Monday, March 05, 2007
"Peak Oil" theory: The New York Times sticks a fork in it
The New York Times has an excellent front page story on the new technologies that have massively boosted the quantity of oil that can be recovered from heretofore depleted fields. The technological advances have been so rapid that unofficial oil reserve numbers have soared. That, in turn, has put enormous pressure on "peak oil" theory, which holds that global oil production has already peaked or will peak in the next three or four years (for a big list of "peak oil" links, see the right sidebar at the Scrutiny Hooligans).
None of this is surprising. Peak oil theory always seemed a lot like the "limits to growth" claims of the 1970s, all of which fell apart under the onslaught of efficient markets and advancing technology. Still, one cannot help but be taken aback by the harshness with which the Times signs its death warrant:
There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading.
A "small band of retired petroleum geologists and some members of Congress"?! Ouch.
14 Comments:
By 
Gordon Smith, at
Mon Mar 05, 12:16:00 PM:
Thanks for pimping my sidebar, but the quickest way to get this info is at Peak Oil Primer, which is a production of Scrutiny Hooligans.
If the NYT has it right, then we can look forward to even more stalling on the part of folks who prefer pollution to conservation.
Here's hoping we have the good sense to invest in nascent alternative energy entrepreneurs. Here in Buncombe County, North Carolina we have some of the highest asthma rates in the nation due to our lousy air in the mountains. A lot of the stuff blows in from Tennessee, so we can't do anything about it. Another factor is the million vehicles that drive through the National Parks in our area every year. A third factor is coal and oil-fired power plants.
We have some of the best alternative energy infrastructure in the nation and an incredible braintrust of alternative energy entrepreneurs and researchers. Yet our county commission recently voted to lease 78 acres for a diesel-fired power plant.
Their unwillingness to utilize the talent and power of our local economy is remarkably shortsighted. Let's hope that any amelioration of Peak Oil worries don't lead to complacency in regards to our children's health and to our small businesses.
By Pudentilla, at
Mon Mar 05, 01:05:00 PM:
Well it's the Times, and it's the front page - but "excellent?" - My students would sure rather that you grade their papers than I.
"small band of retired petroleum geologists and some members of Congress"?!
The characterization omits Matt Simmons and T. Boone Pickens, both of whom have argued that the "peak" has already occured. Given their stature in the oil industry, perhaps a misleading omission?
new technologies
The steam injection technology referred to in the lede is more than a generation old and the field referred to, Kern River, is in decline, if not collapse, as the graph provided indicates. Other new technologies are sustainable only at the price of a much higher extraction cost (e.g. oil sands), which costs, by definition, will have profound implications for a global economy dependent on cheap oil. (Ethanol as a substitute has it's own complexities - how do we evaluate its energy return on energy investment; how do we evaluate the social and ecological consequences of converting crop lands to oil substitute lands?)
Finally, there is some concern that the use of "new technologies" simply steepens the downside of the depletion curve.
Peak oil theory always seemed a lot like the "limits to growth" claims of the 1970s, all of which fell apart under the onslaught of efficient markets and advancing technology.
Perhaps not a fair characterization of the peak oil argument - which is not that all the oil's gone, but rather that all the easy to get oil is going, and that new fields and new technologies are not producing resources at a rate that will either compensate for aging fields (we know, for example that 3 out of the 4 existing "megafields" are in decline and many folks are understandably reluctant to take the Saudi's word that their megafield is not - especially given that they've produced less oil as oil prices have risen over the last two years) and more importantly to compensate for increasing demand for oil.
The cornucopian argument TH implicitly endorses requires a religious faith in the market to provide resolve all problems without noting a) the degree to which remaining reserves are in the hands of state, not market actors; b) the difficulty of the market in rationally - much less equitably - distributing natural resources; and c) the obvious evidence of market failure to accurately price energy and to effectively respond to some of the costs of a carbon based energy economy; see global warming/climate crisis.
