Environment & the World

Thursday, March 8, 2007

Hubbert’s Peak and Oil

Filed under: Books, Energy, Geology, Oil, Politics — amirj @ 10:10 pm

I recently read the book Out of Gas by David Goodstein, which reflects upon energy use especially in light of the coming oil shortage. One thing this book got me thinking about was Hubbert’s Peak and when we really might start to feel the pain of declining oil supplies. Goodstein makes the point that Hubbert’s Peak followers and the major oil companies (using BP’s data as representative) essentially agree that we only have about 40 years of oil supply left at current consumption rates.

If I understand correctly, Goodstein argues that the major oil corporations and the Hubbert followers disagree on the point of crisis. According to Hubbert’s peak, societies will start to spiral into an energy crisis once we pass peak oil production. Passing the peak would be the turning point when supply can no longer keep up with our energy needs–leading to higher prices and shortages. In contrast, the energy corporations seem to argue that we can rest assured about our oil supplies until we’ve pretty much pumped out everything we can.

In thinking about this issue, there are at least three points that deserve further discussion and analysis.
1. Is Hubbert’s view correct that oil supplies will start to fall short of demand once we pass the peak?
2. How much proven reserves of oil are there?
3. What are our contingency plans in the face of an oil shortage?

Hubbert’s view has credibility to it. He correctly predicted that U.S. oil production in the lower 48 states would peak around 1970, which is exactly what happened. Furthermore, the Hubbert curve also adequately characterizes the production curve of individual oil wells. The general trend of oil production appears to follow a rising curve which tops out once half of the oil has been extracted. After that peak, production declines. It therefore doesn’t require a big stretch of the imagination to assume that global oil production would follow the same pattern.

Another way of looking at this point would be to ask whether it is plausible that we can keep raising production to meet increasing demand until we’ve exhausted our oil supplies. It might be; but it also might not be very realistic. Declining oil reserves necessarily mean that certain oil fields will dry up or will start to yield less. Increasing our production in tandem with a growing global thirst for oil means that new oil fields will have to be brought on-line faster than existing ones dry up. The challenge, however, is that new oil fields lie in remote regions and pumping more oil from existing regions would require costly new technologies as the oil becomes harder to extract. The large capital investment in technology, discovering new fields, and bringing them on-line imply that oil-reliant economies might already experience more pressure (at least in terms of cost) well before we’ve extracted the last drop.

The second point is also contentious because the limited time frame in which our oil-thirsty economy can survive depends on the amount of proven reserves. The OPEC 2005 Bulletin estimated that there are 1.15 trillion barrels of proven reserves left in the world (pdf, p.45). The U.S. Energy Information Administartion estimated world oil reserves in 2006 at 1.29 trillion barrels of oil (pdf, p.28). At current global consumption (excel spreadsheet) rates of about 84 million barrels of oil per day this means we have 42 years of oil left in the earth.

The problem with the above calculation is that it assumes that global consumption of oil will remain at present levels in the future and that the proven reserves of oil will also remain the same. In reality, both of these numbers are dynamic. A look at global demand statistics for oil reveals that they rise every year. EIA estimates show that by 2025 global oil consumption could be at about 115 million barrels per day (p.26).

On the other hand, the size of proven reserves could increase for a while (pending new discoveries). The same EIA document estimates that by 2025 we will have 2.96 tillion barrels worth of proven oil reserves in the world (p.29), however it is not clear whether that number takes into account the additional amount we will have consumed by then. In Sept. 2006, an official at Aramco (the Saudi oil company) stated that 4.7 trillion barrels of oil remain. As the Wall Street Journal points out, though, “3.5 trillion of the roughly 4.7 trillion barrels of oil Mr. Jum’ah is counting on will depend on the development of new technologies… He also factored in 1.5 trillion barrels from nonconventional sources, such as Canadian tar sands.”

Estimating future reserves is quite a hotly contested matter, nor is it straightforward. An increase in proven reserves does not translate into prolonged bliss for the oil economy. Advanced extraction techniques and nonconventional sources would most likely be more costly and energy-intensive, so prices could rise and we’d be getting less net energy per barrel produced. Furthermore, some people have taken a more cynical view of proven reserve statistics. High jumps in reported oil reserves have led some to suspect certain countries have over-reported the size of their reserves for political/economic gain.

All this begs the question, what is our backup plan? What happens if oil fields dry up faster than expected, or if we face another oil embargo? Or even, what’s our plan once oil runs out? The U.S. has built a transportation infrastructure that relies almost entirely on oil products, and it’s just not clear at this point what would happen when gas prices spike even higher and when the shortages begin. How will millions of people commute to work? What sacrifices will we be forced to make when gasoline costs rise even more? What about airfare? Road trips? Our three-car garage lifestyle? Higher transportation costs will also affect the prices for products we buy, most of which are shipped 10 to 1000 miles to reach our store shelves.

