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peak oil production in 2009? - what next?
18

peak oil production in 2009? - what next?

peak oil production in 2009? - what next?

(OP)
There are rumblings that the peak in world oil production may occur in 2009, and that the demand for oil is increasing very rapidly in developing countries ( China , INdia) .

There does not seem to be any effort being made in the USA to reduce the rate of consumption or to reduce demand. Simple efforts such as the following are not being used :
a) increase CAFE ( auto gas mileage )
b) improve mass transit in major cities ( Seatle, Houston, LA, etc)
c) propaganda which is aimed at changing attitudes toward energy consumption.

What is the most likely end result in 2009 if noone takes steps to prepare for this event?

RE: peak oil production in 2009? - what next?

With the way things are going, I think a major war with China is strong possibility within my lifetime.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

davefitz,
Nuclear.  Elect me and I'll start building those plants now!  Seriously, I would look hard at nuclear.  Pretty good safety record.  Acceptable environmental impact, IMO.

StressGuy,
Why?

RE: peak oil production in 2009? - what next?

(OP)
funnelguy;
Nuclear might address primarily power and perhaps ocean transport, but power demands can also be augmented by coal or natural gas. The oil peak ( and decline) primarily impacts transportation, mainly auto, truck, rail,and air transportation.  Nuclear is unlikely to impact those in any significant degree, except for some proposals for  generating hydrogen from nuclear power plants.

 Anticipating a supply - based shock to the market, it would suggest a quick decline in the use of personal autos and the suburban lifestyle- but perhaps would add an impetus to tele-commute  and tele-conference. Certain markets would be hard hit- SUV's, power boats, etc.  and all the industies that cater to them.

RE: peak oil production in 2009? - what next?

The simplicity of it is, it's all political.  When's the last time a government made decisions based on science and engineering?  Energy shouldn't be the main concern.  Nuclear will always be an option for us.  We will always get more energy from nuclear power with less waste than any fossil fuel.  When the oil is gone, what will become of plastics?  We are at such a state where it is cheaper to throw things away than to recycle.  And money talks.  There's a lot of propaganda that suggests that the fuel efficient technology is very much a reality, at least for automobiles.  Great for the environment, but what would it do socially?  All domestic jobs based on the oil industry would face a catestrophic layoff.  Corporations would surely fold.  All international relations based on oil import/export (food for oil program) would die.  Any country whose economy is based solely on natural resources would surely crumble.  I'm all in favor of a greener planet, but the reasons above pretty much tell why engineers don't make the decisions.  

By the way... we as people have no idea how much oil is left in the world.  We speculate... but we don't know.  

aspearin1

RE: peak oil production in 2009? - what next?

4
Nuclear? When your reort on the safety issue you are talking about fission reactors and that begs the question: What about Three Mile Island or Chernobyl? With or without a good safety record, its like air crashes. Air travel is pretty well the safest way to travel by far but one air crash is better than two hndre fatal car crashes from a new point of view, nuclear has the added dimension that people can be frightened into expecting children born with two heads or something. An emotive area. Just mention that the lobsters and other fish living in the nuclear power station cooling water outflow are twice the size they are elsewhere and everyone thinks mutation, not that they are benefiting from higher water temperatures. The higher incidence of Leukemia in families living around one nuclear power station in the UK led to the Pavlovian response that this was due to radiation posining. In fact the higher incidence of Leukemia is said to predate the building of the power station.
There ain't no such thing as a small nuclear incident. The press won't let there be. One thing you can count on, the less something is understood the more the pathological fear of oit in the populace at large. Statistics have no place in this logic.
Even so, I agree but only in so far as i see Nuclear fission reactors, like any other fuel source as but a step on the road to clean energy. For me this has to be nuclear fusion. The only question is, how badly will government mess up this development. Big is not necessarily better. Do we want big central power plants with a messy distribution system or lots of small local power plants, or even, ultimately, power plants sufficient for one house or one machine. One thing i could pretty well guarantee, we won't stop using oil because it runs out, but because we've found another fuel. There is still plenty of coal in the ground that will never now be extracted. Today we have more identified oil reserves on tap, so to speak, than at any other time. OPEC has a struggle to limit production to keep the price up where they can all make a profit. There are enough Venuzuelan orimulsion reserves for centuries, i am led to believe. Let's try and avoid some of the worst of the Club of Rome type prophesies of doom and take a good look at oil. As Russia begins to develop its known resources and to add value, and as secondary processing becomes even more prevalent we can expect that in the next few years we are going to see an even bigger glut of fuel available to us. Then factor in the Iraq oil which is flowing again (at above quota). OPEC needed Iraq oil like a hole in the head. Don't forget that oil exploration isn't just about petrol(Gas)its about petrochemical. Petrol is not said to account for much profit but it does pay for exploration and refining. Out of each barrel comes the high value products like the plastic industry feedstocks, Propane, Ethane, ethylene etc. If we take away petrol production, how profitable will oil exploration and refining be then? Take a look around at every day items and figure out how many you would have to do without if we do away with oil. Sure, we can use modern chemistry to produce synthetics. I guess we could start with grain alcohol instead but at what cost?
ANyway, yes we will stop using oil. But all in the fullness of time. Once the future is seen, development toward it will grow. Take a look at the interest in fuel cells and "green" energy (offshore wind currently just about qualifies, or at least, until they find out the downside of that). Ultimately we cannot escape the fact that what ever we do, the more of us there are the more power we use and hence the more heat we generate and never mind about the other effects of energy production. We can work at reducing CO2, NOX etc. but energy = heat. Best we don't lose sight of energy efficiency as a key goal. But developments there come from demand. If the boss of IBM was right and there was only a market for 5 computers. Just think what you would be using now to respond to this post! The whole manned space program could be done on a single laptop today. Go back to the Betchworth Park codebreaking machines and figure out the equivalent you'd need of that technology to give you the computing power of an off the shelf PC today.
OK, rant over. I'll stop now.

RE: peak oil production in 2009? - what next?

Well Said, JMW!

aspearin1

RE: peak oil production in 2009? - what next?

We speculate on oil reserves however if I recall my grade 13 and University geography courses properly almost all predictions are based on OPEC oil reserves which are the easiest reserves to get at.

However we seem to forget ...
   ...when OPEC runs low there is still Canada, Brazil and Russia with their Tar sands to step up and fill the gap.  Yes they are not completely viable economically as commercial grade fuel for vehicles currently but when OPEC runs out .... who knows.  Also I remember that in 1990 it was estimated that the Tar Sands in Alberta contained as many barrels of crude oil as all of OPEC.  Brazil and Russia I believe were estimated as larger deposits.

Also as a side note Ontario is significantly nuclear in its hydro generation.  And has been producing nuclear power commercially since 1962.  It isn't like this is a new concept .... just expensive.

And finally we just successfully started integrating hybrid technology on production vehicles in the last year (thank you Toyota and Honda).  If you think about it that would be the beginnings of a 5 year plan to address issues in 2009 would it not?

To quote the must successful five book trilogy ever produced ...

Don't Panic.

RE: peak oil production in 2009? - what next?

And also don't forget the shale oil deposits. In addition to coal and tar sands.  In the long run, however, we will need a non fossil fuel source, such as fission or fusion.

Also, don't forget that nothing is without a price.  Fossil fuels = carbon dioxide emmissions to the atmosphere with greenhouse concerns (more carbon dioxide the less the hydrogen content of the fuel, thus natural gas is "cleaner" than coal); fission = radioactive waste; reduced energy availability = lower quality of life (perhaps more arguable than the first two); fusion (we don't have it yet).

RE: peak oil production in 2009? - what next?

I look on fossil fuels being non renewable as irrelevant. We have never yet exhausted a fossil fuel reserve. True, we or our ancestors have made serious inroads into the forrests but they can and will grow back but peat bogs are less at risk being depleted for fuel than for garden centres catering to TV gardening fads to keep unsuitable plants happy. Coal is still abundant in the ground.
We don't live just for the present, w hope to build an ever better life for our children and future generations. SOme people made a case that we will have used up the fossil fuels that our children may need and we have squandered it on ourselves. Nonsense. Fossil fuels are like capital investment. If we use them in miserly amounts then we delude ourselves that we preserve something for future generations. If we sue them as we are doing we create a situation where we do have to worry about the future because it could be our own personal futures that are affected and that makes us invest our capital in developing an environment and society where it is necessary to create new advances in energy production. Without we periodically scare ourselves we wouldn't be investing in Fusion research. If we hadn't had the 1970 oil crisis maybe there wouldn't even be the fussion research that we have now. Maybe we do need a further crisis to scare more more money and sense of urgency into this research. Mankind has a habit of rsolving problems giving the right incentives. Probably we don't have the right incentives just yet, we have too much oil. If we clamp down too hard for environmental reasons we may force ourselves into a dead end street. For example, we may end up too dependent on wind power which has a limit and we may force ourselves to limit our development based on this imposed energy limit. The earliest civilisations are the water cultures like that founded between the Tigris and Euphrates river, the Egyptian and Chineese. While water was the great spur to development ultimately it lead to stagnation because the societal dependance on rivers was a dead end.
We need to use any available fuels precisely because if we don't want to stagnate we need to generate appetites that can't, ultimately be satsified by fossil fuels or wind power or tidal energy, especially if we don't want to see our own planet littered with wind turbines. (the current disinclination to have wind turbines on land wil come under pressure in a renewable energy culture as popluation grows and demand grows to the point where offshore can't sustain it.) Far better we create an environment in which we just absolutely must have fussion power and in small pocket sized generators. Then we can tear down wind turbines, gas power ststions, mine all the installed distribution grids for the minerals invested in them, recover the millions of cubic feet of gas locked up in pipelines etc etc.

RE: peak oil production in 2009? - what next?

I think the thing that being missed in this little chat is demand.  Demand has grown steadily but has been limited to essentially a few major players (U.S., Europe, Japan, etc.)  China and India each have a greater population than that total number of major energy consumers today and they are both moving in the direction of heavy consumption like the West.   

I think I remember reading somewhere that the U.S. alone, with about 5% of the world's population, consumes about 30% of the world's energy output.  That percentage is going to drop, but only becuase globalization is going to lead to the rest of the world to consume at levels much closer to what we do now.

On the one hand, that's good.  It means that more of the world's population will be able to enjoy a western standard of living.  But, it also means that there's going to be a lot more competition for that energy.  Is the world capable of pumping oil to meet an energy demand about 10x what it is today?  That kind of competition for resources tends to lead to war.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

OK StressGuy, I understand your logic.  The first gulf war was created by Iraq seeking to control more resources in a situation similar to your scenario.

I do not see either China or India as starting a military conflict over these types of issues as long as their economies are intertwined with other "western" nations, and especially the USA.  The economic retaliation alone would serve as a significant deterrent.  I do not believe the world would stand idly by while any one nation sought to vanquish another for natural resources.

Anyway, I hope you are wrong for the sake of my children and everyone else's as well.

RE: peak oil production in 2009? - what next?

My prediction is that the next war will be more or less for water rather than oil. Any comments. India is heavily dependent on oil imports and there is no let up on it. Small reserves of off shore oil are being exploited. But it is nothing compared to the demand. Natural gas and tar sands may be the next candidate materials.

Nuclear option may not be very popular with the Greens raising objections. Hydroelectric power is my bet, small hydels at the tail end of 1-20 megawatts capacity.

RE: peak oil production in 2009? - what next?

The media tends to overplay the deaths from nuclear and virtually ignore death from conventional fuel technologies.

The worst nuclear disaster Chernobyl pales in regards to the number of deaths due to conventional fuels.

Think about some of the deaths that we accept from conventional fuels.

Black lung in coal miners
Pollution related deaths in places like Southern California
Industrial accidents in the oil and mining industry
Deaths due to the transportation of bulky fuels (coal trains and vehicles at railway crossings etc.)
Drowning in hydroelectric reservoirs

Environmentally what about inundated land for hydro reservoirs and open pit mines?

I could go on but you get the idea.

As far as waste material goes, if we took all the nuclear waste produced and spread it all over the world evenly the increase in background radiation would not be detectable.

I do not have any hard numbers buy I would say that nuclear is a much safer fuel technology than any other on a fatality per unit of energy basis.

Right now we take complex hydrocarbons that can be used for many purposes such as plastics and other beneficial products and burn them. Not only that but we burn them in a very wasteful manner. (Do you really need a SUV to go to the corner store?)

When will the world wake up and see the writing on the wall?
 

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion
www.kitsonengineering.com

RE: peak oil production in 2009? - what next?

Unfortunately, even hydroelectric power takes its toll on the environment.  Any human intervention changes the ecosystem.  There are studies devoted to fish habitat changes due to the implementation of a dam.  Since they are pretty low on the food chain, this then affects all animals feeding on those fish... etc... "The Greens" will find fault in everything.  You want energy?  Pick your poison!

aspearin1

RE: peak oil production in 2009? - what next?

I understand the smallmouth bass fishing is awesome downstream from Three Mile Island.  No, I am not kidding.  Also, the fishing near oil rigs in the Gulf of Mexico is very good.  Greens will not be happy until cloned T Rex's have eaten every last human.  

RE: peak oil production in 2009? - what next?

The fishing in the Gulf of Mexico near oil rigs is indeed good, but it has nothing to do with pollution, nor with the oil.

As it turns out, fish have congregated near the rigs because the underwater support structure of the rig is a great foundation from which sea life builds up reefs.

RE: peak oil production in 2009? - what next?

In the grand scheme of things we are all just a type of virus or parasite. It's kind of bleak, but it's what we are. Most viruses (virusi??) find a way to survive.

