by thorn » Thu 17 Nov 2005, 10:44:15
He put the report into the record.
$this->bbcode_second_pass_quote('', ' ')PEAK OIL -- (House of Representatives - November 16, 2005)[Page: H10476]
The SPEAKER pro tempore (Mr. Jindal). Under the Speaker's announced policy of January 4, 2005, the gentlema n from Maryland (Mr. Bartlett) is recognized for 60 minutes.
Mr. BARTLETT of Maryland. Mr. Speaker, I have in front of me a document called Peaking of World Oil Production, Impacts, Mitigation and Risk Management. As I look at the second page, it says this report was prepared as an account of work sponsored by an agency of the United States Government. That agency was the Department of Energy, and the organization that was funded to do this work was SAIC, a very pre stigious, scientific organization.
Dr. Robert Hirsch was a project leader. He was supported by Roger Bezdek and Robert Wendling in this very important work. It was submitted in February of 2005.
What I would like to do this evening is to go through the salient points of this so-called Hirsch report. Remember, it was funded by the Department of Energy, and it was performed by a very prestigious scientific organization, SAIC.
I have here a quote from page four of this report. This is so important, I have highlighted a couple of phrases, but I would like to read these couple of statements here, because they are so important. The peaking of world oil production presents the United States and the world with an unprecedented risk management problem. What that means is that never in history has there been a risk management problem like this. It is unprecedented, they say.
As peaking is approached, liquid fuel prices and price volatility will increase dramatically and without timely mitigation. The ec onomic, social and political costs will be unprecedented.
Mr. Speaker, what that means is that never in history has there been an occasion when economic, social and political costs will be this big. Viable, mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
Dealing with world oil production, peaking will be extremely complex, involve literally trillions of dollars. Now, around here, we talk a lot about billions of dollars, but seldom about trillions of dollars. This will cost trillions of dollars and require many years of intense effort.
Mr. Speaker, what are they talking about? What is this oil peaking that they are talking about that is going to present unprecedented risk-management problems, and have economic, social and political costs, which will be unprecedented? What we need to do to put in this in context to understand it is to go back about 60 years, and our next chart helps us do t hat?
This begins with the work of a Shell oil scientist by the name of M. King Hubbert. M. King Hubbert worked during the 1940s and 1950s. He was observing the exploitation and the exhaustion of oil fields. He noticed that each oil field followed what we call a bell curve, goes up steeper and steeper, finally reaches a peek, and then down the other side.
He saw this in field after field. He rationalized if he could add up all the fields in the United States and guess as to how many more we were goin g to find, he could then estimate when the United States would peak in oil production. He made that estimate in 1956, and he said that the United States would peak in oil production about 1970.
As it turned out, he was right on target. You can see here from the graph, this peak in 1970. The smooth curve here is his prediction. The more ragged curve, or the actual data points, and you see that right on target, it peaked in 1970.
The red curve here is the curve for the Soviet Union, now Russia. They k ind of fell apart with their dissolution, and they did not reach their potential, so there is going to be a second kind of a much lower short peak here. Russia has already peaked in their oil production.
Mr. Speaker, more than half of all of the oil-producing countries in the world, some 25, I believe, have already peaked. Their peak oil production is already behind them. The next chart shows a schematic that helps us understand this, perhaps a little better.
This represents a 2 percent exponential growth in oil. Now, all the oil that was produced was used. For the first part of the curve the production of oil and the use of oil are the same thing. Obviously, you are not going to produce oil that you do not use.
If you need more oil, and it can be produced, your price indicators will mean that more oil is going to be produced. So for this part of the curve, we have used the oil as fast as we produced it.
At some point in time, it will peak. It peaked for the United States in 1970. M. King Hubb ert said it would peak for the world about now. Actually, he said a few years earlier, but he could not have known of the Arab oil embargo and the world oil price hike spikes which sent the world into a recession, which reduced the demand for oil. That moved the peak a little forward. We believe, many observers believe, that we are peaking about now, or will shortly be peaking.
Mr. Speaker, I hope that the message that is in this document, peaking of world oil production, and the things that I am going to say, I hope they are wrong. Because if they are not wrong, we in United States and the world is in for a very rough ride. By the way, we can make this a very sharp peak or a very gradual one, by simply changing the scale on the abscissa and the ordinate. This represents a 2 percent increase in oil use.
It is 2 percent of what it was last year, so it keeps growing, it grows what we call exponentially. With a 2 percent growth, it doubles in 35 years. Since this point is half of that point on the ordina te scale, this represents 35 years.
[Time: 21:00]
So you see that some years before we actually reach peak, and we believe that we may be here at this point, but a few years before you reach peak, you actually are not producing as much as you would like to use. Just a very few years ago in 1998, I think, oil was under $10 a bar rel, and now it was about $60 a barrel. So, clearly, there is not as much there as the world would like to use; and because there is not as much there, there is a higher demand for it, and so the price goes up.
We will be talking this evening about filling the gap. This is the gap we are talking about filling here. What are we going to do now that we have reached this point? There are two things we can do. One of them is simply reduce our
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consumption of oil so that there is enough to go around, and the other is to try to find some other source of energy so we can fill this growing gap; and the further out we go, you will see the bigger the gap gets. We will be talking about that a little later.
