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Fatih Birol Presents the IEA World Energy Outlook 2007

Posted by Chris Vernon on December 7, 2007 - 11:00am in The Oil Drum: Europe

On 5th December 2007 Fatih Birol, Chief Economist and Head of the Economic Analysis Division of the International Energy Agency (IEA) gave a presentation in London at the Shell Centre, hosted by the British Institute of Energy Economics (BIEE). Mike Pepler attended the meeting and took the following notes (his personal comments are in italics):

Introduction

·         We are on the eve of a new world energy order.

·         On the supply side, we have oil production outside the core OPEC countries reaching a peak, which is not good news for the International Oil Companies (IOCs). The National Oil Companies (NOCs) will determine future oil supply.

·         On the demand side, China and India are transforming global energy markets through their sheer size and rate of economic growth.

·         Between now and 2030, China and India will account for 70% of new global oil demand, and 80% of new coal demand.

Approach

·         Chinese and Indian experts joined the IEA team to write WEO 2007, and extensive peer reviews from their countries were used.

·         Three scenarios are used:

o        Reference scenario. All government policies and economic developments continue as they are at present. This leads to two threats: risks in security of supply for oil and gas, and climate change.

o        Alternative scenario. 1,500 policies currently under discussion across the world are put into practice in 2008. This scenario also includes an option to stabilise atmospheric CO2 levels at 450ppm.

o        High growth scenario. Economic growth in China and India is the biggest unknown in these studies. The predictions have been wrong in the past, underestimating the growth. This scenario assumes an increased rate of growth for China and India.

·         The analysis of China and India’s impact on the global economy, environment and energy market is a key part of WEO 2007.

Reference scenario

·         The continuation of existing policy leads to a fossil-fuel future.

·         Coal will see the biggest increase in use.

·         China and India are responsible for 45% of total energy demand growth from 2005 to 2030, and 80% of coal demand growth.

·         By 2010, China will be the world’s largest energy consumer, overtaking the USA.

·         Oil supply projection to 2015:

o        The supply/demand balance will remain tight.

o        By 2015, an extra 37.5 mb/d (million barrels per day) of production will be required. 13.6 mb/d of this is to meet new demand, while 23.9 mb/d is to replace declines in existing oil fields – a factor that is often overlooked.

o        Oil producing countries have policies that should lead to an extra 25 mb/d by 2015. A further 12.5 mb/d will be required, or a supply crunch can not be ruled out.

o        As well as finding new production, we will also need to find ways to curb demand for oil.

o        The top 5 IOCs have had reserve replacement ratios declining steadily between 2001 and 2006. If they do not redefine their business strategies to move away from oil they will have serious difficulties.

Vehicle sales in China

·         China will be importing 13 mb/d of oil by 2030, as car ownership rises from 20 per thousand people to 140 per thousand.

·         Car sales in China are predicted to overtake those of the USA in 2016.

·         However, Western countries should not criticise China for this – car ownership in the EU is 680 per thousand people, and 860 per thousand in the USA.

Coal demand in China and India

·         In 2005, China exported coal, while India imported, so the net import for the two together was close to zero.

·         China is now importing coal as well, and the global coal price has doubled in the past year.

·         By 2015, China and India will be importing 170 Mtce (million tonnes coal equivalent), and by 2030 they will be importing 330 Mtce. (figures are approximate, as they were read from a graph)

·         Before criticising these imports, we should remember that in India there are 420 million people with no access to electricity. How can we tell them not to use coal, which is the cheapest way of providing electricity?

CO2 emissions from China and India

·         It is worth looking at the cumulative emissions from 1900 to 2005. The USA emitted 340 Gt (Gigatonnes), the EU 240 Gt, China 90 Gt and India 25 Gt. (figures are approximate, as they were read from a graph)

·         The projection in the reference scenario brings China’s cumulative emissions close to those of the EU by 2030.

·         On a per capita basis, China deserves to be allowed higher emissions, although by 2030 they could be similar to those of the EU.

·         The top five CO2 emitters are predicted as follows:

o        2005: USA, China, Russia, Japan, India.

o        2015: China, USA, Russia/India, Japan

o        2030: China, USA, India, Russia, Japan

·         By 2030, China, India and the USA will together emit more than 50% of global CO2.

CO2 from coal power plants in China and India

·         China and India will add 800 GW of electrical generation capacity between 2006 and 2015. This is equivalent to all capacity built in Europe between 1945 and 2006. 90% of the new capacity will be coal fired.

·         Coal power plants have an economic lifetime of 60 years. Once built, it is unlikely that these power plants will be closed early. We would not do this in the West, so can not ask China and India to do so either.

Energy efficiency

·         At present, half of all new building is in China, measured on a square meter basis. The energy efficiency standards of the new buildings are generally not good. As with the coal power plants, once these buildings are there, they will continue to be used for many years.

Investment

·         $22 trillion is needed between 2006 and 2030. Half of this is in developing countries, with 17% in China and 6% in India.

·         We are not running out of energy, or out of money, but we are running out of time.

Alternative scenario

·         Assume that 1,500 current draft policies are put into place in 2008. These include energy efficiency, building renewable energy and building nuclear power.

·         The result is lower growth in net oil imports, leading to growth being reduced by 14 mb/d by 2030. (note that this is still a rise in demand, it’s just a smaller rise than in the reference scenario)

·         In the reference scenario, CO2 emissions rise by 57% by 2030, ending up at 42 Gt per year and possibly causing a global temperature rise of 6C, which would be disastrous. The alternative scenario results in emissions levelling off at 34 Gt, possibly leading to a 3C temperature rise, which could still be too much.

·         The cost effectiveness of this scenario is important. For example, by 2030 China could save 170 TWh/year simply through the use of more efficient refrigerators and air conditioning, as the current standards are low. This is equivalent to twice the annual output of the Three Gorges Dam.

·         To achieve stabilisation of atmospheric CO2 levels at 450 ppm, for a 2C rise in global temperature, emissions need to drop from 27 Gt per year today, to 23 Gt by 2030. This is 19 Gt less than the reference scenario, and to achieve it requires:

o        All power plants built after 2012 to emit no CO2.

o        Early retirement of coal plant in OECD countries.

o        CCS (carbon capture and storage) to be economically viable within 10 years.

o        Improvement in efficiency (energy intensity of economies) to increase from 1.6% per year to 2.7% per year.

o        All the countries in the world to agree on a framework and put it in place within 5 years.

High growth scenario

·         The reference scenario has Chinese economic growth at 7.5% for the next few years, falling to 6% up to 2030.

·         The high growth scenario has Chinese growth at 9.5% initially, falling to 7.5%.

·         The result is more than 20% increase in oil demand by 2030.

Summary

·         The global energy system is on an increasingly unsustainable path.

·         China and India are transforming global energy markets.

·         All countries need to transition to a more secure, low-carbon energy system.

·         New policies now being considered could have a major impact.

·         The next 10 years are critical

o        Significant generating capacity is being built.

o        Technology lock-in means what we choose now will be there for decades.

o        There will be growing tightness in oil and gas markets.

·         These are global challenges, and we need global solutions.

·         The OECD countries must show leadership.

Question and answer session

Where will the projected extra 25 mb/d oil production come from?

·         We know of approved projects around the world that will bring 25 mb/d by 2015 (note that this is still less than the 37.5 mb/d actually required). If the supply turns out to be less than this, we are in serious trouble. If these projects do not come online, the wheels will fall off our energy system. (Yes, those were his exact words)

What oil price is required to cause a reduction in demand, and how will this reduction manifest itself?

·         The bad news is that the price elasticity of oil is declining, so that a rise in price only produces a small reduction demand. The reasons for this are:

o        Oil use is becoming more and more focused on transport, where there are no significant alternative fuels to substitute.

o        The OECD is wealthier than during the last oil price shocks, and can afford to keep buying fuel at much higher prices.

o        Much of the current oil demand growth is coming from subsidised markets, such as China, India and the Middle East, so oil market price rises do not impact demand.

·         We currently expect WTI crude oil to be at or above $65 a barrel in real terms, and this is not enough to reduce demand. If consumers perceive that prices above this level are here to stay, then there will be some impact on demand. However, this price mechanism will not act fast enough, and government policies are also needed to reduce demand. For example, we would like to see fuel subsidies reduced.

·         Also, we do not believe that high oil prices hurt the global economy, which is more than just the USA and EU. Some countries may be hurt by high prices, but others benefit.

·         Note that in the last few years Africa has lost 3% of GDP growth to rising oil prices, but this does not even make headline news, while slight falls in USA growth get everyone worried.

High oil prices are on the way, which will incentivise efficiency – do you anticipate any surprises?

·         We expect high prices for the next decade, and maybe even higher after that.

·         In the developing world $250bn in energy subsidies is paid out each year. If subsidies were removed for energy, then the payback on efficiency measures would be extremely rapid – at present there is little incentive as energy is too cheap. However, subsidies can not be quickly removed in some cases, due to the effect on people. In practice we have found that energy subsidies in India actually divert more money to the upper and middle classes than to poor people.

·         Regulations on efficiency are needed in developing countries.

We need a lot of investment in oil production – what constraints do you see?

·         There is currently a problem in the availability of manpower. However, this can be resolved over a few years simply by increasing the pay of the engineers.

·         Willingness to invest – the Middle East has the money, but is not necessarily willing to invest it in new oil production.

·         Iran doesn’t have the domestic capital to invest, and also has challenging geology in its oil fields, leading to production declines of up to 20% a year in some fields. However, Iran does not have access to international capital in the way that other countries do.

·         The rapidly declining production in OECD countries is clearly a constraint.

CCS leads to reduced efficiency in power stations – is this included in your assessment?

·         I am not strongly in favour of CCS. In normal circumstances CCS would have little impact in the next 10 years as it is expensive and not yet commercially proven. There are also regulatory issues on where the CO2 is stored.

·         I would look at other technologies, such as nuclear power, ahead of CCS.

·         Before China and India can be expected to use CCS, the OECD will need to spend a lot of cash developing it.

·         Time is an issue – China and India are building cola power plants now, and retro-fit of CCS will be expensive.

China plans a target of 16% renewable energy by 2020, and higher targets after that.

·         It is good to have such targets, but we are not convinced they will reach them.

What do you think on the role of Russia in future?

·         Russia is very energy rich, and also close to Europe.

·         The government in Russia has had a strong influence on energy, both domestically and in exports.

·         50% of global proved gas reserves are in Russia and Iran, while Qatar is third.

·         There is a significant decline in gas production from several Russian fields, and there is insufficient investment in new production – they may not be able to honour their export commitments in future.

Further comments from Fatih Birol on oil

·         The market price of crude is now well above the actual cost of producing it in most fields.

·         In many countries the tax on fuel is more than the raw material cost.

·         In producing countries fuel is very cheap, but their populations often suffer from energy poverty despite this.


 * * * * * * * * *

Mike lives in Rye, UK, and works from home for the Ashden Awards for Sustainable Energy (www.ashdenawards.org). He is also one of the founding members of PowerSwitch (www.powerswitch.org.uk), and together with his wife Tracy manages eight acres of coppice woodland near Rye.

Fatih Birol Presents the IEA World Energy Outlook 2007

PDF version

118 comments

Chris Vernon on December 6, 2007 - 5:17pm Permalink | Comments top

Birol stated that 23.9mbpd is needed to replace declines in existing production by 2015. Assume we are currently producing 85.5mbpd. Losing 23.9mbpd from 85.5mbpd over 7 years leaves just 61.6mbpd and represents a 4.0% decline rate from the fields already in production.