The folks at the Oil Drum have collectively provided a thoughtful fisking of the article which some might find of interest.
TH, sorry if this sounds too much like the scrawled notes of a history professor who's just read 50 undergraduate papers on the rape of the Sabine women, but they're the scrawled notes of a history professor who's just read 50 undergraduate papers on the rape of the Sabine women.
By 
, at
Mon Mar 05, 03:45:00 PM:
Want to see what the Middle East with out oil will look like, see the Sudan.
Current score:
Technology 10,000,001
Luddites 0
By , at
Mon Mar 05, 04:50:00 PM:
We are a very long way from being able to depend on an energy source other than oil.
Ethanol is mainly about subsidies to people who vote in the Iowa primary. Ethanol is, and likely always will be a loser.
Here's a few quotes from recent WSJ Opinion articles:
"Take wind energy, long touted as the most economic of renewable energy sources. Ed Feo, a leading wind energy analyst, has estimated that two-thirds of the economic value of wind projects comes from the tax benefits it's given."
"Corn farmers have done a good job of disguising the fact that it still takes more than a gallon of fossil fuel--29% more is the best estimate--to make a gallon of ethanol."
"...federal and state subsidies for ethanol ran to about $6 billion last year, equivalent to roughly half its wholesale market price. Ethanol gets a 51-cent a gallon domestic subsidy, and there's another 54-cent a gallon tariff applied at the border against imported ethanol. Without those subsidies, hardly anyone would make the stuff, much less buy it--despite recent high oil prices...That's also why the percentage of the U.S. corn crop devoted to ethanol has risen to 20% from 3% in just five years, or about 8.6 million acres of farmland. Reaching the President's target of 35 billion gallons of renewable and alternative fuels by 2017 would, at present corn yields, require the entire U.S. corn harvest."
"No wonder, then, that the price of corn rose nearly 80% in 2006 alone. (See the chart nearby.) Corn growers and their Congressmen love this, and naturally they are planting as much as they can. Look for a cornfield in your neighborhood soon. Yet for those of us who like our corn flakes in the morning, the higher price isn't such good news. It's even worse for cattle, poultry and hog farmers trying to adjust to suddenly exorbitant prices for feed corn--to pick just one industry example. The price of corn is making America's meat-packing industries, which are major exporters, less competitive...In Mexico, the price of corn tortillas--the dietary staple of the country's poorest--has risen by about 30% in recent months, leading to widespread protests and price controls. In China, the government has put a halt to ethanol-plant construction for the threat it poses to the country's food security. Thus is a Beltway fad translated into Third World woes."
By Purple Avenger, at
Mon Mar 05, 05:24:00 PM:
Other new technologies are sustainable only at the price of a much higher extraction cost (e.g. oil sands), which costs, by definition, will have profound implications for a global economy dependent on cheap oil.
Higher extraction, but DRAMATICALLY lower raw product cost...since you're giving profits to some mid-east thugs.
Shell is already beyond pilot operations in Canada. They wouldn't be doing that to LOSE money. The one site I'm aware of is ramping up to volumes that will be roughly 5% of the total output from VE.
By , at
Mon Mar 05, 06:45:00 PM:
From my understanding, Pudentilla is right... Peak Oil doesn't do a good job with all oil combined, just the easy to get stuff (or some other category of oil). So I think in that sense, Peak Oil has to be applied to different kinds of oil (conventional, tar sands, oil shale, and perhaps others) separately. In combination, however, they produce nothing like the doom and gloom scenarios that involve living conditions going back to the stone age.
In other words, Peak Oil theory is reasonably correct when narrowly applied, but not particularly useful in the entire debate.
And something about SH's post stood out. "Yet our county commission recently voted to lease 78 acres for a diesel-fired power plant."
