Peak Oil is You
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Page added on March 10, 2012
Oil is still there but harder to extract
Drivers cringe as they watch the numbers roll higher on the gas pump meter. They feel even worse as they see news stories projecting gas at $4 or even $5 as the weather warms. No problem, says candidate Newt Gingrich with a promise to return the price to $2.50 if elected president. This is the same Newt who, while beating the war drums for an attack on Iran, said “that with all the various sources of oil we have in the United States, we could literally replace the Iranian oil.” But a record number of U.S. oil rigs are currently busy, attracted by oil’s high price. As a result we would struggle to add many new crude oil barrels to our 5 million or so annual production — let alone replace Iran’s 2.2 million barrel annual exports.
The fact is that oil and gasoline prices may never look back, as we gradually enter a decline phase in fossil fuel availability, especially with oil. There is still a lot of oil in the earth’s outer crust, but it is much harder to extract. Therefore the slow rate at which we can produce it won’t match the demands of 70 million new people/year, along with the growing aspirations of billions in the less developed world. Oil is not just for transportation but also for the hundreds of products like plastics, rubber, medicine, fertilizer, pesticides, etc, made from petroleum feed stocks.
So far, humans have burned a little over one trillion barrels of this highly concentrated energy fuel. Geologist’s estimates of total original oil in place on earth range from 2 trillion barrels to 4-5 trillion, depending on how much effort, energy, and money we want to spend to recover it. Our first trillion was the easiest. The rest is deep beneath the ocean floor, under Arctic ice flows, in very low grade deposits like the oil sands in Alberta and the Orinoco Basin of Venezuela, or in the even lower grade toxic oil shales of the Green River Basin in Colorado and Utah.
In recent years, world crude oil production has stabilized at a little over 70 million barrels/day(mb/d). In the meantime, General Motors is selling more Buicks in China than they do in the US. And the rest of Asia is leaving the rickshaw for the automobile.
In its annual Energy Outlook, the International Energy Agency(IEA) forecasts no significant increase in world oil production in coming decades. The IEA states, “The cost of bringing oil to market rises as oil companies are forced to turn to more difficult and costly sources to replace lost capacity and meet rising demand. Production of crude oil will remain at current levels before declining slightly to around 68 mb/d by 2035. To compensate for declining crude oil production at existing fields, 47 mb/d of gross capacity additions are required, twice the current total oil production of all OPEC cou tries in the Middle East.”
We are producing substitute biofuels, but 40 percent of the U.S. corn crop provides just 7 percent of our gasoline demand. Worldwide, hundreds of millions of personal cars and trucks are now at the food table, with part of their diet biofuels made from the fruit of the plant. We can attempt to make cellulose biofuels from non-food biomass like grasses and corn stover, the residue stalks and leaves left after the harvest. But nature’s law requires some residue to stay on the land, protecting the soil from erosion by wind and water. And every ton of decaying corn stover offers ten pounds of nitrogen, two pounds of phosphorous, and forty five pounds of potassium to the soil.
Congress in 2007 passed the Energy Independence and Security Act, requiring 100 million gallons of cellulosic biofuel in 2010 and 250 million gallons in 2011. We struggled to make 5 million gallons in each of those years as there is no effective production process for cellulosic biofuel. The same shortfall will occur on the 500 million gallon legislative mandate for 2012. The Laws of Physics and Nature are not easily repealed.
We’ve been spoiled by the surplus energy available from fossil fuels deposited over millions of years. We have spent much of that fossil fuel inheritance, and we are now facing substantial sacrifices to deal with a new energy reality. We’re not hearing much about that or other substantive issues as candidates attack each other during this election season.
16 Comments on "Oil is still there but harder to extract"
Arthur on Sat, 10th Mar 2012 2:09 pm
Holland and rest of Europe: 9$/gallon NOW.
george on Sat, 10th Mar 2012 2:35 pm
prepare your brain for gasoline rationing
Arthur on Sat, 10th Mar 2012 2:41 pm
…and prepare your car:
http://www.youtube.com/watch?v=CzUVjiKhzeM
Arthur on Sat, 10th Mar 2012 2:45 pm
Limited production starting in 2012.
http://en.wikipedia.org/wiki/Volkswagen_1-litre_car
Arthur on Sat, 10th Mar 2012 2:45 pm
Sorry, in 2013
SilentRunning on Sat, 10th Mar 2012 5:49 pm
Since 40% of our corn produces 7% of our gas, all we need to do is to devote 570% of our corn production to make 100% of our gas!!