If we assume the 23.9mbpd will come off the 73mbpd crude production rather than the 85.5mbpd all liquids figure, the decline rate is 4.8%.

ace on December 7, 2007 - 12:25am Permalink | Parent | Comments top

Thanks, Mike and Chris! The IEA is sounding the alarm about peak oil. They are admitting that supply will not be able to keep up with demand by the question below.

Where will the projected extra 25 mb/d oil production come from?

We know of approved projects around the world that will bring 25 mb/d by 2015 (note that this is still less than the 37.5 mb/d actually required). If the supply turns out to be less than this, we are in serious trouble. If these projects do not come online, the wheels will fall off our energy system. (Yes, those were his exact words)

I added up all of the peak flows from projects on the soon to be completed http://en.wikipedia.org/wiki/Oil_Megaprojects . Excluding the unapproved Kashagan project and including a small percentage of 2007 projects, the total new optimistic peak capacity project additions from 2007 to 2012 is just over 27 mbd. This number is close to Birol's 25 mbd.

The IEA has admitted above that non OPEC production is about to peak. Birol says that there are only 25 mbd of approved project capacity. As this is just barely enough to replace lost capacity from his estimate from above of 23.9 mbd for existing field decline, Birol is effectively admitting that world oil production is on a peak plateau now. If a slightly higher underlying decline rate of 4.5%/yr is used then world total liquids supply is in slow decline now, rather than a plateau.

The peak oil plateau is forecast by Sadad al Husseini, ex Exec VP Saudi Aramco, in the chart below

click to enlarge - Oil & Money 2007 Conference, October 31, 2007, London source: http://www.energyintel.com/om/program.asp?year=2007

Also an interview with Husseini here
http://www.davidstrahan.com/blog/?p=67
Husseini says "global production has reached its maximum sustainable plateau and that output will start to fall within 15 years"

Wonder if Birol is in communication with Husseini?

garyp on December 7, 2007 - 6:36am Permalink | Parent | Comments top

Careful ace, something doesn't add up here.

If you total the megaprojects list then you indeed get ~25Mb by 2015. That comes out at ~4Mbpd addition each year on average. However if you take that 4% decline number then you should be seeing increases each year of 0.5-1Mbpd.

But

This year, according to the table, we should be seeing 4.7Mbpd extra. Take the assumption of that 3.5Mbpd decline rate and we should have seen a good million extra barrels this year. Needless to say, we haven't. So either the table data is wrong, the decline rate is wrong, or someone is holding back on supplies.

I also have to say, something about the megaprojects data for 2008 seems wrong. At 7Mbpd extra we should be swimming in the stuff next year. Its anomalous and even taking into account the time for production to reach peak I'd question if there's not some company spin in there.

Given the numbers for this year, we should also consider that maybe the decline rate of existing wells is not 4% but maybe more like 5%, bringing us to somewhere around 28-29Mbpd required to stand still. That puts us on the other side of break even.

It comes down to where does 23.9Mbpd needed to deal with declines come from? It seems to be to be unsupported and the numbers we see for major fields in decline don't match it. A sneaky way to massage the figures is to do so on the factors that people aren't focused on. Everyone looks to new production, so adjusting the physical decline number can slide by.

westexas on December 7, 2007 - 9:10am Permalink | Parent | Comments top

Ask me about the weather, and I talk about net oil exports.

A reminder: Our (Khebab/Brown) middle case is that the top five net oil exporters (about half of current net exports worldwide) hit zero net exports in 2031. Our model and recent case histories, e.g., the UK and Indonesia, show that net export decline rates tend to accelerate with time (worse than an exponential decline rate).

Even if we assume flat total liquids production for Saudi Arabia (11 mbpd in 2005), at their current rate of increase in consumption, their overall long term net export decline rate (2005 to 2030) would be -10%/year, resulting in zero net exports in 2036 (and again, the net export decline rate would start out at a low rate and accelerate).

I think that the big surprise is going to be a rapid decline in net oil exports from Russia.

Chris Vernon on December 7, 2007 - 9:35am Permalink | Parent | Comments top

Our (Khebab/Brown) middle case is that the top five net oil exporters (about half of current net exports worldwide) hit zero net exports in 2031. Our model and recent case histories, e.g., the UK and Indonesia, show that net export decline rates tend to accelerate with time (worse than an exponential decline rate).

Remind me how this works. I would say the UK was able to hit zero exports as oil is/was a tiny part of the total economy (1.7mbpd x $90 = ~$56bn per year from a ~$2 trillion economy). The same can not be said for major exporters like Russia and especially Saudi. When a country’s economy depends in large part on the revenue generated from oil export, a sizeable proportion of exports have to remain. It is folly to suggest that the Saudi economy could maintain/grow internal consumption as exports fell to zero. Without oil exports there is no Saudi economy, no money, without money there are no imported BMWs. (CIA World Factbook has this sentence “The petroleum sector accounts for roughly 75% of budget revenues, 45% of GDP, and 90% of export earnings.”) Unless you are suggesting Saudi develops a complete economy that doesn’t require imports – I’d say impossible with 28 million (+2% pa) living in a desert – we can be certain Saudi will be a significant exporter for just as long as they remain a significant producer and consumer of oil.

Zero net exports from Saudi in 2036 despite constant 11mbpd production? Not a chance.

westexas on December 7, 2007 - 9:42am Permalink | Parent | Comments top

First and foremost, the severe problems for importers arise not from the proximity to zero net exports, but from the first 50% or so decline in net exports. Also, note that as oil prices skyrocket, an exporter can and will generate more cash flow from declining net exports.

I thought that the UK and Indonesian case histories were interesting.

The UK is rich, taxes energy consumption and had basically flat liquids consumption over the decline period.

Indonesia is relatively poor, provides energy subsidies and had increasing liquids consumption over the decline period

Result?

The UK crashed to zero in seven years. It took Indonesia a little longer; they crashed in 8 years.

I would think that virtually every net oil exporter in the world would fall somewhere along a demographic continuum from Indonesia to the UK.

Chris Vernon on December 7, 2007 - 10:10am Permalink | Parent | Comments top

I certainly agree that declining net exports driven in large part by increased exporter consumption is a major, perhaps the most significant, problem faced by importers. However this talk of zero net exporters from countries like Saudi who are so reliant on exports seems highly unlikely and in my mind distracted from what is otherwise a very valid point.

Indonesia is more like the UK than Saudi in terms of how important oil is to its economy. Indonesia has a GDP of $264.7bn, virtually the same as Saudi at $282bn. Their relative oil production (and historic export proportions) shows how less important oil exports are compared to Saudi and how Indonesia (like the UK) could afford to run net exports down to zero.

I don’t accept that the UK and Indonesia provide the endpoints of a continuum of important variables for the ELM.

westexas on December 7, 2007 - 10:23am Permalink | Parent | Comments top

Consumption is only part of the story.

The key indicator of the net export decline rate is consumption as a percentage of production at the final peak. And the overall UK net export decline rate was -55%/year, with flat consumption, because of their high consumption as a percentage of production. In any case, it's just a question of how rapid the net export decline rate is.

But a key point to keep in mind is what I call Phase One and Phase Two Net Export Declines. In Phase One, cash flows from export sales increases, even as volumes decline, because of rising oil prices. In Phase Two, cash flows from export sales decline, as volumes decline, because rising oil prices can't offset the volume decline.

CLZ09 on December 7, 2007 - 11:08am Permalink | Parent | Comments top

Westexas:

I love your work, man, but this is silly. The UK and Indonesia could only go to zero because there was someone else exporting. You can't use the same decline rates for Iran, Russia and SA because the effect on the world price will be totally different when the exports from the last few big exporters start to decline and that will affect domestic consumption.

Now, the asymptotic approach to zero isn't going to be a picnic, but it seems certain that exports will continue at gradually diminishing levels until the end of the oil age. The threat of military action by the US on behalf of energy importers (whether they wish to acknowledge it or not) will keep markets "well supplied" as OPEC ministers love to say.

At what prices we will have to see. But the oil will be flowing.

westexas on December 7, 2007 - 2:33pm Permalink | Parent | Comments top

As I said elsewhere, it's not the last half of the net export decline that causes the immediate problems for importers. It's the first half. Whether some key net exporters maintain some low level of exports for a long time is not really relevant once the world net oil export market has largely collapsed.

In "our" (Khebab did all of the hard work) presentation at ASPO-USA, we used low case, middle case and high case projections of production (based on HL) and consumption (based on a Monte Carlo analysis of prior consumption).

Euan Mearns on December 7, 2007 - 11:35am Permalink | Parent | Comments top

The shape of things to come? Consumption crashing ahead of production - in order to maintain export status. Which part of the ELM was it that forecast this?


Luis de Sousa on December 7, 2007 - 11:50am Permalink | Parent | Comments top

Hey, I can hardly see that yellow bit in 2007 ;)

That's what the ELM is all about: things get ugly when consumption growth and production growth have oposite signs (and the first is positive).

westexas on December 7, 2007 - 2:47pm Permalink | Parent | Comments top

Euan,

Are you sure you are not trying to support the ELM here? In any case, note that we don't have the final 2007 data yet. The EIA shows Indonesia (I believe a founding member of OPEC) at about 65,000 bpd net imports for 2005 and 2006.

As I have said elsewhere, whether some exporters maintain some low level of net exports or whether they actually precisely hit zero net exports and stay there is not really relevant to the big picture. What is going to torpedo the SS World Industrial Economy is the first 50% decline in world net exports.

In any case, in what I have described as the Phase One net export decline, I anticipate that their cash flow from export sales will increase, even as export volumes decline, because of rising oil prices.

Robert Marston on December 7, 2007 - 3:30pm Permalink | Parent | Comments top

Regardless of scale, in a world with increasingly tight supplies this seems like a huge problem. The graph above is pretty chilling if you ask me.

I wonder, do you have a similar graph for Saudi Arabia currently? It might give us an idea if it is following a similar trend to Indonesia.

Euan Mearns on December 7, 2007 - 3:50pm Permalink | Parent | Comments top




I don't have Saudi to hand, but UAE is a good proxy. The danger with UAE is not rising consumption but falling production in the next 2 decades. Exports only begin exponential decline when the ratio of exports : production becomes small.

Robert Marston on December 7, 2007 - 4:07pm Permalink | Parent | Comments top

Thanks for this! I would expect UAE to be a lot closer to Saudi in any case.

westexas on December 7, 2007 - 4:13pm Permalink | Parent | Comments top

See my post down the thread. Saudi Arabia will almost certainly show an accelerating net export decline rate from 2006 to 2007 versus 2005 to 2006; the only question is what the number is. We will have to see what happens in 2008.

Robert Marston on December 9, 2007 - 1:26pm Permalink | Parent | Comments top

Here's a recent article that also addresses this issue: http://www.iht.com/articles/2007/12/09/business/oil.php.

Most notably:

"The economies of many big oil-exporting countries are growing so fast that their need for energy within their borders is crimping how much they can sell abroad, adding new strains to the global oil market."

"Indonesia has already made this flip. By some projections, the same could happen within five years to Mexico, the No. 2 source of foreign oil for the United States, and soon after that to Iran, the world's fourth-largest exporter."

