Peak Oil: Some Truths About Crude Oil Substitutes

We are at a key turning moment in history. The actions that we will soon decide to take will be determined by the beliefs we hold. At a time like this, holding the wrong set of beliefs can destroy your wealth, sap your joy, and even prove to be life-shortening. [1]

Sober thoughts, but ones we need to not only contemplate with more vigor than we have so far (leaders in both industry and government have fallen woefully short of the mark in their truth-telling responsibilities), so too must we start planning—a theme I’ve raise more frequently in recent months.

Despite yet another seemingly optimistic observation such as this one:

THE reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy. [2]

another recent headline, courtesy of Steve LeVine (Foreign Policy), is a more realistic, fact-based  truth, and one whose implications many more of us need to understand: “The age of irrational petro-exuberance.”

The reasoning is fairly straightforward, nicely summarized first by Jesse Parent, and then by Tom Murphy:

[T]here is an inherent cut-off point approaching – and it is very different from the shocks, jolts, and other experiences that formed our current national paradigm of energy and gas prices.
That is the point that I feel needs to be stressed, and it’s lack of emphasis, in my opinion, is the substantial failure of our energy education. Until this realization is made commonplace, the hardships we will endure (are enduring) won’t make sense, and the obstacles in the way of a logistically sustainable future will not have proper context. The world as we know it was built via cheap, easily transportable, and highly dependable fuel, and that fuel is essentially non-renewable in supply. At present, there is no substitute for fossil fuels in this way, as per the actual capacity to supply us with the energy we need to live in the society we do….
Discerning who is to blame for a substantial failure in energy education may not be as important as accepting the responsibility to educate ourselves….
[T]he broader, inherently global context of America’s energy situation needs its own special attention. Transitioning from a culture of blame and neglect to sober understanding and responsibility is likely not something that can come from an administration, particularly given the current political climate. An understanding that sustainability is not merely some matter of environmental concern, but an imperative of cold facts and impersonal logistics, is necessary. It will take courage and intellectual rigor to move past the conveniences of political rhetoric, finger pointing, and the     overshadowing of vital energy issues by more accessible (but more tangential) news trends, but doing so is part of accepting the responsibility that enables choosing the best future – for our country and our planet. [3]

[O]ur reaction to a diminishing flow of fossil fuel energy in the short-term will determine whether we transition to a sustainable but technological existence or allow ourselves to collapse. One stumbling block in particular has me worried. I call it The Energy Trap.
In brief, the idea is that once we enter a decline phase in fossil fuel availability—first in petroleum—our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here’s the rub. The construction of that shiny new infrastructure requires not just money, but…energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term—effectively steepening the decline—for a long-term energy plan? It’s a trap!…
The only way out of the political trap is for a substantial fraction of our population to understand the dimensions of the problem: to understand that we’ve been spoiled by the surplus energy available through fossil fuels, and that we will have to make decade-level sacrifices to put ourselves on a new track. The only way to accomplish this is through sober education, which is what Do the Math is all about. It’s a trap! Spread the word! [4]

It would be far better, less stressful, and certainly a more optimistic approach if we could just forget any talk about Peak Oil (climate change, too) and proceed to a return to full “prosperity” and near-unlimited growth prospects just as soon as we possibly can. Doing so would require that we embrace the most wildly-exuberant statements about our “massive” and “vast” domestic supplies of shale oil, Canadian tar sands, and the gazillion barrels of oil shale just waiting to be plucked from beneath the surface. We could also learn to flap our arms at the right angle and speed and thus learn to fly.

Those two options are unfortunately required to abide by the rules of reality, and reality tells us neither is a viable option.

[Of course, as was reported by Kate Sheppard here, we could just emulate what a number of nitwit North Carolina legislators are attempting to do by essentially declaring sea level rises to be against the law: we could pass our own legislation mandating that any and all vastly massive resources/reserves/supplies be extractable immediately, inexpensively, and easily … or else!]

