Explaining the approach of Peak Oil
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A peek at Peak Oil
Roel Meijer

Demand continues to accelerate as new oil discoveries dwindle

The first half of the Age of Oil is drawing to a close, and possibly much sooner than projected

"Thirty years from now, oil will be little used as a source of energy... Our grandchildren will say, 'You burned it? All those beautiful molecules? You burned it?'"
- Kenneth Deffeyes, Professor Emeritus, Princeton University

We have grown up with the idea that there will always be enough, in some instances more, though deep down we know nothing lasts forever. That is the message of Peak Oil: We are close to the point where the increase in available oil will halt, and after that forever decline. That will be the end of the first half of the Age of Oil.

These days everyone talks about rising oil prices. Given the credentials of the scientists loosely gathered under the banner of Peak Oil, it's sort of bewildering to see how little serious attention they get in the political arena and mainstream media. Instead, we hear "experts" talking about price gouging, political instabilities, the need for more drilling and refining capacity, all temporary things that can and will be solved "soon." Peak Oil says the problem is not a transient one.

Peak Oil is not a myth. Like all finite resources, oil must begin to run out at some point. The only serious question is when, not if, that will happen. Peak Oil doesn't claim we'll run out soon - it states that the most important point in the "lifetime" of oil is when production reaches a peak, which is when roughly half of it is gone. After that point, production will necessarily decline (while demand increases). It can be drawn as a bell-shaped, or
"logistic," curve in which the decrease after the peak will be about as steep as the initial increase.

The theory is based on mathematical models developed in the 1950s by the late U.S. geologist M. King Hubbert. He predicted in 1956 that the peak (known as Hubbert's peak) in U.S. domestic oil production would be in 1970. He was laughed at, but vindicated, even celebrated, later when his prediction turned out to be right. Hubbert later modelled total world oil production and concluded it would peak in 2000. He now seems off by a few years, but that may well be the result of the OPEC oil crisis in the 1970s, which slowed production temporarily. Today's Peak Oil scientists put the peak somewhere roughly between last year and 2010. Even most other, more optimistic, voices see the peak within the next 20 years.

To know how accurate the prediction is, we have to know how much oil has been produced to date, and how much is left. The first part is relatively easy to calculate: it's about a trillion barrels (a barrel is 42 gallons, or 159 litres). The second part, what is left, is harder to find out. Oil fields are deep underground, and they are not smooth structures. A lot of educated guesswork is involved. Also, there may still be undiscovered oilfields left on the planet. And the owners of discovered fields are often secretive about their oil reserves.

But this doesn't mean it's totally impossible - there are a lot of smart people working "in oil." In the past 10 years, some of them have turned their focus to Hubbert's earlier predictions. That was the start of the Peak Oil "movement," a loose group of scientists who, independently, reached similar conclusions on the basis of their experience.

As it turns out, there is remarkable consensus on the amount of oil that is left: about a trillion barrels. So we seem to be near the halfway point. But that's not all. This remaining oil is of lesser quality (heavy crude vs. light crude), harder to get out of the ground, which costs a lot of energy, and harder to refine, which also costs a lot of energy. So the amount of energy we get back from what we spend producing the oil is increasingly reduced.

World oil discovery peaked in the early 1960s. Since 1981, we've consumed more each year than was found. We've been running a deficit for 25 years. But only recently have both OPEC countries and Western oil companies, reluctantly, started to send out distress signals. They're unable to find more oil than they sell - their reserves are shrinking. OPEC calls on non-OPEC countries to increase production, especially Russia. But Russia is probably past peak production as well. Kuwait is under pressure to shave off 50 per cent of reported reserves, after internal data leaked. Saudi Arabia's biggest fields are said to be past their peak and in permanent decline. The Saudis also spend billions of dollars trying to find more oil, drilling hundreds of new wells. But their most productive month ever was April 2003, while no OPEC country has managed to surpass September 2005.

According to the International Energy Agency, 33 of the 48 biggest oil-producing countries have passed their peak. All of the super-giant fields in the world are in decline.

In short, though there is no positive proof, it seems strange to dismiss Peak Oil offhand. If the theory turns out to be true, the consequences will be devastating. Among resources, oil is unique in extractability, transportability, versatility, scalability and cost. There is nothing we know of that can replace it.

