The 2012 BP Energy Outlook 2030
Posted by Heading Out on February 3, 2012 - 10:40am
There are many unintended consequences as fuel supplies become more scarce and expensive. (With a h/t to Rune Likvern), I see that those Greeks who are being starved of affordable fuel are starting to chop trees down for warmth and income. This sort of desperation has devastated the countryside all over Albania, Africa, and Asia, and it is extremely difficult to stop the practice from spreading or to recover from it. The world expects that fuel must be available at an affordable price, and one of the ongoing questions is whether it will continue to be.
In that regard, BP has just released its Annual Energy Outlook 2030, examining how the world energy supply, and mix, will change in the years up to 2030. The booklet is an update from the study released last year, and reviewed at the time. This year the introductory speech by Bob Dudley focused on energy demand in China and India, Middle East exports, and transport fuel demand. BP sees overall energy demand growing some 40% over the next two decades, with virtually all growth coming from the developing countries. More than half will come from China and India alone. And of that energy, they anticipate that the supply will break out as follows:
Demand will grow across virtually all sections, apart from that of transportation in the OECD, which is expected to fall over the next two decades.
Oil will still be the basic source for transportation fuel, and though growth in demand is anticipated to be only 1% a year that turns into another 16 million barrels a day by 2030. One has to be careful therefore in assessing the contributions of the different sources of fuel, as percentages, since, while these may be falling relative to the whole, the actual volumes that are being consumed may still be rising.
On a minor note, the role of coalsurpasses that of oil some 20-years from now, while last year, the two were about equivalent. Even though BP expects that by 2020, coal's share of the global market will begin to fall, though less steeply now than they anticipated last year. And BP expects that some of the change in the mix will be brought about by technical change.
Technology underlies many of the trends apparent in this report. For example, the supply of gas has been accelerated as a result of technologies that unlock shale gas and tight gas. In the transport sector, we believe the efficiency of the internal combustion engine is likely to double over the next 20 years. And that will save roughly a Saudi Arabia's worth of production. By 2030, we expect hybrids to account for most car sales and roughly 30% of all vehicles on the road.
The interesting question is, of course, where BP thinks that all the oil will come from. Last year, when they projected the same growth rate, the sources were expected to be Saudi Arabia and Iraq. This year, they project that more will come from Deep water, rising from the 9% of supply anticipated last year to 10% in the current review (currently it is at about 7%). But, more interesting, is that they see the roles of energy efficiency and technical exploitation of indigenous resources leading to a great change in the international fuel market:
we foresee both the Americas and Eurasia - or Europe including Russia and the former Soviet Union - achieving self-sufficiency in energy, while the Middle East will generate surplus supply for Asia’s surplus demand. In the US for example, oil imports have dropped by about one-third since peaking in 2005 and are likely to be half of today’s level in 2030. The US now produces over 50% of the liquid fuel it uses – as opposed to importing the majority, as was the case a few years ago.
For the U.S. and European pictures to change as much as they anticipate, cellulosic ethanol still appears to be the flag pole on which they have hung their future, and in which they remain heavily invested. Yet when one looks at the make-up of the sources for fuels in 2030, as projected this year over that suggested last year, there has been a slight gain in overall volumes required.
The interesting changes come in Non-OPEC growth, with the contribution from bio-fuels diminishing, growth in US production replacing that anticipated from the FSU (wonder where that went?) and a drop in the Non-OPEC declines. To answer my own question, I suspect that the growth in FSU supplies (which I am covering elsewhere) has been melded into the need to sustain production at current levels, and that may be a part of the reason for the drop in the Non-OPEC declines.
When one considers that BP are forecasting an increase in demand of 8 mbd from China, 3.5 mbd from India, and 4 mbd from the Middle East, with the non-OPEC decline being at 6 mbd, there is a total of 21.5 mbd of new production being forecast, over the next 20 years. And of this, 12 mbd will come from OPEC, namely Saudi Arabia and Iraq, but with a significant contribution - 4 mbd - from NGLs.
At which point I cough gently and draw your attention to recent remarks (h/t Stuart Staniford) of the Saudi Oil Minister, who suggested that they have flexibility up to a full production of 12.5 mbd, with a little time; but, on the other hand, they will drop production to keep the price over $100 a barrel. And so there is a suspicion that as Libyan oil production returns to normal, Saudi production may fall in balance. The upper limit on Saudi production had earlier been set at 12 mbd, but both these figures are now coming under increasing question, particularly since Aramco has had problems in finding a market for their heavier crudes, which make up almost all of the surplus over current production. (And the Saudi refineries to treat them are still a couple of years away). Yet, if the refineries to treat those oils do come on line, and that increases Saudi capability by 1 mbd of marketable product from Manifa, it will still only bring them up to about 11 mbd. It may be that they will raise production that much, to offset increasing domestic use, and maintain the volume of exports that they need to sustain their economy. But how long they can do that, relying on their ageing major reservoirs remains, of course, the other big question. BP anticipates that they will increase production by 3 mbd over current levels, and still have a cushion of a million or so barrels a day.
And as for Iraq, the country exported 2.14 mbd in December having risen 275 kbd or 14.4% over the year. Whether that can be sustained in the face of continued troubles is not clear. The Al-Ahdab field has come on stream and is ahead of schedule, at 120 kbd, though it may well be that all that oil ends up in China. BP, however, are assuming that Iraq can double production, to 6 mbd, by 2030.
Growth in production in the Americas is anticipated to come from the oil sands (up 2.2 mbd); the Brazilian deep waters ( another 2 mbd) and U.S. shale oil (at 2.2 mbd). Total biofuels growth of 3.5 mbd balances out the anticipated supply and demand at just under 105 mbd.
The continued growth in natural gas is divided into two parts, that which is shipped through pipelines, and that sent as LNG in tankers. Total demand will rise about 50% with the Middle East, China and India providing most of the increase in demand, and with supply coming from a number of sources.
BP Energy Outlook 2030)
The growth in use will be across all sectors of the economy, but if I do an eyeball comparison it seems as though there is a significant drop in LNG increase over the numbers that BP were using last year. Back then they were seeing an increase of around 70 bcf/day over the interval; now, while they are projecting a growth of 4.5% p.a., the overall volume is somewhat less.
Coal demand will continue to rise, largely due to increased demand for power and industrial use in China and India, while western nations slowly ease away from the fuel.
BP summarizes the changes that they have made, relative to last year’s forecast as:
Overall, it looks to be a rather optimistic view of the future.
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I will make the fearless iron clad prediction that supply and demand will be in complete balance world wide
price is another question
polytropos,
I think that is by far the most intelligent comment I have ever read at TOD. There is no need to be overly concerned with such minor items as supply and demand, as long as the price mechanism is alive and well, and allowed to do the simple job it was intended to do.
Carl, I think Polytropos was being sarcastic. I am not so sure about you however. It is getting harder and harder to tell when someone is being sarcastic on TOD anymore. I realize your reply to Polytrops is totally outrageous but I know a lot of people who would believe that statement was the most logical thing in the world to say.
Nah, just joking, I know you were being sarcastic also. ;-)
Ron P.
Darwinian,
Excellent points. But, for the record... I am serious. Perhaps we should adopt some sort of system here to identify sarcasm. I agree with you, that it is very hard to know when someone is being sarcastic, or not at TOD. A belief in PO is usually supported by a lack of understanding of how the price mechanism actually operates, and often times by a political need to replace this mechanism with some sort of government control.
I am sorry Carl, I did not realize you were an economist. Peak oil is a myth because the price mechanism will fix everything. As the supply of oil starts to fall the price will enable "alternatives" to kick in and business as usual will continue. Not to worry about anything especially such minor items as supply and demand.
As Kenneth Boulding wrote: Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist. So I must be kind and assume you are an economist.
Ron P.
Darwinian,
The only thing PO has going for it is that everything on this planet including the planet itself is finite. Your arguments can just as easily be used against an "alternative", solar power, because the sun will one day burn out. A highly intelligent commentator (no irony meant) by the name of Bruce_S has covered this area quite well in this space. I see no need to repeat his comments. You also seem to be using straw man arguments, instead of explaining why you apparently don't believe in the workings of the laws of supply and demand.
[Edit]
It appears you don't really understand supply/demand economics.
In a idea world, when prices goes up the market will produce more to meet demand, and if production exceeds demand prices will fall.
Lets apply this logic to diamands. As prices go up production will increase but not to the extent that supply will outstrip demand. Diamonds and Precious metals will always remain expensive because they are a limited resource. Despite better technology the prices for diamonds and PMs remain stubbornly high. Why didn't the Market make the prices for these commodities become dirt cheap?
After Peak Oil, Oil is no longer an abundant resource and slowly becomes into a limited resource. Price of Oil rises because of declining production even as more money is poured into drilling. More money and drilling is required just to offset declining production. Consider that 30 to 40% of global crude oil comes from 10 super giant fields that have an average production age over 30 years. The rest of the production comes from smaller fields. Ever year its becomes harder to find new sources of oil forcing drillers to tap even smaller fields in difficult locations (offshore, artic). The costs for drilling and bring oil to market from offshore and the arctic is more expensive which drives up the cost of oil.
Lastly there is another dynamic force at work, demand destruction. We had a taste of demand destruction back in late 2008, when the price of oil fell to $30 as the global credit crisis unfolded. As the economy recovered the price of oil slowly increased. Its likely that we are head for another period of demand destruction, because the combination of a sovereign debt crisis (PIIGS) and the current high cost of Oil. We can see the airlines are downsizing (Bankruptcy of Spanish airlines last week, Bankruptcy of a Hungarian Airline today) and the layoff of 16K workers at American Airlines. Over then next 3 to 8 years all of the major airlines will fail as the airfare rises (cost of fuel, and debt) and the number of passengers decline (fewer will afford to pay or will take fewer trips). Eventually only the wealthly will be able to afford airtravel.
The future will be chaotic as the price of oil whipsaws between short term lows caused by demand destruction and the slow ramp up of price until it causes another wave of demand destruction. all along, the global economy shrinks, never exceeding its 2007/2008 high. This will continue until there is not enough economic actively to sustain the current global economic system. The whole system comes apart as supply chains collapse, leaving business and countries without raw materials, finished goods, food, and spare parts need to keep the system working. Add in a chaotic geopolitics as nations destabilize (Arab Spring), as promises made by politicians can't be met [gov't funded entitlements and services] because of sovereign debt, and a declining economy . What has happened in Africa and the Middle East will spread to western nations (already happing in Greece) as angry mobs flood streets because they can't find work, soaring tax burdens, reneged promises on entitlements, etc. UK, Spain, Portugal and Greece all experiences violent riots. These riots are far from over and are just getting started as the high price of Oil eats away at the global economy, causing more people to become unemployed or forced to accept a paycut. Some gov't in a desperate act will try to print there way out, causing currency devaluation and making it hard to import the necessary goods required to sustain their economies as foreign creditors and suppliers refuse to accept payment in their currency.
