Peak demand and positive stories

There’s been lots of talk about peak oil and just where world oil production is on that curve. Kris Bevill covered a report this week on another world oil peak, this time for demand.    By 2020, world oil demand will peak at just 4 percent above current levels and, by 2035, the Ricardo study suggests, world oil demand will be below 2010 levels.

While the world’s vehicle fleet is expected to expand by 80 percent, fuel efficient technology and more stringent standards will reduce demand for oil. Biofuels will play a role, but even without biofuels in the equation, oil demand is projected to drop below 2010 levels by 2035.

That raises all sorts of questions about the impact on GHG emissions. Ethanol gets criticized because it doesn’t reduce GHG emissions enough. If world oil demand essentially remains static, the potential reductions from ethanol is perhaps more valuable. And given that cellulosic ethanol, and advanced corn ethanol systems, promise significantly greater GHG reductions, ethanol would be even more valuable.

I also wonder how this view of peak world oil demand would play out in the indirect land use change debate. One of the criticisms of the whole ILUC argument is that it doesn’t factor in oil. While it accesses a penalty for the indirect GHG emissions from new land brought into production assuming it is due to biofuels demand (anywhere in the world), the argument doesn’t consider the extra GHG emissions from newly developed oil production such as the Canadian tar sands. GHG impacts from new biofuel developments needs to be compared to the GHG for new oil resources, the argument goes.

I haven’t run across an analysis of the GHG impacts of the hot new oil development in my backyard—the N.D. Bakken formation. New technology has permitted economical recovery of oil from the Bakken and the newest projections are showing higher reserves than initially thought. The stories I read are much more excited about the job and wealth generation than about considering a life cycle analysis of these new oil resources. The biggest issues in western North Dakota are around the impact of heavy truck traffic on roads and highway safety and the shortage of both labor and housing. There is little discussion about environmental impacts, as we hear from critics of the Canadian tar sands development.

Perhaps the ethanol industry should look for some lessons here. For corn country, the excitement is that ethanol production has brought new jobs and new market demand that has strengthened corn prices. The story needs to be told about how that has impacted the lives of people. How corn farmers appreciate making money off their corn sales, rather than off the farm program, and how that plays out in the community.

I do think we’re seeing more of that. As we monitor the stories about ethanol on a daily basis, we’re seeing more stories where local ethanol plant managers are talking in the local newspapers. Corn growers associations also tell the story. That helps in building good will on the local level. We’ve got to figure out how to do that nationally. The efforts in the racing world are laudable, but we need more. The national organizations are doing their part – but I think the situation we’re in is partly due to the tendency to leave it up to those national organizations. That isn’t enough. To turn national opinion more favorably toward ethanol will require several positive stories for every negative. Everybody needs to get creative about telling those positive stories.

Ethanol Producer Magazine