Making gold into lead
Roel Meijer

Ethanol: Not coming to a pump near you
photo: Courtesy of Pioneer Hi-Bred International Inc.

Popular alternative fuel sources amount to little more than empty promise

For the past 100 years, oil has given us the illusion of a free ride, an endless source of energy.
Of course we know better, but the idea is so tempting that we fell for it anyway. The peak in oil production, whether it happens tomorrow or in 20 years, will bring us back to earth, quite literally. There are persistent notions that all we need to do is find an energy source to replace oil and life will go on as usual. But if we had such a source, one as cheap and versatile and abundant as oil, we would be using it today. A list of problems with so-called alternatives makes painfully clear how far we will go to meet our energy hunger, and to what extent we are willing to saddle our children with the consequences.

Natural gas

A "sister product" of oil, natural gas is seen by many as a substitute for oil. But it will peak worldwide soon after oil does, and already has in North America. There are multi-billion-dollar plans to build tankers and terminals for importing LNG (frozen, liquefied gas), but it's by no means a long-term solution. And no one wants those floating bombs in their backyard (BANANAism: "Build Absolutely Nothing Anywhere Near Anything").

Nuclear power

Even many "greens" these days speak out in favour of building nuclear reactors, a "clean" energy source. Worldwide, there are plans for dozens more reactors. But there is no adequate way to deal with nuclear waste, which can remain radioactive for 100,000 years. The available uranium, plutonium and thorium is very
limited. These limits could, on paper, be overcome with "breeder" reactors, which presume to make their own fuel, but so far they have been a miserable failure. Studies suggest that the U.S. nuclear industry has cost more in money and energy than it has produced. And then there's Chernobyl, Three Mile Island...

Coal

There is a lot of coal left in the world. But the levels of mercury and CO2 produced by burning coal make it about as amoral as nuclear power. If we were to substantially increase energy production from coal, the planet would warm up so much we wouldn't need indoor heating any more. The carefully introduced term "clean coal" will fool many, but there is nothing clean about strip mining and mountaintop removal. China plans to build approximately one coal-powered electricity plant every week for the next 15 years.

Tar sands and oil shale

There are several forms of "unconventional" oil. One hundred billion dollars has been invested in the Alberta tar sands alone. Labelled as the "most destructive process known to mankind," the industry is based on economic distortions: the producers pay for neither the insane amounts of fresh water they use, nor the mind-boggling environmental mayhem they cause. Even then, the output will remain marginal at four million barrels per day, even in 15 years when world oil demand will be 100 million. Oh, and the process uses more energy, as natural gas, than it produces in oil. Oil analyst Matt Simmons calls it "making gold into lead." Well, Matt, Canada has bet its economic future on that lead.

Hydrogen

Is not a form of energy. Period. Sounds nice only as long as there's enough energy left to produce hydrogen. You need electricity to produce hydrogen (by hydrolysis), and then use the hydrogen in a fuel cell that produces electricity to run a car or heat a house. But that process loses up to 75 per cent of the initial energy. Peak Oil guru Jay Hanson: "Obviously, alternative energy technologies that require energy subsidies are only viable as long as we don't need them!"

Ethanol and other biofuels

Many scientists claim biofuels cost more energy to produce (transport, farm machinery, fertilizers, processing) than they deliver. Still, an example: A proposed ethanol plant near Montreal intends to produce 120 million litres of ethanol per year. That's a lot, right? Well... Canada uses 127 billion litres of oil per year, over 1,000 times the production of the plant. And the energy value of ethanol is lower than that of oil, so you need even more. To supply the U.S. with enough ethanol to replace oil consumption, an area the size of Texas would need to be farmed, or 70 per cent of all currently available farmland in the U.S. Without generous subsidies, which make ethanol a fast-growing money maker for the farm industry, there would not be any significant production.

Wind and solar

The best options for last. Alas, both wind and solar power will forever remain marginal compared to today's oil industry.

But yes, do get a small windmill and solar panel on your rooftop. Get one now, while the rest of mankind is still asleep and dreaming of unlimited oil