Peak oil is simple

No, really

Posted by David Roberts at 2:56 PM on 16 Nov 2006

Cambridge Energy Research Associates (CERA) recently released a report called Why the "Peak Oil" Theory Falls Down -- Myths, Legends and the Future of Oil Resources. It's getting a lot of attention, and has produced much consternation in the peakoilosphere.

The definitive response, as usual, is on The Oil Drum.

I must say, the more I read about peak oil, the less complicated the whole thing seems to me. That may sound crazy, since everyone involved in discussions of oil prides themselves on their engineering acumen, impeccable logic, and devotion to empirical data (in the form of charts and graphs, of course!). Pull any one thread of the oil tapestry and you quickly uncover a skein of irreconcilably opposed viewpoints, all backed by reams of data, all contemptuous of the illogic and wishful thinking of the others.

So why do I think it's simple?

Well, we need to separate two questions about peak oil. First, there's the factual question.

As I see it, virtually everyone but the abiotic fruitloops agrees that oil is a finite resource that's going to hit peak production at some point. Even the CERA report, from what I can tell (I haven't ponied up the $1000 to read it), claims production will peak around 2040, stay on an "undulating plateau" for a while, and then decline slowly. This is not a best case scenario, but it's pretty rosy -- it gives us breathing room. Anyone who's read around the internets a little will be familiar with more dire predictions.

I, along with about 99.99% of the population, am not interested in the factual question as such. In general, minerals do not inflame my passions.

What I'm interested in is the political question: how does this affect human welfare? What should we do about it?

Now, it is the nature of engineers, data nerds, lefty wonks, and other too-smart-for-their-own-good types to have a somewhat naive view of politics. They tend to think that the main determinant of political action is the established empirical facts. Establish the facts; policy ensues. That's why winning the empirical argument is so overwhelmingly important for them.

Of course, it's not so. The range of possibilities in the political world -- the real world, not the world of policy wonkery -- is, at least most of the time, much narrower than the range of possible oil production scenarios. And political action cannot be controlled with anything like the nuance one finds in different peak oil perspectives. It can just barely be controlled at all. It moves to its own mysterious rhythms, as responsive to imagery, emotion, and -- crucially -- chance circumstance as to "the facts."

Weaning our society off oil is an enormous task. It's going to take a great deal of time and political effort to make it happen. Progress will be halting and non-linear. There will be many false starts, diversions, and unexpected difficulties. If you think oil production's going to peak -- tomorrow, in a decade, mid-century, whenever -- you need to help get that ball rolling, ASAP.

Perhaps in a perfect Platonic world of policy, a "peak oil is today" strategy would look different from a "peak oil in 2040" strategy. But back down here on earth, we're stuck with the blunt instrument of representative democracy. Our choice is far closer to binary than most oil geeks are willing to acknowledge. The choice before us is: mobilize and start pushing, or don't. Keep doing nothing, or start doing something.

We need to get started. It's that simple.

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Peak oil is even simpler than that

Even if Peak Oil occurred in 2000 (seems like even the hardest core Peak Oil theorists have dropped that one) you still could production to match today's 40 years later. And peak coal will occur even later.

We CANNOT afford to still burning 40% we burn today in 2040 - not to mention the coal (which produces more carbon per BTU). We need to phase out oil use; but we need to phase out coal use just as badly, and natural gas not much more slowly.

Global warming requires much more severe reductions in consumption of oil (and other fossil fuels as well) than peak oil does, and requires them more quickly. Everything you would need to do to solve peak oil, you also need to do to solve global warming - and a great deal more besides.

So peak oil very simple indeed; it is not important when it will occur; we to push for as much reduction as quickly as possible regardless, because we need to stop greenhouse emissions into the atmosphere as quickly as possible, regardless of how many liquified dead dinosaurs we have remaining.

by Gar Lipow at 3:08 PM on 16 Nov 2006

I say again . . .

Do the math, whether for global heating or facing reality on peak oil, and then think about what is within the realm of the possible, and you come back to between 3-5% per year reduction in all fossil fuels usage.