Peak oil is causing debt/entitlement problems in Greece? It is the fault of peak oil, and not retiring hair dressers at 50 to the Greek islands on full state benefits? Do you have any idea of how ridiculous this sounds?
You didn't read it. I stated that another wave of demand destruction was on it's way with the leading cause of a soverign debt crisis (PIIGS). ie during Peak oil prices do not go straight up. They will whipsaw back and forth.
Its hard to explain all of the issues in a brief comment. It would take a volume of books to explain it all. Every time I post a short comment, I get fifteen (your wrong because of this). The more brief a comment is the harder it is to explain a very complex issue. Obviously from the two comments it wasn't complete.
I dunno why I bother anymore.
Could someone provide an analysis of Greek imports, their share of Greek import/export balance, and the impact on the Greek GDP?
A little real data would go a long way.
Obviously PO is only a piece in the puzzle, if a rather awkwardly shaped one.
Yes the Greek hairdressers retiring at 50 is not a financially sustainable situation, but then draining $100 a barrel for imported oil doesn't help the nations bank balance either.
The hairdresser can have their pension cut, which causes them a financial loss. The oil doesn't have to be imported. Put yourself in either/both positions. I'm sure you'll sit quietly by as your life falls apart around you.
Not if they leave holiday in the islands and go back to work (gasp!). Please.
So the pension that they were originally promised (rightly or wrongly) is no longer available, and they have to go back to work, potentially for the rest of their lives. Still with the tanking economy and higher fuel costs and it's seen as being the government's fault that you're in this mess.
Yep, you're right, how could people possibly get upset and start rioting by that news.
Meanwhile back in the real world......
of course there is the little issue of there actually being any kind of work to go back to in that situation...horrible thing to be around a mob is by the way
TechGuy,
I'm not going to even bother to respond to this. You got way too much homework left undone.
Quite the opposite. The pricing mechanism is what will actually eventually cause peak oil. There will always be some oil remaining in the Earth. But when the price of extracting that remaining oil exceeds what the marginal buyer is willing to pay for it, peak oil will occur.
Perhaps you have limited definition of "peak oil" being purely a geological phenomenon. It is not.
Speculawyer,
Sorry. Po only has to do with geological restraints. Here's a good definition from Wikipedia:
"Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline."
It's now up to you to point out where the pricing mechanism is in this definition.
It has been my observation that most believers in PO actually don't even know what PO even is. I believe that you are one of these people. Care to dispute it?
You can point out that geological restraints aren't mentioned either, but all other restraints of which there are many, are known collectively as above ground restraints, and are what are used to disprove PO theories, not to prove them. Hubbert did not take any of these into account. That's the problem with the whole PO thing.
The key issue is exactly why production enters TERMINAL decline. Or, put another way, why is US production going UP when US production is in TERMINAL decline, at least according to Hubbert, the father of PO? Or, more simply, why does down now mean up? Good luck explaining that one!
The key issue is exactly why production enters TERMINAL decline. Or, put another way, why is US production going UP when US production is in TERMINAL decline, at least according to Hubbert, the father of PO?
US oil production has been in decline for over 40 years, and is now around half of what it was 40 years ago. A 10% uptick in production as a new oil field comes on-line doesn't change the fact that most of the other fields are in decline. There was an even bigger up-tick in US production 30 years ago when Prudhoe Bay, the biggest oil field ever found in the US came on-line. It didn't last - Prudhoe Bay peaked a few years later and started to decline, just as all oil fields do, and it didn't change the timing of the total US oil peak.
No Carl, it’s up to you to explain how you went from that Wiki definition to a declaration that PO is only a function of geologic constraints. The segment you quoted makes no reference whatsoever to the reason for the decline, geologic, economic, or any other.
If a non-renewable resource becomes prohibitively expensive to extract, then its rate of extraction will decline, regardless of how much is actually left.
OK. That is the point where demand drops because consumers are unwilling or unable to pay for higher prices needed to pay for greater production. Duh.
I just did.
Who made you king that gets to decide what can and can't be used to do what? BTW, there is only one way to "disprove" PO. The only people that can say "peak oil is a myth" without lying are the nuts that believe in abiotic oil. The rest of you are just hand-waving and saying it is not happening now or soon. And it has been amusing to watch those supposed experts at CERA have to repeatedly scale down their over-optimistic projections for several years now.
He relied on the central limit theorem to cancel out various other effects. His model was crude and he knew that. And if you think PO is only about Hubbert's prediction that is just like thinking evolution is only about what Darwin said. There has been quite a bit work done since then.
polytropos: I will make the fearless iron clad prediction that supply and demand will be in complete balance world wide. Price is another question
Carl Martin: I think that is by far the most intelligent comment I have ever read at TOD. There is no need to be overly concerned with such minor items as supply and demand, as long as the price mechanism is alive and well
Irony
The problem with using the supply/demand equation to solve the oil supply problem is that the dependent variable in the equation (price) might become too high for the average person to afford, and there are serious consequences of that.
It is similar to the Irish Potato Famine. Certainly the price mechanism brought food supply and demand back into balance in Ireland, but millions of Irishmen died and millions more emigrated to other countries in the process. The population of Ireland was eventually cut in half by the consequences of rebalancing the economic system.
There are more humane ways to solve these and similar problems.
Rocky,
"The problem with using the supply/demand equation to solve the oil supply problem is that the dependent variable in the equation (price) might become too high for the average person to afford, and there are serious consequences of that."
Yeah, but the "serious consequences" of that are that the high prices will squeeze the demand out of the market, which causes oversupply at that price, which causes the price to fall down far enough so that supply and demand can once again come into balance. That's why the price is known as the price mechanism.
The potential suffering of humans by high oil prices, or potato famines, has no effect on the workings of the laws of supply and demand, other than to lower the overall demand. The only issue here is whether the laws of supply and demand work or not, not how harsh these workings actually are, or aren't. I think you are trying to avoid the real issue by dragging red herrings across my path. Your partner uses straw man arguments. Neither has worked. Try using sound arguments, if you have any.
And . . . you just admitted that peak oil is real (less demand = less production = production peaked). I think the disconnect is that you may not understand what peak oil is.
Yeah, but the "serious consequences" of that are that the high prices will squeeze the demand out of the market, which causes oversupply at that price, which causes the price to fall down far enough so that supply and demand can once again come into balance. That's why the price is known as the price mechanism.
The real "serious consequences" of the Irish Potato Famine were that the Irish starved to death or emigrated to other parts of the world. Fortunately there were other parts of the world which had room for millions of immigrants at that point in time, otherwise millions more Irish might have starved.
The real "serious consequences" of the oil price spike in 2008 was that the US and European economies went into a very deep recession. It did balance supply and demand due to demand destruction, but it meant that millions of people had to lose their jobs and quite large numbers of them their houses to get demand down to the point where supply matched demand.
The Irish Potato Famine could have been mitigated if the British government had been proactive and knew how to deal with it. There was enough food in the British Empire to feed the Irish, it just wasn't in Ireland. Unfortunately the economic theory of the time didn't provide any good solutions for the Irish except starvation or emigration.
In recent decades, we haven't had any similar famines in either the developed or rapidly developing countries (e.g. China, India) because their governments have figured out how to mitigate the consequences of a food shortage. The only famines which have occurred have been as a consequence of wars or revolutions in countries where government is nonexistent or nonfunctional. A lot of people don't like to believe it, but governments now know how to prevent famines. In the absence of armed conflict, their people may go hungry, but they don't starve to death.
We need to modify global economic systems so these systemic collapses don't occur because of an oil price shock, and most countries haven't figured out how to do that yet. Those countries which have figured it out, and I live in one of them (Canada), will do okay.
There was enough food in the British Empire to feed the Irish, it just wasn't in Ireland.
Actually....it was. It just wasn't available to the people working in the farms, whose product was being exported to England.
The famine was caused by a blight in the home potato patches, which fed the people working in the farms.
Actually - you're right. That's true. There was enough food in Ireland to feed the Irish people during the Irish potato famine, the problem was that they exported it to England.
That's a failure of both the economic and political systems, and one which has had several centuries of serious consequences.
Of course, the rest of the British Empire also had far more than enough food to feed Irish population, which was a minor part of the Empire at the time. The result was that the Irish emigrated to the rest of the British Empire, and of course, to the United States which also had enough food to feed the Irish population.
The problem was not really a failure in the food supply, but of the economic and political systems to distribute it to where it was needed.
[fixed typo]
You are right on all points but your first at least according what I've recently read.
There was enough food in Ireland to feed the Irish people during the Irish potato famine, the problem was that they exported it to England
I grabbed this from here
http://www.faqs.org/faqs/cultures/irish-faq/part06/
and of course I can't vouch for its accuracy, but it just so happens I am reading Cecil Woodham-Smith's The Great Hunger © 1962 and she made the same point on pages 75-76.
the term corn above might cause some confusion as corn meant wheat and small grain, whereas Indian corn was the kernel on the cob stuff wrapped in a husk that we yanks call corn these days.
Her citation for the above: John Mitchel, The Last Conquest of Ireland (perhaps), 1873, p. 208, Mr. Poulett Scrope, H of C, March 18, 1846, Hansard, Vol. 84, p.1169
Cecil's book is actually quite readable, and well researched. She tries to minimize her bias but gentry rings through her voice loud and clear. This is not as bad as it seems as it captures the administrators, and frame of reference for their decisions, actions and in-actions quite admirably.
I'm not trying to be flip, but just how have they figured it out, other than sitting on a huge pile of the magic juju? Are you referring to the performance of Canada's banks during the crisis (which I understand was admirably smooth due to reserve requirements and the like)? If so, I'm not sure that's and iron-clad "figured it out", depending on the severity and speed of a "systemic oil collapse."
Desert
I copied the data listed at: Energy Outlook 2030 summary tables (xls, 65KB). The data is listed as Million tonnes oil equivalent (per year). I wanted to get to barrels per day from tons per year so I multiplied by 7.33 then divided by 365. Here is the results in millions of barrels per day:
As you can see the bulk of the increase is expected to come from the Middle East. The rest from Canadian Oil Sands, Brazil, and North Africa. But the 9.27 mb/d is the biggie that they expect to come from the Middle East. And all this is over and above all declines. And that, in my opinion just ain't gonna happen.
Ron P.
If memory serves, wasn't ~9mbpd the increase that Iraq was touting as possible over current production?