"The report said "soaring internal rates of oil consumption" in Russia, in Mexico and in member states of the Organization of the Petroleum Exporting Countries would reduce crude exports as much as 2.5 million barrels a day by the end of the decade."

xeroid on December 7, 2007 - 5:06pm Permalink | Parent | Comments top

However this talk of zero net exporters from countries like Saudi who are so reliant on exports seems highly unlikely and in my mind distracted from what is otherwise a very valid point.

Chris,

The ME countries may not run the net exports down quite to zero, but they need to make their oil last for a very long time while it is all they have, other than sand, to leave to the following generations .

So, if the net exporters are sensible they will take more than a twenty year view, and will take care of their citizens ahead of other nations. Don't assume other countries will act like the UK - i.e. exporting oil two years ago at 40$ a barrel, now buying it back at 90$!

They will conserve their wealth and won't run unnecesary balance of trade surplus', this means exporting the absolute minimum they can get away with.

I would expect them to drop export volumes more quickly than depletion rate - then hold them at a level that will pay for imports that they can easily maintain for years and years.

On current form it looks like holding foreign currency or bonds is way too risky in the medium to long term.

It looks like the minimum decline rate of net exports for each exporter as their production peaks is going to be at least high single digits. For nations such as Mexico and the UK with deep water production decline rates can be expected to be even/much higher.

Of the 15 largest consumers only 4 import less than 90% of their needs – USA, China, India and Thailand – all the rest are very dependent on net exports.

There are other important uses for oil besides fuel. So, all these large users will very soon have rapidly diminishing supplies of oil available for transport - it isn't change that causes the problem, but rate of change.

shargash on December 7, 2007 - 9:57am Permalink | Parent | Comments top

The Saudi ruling class has enough money to keep the Mercedes coming till long after the oil is gone. The Saudi economy is another story. Per capita income in the KSA is dropping from population increase (down from 24k to 8k according to Crude Awakening). As oil production declines, the Saudis will have to choose between money from oil exports that drives the economy and energy from oil consumption that powers the economy. I would argue that either of those options will increase social unrest. I would not expect the KSA to still exist in 2031.

SamuM on December 7, 2007 - 11:17am Permalink | Parent | Comments top

Chris, just a small comment in between here.

Many ME nations are acutely aware of this.

Hence the scramble for nuclear power.

Hence the very vocal plans to build the countries (like UAE) into tourism meccas that will generate revenue (i.e. diversify the economy).

Hence the quote from Sheikh Rashid: "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel."

And I do agree that they may not be able to give up on exporting oil as easily as UK. That should be painfully obvious.

Chris Vernon on December 7, 2007 - 11:24am Permalink | Parent | Comments top

I'd like to see the Middle East nations with large trade surpluses today invest large amounts - literally a few billion dollars - into solar research. Primarily concentrating solar power (CSP). What could be done over a decade with that kind of investment? No idea, but I think it would be a worthy avenue for a cash rich, solar rich, current oil exporter to explore. Also likely more profitable than nuclear, given the geopolitical implications and uranium scarcity in the Middle East.

ThatsItImout on December 8, 2007 - 8:19pm Permalink | Parent | Comments top

Chris Vernon said,
"'d like to see the Middle East nations with large trade surpluses today invest large amounts - literally a few billion dollars - into solar research. Primarily concentrating solar power (CSP)."

EXACTLY. It is interesting to note that some of the 'TRANS-MED" installations discussedfor getting electricity from the desert by way of CSP extend over into the middle east and Saudi Arabia.

Interestingly, North Africa and some of the oil poor areas of the middle east may turn out to have something very marketable in the future....open space for solar access! Won't it be ironic if some of the currently poorest areas of the world were to see some of the biggest economic expansion in the future, based on CSP and other solar energy developments? Times they are a changin'....:-)

RC

wkwillis on December 9, 2007 - 4:12am Permalink | Parent | Comments top

You don't need research on concentrating solar power. You need production engineering, that is, reducing the cost of building solar concentrators. The key is reducing the cost of maintenance, construction, and fabrication, in that order.
There is a difference between a product and a process. Concentrating solar power units are a product. Making them is a process, and that is where the room for improvement comes in.
My bet is that China will set up factories to make CSP cheap and export them to people who are competing with them for LNG. Like us?
The photovoltaics need research, though. We can always use another ten percent of electricity out of the silicon.

noutram on December 8, 2007 - 2:59pm Permalink | Parent | Comments top

Hi Westexas,

I've been off ill so might have missed it but have you published the ASPO presentation or anything here regarding the ELM yet?

Nick.

westexas on December 8, 2007 - 6:19pm Permalink | Parent | Comments top

No, we have both been busy on other projects. BTW, Drudge Report headline today (no linked story yet):

OIL-RICH NATIONS USE MORE ENERGY, CUTTING EXPORTS...

I have some suspicions as to where this story may be coming from (I have had several discussions with a reporter regarding this topic). We shall see.

noutram on December 10, 2007 - 11:22am Permalink | Parent | Comments top

I've worked your ELM model concept into a little (35 pages!) piece I wrote that tries to sum it all up called: "Peak Oil Joining The Dots..." available here FYI:

http://www.megatrends2020.com/Peak_Oil__Joining_The_Dots.doc

Regards, Nick.

WNC Observer on December 7, 2007 - 11:45am Permalink | Parent | Comments top

Investment in new production really is looking like a key variable, isn't it? You can have all the theoretical oil and "liquids" in the ground that you can imagine, but if the investments are not actually made to actually extract the stuff, there it continues to sit. I don't have the expertise of many of the others on this board, but it sure is sounding to me like the investments simply are not being made at a pace or extent that is consistent with a continuing expansion of global supply. If anything, it is really looking iffy for even keeping up with depletion, forget about any increases. Truly peak plateau time.

Which raises the question: What is really even possible when it comes to further investments. How much capacity does the earth have to ramp up production, even assuming that the oil is there to extract? How much investment capital is available for these projects, and how high AND STABLE must the price of oil be for the spigots to open up on the capital flows? And what happens if (when) we are in a global recession?

Maybe these are all "above ground factors", but I suspect they are going to loom very large indeed over the next decade or two.

Robert Marston on December 7, 2007 - 3:39pm Permalink | Parent | Comments top

Do you know the decline rate Husseini factored in to get these results?

Alfred on December 7, 2007 - 4:27am Permalink | Parent | Comments top

I think that it is worth emphasizing that these are annual rates of decline - when I first glanced at these percentages, I thought they were rather low.

westexas on December 7, 2007 - 9:19am Permalink | Parent | Comments top

Note that the Rule of 72 works going up and going down. You can round it off to 70. For example, let's assume a country producing 10 mbpd. Their decline rate is -5%/year and their rate of consumption increase is +5%/year, starting at 2 mbpd.

Their production would be down by half in 14 years (70 divided 5) and their consumption would double in 14 years.

So, in 14 years, their net exports would be 5 mbpd - 4 mbpd = 1 mbpd, or a decline in net exports from 8 mbpd to 1 mbpd in 14 years (UK and Indonesian net exports crashed to zero in 7 years and 8 years respectively).

As noted above, the net export dynamics result in an accelerating net export decline rate, worse than an exponential decline rate.

Chris Vernon on December 7, 2007 - 9:44am Permalink | Parent | Comments top

How does your analysis account for the fact that internal consumption can be a factor of the revenue generated from exports? It appears you are looking at internal consumption independently from the affect of falling exports has on the economy, on the propensity to consume. This can only be the case where the export revenue is small - not the case for the world's major exporters.

westexas on December 7, 2007 - 10:15am Permalink | Parent | Comments top

As noted above, I would think that most net exporters in the world fall along a demographic continuum from Indonesia to the UK.

Regarding Saudi Arabia, we can say with near certainty that they will show, as the model predicts, an accelerating net export decline rate from 2006 to 2007, versus 2005 to 2006.

An excerpt from my Net Exports/Inventories article follows. I assumed a fourth quarter Saudi C+C production rate of 9 mbpd. The rapid increase in consumption is based on a report (from a source in Saudi Arabia) indicating that total Saudi liquids consumption is going up by 500,000 bpd in 2007 and 2008, because of the shortfall in natural gas production. Note that Rembrandt put Saudi consumption up at close to 10% in the first half of 2007.

The 2005 to 2006 numbers for Saudi Arabia are as follows (exponential increase/decrease per year, EIA, Total Liquids):

Production: -3.7%/year
Consumption: +5.7%/year
Net Exports: -5.5%/year

Extrapolating from year to date numbers, my estimates for 2006 to 2007 Saudi numbers are as follows (I am adding in some increased liquids consumption, because of their ongoing natural gas shortfall):

Production: -5.6%/year
Consumption: +10%/year
Net Exports: -9.5%/year

memmel on December 7, 2007 - 4:33pm Permalink | Parent | Comments top

WestTexas I'd be very interested to see how export land interacts with the assumption that we may be facing a accelerated decline rate. It seems to me that if we are facing accelerated decline rates then you run into trouble easily within 2-3 years give export land. Even if you assume decline rates are accelerating at 1% a year you run into trouble pretty fast.

So assuming 5%,6%,7% and doing a rough calculation.
You get
5% = 14 years to 50%
6% = 12 years to 50%
7% = 10 years to 50%

Assuming a 10% decline in net exports is enough to cause serious hardship. It seems to me that you reach this number in 2-3 years. Esp if you consider the other side of the coin that internal consumption rate may also be increasing initially. Venezuela for example is probably showing a increase in consumption.

Also of course your not taking into account demand increases
from growing economies such as china and even the slow growth in the US. This adds a lot of pressure.

So you can see that adding in some potentially reasonable changes to the export land model and you get a system that is effectively untenable in less that 5 years post peak.

On a human time scale the fact that the situation would be visibly worsening on a 6 month to 1 year time scale makes a huge difference since this tends to fit into our shorter term policies not the slow multi-year to decades needed to change public opinion.

westexas on December 7, 2007 - 4:43pm Permalink | Parent | Comments top

Our middle case for the initial overall 10 year net export decline rate for the top five net exporters (half of current world net exports) is -6%/year, within a range from -2%/year to -10%/year. As noted elsewhere, the actual year to year net export decline rate should accelerate with time.

mikepepler on December 7, 2007 - 5:18am Permalink | Parent | Comments top

And I guess that's the decline rate *after* every effort has been made to stem the decline. I wonder how low it would be if that work wasn't happening...

Euan Mearns on December 7, 2007 - 6:49am Permalink | Parent | Comments top

Mike and Chris - thanks very much for this. This statement is stunning:

By 2015, an extra 37.5 mb/d (million barrels per day) of production will be required. 13.6 mb/d of this is to meet new demand, while 23.9 mb/d is to replace declines in existing oil fields – a factor that is often overlooked.

... is often overlooked by who? Its as if the IEA have only just realised that decline chews most new production every year and understanding this basic fact has led them away from a world awash with oil - to Holly Crap - these pesky Oil Drum kids are right.

I suspect the decline will be calculated on C+C+NGL - all of which suffer from petrophysical declines - which does not affect bio-fuel or syncrude in the same way. So I'd guess that 4.5% will be close to the number they are using. This is the absolute minimum decline that will occur. Its possible to think of a number of reasons why actual declines may be higher and why new capacity may not come on as scheduled - undulating low altitude plateau here we come!

This statement is also fundamentally depressing:

The OECD countries must show leadership.

