Oil and Gas: A Flawed Prediction?

One of the comments I quite often get at external events is that “The oil and gas industry has only got 20 years”. This doesn’t just come from enthusiastic climate campaigners, but from thoughtful, very well educated people in a number of disciplines related to the climate issue. A report by WWF a few years back took a similar but slightly less aggressive line, through the publication of an energy model forecast which showed that the world could be effectively fossil energy free as early as 2050.

It’s hard for anyone who has worked in this industry to imagine scenarios which see it vanish in a couple of decades, not because of the vested interest that we certainly have, but because of the vast scale, complexity and financial base of the industry itself. It has been built up over a period of 120+ years at a cost in the trillions (in today’s dollars), provides over 80% of primary energy globally, with that demand nearly doubling since 1980 and market share hardly budging. Demand may well double again by the second half of the century.

So why do people think that all this can be replaced in a relatively short space of time? A recent media story provides some insight.

As if often the case with the turn of the year, media outlets like to publish predictions. Once such set that appeared on CNN were by futurist Ray Kurzweil. He is described by CNN as:

. . . . one of the world’s leading inventors, thinkers, and futurists, with a 30-year track record of accurate predictions. Called “the restless genius” by The Wall Street Journal and “the ultimate thinking machine” by Forbes magazine, Kurzweil was selected as one of the top entrepreneurs by Inc. magazine, which described him as the “rightful heir to Thomas Edison.” Ray has written five national best-selling books. He is Director of Engineering at Google.

Kurzweil claims that:

By 2030 solar energy will have the capacity to meet all of our energy needs. If we could capture one part in ten thousand of the sunlight that falls on the Earth we could meet 100% of our energy needs, using this renewable and environmentally friendly source. As we apply new molecular scale technologies to solar panels, the cost per watt is coming down rapidly. Already Deutsche Bank, in a recent report, wrote “The cost of unsubsidized solar power is about the same as the cost of electricity from the grid in India and Italy. By 2014 even more countries will achieve solar ‘grid parity.’” The total number of watts of electricity produced by solar energy is growing exponentially, doubling every two years. It is now less than seven doublings from 100%.

That gives us just 14 years! But maybe not.

Kurzweil has compared the growth of the energy system to the way in which biological systems can grow. With huge amounts of food available, a biological system can continue to double in size on a regular time interval, but the end result is that it will either exhaust the food supply or completely consume its host (also exhausting the food supply), with both outcomes leading to collapse. Economic systems sometimes do this as well, but collapse is almost certain and there have been some spectacular examples over the last few centuries.

The more controlled pathway is one that may well see a burst of growth to establish a presence, followed by a much more regulated expansion limited by resources, finance, intervention, competition and a variety of other real world pressures. This is how energy systems tend to behave – they don’t continue to grow exponentially. Historically there are many examples of rapid early expansion, at least to the point of materiality (typically ~1% of global primary energy), followed by a long period of growth to some level which represents the economic potential of the energy source. Even the first rapid phase takes a generation, with the longer growth phase stretching out over decades.

The chart above was developed by energy modelers in the Shell Scenario team, with their findings published in Nature back in 2009. The application of this type of rule gives a more realistic picture of how solar energy might grow, still very quickly, but not to meet 100% of global energy demand in just 14 years. The “Oceans” scenario, published last year as part of the Shell New Lens Scenarios, shows solar potentially dominating the global energy system by 2100, but at ~40% of primary energy (see below), not 100%. A second reality is that a single homogeneous system with everybody using the same technology for everything is unlikely – at least within this century. The existing legacy is just too big, with many parts of it having a good 50+ years of life ahead and more being built every day.

shell.com

16 Comments on "Oil and Gas: A Flawed Prediction?"

DC on Tue, 11th Feb 2014 1:48 am 



Q/one of the world’s leading inventors, thinkers, and futurists, with a 30-year track record of accurate predictions. Called “the restless genius” by The Wall Street Journal and “the ultimate thinking machine” by Forbes magazine,

ROFL. Ray Kurzweil? Singularity Ken? Is that who they are taking about? Damn, its like comedy central over@shell.com

andya on Tue, 11th Feb 2014 2:07 am 



Those are all just guesses, would help me if they could.

“I am the only one who is right” – Everyone.