RE: peak oil production in 2009? - what next?

Hello,

JMW - Its not Betchworh park its Bletchley Park. The Americans made a film about how they cracked the Enigma machine, but it was the British.

On a lighter note, when oil runs out, why not use Guinness, same colour, same consistency and, in my opinion, probable the same taste.


RE: peak oil production in 2009? - what next?

We are ignoring one fundamental fact.

The supply of oil is finite.

The earth could be a sphere of oil floating in space and the supply of oil still would be finite.

Couple that fact with the fact that we are increasing our consumption of oil at roughly 7% per year and we have a doubling of consumption every decade.

You are engineers and you can do the math. A geometric increase in the consumption of a finite resource will eventually exhaust that resource. Every doubling of a geometric progression consumes the same amount of the resource as was consumed in the entire sequence up to the start of the doubling period.

That’s right. Every decade we consume as much oil as we have in history up to the start of that decade. (Before you call me in this DO THE MATH).

I have read that if the earth was a sphere of oil, we would at present rates of increase in our consumption run out of oil in some 300 years.

So when we get to the point where the “experts” are saying that we have as much oil as has been consumed in the entire history of the world that means that we have a 10-year supply left.

Obviously something has to give. We could do something about the consumption rate. Do you really need that SUV to drive to the store for milk?

In the 1600’s England was faced with an energy crisis. The country was running out of wood for heating. This led to the discovery of coal, which fuelled the country for a couple of hundred more years.

Our economies now are such that they would collapse if we had a crisis of that magnitude now. We need alternate sources of energy and until they are available to the masses we must conserve the oil supplies that we have now.

See also “The Forgotten Fundamentals of the Energy Crisis”. This was first written on the 1970’s and has been updated and is available at

http://www.npg.org/specialreports/bartlett_index.htm

This is the source of the 300 years to consume the earth-sized sphere of oil and explains the doubling concept for geometric progression. It should be mandatory reading for all technical people and politicians.



Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion
www.kitsonengineering.com

RE: peak oil production in 2009? - what next?

RDK,
I don't think anyone is suggesting that the supply of oil is infinite. I would suggest that we will never use it all. We still have trees, though back in the 18th/19th centruies there was a shortage of trees in the UK because of all the shipbuilding, smelting etc. and as for coal, a sizable proportion is still where it is because we moved on. We will move on from oil. It isn't a question of should we or shouldn't we, it's a question of when and what to. Frankly, the more oil we use the bigger the market for it and the more likely there will be investment. Getting oil demands a lot of investmenmt and a high level of technology, more than is needed for coal, especially deposits like the open cast mining of brown coal in Germany. Countries like Greece have an abundant supply of lignite but what are they doing? they are moving to gas from the pipelines. Why? it's certainly cleaner, it's definately more convenient. Is it the cheapest fuel around? No. Coal is. Then heavy fuel oils. I guess orimulsion fits in there somewhere with coal and HFO. I am hard put to consider the significance of wind turbines. Wind energy is definately not cheaper than gas. Changes in government legislation and taxation make it, if not viable, certain to be source of energy for some countries for some time. 12% of energy in Europe by 2010, i think. My concern is will this hinder the serach for something better or enhance it? Ditto SUVs. if we knew, 100% that there was nothing else, not a return to fossil fuels, no to nuclear, no to fussion then i guess we would be in real trouble because we would definately need to take stock of what energy can be derived from, how much and who gets it. Frankly it may be easier to suggest that we will want an ever expanding supply of cheap energy. Cheap depends on market size. SHutting down or controlling demand may just shut down a number of development channels that require a substantial investment but which could solve our pollution problems (except for heat). It is easier to get people to accept alternative fuels than it is to stop them using energy.

RE: peak oil production in 2009? - what next?

jmw

If I follow your reasoning, you are saying that we should use all the oil, make major investments in the infrastructure and technology to do so because that will create a huge demand for energy and that when we run out of oil this huge unsatisfied demand for oil will cause new technologies to be created to satisfy this demand.

My position is that there should be more development of alternate fuels NOW and not in 10, 20 or 100 years when we run out of oil.  Running out of fuel will do to our economy what running out of fuel does to a car. It will bring it to a sudden and complete stop.

In a car this might not be a big deal since more fuel is only a gas can away.

In the economy the sudden stop will bring about anarchy and severe hardship to the population.

The investment can be in many forms and these are not mutually exclusive. Conservation is one of these forms. Increased fuel taxes to fund alternate fuel development will foster conservation and provide some funding for research into alternate fuel sources.

Here in Canada we dismantled our national rail service in favour of increased truck usage. This was short sighted since the increased fuel consumption, wear on the roads and overall cost increases due to increased manpower has more than offset and savings. Governments can and should structure the economy to produce some desired benefits. Taxation is one main way to do that. Tax fuel inefficient technology and products and give tax breaks to alternate fuels and fuel-efficient products.

Most of the wars in the last 40 years have been in oil producing regions. Japan started WW2 in the Pacific to secure resources to fuel its economy. What do you think will happen when the last few barrels of oil are left?

(Also please use your enter key a little more, some white space between paragraphs will make your posts more readable, especially for longer and more complicated posts.)

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion
www.kitsonengineering.com

RE: peak oil production in 2009? - what next?

And are we not looking for new energy sources now?
If we run out of oil before we discover them we have a huge problem, we have a society dependent on energy and with no way to satisfy it.

Perhaps we need a few frights, perhaps we do need to scare people about a future without oil. Perhaps that is what is happening now.

It would be nice to think that somewhere, someone is providing a direction.

It would be extremely concerning to discover that governments with their short attention spans and their gift for vote related descision taking were only concerned with the short term and had no concept of the long term or were conciously or inadvertently creating an environment in which a long term goal is sacrificed for a short term dead end.

Governments are all too susceptible to the wrong sorts of pressure and their policy is based on this. We should realise that "wind turbines" are a great sop to the voting population but not a long term solution.

We have seen governments in the past pay attention to the green parties but only for so long as they represent a threat to the establishment status quo. The reduced effectiveness of the green parties in Europe is beginning to show, but we nonethe less have a commitment to 12% wind energy in Europe.

Wind energy is not a global solution. It is not limitless. It is not even that convenient. It may be clean but how much conventional resource goes into producing the equipment? Is this resource that could be better spent?

For longer term developments we must rely on more powerful forces than government. It may be that that means "market forces". More subtlety is required and clearer long term vision. I would be concerned to discover that there is no long term objective and that there are no long term investments.

Time has come for us to determine just where we are likely to find our energy "philosphers stone" and what we need to do to breathe life into it.

RE: peak oil production in 2009? - what next?

(OP)
Again, the reduced supply of oil combined with increased demand will mostly affect our habits related to transportation. Those habits will be forced to change due to the impostion of economic messages to that effect, viz, it will be too damn expensive to commute to work in a SUV occupied by one person, it will be commercially unsustaninable to ship most food produce by truck,and flying around the world on a whim will become impossibly expensive.  

IN terms of structural damage to the economy, the effects on the production and distribution of food  seems critical, and its effect on most anything else is just background noise that we can afford to accept.

RE: peak oil production in 2009? - what next?

Just a few days ago I was reading that the 3rd world farmers where being hit hard by the subsidiced export crops from the US/Canad/EC countries, why not try to shift some of your surplus agricultural production to the production of renewable energy sources.

Brazil for one has a very interesting ongoing program for using alcohol for fueling cars, and its a cheaper fuel than oil based fuels.

About 40 years ago here in Peru the Grace company had a agricultural complex based on sugar cane production than had PVC as one of its final products, besides, sugar, paper, soda, alcohol all starting from sugar cane and sea salt, the technology is there, it should just be put into production and refinement to increase the yields, but back then PVC pellets made starting from sugar cane where cost competitive with oil based alternatives.

Right now there is big talk, but few actions, to implement alternative crops on Coca leave growing areas to produce alcohol and replace at least partially the use of oil in automotive use fuels.

Sure there are a lot of other solutions, none is the right one, all are, just how much of each one is implemented will be a matter of economics but you all are right we should be starting to develop and refine them NOW.

So gentlemen lets start working on it.

SACEM1

RE: peak oil production in 2009? - what next?

It's about the energy;
I've read that the energy payback on energy invested in the oilsands projects in Canada is about 5. Is this in the ballpark? Can a petro engineer give us some guidance on this number?

Contrast that to the energy payback time of 3-4 years for PV, or 3-4 months for utility size wind, with expected lifetimes of 20-30 years, as well as the USDA estimate of 1.25 energy payback ratio for corn derived ethanol. Now if we wanted to get the most energy out of the energy we have available today, what do we choose? But this does not count the convienence factor of the various sources.

davfitz has a good point, it's the transportation system that will be section effected the greatest by this change. And that seems to be a huge basis for the JIT economy.

I have to cringe whenever I hear a political type spout off about reducing the US's dependence on foriegn oil, thus open  whatever area to drilling, but when will that oil be more valuable, now (prepeak) or later (postpeak)? Our resources (relative to demand) are miniscule compared to global resources, and we want to further deplete what we have left?

comments?

darren

RE: peak oil production in 2009? - what next?

I recall reading many years ago that the transportation system (with both oil and gas requirements as a fuel and lubricant) was actually only 32% of the overall demand for oil.

Now I know that number has shifted with the increase of automobiles in Japan and China but I would hate for us to limit our focus on transport only to get burned when the Sales team can't buy any polyester suits.

Being ignorant I would ahve to ask what other products do we need to look at that we haven't mentioned yet?

RE: peak oil production in 2009? - what next?

Take a look at the household shopping, electrical goods, in fact, almost anything these days has some component or other made from fossil fuels! That is, both oil and gas.
It is all very well blaming transport and SUVs but if you can think of any more frivolous use of fossil fuels than for through-away wrappings, disposable water cups, the absolute mania for packaging 3 woodscrews in plastic blister packs, and so on.

I am all for recyclable materials and especially one time packaging. Cars are increasingly manufactured with 80-90% recyclable components.

The fad for mineral water (which is arguably just an expensive way to drink water with no benefits over tap water in the developed world) means that we are paying top money for 05l of water and a plastic bottle used only once and thrown away.

Why not return to glass bottles with money back deposits...?

Why do we appear to lack the technology to have street lighting that only comes on when its needed? How much energy is wasted on lighting up streets when no one is there? If we need to develop new light technology, then let's do it and switch the things off and only bring them back on when people are near enough to benefit.

RE: peak oil production in 2009? - what next?

jmw is right, we as engineers know that oil is not going to last for ever, so let us put our brains and efforts towards a more rational use of it, so that what we have will last longer and give humanity more time to be able to switch to an oilless society.

Increasing efficiency of use is one way, decreasing useless waste is another, finding alternative ways to do things to save or replace energy, finding new sources of energy or of not needing energy are other.

Even if market forces drive waste down, by increasing cost of oil, thr trend to reduce waste/ icrease efficiency will be too slow to really start the shift in user habbits enough to make a dent in oil use, a clear sign should be sent by goverments all around the world by stablishing taxation over missuse/inefficient use/waste of energy and redirecting those funds towards developing better ways to use energy and recycle/replace oil based materials.

I would like to be starting a thread to compile all suggestions to save or replace fossil oil use and maybe start a trend towards more rational use of our world oil resources but it should be opened in another forum, any suggestions about in which one?

SACEM1

RE: peak oil production in 2009? - what next?


..."Cold Fusion" was such a great idea while it lasted.

RE: peak oil production in 2009? - what next?

Is it dead then? I thought they were now looking at cavitation as an initiation mechanism...

RE: peak oil production in 2009? - what next?

from:
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt
Total Prod Supplied for Domestic     20,773   

Products Supplied
Finished Motor Gasoline (4)           8,666   
Kerosene-Type Jet Fuel                1,562   
Distillate Fuel Oil                   4,541   
Residual Fuel Oil                       969   
Other Oils (8)                        5,035   

Total Products Supplied              20,773   

Total Net Imports                    11,451   

[in millions of barrels/day, numbers from last week]

How many of you have seen the following:
A person that brings their own bags to carry their groceries  home...
But purchased (almost exclusively) single serving containers

These people may have the right intentions, but some are truly clueless...

RE: peak oil production in 2009? - what next?

A while back we had a rather acrimonious debtae on this. One piece of 'evidence' was Hubert King's graph of oil consumption, which, as I remember, gave us about ten years until it peaked, and then halved in about 25 years time.

On holiday recently I was in a hut in the wilds of New Zealand. The only reading matter was a National Geographic from 1974. It had an article all about the likely shortage of oil, and featured a curve demonstrating that oil production would peak in 1984, and would halve by 2005.

I'll leave you to guess the name of the 'authority' in the article.

While I am far from convinced that oil production and the greenhouse effect are linked, I prefer efficient solutions to inefficient ones. It seems to me that nuclear technology is the safest and most convenient way of generating electricity, and that efficient oil powered cars are still the most cost and energy effective form of personal mobility for most people.



 

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

JMW,

This story seems to coincide with your "cavitation" post about cold fusion.

http://www.azom.com/news.asp?newsID=1073

So, is this for real?  Could it replace fission in the near future?

RE: peak oil production in 2009? - what next?

Funnelguy, thanks for the link. Interesting reading.

I had the recollection of a much lower temperature when a cavitation bubble collapsed but then, they are talking about bigger bubbles. The bigger the bubble the higher the velocity of the molecules when it collapses.

I certainly hope for fussion power in the future and this is one path that, thankfully, hasn't been closed down. Work has been going on for decades to develop fussion reactors. The big worry for me is that they will design big. I'm with Schumacher, Small is beautiful.