The leaders of the OECD currently operate on a principal of followship - and that is following pig ignorant public opinion and media hype.

biggerpicture on December 7, 2007 - 3:03pm Permalink | Parent | Comments top

Euan-

To a large extent, I think decline rates are overlooked by many financial/investment analysts and others (CNBC, etc.) who semm to focus exclusively on how a slowdown in U.S. demand might impact oil prices. In fact, many argue that oil will trade in the mid $70 as the U.S. economy slows down. Of course what I find missing from this logic is that (1) China will likely buy any barrel the U.S. doesn't, but more importantly (2) decline rates make up significantly more of what is needed in terms of new supply than demand growth. Maybe Mr. Birol's breakdown of the numbers will get some of the less knowledgeable thinking. What is concerning about what he says is that if decline rates are 5% and we have project slippage of 20-30% (see Kashagan, Jack 2, etc.), we cannot begin to maintain existing production levels.

ThatsItImout on December 7, 2007 - 5:23am Permalink | Comments top

Chris,

Excellent post, and fascinating remarks by Fatih Birol. This post will be seen by several of my friends, by way of me, it is a great "big picture" view.

There is so much that can be discussed about Birol's remarks, but I will leave them for later, after I can re-read and digest all of the available information.

Two sentences stood out to me in the first reading:
"The reference scenario has Chinese economic growth at 7.5% for the next few years, falling to 6% up to 2030."

Is there any way we can get the Chinese economists to defect to Europe or the U.S.? What a fantastic run that would be, 23 years of 6% plus growth! It would make Ronald Reagan and Maggie Thatcher green with envy!
And that is the "reference scenario", the high growth calls for even more!
(my bet, they don't pull it off, but only time will tell!)

The other sentence of interest, ragarding demand for oil:
" Oil use is becoming more and more focused on transport, where there are no significant alternative fuels to substitute."

This is often forgotten. In the U.S. in particular, and also in Europe, the oil problem is essentially a transportation fuel problem. In the U.S., with only a few statistically marginal exceptions, almost all oil is used in transportation.

That is why the transportation consumption is where we MUST work first, hardest and fastest.

This is why the idea of "grid" based transportation is so revolutionary. It brings in all the energy producing methods that the grid is already using (solar, wind, nuclear, coal, natural gas, hydroelectric, etc) and puts them in direct competition with oil. It will be revolutionary, but we MUST get to work on this now, and in a big way. Birol makes this point perfectly:
What we do now will determine what happens over the next 20 years.

One more thing, and I know others will discuss this...what a logistical challenge for China to get that much coal out of the ground and or import it!
It will require massive infrastructure, rail cars, barges (coal is annoying to move in that it cannot be pipelined). What a challenge. Billions of investment will be required, opportunity for someone!

Roger Conner Jr.

kenny on December 7, 2007 - 1:05pm Permalink | Parent | Comments top

Chinese growth simply cannot continue at the predicted rate of even the reference scenario. Resource competition will precipitate a broad global economic downturn long before 2030.

Robert Marston on December 7, 2007 - 3:35pm Permalink | Parent | Comments top

With the Chinese subsidizing their oil consumption, it does raise the spectre of resource competition. But then the question becomes does China, the US, Europe, or India get the oil? In the end, that's a calculus for war. Historically, securing the oil supply has required a substantial military to protect/influence the shipping and supply lanes.

FuturePundit on December 8, 2007 - 3:04am Permalink | Parent | Comments top

Roger, Agreed on the importance of a shift to the "grid" for transportation. We can maintain and increase our electricity production. Anything we can shift to electricity becomes insulated from peak oil.

We need to shift heating to ground source heat pumps as well.

xeroid on December 8, 2007 - 5:16am Permalink | Parent | Comments top

No, we need to insulate.

Robert Marston on December 8, 2007 - 10:12am Permalink | Parent | Comments top

I agree. I think a 'go to grid' transportation plan would be the easiest to enact due to readily available infrastructure and an emerging electric and hybrid automobile manufacturing capability.

Plug in hybrids for farm equipment now :)

Luis de Sousa on December 7, 2007 - 5:18am Permalink | Comments top

Thumbs up to Fatih Birol, in my view he is sending the right message. Of course it is a belated one, based on unsound numbers but still an important shift away from the IEA's "don't worry be happy" traditional message.

Some points:

  • The decline rate used for fields in production is 4%. Optimistic to say the least, given that CERA itself points to 4,5%;


  • Even with those 4% we need a new Saudi to meet forecasted consumption growth;


  • Given that the reporter meant Mtoe when he wrote Mtce, we have a Coal crunch on our way.


  • [...] but we are running out of time.

    Exactly the point; has Fatih Birol been reading TOD lately?

  • In the reference scenario, CO2 emissions rise by 57% by 2030, ending up at 42 Gt per year and possibly causing a global temperature rise of 6C, which would be disastrous. The alternative scenario results in emissions levelling off at 34 Gt, possibly leading to a 3C temperature rise.

    IEA's forecasts for fossil fuel use are still considerably above geologic/mathematical based ones. The assessment made by Dave Rutledge on this issue resulted in a total increase of 1.8º C over a period of 150 years;

  • To achieve stabilisation of atmospheric CO2 levels at 450 ppm, for a 2C rise in global temperature, emissions need to drop from 27 Gt per year today [...]

    These numbers also mismatch Dave Rutledge assessment, wich has higher fossil fuel use in 2030 than today but still resulting in a temperature increase below 2ºC;

On the Q&A very interesting comments on CCS. I'd would add that it looks really difficult for Europe to invest on an energy source that's not widely available internally and that could be facing a market crunch in the years ahead. Going for Renewables and if we can Nuclear looks indeed a much better choice than researching CCS for Coal.

Finally a point that should really alarm everyone in Europe, Fatih Birol raised skepticism on Russia's ability to fulfil present Natural Gas supply contracts. If it turns out to be so, Natural Gas can become a much deeper problem in Europe than Oil or Coal.

mikepepler on December 7, 2007 - 5:26am Permalink | Parent | Comments top

Given that the reporter meant Mtoe when he wrote Mtce, we have a Coal crunch on our way.

I copied down what was on his slides, but I agree, it's a bit weird to talk about Mtce for coal! Unless he meant various grades of solid fuel, in an equivalent tonnage of hard coal?

Luis de Sousa on December 7, 2007 - 7:14am Permalink | Parent | Comments top

Hi Mike, here's the difference:

1 tce = 29.3076 GJ

1 toe = 41.868 GJ

The problem is that the amount of Coal transactioned internationally today is about 300 Mtoe. If Birol had been using toe then we would be talking about China and India importing the equivalent to all the Coal coming to the international market today by 2030. If it's tce it's not as bad but still a worrisome scenario.

Ton of Coal Equivalent is indeed a rare measure, toe is much more common.

mikepepler on December 7, 2007 - 8:18am Permalink | Parent | Comments top

Hard to say which he meant then, but Mtce is what was on the screen. Maybe it should have just said Mtc?

DaveR on December 7, 2007 - 8:47am Permalink | Parent | Comments top

Hi Mike,

tce is a bad unit, because it does not correspond to the actual average energy in coal. The world average, from the BP Statistical Review, is 21GJ/t.

Dave

Luis de Sousa on December 7, 2007 - 9:22am Permalink | Parent | Comments top

Well Dave i think tce refers by default to hard Coal, hence the higher number. But I'm not certain.

DaveR on December 7, 2007 - 12:14pm Permalink | Parent | Comments top

Hi Luis,

Agreed. The place I see tce most prominently is in the German BGR resource reports. This is ironic, because it is an anachronism even in Germany, where the focus is on lignite production, which has very low energy density.

Dave

ChrisN on December 8, 2007 - 4:17pm Permalink | Parent | Comments top

Dave, based on the coal report from the Energy Watch Group this year, I have to wonder how useful an average of energy content in coal is. What I got from their analysis is that looking at coal as something uniform has led us to assume that there is far more energy available from coal than there really is, and that the devil is in the details. I wonder if BP took into account the varying energy content of different grades of coal when they arrived at that number. Your thoughts on that?

DaveR on December 9, 2007 - 12:54am Permalink | Parent | Comments top

Hi Chris,

As far as I can tell, BP does take the varying energy content into account. The average for Germany is 11GJ/t and the average for Australia is 23GJ/t.

It turns out that the CO2 that is produced by burning coal correlates well with the energy content rather than the weight, so average energy content can be useful for calculating CO2 emissions from production data in Mt.

Dave

stiv on December 7, 2007 - 9:09am Permalink | Parent | Comments top

China's projected use of coal on top of existing uses is nothing short of terrifying. I don't think I need any mathematical models to come to the conclusion that humans are risking everything like a drunken gambler.

At some point, the "wheels are coming off"--better sooner than later.

We need more aggressive measures all around.

Immediately.

People must step up, switch to RE/conservation NOW,
so that a future might be possible!

mikepepler on December 7, 2007 - 10:10am Permalink | Parent | Comments top

The fact that China/India are building 800GW of power plants between 2006 and 2015, which was said to be equivalent to all plants built in Europe 1945-2007, explains where the huge demand in coal is going to come from, as 90% will be burning it. I hope the rest of the world isn't counting on coal, unless they have their own reserves...

Luis de Sousa on December 7, 2007 - 11:16am Permalink | Parent | Comments top

Mike, this is really a point worth noting, we may in fact be facing a Coal crunch if this growth forecast comes to unfold.

The amount of Coal transactioned internationally is only 10% of what is extracted every year. In a very short number of years we could have too many importers for too few exporters.

Chris Vernon on December 7, 2007 - 11:33am Permalink | Parent | Comments top

The amount of Coal transactioned internationally is only 10%...

That is a good point. In some respects coal is a more regional resource even than natural gas and clearly nothing like oil. Anyone have any details on oil-miles, gas-miles and coal-miles? i.e. how far the average unit of oil, gas or coal travels before being used? I suspect coal is the shortest with most being bunt no more a few hundred miles from its source.

This makes the distribution of coal critical for future global production – and here again coal is at an extreme with reserves even more concentrated in a small number of countries than oil. When China coal production peaks – the world coal production peaks, even if the US is still sitting on very large reserves.

Luis de Sousa on December 7, 2007 - 11:45am Permalink | Parent | Comments top

The information I have from the national electric grid operator is that all Coal burned in Portugal for electricity generation comes from New Zealand, a country that is exactly in the antipodes. Some of the Coal exported by New Zealand also ends up in the UK.

mikepepler on December 7, 2007 - 11:48am Permalink | Parent | Comments top

I guess the US will be OK, with its large reserves. The UK is opening up old coal mines right now, but I don't have the figures on whether they could ever replace our imports...

Robert Marston on December 7, 2007 - 3:28pm Permalink | Parent | Comments top

Dave Rutledge seemed to think world coal supply was also about to peak. As noted above, he also appeared to be a bit more conservative on climate change estimates. But he didn't address feedbacks resulting from a base line increase in world temperatures.

Here's a video of his speech: http://today.caltech.edu/theater/item?story%5fid=24502.

Well worth listening to if you guys have the time.

Luis de Sousa on December 7, 2007 - 4:04pm Permalink | Parent | Comments top

MAGICC takes into account the feedbacks of increased concentrations of CO2 and global temperatures.

Robert Marston on December 7, 2007 - 4:13pm Permalink | Parent | Comments top

Thanks for the correction. The presentation includes Dave's MAGICC assessments which include model-based feedbacks.

