The New Energy Crisis
Matt Simmons has been a lone voice in the wilderness warning Americans about the impending peak-oil crisis. His prediction of a global peak in crude-oil production at 73 million barrels per day in 2005 has proved correct. Worldwide total liquids production peaked at 86 million barrels in 2008.
All the "easy" oil and gas in the world has been found. Additional supplies will be found deep below the ocean, in challenging arctic regions, in tar sands, and shale. It will be dramatically more expensive to extract oil from these sources. Oil discoveries have been in a steady decline since the 1970s.
The United States has been dependent on 600 million barrels of oil from Mexico every year. By 2012 Mexico will become a net importer of oil, so 600 million barrels of oil will need to be replaced. Iran’s oil production is in decline as capital investment has been ignored for years. Russia’s production has peaked. Saudi Arabia continues to dissimulate about its ability to ramp up production. Their oil fields are 40 years old and in terminal decline.
By 2012, the world will only be able to produce 80 million barrels per day. There's no doubt that demand in 2012 will be higher than today’s 85 million barrels per day as China, India, and other developing countries continue to grow. Even a Wall Street economist could predict what will happen to prices.
Peak oil will have the most dramatic effect on America. We have 5% of the world’s population, but use 25% of the world’s energy. Practically 85% of the world barely uses energy. The world population will likely grow to 10 billion by 2030. Both China and India are selling more cars annually than the US.
As people throughout the world enter the middle class, they want cars, TVs, and modern appliances. Energy demand cannot be reversed. Infrastructure constraints will exacerbate the coming energy crisis. The NIMBY crowd has managed to keep any refineries from being built in the US since 1976. Our energy infrastructure is made of steel and is rusting away. It would take trillions to upgrade the energy system and these investments won't be made. Geologists and other experienced oil people are retiring -- and no one is replacing them.
The green agenda -- fully supported by the Obama Administration -- is sweeping the country and will be the final nail in the coffin. And the key to the success of the plan? Ethanol. The government subsidized a fuel that required more energy to produce than it provided. The ill-advised investment in ethanol plants led to a boom -- and the requisite bust when government interferes in the free markets.
The use of corn for fuel caused prices to rise for other food crops and meat. With the crash in oil prices, ethanol plants have been going bankrupt at an accelerating rate.
"Renewable energy" and "green jobs" are the catchphrases currently in use. But the real inconvenient truth is that the United States depends on oil (see USO), natural gas (see UNG), and coal to supply 87% of its energy, with nuclear power providing another 7%. Solar, wind, and geothermal sources supply only 1.5% of our energy needs.
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Ethanol is almost obscene, as it uses water, fertilizer, pesticides, and oil to produce and the end product uses more oil than it replaces while jacking up the price for a staple of human and livestock diets.
Real tractors used on farms are more like Caterpillar earth movers instead of the image of a 3-cylinder tractor that is not much bigger than Grandpa. They need oil and lots of it. That is why we can sit in suburbia and cities and type on our computers; our food is being grown and harvested by machinery instead of us.
Cheers,
Eric
The problem is not growing oil scarcity, the problem is the continued rapid growth of human populations beyond any sustainable carrying capacity of the physical systems of the planet.
Due to globalization, the standard of living of humanity is going to approach a global average in the coming years. As the global population increases, the basement of this average will decline. In the short term outside the USA, this represents an increased standard of living for many. For the USA, our standard of living is going to crash dramatically and severely when the dollars we print in lieu of making anything useful fall in value. Monetary gerrymandering will slow the decline, but absent dramatic repatriation of manufacturing onshore in the US, the end game is inevitable.
Recognizing the problem does no good. Population issues are tied up in ethnic, religious and political hysteria, with some groups calling for population control (they will soon be extinct) while other groups actively encourage their members to outbreed their competition (they will inherit the future, such as it will be). US immigration policies are suicidal but no wants to be on the wrong side of an issue that is staked out by immigrant advocacy groups as a struggle of good (open borders) vs evil (rule of law).