Facts continue to annoy, ruining all the “good” reasons arguing against the validity of Peak Oil (as if there weren’t enough already.)

The hard truth is that there are no good fuel substitutes anymore. Throughout human history, we have always been able to find not just a substitute fuel, but a better one: a cheaper, denser, more abundant one. That is simply no longer the case. One may hope for some miraculous technological breakthrough, and one may simply have faith that the invisible hand will solve our problems, but such thin threads are hardly a reasonable basis for policymaking and forecasting. [5]

We assume that the next 50 years will be like the last 50 in terms of energy availability, when the data clearly show that it will not. We assume that if oil runs short, we’ll find a substitute, not comprehending that the substitutes have much poorer quality, far lower production rates, and lower energy content. We assume that societal surpluses, like health care, or one person per car, or a complex society sporting ten times the retail space per capita of Europe, are normal. They are not. They are artifacts of an age when energy was insanely cheap. [6]

Yes, the Bakken could produce as much as 2 million barrels per day (bpd) up from roughly 500 thousand bpd, maybe as much as 3 million bpd, but the US imports roughly 8 million bpd today under even severe economic conditions, and as much as 10 million bpd under happier economic conditions.
The Bakken and other shale plays are simply not going to replace all of that — ever. Note, too, the slope of the line before the ‘Bakken bump,’ and observe that whatever gains are realized from shale oil will be fighting depletion losses from the rest of the tired fields under production. [7]

It turns out, however, that what most environmentalists know about the future supply of natural gas and other fossil fuels is based more on industry hype than on actual data….: There is increasing evidence that no fossil fuel will continue to see its rate of production climb significantly in the decades ahead and so none of them is a viable ‘bridge fuel,’ not natural gas, not oil, not coal. This means that global society must leap over fossil fuels and move directly to renewables as quickly as possible. In advanced economies this leap must be combined with a program of radical reductions in energy use, reductions which are achievable using known technologies and practices….
When the petroleum glut long predicted by the optimists failed to appear, they started lumping in ethanol, biodiesel and natural gas liquids with petroleum and calling them all ‘oil.’ These other products are useful, but they are not as energy-rich, versatile or easily transported as oil. Our current infrastructure is heavily dependent on oil inputs with no real substitutes available in the quantities required….
The hydrocarbons locked in the tar sands and the Orinoco oil belt in Venezuela aren’t what we call oil and must be heavily processed at high cost using enormous amounts of energy. As for the oil shale in the America West, the amount of commercially produced oil we are currently getting from that oil shale is zero. No one has figured out how to extract it profitably. Partly this is because oil shale contains no oil. Instead, it contains a hydrocarbon-rich waxy substance called kerogen which must be heavily processed to turn it into oil….
The hard-to-get oil resources are large, but they take a long time to develop and require strenuous, expensive and energy-intensive methods to extract. All this, when combined with the relentless depletion of existing fields, spells little or no growth in the worldwide rate of oil production in the coming years…..[8]

It would appear that we have what some might consider to be a “predicament”. Others might prefer a more basic “Oh, Sh*t!”

Pretending these factors don’t exist, aren’t relevant, or can simply be set aside by some combination of free-market wonders, the Technology Fairy, and good ol’-fashioned human ingenuity has a very tiny place in the important conversations we all need to start engaging in.

However we transition our society, lifestyles, industry, and transportation (for starters) away from the inexorable decline of crude oil supply and the inadequate replacement of same by renewables and/or shale-tar sand substitutes, the time factor, complexity, and disruptions to our preferred Business-As-Usual approach is going to call for a much greater level of serious debate with and contribution from … everyone.

We can make it worse by pretending and/or ignoring and/or doing nothing until there’s a “better time” for experts to take care of this for us. That is an option. It sucks, but it’s an option.

More information—admittedly—unpleasant, is better than not knowing. Football and hockey players in particular will tell you that being blind-sided is never fun. It’s no different when discussing our future and our future well-being.

I’ll have some more thoughts, along with observations from others, as this series continues.

Peak Oil Matters