FuturePundit on December 8, 2007 - 3:14am Permalink | Parent | Comments top

Luis, Higher prices for coal due to a supply shortage would be good news. It would push new construction toward nuclear.

Luis de Sousa on December 8, 2007 - 12:15pm Permalink | Parent | Comments top

Were I live people do not like Nuclear power plants nor dams, so we'll be dependent on New Zealand Coal for a long time. Bad news for me, if you're a New Zealander good news for you then.

obdacher on December 7, 2007 - 9:59am Permalink | Parent | Comments top

Energywise Russia will split in an eastern system supplying the asian market, with Europe beeing stuck with old,tired and rapidly declining wells in western siberia.

ccpo on December 7, 2007 - 11:13am Permalink | Parent | Comments top

Fist time poster. Hope you all don't mind.

Luis said:

IEA's forecasts for fossil fuel use are still considerably above geologic/mathematical based ones. The assessment made by Dave Rutledge on this issue resulted in a total increase of 1.8º C over a period of 150 years...

These numbers also mismatch Dave Rutledge assessment, wich has higher fossil fuel use in 2030 than today but still resulting in a temperature increase below 2ºC;

Global warming of an additional 3°C would be a guarantee of ineffable disasters for humanity and other creatures of the planet. It is inconceivable that the West Antarctic and Greenland ice sheets could survive 3°C additional global warming, with expected warming 2-3 times larger at the location of the ice sheets.

A more realistic assessment is that global temperature should be kept approximately within the range of prior interglacial periods of the past million years, which implies that additional global warming (above the temperature in 2000) should be less than 1°C. If recent evidence of instability of the West Antarctic and Greenland ice sheets continues to increase, it may be that even 1°C additional global warming is dangerous for humanity.

Dangerous CO2.
A global warming limit of 1°C above the temperature in 2000 implies a CO2 limit of the order of 450 ppm. However, the CO2 limit is a function of the course of non-CO2 climate forcings (Hansen and Sato 2004).

I'm not familiar with Rutledge, but the new data on climate sensitivity is scary. This from Hansen at NASA:

http://www.columbia.edu/%7Ejeh1/East-West_070925.pdf

This work indicates sensitivity is far higher than previously suspected. If you take out coal, it's doable. All that coal? It kills.

If the bulk of coal resources are removed from the equation, via use only at power plants with carbon capture and sequestration, it is readily possible to keep future CO2 well below 450 ppm (Kharecha and Hansen 2007).

Cheers,

ccpo

Luis de Sousa on December 7, 2007 - 11:29am Permalink | Parent | Comments top

I do mind that you never posted before. Welcome to TOD ccpo (are you a robot? ;) )

Jim Hansen has papers for all tastes. Chris Vernon has been covering this issue for some time, check out this post based on one of Hansen's papers.

With this post it became clear that problematic temperature rises will occur solely if considerable amounts of Coal can be burned in the next decades. Later Dave showed how this hypothesis is improbable using the same models that backup the work made for the IPCC. Check this Coal round-up also by Chris.

As for the sensitivity analysis, that's a ground that I'm not comfortable to dive into.

stiv on December 7, 2007 - 12:18pm Permalink | Parent | Comments top

Global warming is sucker punch that some people on TOD are not going to see coming.

http://www.worldviewofglobalwarming.org/

Look around, look at the devastation.

Want more of that? You got it. Just burn coal.

Luis de Sousa on December 7, 2007 - 12:46pm Permalink | Parent | Comments top

Skewed views do not interest me.

goritsas on December 7, 2007 - 1:26pm Permalink | Parent | Comments top

Jim Hansen has papers for all tastes.

I'm not entirely clear as to what you're suggesting. Perhaps you could explicitly state your position?

Luis de Sousa on December 7, 2007 - 2:06pm Permalink | Parent | Comments top

Follow the links to the different articles above and you'll get the idea.

Robert Marston on December 7, 2007 - 4:01pm Permalink | Parent | Comments top

Climate change estimates are still in the refining stage.

I think we need to take a few things into account before making hard assumptions:

1. Limited conventional supply of coal, oil, natural gas.
2. Current marked and observable changes to the world environment and climate system.
3. Unknown and known feedbacks to climate change.
4. Unconventional carbon based energy and the likelihood and capacity for extraction. This would include tar sands, oil shales, and methane hydrates among others.
5. The extent of damage on a sliding scale. Even a 2 degree C increase could result in some pretty awful stuff. It's bad. But not as bad as turning Earth into Venus in a doomsday runaway climate change scenario.

Just as a note. Current positive feedbacks to warming include: methane gun effect, loss of glacial reflectivity, increase in water vapor with higher temperatures, ocean carbon leeching at a certain point, sudden forced release of carbon from forests through burning at higher temperatures.

Also, focus on carbon increase through fossil fuel consumption does not take into account carbon increase due to larger agricultural footprints at higher world populations and deforestation.

Oh, and I'm new as well. I don't know if it counts that I've lurked here for about a year :)

ccpo on December 8, 2007 - 12:00am Permalink | Parent | Comments top

Hello Luis,

The post you pointed to in the post I originally responded to is, essentially, out of date. It pre-dates the Hansen articles I am referencing, thus it pre-dates the work on climate sensitivity which profoundly affects how one considers effects of GHGs and feedbacks.

If you have not considered the new evidence on sensitivity, you really must. Speaking on this topic without that in consideration is essentially pointless. The climate sensitivity is that precarious.

Off the top of my head, if the new data on sensitivity is correct we passed the point that would lead to a two degree change from the pre-industrial era decades ago. The only way to prevent warming in the 3 - 6 degree range is to bring emissions to nearly zero by the end of this century.

Let me point out one need not be a scientist to "understand" and know, i.e. do intelligent analysis. When the IPCC report came out in February, I knew immediately they were wrong in their projections. Why? I was reading current research, while the report only included data up to 2005. The new data was showing changes far beyond what that report was saying. That is, it was wrong before it was published. As evidence I offer the Arctic melting of this past summer - also pre-dated by the information you posted. I predicted the melt would come sooner and that it would likely happen within 1 or 2 decades. And so it seems to be. One need only understand a small bit about complex systems and Chaos Theory to know why I am quite likely correct. And why Hansen likely is. Bifurcations (a.k.a. tipping points) are a bitch.

Finally, a couple of your comments seem to indicate a bias where Hansen is concerned. A negative one. Given he is generally regarded as the top climate scientist, or among those that would be, I find this strange. It also contradicts your statement to another here that you basically reject any strongly biased opinion. A bias to the center is still a bias. As the "answer" or answers to Climate Change and Peak Oil (thus the handle ccpo) are going to be found by taking in and considering all info available, I encourage you to drop the bias, if indeed you hold one.

Cheers

http://pubs.giss.nasa.gov/docs/notyet/submitted_Kharecha_Hansen.pdf

http://www.richardheinberg.com/museletter/187

The data surveyed suggests strongly that in many key areas the IPCC process has been so deficient as to be an unreliable and indeed a misleading basis for policy-making. . . . Take just one example: the most fundamental and widely supported tenet - that 2°C represents a reasonable maximum target if we are to avoid dangerous climate change - can no longer be defended. Today at less than a 1°C rise the Arctic sea ice is headed for very rapid disintegration, in all likelihood triggering the irreversible loss of the Greenland ice sheet and catastrophic sea level increases. Many species are on the precipice, climate change- induced drought or changing monsoon patterns are sweeping every continent, the carbon sinks are losing capacity and the seas are acidifying. . . . The Arctic began to lose volume at least 20 years ago when the global temperature was about 0.5°C over the pre-industrial level. So we can now see that to protect the Arctic the average global temperature rise should be under 0.5°C.

Luis de Sousa on December 8, 2007 - 12:10pm Permalink | Parent | Comments top

Either you like it or not, James Hansen has two papers being published in the space of a few months containing each two completely different conclusions, on one paper there's not enough hydrocarbons to provoke dangerous climate change, on the other the amount of CO2 presently in the atmosphere is already dangerous.

I don't know what you mean with a “bias towards the centre”. Politically? I'm away far from the centre, but take into account that this is not politics we are talking about, it's about data.

Let me show you what I meant by “skewed views”:

Today at less than a 1°C rise the Arctic sea ice is headed for very rapid disintegration, in all likelihood triggering the irreversible loss of the Greenland ice sheet and catastrophic sea level increases.

What has the artcic sea ice to do with the Greenland ice sheet? One is over the ocean, the other inland at some 2000 meters of altitude. The concept that these two ice masses can melt under the same conditions is simply wrong.

As for the “headed for very rapid disintegration” the author should explain why did the Arctic ice sheet grow 4 million square kilometres between the midst of October and the midst of November, in the largest ice mass built up ever recorded.

P.S.: CO2 emissions from conventional fossil fuels will fall close to zero by the end of the century, keep an eye on TOD.

ccpo on December 10, 2007 - 5:43am Permalink | Parent | Comments top

Either you like it or not, James Hansen has two papers being published in the space of a few months containing each two completely different conclusions, on one paper there's not enough hydrocarbons to provoke dangerous climate change, on the other the amount of CO2 presently in the atmosphere is already dangerous.

I can only assume this is related to the sensitivity issue. As you are obviously well aware, there is considerable lag between research, writing and publication. We really don't know when the two reports were "really" researched and created. The conventional wisdom had been the sensitivities we have already referenced. I'm fairly sure the new sensitivity research is actually recent and that the authors felt some pressure to get it out before Bali happened as it changes the picture considerably. The previous article would probably read quite differently if updated. But you'd have to ask Hansen. :)

I don't know what you mean with a “bias towards the centre”.

If you don't wish to consider "skewed" perspectives, then are you not presenting yourself as someone who is a "centrist" on a given issue? Anyway, if I misunderstood you, I apologize. How you see yourself/present yourself is really not my business.

Let me show you what I meant by “skewed views”:

Today at less than a 1°C rise the Arctic sea ice is headed for very rapid disintegration, in all likelihood triggering the irreversible loss of the Greenland ice sheet and catastrophic sea level increases.

What has the artcic sea ice to do with the Greenland ice sheet? One is over the ocean, the other inland at some 2000 meters of altitude. The concept that these two ice masses can melt under the same conditions is simply wrong.

I'm afraid it is you who are wrong. They are not separate systems. But they are not the "same" system, either, thus not under exactly the same conditions. They are part of a global system. At least one immediate effect of warmer water in the Arctic is obviously warmer water around the northern reaches of Greenland. Same would almost certainly be true of air mass, but am not familiar with air movements in that part of the world. I'll try to find a link. I know I read on this specific issue recently.

http://www.nytimes.com/2007/10/02/science/earth/02arct.html?_r=1&oref=sl...

As for the “headed for very rapid disintegration” the author should explain why did the Arctic ice sheet grow 4 million square kilometres between the midst of October and the midst of November, in the largest ice mass built up ever recorded.

Actually, I expected this. I even said so to my wife. If you look at the high in ice loss in 2005, it was followed by a larger buildup of ice extent in 2006. As we all know, that was followed by the massive loss this summer. This is almost certainly natural variability attempting to assert itself. Chaotic systems look exactly like this. Chaos teaches us that we often can predict certain parameters will be met, but at the same time often cannot predict their order. Think coin tosses. I can predict easily that over time they will be about 50%. I cannot predict with any certainty at all whether the next one will be heads or tails.

