Mar 2010

Peak oil revisited (part 2)

[Part 1] | [Part 3]

In Part 1 of this article we learnt that a proven methodology (the Hubbert Curve) exists to predict the rate at which a given region will produce oil. We learnt that when applied to the “official” (BP published) figures for existing oil reserves, this methodology predicts a peak in global production in the middle of this century. However, we also learnt that these official figures are unreliable and that the application of the Hubbert Curve to a more accurate database suggests that a production peak is imminent.

The ‘meaning’ of Peak Oil

But what exactly does this mean? Well, firstly it’s important to realise that it doesn’t mean crude oil will run out in a few years. The Hubbert Curve illustrates that the dynamics of oil fields are such that peak production occurs when roughly half of the available oil has been pumped. So when global oil production peaks, it will mean we still have the same amount of oil available to us as has already been consumed.

However — and people unfamiliar with petroleum geology really need to understand this point — the rate at which oil can be extracted from a given well is fixed by the geology of the oil field. As more and more oil is pumped out, the internal pressure of the field drops. By the time you’ve extracted half the available oil, the flow begins to decrease and the rate of extraction falls by between 3% and 6% per annum, depending on the specific field.

There are Enhanced Oil Recovery (EOR) technologies available, but these tend not to extend the life of a field very much. They can increase the total amount of oil that gets extracted from a field, but they also usually recover the oil faster. This leads to a slightly higher peak production rate and a slight extension of that peak (making it more a plateau than a peak), but they also ensure a more precipitous fall in production after that plateau. Furthermore, pretty much every major field in the world suitable for EOR is already using it. For this reason, it’s likely that the post-peak per annum drop in global production rates will be closer to the 6% figure than the 3%.

Now, the reason this is so important is down to the fact that oil is the primary driver of the global economy. It accounts for 40% of the total energy used by humanity and more than 95% of the transport sector. Just as importantly, crude oil is the raw material from which we produce a mind-numbingly vast array of products. From pesticides to paints to plastics. It is the feedstock for so many of our industrial chemicals and lubricants that it’s difficult for someone like me who has worked in industry to imagine how a modern factory could possibly function without it. Right now we are living in the Age of Oil. And it’s drawing to a close.

An article produced by the RunningOnEmpty web group estimated that crude oil had more than half a million different by-products…

… including fertilizers (they are the most vital), medicines, lubricants, plastics (computers, phones, shower curtains, disposables, toys, etc.), asphalt (roading and roofs), insulation, glues/paints/ caulking, “rubber” tires and boots, carpets, synthetic fabrics/clothing, stockings, insect repellent…

Modern food production, preservation and distribution is highly reliant upon cheap and plentiful oil. Whether it’s fertilizers, pesticides, refrigeration, packaging, transportation or simply preparation; oil plays a huge part in keeping us all fed. Systems Theorist H.T. Odum once suggested that modern agriculture was effectively a system designed to convert fossil fuel into food. And it’s a system upon which billions of us now rely for sustenance.

I feel we should all remember this every time we climb into a car. It’s a finite resource with a multitude of alternative uses, so the petrol being burnt to move us from A to B is — in a sense — potential “future food” that will never be produced.

There are no effective substitutes for crude oil

This is another point that people unfamiliar with this issue don’t always appreciate. Certainly when I first started to research peak oil back in the late 1990s, I became convinced that biofuels offered a simple and effective solution. I became something of an evangelist for the idea. Unfortunately though, I was wrong.

The energy density of crude oil is such that available arable land simply can’t produce a fraction of the energy required to replace global oil production. I once did a rough, back-of-a-napkin calculation which revealed that Ireland (a small nation but one with a relatively low population density) could devote the entire arable surface of the country to growing high-yield fuel crops and still only produce approximately half of the fuel required to run our private automobile fleet. That’s just private cars.

All of our arable land, and we’d still need to import about 45% of the fuel needed for our cars.

And it’s this reason why allowing free market forces to deal with peak oil is so disastrous. But more about that a little later.

Prior to that, let me first address some of the other “oil replacements” that are often suggested. Like biofuels, many of these appear to be fine ideas until you try to scale them up. Yes, a barrel of oil can be replaced by a barrel of biofuel*. But replacing 85 million barrels of oil per day with vegetable-based oils? It’s just not an option. We can convert every remaining wilderness and forest into fuel plantations and still not make a serious dent in that number. We can all become vegans and grow biofuels on the land currently used to graze animals and grow their feed… yet still we’ll be relying on biofuel imports from Alpha Centauri.

Put simply, we need another couple of Earths if we are to replace crude oil with vegetable oil.

Others speak of the hydrogen economy. This too is a complete non-starter. Primarily because hydrogen is not an energy source. There are no hydrogen reservoirs; it needs to be manufactured. And the manufacture of hydrogen consumes more energy than is produced by burning the end product. It’s like a proposal to replace 85 million barrels of oil per day with batteries. Hydrogen may have a role to play in the storage of solar or wind power (and I stress “may” because hydrogen has problems of its own and there are probably better energy storage solutions available), but those who propose it as a substitute for oil don’t understand basic physics.