I'm not a mechanical engineer, so I'm no expert. That being said, I believe the expected doubling of vehicle efficiency is... wildly optimistic to say the least. Hybrids sure, engines maybe (there's some room for a more efficient otto cycle using five-stroke engines), but history has shown that all overall vehicle efficiency gains have been undermined by increases in the mass and performance of cars.
There was a recent paper out of MIT that covered this, but I can't seem to find it.
Motor scooters are much more efficient (mpg) than automobiles. I think a lot of people will be economically forced to downgrade to vehicles such as this.
Is "forced" the right word? Seems like "prioritization" might work better. A consumer drives an SUV and buys a latte at Starbucks every morning. The price of fuel skyrockets. and the consumer is forced to decide, drive less and keep the latte, drive the same and give up the latte, or dump the gas guzzler, collect a Volt, and triple the latte allocation. I'm not sure if these basic choices qualify as a "forcing"?
Yes, forced is the right right word. The SUV and latte is no longer an option, so a new choice "must" be made. It might be an easy choice for the individual, and they might even be better off for it, but they have no choice but to do something else.
Of course the SUV is an option, I bought a new one not two weeks ago. Machines like that are wonderful for large families, towing trailers and other cars, and camping up in the mountains. The choice is in the proper tools for the job, as it is with most things.
But now you've changed the argument.
In the scenario, the person can no longer afford to run an SUV and have a latte. So the options available are:
1. SUV and not latte
2. other car and latte
You were arguing that the user hasn't been "forced" into changing. Just because the changes might not be onerous doesn't mean that they don't have to be made.
It's like arriving at a T junction. Straight on is no longer available so the person is forced to choose left or right.
If I were offered the choice, it would be to skip the latte and keep the SUV. There...a choice is made. Given more time, and say another doubling in fuel costs, it would be time to make another choice, gas powered econo-box perhaps, or full blown EV. In either case, the price can change quite a few multiples, and I would be paying no more (potentially less) for fuel. Certainly random American suburban transport will not end just because real crude prices are in the same ballpark as they were in the late 70's.
So when the situation changes, you are "forced" to make a choice from several different options. Some options will not be available to you in the circumstances that you find yourself. One of those constraints is money.
If you can't afford the option, is it an option at all?
We all have the option to go out and buy a Tesla Roadster, but how many of us could even if we wanted too? And what happens when that "out of my price range" cut off point applies to any car? Mopeds and bikes start to look a lot more attractive in that climate.
As long as we agree that prices can apply "force", sure, then we pays our money, takes our chances, and makes a choice of some sort.
As far as not affording something, peak oil didn't invent poverty any more than it will cause it going forward. The solution to having the maximum number of choices to make appears to be related to being born in a First World country for starters, otherwise the choices available are limited by poverty, death squads, religion, politics or your neighbor deciding your momma wasn't born into the right ethnic group and making sure she is properly punished for this disparity.
And what is wrong with a Tesla roadster? While a bit ostentatious for a personal peak oil solution, it is a perfectly nice car, and uses the "right" type of crude based fuel to power it. Which is to say, none.
Agreed, PO certainly won't be a primary cause of poverty - collapsing economies will take of that. PO will just help that collapse come a little sooner. It's quite probable that the European economy takes a dive, taking the rest of the world with it, before PO becomes obvious to the world at large.
I don't think PO will ever really come into the consciousness of general public. There will always be some more focused reason to blame their current woes on.
From my standpoint, the only thing wrong with the Tesla is the price. I'd have to sell the house, wife and at least 2 of the kids to buy one - running costs on it are low though.
My hybrid does 20mph avg / 30mph peak for about 30mi per day on 450Wh (which I assume takes around a kWh to recharge), plus however much food I eat. Maintenance costs run maybe $100/year (Grand total 365 * 0.10 + 100 = $150). It's not for the very young or old, but it's sure a good economic choice for the rest of us these days. Personal experience says the 'hybrid' part adds about 10mph to my speed, and it's a godsend on windy days. Acquisition cost around $1000. One could finance it over 5 years for a monthly payment of $20 at 6% like a bigscreen tv.
As far as people economically downgrading to this, I can say I've see exponential growth (doubling every 2 years or so) in this mode of transportation along my usual route since Lehman. It's in the 30's and 40's(F) most mornings this time of year, so the weather doesn't seem to be deterring people much either.
How much gasoline is a kWh? Google tells me about 4oz or half a cup (1/8L). It's also one hour of full light on an ideal square meter of PV. Yeah, we can & will increase our transportation efficiency a fair bit on the personal end, I'd say, but it's gonna take serious pain at the pump.
The same commute in my pickup uses 3gal gas or 100kWh, and I only get there 5 minutes faster (25-30 vs. 30-35) due to traffic & the like. Still, when you don't drive much, hopping behind that V-8 is like taking front seat in an F-16, and people take it for granted every day! Shame that e-cat thing didn't work out, we would all be taking hydrogen F-16's to work by now - Vrrroom!
I believe some of the first Prius' are coming up for battery replacement? Expensive suckers I hear.
And isn't their manufacture pretty heavily subsidised?
EROI is the only thing that matters, not the $$.
Cheers, Matt
Get Rcokman to start determining the value of his drilling projects using EROEI, and we'll talk. Until then, EROEI is amusing, but not useful.
Bruce - I hand't thought of that perspective until I read your comment. The EROEI (whatever it actually was) of my deep NG drilling program hasn't changed in the last couple of months. But I just reduced that drilling budget by $40 million (which represents about $80 - 100 million in drilling projects). NG prices below $3/mcf just don't work very well. Maybe folks can better appreciate the reality viewing the situation from that perspective: ROR will always trump EROEI for the oil patch...even when EROEI is adequately positive.
Oh, I bet EROEI changes all the time. For example, lets say you use the same rig, to drill to the same depth, in the same amount of time, with the same tubular program, completed the same way. Using the same amount of energy. Except one well produces 3 bcf (URR) and the other produces 6. A different EROEI is easy, just because of the results being different. Based on the EUR distributions of wells (a recent article in O&G Journal on the Haynesville comes to mind), the differences from top to bottom run an order of magnitude or two. That kind of results range could certainly swing the EROEI calculation just as hard. If it mattered in the least, anyway.
Er, fundamentally aren't we trying to save the planet? (Our kid's futures?). Isn't the whole point to achieve "sustainability"? How can a "hybrid" possibly be part of the solution with all it's energy inputs? Really, what human invention is sustainable?
Less is more; that needs to be the push. Not BAU.
Cheers, Matt
Save the planet? If that were the case we wouldn't be talking about peak oil and resource depletion and such, but arguing about the best way to get rid of all the people. Peak oil is basically some historical fact at this point, it happened, life was rough for awhile, and now we are settling into our "use ever less" routine. Been there, done that, got the t-shirt.
And there is no such thing as "sustainable", it is only a relevant term only within the concept of time. In a short time period, nearly any functioning process existing longer than a nano-second could be termed "sustainable", on long time frame, the entire planet (with or without people) is a completely unsustainable system (no matter what you do, no matter what I do, no matter what humans do, the sun runs out of hydrogen and that is it, adios amigos).
Sustainability is just another illusion of time, like safety and security (personal or collective), or any of these things which humans rarely appreciate. Or understand, to be honest.
Bruce_S,
Yes, the concept of EROEI is amusing, but certainly not useful. It's curious that an entire oil industry hell bent on profits is not at all concerned about EROEI. Could it be that all EROEI concerns are automatically covered by something else called...(ahem) costs of production?
EROEI appears to be an academic construct by those with zero, or near zero knowledge of how the industry works. I base this conclusion on the industry specialists here who completely dismiss the idea. Not a single industry person has yet chimed in to tell us how wonderful their last project turned out, based on its wonderful EROEI projections which held up through the length of the project and delivered a higher than expected EROEI and the board of directors then showered them with BTUs as a reward. As has been pointed out, it is all about ROR, and as long as that is true, the form and cost of energy matters so much more than the quantity involved.
EROEI appears to be an academic construct by those with zero, or near zero knowledge of how the industry works
I thought the 'academic' construct worked fairly well. Darwin, among others, has shown how it works in the long run...I think you were inferring this point in your sustainability post. Maybe you meant to say no one has done a really good job applying the concept of ERoEI to their models of the industrial world...well as you noted when talking about sustainability, it is the population and time frame the model encompasses that makes all the difference...
I am not aware of Darwin's work on EROEI. Do you have a journal, month/year, page/volume available, or is blogcentric?
I am aware of what Cutler and Cleveland have claimed.
"Extrapolation of energy costs and gains in petroleum drilling and extraction indicates that drilling for domestic petroleum could cease to be a net source of energy by about 2004 at low drilling rates and by 2000 or sooner at high drilling rates, and that the net yield will be less at higher drilling rates."
Hall, Charles A., Cleveland, Cutler J., Petroleum Drilling and Production in the United States: Yield per Effort and Net Energy Analysis, Science, New Series, Vol 211, No. 4482 (Feb, 1981), pp 576-579
Hopefully these authors now incorporate more knowledge of the resource pyramid and basic economics into any similar work.
1.The ERoEI concept was really made popular by the biological sciences.
2.Darwin did pretty much bring the 'natural selection' mechanism to the mainstream.
Over time different mutations produced different finches in different Galapagos environments. Why? Because the owners of the mutations that prevailed got a more favorable return on the effort they invested in their quest to pass on their genes than the effort of their competitors that disappeared got. That was Darwin's conclusion wasn't it?
Effort is made possible by expending energy-sometimes a greater effort over time is allowed by conserving energy in the shorter run-it is quite a complex bunch of webs weaving about this planet. New external factors can change the environment from one to which a species has adapted to one that favors another species or to one favoring less of all species, but the species within the environment still have to deal with their net energy situation
The only truly 'free market' that exists on Earth is the one Darwin described.
ERoEI may not be the only factor determining natural selection but it is a big one. No citations necessary, just a big picture view which you brought to the discussion first with your 'sustainable' post.
As I said
Maybe you meant to say no one has done a really good job applying the concept of ERoEI to their models of the industrial world..
the Cutler and Cleveland quote you mention does support my interpretation of your intent as well as my claim that
it is the population and time frame the model encompasses that makes all the difference...