Further, keep an eye on not only ice extent, but density/thickness. E.g., there is precious little ice left more than 1 meter thick. This means the ice will be more sensitive to immediate conditions. I suspect the ice being built up now is rather thin and may well all melt away, and then some, next summer. However, I actually expect a bit of rebound next summer. Part of the melt this summer was due to unusual wind conditions.

P.S.: CO2 emissions from conventional fossil fuels will fall close to zero by the end of the century, keep an eye on TOD.

God willin' and the creek don't rise. But we're still going to get 1 to 3 meters of sea level before then. My son's beach house (he's due any day) is not likely to be in Florida.

And, if emissions aren't at or near that level, a lot of people are going to be dying.

Cheers

Luis de Sousa on December 10, 2007 - 8:02am Permalink | Parent | Comments top

Given the oil and natural gas forecasts Hansen used in the first paper it can't be that old. I do acknowledge that the time lag between submission and publishing of a paper can be quite long and sometimes drag for years. I agree with you on a press to have the sensitive analysis published before Bali.

they are not the "same" system, either, thus not under exactly the same conditions.

Thank you for acknowledging this. Arctic ice can be divided in three different areas, the Arctic quasi-triangle ice sheet that isn't affected by seasonal changes, the Greenland highlands and the Arctic sea-ice. The first two have been cooling while the latter has been warming.

there is precious little ice left more than 1 meter thick.

If ice is so precious for you, you can always go to Antarctica, there's plenty of the stuff there, even if you take back some hundred thousand square kilometres with you the anomaly will continue to be positive ;)

I suspect the ice being built up now is rather thin and may well all melt away, and then some, next summer.

Like it does every year – that's why it is called the Arctic sea ice sheet.

a lot of people are going to be dying.

I also expect a lot of people to be dying before 2100, including me.

ccpo on December 11, 2007 - 9:56am Permalink | Parent | Comments top

Luis, you are obviously a bit of a skeptic. I would like to see your sources for your claims on the warming and cooling, because they do not match what I have read. What we do know of Greenland and Antarctica is that there is always ice being added. Particularly in Antarctica, the East Antarctic Ice Sheet is growing. This is not an error. It is expected. Too many, and seemingly yourself either purposely or out of a lack of info/understanding, expect climate change to be linear. It is not, it will not be, it cannot be. Complex/chaotic systems simply do not behave that way.

Is ice being generated in Greenland? Yes. Is the amount of ice at the center likely still accumulating? Yes. Is even more ice being lost to the faster march of the glaciers to the sea? Yes. And simple physics tells you this should be so: More weight, more pressure pressing outwards. The more lubrication from melt, the faster this goes.

I'll try to provide you with the recent article I read on this, but I use three different computers between work and home...

I have to say, I'm not overly appreciative of the brush off inherent in this last post. Let me try to address some of this, however.

the Arctic quasi-triangle ice sheet that isn't affected by seasonal changes, the Greenland highlands and the Arctic sea-ice. The first two have been cooling while the latter has been warming.

Luis, this is not really honest. To mention the highlands without mentioning the lowlands does not tell the truth of the matter. Greenland is melting more than it is gaining. Simple reality. The sea ice isn't just warming, it warmed catastrophically this year. (Depending on your perspective, I suppose.) The heat absorbed by the open water will have an effect on the water, on the air and the ice. This is a guarantee based in basic science.

there is precious little ice left more than 1 meter thick.

If ice is so precious for you, you can always go to Antarctica, there's plenty of the stuff there, even if you take back some hundred thousand square kilometres with you the anomaly will continue to be positive ;)

Have you a link stating the overall balance in Antarctica is positive? It is in the East, but for the whole?

I suspect the ice being built up now is rather thin and may well all melt away, and then some, next summer.

Like it does every year – that's why it is called the Arctic sea ice sheet.

Please, Luis, we are not children sticking out tongues here. The melt since 2000 is incredible. The melt in 2007 frightening. The effects of all that sunlight hitting all that open water...

To be honest, I have little time for climate change skeptics at this point. The evidence is overwhelming to the point of the absurd. I leave you with, sincerely and with all due respect, your head to be firmly in the sand till such time as reality hits. Until then, I respect your contributions to the PO issue and wish you a speedy realization on the climate issue.

Cheers

PS. While this will not, and should not, move you, let me say quite simply that I knew the ice was going to melt faster, and it has. I will not be at all surprised by a rebound next summer. Neither by even greater melt. Chaotic systems. If you've not read on this, do so. It makes much clear. If you have already, then I do not know what else to say.

Yours,

ccpoa

Robert Marston on December 7, 2007 - 3:37pm Permalink | Parent | Comments top

Fatih should certainly be applauded for taking a stand on these issues. But I think we need more from an energy leader like the IEA. Hopefully this starts to turn the ship around.

nrgyman2000 on December 8, 2007 - 1:09pm Permalink | Parent | Comments top

First of all, thank you for an interesting post and discussion(s).

Nat gas is what now seems to be the problem for Europe in the near future. A crude estimate I made some time ago indicated that nat gas consumption within Europe would grow by 100 Bcm/a (EIA reference forecast), from present levels, by 2020. At the same time nat gas production from EU+Norway will decline by an estimated 100 Bcm/a by 2020.

(Norwegian nat gas production will continue to grow to 2010/2012, and then start to decline due to depletion. I am aware that this is not what present official Norwegian projections suggests, but there are some signs that the upbeat Norwegians projections will be significantly revised……down in the near future).

This suggest that approximately 200 Bcm/a of new supplies must be brought in by 2020 to meet projected demand/consumption in Europe. Some will come from North Africa (Algeria), but just a fraction (20 Bcm/a) to cover the gap, and the rest will have to made up from Russia and LNG, and as of now….. there is nothing in the development of nat gas infrastructure that suggests this is close to happen.

It would be interesting to hear IEA’s viewpoints on the future, towards 2020, of European nat gas supplies.

If Russia should run into problems with their contractual obligations towards Europe in the near future, well then TSHTF much faster than my (back of the envelope) gloomy outlook predicted.

Could it be that the European nat gas supplies situation has not got the attention it deserves, and that its effects will be felt well before the effects from Peak Oil?

Just my 2 cents.

SamuM on December 9, 2007 - 9:54am Permalink | Parent | Comments top

Energy policy mainstream discussion often proceeds by one theme/issue at a time.

Currently in Europe it is the _political stability_ of Russia and its consequences on Russia's reliability as gas exporter.

So, yes, I agree. EU is not publicly that worried about geological (or investment related) natgas shortage from Russia.

If they were, they certainly wouldn't be trying to build Nordstream and planning to increase the use of Russian natgas.

The question is: what is needed for this issue to come up as the theme of the week in EU Energy politics?

Surely it is debated behind closed doors. That much is certain.

Boof on December 7, 2007 - 6:31am Permalink | Comments top

In my opinion Australia should not help out China and India with their extra coal needs. If through cap and trade Australia can cut domestic consumption by x% then export customers should take an x% cut also. Think of it as a kind of depletion protocol. Note that currently western Asia is a minor coal importer compared to Europe, Japan and South Korea.

The standard response may be that China and India will get the coal somewhere else. Well let them. However there is an ominous development. A month ago George Bush used to phone his mate John Howard for a chat. Now is Premier Jintao who phones Kevin Rudd who speaks Mandarin. I believe they may have discussed iron ore prices. Did the Premier also ask for a coal supply assurance?

Chris Vernon on December 7, 2007 - 7:12am Permalink | Parent | Comments top

In my opinion Australia should not help out China and India with their extra coal needs.

Agreed. I think one of the most effective (and vaguely possible) responses to the climate change threat would be an Australian coal extraction/export cap. To burn coal and emit CO2 first one must dig it out of the ground. Rather than focus on the demand (electricity generation) side we could focus on the extraction. The new “green” Australian government could, conceivably, introduce coal extraction caps and in so doing apply the breaks to the growth in global coal combustion.

The bottom line when it comes to climate change is working out a way of leaving significant volumes of otherwise economically extractable fossil fuel in the ground.

lilnev on December 7, 2007 - 4:48pm Permalink | Parent | Comments top

That's a very interesting suggestion. If coal exports are concentrated among few enough countries, they might even make a profit by cartelizing to drive up the price. And nothing would move the world to alternative power sources faster than a high coal price....

Chris Vernon on December 8, 2007 - 10:31am Permalink | Parent | Comments top

Should OCPC be formed in the same vein as OPEC, its objectives supply side caps in the name of managing global CO2 production?

I suggested a supply side approach in this article:
Climate Change - an alternative approach

Luis de Sousa on December 7, 2007 - 7:26am Permalink | Parent | Comments top

Boof you're an evil resource nationalist.

DaveR on December 7, 2007 - 8:43am Permalink | Parent | Comments top

Boof, Chris, Luis,

Australia is the leading coal exporter (net is 3Mboe/day, from the BP Statistical Review) and exports are up 50% since 1997. It does seem that Kevin Rudd should not get credit for signing up Australia for the Kyoto Protocol unless he also figures out how to roll back coal exports to the earlier level.

Dave

tirwin on December 7, 2007 - 7:42am Permalink | Comments top

If they burn the amount of coal suggested here, the northern hemisphere burns as well as most of Australia. 450 ppm CO2 is bad enough. This will exceed it.

DeltaGreen on December 7, 2007 - 8:19am Permalink | Comments top

This is some scary shit, to be sure. Sorry for the language, but it was the first thing that came into mind.

I need to re-read this whole piece and put it together in my mind, but it seems to me that we are entering a strange Twilight Zone here. The numbers for China and India are astonishing, but they tell no lies. We are not going to make it to 2015 in one piece, I think, there won't be enough oil to mitigate the decline, much less keep up with demand growth. The only good thing about this is that a hard economic crash will surely slow down this growth frenzy on the two giants, along with the rest of the world. A massive recession would definetly help to "destroy demand". It seems that TPTB are finally saying that peak oil is true, but they are still ignoring the writing on the wall (recession, suburban crash, decreased agricultural production, etc).

We are bound to see some very interesting times in the next 10 years, and that's for sure.

Matt on December 7, 2007 - 8:49am Permalink | Comments top

NASA climatologist James Hansen:

Assuming that proven oil and gas reserves do not greatly exceed estimates of the Energy Information Administration, and recent trends are toward lower estimates, we show that it is feasible to keep atmospheric CO2 from exceeding about 450 ppm by 2100, provided that emissions from coal and unconventional fossil fuels are constrained. Coal-fired power plants without sequestration must be phased out before mid-century to achieve this CO2 limit.

http://arxiv.org/abs/0704.2782

The Stern Review has a 450 ppm CO2e stabilization path which requires a reduction of annual emissions by 30% by 2020 and another 30% by 2030.
http://www.hm-treasury.gov.uk/media/987/6B/Slides_for_Launch.pdf

galacticsurfer on December 7, 2007 - 9:27am Permalink | Parent | Comments top

Good to hear the PO meets GW finally at the big level of Hansen, et al. this saves us the head butting. Perhaps this stuff will finally come up in bali as they working from a false premise. As long as they are all there talking about limiting emissions maybe they could make a deal on enrgy usage restriction like the depletion protocol as that is more urgent to prevent conflict. We have to get used to the idea of Powerdown and sharing at the international level and such massive conferences are few and far between. If PO consciousness takes on in one to two years I suspect such a confeence as is now happening will be made for just this purpose with Kyoto/Bali, etc. as the model. We don'T need a peace conference after an energy war for Australia's coal and Saudi's oil but beforehand to avoid such a war. If an Obama or somebody actually comes to this realization (does he "get" PO?) before or after getting elected and then a true and serious energy crisis hits, apparent to all then such a course might just work as only a US president can press such change effectively, otherwise the whole system gets blocked up as has been the case since Bush took over.

galacticsurfer on December 7, 2007 - 9:14am Permalink | Comments top

So the officaldom is just telling us we were right all along?