RE: peak oil production in 2009? - what next?


Yeah, jmw, there are a few empty supercollider superconductor sites around that speak volumes about the idea (necessity!) of small reactors.

The cavitation article was neat, wish I knew more.

RE: peak oil production in 2009? - what next?

Very Interesting. I decided to do a search, "Cold fusion" on goggle imedaitely threw up this quote:
``It is difficult to imagine a more profound reversal of scientific fortunes than what has been emerging in the "cold fusion" field. One of the most disputed anomalies in the history of science is inexorably heading toward acceptance by the scientific community.'
                                     -- Dr. Eugene Mallove
and a link to this site:
http://www.infinite-energy.com/ Of course, i am not sure how legitimate this is, it could be L Ron Hubbards web site for all I know. For some reason, i am a bit suspicious of very professional web sites... i wonder if the appearanceof the web site is meant to suggest the veracity of the material within it.

I will explore with interest, be pursuaded of what i want to believe and then, possibly, be disillusioned by the smarter brains in this forum.

RE: peak oil production in 2009? - what next?

Well, i am a little happier.
This link (http://www.wired.com/wired/archive/6.11/coldfusion.html) reveals that it isn't Hubbard behind Infinite Energy but Arthur C Clarke. Well, he is a contributor.

But this page does set out some of the current position with JET and Cold fusion.

RE: peak oil production in 2009? - what next?

I wonder

What would the long term consequences have been if
we had spent the money for the gulf war ($80 billion)
on nuclear fusion research. Just think of the spin off
technology even if we never fuse hydrogen.

RE: peak oil production in 2009? - what next?

(OP)
2dye4:
The main spin off of spending more billions on fusion will likely be a few more BMW + Lexus dealerships in Princeton NJ and a few more 5000 ft2 mansions in the same area. This was the primary result of the billions spent in the 80's + 90's at the Princeton Tokomak.

RE: peak oil production in 2009? - what next?

Alas for the remaining "renewable" energy resources, the UK's plans to be seen as "green" (despite a minimal Green Party presence in the UK, unlike Germany where, at their peak they influenced some policy decisions....) meet some obstacles.

Offshore windfarms are claimed to be the best way out of the environmental impasse onshore wind farms are entering.

Plans for some onshore windfarms in Scotland have been opposed by the ministry of defence for a variety of reasons of "national security" and now there are voices raised by the Shipowners associations regarding controls on siting of offshore windfarms in a claim about potential hazard to shipping, environmental risks and that if badly sited, the diversion of shipping could see the energy gains offset.

http://www.british-shipping.org/news/index.htm

So, back to the search for small fussion reactors (small enough to run a washing machine would be my objective).

RE: peak oil production in 2009? - what next?

2
I'm with DaveFitz, more government money on fusion will not accelerate the development of viable fusion sources.  What is required is an individual to have a break through.  That is just a likely to happen in a pump shop as in an $80 billion lab at Princton.  

I love the discussion of "green" energy.  I recently did an analysis on the power requirements for a solar-powered pumping unit to get water off of a gas well.  With today's solar technology I would have had to deploy 2 acres of panels (down from 6 acres just 5 years ago).  The ground under the panels would never again see sunlight and any plants living would die.  Seems a long way from "no impact" to me.

Taking an SUV to the corner store is simply accelerating the time when cheep fuel is not an option.  Gasoline in the U.S. today is 3/4 the price we paid in 1970 (at constant 1970 dollars).  At those prices, it is not a hardship to my budget to drive my SUV, if we paid European prices (i.e., 60-80% of the pump price is taxes), then I would have to reconsider.  Government policy in the U.S. is to bemoan the drain on our resources (meaning money) going offshore for imports rather than doing anything about the imports.  If you want to reduce the imports, reduce the demand.  Isn't that what they said in Economics 101?

All of that is simply economics.  The bottom line is that fossil fuels are finite.  Someday they will either be gone or a cheeper alternative will surface.  If they are used up before the alternative is here, then there will be incredible disruptions in the lives of billions of people.  End result, the population will reach a new level at an acceptable use of the available energy.  Probably a lot fewer people using a lot less energy per capita.  One of these two scenarios will happen if we avoid asteroids and other life-ending energy transients.  Hopefully some clever person will have an epiphany and figure out how to make power from lightning bug tails (see "The Roads Must Roll" by Robert Heinlein) or something equally as un-dreamed-of.

David

RE: peak oil production in 2009? - what next?

zdas4

  How much energy is generated by those two acres of panels?
Just curious.

Chris

RE: peak oil production in 2009? - what next?

Nine horsepower average over a full day.  Peak load calcs to 12 hp.  By the time you size for a 1 hour peak transient that occurs at 6 am on a day following a cloudy day, the panels get way out of hand.

David Simpson, PE
MuleShoe Engineering
www.muleshoe-eng.com

RE: peak oil production in 2009? - what next?

There is a problem with governments.
1) They are no good at anything worthwhile.
2) They think first about votes. Most politicians and governments have the long term planning ability of goldfish. (That is, apart from “Thousand Year Reich” schemes)
3) With governments you get what they give you. With commercial forces you get what you want. Why? Industry provides what sells best and that is usually what people want the most.
4) Governments have no idea of what people actually want (apart from less government which they aren’t about to let us have).
Quick example, government loves taxes. People don't, QED.

Market forces are much more dependable.

As an example, take a look at the UK government approach to a telephone system. Under Post Office Telecoms they provided the worst dinosaur of a system imaginable. Of course, once privatised, it leapt into the modern world.

Governments can't help it, it's in their nature to do things the way they do. But if you want something done right, don't let government have anything to do with it.

The best way to get fusion power research moving is to take it away from governments and give it over to the market forces where industry will do its research and give us what we want.

So, as the depletion of fossil fuels looms large, all those industries dependent on supplying us goods that consume energy and the energy providers will recognise the need for an alternative. The more energy we consume, and the more dependent on power the bigger the market at risk and the greater the incentive for the market to develop what the market (and the consumer) needs. That means fusion power.

It also means fusion power plants that are best fitted to society. With the unbundling of national power providers, TPA (Third Party Access schemes) the imperative for huge centralised power plants is already disappearing. Energy doesn’t or shouldn’t need subsidy. There is an abundance of it, now more than ever.  

Subsidy in the energy sector is about going where the government wants to go for its own reasons. This may take us away from the path to a real sollution.

This is the “manned spaceflight” vs commercial exploitation of space scenario. In the commercial sector we have a whole array of satellites providing for our every whim, efficiently and cost effectively. We have weather satellites, communications satellites and even GPS in our cars to ensure we don’t get lost on the way to the shops. Pretty soon the commercial forces at play will give us, each and every one, affordable satellite telephones and we can then abandon all those phone masts everywhere.  

If we want manned space flight for the people then forget government and let the commercial sector have a go. In fact, there is a competition running for the first privately funded manned space flight with a re-usable vehicle. Who wants to bet that spaceflight will not be available to you an me in the next decade?

We can see the changes in the energy market that are bringing about many of the circumstances we require for fusion power and fusion power as we want it, not how government would like us to have it.
We need to re-inforce those things that take us where we are going and discourage those that don't. Stop subsidising wind farms. Forget limited solutions and go where the futture is.

RE: peak oil production in 2009? - what next?

Market forces aren't always the answer. Take electrical power generation, for example. You might have heard of the rolling black-outs that hit the northeast last year at the peak of freezing temperatures. What had happened was that power generation had been de-regulated and the companies cut back on the building of new plants to achieve greater efficiency. It was all well and good until the extreme low temperatures caused a spike in power usage and there was no extra capacity available to kick in when it was needed. Market forces don't look far enough ahead into the future to anticipate swings like this. Short-term gains always seem to prevail over long-term stability and growth.

As for cold fusion, it's not dead, though it's been pretty rocky up to now. http://www.sltrib.com/2004/Mar/03272004/nation_w/151658.asp

RE: peak oil production in 2009? - what next?

Stirring the pot...

Steel prices have doubled for some products here in our midwestern US location.  Local press stories are blaming Chinese consumption for the scarcity and consequent price increases.

The same local paper seems perfectly content to blame increased Chinese oil consumption for the increases in fuel prices.  The proposed 4% production cut by OPEC is also considered as part of the problem.  No one even talks about refining capacity.

I am somewhat jaded regarding fuel prices.  I have watched our refineries gouge consumers in the past and attempt to blame OPEC.  A lack of refining capacity seems more plausible to me.

So, soothsayers, what does the future hold?

RE: peak oil production in 2009? - what next?

In the UK it looks like a 25% petrol price hike. Between OPEC and their Chancellors need for money, they look like securing the prize for the highest priced fuel on the planet. Of course it may also have something to ddo with the British Governments keeness to be seen as green by the greener Europeans (no pun intended) and by so doing to make the wind farms appear more cost effective....
... meanwhile the Chinese hydro-electric schemes on the MEKONG appear to be threatening the livelhoods of 65million people downstream in various countries who depend on the river for its fish.

JMW
www.viscoanalyser.com

RE: peak oil production in 2009? - what next?

A thought provoking series of posts.  So - here are some thoughts.

RDK's comments about the math of geometric progressions reminded me of an old science fiction story.  The world's economy was based on replicators, devices that transformed matter into anything you needed. (food, cloths, autos).  The closing paragraph was an archalogical discussion about the twin body system of Earth and Moon.  Were the two bodies always the same size?  The problem with doing the math is the math almost never predicts what eventually happens, but it makes interesting reading. Just read Greg's 1974 National Geographic for confirmation.  I guarentee we won't consume an Earth volume of oil in the next 300 years because we can't.  We have to do something else and we will.

People are reactive.  We drive SUV's (I don't) because we can afford to.  But in the 70's small cars were the reaction to $0.50 a gallon gas prices.  Got rid of my GTO, bought a Pinto.  People reacting make markets.  Javac, can you be sure that the rolling blackouts would have been eliminated by regulated power industries?  I trust the markets more than I trust regulation, but neither one will be right all the time.  

Fusion may be the energy savior, but for private funding to be viable a company has to see profit at the end of the process.  As it happens I start a new job next week in the wind turbine industry.  Here is an energy source that offers engineering problems we know how to solve but couldn't sell without a tax credit because it cost $0.01 per Kwh more to generate than other plants.  Who is going to fund the development of fusion with much tougher engineering problems to solve?  We have active development of private manned space flight because someone offered a prize.  I admit I'm guessing but I'd bet the total value of the R&D by the companies seeking the prize is significantly higher than the value of the prize.  Maybe a prize rather than direct funding is what governments should offer.  

 

RE: peak oil production in 2009? - what next?

Iskit4iam,

The government does offer a prize.  It is known as a patent.  It guarantees a 20 year monopoly from the date of filing.

Problem - patents are enforced only through civil courts.
Solution - patents should be enforced via criminal courts.

A large company infringing on an independent inventor's technology will always win!  As an independent inventor I have been there and I don't intend on taking on Goliath again.

With respect to Peek Oil production in 2009 we need to only look in our own backyards and garages.  It starts with the vehicles we drive and the corresponding fuel efficiency of that vehicle.

It is this simple:
(1) Eliminate the $23,000 tax break on vehicles having a GVW of greater than 6,000 lbs that are used for business.  Create a tax break of $23,000 for any vehicle that gets over 30 mpg regardless if it is for business, pleasure or personal use.
(2) Convert all highway HOV lanes to High Efficiency Lanes.  Soccer moms who are carrying no other legal licensed drivers should not be allowed to drive their gas guzzling SUVs in the HOV lane.

Next, accelerate the development of upgrading oilsand directly to refinery feedstocks.  Alberta Canada has enough oilsand to fuel North America for the next 100 years.

Finally, over the next 50 years accelerate the construction of Nuclear Power Plants and convert all coal burning power plants to biomass power plants.
 
During that time frame gas to liquids (GTL) technology will be mature and clean burning gasoline and diesel will be widely available since natural gas is widely available in the US.  Also, demand that all vehicles be hybrid gas/electric.  At nightime the vehicles can be recharged with Nuclear Power or renewable power.  Thus, the gas is used only for an instant burst of power.

RE: peak oil production in 2009? - what next?

I wonder if Fusion power will be obsolete before they even get it off the ground?
 
I understand that physicists at CERN (Geneva) have been having some success with producing anti-matter. The energy conversion from anti-matter is said to be 100% compared with about 1.5% for fission. Of course, I've seen too many Sci-Fi movies to be completely content with a bunch of anti-matter power stations being run by some of the guys who like to cut back on engineering staff etc in the name of economy and shareholder interests. In fact, I wouldn't trust some of these guys in charge of a wheel-barrow.

Meanwhile i need to check up on some of these figures.

JMW
www.viscoanalyser.com
eng-tips, by professional engineers for professional engineers
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

(OP)
I think that if we are looking toward fusion or anti-matter as solutions to the porblem of  a reduction in available supplies of oil then we are in deep doodoo.   Concentrating on such unlikely measures is tantamount to psychological denial that the problem is on the horizon and that the practical solutions are available , but unpalatable.

RE: peak oil production in 2009? - what next?

I notice a few of you are automotive engineers, and I'd like to throw this out for comment.

I little while ago I read a magazine article about hydrogen powered vehicles.  In an effort to improve some aspect of performance, the solution expressed was that an increase in pressure of the hydrogen was required, to something like 10000 psi.  So now I'm thinking, small lightweight (plastic) car, and a high-pressure cache of hydrogen.  The word that kept popping up was "Hindenberg."

Do hydrogen fuel cells for automobiles have the same sort of volatility?