Please don't think I disbelieve you, but I would prefer to read the words he wrote rather than accepting someones interpretation. My experience is that people often see what they wish to see, so I would prefer to see the man's words in their context and decide for myself. So do you have an actual reference to his actual words? I am familiar with his main work of course, but is there a page/chapter/paragraph which supports the position you have assigned to him?
edit
Darwin did pretty much bring the 'natural selection' mechanism to the mainstream
Chapter IV "Natural Selection" The Origin of Species by Means of Natural Selection ©1859
I believe this fits the bill on that part.
specifically from Chapter III "Struggle for Existence" found in the same work
"The action of climate seems at first sight to be quite independent of the struggle for existence; but in so far as climate chiefly acts in reducing food, it brings on the most severe struggle between the individuals, whether of the same of of distinct species, which subsist on the same kind of food. Even when climate, for instance cold, acts directly, it will be the least vigorous, which suffer the most. When we travel from south to north, or from damp region to dry, we invariably see some species gradually getting rarer, and finally disappearing; the change is conspicuous, we are tempted to attribute the whole effect to its direct action. But this is a very false view: we forget that each species, even where it is most abounds, is constantly suffering enormous destruction at some period of its life, from enemies or form competitors for the same same place and food; and if these enemies or competitors be in the least degree favoured by any slight change of climate, they will increase in numbers, and, as each area is already fully stocked with inhabitants, the other species will decrease."
He goes on in the same paragraph to say as we travel south it seems obvious it is competition with species that seems the most important determinant of who survives while as we travel north "When we reach the Arctic regions, or the snow-capped summits, or absolute deserts, the struggle for life is almost exclusively with the elements."
I of course I never said Darwin used the term ERoEI however the struggle to get food out of the environment is an energy returned on energy invested enterprise. If you don't believe this spend the next two months eating only tree bark and see how it goes. Diminishing returns are especially obvious as you go north or up and the same species becomes dwarf and then eventually disappears. Past the boundary of where it lives that species can't get enough energy out of the environment to sustain the efforts that allowed it to live as a dwarf--and it isn't for lack of trying, some of the dwarf seeds are always trying to establish themselves in the inhospitable edge where there is no competition for the same food. And for a species to survive its individuals have to have, at some point in their life cycle, enough energy over and above what it takes to keep their biological systems functioning to send their genes (encapsulated in some form or another) to the next generation. This is what isn't happening at the extreme edge of a species range.
Like I said lots of energy strategies out there in the food web, but if one generation uses up all the energy available to it without being able squirrel away enough to get another generation going its gone. I found 'Origin' a good winter morning's read (many mornings). Darwin's reasoning was generally flawless. He goes down multiple routes getting to the same end. Of course he didn't know how the variations happened but he figured it was in the black box of the reproductive process--dead on he was as that is where we found the gene. Now we are finding the same gene can have different controllers that switch functions on and off. This is all one big ongoing learning process, but as of yet I haven't heard the we have found any species that can survive without getting positive enough energy return out the environment to pass on its genes to a new generation.
Thanks.
EROEI will only work as a concept when you can take into account the energy content of each squirrel Rockman ate when he was studying Geology because every well he has drilled must not only contain enough energy to pay for the well itself but for the squirrels eaten by Rockman as he studied Geology. Every well must have a line which says Kilojoules of squirrel energy paid back with fossil energy if you want to be accurate for EROEI for Rockman's wells.
OK! So it isn't as extreme as that, however you do need to pay energy for more than what the total mechanical energy of each well requires. You also have to have a payback for education and some proportion of energy (money) in compensation for time spent because I assure you that those flat screens don't pay for themselves, nor do the 15 years in education from grade school to graduate training. Even after that you could argue that there are also a few bad wells drilled which must be accounted for as Rockman for instance gains experience and learns from mistakes. Even the technology developed by the oil industry and outside used also has a proportion of embedded energy in it. Each well isn't an island only to itself in terms of energy, you have to pay for not only the drilling industry but the associated industries and technologies used as well. This is why money is a better concept to use because it accounts for the external facts a LOT better.
David Attenborough: The old Grizzly we've named Rockman is a sly old beast. He stalks the last remaining prey in the area which has been depleted by other Grizzlies and the actions of Man in order to replenish his energy stores and gather enough energy to hibernate for winter. He is a sly old beast, he is careful not to expend energy unnecessarily and plans his moves wisely in order to maximise the energy return from his movements. He pounces! Whilst the prey was smaller than he'd like, he ought to extract a few million cubic feet of gas and recover more than his energy expenditure.
So yeah, if the oil patch was a nature show then sure you can use EROEI... :-P
yeah all in this little thread agree here, there is no meaningful way to apply ERoRI at the well head level or there abouts to predict how much effort our system can afford to put into getting oil out of the ground.
And of course the oil patch is part of a nature show--a darned long running one when you start at its beginnings--these discussions mostly just differ on what the next few scenes in that show are going to look like ?- )
If EROEI was stable for various energy sources (they wouldn't need to equal each other), Carl Martin's assumption would be correct. If EROEI is changing, then costs of production are based on previous EROEI factors. For labour & immediate consumables, this is not such an issue, but fixed assets last for years and the energy embodied in their manufacture was purchased at previous rates of EROEI. At present, with EROEI falling, this means that fixed assets are unrealistically "cheap" from an energy perspective.
The energy embodied in fixed assets is particularly significant in the oil industry, since drilling for oil and setting wells for production is a very capital-intensive exercise. Further, there is the sunk cost phenomenon, whereby massive initial expenditure (of money and energy) may be effectively wasted if a large discovery is not made, but it still makes sense to develop the small discovery that is made, because it needs to be evaluated against future costs, not costs to date.
There is also another factor, which I rarely see mentioned, which is that some energy sources attract a premium because of characteristics like portability or the the ability to switch on & off easily. This doesn't invalidate EROEI analysis, but it does make it a good deal more complex.
[spelling edit]
There is also another factor, which I rarely see mentioned, which is that some energy sources attract a premium because of characteristics like portability or the the ability to switch on & off easily
That is important--the ERoEI for the activity of the entire civilization has a whole lot of energy gathering components. If oil production ERoEI falls to a rather low level but still enables enough high ERoEI activities to be pursued using the oil produced that oil can demand a great premium.
That may be part of what you meant by If EROEI was stable for various energy sources (they wouldn't need to equal each other), And of course, as you said, all the banked embodied energy in the infrastructure and equipment in use can soften the effects of a sharp drop in ERoEI from any source.
Its a big complex system, scarcity/price will move our resource allocation around, but it would be hubris to try and predict the exact shape of that reallocation as changes compound into the future. Seven billion and rising with unprecedented per capita energy use--our species is in wholly uncharted territory.
Ablokeimet,
Regardless of the stability/instability of any EROEI or the form of energy involved, ALL EROEI is covered by something called costs, because it is a subset of cost! This is an accounting issue, not a PO issue. There is no need to dwell upon such complexities. Just try to prove that it's not accounted under cost. Then you will perhaps see the light.
No cost only accounts for the second half of ERoEI. Energy invested is cost, energy returned is revenue. Profit is the light at the end of the tunnel when revenue overbalances cost. PO could well be an issue to the economies that can't turn high enough revenues to sustain themselves after energy costs are accounted for. That certainly has been the case for species in the biological world's accounting system. Everything human is just a very small subset of that after all. So of course it all comes out in the cost/revenue wash.
Luke H,
You are not talking about EROEI on the company level. I am.
Far upthread I said that Bruce's arguments with ERoEI are merely that it has not been properly applied to industrial models...the timeframe and scope of activities included in the calculations just haven't been inclusive enough.
ALL EROEI is covered by something called costs, because it is a subset of cost!
refers to the company level not at all. The person you were replying too was also not talking about ERoEI at the company level.
Lets go to the company level to talk about the ERoEI of oil. Specifically to an oil company. For that company all the energy returned from the oil is in the oil produced. Is the oil produced called a cost by the oil company? No its the source of revenue, and when bartered oil is the revenue. Revenue is NOT cost. All the efforts it took to produce that oil including EI, energy invested IS the cost. Dirty trick, eh.
I know what you are driving at, I understand that you say the ERoEI is somehow reflected in the cost of the product down the road, but the ER or energy returned itself is NEVER an actual cost. The EI is a part of the cost side and can be ALL of the cost side if you make it inclusive enough.
But like ROCKMAN says no oil producer cares what the ERoEI is, they only care about the cash flow. So as far as the oilmen are concerned ERoEI is totally irrelevant to cost as well. So ERoEI isn't even a subset of their costs. They only care about how much money they get from how much money they spend how fast. Oh, the EI, energy invested is a part of their costs however, but they don't really care about that either, they only care about what they had to pay for that energy invested. Well I left out one care--public companies do seem to care about expanding their reserve bases, that can certainly throw a monkey wrench into the cash flow picture--for little while anyway.
Why do you believe that? You infer it's a planned event and/or common.
Toyota designed the (main/traction) battery for the life of the car, defined as 180,000 miles (290,000 km).
Depending on jurisdiction/model year, the battery is warrantied for either 8-10 years or 100,000-150,000 miles.
http://www.toyotapriusbattery.com/faq.html
There have been Prius going for 700,000 km (435,000 miles) before a battery change.
http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20110125/bc_olsen_prius...
If a Prius has a premature failure out of warranty (.003%),
http://www.hybridcars.com/components-batteries/first-numbers-hybrid-batt...
the cost of a new replacement is about $3K (battery itself is $2500), the junkyard will sell one for $500-$1000.
http://en.wikipedia.org/wiki/Toyota_Prius#Battery_life_cycle
http://priuschat.com/forums/prius-hybrid-ev-alt-fuel-news/53896-toyota-a...
n.b. there is a 12V lead-acid auxiliary battery that looks suspiciously like a motorcycle battery. Those need replacing about every 5 years, near $200 at a shop.
What you hear is hysterical nonsense from people who are so scared of peak oil (and the end of Business As Usual) &/or climate change that they adopt a coping strategy of blame/belittle the messenger.
So they make up lies about the Prius being heavily subsidized or using more energy than a Hummer, rather like Lady Macbeth trying to assuage her guilt by screaming "out, damned spot".
(PDF warning)
"Hummer versus Prius: 'Dust to Dust' Report Misleads the Media and Public with Bad Science
Hysterical nonsense? If I challenge the idea that AGW is hysterical nonsense, with all the big chills going on lately, am I also to be roundly criticised? No doubt I'm a dopey bastard with an average IQ, but everyday I see ridiculous and ever expanding traffic jambs and wonder how replacing one thing with another that's a marginal improvement at best is an appropriate solution to resource depletion.
Let's say for argument's sake the Prius' cradle to grave benefit is *twice* that of a *similarly-sized* vehicle (comparing against a Hummer seems kinda mute). Promoters of the Hybrid, including yourself, still fail to address the fundamental problem, BAU; more and more people wanting more and more stuff. Instead of creating a fancy new transport that's still very much FF dependent, why not start demanding two people ride in a car instead of one? That'd take away *choice*, of course, not to mention a hit to growth and the almighty flow of $$$, but surely that would buy us more time to work up a long term plan? A better way forward... Until TPTB start discussing the downside of compounding growth, and begin moving away from BAU, I'll see "greener" alternatives as nothing more than a distraction.