No matter what view you take on peak oil, it’s clear that our way of life as we know it will no longer be possible if we continue to build economies and lifestyles dependent on ever rising appetites for oil. Oil consumption does not need to grind to an instantaneous screeching halt, however we need Plan Bs and Cs and we need to develop alternative energy sources that will make our economy more resilient in the face of oil supply shocks. After all this fretting, I haven’t even made mention of the climate change angle, an issue intimately connected to, and one that will only be exacerbated by, ever more voracious oil consumption. In a scathing dose of reality, James Howard Kunstler describes our attitude towards the oil dilemma as sleepwalking into the future. Indeed, it is time to wake up.

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Thursday, January 4, 2007

Reading Group: Natural Capitalism, Ch. 1

In this first chapter, “The Next Industrial Revolution,” Hawken and the two Lovinses (H&L) give us a brief history and description of capitalism, point out its shortcomings, and from there sketch out their outline for a new industrial revolution to correct the situation.

Their description of capitalism and the problems that arise from it seem on the mark. In fact, much of it echoes the concerns we’ve already voiced in our threads about environmentalism and economics. Essentially, H&L argue that natural capital (meaning the resources and living systems that make life possible) is on the decline, and that the problem with the current capitalist paradigm is that it fails to value natural and human capital. Moreover, they outline several reasons why simply assigning a monetary value to natural and human capital is neither straightforward nor enough of a corrective measure. H&L hit a high note when they point out that the fallacy in contemporary and past economic theory assumes “that natural and human capital have little value compared to final output.” This assumption worked when labor was scarce and natural capital was abundant. They argue, however, that we now face the opposite scenario in which labor is abundant and natural capital is on the decline–we therefore need a new type of economic theory to effectively address these changing conditions.

H&L’s “natural capitalism” attempts to be just that. They propose a natural capitalism based on four main strategies: resource productivity, biomimicry, service and flow, and investing in natural capital. While these four categories bubble with exciting ideas, many of them come from the stock of ideas that have been floating around in the environmental movement for quite some time (or are they the originators of some?). Their main points are that the current industrial model is quite wasteful: according to H&L only 6% of material flows in the U.S. economy end up in final products (p. 14). Their solution, then? To increase our efficiency, to improve productivity, to waste fewer resources, to remove “vestigial subsidies” that promote inefficient processes, and to correct “deliberate distortions in the marketplace” that favor extracting virgin materials over recycling.

H&L also envision a new business model in which companies retain ownership of their products and instead of selling them, lease them to customers. Because companies would own their products, and therefore be responsible for repairs and disposal, H&L hope that this would inspire a new kind of corporate benevolence. They believe that it would then be in the company’s best interest to reduce the toxicity and improve the recyclability of their products. Furthermore, H&L argue that this would encourage companies to develop more efficient processes which also would create more jobs. (more…)

Thursday, December 28, 2006

Introducing the Reading Group

Filed under: Books, Reading Group — amirj @ 8:44 pm

We thought it might be fun to try something different with this blog. In addition to our regular posts, we’ll be starting an environmental reading group. Taking advantage of the online availability of some relatively new books written by leading environmental thinkers, we’ll be reading and discussing them on this blog. Since the first books we’ll chose are available online for free, anybody with internet can read with us, and indeed we welcome anybody who’s interested to chime in on the discussions.

We’ll aim to read a new section of a book roughly every week, but we’ll leave it up to the discussion leader for that week to post at their discretion. We’ll rotate discussion leaders, meaning every week someone else will write a new blog entry with their reaction to the section we read that week. The discussion will continue in the comments section for that post, and we invite anyone to post their reactions, questions, suggestions or thoughts about the reading.

The first book we will be reading is Natural Capitalism by Amory Lovins, Hunter Lovins and Paul Hawken. The first chapter of the book is available online, so feel free to get reading and perhaps even join us in a week!

Wednesday, November 15, 2006

Word of the Year: Carbon Neutral

Filed under: Books, Climate Change — amirj @ 2:08 pm

Okay, so actually it’s two words that together signify one concept, but don’t take issue with me over it. Oxford University Press announced carbon neutral as the word of the year.

“Being carbon neutral involves calculating your total climate-damaging carbon emissions, reducing them where possible, and then balancing your remaining emissions, often by purchasing a carbon offset: paying to plant new trees or investing in “green” technologies such as solar and wind power.