Makati1 on Tue, 11th Feb 2014 2:42 am 



DC, I agree. He is one of Techie religions high priests of dreams. I read his book, “The Singularity is Near” and believe it is the best science fiction book I have ever read, and I have been reading SF for most of my 69 years.

Solar is another dead end, a net loss of energy, if the numbers were really crunched. It is ok for stand alone systems for your home, and may allow you to live a few extra years in the electric world. but eventually, you will run out of things that use electric as they burn out or just die.

Yes, we are putting one on our farm because it is cheaper than running a line 1/2 mile into our property from the commercial source, and also to be independent when the SHTF, but it will likely not last more than 10-15 years without new converters, batteries, etc., which will likely not be available then. By that time, we will be adapted to a life without electric or oil. Will you be?

DC on Tue, 11th Feb 2014 3:27 am 



For some reason..the site ate the comment I wanted to make on this BS chart….

Nony on Tue, 11th Feb 2014 4:07 am 



solar and wind don’t develop without ongoing tax credits and utility protections. The Bakken and EF came out of nowhere with private backing and tons of capital being poured in, instead of a government mandate. governments do stupid things like Jimmy Carter synfuel (kerogen-type oil shale).

DC on Tue, 11th Feb 2014 5:15 am 



You know BillT, you might not care for this, but if Rayboys ‘singularity’ or anything remotely like it were on the way, damn, Id be all over that shyt. Needless to say, nothing even remotely resembling that is happening. Maybe the 1%ers and there private research teams have come up with some nifty toys. If they have, they sure aint about to share any of it with the rest of us. But I doubt beyond a few hidden breakthroughs of marginal utility, even the 1% probably dont have all that much squirrelled away. The singularity was and is, a big bust.

If that chart above is supposed to represent the ‘future’, what sort of future? Clearly shell.com thinks it will look exactly like the present, only with the %’s shuffled around some. But otherwise, exactly the same as 1980, 1990, 2000, and 2010…..

I mean look at that chart.

2100 CE

-‘Biowaste’
-Corn Bio-fools
-Oil…..
-Coal(rofl)
-Nuclear…..yea what a roaring success that is in 2014. Lets keep doing that. Figure by 2100 there would be at least… 6-10 TMI, Fukishimi Chernobyl, Chlelyabinsk level disasters-or worse even.
-And all the rest of the stuff we have now in greater or lessor degrees.

The futures so bright, gotta wear…shades!

GregT on Tue, 11th Feb 2014 6:35 am 



“By 2030 solar energy will have the capacity to meet all of our energy needs.”

Really?

Solar energy always had the capacity to meet all of our energy NEEDS. It is our energy WANTS that have caused all of our problems. If we could learn how to live within the confines of the natural environment, our existence would be sustainable. Man made energy sources are not sustainable, and neither is all life on Earth, if we keep using them.

meld on Tue, 11th Feb 2014 10:34 am 



The Singularity is probably the greatest threat to the continuation of the human species and here is why.

It’s a well known fact that people base their experiences/vision of the world on the environment they grew up in during childhood. This is a logical deduction of “survival of the most adaptable”

If people could live for ever (or a very very long time) then the few who could afford the tech would all rise to the positions of power and stay there indefinitely. We could have 2000 year old robots cyborgs running the world basing their judgements off how the world was in 1997.

Death is the most important part of humanity’s continuation as it allows the young who have the real experience of life as it is now to adapt and invent new technologies and ways of living that are in tune with whatever the current environment is. This is why I laugh at Kurzweil and his thinking, it’s very woolly and very close to a cult.

rollin on Tue, 11th Feb 2014 12:02 pm 



The growth of solar PV or wind is not, I repeat not comparable to the growth of fossil fuels. Fossil fuel growth depended upon new discovery and development of sources. PV and wind do not depend upon new discovery and development of sources, they are both known and available at the surface across much of the globe. It’s more of a manufacturing and installation problem, exponential growth could occur for a long period of time until saturation of the energy stream. Especially if people realize the dangers in using fossil energy and it’s finite limits.

So the model of slower linear growth fairly early on is not valid.

Davy, Hermann, MO on Tue, 11th Feb 2014 3:39 pm 



Called “the restless genius” by The Wall Street Journal and “the ultimate thinking machine” by Forbes magazine, Kurzweil was selected as one of the top entrepreneurs by Inc. magazine, which described him as the “rightful heir to Thomas Edison.