Of course, nothing I've seen or heard in mainstream where I live has convinced me to be anything else other than a doomer. I wish I had the mental capacity to absorb some of the reports you TODers do (and link to them), but I don't and have to accept my limitations as a Joe Average. But I do get the basic law that unchecked compounding growth is impossible on a finite world. Everything else is detail.
Cheers, Matt Blain
Still concerned for my kids futures
The hysterical nonsense he was referring to was certain need for battery replacement and outrageously high prices for battery replacement.
Coincidentally, I was looking at old cars this week. The Holden FX (an American design declared 'too small' for the US Domestic market) apparently got 30mpg, which might back up ktf's theory above about increasing vehicle mass offsetting efficiency improvements.
Those that could already had in Italy and the South of France, unfortunately, mother nature reminded us this winter that the Global Climate Extremes (GCE) in a world that no longer has a Biomass cover are wider.
Lets keep a count of those that so far have died to weather exposure and we would be able to add to the BP forecast in the number of people that would die when the price of crude gets to US$ 200.00; 250.00; 300; and so on.
I recall that information as well. Perhaps the answer lies less with increases in efficiency than it does with changes in behavior. For example, if gasoline were $1.50/gal I would be using my SUV (6000#, 300HP+, V8 power, 10 mpg in town) to travel everywhere, all the time, regardless of need. But (anticipating that this summers price for gasoline will be $4.50/gal) at higher prices I adjust my habits accordingly and use a compact car instead (2400# vehicle weight, 100HP, I4, 30mpg in town). The cost per gallon triples, but my gross commuting costs don't budge. An individual making a change in ownership, under increasing fuel cost pressure, would certainly give consideration to making exactly this type of change. Or not, based on their economic situation. The beauty of economic theory kicks in right here I imagine, interacts with human behavior and priorities, and all peak oil needs to do is find the right price point to make it happen. Mandating it from above rarely works, as the government has demonstrated on more than one occasion.
Yeah, what you say about the past is true. But that is because gasoline was still dirt cheap back then. Gasoline is no longer so cheap so we will NOW start applying the efficiency gains to get better MPG instead of just more creature comforts. We can't afford otherwise.
Lots of people are whining about the lofty CAFE standards. Oddly, the car companies are not complaining so much. And it is not just because they were bailed out. Only a couple of them were bailed out and the bail-outs are done such that could turn around and bit the hand that feeds them if they wanted to. No, they are not complaining because they have peak oil consultants that are telling them that if they want to survive they will need high MPG cars in the future. That is where the market is headed. Sure, they'll keep making gas guzzlers as long as there are people dumb enough to keep buying them. But they need to be ready with higher MPG vehicles so they don't get caught with their pants down again like what happened when oil shot up to $147/barrel. $150/barrel prices are coming again . . . it is not a matter of "if" just "when".
The sooner peak oil drives the price of oil to $200+ the better. So "when" is quite correct, unfortunately, it is taking WAY too long. Without a sustained price increase, the alternatives won't be able to utilize Al Bartlett's fine explanation on the power of exponential growth.
There are some possibilities, but a lot depends upon how technological advances are used. On the engine side, if the wave disk generator comes to pass, that would be a big deal. Of course size, speed, and power are all things that if they were reduced would greatly improve the overall picture.
Right now hybrids are not selling well, so the percentages sound pretty optimistic.
Well said, jtf. Doubling of vehicle efficiency in that short of a time period sure sounds like just more pie in the sky to me. One has to consider the entire world's fleet of cars, and that many of the old clunkers will continue to be driven all over the world. Many don't realize, that there is a huge export business going on for all the old gas guzzlers. This practice will not be easily stopped. Basic economics has always dictated the behavior of most humans. I can't see how, or why, this is likely to change anytime soon.
Partnership for a New Generation of Vehicles
http://en.wikipedia.org/wiki/Partnership_for_a_New_Generation_of_Vehicles
Your taxpayer dollars got you working concept vehicles in 2001:
80 mpg diesel-hybrid GM Precept
72 mpg diesel-hybrid Ford Prodigy
72 mpg diesel-hybrid Chrylser ESX-3
Program cancelled by Duhbya Bush administration in 2001.
It did, however, scare Toyota into privately funding their Prius (since the U.S. automakers didn't want any foreign members).
5 stroke? How do you get an odd number of strokes? (two high pressure 4 stroke pistons share a single low pressure expansion piston between them - that's how!)
Interesting, there is indeed, and the concept dates back to Otto himself (1879).
http://en.wikipedia.org/wiki/Internal_combustion_engine#Five-stroke
Explanation and picture (on 2nd page) at:
http://www.ilmor.co.uk/concept_5-stroke_1.php
video at:
http://www.youtube.com/watch?v=-yo6xuVS7tg
Thanks for the mention of the 5 stroke jtf - learn something on TOD all the time...
Though brake specific fuel consumption of 215 g/(kWh) is not that much better than a Prius (225),
and Audi's 2.5 liter TDI beats it (198).
Could someone address the question as to how much new oil discoveries will be needed to reach this target (assuming the 5%/year or whatever decline in old fields) and how this amount of new discoveries compares to the existing rate of new oil discovery (average over the last 10 years or whatever)?
I would be very interested in seeing the alternative projections readers here have instead of this BP projection. The big difference I project is that there is not going to be anywhere near this much increase in energy usage--because of massive economic problems across the world as well as peak oil and other limits to natural resources.
pasttense,
You are asking the wrong question here, as increasing oil production is NOT only dependant upon finding new sources of oil. There is still a huge amount of opportunity in merely developing the sources of oil already found. There is new oil being discoverd almost every day (usually in very small amounts), but much of it is then back dated and linked to the original discovery. Entirely new, but usually small deposits, are being found on a fairly regular basis. New technology allows this to happen. Oil also no longer even means oil. It means All Liquids. I think you might need to get more up to date on all these issues.
Sorry sunshine, but Oil means Oil. All Liquids means All Liquids. If you want to call Oil 'All Liquids' then I can call a Badger a Wombat.
Defining "oil" as "all liquids", including natural gas liquids, is one way to disguise the fact that oil production is peaking. If you look at only crude oil, which is what is actually peaking, the situation is much less rosy.
The US government is fond of defining "oil" as "all liquids" because it avoids having to deal with the problem (until after the next election is over).
Unfortunately, by the time "all liquids" starts to decline, crude oil production will have been in steep decline for some years and it will be too late to design an effective strategy to deal with it. In fact, it's already too late, and the current solutions being promoted amount to grasping at straws.
May I ask what other studies of global magnitude you compared the BP information to in order to make this determination? Are the BP answers far higher than those of the IEA, for example? Or the EIA?
The problem is that the economy cannot withstand very high prices. There quickly get to be too many debt defaults. These forecasts of these various organizations might be all right, if the economy could work on $200 or $300 barrel oil, but this doesn't happen in real life. The problem is really one of too low Energy Return on Energy Investment for the economy to continue to function. (We use up too much of the energy, in making it and in supporting the essential parts of society needed to process it.)
Define "withstand"? Zombies in the streets, or just the regular recessionary environment when real crude prices were just as high back in the late 70's? Certainly the economy in the late 70's in the US (and world) reworked itself pretty nicely around the more efficient use of barrels per unit of economic activity.
on the flip side of this the budgets if countries like Russian and Saudi Arabia and Iran cannot function now unless the price of oil is 100/barrel.
Gail is focusing too much on the United States. Certainly high oil prices would cause a recession in a society as highly oil-intensive as the US, but most of the rest of the world is growing a lot faster, and with a lot lower level of oil intensity. China, India, Brazil, etc have a much less profligate energy consumption pattern and the point at which they would be sent into recession by oil prices is a lot higher. Each US recession brought on by high oil prices would therefore result in the US being a smaller proportion of the world economy and its recession having a successively smaller effect on the oil price.
Basically, US drivers of SUVs will be priced out of the market faster than European drivers of 4 cylinder diesels, who will in turn be priced out before Indonesian motorcyclists. It's one way in which the OECD countries will make way for the superpowers of the 21st Century.
Well said, Ablokeimet. You've got it exactly right. You only have to look at the percent of U.S. oil consumption, that is presently being imported. It is always falling, but for two separate reasons. Less consumption, because of recessionary pressures, and more home production, strongly influenced by the same high oil prices, that are lowering consumption. Geology (shale oil) and better technology also play their part. So does all of the improvements in the various financial instruments geared to oil production. I don't know why this topic is even being discussed at TOD. Surely everyone MUST know that the U.S. share of the world oil pie is shrinking. The many reasons for this are VERY well known. But, apparently someone out there does not seem to be very well informed of such matters.
Gail,
Could you provide us with your list of oil companies, that actually agree with your opinion? If none of them agree, then I don't see why any of us should.
Basically I was thinking of the statements about US production relative to potential capabilities (which I reviewed here a few months ago, on a region by region basis) and Russian production in the same light ( I am now reviewing regional production in Russia here on Sundays) both of which are projected by BP to make the Americas and Eurasia self-sufficient in energy. While I have yet to write the summary conclusion from the Russian study, you don't have to read very far through what I have found and written about so far to find the BP projection optimistic.
I will likely review the Oil Drum reviews of Saudi Arabian and Middle Eastern potential after I get through Russia, and that is also less optimistic about the future than the BP report. Remember that this site, with the help of some extremely well informed comments from our readers, has been writing about this topic now for almost 7 years. That experience also makes me a little cynical of some of the other BP projections.
Sounds like the answer to my question is...no?
Well not exactly. I may compare this with the Shell and Exxon Mobil predictions (I reviewed EM in December). I will also refer to this and contrasting views from either the EIA or IEA or from the monthly reports from OPEC, as pertinent topics come up. These are all somewhat time sensitive since, as the known facts change or become more evident so do the predictions. This time I just focused on what BP thought had changed. Oh, and we did look at an industry projection from API in the fall also.
Production Predictions: Time for a Meta-Study?
The discrepancies/assumptions highlighted by your analysis suggest that it is time for a meta-study of oil production predictions.
We are, apparently, already seeing signs of 3-card monte even in successive years' predictions. I suspect that this maneuver has been going on for some time.
There are only a limited number of authoritive, publicly-available series of predictions available.
The question is, is there anyone within the OD fraternity with the time and patience to reconcile them and the artistic flair to render the result comprehensible to us laypeople?
Every story tells a picture, and this one should grow increasingly interesting.