It's my understanding that petroleum fired plants are generally only used during peak load conditions, or as generators of last resort. They suffer from high capital and fuel costs, but can be turned on almost instantly. Typical large plants (coal, nuclear, natural gas) can't ramp up quickly. And smaller alternatives (solar, wind) are unpredictable. Until electricity storage farms (batteries? hydrogen?) are developed and created, there will be a need for these types of diesel
generators.
By Assistant Village Idiot, at
Mon Mar 05, 07:15:00 PM:
SH said "...folks who prefer pollution to conservation." That is a classic false dichotomy. How can we have a discussion with you when you think like that?
By , at
Mon Mar 05, 07:36:00 PM:
Interesting reading at this link Review of Twilight in the Desert
TJIT
By Lanky_Bastard, at
Mon Mar 05, 07:39:00 PM:
5 years, 50, 500... there's only so many dead dinosaurs to burn, and we do them faster every year. We're like yeast multiplying in yummy beer broth. Sooner or later those yeast either consume all the sugar or die in their own toxic waste products.
Maybe the end is near, maybe it's not. We should try to break the cycle either way.
By , at
Mon Mar 05, 11:36:00 PM:
Its time to tell the eco-wackos like GREENPEACE and SIERRA CLUB to blow it out their ears and drill in the ANWR and feed the ec0wackos to the polar bears and killer whales
By Bobby Coggins, at
Tue Mar 06, 05:28:00 AM:
People forget about the abiogenic origin of oil, which has been sidelined by the politically correct notion that oil can only come from 'ancient life,' notwithstanding certain hydrocarbons being found on Titan, and floating free in interstellar space.
I prefer nuke plants...if the French can generate 70% or so of their electricity from them, surely we can...if the "environuts" will let us use a cleaner technology.
By TM Lutas, at
Tue Mar 06, 04:50:00 PM:
There's a great deal of research going on in alternative energy, both in making engines that are more efficient than internal combustion engines and in reducing the cost of fuel production. What's needed right now is to buy time for that research to pay off. Once it has, we don't much care how steep the dropoff is. Ballard says they'll have a hydrogen fuel cell engine that costs the same, performs the same, and fits in the same space as a conventional ICE by 2010. GM has penciled in 2011 as the first model year where they're going to be putting out mass marketed hydrogen fuel cell vehicles. There are so many pathways to get hydrogen (some green, some not) that we're not going to run out of the stuff. We just need enough time to shift over.
By , at
Tue Mar 06, 05:04:00 PM:
Mr. Lutas,
You may sincerely believe that, but I don't. There are going to be ICE's into the forseeable future; not that I want that, but there is no infrastructure to make and distribute hydrogen at the moment, and it will take DECADES to build one up. There may be a few demo prototypes on the road in a few years (good!), but their impact will be miniscule. Unless there is reformer technology involved that uses a hydrocarbon fuel (like methanol or ethanol), the Hydrogen Economy is a long way aways. We will need to vastly increase our scale of power generation to make hydrogen, or invest in plants that make it from coal catalytically. Ifrastructure, again.
Our greater hope to get off the need for huge amounts of imported oil is electric cars with very high efficiency batteries. They are coming, and soon. There is already a good infrastructure in the US for distributing electricity (grin), so that doesn't need to be built from scratch.
Peak oil. When it actually arrives, don't expect some kind of brass band to announce it. What was the peak oil year for the production of sperm oil (from whales, heading for extinction!), before it was supplanted by "fossil" hydrocarbons?
By , at
Wed Mar 07, 01:01:00 PM:
One note on the Hydrogen Economy:
The move to hydrogen is often thought be very far in the future due to lack of distribution infrastructure and the considerable size of on-board storage devices.
Chemical engineering professors Kirwan and Espino at UVA propose a little-never considered option for driving the move to hydrogen: big rigs.
Developing fuel cells for semi trucks makes particular sense for 2 reasons: 1 - they're not so nearly constrained by size as are passenger vehicles, thus they can carry bigger tanks; 2 - hydrogen fueling stations can be spaced 50 or 100 miles apart on the interstates.