The US, the biggest energy hog and energy waster in the history of the known universe, can easily reduce its fossil fuels usage by 3.25% in any given year--in fact, it will be easiest here at the fat end of the thing; it will be harder later, although we will have had more time to develop better tools and habits.

The point is that this is a rough "oil depletion protocol" (a la Colin Campbell and Richard Heinberg) that also happens to hit the target for carbon reduction.

It's a simple, doable plan that would pay us in spades. Let's start.

The 5% Project

by JMG at 6:59 PM on 16 Nov 2006

Surprising similarities

What is not coming out in the media is how close the CERA and peak oil positions are. This is significant because CERA is probably close to the official position of the oil industry.

Here is a comparison I wrote for Energy Bulletin.

I was surprised the number of points on which CERA and peakists agree. (CERA uses the term "peakist."):

A peak (or plateau) of oil production is coming. CERA says no sooner than 2030; peakists say sooner.
Both CERA and peakists seem to be agree that there will be a curve of rising production, a peak (or plateau), followed by falling production. CERA criticizes the "bell shape" of Hubbert's curve and maintains that the curve will be asymmetric. Many peakists agree. (The discussion about the shape of the curve quickly becomes very complicated - beyond the understanding of most lay people.)
CERA prefers to talk of an oil production "plateau." Many peakists also use the term.
Both agree on the urgent need to "prepare for the time when oil supply could cease to grow adequately to meet demand."
CERA says: "Technical innovations will continue to unlock additional oil resources not currently identified or understood, or viewed as uneconomic." The difference between CERA and the peakists lies in their estimates of the magnitude and quality of the resources to be uncovered.
CERA says: "we still appear to be in a phase where oil supply (deliverability) is largely determined by demand, economics, and aboveground risks rather than on any fundamental problems with resource availabily." Most peakists would agree that demand, economics and aboveground risks are important factors - especially now. However, they would probably say that these factors are exacerbated by geology.
CERA says: "there is still no accurate assessment of global reserves and resources." Peakists heartily agree. Matthew Simmons argues that "transparency" about oil reserves is a critical need.

Despite the many points of agreement, there are significant differences between CERA and peakists. For example:

CERA frequently lumps unconventional sources of petroleum together with conventional sources. Peakists tend to analyze them separately.
CERA takes an optimistic view of technological improvements. Peakists are more conservative.
CERA does not mention EROEI (energy return on energy invested) in its press release or report. Peakists are constantly talking about the EROEI of energy sources.
CERA does not mention global warming and the constraints it will place on energy sources (at least in these documents). Among peakists, the picture is mixed. Some peakists do incorporate global warming in their analyses, while others do not.

On the positive side, the CERA report is surprisingly open to debate about peak oil:

We respect the urgency and seriousness with which some with whom we disagree put their case.
...
We invite others to join in a considered dialogue, which now seems too easily lost in the rancor.
...
It is essential and more productive [than making bitter and "true believer" arguments] to build common understanding and conclusions, open to rational assessment of evidence, so that preparations can be made for the future.

Many more responses to the CERA report are posted on Energy Bulletin.

Bart
Energy Bulletin

by Bart Anderson at 9:08 PM on 16 Nov 2006

3-5% reduction per year in fossil fuel use

3-5% reduction in fossil fuel use sounds good to me. That is a phaseout over the course of thirty years or fewer.

by Gar Lipow at 9:11 PM on 16 Nov 2006

Engineers

I don't know much about peak oil, but I do know a lot about engineers. You really nailed it with this:

"They tend to think that the main determinant of political action is the established empirical facts."

I remember trying to tell some engineers that it didn't matter what the data showed about hurricane intensity, all that mattered was public perception and they just didn't get it. But I guess that's why they're engineers and I'm not.

by KathyF at 11:58 PM on 16 Nov 2006

"don't know much about peak oil"

Good! I know too much. And it was a complete waste of time. Peak oil, schmeak oil.

Oil industry engineers do not believe anything can or will be changed and spend their time justifying that point of view (renewable energy is only 1% of energy production, blah blah blah..). The only thing this POV has to do with empirical facts is that they like to pick out or make up ones that support the status quo.