Put simply, a future USA of half a billion impoverished and poorly educated people will look back in wonder and disbelief at the standard of living we recently enjoyed and squandered on gigantic cars and houses. Visit any third world country to see what lies in store for your children.
Unless and until we get away from growth based economic models, and make some hard choices, we are all screwed (except for the gated community crowd).
I respect many of the people who talk about peak oil. However, it is rubbish. Every generation hears that we are running out of oil. We are not. Will energy become more expensive? Only if we continue to fight againt our continued devleopment and construction of the energy infrastructure in our nation. I am not speaking about the farce of wind or solar, though they may help eventually. I am speaking of new refineries and small size nuclear reactors.
We will not run out of oil, but will instead slowy move away from using it as we find cheaper alternatives. What will those be? Maybe polywell fusion or small pebble bed reactors but I honestly have no clue.
I had no idea what the internet was twenty years ago either. Instead of good old Dewey Decimal I can find out information on any subject within tenths of a second.
Think on that for a minute. What a leap of development... It still blows my mind daily.
Innovation will produce the same result for energy if we allow it. Strangling production, incentives and innovation are not going to cut it. We will achieve these goals as long as we keep fighting for our freedom.
Last, but not least... The population bomb thesis. It disgusts me. How can anyone argue that more humanity is bad? Every person is a miracle... Look in the mirror!
We were supposed to run out of food to feed the world in 1985. We produce more food using less energy input them we did thirty years ago. Efficiency and innovation solve another problem. End of the world averted once again! Shocking how we always somehow avoid the impending doom over and over again,,,,
The argument that we need to have fewer children is so arrogant it hurts. Economic growth is not a zero sum gain. Working with the Chinese and Indians to raise their people out of squalor has not only been a remarkable achievement, but we made money doing it!
As countries develop and become wealthier, their citizens begin to have fewer children naturally. Economic growth will slow the rate of increase in the population until it begins to decline like in Japan. That sounds like a terrible situation, not something to be hoped for.
My only consolation is that those who fear for the "coming" disaster, whatever it may be that day, tend to have even fewer children than the average. Hpefully, these genes will slowly die out of the population. Those of us who continue to hold the faith and are optimistic are slowly inheriting the Earth.
So please let me know when the coming nuclear holocaust, Ice age, baby boom die-off, Y2K, death of capitalism, end of democracy, mass hunger, peak oil, global warming, SARS, Swine Flu, and any other disaster is about to appear.
That way I can make the same argument once again. Somehow we muddle through, same as it ever was throughtout the history of man,
It is hard to believe we have gone from a nation of rugged pioneers and immigrants risking everything to come here, to a nation of neer-do-wells who are squandering the wealth and freedom won for us by the sacrifices and deaths of our forefathers.
- notice not a lot of press about the huge oil finds in N. Dakota. You might think this would be big news.
- gamechangers like the Internet rarely are forseen ( no more H. G. Wells and Asimov's around? ). We look backwards and take microwave ovens, cell phones, computers, GPS, etc. so for granted. And all those were invented without the computing power we now take for granted.
- there is a lot of stuff happening worldwide, in energy research, in nanotechnology, with really smart people with acccess to really smart tools like supercomputers. I have a huch we may have a gamechanger or two yet to be discoverd/developed.
- if our government doesn't completely kill private enterprise, we may indeed muddle through
However, since have a BA in geology, I'm much more inclined to believe in Peak Oil. All Peak Oil says is that we've pasted peak production (probably) in the world's major oil fields. The translation is not that the oil is not there, it's that it will probably be alot more expensive to pump out of in the future. For instance, peak oil calculations apparently correctly predicted approximately when the US would become a net oil importer, which we have become.
Regarding the oil finds in North Dakota: what kind of fields are they? Oil sands and shales are not the same as finding liquid oil in the ground. It takes a great deal more energy and water to process the oil into something usable from those sources.