There! Problem solved by resorting to math, with no concern for physical reality.
Can I be an economist cornicopian now?
😀
DC on Sat, 10th Mar 2012 8:11 pm
That 7% of ‘fuel’ however, bascially took 7% of the oil amerika imports to produce it. How are bio-fools ‘replaceing’ anything at all? How does takeing 7% of your heavily subsidized oil, to then use it make even more subsidized corn, which is then converted to a less energetic fuel at a more less 1 for 1 basis, and THEN, the resulting ‘fuel’ is shiped out to the oilcos that then water down regular fuel with it at a 1:9 ratio?
Im sorry ….what???!!!
BillT on Sun, 11th Mar 2012 3:37 am
Well, gas passed $5.50 per gallon here in the Philippines this week. Diesel is about $4.50 but only buses and trucks use it. The taxi pick up fare jumped from 40 pesos ($ .95) to 50 pesos ($1.20) Jeepney fares will probably go up in the next few weeks from 8 pesos to maybe 9 or 10. Jeepneys take you in a 10 or 12 block fixed route.
As for the US, you have been living on tax subsidized gasoline for decades. Now you will experience what the rest of the non-producing world has been paying. I see $5 by summer and maybe $6 by Labor Day. No? Wait and see.
Gale Whitaker on Sun, 11th Mar 2012 3:50 am
Higher fuel prices are great. Higher fuel prices mean the end of globalization. As globalization fades big business will be forced to bring factory jobs back to the US. China will be forced to find some other way to pay for their rice and noodles.
BillT on Sun, 11th Mar 2012 6:23 am
Gale, yes, jobs are starting to come back to America….Central and South America, not the US. Labor is still way cheaper and those places are next door compared to Asia.
Arthur on Sun, 11th Mar 2012 1:24 pm
Higher fuel prices indeed mean the beginning of the end of globalization. But it also means higher prices for everything you can touch (commodities), but not the price of labour. At some point China/Asia will decide not to fund American deficits any longer, because the insight will grow that these deficits will never be paid off. Greece is the first example of this, but they are bailed out by northern Europe, for the moment. When China will stop funding, that will be the moment for the rise of American protectionism. And that will be the chance for local producers. The free trade ideology of the nineties was meant as a preparation for world government (from Washington, NWO). But Peak Everything is going to prevent that scenario. The future is: retribilization, protectionism, local production, the break-up of large and not so large geographical entities (USA, UK, Russia, possibly the EU). The future means managing of the decline. It means the return of family values, because the state will run out of means to provide for an alternative protection layer, the disappearing of the car, the lowering of life expectation, since expensive urgent medical care is going to be reserved for younger people (forget about an artificial cardiac valve when you are over 60), the return to larger families as an alternative pension plan.
beamofthewave on Sun, 11th Mar 2012 4:57 pm
All these countries with high gas have national health care. I get taxed much more than high gas for useless miserly health insurance. I pay out of my pay check 1000 a month and that really annoys me. Give me health care for free like in France for all citizens and then take gas to 9, I dont care!
Arthur on Sun, 11th Mar 2012 5:51 pm
Here a clearer insight into the real dimensions of the VW-1L:
http://www.spiegel.de/fotostrecke/fotostrecke-79724-6.html
Again: 235 miles/gallon
It takes some skill to leave the car. But it is still more comfortable than a horse 😉
Kenz300 on Sun, 11th Mar 2012 9:08 pm
40+ mpg is better than 18 mpg……
Bring on the electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles. It is time to end the oil monopoly on transportation fuels. We need a choice at the pump.
BillT on Mon, 12th Mar 2012 4:51 am
“…Bring on the electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles…” It will never happen, Kenz. Not possible. Read Arthur on Sun’s comment to see why.
Arthur on Mon, 12th Mar 2012 1:07 pm
I just saw that the new model VW XL1 has a fuel efficiency of 310 mpg:
http://en.wikipedia.org/wiki/File:Volkswagen_XL1.jpg
With this figure an elite will likely be able to keep driving (on biofuels) in the long run.
That does not change one iota to the almost absolute certainty that the global car economy is going to crash in a couple of years. Somewhere in this decade most of these hundreds of millions of cars will come to a shrieking halt.