RE: peak oil production in 2009? - what next?

crossframe,

The problem with a hydrogen  economy is twofold.  First, the infrastructure does not exist with regards to pipelines for transporting hydrogen.  Oh, it exists on the Gulf Coast amongst a few players, Air Liquid, Air Products, Prax Air, etc. for transporting hydrogen to major end users - refineries - for hydrotreating purposes.

Transporting hydrogen via piplines to every single gas station is not feasible.  Likewise, transporting H2 via trucks to every gas station is not feasible.  If you ever pass a H2 tank truck on the highway, take note of the many small diameter tanks.  It is not one large tank such as with butane/propane etc.

The second problem is the source of hydrogen.  If it will come from the traditional source - steam reforming natural gas - then what will they do with all of the CO2 produced in the water gas shift reaction?  CO2 sequesteration technologies are still in the infancy stage.  And isn't that the purpose of hybrid or hydrogen vehicles - low or zero emissions.

With respect to carrying hydrogen onboard, the H2 is pressurized to 5,000 psig.  Small tanks are readily available.  For example, a small composites company is manufacturing CC (carbon-carbon) composite scuba diving tanks.  Very lightweight and very strong.  Several Universities and Researchers are using these readily avaliable tanks for testing purposes.

A little about "Hindenberg."  First, and foremost many chlor-alkali plants vent copius amounts of hydrogen.  So you   should look deeper into the recent reports investigating into the cause of the "Hindenberg" explosion.  Same problem all chlor-alkali plants strive to eliminate - static electricity.

Although H2 has a much broader explosive range in air as compared to NG, gasoline, etc., H2 still requires a catalyst or ignition source (high termperature, spark, static electricity etc.) in order to undergo oxidation (combustion with oxygen).  Hence, the catalyst used in PEM fuel cells  combines hydrogen with oxygen to form water and DC electricity.

Likewise, the spark plugs in your car are used to "explode" (detonate) the fuel/air mixture in order to forcefully push the piston in order to rotate the crankshaft.

Now, what I firmly believe is very feasible is the injection of hydrogen in combination with gasoline or diesel to lower NOx emissions.  This would only require a small bottle of hydrogen to produce 30% less NOx emissions.


 


 

Todd
www.oxilume.com

RE: peak oil production in 2009? - what next?

I don't think anyone in the Auto Industry is seriously considering Hydrogen fuel cells as a possible short term alternative.  There is still research going to determine feasibility of a long term solution but there are several safety issues for which it is not known if there is a plausible solution for.

The key focus on vehicles these days is Power on Demand engines, magnetic/electric/gas hybrids and biodeisel alternatives.  The two which appear to be the most aggressive are the hybrids for general consumer use and biodiesel for heavy vehicles and equipment.  

POD engines don't see the same gas savings as a hybrid.  Their advantage is that there isn't any loss to performance or power. Biodiesel is gaining popularity since you can use it in existing diesel engines and its costs are coming down.  Current prices are about the same as typical gasoline as opposed to current diesel costs.  There are 6 new biodiesel filling stations opening in Ontario as I type this.

There are several hybrids on the market these days.  The Pruis, the Insight and the Civic are coming to mind.  The Accord will have a hybrid option later this year as I recall.  This is the industry's short term focus for dealing with this issue.  Research is ongoing and I wouldn't be surprised if by 2010 we are past the 100 mpg range.

RE: peak oil production in 2009? - what next?

I keep looking at the fueling problem.  The CNG/LNG commercial fuel stations are pretty daunting, H2 would be way worse.  

We had CNG on fleet of 60 vehicles for oil-field workers for several years and 2-3 vehicles a year were burned to the ground by these competent, savy workers.  These fires were always traced back to the fuel-transfer process.
In the years before and after that experiment, we had zero fuel-related fires (we did have one spill when a guy drove away from the pump with the nozzle in the fill neck, I don't even want to think about the consequences if the hose had been H2).  Just think about the stereotypical techno-phobe "granny" using even more complex equipment.  It just ain't going to happen.

David

RE: peak oil production in 2009? - what next?

Yet, oddly, in Australia a large percentage of cars use LPG, and they don't burn to the ground in any great numbers.

Why is LNG worse than LPG?

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

Greg,
I don't know that it is.  

My experience was with CNG (compressed natural gas) which has a fraction of the energy per unit volume of LNG/LPG (notice how I deftly avoided specifing units there?).  Maybe the difference is that you have to fill the CNG so frequently that the opportunity for mishap is greater?

Maybe the group I was working with were dunderheads (but they do operate a fairly large natural gas field with an excellent safety record)?

Maybe we got defective equipment (it did all come from the same vendor made during the same time period)?

Whatever the reason, our experience with a product that is gaseous at ambient temperature was not a roaring success.

David

RE: peak oil production in 2009? - what next?

Ah, no I misread your post. I know CNG is more difficult to handle, I thought you had problems with LNG.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

I would like to know if there is more information around about the use of CNG as there is a big project for implementing that fuel here in Peru for use in all type of personal and bussines vehicles.

We have been using LPG in many taxis and light commercial vehicles for several years now but a big source of NG is being brought from the highlands to the capital city of Lima by a big gas line and one of the propossed uses which is being heavily promoted is using it in cars as CNG but if the rate of accidents is that high maybe we should be informed better.

Please give me the most information on the safety of using CNG in light vehicles.
Thanks

SACEM1

RE: peak oil production in 2009? - what next?

I know of several pilot programs using it, but not much has been published.

This seems fairly detailed:

http://www.afdc.doe.gov/pdfs/ups_cng.pdf

I have heard that CNG had safety issues, but there seems little hard evidence. In a crash diesel is probably better, as it is not pressurised and once the tank is ruptured since it is more likely to run off the road and into the gutter, even in the presence of flames.

It looks like the refuelling technology is now ready for mainstream use, but it is new technology, and will be more expensive.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

If at all posible try not to buy fuel on May 19.

RE: peak oil production in 2009? - what next?

I'll bite. Why May 19th?

JMW
www.viscoanalyser.com
Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

He's probably complaining about the rather low price of gas at the moment, in historical terms. It is 2/3 the price that it reached in 1981.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

Indeed, but the world economy is far more dependant on fluctuations in fuel prices now as well.  All that money we don't spend on gas gets spent on other things.  So, talking about how "cheap" gasoline is compared to some inflation adjusted historical number is not very meaningful.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

StressGuy,
Why isn't it meaningful?  You look at your own real wealth based on values relative to some inflation-adjusted historical number.  When my parents bought their first house, the portion of their income that was tied up in their monthly payment and the number of years salary the capital investment required were both very similar to what I paid for my first house.  

Why can't we look at gasoline prices in terms of hours worked to buy a gallon of gas?  Or the minutes worked to travel a set distance?  When I was a kid the $1.00/hour I was paid for back-breaking farm labor represented just under 3 gallons of gasoline.  My son is working in a typical high-school job and an hour of salary buys just over 3 gallons of gaoline.  His vehicle gets way better gas milage than mine did, so his cents per mile is about half what mine was.  Seems meaningful to me.

David

RE: peak oil production in 2009? - what next?

"the world economy is far more dependant on fluctuations in fuel prices now as well."

Really? In 1981 the proportion of the first world's GDP spent on fuel would have been higher wouldn't it? After all, we weren't buying computers, software, cell phones, DVDs, CDs, home theatres, VCRs etc etc.

I'm struggling to find global data, for the USA I get the following

OK, here's how I looked at it:
1981
USA GDP: 3Trillion
consumption of oil: 17 million barrels/day
Price of oil:$37
% of GDP: 7.6
2003
USA GDP: 11Trillion
consumption of oil: 20 million bpd
Price of oil: $41 (use today's price)
% of GDP: 2.7

I really struggle to believe that non linear effects in the price of oil can overcome a factor of almost 3 in cost relative to GDP.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

Although it is not in the near future, I find this rather fascinating.
Power from Waste

RE: peak oil production in 2009? - what next?

(OP)
I beg to differ. The future is now. The rate of increase in deamnd for fuel oil ( primarily driven by increase in demand from China) is rapidly exceeding the rate of increase in production. In addition, the peak rate of production of oil is expected to be reached in 2009, and then after that approx date the rate of oil production is expected to decrease.

Bottom line: Between now and 2009 , we are going to have to get used to sharing the oil with developing countries, meaning  each of us will be using less oil on a per capita basis. The Western developed countries oil  consumption per capita basis might need to decrease by as much as 30% by 2009 if the current increase in demand by China etc continues unabated.

RE: peak oil production in 2009? - what next?

Greg,

I think your numbers just about make my point for me.  The money we spent for oil consumption was a larger percentage of the U.S. economy in 1981 than it was today - i.e. we bought gas and didn't buy other things.

Now, because we haven't had to pay as much for gas/oil, we have had money to spend on other things - computers, cell phones, CD/DVD's.  Our economy grew because we had effectively more disposable income.

If gas/oil prices continue to increase, people are going to have to make cuts in other areas because their vehicles need to be fueled, and, all those devices I mentioned above are largely plastic, so prices have to rise to cover the material costs.

So, that is why I say our economy is more dependant on gas prices now than before and the arguement that gasoline is "cheap" now in relative turms is a weak one.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

StressGuy,
I'm still not buying it.  In the '80's disposable income was disposable income just like it is today.  Your argument seems to be that "way back then" we didn't have stuff to spend our non-fuel money on.  There was stuff. We bought what we could and lusted after the rest.

There never has been a time in the history of mankind that people didn't have to make choices on the distribution of their resources.  If fuel becomes a significant portion of an individual's income then they'll make a choice - do I go or not go to some optional location?  Do I (dare I say it) walk to the corner store intstead of driving?  Do I leave my truck running when I jump out for a few minutes?

Many will also make a choice to sell the SUV (if the oil embargo of the '70's is an indication, they'll sell it at a loss if they have to) in favor of a hybrid (thereby reducing the portion of their income spent on fuel dramatically - even at higher prices and leaving even more money for important things like CD/DVD's).

Cheep fuel has led us to many life-style decisions.  Less-cheep fuel will cause the re-evaluation of those decisions.  Big Deal.  

My read is that the trade balance, the environment, and real wealth would be significantly enhanced by $8/gallon gasoline (that was not a typo).  As someone who has spent a career in Oil & Gas I would like for the difference to go into exploration, but I would be fine with it going into the gaping maw of the government.  The only thing that is ever going to change poor energy-consuming habits is for those habits to become prohibitivly expensive in real terms.

David

RE: peak oil production in 2009? - what next?

I can't help but think that looking at gasolenes prices in isolation is a very simplistic way to try and undertsand our oil economy. It's for sure the way some politicians would like us to think but gasolene prices are only the tip of our fossil fuel bills iceberg.

Gasolene is the loss leader at the refineries, they have no margins to absorb fluctuations in the crude oil price and the way tax is calculated aggravates the problem. In the UK tax is around 80% of the cost. But it isn't a fixed tax per litre, it is weighted on the cost price. So a butterfly flapping its wings in the oil fields is like an windtunnel at the pumps.

Gasolene isn't the only product from crude its the main purchase we make directly. Everything else comes from indirect purchases or taxation. The rest of that barrel of oil isn't exported to Mars. We use it down to the last drop. The refiners say there are no wasted products. The residuum is either cut back for heavy fuel oils or blown for bitumens and asphalts. Who pays for the roads and the roofing shingles?

When we come to divorce ourselves of fossil fuels, we'd better have a damned good exit strategy for all the other products we derive from fuels because, for me anyway, you'll have a hard job pursuading me that cutting down rain forrest so we can produce gasahol isn't going to be the solution. I don't value buying three screws in a blister pack from Home Base that highly, or at all.

Buying gasolene and only looking at the gasolene cost is a bit like buying a scanner printer from Lexmark for $80. You have to figure in the ink costs.

JMW
www.viscoanalyser.com
Eng-Tips: Pro bono publico, by engineers, for engineers.

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RE: peak oil production in 2009? - what next?

So Edward, you are saying that if the USA spent a greater proportion of its GDP on oil then it would be less sensitive to changes in the price of oil? That's the way I read your note and it seems rather unlikely.



Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

Apparently, I'm having trouble articulating my point.  Perhaps the proper wording will come to me over the weekend and I can take another shot at it.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

"All the world is a Spring"

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

Edward,
I really don't mean to be picking on you.  It is just that there is so much bad information on the popular media (and too much bad information in the technical media) that I get defensive.

I'll look forward to your post on Monday.

David

BTW: is there any connection between "All the World is a Spring" and Art Montmayer's home town?

RE: peak oil production in 2009? - what next?

Alright, gentlemen.  

Let's see if I can explain my thinking.  I believe there's a bit of confusion.  As I am thinking of oil, I'm not thinking of it just as a fuel source, but also as the basis for a wide variety of products made from plastics.  Everything from CD's, computers, cell phones, cameras.  Because oil has been historically cheaper for the last 20 years, all kinds of new products have come to market.  I heard someone say on the radio this morning that, adjusted for inflation, compared to the early 80's, our gas prices should be well over $3.00 gallon with oil prices to go along with it.  

Had we seen that kind of pricing for oil and gas over the last 20 years, I don't think our economy would have grown to the size that it has because that pricing would have made the development of these products less favorable and more expensive (in addition to the earlier point that we would also be spending more oil dollars for fuel instead of other items).  

An economy grows as money moves through more quickly as goods and services are bought.  Higher prices tend to reduce the overall movement of money, even though more money is moved for a given transaction.  Our economy has grown sigificantly based on the availability of "cheap" oil and that is why I argue that it is more sensitive to the increases in pricing that we're seeing now.  

