Kunstler: The Long Emergency - the crash after Peak Oil Production -

[Guest guest]

It seems the bottom line is WHEN is Peak Oil, Is it now , or 20 years from

now.

 

Another view:

 

The Mitigation of the Peaking of World Oil Production

Summary of an Analysis, February 8, 2005

 

Dr. Robert L. Hirsch

 

 

A recently completed study for the U.S. Department of Energy analyzed viable

technologies to mitigate oil shortages associated with the upcoming peaking

of world oil production. Commercial or near-commercial options include

improved vehicle fuel efficiency, enhanced conventional oil recovery, and

the production of substitute fuels. While research and development on other

options could be important, their commercial success is by no means assured,

and none offer near-term solutions.

 

Improved fuel efficiency in the world’s transportation sector will be a

critical element in the long-term reduction of liquid fuel consumption,

however, the scale of effort required will inherently take time and be very

expensive. For example, the U.S. has a fleet of over 200 million

automobiles, vans, pick-ups, and SUVs. Replacement of just half with higher

efficiency models will require at least 15 years at a cost of over two

trillion dollars for the U.S. alone. Similar conclusions generally apply

worldwide.

 

Commercial and near-commercial options for mitigating the decline of

conventional oil production include:

1) Enhanced Oil Recovery (EOR), which can help moderate oil production

declines from older conventional oil fields;

2) Heavy oil/oil sands, a large resource of lower grade oils, now produced

primarily in Canada and Venezuela;

3) Coal liquefaction, an established technique for producing clean

substitute fuels from the world’s abundant coal reserves; and

4) Clean substitute fuels produced from remote natural gas.

 

For the foreseeable future, electricity-producing technologies, e.g.,

nuclear and solar energy, cannot substitute for liquid fuels in most

transportation applications. Someday, electric cars may be practical, but

decades will be required before they achieve significant market penetration

and impact world oil consumption. And no one has yet defined viable options

for powering heavy trucks or airplanes with electricity.

 

To explore how these technologies might contribute, three alternative

mitigation scenarios were analyzed: One where action is initiated when

peaking occurs, a second where action is assumed to start 10 years before

peaking, and a third where action is assumed to start 20 years before

peaking.

 

Estimates of the possible contributions of each mitigation option were

developed, based on crash program implementation. Crash programs represent

the fastest possible implementation – the best case. In practical terms,

real-world action is certain to be slower.

 

Analysis of the simultaneous implementation of all of the options showed

that an impact of roughly 25 million barrels per day might be possible 15

years after initiation. Because conventional oil production decline will

start at the time of peaking, crash program mitigation inherently cannot

avert massive shortages unless it is initiated well in advance of peaking.

Specifically,

· Waiting until world conventional oil production peaks before initiating

crash program mitigation leaves the world with a significant liquid fuel

deficit for two decades or longer.

· Initiating a crash program 10 years before world oil peaking would help

considerably but would still result in a worldwide liquid fuels shortfall,

starting roughly a decade after the time that oil would have otherwise

peaked.

· Initiating crash program mitigation 20 years before peaking offers the

possibility of avoiding a world liquid fuels shortfall for the forecast

period.

 

Without timely mitigation, world supply/demand balance will be achieved

through massive demand destruction (shortages), accompanied by huge oil

price increases, both of which would create a long period of significant

economic hardship worldwide.

 

Other important observations revealed by the analysis included the

following:

1. The date of world oil peaking is not known with certainty, complicating

the decision-making process. A fundamental problem in predicting oil

peaking is uncertain and politically biased oil reserves claims from many

oil producing countries.

2. As recently as 2001, authoritative forecasts of abundant future supplies

of North American natural gas proved to be excessively optimistic as

evidenced by the recent tripling of natural gas prices. Oil and natural gas

geology is similar in many ways, suggesting that optimistic oil production

forecasts deserve to be viewed with considerable skepticism.

3. In the developed nations, the economic problems associated with world

oil peaking and the resultant oil shortages will be extremely serious. In

the developing nations, economic problems will be much worse.

4. While greater end-use efficiency is essential in the long term,

increased efficiency alone will be neither sufficient nor timely enough to

solve the oil shortage problem in the short term. To preserve reasonable

levels of economic prosperity and growth, production of large amounts of

substitute liquid fuels will be required. While a number of substitute fuel

production technologies are currently available for deployment, the massive

construction effort required will be extremely expensive and very

time-consuming, even on a crash program basis.

5. Government intervention will be essential, because the economic and

social impacts of oil peaking will otherwise be chaotic, and crash program

mitigation will need to be properly supported. How and when governments

begin to seriously address these challenges is yet to be determined.

 

Oil peaking discussions should focus primarily on prudent risk management,

and secondarily on forecasting the timing of oil peaking, which will always

be inexact. Mitigation initiated earlier than required might turn out to

be premature, if peaking is slow in coming. If peaking is imminent, failure

to act aggressively will be extremely damaging worldwide.

 

World oil peaking represents a problem like none other. The political,

economic, and social stakes are enormous. Prudent risk management demands

urgent attention and early action.