Now we can forget being a small rabblerouser sect when the press interprets this correctly, if they are numerate, which I doubt.

Shock in the press will presumably only occur when it cannot be avoided due to shortages and price shocks. Otherwise even when IEA makes a panic (and this is not that, at least officially, that might take a couple of years) like IPCC on climate it will be ignored as not being an everday problem but something manageable.

Slowly our PO opinion is becoming more main stream but it still means nothing to general public policy until... what?

I cerainly hope that by the elections or before the first SOTU address for the new president in Jan. 2009 there will be very drastic problems which make real action undeniable.

2008 should be fun, at least for us as we are mentally prepared and ready to give advice and lead.

Matt on December 7, 2007 - 10:18am Permalink | Comments top

Here is a video:

World Energy Outlook 2007: China and India Insights
http://youtube.com/watch?v=mDa81-Fgz8s

with Fatih Birol speaking, introduced by David G. Victor from the Council on Foreign Relations
http://www.cfr.org/bios/3131/david_g_victor.html

SamuM on December 7, 2007 - 11:26am Permalink | Comments top

This is quite a shocker, even if Faith/IEA has been hinting at this all year long.

Let me try and summarize:

1) There will not be enough oil at current consumption growth levels

2) If there's a significant oil shortage, economy will go run into serious problems (chaos? depression?)

3) Coal will be used, CSS or not and CSS does not look too promising yet.

4) CO2 emission growth looks bad, efficiency may not solve all issues.

5) China's economy is to continue to grow really fast, devouring lots of energy, growing in CO2 emissions.

6) All of the above combined is totally unsustainable (from many points of view)

he didn't mention anything about biofuels this time? Nevertheless IEA's stance has been so far:

7) Biofuels are fool's gold and won't scale to more than 10% of demand.

That is quite a mouthful (a powerpointful?) from an official still holding an important position.

So far most important energy officials saying unpleasant things about oil/coal/climate have all been retired or somehow out of the daily running.

If this doesn't show up in the media everywhere, I'll be sure to at least act surprised :)

AlanfromBigEasy on December 7, 2007 - 7:35pm Permalink | Parent | Comments top

7) Biofuels are fool's gold and won't scale to more than 10% of demand.

The ethanol scenario run on Millennium Institutes's T21-USA model shows that the USA could get 20% of it's liquid transportation fuels from ethanol, at the cost of stopping food exports. Net energy gain, 4%.

Fool's Gold indeed !

Alan

SamuM on December 10, 2007 - 2:51am Permalink | Parent | Comments top

Hi Alan,

thanks for that stat!

Do you have a link to a full run / paper about runs made on that model?

Or is the data still in preparation?

AlanfromBigEasy on December 10, 2007 - 8:30pm Permalink | Parent | Comments top

I am in the process of writing {moan},

Best Hopes for Divine Inspiration so that perfectly stated words flow like water,

Alan

Prof. Goose on December 7, 2007 - 11:34am Permalink | Comments top

http://science.reddit.com/info/62emo/comments/

thanks for your support!! :)

Robert Marston on December 7, 2007 - 3:18pm Permalink | Comments top

Cheers to Chris for this post! Not only did I find it informative, I think it's telling the IEA has admitted to so much uncertainty ahead for future oil supply and demand.

In the face of a crisis, leadership is often required to steer people through. Part of that is shifting focus away from the problem and toward workable solutions. But if this shift in focus essentially amounts to denial and perpetuation of the status quo (which now amounts to sunbathing on a sinking ship), then no viable solutions are proposed and leadership becomes an act of failure.

In 2004, 2005, and 2006 it seems most information coming out of the major energy watch dog groups around the world amounted to little more than denial. Now it seems we have a slow awakening to the problem represented by peak oil. I don't know about you guys, but it's excruciating for me to watch -- like a man standing a mere hundred feet away from an onrushing stampede of bulls who suddenly says -- "did you hear something?"

Not only am I disheartened by this excruciatingly slow awakening to the problem I also feel the proposed solutions are laughable.

In a continuation of the comic dialog above our leader says "Ah, that might be hoof beats! Which means there may be some bulls coming toward us! Maybe we should prepare to get off the path in a few hours?" Of course, if he just lifted his head and looked he could stare right into the horns of the oncoming stampede.

As many of you well know carbon capture coal plants, marginal gains in renewable energy supply, and more rigs poking more holes in the earth are not going to solve our energy problems. Rather, they would prolong and intensify. Given the dual problems of imminent depletion and increasingly damaging climate change, carbon based energy must be first marginalized and then phased out.

Timescale? Given current information it looks like we'll need to start yesterday and finish within 30 years.

What I'm looking for is not only recognition of the current problem which, with each passing year, seems to become more and more obvious and hard to ignore, but also a proposed and adhered to set of solutions that leaves the civilized world intact after the coming crisis.

In my opinion, this involves significant and decisive action toward a renewables based economy. The technology for most of this stuff is available now. It is simply a question of:

1. Political will to change
2. Tax incentives to encourage efficiency and development of renewable infrastructure.
3. Direct investment in the technologies that are proven to work NOW.
4. Turning a deaf ear to the howls of the dying oil and fossil fuels industries.

In the end, there is no civilized future in fossil fuels. The future they perpetuate is one of poverty, brutality, war, and collapse of global civilization.

As ones aware of this problem, we need to do our best not only to inform people about the dire danger we face but also turn people's eyes to its obvious solutions. If we allow the immensity of the problem to captivate and paralyze us then we will be almost as bad as those who still deny the problem exists in the first place.

AlanfromBigEasy on December 7, 2007 - 7:24pm Permalink | Parent | Comments top

I agree with much that you say, and I am trying to develop a comprehensive policy to deal with both PO & GW.

Per my work with the Millennium Institute (just got off phone call with Andrea there), the best economic policy is a combination of the two best environmental policies.

A maximum push for renewable energies and a maximum push to develop electrified rail + bicycles. Just that simple !

Apply a variety of oil depletion scenarios, and these two policies, combined, give the highest GDP, lowest GHG and lowest oil use. Much more work needs to be done, but we have the bare outlines of a VERY viable solution !

No JIT Technology Fairy required.

Best Hopes,

Alan

BTW, I have coined the term "Maximum Commercial Urgency" to describe the current efforts in the Alberta Tar Sands. Apply Maximum Commercial Urgency to renewable energy and electrified rail and making bicycling easier & safer. It would take a while (maybe 8 years before the corner is turned) but turn it we will !

Peaknik on December 8, 2007 - 7:59am Permalink | Parent | Comments top

Alan, don't forget to remember that we must also reduce our consumption, we can't grow our electric generation capacity ad infinitum, if we are doing changes here and now, why don't we are doing changes that would be useful for many decades into the future?

Everlasting growth is really the problem.

Consuming less, needing less is really the way to go. But first we have to change our economics. Applying bioeconomics and forgetting about classical economics is as important as getting right our energy mix.

Pushing just energy technofixes is not going to be enough in the long term.

I say this to you because I think your proposals are sound, but they would be even better if you were looking at the whole picture.

AlanfromBigEasy on December 8, 2007 - 10:51pm Permalink | Parent | Comments top

I think I understand and appreciate your point. However, the added baggage of a social/economic "revolution" will, IMHO, reduce support and I will need all the support I can get !

TOD is a positive revolution in it's own way. One needs less transportation but is only deprived of sitting in a car for hours each day. Less need but bot deprived is "saleable" IMO.

My "USA 2034" TOD article has some subtle points. "Consumer" is now a pejorative :-)

http://www.theoildrum.com/node/3140#comments

Best Hopes for Positive Social Change,

Alan

SamuM on December 9, 2007 - 9:16am Permalink | Parent | Comments top

Yup. The data is quite obvious on this:

Economy does require energy and 87% of that comes from fossil fuels and that all feeds global warming.

Pretty hard scenario if we try to grow the economy at 2% pa minimum...

Robert Marston on December 9, 2007 - 1:35pm Permalink | Parent | Comments top

Excellent illustration!

In my humble opinion, we need a rapid growth non fossil fuel solution (especially since fossil fuels seem ready to make a tumble).

One other point, you can grow an economy on efficiency gains. Happened measurably in the US from 1979-1984. There is such a huge chunk of comsumption that is wasted that at least a substantial part of the solution needs to come from conservation/ increasing efficiency.

For my part, I don't think that any single solution will be a 'silver bullet.' In my opinion, we need a diverse set of solutions and we need them yesterday :).

AlanfromBigEasy on December 9, 2007 - 3:44pm Permalink | Parent | Comments top

I find the quick jumble irritating (switches too fast to read & analyize). Do you have a link to a stable source of that info ?

Thanks,

Alan

Engineer-Poet on December 10, 2007 - 1:21am Permalink | Parent | Comments top

That's my complaint too.

If I were doing this graphic, I'd do it as a morphing bar chart where the previous bars grey out when ones are added for the new data and the scale changes.  Keep all the old data visible while showing the new stuff for comparison.

SamuM on December 10, 2007 - 7:13am Permalink | Parent | Comments top

Yes, the data is from Germanwatch/IEA via Spiegel:

http://www.spiegel.de/flash/0,5532,16836,00.html

Yup, that's what I would too (animation morphing), if I had more than 2 minutes :)

mahdrofeloc on December 7, 2007 - 7:55pm Permalink | Parent | Comments top

"In the end, there is no civilized future in fossil fuels. The future they perpetuate is one of poverty, brutality, war, and collapse of global civilization.

As ones aware of this problem, we need to do our best not only to inform people about the dire danger we face but also turn people's eyes to its obvious solutions. If we allow the immensity of the problem to captivate and paralyze us then we will be almost as bad as those who still deny the problem exists in the first place."

Well said, Robert. We do need to try & educate people. The Powers That Be have intentionally kept us all in the dark so we continue "consuming like there's no tomorrow" (funny phrase that!)

Certainly Solar energy is going to play a large role & there will be a de-centralisation of energy from it's current form (we all get electricity from a main source) to the new Paradigm of independent self-sufficiency (each house has it's own solar hot water system, solar electricity capacity of some degree & it's own water tanks). This is the future, Folks. & Permaculture (grow your own food if you can!).

ThatsItImout on December 8, 2007 - 12:14am Permalink | Parent | Comments top

RETHINKING WHAT IS POSSIBLE AND WHAT IS SCALABLE

It is fitting that this post by Chris Vernon gives us reason to return to a prior post on The Oil Drum by Chris Vernon some 6 months ago:

http://europe.theoildrum.com/node/2583

At the time of the post on Concentrating Solar Mirrors, it was read with interest, discussed, and then suffered the fate of the really good posts done on TOD, and rapidly forgotten by many, buried in the rolling wave that is the nature of online message boards.

Needless to say, many made the argument that the concentrating mirror idea as depicted was not "scalable", that it was not practical.