As the prices at the pump rise and costs for oil based products rise, people will consume less of them, particularly as many products (cell phones, cd's, dvd players, etc.) are items that are "wants" that we buy with excess income vs. "needs" that we require to survive.  But, much of the great size of our economy these days is based more so on the purchasing of wants rather than needs.  Cutting back on the wants because oil gets more expensive has the potential to cascade and put a big dent in the size of our economy.

Had oil prices followed the trend over the last 20 years to get to where we'd be paying over $3.00 gallon by now, I don't think our economy would have grown nearly as big as it has and therefore would not have as far to fall to get down to the simple "needs" level.

That's still not as coherent as I'd like it to be, but hopefully makes it a little clearer where I'm coming from.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

"All the world is a Spring"

All opinions expressed here are my own and not my company's.

RE: peak oil production in 2009? - what next?

Edward,
Interesting view from the "short-term consumer" side of the equation.  Even from a short-term perspective there are different ways to look at it.  If oil prices had kept pace with inflation, then plastic grocery bags (for example) would have been too expensive to produce in the billions of tons/year that they've been produced.  Maybe more stores would have taken the Sam's Club approach and not offered them.  Maybe you wouldn't see three screws in a bubble wrap.  Resources consumed for plastic bags and packaging have increased at many times the average inflation rate.  That could only have happened with feedstock prices out of balance with frivolus uses.

From the "Producer" side, margins 20 years ago were 3-4 times what they are today.  20 years ago an oil company could afford to explore for new sources of oil and gas and the one-success-in-seven-tries the industry saw was well compensated by the "windfall profits" (to use an offensive term).  Today, one-success-in-three is seen to be an unacceptably low success rate because margins have been cut too far to allow for risk.  Consequently the industry is often spending decades gathering and processing data before a new-field wildcat well is drilled.  Companies are not replacing the reserves that they produce and the health of the industry is teetering on the edge of an abyss.  In 1980, the Oil & Gas industry was outraged that imports were approaching 40% of consumption.  That year the domestic reserve-replacement-rate droped to below 2 times production for the first time ever.  Today it is closer to 1.0 and dropping.  The "high" prices are far too low to allow for a healthy industry.  And the industry is not healthy.  Petroleum-engineering departments are being closed in many universities due to low enrollment, I don't know of anyone in this industry who encourages their children to go into the field at any level.  The "mega-mergers" have increased the overall level of financial caution to near gridlock.  Top manangement is spending so much time catering to stock analysist that we've gone from the "flavor of the month" to the "flavor of the hour", and look fondly back to the days when we complained about micro-management (from today's vantage point of nano-management).

From the "Long-Term Consumer" viewpoint, 60-70% of the U.S. oil consumption (for fuel and all other uses) is imported.  That means real dollars, and real wealth leaving the country in huge quantities.  With $8/gallon gasoline, the first big cut in consumption will come at the expense of imports.  With time, the margins on production would increase to support the risk of new-field drilling and the imports would further decrease.  The result would be a stronger economy with more wealth staying in the country and more people having more wealth to buy stuff.

There are two sides to every transaction.  The current oil transaction has the producer complaining about low prices and unacceptable returns for the risk while the consumer is complaining about ridiculously high prices.  This is an untenable situation.  The saddest thing about it is that government energy policy is still operating on the principle that drilling in a couple of sensitive locations and using the laughable "strategic energy reserve" (2-3 days worth of consumption) will fix the mess as soon as they can get the Democrats out of the way.

David

RE: peak oil production in 2009? - what next?

zdas04, are you saying that oil exploration and new well finds have fallen largely due to the very low price of oil over the past 10-15 years rather than what some of the peak oil doomsdayers are saying, which is that exploration & finds have dropped off because there isn't much more to be found?

If oil stays at around $35-40US a barrel is that price high enough for increased exploration, or is there enough oil in places like Iraq & some of the former soviet states to not make further exploration worthwhile for a few more years yet?

Interesting discussion, I asked a similar question on another forum & got similarly diverse responses varying from "we're all doomed" to responses from people in or connected to the oil industry saying not to panic there's still plenty left.

RE: peak oil production in 2009? - what next?

http://www.daviesand.com/Perspectives/Forest_Products/Oil_Reserves/
This scenario has a publication date a the height of a rise and predicts a decline.

Any internet search will show that peak oil production has been forecast many times and each time the deadlne passes unproven.

This isn't necessarly because the forecasts are wrong but because they are interpreted against a background where technology is changing all the time and where oil price is a defining factor in what is recoverable and what is not.

None the less, that there is a finite limit is not doubted. The uncertainties are how much oil we can discover, how much we can recover and how long it will last.

As one website source says " asking how much oil is left is like asking how long is a piece of string."

80-100 years appears to be a reasoned current estimate depending on source.

The range of attitudes is from the "bomb shelter/stockpile/militia" mentality which presumably will decide who can have SUVs and who walks, to those in denial and those who think it is someone esles problem.

It is difficult to make a rational exploration from any extreme and those that attempt it are often castigated by the extremes. Interesting to see some of the "doom and gloom" sites do actually represent a rational position expressed in an alarmist manner, presumably to frighten others on board. Perhaps it isn't the truth but the language the issue is discussed in, that matters to some.

Certainly, when discussing gas prices a US Governement energy site refers to gas prices as a "political lightening rod". Other sites show the barrels of oil per capita produced and consumed though, as ever, care is needed with any of the data presented as there are anomalies that need to be understood.

http://www.cato.org/dailys/04-08-04.html
http://news.bbc.co.uk/2/hi/business/3590137.stm
http://www.hubbertpeak.com/
The Hubbert peak website addresses the issue of oil depletion here. Interesting to note the paralleling of some comments in this thread.

http://www.nationmaster.com/graph-T/ene_oil_res
A source of data on energy resources.

JMW
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RE: peak oil production in 2009? - what next?

(OP)
for an opposing opinion, see some of the information being presented today and tomorrow ( 25-26 may) at an int'l conference on peak oil production at <www.peakoil.net/uhdsg/Default.htm>

RE: peak oil production in 2009? - what next?

Campbell does appear to be the guru in this area.
I guess he is getting a little impatient of the detractors and is presenting a forcast (continually revised) that is accurate within the terms of reference.

The problem being that different groups chose to speculate on alternative scenarios with different terms of reference and hence try to suggest that their forecast is more accurate or probable.

The issue isn't that oil is going to run out nor when it will run out but how we use the oil that is accessible and how we shape our future.

My own view is that we will not exhaust the oil reserves even though they are finite. We didn't exhaust coal, we still have trees. What we will do is change to a new source of energy. Hopefully the way we use oil as a tool to develop an economy that will sustain the investment in new energy sources as anything. The emergent phase of any new technology is expensive. If we frighten ourselves too much we may cut our oil use to the point where a limited sustainable renewable energy resource will replace it but, due to its limitations, will impede our future progress. A more agressive approach may give us a global economy which will finance a more ambitious energy scheme that may give us an unlimited energy future.

For example, we may end up with wind farms all over the place; affordable but limited and somewhat damaging. Or we may find we have a financially realisable potential in orbiting mirror reflecting solar energy into collectors.

I don't say either is the solution, I'd like to think the promise of fusion power is realisable in small flexible power units.

When we moved from coal to oil the economy grew. Gas is even more liberating. Beacuse of costs we still find coal being used and we even see some projections of increased useage, it is the cheapest fuel I believe. Reduction in oil avails may see a resurgence as prices make recovery and exhaust gas processing more viable but in large power stations. Oil and gas make smaller power stations viable.

We just need to know what it is we want and then set our development on that path. It is encouraging to see that there is widespread recognition of the potentials but concern that the short term thinking of politicians may lead us down a false path.

JMW
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RE: peak oil production in 2009? - what next?

Ghamish,
This is a hot topic, sorry so many posts intervened after your question to me.

The U.S. Oil & Gas industry has been in "Starvest" mode since 1986.  When I retired from a major oil company last year, all the engineers in the company either had gray hair or rode skateboards.  There was basically zero hiring for almost 20 years.  Consequently, the Petroleum Engineering departments of some great universities had a very difficult time placing good graduates.  Research facilites at all the majors were shut down or significantly curtailed.  The only research into the basic physics of petroleum production is happening at a few universities and the translation from universities to industry has had pretty poor success.  So you have an industry with very low risk tollerance, no new blood, low product prices, and a very low standing with the financial markets (therefore a difficult time raising capital).  Is there more U.S. Oil and Gas to be discovered?  Without a doubt.  Will it be cheap and easy to get?  No.  What will it take to get it?  Multi-year returns consistant with the risk so that the siege mentality can leave the industry.  I'm not sure that $35-40/bbl is enough, but I do think that sustained prices in that range will make many of the small producers take notice.  The majors are all so grid-locked and focused on the multi-billion dollar, multi-decade activities that very little will cause them to behave rationally.

In addition to new-field wildcats, there is a lot of petroleum left in depleted fields.  "Depleted" gas and oil fields always have some amount of product that is just too expensive to recover and is abandonded in place.  I get calls every day from folks who say "we booked reserves to 350 psig abandonment pressure, we're there, we're still making a lot of gas.  What do we need to do differently to revise our abandonment pressure downward to 100 psig?".  The stuff I tell them about is fairly expensive.  Way too expensive for $1.50/MCF gas or $15/bbl oil.  At $6.00/MCF and $40/bbl it is acceptably cheap.

The point of this ramble is that when the easy stuff is depleted (and it will be unless we stop using fluid hydrocarbons), there is still a bunch of products that will be available at a new price point.

David Simpson, PE
MuleShoe Engineering
www.muleshoe-eng.com
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RE: peak oil production in 2009? - what next?

This article provides some interesting info on gasoline prices, crude prices, supply and profitability.  I certainly found it interesting.  Oil company profitability goes up with increasing costs of crude and overall consumption stays about even?

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1085944410599&p=1012571727108

Zdas04,
Several posts up you made mention of the strategic oil reserve.  Specifically, you stated, "The saddest thing about it is that government energy policy is still operating on the principle that drilling in a couple of sensitive locations and using the laughable "strategic energy reserve" (2-3 days worth of consumption) will fix the mess as soon as they can get the Democrats out of the way.

I agree that using the strategic oil reserve is just a political gimmick and will not have any real impact on supply or consumer prices.  In fact, this was proven to be the case when Bill Clinton tapped into the reserve during his tenure in office.  I believe Bush's administration has refused to use the reserve even when pressured by John Kerry publicly.  Just wanted to correct that point.  The "Dems" are, in fact, the party that plays silly games with the reserve.  The Republicans have their faults, but this isn't one of them.

RE: peak oil production in 2009? - what next?

One thing to recognise is the impact of environmental concerns on fuel prices.
We no longer use leaded fuels but the latest round of low sulphur iniatives is going impact on refinery prices. The routes to low suplphur are various but include producing gasolene from crude already low in sulphur for which competition will drive up the price.

It will also impact in other ways such as in consumer goods and especially imports.
Marine Heavy fuel oil prices have been climbing steadily and stand at very high levels today.
 
At US$187 (typical) per ton low sulphur fuel is expected to add US$65 a ton to the price initially but as low sulphur fuel becomes more readily available the premium will probably drop to around US$30-35 per ton.

You may think that $187 per ton isn't much for 380cSt fuel but fuel costs are around 70-75% of the operating cost of ships and, at the current high prices, represent the biggest or second biggest single cost to many companies. Low suplphur will push fuel to the top of the list.

Add in all the initiatives for other environmental concerns which are now impacting and you know that someone, the consumer, will be paying through increased freight costs.

Hence, again, we should all remember that what we pay at the pumps for gasolene isn't the only part of outr paycheck that goes into the hydrocarbon economy.

JMW
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RE: peak oil production in 2009? - what next?

Funnelguy,
Thanks for the clarification.  I got this week's Oil & Gas Journal this weekend and found that my "estimate" that the SER would last 2-3 days was a bit of hyperbole.  At April, 2004 consumption rates the SER is almost 30 days supply.  Of course if we had to rely on it, unit costs would go through the roof, many people would sharply curtail usage, and many others would attempt to hoard personal supplies--so who knows how long it would really last.  The Journal also had an interesting statistic about gasoline prices--if you carry the previous peak gasoline price forward from 1981 to 2004 dollars, the pump price was $2.99/gallon.  In constant dollars today's prices are 2/3 the record.

I found your article interesting, my experience with one of the majors listed in the last paragraph is exactly in line with the price forecast mentioned.  While actual price decks are confidential, they don't swing with the NYMEX and it can take years for a sustained price change to be reflected in an economic analysis.  Target rates of return have also not followed a reduced tollerance for risk.

We've had at least 50 years of short-sighted (never farther than the next election) and generally bad energy policy under both Democrats and Republicans.  I don't see that changing.  If ANWR, the Pacific Shelf, the Eastern Gulf, and the Western Atlantic are all opened up for exploration today we'll see production starting in 2008 and ramping up to maximum in around 2012 or so.  The net result of this drilling will be less than decline rates between now and then.  Demand will increase at projected prices and total imports will make up the slack.  Balance of payments just keeps getting farther out of whack.  The only viable "solution" is the reduction in demand for oil and gas either through higher consumer prices or finding an alternative.  If higher pump prices result in better margins, then some un-economic projects will become economic which will help the trade deficit as well.