Found this via Our Finite World:
Shaping the global oil peak: A review of the evidence on field sizes, reserve growth, decline rates and depletion rates
http://www.sciencedirect.com/science/article/pii/S0360544211006694
My takeaway:
BUT
AND
AND
AND
OR
In other words, everything has to go right and not one thing can go wrong if we are to see anything like the optimistic World Energy Outlook.
Cheers,
Jerry
I printed the paper out about 3 days ago. I didn't take away quite the same angle that you did.
How did you get the paper? That thing costs $35 to retrieve. You didn't actually pay for this, or did you get it from your employer's subscription service?
The paper is published by Elsevier, who is facing a massive boycott by the research establishment.
I first learned about the boycott last week: http://johncarlosbaez.wordpress.com/2012/01/26/ban-elsevier/
The word is that Elsevier pulls in huge amounts of money by selling their data online. Never mind that most of this "data" is research funded by taxpapers, compiled by researchers who have to pay a publication fee to Elsevier, and then Elsevier turns around and extorts money from libraries and individuals to have the privilege of looking at the research. The original authors often have to sign an agreement that they won't release electronic copies on their own.
The problem is that scientists are too timid, and the minute that they start making a fuss, they get shot down as being shrill and therefore non-objective.
What the heck. I bet I have everything covered in that paper anyways in my free, open access on-line book. It has all the graphs on reservoir size and reserve growth and anything else you would want to know. I also have an analysis of some of the work that Roger Bentley, one of the main authors of that paper, has done before. My take is that Bentley's work is not very comprehensive.
So the remedy is simple: Publish in open-access journals or just publish online on a website archive. If the stuff is any good, it will eventually get recognized. If not, it will die on the vine.
I have a local library. My local library has access to online resources. I just downloaded the paper, highlighted the interesting parts (the two main authors I am familiar with and read their work before) and moved on. Nothing particular new in it, but their opinion on certain topics is sure to cheese off the less academic end of the peak oil world.
So oil companies are telling people that the percentage of energy from oil will have a big drop over the coming years. Oil is a really great convenient easy-to-transport easy-to-use energy-dense energy system. The fact that it is such a great energy system is why it provides so much of our energy today. So why in the world would our usage of oil go down relative to other sources? The answer is obvious.
Anyone with a brain can read between the lines and see that oil companies are telling you "The price of oil is going to go up sharply over the next 18 years!" That is the only reason why we would use less of the great stuff. Sadly, most people have no clue. Go buy another SUV. Have Daryl Issa complain about CAFE standards. Ugh.
It looks as if BP is expecting coal production to increase as much in the next ten years as it has in the last ten years.
I wonder where they expect that coal to come from? To pick just one class of coal from a major producer, Australian thermal coal has increased in price from a little over $20 per tonne to $116 from 2002 to 2012. That kind of price increase seems really similar to what happened with oil from 1998 to 2008.
That's when oil (the real stuff, not something made from tar) hit a production plateau. So it seems reasonable to guess the world might be reaching peak coal. There's plenty of it still in the ground, but like oil, the easy and cheap stuff has already been burned.
At least that would be good from the climate point of view.
Part of the problem in projecting future growth for coal as a source of power comes in the need for long-term commitments to both mines to produce it, trains and ships to move it and power plants to burn it. These are all highly expensive and if the political climate suggests that constraints will be put on the development of that production down the road then the investments are not being made (this has been demonstrably true in the USA over the last few years). But as alternatives do not totally measure up to demand, then it is still possible that the political winds may swing the other way again, and with better assurances for the future coal prospects will grow more strongly.
There are many sources of coal around the world (I am not cataloging, for example, the ones in Russia since while it is there very few people are excited about digging it up yet). Peak coal is still some decades away, and depending on which of us who write on this you choose to believe, it is easy for you to find the estimates.
I made some early enquiries to our local electricity wholesaler recently, about putting in a small-scale Solar PV farm and getting the bonus Feed-in-Tariff. They are, to put it mildly, not interested. The price the offered per kWh was not even enough to cover even half the interest bill on the loan required to buy the equipment.
When was the last time they really ran the numbers? The PV prices have changed massively in the last couple of years.
Who ran the numbers?
I did some back-of-the-envelope calculations for bulk (by the pallet) prices from US wholesalers, and came up with the expected daily output. At the feed-in price offered by the Network, I couldn't even pay the interest bill on the purchase cost of the system.
If I put in a smaller 'residential' system, I would be eligible for the bonus feed-in tariff, which comes to almost the same 'income', on a vastly smaller cost-base. The small system would cover my needs, but would do nothing to improve the 'greenness' of the overall grid or lower the networks costs (they have to add more capacity as the population rises).
The coal demand by region chart suggests China will be burning 3 Gtpa of coal in 2030. If China is about to experience a local production peak that will have to come from imports. In fact there are major new coal developments in Australia aimed at supplying China, one project is actually called China First. This seems hypocritical since Australia is introducing a domestic carbon tax on July 1st of $23 per tCO2. It seems helping global emissions is OK however.
The first problem is a possible backlash against this by the Australian steel industry and others. The second problem is the amounts of coal exported to China will be at best 100-200 Mt not a major fraction of 3,000 Mt. Therefore I'm not sure I can agree with the chart and incidentally this (China coal burning) represents a major chunk of global emissions.
They are opening up major coal mining in inner Mongolia. IIRC (my memory is pretty fuzzy here), several hundred million tons per year (as in a little short of a GT/a)).
eos,
Your memory is fine!
http://www.economist.com/node/21543113
Some day we will run out of new frontiers of untapped easy-to-extract resources.
Here's hoping for a declining total population in the not-too-distant future.
Australia is the major global coal exporter, since most countries have been consuming their own production. The appearance of China on the import market has had a massive effect on the coal market, after having its consumption rise above what domestic resources could supply. International demand shot up extremely rapidly, much faster than Australian supply could respond. The result was a bidding war. In the next few years, more coal mines will come on line in Australia, and some other countries will also begin exporting meaningful amounts of coal, so prices should drop in the medium term.
Of more medium term interest is coking coal, for use in steel-making. Global resources of this extremely high quality coal are already limited and I doubt there is potential to increase production much further. They are already starting to go down the quality slope and begin using PCI technology. From what I understand, PCI requires coal that, while lower in quality than coking coal, is higher than required for steaming coal. PCI coal therefore brings a price intermediate between that of coking coal and steaming coal.
In the long term, the world is working its way through coal reserves by giving priority to development of the highest quality mines. As time goes on, therefore, the curve on the graph of the energy content of coal produced will be lower than the curve on the graph of coal production itself. Peak coal energy will come before peak coal production. This means, of course, that the greenhouse implications of coal fired power stations will deteriorate further. And that's something I find scary indeed.
Ablokeimet,
Your assessment of the world coal industry is entirely correct. It is, after all, no different than any other item produced by the world's extraction industries. The lowering of the energy content of the coal mined is somewhat similar to the concept of EROEI, except that it is far more real. You only have to compare the price/energy content of Powder River Basin coal to Appalachian coal to see what's going on. Try looking at railroad statistics to see how far East they are actually shipping PRB coal. It's getting shipped closer and closer to Appalachia, but it also goes west to China. But, more and more higher grade App. THERMAL coal is also getting shipped to Europe, as low grade MET coal. Yes, we are shipping coals to Newcastle! It is all explained at the coal company websites.
IRD,
Yikes! Higher coal prices couldn't possibly result in greater coal production as a natural consequence could it? The biggest headache for THERMAL coal investors these days, is potential world natural gas production. In the U.S. more and more electrical generating plants are switching from coal to NG, because of the price DIFFERENTIAL between coal and NG. I sure hope that I don't have to explain to you that U.S. thermal coal prices are down, because of a U.S. NG glut, that is pushing NG prices way down.
The anecdote at the beginning of this article (...Greeks who are being starved of affordable fuel are starting to chop trees down for warmth and income) stirred memories for me. I was living in a coal mining village in Yorkshire during the year long 1984 coal miners strike. The NCB had cut off the miners tonne of coal per quarter allowance, and Margaret Thatcher's govt denied them any welfare.
As a result during the hard winter the trees around the pit villages were decimated for firewood. The colliery spoil tips were also mined for nuggets of coal amid the dirt. And this was in a mature western democracy.
If we get to 8+ billion and energy production falls off a cliff then it won't be pretty...
Don't worry, as the trees start to be cut down the price of trees will rise, increasing the amount of trees available to be cut down.
Also, the price mechanism will kick in, efficiently pricing some people out of the tree market, meaning those trees will go to the person who gains the highest marginal utility from burning trees. In other words, they will probably be converted to fuel for an SUV, while poor people freeze. This will help keep the markets in balance by removing demand.
AdTheNad,
Sadly, you've got it exactly right.
And not forgetting that the high price of wood will allow for substitutions to flourish, so we can switch to burning economists.
Newbonic- during the depression years the spoil tips were dug over for scrap coal, and people walked the RR tracks to pick up dropped from the engines. The biggest gain in efficiency would be to switch to Diesel for autos. Didn't Herr Diesel's engine run on coaldust. Flour Mills have to be careful of dust, which can explode. Could we run Diesels on corn starch, and cut out the ethanol process?
No, Diesel's first attempt at a coal dust engine exploded when he tried to start it!
The History of fuel Injection
It is widely stated that his first engine ran on peanut oil, but this is not true either, though there was a famous demonstration, made by the French gov, of a diesel engine running on peanut oil at the 1900 World Fair.
Diesel would later write about this;
Pretty relevant for being written 105 years ago, Id' say.
Rest of that article here;
http://www.biodiesel.org/resources/reportsdatabase/reports/gen/20011101_...
There have been modern experiments to run diesel on coal dust, as a coal and water or coal and oil slurry - all have been unsuccessful, resulting in extreme engine wear. Much better to gasify the coal, run the engine on that, and leave all the nasty stuff in the ash.
Most of what you write is not correct. I first wrote about it on Feb 5th 2007 and have several times since. GE has hundreds of track hours for a diesel engine running on coal water and the NCB had at one time a car going around the UK running on coal:water. The coal needs to be less than 5 microns but that is really easy to do these days.
IIRC the problems are engine wear and emissions.
Didn't the Hirsch report advise not to wait until peaking?
BP knows shit is inbound yet they are trying to keep up
appearances by shelling out these hilarious long-term energy trend projections.
I bet they don't believe a word of it themselves.
The Hirsch report advised many things. Considered how long ago peak oil happened, and how the effects weren't quite what was expected, I'm not sure his conclusions are any longer apropos.