Some argued against the plan due to the use of land for the mirrors, basing their argument on environmental grounds.

Now, let us reread the post by Fatih Birol, and simply ask ourselves:

Which now seems more "scalable"? Compare the catastrophic increase in greenhouse gas of the coal production that will be needed to keep the world electric power grid running to the concentrating mirror solar system discussed.

Now, some people actually argued that the mirrors shouldn't be built because there would be greenhouse gas caused by the production of the mirrors!

Compare the greenhouse gas of the production of the amount of mirrors needed to the greenhouse gas emission we will soon face from increased Chinese and Indian electric power production by coal! Can there be even a
comparison? We are now stopping programs that are needed NOW with frivolous arcane arguments.

Think about infrastructure. The infrastructure of large solar concentrating mirror collectors looks daunting.

Now, think of the infrastructure that will be needed to mine, transport, and burn the amount of coal that is being described as needed by the growth in consumption needed in just China and India, according to Mr. Birol.

The argument has been made that the concentrating mirror systems will require labor. But how much labor will be required, working in one of least healthy jobs on the face of the earth in the mines, will be needed to produce the amount of coal that Mr. Biro says will be needed?

The sheer volume of what must be done to extract, move and burn the amount of coal that China and India will need is staggering. The volume of greenhouse gas release surpasses understanding. The amount of land, water, and humans that will be left broken and unhealthy borders is almost criminal.

The interesting thing about Fatih Birol's remarks are that they put in context the scale of what the fossil fuel industry now needs to expand, and cause us to notice that what once seemed like radical solutions are actually far less radical than the proposed expansion of fossil fuel consumption!

For those who dismiss alternatives as "silver bb's", not scalable, not workable, compare them to the "poison bb's" of pouring unbelievable amounts of money, infrastructure, human hours, and effort into schemes that will prove to be catastrophic to the Earth.

I hope I am making an important point: Any attempt to consider alternatives is immediately attacked on every possible front. Arguments of EROEI are brought against them that the oil, gas, and coal industry never have to face.

The alternative is expected to absolutely clean, not just much cleaner, but ABSOLUTELY CLEAN, while the discussion of how much cleaner than coal, oil, or gas the renewables are is shoved off the table.

We must attempt to get a grip, and deal in comparitive logic. The solar concentrating mirror systmes described in Chris's earlier post look difficult, look expensive. But once you factor in the issues of greenhouse gas, the issues of treatment of workers in the mines, the destruction of landscape insome of the most ecologically diverse regions of the world (google "mountaintop coal removal in Kentucky for an example) compared to concentrating mirrors in the desert....please reread Fatih Birol's calculations, and then re-ask yourself....What is possible, what is scalable in the terms we are now seeing.

Now, reread Chris's post:
http://europe.theoildrum.com/node/2583

It really is one of the best I have seen on TOD.

Roger Conner Jr.

Robert Marston on December 8, 2007 - 10:30am Permalink | Parent | Comments top

I've got to run so I can only make a very short reply. And without time to read Chris' original post I hope I'm not talking about the same thing!

But third generation photovoltaics seem to be something that is scalable. Nanosolar has recently built the largest photovoltaics plant in the world. In short, it uses printing press technology to print extremely thin film solar cells. The scale is huge -- 430 MW capacity for one plant per year. The cost of production -- 33 cents (US) per Watt of capacity.

FuturePundit on December 8, 2007 - 12:47am Permalink | Comments top

A few notes:

1) Limits on money to develop fields (such as in Iran and Venezuela) should not be seen as a bad thing. Delayed field development makes the down slope less rapid and drives up prices sooner to make incentivize the search for replacements and the implementation of conservation measures.

2) If the decline is greater than 23.9mbpd then we might get lucky and enter a shallow decline period between now and 2015. The shallow decline is our best bet because it doesn't cause an economic collapse but does wake people up to the size of the problem. The sooner people know the sooner more efficient buildings will get built, smaller cars will get bought, people will live closer to jobs, and countless other adjustments will get made.

3) I think the biggest wild card is coal reserves. Is the forecast growth in coal electric production really possible?

ThatsItImout on December 8, 2007 - 1:32am Permalink | Parent | Comments top

FuturePundit asks,

"3) I think the biggest wild card is coal reserves. Is the forecast growth in coal electric production really possible?"

Very good question, and touches on the edge of what I am trying to discuss...such growth in coal production may be possible, but if so it will create a logistical strain that will make the logistical strain in the oil industry seem mild by comparison.

We are already seeing equipment and labor shortages in coal production in the U.S., and the transportation issue is looming large.

The U.S. Association of Rural Electric Coops has recently made a cause of seeking fairness on rail rates, as haulage prices have doubled, and many "stranded" destinations (served by only one railroad) are facing gaps in service. As more and more coal trains are needed this issue will only get worse.

China will face a similiar problem, but with a much older and less efficient rail system, it will be even worse. The locomotives and switching systems for rail in America are world class, despite what some people believe. We just don't use our trains to haul people.

How much steel will be needed to build the coal cars alone? How much in new coal tipples and terminals, in barges and barge terminals? The expense will be massive, and the money must come from somewhere. It looks like China can make good use of those declining dollars after all.

The sheer volume of coal tonnage that would be needed to be moved on a daily basis for such coal growth to work would be staggering. This in one way echoes the "peak oil" issue, the question becomes not reserves, but production. How much can you get to the generating stations on a daily basis?

As I pointed out in my post above, the scalability problem for coal runs the risk of exceeding the scalability problem for what once seemed like radical solutions such as PV and concentrating mirror solar.

We are truly, as Mr. Birol said, entering a new energy age. But the direction and shape of this new age may surprise us all.

RC

Relayer on December 9, 2007 - 1:15am Permalink | Parent | Comments top

ThatsIt says-
The locomotives and switching systems for rail in America are world class, despite what some people believe.

If you look at the right parts, yes. The Union Pacific control center in Omaha is awesome. A tornado proof bunker where operators sitting in front on banks of big screens can see every switch on their line. Likewise the UP hump yard in North Platte is extremely impressive. Computer controlled weighing and classification of each car, almost entirely by gravity.

And of course others of similar ilk. But this is the top end only. St. Louis is a total nightmare by comparison. Most of the major lines try to get through there in one way shape or form, across a mere pair of bridges controlled by two separate short lines. Not a fun situation. A car can lose days here.

In my time as Amoco Rail Safety Coordinator I lost track of how many yards I spent time in, being least impressed by most yards in the SE U.S. Old, under-tracked, congested to a fault. Lack of bypass track, you name it.

Most yards are at or OVER capacity.

Transit times are often iffy and hard to predict. Automotive and coal trains get priority. I had a training tank car I had to schedule around the country. It got very good treatment from most RRs, it being in their interest to work together with me and others that had training cars. I still learned to keep two to three weeks in between sessions and to schedule stops as closely together geographically as possible.

Doing Logistics for Lubes was a further education.

A simple Whiting, IN (Just outside Chicago) to Denver run- 10 days. Uhm, two days by truck, if you aren't using teams. And then you have to wait for the car to get back. And by the way, empties sometimes just don't get the same attention from the RRs as loaded cars.

How about Whiting to Houston? Hard to do without the car changing RRs at least 3 times. Oh yeah, and going through St, Louis, sigh. Call it 20 days to be safe. Versus 2 via truck again.

Don't get me wrong, I like rail. Roughly 3.5 truckloads can be hauled in one tank car at a big savings in cost and energy used. But the system in this country is far far from ideal. A LOT of streamlining, upgrading and debottlenecking needs to be done.

On the good side, Whiting to Commerce yard in L.A.- 4 days is achievable, usual even. Well, not quite from Whiting, truck to the UP Chicago yard to get in train, unit train on UP the rest of the way straight through. If not, you give up a couple days simply getting into the UP yard, have to change carriers and all...

AlanfromBigEasy on December 9, 2007 - 5:57am Permalink | Parent | Comments top

Interesting !

What is your opinion of the CREATE program in Chicago ?
http://www.createprogram.org/

And of Public Belt in New Orleans & the Huey Long Bridge ? We have UP, BNSF & KCS on the West Bank feeding (and being feed by), NS, CSX & CN on the East Bank. Double track bridge w/o weight limitations.

The double track over pass in Kansas City (N-S over E-W trains) that was completed a couple of years ago is supposed to had a positive ripple effect over half the USA.

Best Hopes for Improvements to Rail capacity,

Alan

FuturePundit on December 9, 2007 - 2:24pm Permalink | Parent | Comments top

Relayer, I agree with Alan: very interesting!

I am disappointed by the slowness of rail shipments. Why don't railroads spend more on switching capacity? They've got lots of rail cars and cargoes tied up in switching yards.

AlanfromBigEasy on December 9, 2007 - 3:39pm Permalink | Parent | Comments top

You should hear Ed Tennyson go on about this !

His solution is less switch yards, kept them moving !

He points to CN as a model. They schedule locos and take railcars (long or short train) at defined periods. Even though some short trains are "uneconomic", the overall costs are lower. Labor utilization is better.

BTW, the 2/3rds complete double tracking from LA to El Paso for UP is already showing benefits. From memory, average train speed is up 60% on that vital stretch, as well as capacity.

Best Hopes for Increased Capacity,

Alan

FuturePundit on December 9, 2007 - 10:48pm Permalink | Parent | Comments top

Alan, Here's something you will find interesting: In Santa Barbara a lot of politicos want to operate commuter rail down the coast to Ventura. But what limits the use of rail for commuting is scheduling of freight trains.

What constrains freight train scheduling? Not enough siding to allow trains to pull over to let other trains to pass. So they have to pull trains over 100 miles north of here (somewhere around San Luis Obispo) to let other trains past.

The railroad says that if the commuter rail supporters could help get permits and funding for more siding nearer to Santa Barbara then more scheduling slots could be opened for commuter rail and longer range Amtrak passenger rail.

AlanfromBigEasy on December 10, 2007 - 8:27pm Permalink | Parent | Comments top

Simply double tracking would create a massive increase in capacity (and speed ) vs. sidings.

Perhaps joint financing (RR + public) could do this.

An innovative option would be to offer the RR XX years of no property taxes (surely would require a state law) in exchange for double tracking & electrification (a utility might offer to electrify and sell "power at the wire" in exchagne for transmission corridor).

CA RRs were built for 1920 California, a vastly different place than today. California desperately needs more rail capacity IMHO.

Best Hopes,

Alan

robert2734 on December 11, 2007 - 11:41am Permalink | Parent | Comments top

Tucson was originally a railroad town. Southern Pacific was the largest employer in town from 1890s to 1950s. Amtrak runs a train from Tucson to LA, actully it is from NOLA to LA with stops along the way. I'm guessing it is on SP track.

Anyways, to get to the point, if somebody wants to put solar thermal in the desert, it seems like the SP track would make good ROW to put the power lines. And LA is already requiring railroads to electrify in town because of the smog from diesel locomotives. Sounds like a good place to implement an electricity for transmission corridor deal. If we could crack heads and get it done.

My legal address is north Santa Barbara county. I only work here. I haven't figured out why I should pay extra taxes to expand 101 when the locals don't want it. Or put in a Ventura to SB commuting line no body will ride. We voted done your county wide taxes before and we will do it again. It's people who live in Ventura county who are stuck in traffic. WTF should I care. Especially when SB doesn't.

Robert a Tucson

Fatih Birol Presents the IEA World Energy Outlook 2007

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