David Simpson, PE
MuleShoe Engineering
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RE: peak oil production in 2009? - what next?

zdas04,
The part I find most disturbing and short-sighted is that the USA is currently in a situation where our oil supply from OPEC could very well be interrupted or slowed by terrorist actions.  The SER should be reserved for interruptions such as that.  Possibly the reserve should be expanded given the unrest at present.  Instead, we have these twits lining up at microphones to demand that we dump the reserve onto the market to drive down consumer prices, a gambit that didn't work the last time it was tried.  What about refining capacity?  End of mini rant.  I'm off to find the decaf...

RE: peak oil production in 2009? - what next?

Thanks for your response zdas04,(I'll stop worrying so much now) being an aussie I was thinking more in terms of whole world supplies, but I imagine what you have said about US exploration would still apply, nobody will go after the more difficult (expensive) stuff until they are sure they can get a return on it & this wont happen untill the easily obtained reserves start to decline.

When you say alternative products, are you reffering to things like the Canadian tar sands & gas to liquids technology? which seem to be waiting in the wings, but haven't been competitive on price up till now.

RE: peak oil production in 2009? - what next?

I think that the real alternative energy source is yet to be discovered.  New sources of old stuff, new ways of processing old stuff, and conservation will just delay the inevitable switch to something else.

Maybe it is the firefly derivative that Heinlein talked about in The Roads Must Roll or something equally as far out there.  It is unlikely to be either a Hydrogen or a Carbon chemical reaction (the first due to the transportation problems, the second due to environmental concerns).  Maybe fusion.  Maybe we pull our heads out and re-embrace pressurized water fission reactors.  Maybe we discover a way to drill for geothermal energy cheaply enough to make it viable for large populations.  Hydrates may play a part in the transition.

The only thing that I'm certain of is that the "answer" will be a significant departure from our current thinking and that cheep fuel reduces the impetus for the unnamed genius to come to market.

David

RE: peak oil production in 2009? - what next?

3
As the famous pop TV psychologist says, "The best predictor of future behaviour is past behaviour".  What will we be doing in the future?  Burning fossil fuels, that's what we'll be doing.  As the low lift-cost sources dry up, we'll move to higher lift-cost sources.  As those dry up, we'll exploit dirtier and more energy-intensive forms like oil sands, oil shale and coal.  And we'll be drowning in our own filth, basically.

There is NO technological fix to this problem.  Fuelcells and hydrogen won't save us- they CAN'T- there's no technological basis to suggest otherwise if the source of the hydrogen remains fossil fuels.   What we need is wholesale changes to people's consumption behaviours driven by LEADERSHIP.  We need taxation of consumption with the funds dedicated to weening us from our fossil-fuel addiction by promoting and subsidizing energy conservation measures like co-generation, public transit etc., and renewable sources of energy generation (particularly wind).  And we need it now, not later.

Will it happen?  Not as long as charlatans keep giving people false hope of global survival in the face of geometrically increasing fossil-fuel consumption.  Leadership against the wants of a population is difficult business and beyond the skill of most modern democratic politicians.  But we have to keep trying- the planet's future is in the balance.

RE: peak oil production in 2009? - what next?

Hi moltenmetal!

I have no knowledge of fuelcells/hydrogen aside of what appears on TV every now and then.  Hydrogen is usually presented as the perfect solution, so your post shook me up.

I never considered that fossil fuels would be required in the production of hydrogen.  I assumed (perhaps naively) that nice clean Hydro-Electric power could be used to produce the required amount of hydrogen to power the super clean cars of the future.  Is there some difficulty doing this, or is the hydro capacity simply insufficient?

RE: peak oil production in 2009? - what next?

Hydro electric isn't that popular because of the huge environmental impact. Witness the major schemes in Turkey and China and the uproar they cause (apart from the above mentioned Canadian hydro-electric schemes)

This is why Europe is pushing for off-shore wind farms (out of sght, out of mind) as the last remaining "green" fuel. Even so many woind farm speculators keep trying for on-shore wind farms and they keep getting shot down.

JMW
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RE: peak oil production in 2009? - what next?

Moltenmetal,
I gave you the star because of your comment on political leadership.  If those individuals (spelled M-O-R-O-N-S) don't pull their heads out and start leading, we have the potential to be in a deep mess one day soon.

I'm not sure I buy the TV psycobabble quote.  A hundred years ago a fairly well-informed engineer would have had a hard time predicting fission, but it happened.  The only reason it hasn't made a bigger impact is poor political leadership, stupid media, and a bad job of PR by the industry.

I'm not at all confident that there isn't something equally as far out there just waiting for the right person to find the right shoulders to stand on to discover.  If that person doesn't come forward, then you hit the nail right on the head - the "clean"er fuels get used up and the nasty ones get used and the muck gets thicker and we have to abandon any city suseptible to inversions.

David

RE: peak oil production in 2009? - what next?

The great hype surrounding many alternative power sources has always left more questions unasked.

Take electric cars. Always a great hope of the very green (double meaning intended) I always wondered where many of the enthusiasts thought their electricity was coming from. Since most of these people seemed anti-nuclear clearly fossil fuels would be the primary fuel source.

So how does this stack up?
Is an electric car greener?
Well, one might suppose that producing power centrally allows for all sorts of sophisticated controls on emmissions based on the economies of scale. Of course they can be gas as well as oil fired which might gain some advantage.

But now consider, with the unbundling of national power generators and the Third party access deals than seem to be virtually global,  auot-generators contribute more and more to the national power grids in many countries.
So consider, a typical autogenerator is maybe a textile factory where they use a lot of steam and electricity. They install their own power plant and sell surplus electricity to the grid and which is used to charge up electric car batteries. TA proprotion of that power is coming from large diesel engines. OK, by generating steam they are much more efficient. But how much better is the emmissions control than in a diesel car? The fuel they burn is heavy fuel oil; refinery wastes blended with low quality cutter stocks.

Now ask also how the energy equation balances if the fuel is burnt, converted to electricity and then stored and used?

Is this approach ccheaper?
Is it more efficient?
Is it more environmantally friendly?

How much energy is consumed in producing electric cars? Is it more or less than an IC engined car?

Does anyone know?

JMW
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RE: peak oil production in 2009? - what next?

Lorentz:

We've had little luck in shifting even our EXISTING electrical generation infrastructure toward renewables, much less generating all our transporation energy needs via renewables.  In Ontario, Canada (my province, for which I have the statistics), we have a crisis on our hands trying to replace the ~ 21% of our electrical demand that is currently satisfied by coal- and that represents only 21% of the 18% of our net energy that we use in the form of electricity- only a mere 3.8% of our overall energy needs!  We currently generate ~44% of that 18% by means of nuclear plants, and the majority of those plants are nearing the end of their cost-effective life-cycle.

We're unlikely to build new nuclear plants to replace our coal-fired electrical supply, much less to build huge hydrogen-generating electrolysis centres to fuel our vehicles.  Fission nuclear is no panacea either- the overall environmental impact may be lower than that of fossil fuel use, but nuclear power is centralized, complex and very, very expensive from a capital and maintenance perspective, even if you manage to get the political will to find a place to store the radioactive waste.  In vast Canada with all its essentially unoccupied land mass and vast tracts of Shield granite, we've had nuclear power for over 45 years and STILL have no permanent nuclear waste storage facilities.

If you get real for a second, you'll realize that fossil fuels, more specifically natural gas, will be the source of any hydrogen you may plan to use to run your magic fuelcell hydrogen vehicle.  Every atom of carbon in that natural gas will end up as a molecule of CO2 in the atmosphere as a result of the reforming process- if you do anything to reduce that amount, it will come at a very significant energy efficiency hit, which means you'll consume eveny MORE fossil fuel per pound of hydrogen you use.  And despite the huge infrastructure costs and dramatically higher vehicle cost, there is virtually no net energy efficiency benefit of running a fossil-source hydrogen fuelcell hybrid vehicle when compared to running a fossil-fuel driven internal combustion hybrid vehicle once you take all the various efficiencies into account.

Will we dream up something as revolutionary as fission to replace our current sources of energy?  I doubt it.  Fusion is pretty well studied and I doubt we'll have pocket fusion generators any time soon.  The other fundamental sources of energy on the planet are pretty well understood, which we couldn't have said a century ago.

Until we DO discover that magic bullet, we should work to reform our consumption patterns as if this magic bullet isn't likely to EVER be found.  That's the only way our species will be truly viable long term.  This addictive, mindless, needless, wasteful consumption has to be curbed, and the only way it's going to happen is if we stop holding out hope for magic technological fixes like the "hydrogen economy".

RE: peak oil production in 2009? - what next?

Moltenmetal,
Another great post.  I think that the nuclear "waste" issue is also one of leadership and focus.

Remember when sawmills were difficult to see from within the cloud of smoke generated from burning the sawdust and "unusable" slabs?  Now many of the mills make nearly as much from these "waste" products as they do from lumber (not really, but they've turned a liability into a non-trivial asset).

Had we approached nuclear waste from the engineering viewpoint of maximizing total value, we would have been looking at refining the junk into unique materials that have the potential of solving other unrelated issues.  Instead, governments and industry leaders have argued about how deep to bury the junk.  Tritium is the most expensive material on earth (by unit mass), how much of it is buried in drums?

When I worked in nuclear power, we had to package every single thing that had had the potential to have touched a radioactive source for disposal (double bagged and taped).  How many thousands of tons of recoverable stuff could have been safely recovered had we allowed a nuclear "waste recycling" industry to develop?  I don't know, but it is a large number.

The Pressurized Water Reactor Plant (PWRP) technology is capital intensive.  The last numbers I saw had an average PWRP return on capital under 10%.  Had the industry been able to be built a plant in less than a decade without protracted legal battles, the return would have been better - again leadership and public relations.

In terms of being a large, centralized target for attack, they are actually less attractive a target (in terms of population impact) than a dam.  Were the new Three Rivers Dam in China to fail catastrophically, the loss of life would be in the millions of people.  There is nothing you could do to a PWRP that would approach that sort of impact.

I don't think that fission is the silver bullet to get us out of the muck that we find ourselves in.  I do feel confident that a sensible approach to it would have reduced the garbage we've put into the air in the last half century.  Maybe that would have further delayed the inevitable crises and made it even worse when it does come.

One thing that you are dead right about is that sitting here thinking that the next big invention to get us out of the mess is "right around the corner" is a really bad thing.  Conservation is the only rational path.  Not that conservation will prevent the inevitable exhaustion of fossil fuels, but that it will reduce trade deficits and keep some of our trash out of the air.


David

RE: peak oil production in 2009? - what next?

A whole bucket of stars for moltenmetel.

If only our polital leadership would pay just a little
attention to what the technical community had to say and
take it seriously I would feel a lot safer.

As it is they ignore what doesn't further their cause and
embrace as gospel what does help their cause.

If I were Prezindete tomarrow I would add a US $2.00 a
gallon tax to gasoline and use that money 25% for
education, 25% enviromental research and and 50% for
long term energy research.  None of this money would
go to any beaurocrats.  Teachers, Scientist, Engineers
would get it.  Sure there would be waste but I would
rather have the grass roots people wasting a little instead
of big business.

RE: peak oil production in 2009? - what next?

zdas04:

We agree that a rational approach to fission power could probably have reduced the atmospheric emissions load on the planet considerably.  In fact, it could most probably have reduced even the radioactive emissions load to the environment by displacing fossil fuel combustion.  Remember that the heavy fossil fuels (coal and heavy oils) contain trace amounts of radioisotopes which used to be safely locked below the earth, and are now (mostly) happily floating around in our environment thanks to fossil fuel combustion!  Taking Chernobyl out of the equation, the radioactive fallout from fossil fuel consumption is probably larger than the fallout from the entire peaceful use of nuclear energy to date.  But there's the problem- you can't take Chernobyl out of the equation, can you?!

The problem with taking a rational approach to fission power is the sheer impossibility of human beings remaining rational when thinking about and discussing something that has such a catastrophic downside should it fail.  The result is the regulatory "overkill" (a word resulting from that other, kaboom-oriented field of the nuclear "industry") that ham-strings fission power in terms of capital cost, waste disposal etc.  The public know just enough about fission power to not trust anything any technical person says about how safe it is- especially if that person derives all or part of his/her income from it.

That would be OK in and of itself, except that the public in their ignorance assume that the "do nothing", or more properly, "do what we're already doing" option is zero risk.  It isn't!  Thousands of people die prematurely and indeed needlessly in my province every year because of bad air quality resulting primarily from WASTED and NEEDLESS fossil fuel consumption. More nuclear power (in the form of relatively safer CANDU heavy water reactors in our case) isn't either the saviour or the bogeyman in this case- it's just one option for solving some problems while creating others.  The only option which has nothing but net benefits in terms of people's health is CONSERVATION- not wasting the energy in the first place- because all forms of energy generation have environmental impacts, they only differ in nature, likelhood and degree of severity.  The trouble is, people's attitudes and behaviours have to change, and that's tough stuff for politicians to sell- even when the plain truth is in front of their own eyes.

Exactly the same phenomena are observed in regard to hazardous chemical waste disposal problems.  The public know enough about PCBs to be afraid of them, so they prevent the implementation of basically any new technology to destroy them because of "not in my backyard" concerns.  As a consequence, occasionally the storage locations of these materials catch fire (as they did at a little town in Quebec called Ste. Basile de Grande), consequentially exposing the public to orders of magnitude more PCBs than if 1950s incineration technology had been used to dispose of them in the first place.  The "do nothing" option is not necessarily lower risk!

We technical people have the responsibility to step up to the microphone, tell the public that we're sorry but there IS no technological fix in this case- the only route to energy consumption which is actually lower in harm is to conserve energy and use it more wisely.  We technical people have LOTS of tools in our technological toolbox to improve energy efficiency- but people's behaviours and consumption patterns will need to change if we're going to have the desired effect.  The only way that will happen, realistically, is if wasteful consumption hits people in the pocketbook.