1000 bucks to read more "empirical facts" like that? I bet the engineers who wrote that projected that is how much they would have to charge to break even on the report itself.

What do you think? Did they break even?

Anything you read about peak oil is really about pump and dump oil futures trading and that is it. The insiders pump the current trading trend (price, supply, demand up or down, it doesn't matter) and then dump their positions into that trend, the suckers (and we the consumers)who believe the hype get shucked.

That and oil war, oily monopoly corruption of governance, and global climate disaster is all we the people need to know about peak oil.

http://amazngdrx.blogharbor.com/blog

by amazingdrx at 2:54 AM on 17 Nov 2006

Here's a strong start to cutting fossil fuels use

D.C. Moves to Become Pioneer In Forcing 'Green' Construction

By Nikita Stewart
Washington Post Staff Writer
Thursday, November 16, 2006; A01

The District is poised to become the first major city in the country to require that private developers build environmentally friendly projects that incorporate energy-saving measures.

By 2012, most large construction in the city -- commercial and city-funded residential -- would have to meet the standards, if the D.C. Council gives final approval to a new bill next month.

The 5% Project

by JMG at 5:36 AM on 17 Nov 2006

Link to full story

http://www.washingtonpost.com/wp-dyn/content/article/2006...

The 5% Project

by JMG at 5:37 AM on 17 Nov 2006
[ Parent ]

EROEI...

...is very important in these analyses, and unfortunately CERA seems to not do that work. Lowering EROEI means higher fossil fuel and energy prices, and as it comes closer and closer to breaking even, the cost will rise higher and higher. I don't know at what price of energy the world will hit a depression (probably not the only driver, but whatever), but it is inevitable. The peak oil argument is not as simple as the 'end of oil' , it's really the 'end of cheap oil, with the subsequent effects on economic, political, social, and agricultural status quo'. Think 70's, but worse.

by atreyger at 6:56 AM on 17 Nov 2006

It's simple because it doesn't matter

peak oil has been one of the biggest wastes of intellectual energy- it adds essentially nothing to the debate of CC and energy- let's put it aside and move forward

I teach environmental economics and blog at www.voicesofreason.info.

by Jason D Scorse at 11:57 AM on 17 Nov 2006

It matters a huge amount . . .

. . . because it signals the end of the infinite growth school of economic theology and provides a warning to those who will hear that there is good reason to make preparations for the transition to a low-energy lifestyle now.

The 5% Project

by JMG at 1:04 PM on 17 Nov 2006

non-listeners are non-listeners

Global warming is every bit as much a physical limit as peak oil. A finite atmospheric sink is every bit as much a limit as a limited energy source.

by Gar Lipow at 3:45 PM on 17 Nov 2006

Oh boy...

the signal is called price- it's something economists have been studying for going on 3 centuries- and right now the price of oil is dropping- if we look to peak oil for policy we're screwed...big time

I teach environmental economics and blog at www.voicesofreason.info.

by Jason D Scorse at 5:41 PM on 17 Nov 2006

what kind of market

and right now the price of oil is dropping-

Surely, the oil cannot even charitably be described as free, though. Doesn't that render price signals a little suspect?

by claxton6 at 6:09 PM on 17 Nov 2006

oil market

Drat. Preview is there for a reason. Should be "Surely, the oil market..."

by claxton6 at 6:10 PM on 17 Nov 2006

Price signals

>the signal is called price- it's something economists have been studying for going on 3 centuries- and right now the price of oil is dropping- if we look to peak oil for policy we're screwed...big time

While I think we are on the same general page on how much to concentrate on peak oil, on price signals. I'll point out that carbon equivalent emissions also have a price, and that this has dropped a great deal more than the price of oil.

by Gar Lipow at 7:03 PM on 17 Nov 2006

Oil Shocks unlimited...