With China's plans to reach 200GWe nuclear by 2030, double that of the US currently and 20X what China has installed today, I fail to see how BP concludes the nuclear share will stay flat.
http://www.world-nuclear.org/info/inf63.html
Falstaff: Lets hope that the nuclear share falls substantially while there is still some fossil fueled generation on line. If all a network ends up with is a set of nuclear power plants then the end will be very messy:-
Background:
The recent events at Fukushima and in USA have highlighted how dependent each nuclear power plant is on continued supply of electricity from outside the plant site for operation and for safe cooling of reactor fuel loads and spent fuel to the point where the fuel can either sit in a quiescent water pool or in dry cask storage for perpetuity without any further need for external power to keep it from presenting a hazard to the 'downstream' environment.
My understanding is that from the time the control rods go in until the time the fuel load is in this truly cold state no longer requiring external power is many years. Perhaps several decades if, as at Fukushima Daiachi unit Four, the rods are near new fuel and/or contain mixed oxides (MOX).
In a number of countries (France, which generates 70% of its power from nuclear plants, and Japan, for example) any political decision to shut down the countries nuclear power plants (perhaps made democratically, as in Germany, or forced in Japan if the economy collapses) presents the technicians with an interesting game of musical chairs, or (when you think about it a bit more) a game of deliberate Mutually Assured Destruction.
Scenarios
Consider the simple 'mind game' of a network provided from say four mutually supporting nuclear power plants (NPPs). #4 and #3 shut down ok as they have two others to provide their make safe power. But when #2 shuts down it immediately takes #1 with it (since #2 was providing external power to #1, and vice versa). And then all four plants go onto local emergency generators for as long as each plant's local fuel reserve holds out. Days, or hours. After that it has to be 'Fukushima' for all of them.
Consider France. As each nuclear power plant (NPP) is shut down for decommissioning and make-safe, the responsibility for its continued external power supply shifts to the remaining NPPs and to the other generators amounting to just 30% of current generating capacity. As the NPPs are progressively shut down then the national demand on the remaining generators increases and the overall stability of the network becomes more precarious. At some point they will end up in the situation where if/when they shut the next NPP down they will not be able to guarantee the supply of power to consumers at all. Not to domestic or industrial consumers or to the many NPPs relying on that external electricity for make-safe power. If that next plant closes, or something else goes awry with the remaining grid, then it can only lead to prompt and multiple Fukushima lookalike events at every NPP in the network.
Oil and Electricity are Mutually Dependent
While the risk of 'normal' random disasters is high and the outcomes appalling, the issues and risks relating to the deliberate shutdown of multiple nuclear power plants within a mutually supporting electricity network have not in my view been properly appreciated.
This threat is heightened by the increasing fragility of global oil supplies. At the most optimistic end of the spectrum is the acknowledgement by IEA and others that major oil exporting nations like Russia and Saudi Arabia will be using all their production internally by the year 2025. So the rest of the world will be short of oil long before then; and long before any spent fuel pond in the world stops requiring external power for cooling
As found in Europe and Great Britain in the fuel blockade of September 2000; when workers have no petrol in their cars and coal trains no fuel in their tanks then key infrastructure like electric power generation is threatened with abrupt shutdown within a couple of weeks. At nuclear power plants a loss of the local electricity grid means there are no fuel pumps operating at fuel depots in the area to replenish the tanks of the fossil-fuel-powered standby generators or pumps, there are no communications and there are no emergency response vehicles on the road to bring additional staff to carry out works on the site, or to facilitate the evacuation of the local population.
Therefore in my view while the risks presented by things going wrong at nuclear power plants and by the present spent fuel disposal arrangements are of grave concern, the currently under-appreciated risks involved in the deliberate shut down of a national grid's nuclear power plants and the direct consequence of total disaster at every nuclear power plant in the network is of the utmost significance.
Actions
Avoidance of this risk entails (as one approach) the prompt development and deployment of methods for taking individual 'hot' fuel rods out of recently control-rods-in reactor pressure vessels and out of spent fuel ponds and putting then into some type of individual cask system that can use natural black-body and convective air cooling to let the rod lose energy without any external power requirement. A star-shaped cross section casing filled with molten lead into which the rod is placed could be a starting point. Ionising radiation levels around the cask may remain high, but particulate emissions of radioactive materials to the wider environment are eliminated.
Per rod this may be an expensive system, but per human life saved it will be priceless.
Of course a declaration by all states of the UN for 'Rods In and Welded in place' at all reactors on Earth by next Friday would be welcome. We live in hope.
nigwil, you've hit on and well explained a predicament that I've been musing on/worrying about since the events at Fukushima and the "slow tsunami" extreme flooding on the Missouri River in the American midwest last spring. The latter unexpectedly severe weather situation threatened a couple of NPPs there with potentially disasterous consequence for the argricultural midwest and river communities downstream, had the flood waters risen a few more feet. Media news was downplayed in both cases with the latter one so complete that few even now know about it and have therefore most certainly not considered the potential dangers.
What we are witnessing with respect to oil and other resource depletion is denial and coverup in the near-term interest of continuing BAU for as long as possible. If this industrial-government policy of denial continues until grid and transport issues become serious, then the scenarios you outline above become all too real and too late to avoid. If even a few more nuclear meltdowns occur, it could be crippling to a society under stress from other resource depletion related issues. Imagine France's or North America's "bread baskets" contaminated, or continued problems in East Asia spreading more fallout upsteam of North America and Europe, West Asia.
Yet they all desperately need power to replace dwindling fossil fuels. I keep thinking of 'the monkey and the gourd' as analogy.
It is more denial and ignorance than cover up. Look at our politicians. They don't understand evolution nor believe it. They can't fathom climate science. They invade countries based on WMDs in their own minds.
There is no cover up . . . the ignorance is out in the open.
No, only five years. Or even less; simply put less spent fuel in a dry cask, and you'd reduce the heat being generated proportionally. And new fuel is *less* radioactive than spent fuel, not more; and MOX doesn't make a difference -- the heat and radioactivity comes from the fission products, not the uranium or plutonium.
The main issue here is cooling the reactor core itself with emergency power given a grid outage, and there 30-60 days is enough. The decay heat at the instant of fission shutdown is ~6% of operating fission power. One hour after shutdown the decay heat power is at 1%, and 10 days after the power is 0.1%. One hour after shutdown at Fukushima the tsunami hit knocking out the emergency cooling. Continued cooling for 30-60 days is enough with a full load of water to allow ambient cooling to dissipate the last 1MW or so. If spent fuel was stored in large pools (unlike Fukushima) then it wouldn't be a problem either.
I see the major problem as the PWR design itself as not being failsafe (not the supply of diesel fuel). There are several designs available that are failsafe, allowing walk away after shutdown, esp. molten salts.
When the first commercial jet aircraft came out there was a crash once a month or so, even among the small numbers. When the first large bridges were built in the 19th century, one collapsed somewhere in the world every month or so until Roebling came along and actually mastered the suspension engineering. Unfortunately modern reactor design is stuck in 1950's technology thanks to government agencies like the US's NRC, which has never approved/licensed a reactor proposed since its creation in 1975. So I suspect we continual to see the odd recurrence of nuclear disasters.
Thanks Falstaff. It is difficult to generalise I know, but when one looks at the SFP temperature charts for Fukushima Daiichi and Daini they all gain 5 to 10 degrees C per day, meaning that in 5 to 10 days without water input they are boiling dry and the horsemen of the apocalypse are trotting around the neighbourhood. And these pools have fuel that is many years old.
Around the world some plants will have SFPs that are less heavily loaded some more. But regardless of the variability, overall a Nuclear Power Plant is just not a good neighbour to have upwind of anybody you love eh?
That's a curious perspective. Yes the soil contamination and such adjacent Fukushima will be a burden there for some years. By contrast however, Japan suffered some 13,000 people killed from the tsunami, the infrastructure of much of the northeast coastline wiped clean, but not a single death from the nuclear accident, not even from the chemical explosions. Meanwhile coal plants in Japan will continue to cause their 10,000 or so premature deaths per year from various toxic emissions. From that fact base, you choose not to suggest the population relocate inland, not to call immediately for sea walls, nor even improved nuclear plant design, but instead choose to throw terms out like 'apocalypse' about nuclear power?
Regards the cooling pools, a the pool area can always be made large enough to force the temperature increase to zero by ambient radiative/conductive/convective cooling.
Regards the grid connection, again I think passive failsafe designs should be introduced. Still, the grid is required only for operation not shutdown. Consider the scale of the pumping power required to handle decay heat - its in the hundreds of kW at best, so backup diesels can handle the job without the grid, reliably it seems if they're installed with some prudence, unlike at Fukushima. That is, something on the order of one nuclear reactor could run the pumps for all of the worlds nuclear plants.
Ah Falstaff - I think I am beginning to see where you are coming from. But I will let that pass.
Of course prudence and historic knowledge dictates that people should live above the tsunami line. There are ancient markers of that line all over Japan that have been ignored. But you are saying, I think, that since approaching 20,000 souls were lost in the tsunami that we should give nuclear our blessing. I'm have reason also to doubt your assertion that 'not a single death' has arisen from the nuclear accident. Even Tepco would be forced to disagree with you there.
Cooling ponds SHOULD be made large enough to cool their contents naturally. But they are not anywhere and in the case of Fukushima such additional construction has proven to be tricky in buildings destroyed by explosions, weakened by the succession of earthquakes and aftershocks and with spent fuel ponds located 30' up in the air suspended in the ruins among promptly fatal levels of radiation.
And yes passive fail safe designs SHOULD be introduced, but they are not. And the diesels will last as long as the diesel in their tanks, and then the national guard will have to fight their way through fuel-hungry crowds to bring diesel from afar to keep them running. Wont happen for long - certainly not for the time it takes the reactors and SFPs to cool to ambient.
So in theory everything is fine. But Fukishima, San Ofre, Three Mile Island, Chernoble, Byron, that NPP on the Mississippi and many others show the theory is not being put into practice - and therein lies the rub. I don't want my children and grandchildren exposed to this unnecessary risk. Rods in, and shut them all down. Now. I'm done here.
No.
And no they don't.
Thanks Bill. Noted. SInce I guess its fairly rare for a 'spent fuel pond' to have 'new' fuel rods therein we can be pretty sure that the bulk of the SFPs on the Earth have pretty decent loads of fission products in them - enough to sustain my concerns at full strength anyway!
When I look at the records of where reactors are working around the world
http://en.wikipedia.org/wiki/List_of_nuclear_reactors
an awful lot of them are in places where even today the local electricity distribution grids are in poor shape, and the political and social situations are not good. When a terrorist/nationalist group decides to drop out a substation I doubt that they worry that there is a NPP relying on those feeds for off-site power. Most of those nations do not have the financial or technical resources like Japan, Russia or USA, and the results of an 'Ooops!' moment could be somewhat far reaching.