RE: peak oil production in 2009? - what next?

The main powers have a huge responsibility to the world as it is now and to our children.

We are screwing the planet in a 'don't give a damn' attitude which amazes me.

We need to:

a. Take responsibility for our own waste.
b. Stop creating polution or take every step reasonable to reduce it.

This begins at home as well as the workplace.

A few examples:-

In the UK we use vehicles with efficient engines to reduce running costs. Fuel is expensive so we take extra care in choosing efficient cars. We don't generally drive fuel guzzlers.


Building Regulations are tightening. Building insulation values are improving, regulations restrict energy use and try to limit air-conditioning etc.

Plant has to be more efficient. There are minimum limits on domestic and  industrial boiler efficiencies with a trend to use condensing boilers etc.

On the down side there is a trend to use more air-conditioning- when we could design this out by careful building design and coordination between the architects and building services designers.(some education needed)

Our company discusses the advantages of energy efficient design with the client in an endeavour to convince them to spend a few pounds more which will give long term gain, though this is an uphill struggle sometimes.

Global warming is upon us and we (the high energy users) must take account of this and stop hoping that others will compensate for their dangerous apathy.

Ther are already signs that sea levels are rising. Scientists argue that this could be a natural phenomena and that reducing energy use will make little or no difference. Can we afford to wait until we really know the truth.

Friar Tuck of Sherwood

RE: peak oil production in 2009? - what next?

(OP)
friartuck:
You are right, but the main point is that the responsibility is not primarily with the gov't leaders, but with ourselves and our own energy consuming practices. To soften the shock, the immediate concerns should be with educating the public on methods to reduce energy consumption, and planning now for the changtes ahead.

More bikeways, having a 4 day workweek, increased bus coverage, and perhaps an internet based bulletin board for rideshare information updated daily would be a move in the right  direction for the average worker. Large houses may need to be redesigned in a zoned manner to allow heating only a central core portion of the house in the winter.

Structurally, a major concern is that the means of agriculture might  need to change. Current practices of using mega-farms with few workers and large combines for ploughing, harvesting and processing the profduce, using petrochemical based fertilizers and insecticides, and long distance trucking would probably need to be re-examined to determine if they need to be modified if the present cost of the oil were to increase by a factor of 2-3 .

I would have thought that the likely population shift woudl be from suburbs and rural areas to urban areas, due to the improved efficiencies of trnasport and distribution, but I understand that studies in Europe on the likley way to adjust to an oil shock would be to relocate from urban areas to rural areas.  Similarly, the saem shift fromurban to rural occurred when Cuba recently reacted to the artifical oil shock imposed by the collapse of the soviet union . Perhaps the risk of  social unrest is a higher risk factor than distribtuion costs.

RE: peak oil production in 2009? - what next?

davefitz,
Your post sounded so naive.  There have been conservation campaigns for years.  As long as energy costs are a declining portion of an individual's disposable income, requests to conserve will fall on deaf ears.  The only way to affect conservation is to make each individual's short term cost-benefit evaluation fall in favor of conservation.

There is a post above about real conservation efforts in England - the reason is that the price of energy is very high in real currency.  This high price is solely due to very high taxes (a case of politicians leading and setting energy policy in a way that has a chance of working).  With high prices at the pump (or the home gas meter), people have a personal incentive to conserve.

With the prices in the U.S. today (less than 60% of 1981 prices in constant dollars), what is the incentive of average consumers to conserve?  Civic responsibility?  That dog don't hunt.  Concern for the quality of life of future generations?  The great unwashed masses have a hard time deciding which stupid sit-com to watch, let alone making a decision for unborn grandchildren.

Build your bike lanes - people will use them for turning lanes.  4-day workweek is fine except on 3-day weekends many of the people will drive farther than on a workday.  Get the population to spread out?  Great idea, make the other guy move and I'll have less congestion in my town.

If it doesn't hit the pocketbook hard enough to hurt, it won't hit home.  Over the long weekend last month (Memorial Day in the U.S.), everyone was complaining about gasoline prices, but total volume of gasoline sold exceeded the previous year.

David

RE: peak oil production in 2009? - what next?

(OP)
There is no incentive to conserve with the present cost of energy- no question. The issue of this thread is : if the demand for oil continues to increase at 3% per annum but the rate of oil production reaches its maximum ( peak) in the year 2009, then the cost of oil ( and its derivatives) must increase in order for  demand to match reduced production capabilities. If this new cost in the years after 2009 reaches levels of 2-3 times current cost ( in present dollars) , most low income persons would be priced out of their cars and lose the means to work ,and equivalent effects would also to the cost of goods that depend on low oil prices.

As an  example of the resulting social impact, a few years ago the british government increased the oil tax, and reduced production of oil from the North sea rigs also infuenced the price of oil /gasoline in england.  A result was a strike by truck drivers that brought the economy to its knees.

RE: peak oil production in 2009? - what next?

Well, not quite brought the economy to its knees, the chancelor defused the situation by taking a penny or two of his increase. He put it back on a couple of months later and no-one could be bothered to have another go, mainly because he managed to stockpile fuel against blockades of the terminals. There was about a day or two of disruption.

The Chancellor had learned well from the French approach to these matters and where insurection is frequent, and a jolly good opportunity to blockade the channel ports by French Farmers, truckers or whoever gets the turn that week.

The Gendarmes do nought (unless British truckers caught in the ports complain, in which case they are sternly spoken to), the French government promises and then never delivers.

Now e again have the chancellor making noises about a fyurther hike in fuel taxes and having learned from the last experience i doubt there will be a protest.

Note that it is diesel tax that causes the problems. It is so high that blackmarket trading is rife, fuel is being stolen from everywhere and car owners are repeatedly sold agricyltural diesel.

In the UK diesel is more expensive than petrol. This is why the Society of Motor Traders advise that diesel cars sales are bouyant on the continent and not in the UK.

This tells us that this isn't about the environment but about tax revenues.

JMW
www.viscoanalyser.com
Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

"If this new cost in the years after 2009 reaches levels of 2-3 times current cost ( in present dollars) , most low income persons would be priced out of their cars and lose the means to work ,"

Um, if the price of gas trebles in the USA then it will have risen to roughly what is CURRENT in Europe. On my last visit I didn't notice any great tendency for the low income people to walk or catch public transport in any greater numbers than in the past.

You are right, as the supply of easily obtainable oil dries up, the price of oil will rise. Various doomsayers have been singing this song for 35 years, yet oddly enough, the supply of cheap oil INCREASES as time goes on.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

There's debate as to whether or not you get a net energy benefit out of hemp oil or any other vegetable oil once you consider all the fertilizer, fuel for tractors, and the process of producing biodiesel from it.    Some calcs show a net energy benefit, others show that it takes as much as a litre of fossil fuel liquid to produce a litre of fuel-worthy biodiesel. It depends on what part of the world you're in, what cultivation practices are used, and how optimistic or inclusive your calcs are.  And we'd have to convert such huge tracts of farmland to match our current fossil fuel consumption that it's doubtful we'd have enough left over to feed and clothe the current population as well.  Figure growth in India and China into the picture and it becomes even more hopeless.

The same goes for sugar-based fermentation ethanol- figures I've seen show little if any net energy benefit. (I don't have figures for cellulose-based ethanol- the only figures I can find for it are biased because they come from Iogen who are in that business).

Although biodiesel does offer some smog-reduction benefit when blended with fossil-source diesel, in the end both diesel and ethanol smack more of an attempt to mask agricultural subsidy than as a sincere means to "green" the planet by reducing our dependence on fossil fuels.

Let's not forget that the automobile was invented as an environmental alternative to the more "natural" methods of transporation in use in cities at the time.  Cities all over the world were piling up in horse manure and horse carcases...

If we REALLY want to deal with our fossil fuel addiction, we have to get serious about taxing consumption of these fuels, and investing the proceeds into means to reduce our addiction on them by improving energy efficiency.  That means hybrid cars in the short term, and mass transit with higher population densities in urban areas in the longer term.  Say goodbye to your car- or goodbye to the planet once everyone in China and India want one.  Your choice.  

RE: peak oil production in 2009? - what next?

I can't see a culture that has grown up dependent on freedom of movement disolving itself overnight so we need a viable alternative that will sustain our current way of life.

Rather than give up our cars, how about not having so many children? Seriously, negative population growth is a solution or part of it. (www.populationconnection.org/com)

There is truth in the old saying "The rich get richer, the poor get children" and, in part, this is unregulated i.e. a natural consequence of the pursuit of a higher standard of living is fewer children. In poorer societies the more chidren, the more the burden of care of the older people can be distributed. A consequence is the partioning of the inheritance into too many unviable parts.

There are many logical reasons for this. Inheritance laws and inheritance taxes are factors that could be positively exploited e.g. primogenture.

There is more than one way to skin a cat. This approach addresses more than just the fuel problem.

JMW
www.viscoanalyser.com
Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

(OP)
The low birth rate hypothesis has its own issues.

In the case where a population deliberately accepts measures to reduce the birth rate, other economic issues arise which lead toward increased immigration, and the net result is an incrasing population . It is no coincidence that increased immigration to US, Canada, Germany, England has been offically or unofficlaly increased to the result of a net population increase at the same time that the societies fertility rate had dropped.

If an economy were to allow a net reduction in population soley thru reduced birthrate, its effect on funding for social security, demand for entry level housing and other consumer commodities strongly correlated to families, labor, military , etc would result in intense lobbying efforts to convince regulators to permit practices that tend to return the society to a net increase.

RE: peak oil production in 2009? - what next?

Hello Greg,

Your quote:

"You are right, as the supply of easily obtainable oil dries up, the price of oil will rise. Various doomsayers have been singing this song for 35 years, yet oddly enough, the supply of cheap oil INCREASES as time goes on."

The problem is that the demand for oil will soon exceed the supply (look at how all the car companies are building cars in China and India). Cheap oil will be a thing of the past. Unless governments subsidize it, but that will not help us, because we will pay for cheap oil through our taxes.

Oddly enough, the oil companies will not lose out, they will get rich at our expense (as they have in the past).

Cheers,

Joseph

RE: peak oil production in 2009? - what next?

Hello All!

I must agree with jmw that population growth is the key factor, and I think that in the long run it will defeat any attempts to solve the problem via conservation and/or innovation.  When you have a pole in the right half plane i.e. exponential growth, you have an unstable system (and to think I was arguing for less math education in another thread).

However, both conservation and innovation will be needed to buy time for people to (hopefully) adapt to the idea of a smaller population.

RE: peak oil production in 2009? - what next?

But, back to the what comes next aspect, i am not alone in believing our best hope is fusion:

Fusion should put its energy into oil
The energy industry is facing a crossroads. The future is fusion, suggests Dr. William Nuttall, but funding must come from private money - and where better to go than to the major oil companies.

 The Engineer, 28 May 2004

JMW
www.viscoanalyser.com
Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

Yes, there are some people would rather restrict the right of others to have children than see their own "right" to drive an idiotic 2-tonne SUV in suburban commuter traffic restricted.  The problem is, their so-called right is borne solely out of their ability to "afford" this luxury by virtue of artificially low fossil fuel prices propped up by major economic externalities (i.e. costs that they transfer to others by doing so).  One of the costs is slow destruction of the planet's climate.  The other is a premature end to people's lives.  It's a problem of values that won't be solved by a simple technological fix.

You're right- unfettered population growth makes for an unstable system.  Kill all the humans and on the geological timescale, Earth will be back to normal in no time!  Clearly no better a solution than trying to limit people's ability to have children, a basic biological drive underpinned by aeons of evolution.

In the meantime, we humans that want to stay here and stay alive will have to moderate our consumption patterns by distinguishing our "needs" from our "wants".  People "need" a means to efficiently travel from point A to point B- they don't need an idiotic SUV to do that, and once they pay the real cost of fuel PLUS a tax to act as a disincentive to excessive, wasteful consumption of fossil fuels, they'll no longer "want" an SUV either.

Yeah, I know I sound like a reactionary, but while people hold out hope of avoiding this inevitable change in consumption habits, the planet's situation gets worse and more difficult to do anything about.  The "do what we're already doing" option clearly isn't risk free in this case, and sticking our heads further in the sand and hoping for a near-term breakthrough in fusion power isn't going to cut it as an alternative plan either.

RE: peak oil production in 2009? - what next?

josehpv,
I just can't let your last statement slide.  

Oil-company rates of return on capital for the last decade have been slightly better than bank passbook rates - every oil company has cut staffs way past the bone, every major has shut down most research facilities, and "exploration" has been cut back to things less risky than step-out drilling in the 1950's.  

Big, Bad Oil Companies are currently approaching a position to stop being such a drain on society.  When they've all downsized themselves into bankruptcy, the people who go out of their way to take cheep shots at the industry will wonder why they can't get fuel to operate their methonol stills.

In the Jimmy Carter "windfall profits" days, the industry defined success as one discovery well in 7 new field wildcats.  Supporting that sort of failure rate required at least 30% rate of return on capital from ongoing operations to fund the failures.  Today's prices in the U.S. are 2/3 the 1981 prices (in constant dollars), and the variable cost structure is about half, and fixed costs are about twice (production and business taxes have kept up with inflation).  

All of remaining the Petroleum Engineering programs are having a hard time filling the seats, and schools are shutting down programs.

If the Oil companies can't get back to year-on-year profitability, then the crises will come sooner and hit harder than anyone can imagine.

Just quit bashing the easy target.  You may find that Atlas really can shrug.