Coal is often suggested as a stop-gap solution until something better comes along. Unfortunately there are serious drawbacks with this (not least the huge increase in carbon emissions and other forms of pollution it would entail). The process of converting coal to liquid fuel, which would be required if it was to replace some or all of the 95% of transportation energy currently provided by oil, is costly (both economically and from an energy-efficiency standpoint), highly polluting and requires large quantities of fresh water (another global resource in increasingly short supply). If we view coal as a potential replacement for oil, then we are resigning ourselves to massive increases in carbon emissions, the acceleration of fresh water depletion and the destruction of large parts of our natural environment. Furthermore, the oft-quoted line that we have “hundreds of years worth of coal” still left in the ground is only true so long as we don’t radically increase its use (which would be the case if we tried to replace the energy we get from oil with it).

Probably the only energy source that is broadly comparable to crude oil is natural gas. It’s slightly less polluting, but is also slightly less convenient. Liquifying it for transportation by tanker (or for use in combustion engines) reduces the energy efficiency of the fuel. To store it efficiently requires compression and/or refrigeration. All in all, when compared with crude oil, it’s a pain in the arse to work with. None of which rules it out as a replacement for oil. The fact that it’s also being rapidly depleted, however, does rule it out. The Association for the Study of Peak Oil and gas (ASPO) estimates that we will reach a global peak in natural gas production sometime around 2020. And it’ll certainly be sooner should we ramp up our gas consumption to compensate for a reduction in oil availability. Even worse, the depletion profile of natural gas isn’t a smooth curve like that of crude oil. Dr. Colin Campbell uses the phrase “natural gas cliff” to describe it. So while our reliance upon crude oil will force us to deal with gradually decreasing availability at up to 6% per year, any reliance upon natural gas will soon be met with sudden and large drops in supply.

Nuclear power is a terrible idea for all manner of reasons. Firstly, there are the obvious issues like waste disposal, security and proliferation to worry about. Less well known is the fact that uranium isn’t exactly plentiful. The world’s largest producer — Australia — estimates that they have about 40 years worth of the stuff left at current consumption rates. This will clearly be significantly reduced should we ramp up nuclear power generation. Certainly there are theoretical solutions for this (fast breeder reactors that can use reprocessed waste as new fuel, and the idea of extracting uranium from sea water). However, the current plans for a new generation of nuclear power stations do not propose to use any of these technologies. Given that new nuclear can’t be expected to come on line for at least 15 years, at the earliest, we shouldn’t expect these advanced nuclear technologies to show up much before 2030 or 2040. This will, quite simply, be too late to meet the challenges of peak oil. Furthermore, it would be foolish to assume that a society in the grip of an oil crisis would be capable of the sort of massive industrial effort required to greatly expand nuclear power. It would consume much needed resources without bringing us any closer to genuine sustainability.

Renewable energy solutions like solar power, wind, wave and tidal will doubtlessly play an important role in keeping the lights on in those nations who invest heavily in them. They have their own drawbacks of course, but they are at least sustainable in the broadest sense.

Like the other proposals, however, what they cannot do is meet the energy gap left by oil depletion. Liquid fuel shortages can’t be mitigated by building wind turbines. Crude oil is an amazingly precious resource. Those who suggest it can easily be replaced by “something else” tend to be largely ignorant of just what makes it so precious. It is (thus far) fantastically plentiful, easily accessible, convenient to transport and versatile almost beyond belief. It also contains vast amounts of concentrated energy when compared to any potential replacement (with the exception of uranium which has its own set of problems).

On top of all this, we’ve only been considering substitutes for oil as an energy source. All the wind turbines in the world won’t generate pesticides or plastics. The byproducts of oil surround us all. I’m typing this on a keyboard made of the stuff. The infrastructure supporting modern life is sculpted from crude oil. It grows the food we eat, coats the roads the food travels on, fuels the trucks that carry it over those roads (and is the raw material for many of the components of those trucks), it’s the wrapping that keeps the food fresh and the refrigeration that keeps it cool.

Introducing ‘The Problem of The Market’

Some critics of Peak Oil theory dismiss it on the grounds that it simply won’t happen… that there won’t be supply constraints in our lifetimes. This is nonsense and unworthy of serious discussion. The evidence is there and even the most optimistic of those who understand the evidence acknowledge that it will happen by the middle of this century (which, as I hope I’ve demonstrated, is likely to be inaccurate by 30 or 40 years). Others, however, insist that while oil production capacity may peak soon, it isn’t all that big a deal. Some of them play down crude oil’s vital role in keeping our civilisation ticking over; others believe that with a bit of minor tweaking, something else can play that role; or they believe that free markets will somehow deal with the problem.

I hope I’ve shown why oil is indeed vital to our modern world, and why there is currently nothing else available to fill the gap it will leave. In Part 3 I’ll address the issue of free markets and why they pose a dangerous obstacle to peak oil mitigation rather than a potential solution.

[Part 1] | [Part 3]

* Actually, because of the energy densities, a barrel of crude oil provides more energy than a barrel of biofuel. But that’s not important right now.

Posted in: Opinion