And....all this still applies to a predictable and somewhat stable geo-political world going forward...despite the elbowing in the oil chow line. I am referring, of course, to an event that is more likely than not, and referenced by Panetta's comments on Iran the other day.
BP forecast unrealistic, or simply pure imagination? Until the supply countries are stable and cooperative, forecasts are simply not relevant. With energy, money, power, and human nature all part of the recipe, plus diverse cultures, religions, and inequality stirring the pot, I really must wonder why these forecasts don't begin with a caveat in bold caps?
Thanks for the numbers and comments. The member contributions/comments worth reading; BP forecast pure fantasy.
Respectfully, Paulo
A link to our "Gap" charts, showing the growing gap between the rates of increase in production/exports, from 2002 to 2005, versus 2005 to 2010:
http://www.theoildrum.com/node/8729#comment-859013
For example, the ANE chart follows. ANE = Global Net Exports (GNE), less Chindia's combined net oil imports
There are about 157 (net) oil importing countries in the world. At the 2005 to 2010 rate of increase in the Chindia region's combined net oil imports as a percentage of GNE, China & India would consume 100% of GNE by 2030.
Stein's Law: If something cannot go on forever, it will stop?
For a little while I've been meaning to reply to Westexas on his "Available Net Exports" concept. Basically, I don't think it's sound.
For quite some time, Westexas has been contributing on the topic of "Exportland" and arguing that the crunch in oil importing countries will come from a decline in global net exports rather than declining global production. To an extent, I agree with him on that point. This is because oil exporting countries react to increasing oil prices differently from oil importers.
The way in which oil exporters react to increasing oil prices depends on whether domestic oil prices are kept down at cost levels or are allowed to rise to that of the world market. If domestic prices are subsidised, oil consumption will rise rapidly. Profits from oil exports will flood the country with money and economic growth can finance a lifestyle based on high oil consumption. The plus side of this is that it is an obvious and popular policy. The down side is that it will deplete the national oil reserves quickly and bring forward the day when oil production can no longer be kept up to the level where exports are possible.
A different model is to let oil sell on the domestic market for the world price. This will conserve the nation's patrimony and allow more to be exported. Therefore, ultimate returns from the oil will be maximised. It will also ensure that development takes place on the basis of the real costs of energy and society won't find itself locked into a high consumption economy when local production declines. In this scenario, however, oil consumption still rises faster than the rest of the world, because high prices boost the economy for as long as oil is being exported. Economic growth will be higher than in importing countries, thus putting oil consumption on a higher curve than in those importing countries. The Exportland model shows that, even with global prices in exporting countries, net exports decline faster than production.
So far, so good. Westexas, however, takes the Exportland model a step further - and, I contend, a step too far. There is no reason to say that China & India will have some priority access to oil exports. If they are paying the same price as other importing countries (and they will be, with perhaps trivial exceptions), their economies will be affected by the same dynamics of supply and demand as net exports decline. They will bid on the world market for oil and the price for everyone will settle at whatever point balances demand with declining supply. Certainly, these countries will not be as severely affected by rising prices, because they are not so oil-intensive as OECD countries, but that is a matter of the differing social effects imposed by different oil intensities, not whether they will respond to the price signals sent by declining net exports.
In short, I think the Net Exports graph that Westexas publicises is an important piece of work. The Available Net Exports graph, howevever, isn't.
It's always helpful to look at actual data. We have seen two recent Brent crude oil price doublings, from $25 in 2002 to $55 in 2005, and then from $55 in 2005 to $111 in 2011.
While it’s true that we don’t know what will happen regarding consumption, we do know what has happened. Normalized oil consumption for China, India, Top 33 net oil exporters and the US (Total petroleum liquids, BP, 2002 consumption = 100):
Based on the BP data base, from 2005 to 2010, the Chindia region's net oil imports increased at 7.5%/year, while US net oil imports fell at 3.6%/year (primarily due to reduced consumption). If we look at 2004 (prior to hurricanes) to 2010, 84% of the decline in US net oil imports was due to reduced consumption, as the US was forced to consume a declining share of a declining volume of GNE, with many developing countries, e.g., China & India, consuming an increasing share of a declining volume of GNE.
That doesn't address the point raised.
To put a finer point on it: why say "the US was forced to consume a declining share"?? Higher prices induced different economic choices: Maine homeowners installed insulation and switched to natural gas; CAFE MPG regulations rose; taxidrivers bought hybrids; etc, etc, etc. IOW, the market worked.
westtexas,
Would you mind explaining why you are using age old data 2002-2005, then extrapolating that data to attempt to arrive at an accurate number for the year 2030? Why don't you first update all your data to at least 2010, then you would be operating off of something called historical facts, instead of extrapolations. All you are doing here is extrapolating off of extrapolations. I can only assume that this chart originates from all the way back to the year 2005. I haven't even bothered to consider what subject matter this chart even covers, as your methodology does not appear to be at all scientific to me. This is what I meant in a previous post about, how I can't crack your code of understanding. All I can pick up is misunderstandings of a world of logic, that most level headed people happen to live in on a daily basis.
As noted above, I believe that I was stating a "If, Then" scenario based on the 2005 to 2010 data:
While I think that it's unlikely that China & India will actually be consuming 100% of Global Net Exports by about 2030, I think that the trend is pretty clear--developed countries like the US will, in my opinion, continue to have to get by on a declining share of a declining volume of Global Net Exports.
I would also assume that global oil production would begin it's terminal decline before 2030 and when that happens then the decline in Global Net Exports will accelerate. This decline in global oil production would also result in large price increases, price increases that will be recession inducing and this would effect the finances of importing then exporting nations which would effect the amount of available exports. I know, lots of ifs in that statement but it is reasonable to assume that this decline in Global Net Exports will accelerate much faster over time especially if the accompanying recessions has an effect on the amount of investment that can be made to bring new oil fields online.
Wow! As soon as 18 years from now? According to JODI the peak occurred in 2006 and according to the EIA the plateau began in 2005. Also net oil exports peaked in 2005. Peak oil is here now. Terminal decline in net oil exports began in 2006.
100$ oil has brought out every drilling rig available. Old fields are being drilled again and again and every ounce of oil is being sucked off the top of those old fields. New fields are coming on line at a rate of one barrel for every four barrels produced. It's all over but the crying.
Ron Patterson
Darwinian,
Oil no longer means oil. It means "All Liquids." Whether, what you are saying is actually true or not, is not very relevant to present day, February, 2012, oil related issues. You are only arguing an outdated straw man's argument. These issues were all decided upon years ago.
And a Budgerigar is a Cockatoo.
With enough refinement a Cockatoo can be converted into oil or all liquids which are the same thing. If you look hard enough you will find there is oil or potential oil sources literally everywhere you look. We just need the ingenuity and the removal of pesky regulations to gain access to these unconventional reserves.
the removal of pesky regulations to gain access to these unconventional reserves.
Here we go again with that false notion!
My tongue was planted firmly in cheek with that joke. It was kind of a lampoon on what the MSN says. Off course if we actually wanted to convert wildlife and people into oil we would need to change some regulations but the solution would solve two birds with one stone. At the very least this move would expand our reserve base which is great news for public companies who need to sell their stock on Wall Street. We all know bankers, bonuses and share prices are more important than people these days...
That's another problem that's come up recently; it's so hard to tell someone's joke from reality!
west,
Yes, but as I pointed out you are basing your 2005-2010 "data" on an extrapolation of 2002-2005 information, that may or may not be, actual data. It is your methodology that is in question, not any specific data points, or conclusions. Please deal with this issue head on and stop beating around the bush, as if you have something to cover up or something, or that is the only conclusion we others can logically come to.
?
How very odd. The ELM model is basically highlighting the outcome of a mathematical function, in just the same way as Bartlett's examples of the exponential function.
As for the logic - it makes perfect sense to me, and logic has been my job for the past 27 years.
Which, of course, points out the flaw in references to "Bartlett's examples of the exponential function": they're mostly not realistic. Most of the time nobody is expecting such trends to continue forever.
I haven't seen comment yet on the CO2 emissions implications of BP's projections, which are addressed in pages 80-83 of the report. They suggest 3 possible futures on page 80, "Base Case", "Policy Case", and the improbable "IEA 450 [ppm CO2] Scenario".
The "Base Case" is the outcome of the projections from the earlier sections of the report, with production of all forms of energy (even oil) relentlessly increasing, and assuming no global agreements on CO2 emissions reduction. "Policy Case" projects CO2 emissions plateauing around 2020 and beginning to decline slowly after that; the "450" scenario peaks around 2015-2016 and then declines more sharply. Presumably the latter is based on an IEA recommendation of what's required to (possibly) avoid catastrophic climate change (never mind James Hanson's far more aggressive 350 target).
All experience thus far with global industrialization leading to accelerating (2010) rates of C02 emissions and atmospheric accumulation, and our species' lack of success in concluding any binding or enforceable agreements across nations, suggests we're nowhere near achieving a "Policy" scenario, let alone the "450 Scenario" best-case. This is important, and I cannot be optimistic. For more evidence, see the NY Times article today on Tea Partiers in the U.S. trying to link local "green" projects - like bike lanes - with the UN's secret agenda of global domination and "One World Government". The stupidity and ignorance displayed is frightening.
Dick Lawrence
Dick:
Grin, that's 'cos I keep out of trouble here by posting about those topics at Bit Tooth.
And when peak oilers discuss the same thing, that is all well informed and heart warming? Conspsiracy cranks are conspiracy cranks, regardless of what other groups they happen to revolve within. Some are Tea Partiers, some are peak oilers, some are survivalists and rapturists and occupiers and back to nature, free love, peace for all and who has some weed enthusiasts. I'll bet there are even some democrats in the mix.
The inter-relations of the resources are overlooked in these so-called forecasts. For instance, Canadian oil sands are touted as having 145 billion barrels of oil. That's great! But it takes natural gas to covert the sand into oil. Canada has 55 trillion cubic feet of natural gas. That amount of natural gas is sufficient to convert only 1/4th of the oil sands into oil. And that assumes they use None for internal use (currently 7.7 billion cf/year) or to export to the U.S. (about 7.5 billion cf/y).
If you look at a scenario where they use 1/3rd of their available natural gas to produce oil sands then they can provide the U.S. with 4 million barrels per day for less than 10 years. They they are OUT of Natural Gas! So, it's easy to say how much "unconventional" oil there is. But it's quite another to actually produce it by using other fossil fuels that are also limited.
See the details in this video at Sanford http://www.youtube.com/watch?v=KTsYjRqPmNA