Erin McKean, editor in chief of the New Oxford American Dictionary 2e, said “The increasing use of the word carbon neutral reflects not just the greening of our culture, but the greening of our language. When you see first graders trying to make their classrooms carbon neutral, you know the word has become mainstream.”

This mainstreaming of a somewhat wonky environmental concept offers an opportunity to reflect upon other ways in which concepts from the environmental movement have crept into pop culture. As beleaguered as much of the environmental movement may have fancied itself so far this decade, due to an unfavorable political climate in the U.S., some progress has still been made. Some celebrities have started to ditch SUV-limos in favor of hybrids to arrive at red carpet events. Al Gore made a big splash with An Inconvenient Truth, forcing many in the U.S. to confront the reality of climate change at a time when public discourse on the issue still called it into question. We’ve also seen leadership on the city and state levelballoon into something of a grassroots groundswell to reduce our emissions. Even corporations like Wal-Mart and Google have announced major initiatives to curb their emissions, and take the first steps towards sustainability.

While Bush certainly has not been the right president to elect to champion environmental protection, I never saw his election as a reason to give up hope. A good president can certainly give a cause a megaboost, but even Bush’s rather apathetic stance on climate change couldn’t stop us–there was just too to accomplish. So far this decade climate action didn’t come from the federal level, top down, in one ceremonious presidential signing ceremony. So what? Even in the 2006, during the reign of President Bush, “carbon neutral” became the word of the year. Yep, on his watch.  

Sunday, August 13, 2006

Big Coal, the Book

Filed under: Books, Energy — amirj @ 5:13 pm

Earlier today I saw Jeff Goodell talk about his latest book, Big Coal, on C-Span’s BookTV. Goodell, who today is a contributing editor at Rolling Stone and also contributes to the New York Times Magazine, grew up in Silicon Valley with no affiliation with the environmental movement. The idea for this book began after a trip to the West Viriginia coal mines on behalf of the New York Times Magazine to cover the rising fortune of the coal industry after Bush announced his new energy plan several years ago, in which he touted “clean coal” technologies to power the U.S. in the coming century. Having grown up in the Silicon Valley cradle of technology, which often takes for granted an abundant supply of electricity–divorced from concerns over where, how, and at what cost it receives it, Goodell turns precisely to those concerns in this book with regard to coal-generated power.

Goodell spent several years visiting coal mines across the country and researching the book. In it, he reflects upon the politics, economics, environmental and human health reprocussions of coal. With regard to the former concerns, he discusses the history of coal, its widespread availability in the U.S., and its business and political connections. The latter concerns, however cause Goodell to raise questions about coal and ultimately question whether or not this source of energy that powered the 19th and 20th century ought to power the 21st century as well.

Interestingly, while Goodell acknowledges that coal power plants can indeed be built to emit minimal emissions and to sequester most of the carbon dioxide, his critique of coal persists due to unresolved problems: environmentally harmful mountain-top removal techniques, the human toll on miners’ health, and the socio-economic grip that coal industries have on many mining towns. For these reasons, the research and writing of the book have turned Goodell into a critic of President Bush’s energy policy, as is evident in “The Fake Energy Solution,” a piece he wrote earlier this year for the Rolling Stone.

Goodell also inevitably points out the role coal plays in contributing to global warming–another reason why he is not a fan of coal. Despite ample praise for his book, some critics such as Corey S. Powell in his NY Times review of the book accuse Goodell of falling short on proposing viable energy alternatives to coal. Powell writes,

“Goodell’s writing, so fiery and committed through the narrative parts of ‘Big Coal,’ turns oddly tentative when it comes time to endorse solutions. He waves off green dreams like wind and solar electricity. He pins much of his hopes on a kind of national psychotherapy program to ‘change our thinking’ and ‘make the invisible visible,’ which translates into a vague endorsement of new emissions taxes and regulations.”

However, after decades of pushing for its “green dreams” of solar and wind, the environmental movement’s energy dreams still remain mostly that–dreams. While Goodell’s actual suggestions in the book many not be the most novel nor inspiring, if some sort of “national psychotherapy program” is what Goodell believes this nation needs in order to reorient its energy future, he has taken on an important step: educating. If the book is taken for what it is–a thorough study of the place of coal in U.S. society–then it seems to do a good job of explaining the multifaceted reasons why burning coal to produce energy may not be the best plan for our energy future. And in these times, perhaps that education is better than yet another call for more wind and solar power that will fall on deaf ears or preach to a chorus that cannot change the status quo.

 More on Jeff Goodell and Big Coal:

In Goodell Company,” an interview at Grist.

Could Coal Make the U.S. Energy Independent?” an interview on NPR.

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