probability within 10 years. There are a number of people who have analyzed this issue and believe we are right at or near peak. So the question in my mind became "Why is there such a divide, and how do we address it?" Because I don't believe we can just afford to write off people who think peak is a long way off.”...
“I also spent some time thinking "Is it possible that I could be so wrong on this issue?" This is probably something we all wonder from time to time. I personally question and "challenge my own positions on a frequent basis.”
This is exactly the line of questioning that has so frequently gotten me in trouble here at TOD. And I am not sure your contention that this “is probably something we all wonder from time to time.” is true here.
I do think that at least a sizable percentage of the posters at TOD now have NO DOUBT that catastrophic collapse is coming and coming soon. The idea of “questioning and challenging” peoples preconceived notions is becoming to say the least, extremely unpopular.
But the issue of whether we can have any hope of timing peak and the onset of rapidly changing economic conditions matter greatly, as it relates to personal investing and planning. Absolutely catastrophic planning decisions can result if, by some chance, and to use R.R.s words, we are “so wrong”. This is the reason I often refer to the 1970’s-80’s, a period when many of us were indeed “so wrong”.
What we have to try to find, in my view, are ways to reduce energy (oil /gas/electric in particular) consumption without destroying our financial and cultural lives even if peak does not occur until 2044. It can be done, and in fact SHOULD BE DONE. Diversity, distribution of sources, alternatives and strategic risk management are good in any industry. Reduction of waste and truly modern design is sensible beyond words, peak now or peak later.
Other news: Like it or not, ethanol is coming. It seems as though it will be limited only by the capacity of the industry to deliver.
There is danger here: Pressure is already being felt in corn and meat prices as grain prices are driven higher. Recently, folks have finally began to look at the natural gas consumption involved.
Topsoil and water issues are capturing ever more attention.
But, the government, with it’s subsidies and mandates have made ethanol now impossible to get away from. We are committed to this path.
The topsoil issues can be somewhat mitigated with cautionary growing methods, and these should be researched immediately. Likewise the water issues (can one picture giant aqueducts carrying water from the great lakes to the plains to feed cities and towns with water, while the ethanol industry swallows up local water? It’s possible that a giant “TVA” type water program could be needed if capacity of ethanol production grows rapidly. The question is, how many costs for the ethanol, per barrel will have to be externalized to keep the industry running?
The natural gas issue however, cannot be easily mitigated. Natural gas is now being called upon to do so much in our future.
(a) Tar sand production
(b) Ethanol production
(c) Electric power production
(d) Home heating
(e) De-sulfuring of Diesel and cleaning of ever heavier crude oil for gasoline production
(f) Direct use in transportation engines, and distributed power generation
(g) Fertilizer production for the increased agricultural and fuel needs of America
(h) Plus it’s long-standing duties in industry, concrete production, brick and ceramic making, etc.
The U.S. seems to feel that the natural gas problem is really a mirage and not of serious import. We keep planning like we did in the 1970’s, for an ongoing dash to gas, the “clean and abundant fuel.” This needs to be discussed in a deep and serious way by all shareholders in America.
Now, to Diesel.
Once more, the Diesel dream seems to be rising like a Phoenix.
I drive a Diesel car, and own 2 of them. I like them, I have been relatively happy with them.
But, we must recall that in the 1970’s/80’s, when Diesel fuel was a good deal cheaper than gasoline, and performance demands were lower for automobiles, the whole Diesel auto idea was essentially stillborn.
Why would we now presume, with Diesel fuel in most cases higher priced than gasoline, gasoline cars available of great efficiency (small efficient cars, and the hybrids) that Diesel will fare better today than it did 30 years ago?
Recent studies have shown that the public finds even Prius and Camry hybrids too slow to be fully acceptable, with complaints about acceleration being a barrier to sales (!)
Obviously there are many people extolling the Diesel automobile who have never driven them.
Shocking surprises:
Mr. Cavaney:
“The other point I would say is if you look at most of the rest of the world where oil is forecast to be, they are so under explored that it’s not even (laughable–?). For example, only three percent of the exploration that’s taken place in the Middle East, even though they’ve got, you know 70 percent of the proven reserves, in Saudi Arabia alone, which most people would argue has probably got a fair amount of oil there”
Can this possibly be true? Mr. Cavaney gives this number as though it is a statistic about which there is no doubt. This is one of those “am I in touch?” type moments for me, because the whole tent of impending doom is now pegged so tightly to the idea that discovery peaked long ago. But if there has been little exploration, there of course would be little discovery.
This is an issue that has bothered me for a long time: It is fascinating that discovery dropped like a rock at about the same time that oil prices crashed, in the 1980’s and ‘90’s. This does not seem like a coincidence to me. If impending peak production is based on prior peak discovery, when exactly was peak exploration?
In other words, during the horrendous collapse of the petroleum industry in the 1980’s/’90’s, when simply surviving was the oil companies all consuming goal, and oil consumption was relatively flat worldwide, was anyone really spending hard earned cash even looking for oil?
If so, why? The North Sea was delivering, Saudi was still delivering, Mexico/South America at that time was still delivering, would you have spent your money, the shareholders money looking for oil in odd and expensive places?
As Robert said, and I agree, I spend a fair amount of time asking myself “Am I that wrong?”
I have not even discussed advancing technology on the alternative energy production side, which is now moving much faster than most folks can even imagine. We are nearing some absolutely revolutionary confluence points.
(Hint: At a certain point, solar energy direct to hydrogen sets a ceiling on oil and gas prices. It is ABSOLUTELY INEVITABLE. When the price/scale point is reached, it completely alters the economics of the oil/gas/fossil fuels industry and thus the world. We cannot know when the efficiency levels/EROEI balance will allow this to happen, but EROEI is going down on fossil fuels and going up (very fast) on alternatives such as solar) Perhaps much, much sooner than most folks can imagine.)
Despite the screamers who say it over and over again, hoping that repetition will somehow make it true, ENERGY ON EARTH IS NOT, ABSOLUTELY NOT A CLOSED SYSTEM. It’s just not honest for people to keep screaming it, knowing it is absolutely untrue.
If we intend to not only survive but prosper in the upcoming age of change, we must keep all options on the table. Be ready for anything. And yes, YOU WILL BE WRONG. The question is not whether you will be wrong, but in what direction, and by how much. My bet: We will be wrong in exactly the most unpredictable way, and by a great deal.
Thank you.
Roger Conner Jr.
Remember, we are only one cubic mile from freedom
My bet: We will be wrong in exactly the most unpredictable way, and by a great deal.
I want to say you are wrong but.......
red,
"I want to say you are wrong but......."
yeah, yeah, I know.....you don't want me to win my own bet....an enigma, isn't it, if I just go ahead and say I will be wrong (and I will, of course), then if I am wrong I am right! :-) (gee, I love rhetorical discussion!)
RC
Does the H2CAR proposal change the calculation that cellulostic biofuels could not help solve peak oil when combined with hydrogen and more efficient vehicles.
H2CAR suggests all of the transportation fuel needs of the US could be met with biomass combined with hydrogen from solar/wind/nuclear while using 6-15% of the land in the US.
http://www.pnas.org/cgi/content/full/104/12/4828
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http://advancednano.blogspot.com/2007/04/hydrogen-and-biomass-could-prov...
http://advancednano.blogspot.com
Hi advanced,
My suggestion is - if you'd like a response to this, post it in a section for today or tomorrow, as it may be that no one is reading this thread now.