No amount of of CERA propaganda will make a difference to those of us who've been looking at this for a long time.
The current "low" price of oil is a temporary phenomenon, it won't last long. The US inventory is high but oil-use during the coming months will rise, whether there's a mild or severe winter.
Production of oil is so tight that even small disruptions send the price upwards. However, I've personally stopped looking too closely at supply/demand data because it hardly makes that much difference to prices; background manipulations are more interesting and have a greater bearing on price at this time. Demand-destruction is the major strategy used these days; note the coincidental "liquids-on-planes" fiasco that timed perfectly with the aviation-fuel bottle-neck - all those cancelled and delayed flights managed to give them some breathing space to lift stock. CERA isn't the only pay-for-comment organisation "on the payroll".
The other markets are much more worth paying close attention to as so many clear imbalances are guaranteed to crash the markets overnight, and sometime soon. It's a matter of where it will start that's going to be the most interesting aspect.
The FOREX currency trades have been one place I watch fervently; the US$ is being sold-off by a lot of foreign central banks and Goldmann Sachs and the (privately-owned) Federal Reserve Bank appear to be holding up the dollar through buy-ups.
The US housing bubble is yet to burst, though its been deflating rapidly lately, while the cheer-squad on Wall St continue to pump out dubious treasury figures and dubious market predictions.
The US deficit is going through the roof and net savings are in negative territory, and worsening.
The petro-dollar is the only thing saving the currency above the buy-backs, but moves in oil prices will add to the downward pressure on the US dollar. I think a recession/depression will become the demand-destruction tactic of the future, it should push the oil-peak ahead by a few years; which will still only delay the inevitable...

A man never reaches that dizzy height of wisdom that he can no longer be led by the nose. - Mark Twain's Notebook

by icurhuman2 at 8:07 PM on 17 Nov 2006

Well Jason

For once we agree! Now start backing my energy plan! Hehehey.

http://amazngdrx.blogharbor.com/blog/_archives/2006/11/17...

Canis convinced me animal rights are important enough to debate, sorry for the harsh critique.

http://amazngdrx.blogharbor.com/blog

by amazingdrx at 7:56 AM on 18 Nov 2006

It *is* important, because...

"peak oil has been one of the biggest wastes of intellectual energy- it adds essentially nothing to the debate of CC and energy- let's put it aside and move forward"
I disagree. If we don't have this debate, all we have is Exxon saying oil will last forever, and that we should just go out and buy the biggest car and drive as far as we can.

"Peak Oil" theory hits the public in ways they can understand. It shows the relationship between energy and food, medicine, life-style, and numerous other things.

Most people don't get this. They think they'll get a Prius and everything will be okay. They don't understand that their shopping cart at the grocery store is saturated in petroleum. They don't know that human population growth correlates exactly with the growth of fossil fuel -- and haven't even had to think of the subsequent implication of decline of fossil fuel.

We need a carrot and a stick. The carrot hasn't worked by itself -- outside of a small percentage of humans who view themselves as "do gooders," the vast unwashed masses have yet to do anything that their wallet has not forced them to do. For most people, the rewards have just not been there.

Peak Oil is the stick. If people know that energy will, on average, cost them more next year, they will use it more carefully this year. Peak Oil is the absolute. It is the injection of basic physics and the Laws of Thermodynamics into the unreality of economics and the false joyride of consumerism and endless growth. It says, "You'd better do something meaningful with this gift of ancient sunlight, because it's going away." People can understand that.

On a grander scale, fossil energy decline and climate change are irreconcilably intertwined. This could be a "win-win" situation here. Any meaningful work on one must include the other! While one may choose to concentrate on one aspect or the other, it makes no sense for the two camps to start throwing darts at each other. Let's find an integrated solution to both problems!

People who are living alternative life-styles shouldn't be too smug, either. I don't think any human on earth is really free of by fossil fuel, and everyone will be impacted by its decline.

For those who aren't really sure what energy really is, and what all the fuss is about, I've written a brief primer that appeared in Communities Magazine.

:::: Jan Steinman, Communication Steward, EcoReality ::::

:::: Jan Steinman, EcoReality. ::::

by Bytesmiths at 2:58 PM on 04 Dec 2006

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