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    World Energy Outlook for 2010


    For a little background, Energy Depletion thinker Richard Heinberg narrates 300 Years of Fossil-fueled Addiction in Five Minutes.


    And the above is a trailer for a film coming out in 2011, The Economics of Happiness.

    The latest buzz in energy depletion circles is about the IEA report. Former CIA analyst Tom Whipple writes:

    The International Energy Agency released its annual, and controversial, magnum opus World Energy Outlook 2010. Ever since IEA stopped assuming that there would always be enough oil to meet growth during the following 25 years, it has pursued a delicate balancing act of projecting enough oil for the global economy to continue to grow without postulating absurd numbers. This year Outlook 2010 takes a new tack and projects three cases: business as usual; new energy policies; and a major effort to reduce carbon emissions. IEA is also starting to talk about peak global oil production, but in a manner that does not admit geologic constraints.


    On his Early Warning blog, former Oil Drum editor Stuart Staniford writes:

    If you go to the executive summary of the 2009 International Energy Agency World Energy Outlook, and search for "peak oil", your browser will come up empty.  The whole subject was so beneath the dignity of a serious energy agency that they didn't even bother mentioning it.

    However, yesterday, the 2010 IEA World Energy Outlook became available.  And if you repeat the exercise in that executive summary, you will come upon a section titled: Will peak oil be a guest or the spectre at the feast? Followed by an explicit discussion of the whole question.  The IEA's position is summarized in the graph above - conventional crude oil production has already peaked in 2006!  Suddenly, the subject of impending peak has gone from not worthy of discussion to in the past already!


    Even though the IEA now kind of, sort of admits to Peak Oil, Gail (the Actuary) Tverberg summarizes twelve "questionable assumptions and major omissions" to the report from the rockheads at The Oil Drum.

    8. Failure to address why world oil production has been flat for six years. If the amount of available oil reserves is so great, why hasn't new oil been rushed into production in the last six years, as oil prices spiraled to $147 barrel? If there was difficulty raising production in the last six years, how can one possibly assume in the "Current Policies" scenario that oil production would continue to rise in the future.

    One of the issues in the recent flat production is the flow rate of reserves. Some of the unconventional oil is extremely slow to extract. Reserves to production ratios can be extremely misleading, because the fact reserves are there, doesn't mean a reasonable amount can be extracted in a given year. It is a little like having a bank account with $5 billion dollars, that you can only remove $100 a year from.


    The IEA report is important within the energy industry, and ultimately affects policy that affects all of us.

    The exercise below is speculative, but exciting. It is very long, but in brief, by substituting alternate inflation values, the author graphs a strong correlation between oil price spikes, gold price spikes and recessions.

    Was Volatility in the Price of Oil a Cause of the 2008 Financial Crisis?



     

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    Comments

    Well Donal, it will take a major attitude adjustment on the part of a whole lot of people. Both on the left and right they mostly of the mind where they are all for you to make sacrifices for the good of humanity but not at all OK for themselves to make the same sacrifices.


    I read all of the Therramus page and found it very interesting. The interelationship between resource depletion and the "shadow bank" element gives a context for the "grab it while you can" fever of the investment community. The sense that the present economic crisis is not like others can be felt even in journals like the Financial Times: A veneer of business as usual topping an underlayment of not quite expressed nihilism.


    That nihilism would expolain the almost complete lack of interest in investing or even maintaining infrastructure.


    It would also explain the almost fevered rush to exploit labor - foreign and domestic - without any substantial concern for the long-term surfeit of any "consumer class" being supported and nurtured. "Maximize profits now whilst you still can" seems to be the driving force of the G20 and the "Common Wisdom" economists. The lack of sustainability seems to be a foregone conclusion, if only because it is so readily apparent but so feverishly ignored.  


    The Economics of Happiness video was fantastic, Donal; thanks for it.


    Here's a series of videos for us laymen on the subject of peak oil. I got it from someone on David Seaton's blog. The title is Arithmetic, Population and energy by Dr. Albert A. Bartlett at the University of Colorado, Boulder.

    Here's some highlights:

    1> The first two prepare you with the simple math necessary to understand where's he's coming from. Very easy stuff...grade school level.

    2> In video #3 he talks about a bottle and bacteria...once you catch on to what's going on in the bottle, he opens a new can of worms

    3> In videos #4 and #5, this is where he begins to talk about peak oil, Dr. Hubbert, extraction of known reserves and consumption.

    a) For example, oil extraction in the US began to fall off in the 1930. That's were demand began to outpace production.

    b) We began to import oil in 1976 because demand was greater than production could support.

    c) I suspect the videos were made either in the late 90's or early 2000's, because at the time he says we had used up approx 1/2 of the known reserves in the US.

    d) Demand far exceeds production. For example, ANWR is estimated to hold 3.2 billion barrels. That's less than 1 year at our present consumption rate.

    e) The Gulf of Mexico holds 700 million barrels. That would last about 42 days.

    f) Another oil field found holds 1 billion barrels. That would last only 56 days.

    g) Our current level of oil output is 8.6 barrels/year, but we consume 3 times as much.

    4> In video #6 he discusses substituting ethnol for oil

    a) A 43.5 million barrels/year crop produces only 1% of our energy needs.

    b) We'd have to increase the number of fields from food crops to energy crops by 100% to meet our current energy demands.

    c> The problem with crops-to-energy is the amount of energy necessary to produce a gallon of ethnol is equal to the oil used to produce it....net zero gain.

    5> Other interesting facts

    a) He uses US oil consumption of 16.6 million brrels a day based on data from 1991.

    b) In a global sense, a person use of fossil fuels, either directly or indrectly should not exceed 1.7 liters a day.

    c) The average person uses 8.1 liters a day.

    It's a series of 8 videos that lasts about an hour, easy to digest and a real eye opener.

    http://www.google.com/#q=The+Most+IMPORTANT+Video+You%27Ll+Ever+See+%28p...


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