I also tend to agree that at some point we're going to have to give up the idea of "eco" sources of energy and begin to turn to both nuclear and coal (which the US still has in great abundance.) Like it or not, we've got better things to be doing with oil than burn it for *ahem* "clean" energy. (Fertilizers and plastics and all sorts of industrial uses come to mind...)
You can put your faith in technology, but humans are still in control. Think of the technological strides we made from 1850 to 1929. Light bulbs, discovery of oil, telephone, airplanes, cars, etc. Did these tremendous advances keep a 12 year recession from happening? Did it stop a World war that killed 73 million people? Did it stop the wonderful development of atomic bombs which we immediately used?
Don't put such faith in technology and innovation when humans call the shots.
grassoline at their web site. The solution grows like weeds,
because... It IS weeds!
Why no mention of this, or bio-fuel from algae?
Solutions aren't impossible, they will take a little effort.
Amy, take a gander, see what you think, with your far better educated set of eyes than mine for this. I seem to recall the original Bakken field find was thought to be possibly huge; seems like a lot of unknowns still.
Expanding on your peak oil thoughts, clearly easy to reach pressurized oil is in decline, and demand is going to continue upwards. The depression is holding it in bay for now, but can't help but explode up again as Chinese and Indians buy cars, even ones that get 40-50 miles to the gallon ( bikes and rickshaws have far better MPG! ).
Finding replacement energy sources for oil seems almost impossible, given oils energy density, transportability, and historic low cost ( relative to any alternative ), but somehow we must and we will. Or like you said we won't, then it's just que sera, sera.
Actually, I don't. I can't predict the future good or bad, so I don't understand the sense of worrying about it. We've taken some steps assuming that future energy will be expensive (conserve energy, learn "old" skills, etc, etc.) and that's about all we can do.
www.TheBurningPlatform.com
Look, we clearly over-spent and over-borrowed the last 20 odd years, and we're going to have a long recession. So? I guess we'll have to be more sober about consuming. And I have no doubt various existing and new wars will remain throughout our lifetime, just as they did oh let's see, since time immemorial.
Yes, it would be great if human-kind could ever learn, but it seems we can't. in the meantime, though, for every Hitler we produce a Da Vinci. For every new weapon, we cure some disease. We pollute, then learn to clean up.
Technology and innovation, by and large, have led to better health, more enjoyable lives, and duration of life. They have also led to scary stuff like nuclear bombs, ever more precise wepons, and Bruno in Hi-Def.
In the middle of all this, we just lead our lives as aware as possible, help where we can, and seek joy where we can find it.
I'd highly recommend The Fourth Turning by Strauss & Howe. I plan on being prepared as our cycle of life goes from High to Crisis and back another High.
If you think my Peak oil article was a downer and doomsdayish, you will love the whole article at my website.
Green energy is a crock, but we all know that -- or at least those of us who can do the math.
There is no impending energy crisis; let's all just chill.
So even if believed that you are 100% correct, (which I don't) there's no point on dwelling it on or even being angry about it.
When I read between the lines, is that doesn't look like they really know how big the deposit of liquid oil really is or if they will screw something up by doing too much drilling. Oil shales have been investigated since WWII for their oil potential and not much has come of it yet. (I had the privilege of meeting one of those involved with 50's investigations, but I digress...)
When oil companies dance around the economics of development, as in that article, it means they are betting that when it's all said and done, $70 per barrel will not cover recovery costs. I tend to see these articles as peak oil in a nutshell. The oil is there, but it will be expensive to recover with current technology.
Unfortunately, I still can't predict or control the future, theirs or mine, despite my bent towards wanton reproduction. People have lost their children, ruined environments, started wars, etc, long before we discovered oil. Life comes with no guarantees. (Or return policy, in the case of kids. ;) )
I plan for the worst, hope for the best and muddle through in the middle. If I'm really lucky I'll have some fun, too.



