First, if WSJ, Forbes , and EInc. Say these things, well, we know the outcome. Kurzweil, augment is like a house of cards. Where is the support base? The dirty sweaty beginning of manufacture, energy, and maintenance. His base is self-replicating technology. Like artificial intelligence creating robots that create robots. Are renewables going to create renewables? He follows the flawed economist view of substitution making the inference that renewables can be produced by renewables. At some point in a finite world there is no substitution. This is a kind of modern alchemy of technology. We have seen this throughout history. Creating energy out of energy is his meme. I would say look to the laws of thermodynamics and we see his argument dissolve. Renewables are like, Gail the Actuary, mentions “fossil fuel extenders” They are not even good ones most likely because of the conversion cost if you look at the whole life cycle. This same thinking is present in the financial system with the markets, debt, and growth. It is technological exuberance, optimism, and belief in exceptionalism. God said so it is. Who’s God…Their God? What if God is pulling the wool over our eyes is most likely the case. I have read the Godhead believes in humor and loses himself in humor because absolute knowledge and awareness would create complete paralysis. Think that is Hindu theology. Not here to preach just say we need some humor in this case!

GregT on Tue, 11th Feb 2014 3:51 pm 



“Death is the most important part of humanity’s continuation as it allows the young who have the real experience of life as it is now to adapt and invent new technologies and ways of living that are in tune with whatever the current environment is.”

???????

Experience comes with age. It is the elderly that have the real experience, not the ‘young’. The ‘current environment’ is dying, human technologies and inventions are what is killing ‘it’. Adaptation is not possible, in a dead natural environment.

Nony on Tue, 11th Feb 2014 6:17 pm 



1. This stuff comes in and out of fashion. I have seen at least 2 previous solar booms (on the R&D side). One in the 70s and one with Gore-Clinton. This is number 3. And there were probably others before it. That doesn’t mean we will never crack the nut…just that you should at least understand the background before making breathy dotcom remarks. (I think this is RR’s critique of Khosla on biofuels.) Biofuels have previous periods of being in/out of vogue. (Read the novel Needle by Hal Clement…written in the 1950s, he was anticipating large scale biofuel oil in the near future (novel still has propeller aircraft for overseas transit).)

2. Don’t underestimate the possibility of the incumbent to improve/innovate either. Had a wise (older) prof advise me on this, when I was super psyched on the SOFC stuff in the 1990s. He was himself a solar guy…but he warned: all these alternative energy guys draw lines showing how their technology improves over the years. And think how they can catch normal power production. But they don’t show how the gas turbines are getting better (and they are/have). Heck…given a solar/wind cell may not be competitive at all (unsubsidized), as well as the huge difference in overall usage…a 1% improvement in efficiency of a Brayton cycle may be more meaningful than a 10% improvement in a fuel cell.

curt lampkin on Tue, 11th Feb 2014 9:28 pm 



You need efficient ways to store wind and solar energy because they are intermittent. Being intermittent you always need equivalent fossil fuel plants to come on line at night and when the wind stops. This will more than quadruple our energy costs. It is insane to continue installing wind and solar with no way to store the energy

Jonathan Keller on Wed, 12th Feb 2014 7:24 am 



Yes, your given statement is right. Solar energy is the most readily available source of energy. It reduces our dependence on non-renewable sources of energy and makes our environment cleaner. Wind energy is friendly to the surrounding environment, as no fossil fuels are burnt to generate electricity from wind energy. Wind turbines are a great resource to generate energy in remote locations, such as mountain communities and remote countryside. Thanks for sharing.

meld on Wed, 12th Feb 2014 11:16 am 



@GregT – Experience is a useful tool when the environment and narrative stays reasonably static, but it is pretty much useless when the environment one received the experience from no longer exists. For instance what use is a computers programmers 40 years of experience in programming going to be when computers no longer exist? etc. etc.

meld on Wed, 12th Feb 2014 11:21 am 



@GregT – Also inventions do not necessarily “kill” the environment, pre industrial tech certainly changed the environment in many ways but it was never in any danger of killing anything. The point being there is a state in the human experience where technology is optimised to give the easies, healthiest life for humans combined with a low impact on the life sustaining systems of the planet. Hopefully that optimum period lies in our future (few hundred years) rather than our past.