David

RE: peak oil production in 2009? - what next?

Josephv, I was making an observation based on past experience. You have merely stated the opposite, as if it was some sort of fact. Where is the evidence that cheap oil is 'running out'?

I'm not saying that Oil is an infinite resource, I just think the gloom and doom merchants have carved themselves a nice little niche based on emotion not facts.

If someone predits a really bad thing will happen in 10 years time, 30 years ago, and repeats that message every 5 years for 30 years, how much credibility does their methodology have?

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?


Hello Greg,

Thank you for your reply. There is plenty of evidence that the big crunch is coming:

- Global oil discovery peaked in the 1960's
- Production curves mirror discovery curves, this means that production will peak around 2010 (depending on many factors including recessions)
- oil is not cheap, it is heavily subsidized (see my comments below)

Hello David (zdas04),

Thank you for your post, very interesting information, but you have to tell the whole story:

- The bills in the National Energy Policy provide the following
- more than $ 9.6 billion in new or expanded tax breaks and subsidies for oil and NG
- price supports for the Alaska NG Pipeline (approx. another $10 billion)
- how about if we through into the equation the taxes spent on protecting the Kingdom of Saud? We are talking about 3 Gulf Wars.... which translates to another few billion dollars ... and worse this translates to lost lives


How can anyone seriously think that oil is cheap?

Imagine we spent this kind of money and effort on something else.

Best regards,

Joseph

RE: peak oil production in 2009? - what next?

Joseph,
The "tax breaks" are an interesting concept.  The company that used to prepare an "Industry P&L Statement" has been driven out of business in the cost-cutting binge of the '90's, so I looked at one particular company as representative.  This company had a before tax net profit in 2002 of $16.4 billion (thousand million).  On that profit they paid $5.8 billion in the various taxes - that is 35% marginal tax rate.  Does your company pay anything approaching that?  The taxes include severance tax, production tax (which is in addition to any income tax), property tax, income taxes, harbor use taxes, etc.

Before reaching the $16.4 billion, the company deducted $2.8 billion in environmental charges.  This doesn't include capital to meet progressively stricter fuel-quality regulations, just current expenses to do things like putting catalytic converters on big-horsepower engines, building sound walls, repainting all production facilities because the new head of the BLM didn't like brown equipment in the desert and wanted it green, extensive proscriptive berms around facilities (instead of the government saying "show us your plans to prevent spills", the government prescribes expensive and often ineffective procedures to "prevent spills").  On top of all that, there is a couple of hundred million dollars required to comply with extensive reporting requirements.

After all of the give-away tax breaks this company paid 35% of its margin before tax on taxes - 55% of after tax profit.

The "price supports" for the Alaska pipeline are simply an insurance policy that individual companies need to protect them from the government repeating their historically stupid energy "policies".  If your business was asked to invest $20 billion on a project that would take 12 years before it flowed the first drop of saleable product and has a return on capital of 8%, would you want a price guarantee?  I doesn't take much of a drop in prices to make the economics stink on that project.  The country needs the gas.  Seems to me that good governing would require that either the price supports be provided or for the government to embark on the construction themselves (which would make it a $200 billion project that would take 25 years).

Your contention that the Gulf War and Iraq are just oil grabs is offensive.  All oil flow from Iraq stopped a couple of weeks ago and the world supply/demand balance didn't change a nickel.  Saying that we went into the Gulf War because of oil is just ignoring the fact that one sovereign nation had invaded an ally of the U.S.  Had that been Cuba invading Bermuda, our intervention would have been hailed as "statesmanship".  But because the countries are Islamic and oil exporters it is damned as "protecting Saudi".  Give me a break.  My son recently returned from a year in Iraq and he's going back in the fall.  It is obnoxious to sneer at his sacrifice.

David

RE: peak oil production in 2009? - what next?


- Global oil discovery peaked in the 1960's

That's right, it is uneconomic to keep looking for more because evry time they do they find more. In that context it is unwise to keep looking, until they need to.


- Production curves mirror discovery curves, this means that production will peak around 2010 (depending on many factors including recessions)

Wow, so yet again you are predicting that in five-ten years time oil production will peak, with not a shred of evidence. Having heard this in 1974, 1980, 1985, 1990, 1995 and 200, I guess at least this time you are one year early. Unless you have time machine, or more knowledge of oil reserves than is commonly available, you CANNOT make such statements.

- oil is not cheap, it is heavily subsidized (see my comments below)

OK, I was using 'cheap' as in how much we pay for it. Your use of that word presumably means something else. The proportion of the USA's GDP used to pay for its oil consumption has fallen by a factor of 3 in 25 years. Sounds cheap to me.

Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

(OP)
For the "proof", see <www.peakoil.net>.  

It seems the main constraint to constantly increasing production is the increasing need to flood the larger oilfields with increasing quantities of water to force oil to levels that can be economically pumped. The ratio of water to oil has increased to very high levels in the larger fields, and thus it is straightforward  to accurately predict the date of peak oil production.  On the other hand , if CO2 sequestation  efforts leads to a low cost source of liquid CO2 for oil field priming, then maybe another plataeu could be achieved, but that is certainly down the pike a ways.

RE: peak oil production in 2009? - what next?

All reserves estimates and production forecasts that are made public are required by law to start with a price forecast.

Ultimate recovery and final rates are totally dependent upon product price and transportation costs.  If prices increase, and the increase is believed by the industry to be sustainable, then the reserve numbers and the public production forecasts will change dramatically.

The water-flood technology is called "secondary recovery" and has been responsible for huge additions to oil recovered.  Injection CO2 and other non-water chemicals is called "tertiary recovery" and has also added a lot of reserves.  People are starting to talk seriously about "quantary recovery".

In the early 1980's I sat through a presentation by a scientist who was working on changing the wetability of reservoir rock from oil-wet to water-wet (i.e., change the rock so that the capillary forces at the rock-surface showed a measureable preference to attach water instead of oil).  He had been working on this for 5 years and was starting to show progress.  Since 30-50% of the original oil in place in a reservoir is classed as "immobile" or attached to the rock, changing the wetability could result in the conversion of a quantity of oil from "abandonded in place" to "recoverable" nearly equal to the amount we've produced in the last 100 years - where is the peak in that scenario.  This guy was layed off in 1986 and his lab was closed, never to reopen at that company.

A buck or two change in oil price will shift the peak several years.  A quarter will make the same shift in natural gas forecasts of peak.

David

RE: peak oil production in 2009? - what next?



Davefitz

http://www.peakoil.net/uhdsg/Default.htm

Where's the beef? That site is just assumption piled on opinion, not proof.

Pretty graph though.

Thinking about it, the peak is not important, after all, if there was a big recession the volume of oil shipped would drop, proving nothing about reserves.

The important question is, is there enough oil shipped at a low enough price for people everywhere to buy as much as they want? Since it is currently cheaper than milk it really seems to have a pretty low value at the moment.



Cheers

Greg Locock

RE: peak oil production in 2009? - what next?

David,

Thank you for your informative response. My apologies, it is not my intention to offend you or anyone else.

I never said, nor implied that the Gulf Wars were "oil grabs". I don't know the exact causes for these wars, but I believe that securing global energy supplies played an important role (sorry if this is offensive to you, but that is the only logical conclusion to me).

Let me quote John C. Gannon (deputy director of the CIA in 1996) "We have to recognize that our nation will not be secure if global energy supplies are not secure... we need a substantial quantity of imported oil to sustain our economy... the US will need to keep close watch on events and remain engaged in the Persian Gulf to safeguard the flow of vital oil supplies"

His words, not mine... by the way, why are there US troops in the Caspian Sea? I believe that energy supplies once again play a role.

Sorry, but Saudi Arabia is a Kingdom controlled by one family (this has to be offensive to anyone who values democratic principles). Yes they are an ally, but why are they an ally? (Iraq once was an ally too). At least Barbados holds elections.

Finally, I don't see many governments preparing for the oil peak.

This is all very tragic, but we have seen bad energy policies and bad foreign policies for years.. but we are still paying the bills.

Joseph

RE: peak oil production in 2009? - what next?

(OP)
Gregolock:
Well, I was careful enough to use quotation marks on "proof". According to some philospphers, we can never know anything, there is no proof to anything, blah blah blah...

The way many conventional economists explain the growth and stability of nation's economy, they relate the growth in wealth to the increase in energy consumption. Of course, one can alternatively say there is no cause and effect relationship, and that it is just coincidental. In particular, the relationship of energy consumption and wealth per capita seems to have reversed in some EU countries lately.

In any case , if the demand for oil increases faster than the rate of production increases, then the cost for oil must increase so as to reduce demand, at a rate related to the flexibility to switch to alternate fuel or alternate ways of lifestyle. To the extent these demands are inflexible, there can be sorts of crises developing .
 ( I know, no-one needs to review economics 101)

I do not know of anyone that is refuting the basic premises  at <www.peakoil.net>, viz, that there will be a peak in oil production in the near future. I also do not see any efforts to make the demand for oil more flexible in the US. It seems as though we are looking for trouble
( what, me worry?).

RE: peak oil production in 2009? - what next?

Most people accept that there is a finite supply of oil, but as Sheikh Yamani (ex- head of OPEC) said, "the stone age did not end for a lack of stones"!  The oil age will porbably end when a better fuel is developed, not because the oil ran out.

I've done reserves audits, so I know that one of the key parts of working out how much oil there is left in a field is the oil price; ALL reserves figures are based around economics.  Change the price and you get more oil.  The last field I looked after has had a repreive due to sustained $30 oil- it was due to be abandoned next year, and now they are working over three wells and abandonment is slated for 2008.  And the world's Proved and Proabable reserves of oil are increasing:

http://www.bp.com/subsection.do?categoryId=95&contentId=2006480

(This is probably the best and most respected sets of energy statistics you'll find).

Having read a lot of the Peak oil stuff, one of the funny things is watching the younger Earth Scientists still working in the oil & gas industry arguing with this guy who retired from the industry some time ago!  I'd go with the guys still in the industry!

And don't forget there are problems with the Hubbert curve: it's only valid for clearly defined, separate basins; the Hubbert curve for discoveries in the US has recently gone up due to an brand new basin, the Deep & Ultra Deep Gulf of Mexico, for example.  Then think about the untapped basins off the Florida Gulf Coast, the Eastern US seaboard (there's oil onshore in teh Eastern US and there's quite a bit of oil offshore in the Canadaian Atlantic coast so ther's proabably oil in the US Atlantic coast.  The same reasoning works for offshore California.)  So now extend these problems of using the Hubbert curve globally: how does the Hubbert curve account for totally unexplored basins world wide- Southern Atlantic, the huge sedimentary basins of East Africa and so on?

At the same time, using less energy is a good step: the EU uses less energy per head for a similar GDP per head.  But then fuel is heavily taxed in Europe, so fuel efficiency and small cars are popular....

RE: peak oil production in 2009? - what next?

DrllerNic,
No, sorry, you can't include California.

It doesn't matter what they have off-shore, new finds or old, it cannot be touched.

These guys/gals would prefer not to spoil there wonderful state with nasty offshore oil exploration. Bad enough to have all that nasty horrible black stuff oozing up through the ground at La Brea, without having oil on the beaches; no thanks, they'll meet their energy needs (and water) from out-of-state resources, and, by the way, they are going to cap the price they pay.

While CA may be a leader in many environmental issues, with some tough calls on emmissions, and while they will restrict oil production, it doesn't necessarily extend to cutting their usage to match their own production.
This is the NIMBY state. http://www.cfact.org/site/view_article.asp?idCategory=7&idarticle=252

Talk about SUVs, is this the state with the highest ownership of the mother of all SUVs, the HumVee? er, and doesn't/didn't the new Governor have one?

JMW
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RE: peak oil production in 2009? - what next?

JMW- I'm not that worried about California: the Newfoundlanders opposed oil exploration off the Grand Banks for decades, and now they're getting upset because there's not enough drilling going on.  I'm sure California will change their ides if the lights start to go out!

RE: peak oil production in 2009? - what next?

The Newfoundlanders opposed drilling until the fish ran out.  Then they were all for it.  25%+ unemployment might have something to do with it.

Doubt similar circumstances will EVER motivate California or British Columbia to go the same route.

RE: peak oil production in 2009? - what next?

Here is an interesting article about reserves that addresses the issue of the currebt focus on the easily accessible and economically processable light oil reserves.
Heavy oils and bitumen/asphalt (also orimulsion, see orimulsion thread on this site)are more expensive to extract and process and emissions are more complex to deal with.

As we deplete the light oils ("cherry-picking"? or is this "low-hanging-fruit in management jargon?) then the economics of heavy oil processing become more attractive.

http://pubs.usgs.gov/fs/fs070-03/fs070-03.html

JMW
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Eng-Tips: Pro bono publico, by engineers, for engineers.

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

RE: peak oil production in 2009? - what next?

Exactly as I said in my original post.  There's no worry about running out of fossil fuels anytime soon.  There IS a concern that as we wantonly burn through the existing, light stuff, we'll have to bring on more and more heavy stuff (tar sands bitumen AND coal) to keep up.  These fuels are characterized by both a higher cost of extraction and a higher cost in CO2 emission per BTU of heat produced, than natural gas or light oils.

What it means is that from a greenhouse gas emissions perspective, as consumption increases and light oil and gas reserves deplete, our problems will be getting WORSE at an increasing rate.  Prices will go up too, but not fast enough to stem wasteful consumption.

RE: peak oil production in 2009? - what next?

Excuse me Davefitz, if i pre-empt your thread and start part two for the 56kers.

JMW
www.viscoanalyser.com
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