The next chart is an interesting one that shows the relationship between the oil we found and the oil we used. This is the difference between the oil we found and the oil we used. You see this is about the year 1980. Up until about 1980, every year we found more oil than we used. So we were accumulating an excess. This much excess was accumulated. From about 1980 on, we did not find as much oil as we used; and so to have enough oil available, we had to now start pumping our reserves. And so since 1980 our reserves have been going down and down because we have never, I think, in any year since about 1980 found as much oil as we pumped.
The next chart shows these relationships in a somewhat different way that may be a little easier to understand. Here we have these bars and they represent, you see that was very similar to the previous chart, and this shows the actual discovery of oil. This does not subtract what we use from what we found because we have a second curve here, which is the use curve, and you will see this black curve here. That is the amount of oil that we have used.
Now, it is very obvious that you cannot pump oil that you have not found. So if you kind of round this curve out and you get a curve here that has an area under it, that is the amount of oil that we can use. The amount that we have used is under this curve here. And since about 1980 we have had to make up for what we did not find by borrowing from that which we had found. So you are going to have to borrow some of this and fill in this space here to get us to where we are now in 2005.
Where do we go from here? Well, where we go from here is going to be determined by how much of this oil that we found is still available and how much more oil we are going to find.
Now, the people who put this graph together guessed that the oil could keep going down because it has been going down for 20 years. See the slope down for about 20 years? They guessed it would keep on going down at that slope. So the amount of oil we can use in the future is going to be the difference between what we find, which they think is going to be less and less each year which I am sure it will be because it has been for the last two decades, and the amount of oil that we use, and that will be made up by the oil that is here.
So you can draw very many curves that do not have you falling off a cliff. And clearly the wells do not perform the way that you pump full bore and you get the last drop out and you do not get any the next day. It tapers off little by little as you come down what is called Hubbert's peak.
The next chart is from the Hirsch Report, and in this chart he has simplified Hubbert's peak. And for purposes of their presentation here, they have depicted Hubbert's peak as not being the bell curve that we looked at before, but as simply bei ng a slope up and they slope down. And they will tell you in the report that they have simplified that because of the points that they want to make later.
The bottom of the chart here shows something very interesting. It shows our production of oil in our country peaking in 1970. After 1970, we have developed some really good techniques for improving the discovery of oil and the recovery of oil.
Mr. Speaker, really big increases in our technologies for both finding oil and for pumping it, enhanced r ecovery of oil, did not make any appreciable difference in the amount of oil that we were able to pump. This points to the fact that the geology really determines how much oil we are going to get in the enhanced recovery techniques, and the field exploration techniques do not make much difference.
Another thing that does not make much difference at all is price. We are falling down the slope here. Notice what happened to price. It went way up. That ought to have resulted, if you think the marketplace wo rks, that ought to have resulted in a lot more oil production in our country. It did not.
You see, nothing really happened to the oil production when the price really spiked here. But what this graph does is to make the point that increased technologies and increased price will have little effect on the production of oil from a field that has already pea ked and you are going down slope.
The next chart is an interesting one, and what this shows is kind of what was shown in the past one, perhaps in a more dramatic way. By 1980 we were already 10 years down the other side of what was called Hubbert's peak, and the Reagan administration noted that and they knew they needed to have more oil. Their solution to that was to incent our oil companies to go out and drill more, so they provided some tax incentives for that, and it really worked because this is the drill here you see. And it really spiked after 1980; they drilled a lot more wells.
But notice this relationship between the oil that you have found and the oil you are pumping; and in spite of all that drilling, we went negative. What that shows is if it is not there, you cannot drill it. No matter how many holes you drill, you will not get more oil if there is not more oil there to get.
The next chart is kind of a blow-up of the situation in our country since 1935 to roughly the present. This sho ws where we have gotten our oil from. It shows us peaking in 1970. Oil from Texas, the rest of the United States, the natural gas liquids, and then the big discovery of oil in Prudhoe Bay. We were already slipping down Hubbert's peak. There was a little blip there as we slipped down Hubbert's peak. But notice this source where we are getting 25 percent of our oil really did not stop us from slipping down Hubbert's peak.
Notice the yellow there, Mr. Speaker. That is the fabled Gulf of Mexico oil discover y. You may remember that. A number of years ago that was supposed to solve our problem. It was oil for the foreseeable future. That is all the contribution it made.
Now, we clearly have been using more oil since we peaked, and we have been getting it from overseas; and we now get nearly two-thirds of our oil from overseas because, Mr. Speaker, we have only about 2 percent of the known reserves of oil in the world. We use about 25 percent of the world's oil, and we import about two-thirds of what we use.
The next chart shows the estimate of a number of authorities on when peaking is going to occur. Here we have the dates, and this first block of dates are those between now and 2010. That is pretty soon. You see the individuals there. Several of those I know personally. Colin Campbell, I have talked with him on the phone from over in the British Isles. Matt Simmons is the personal energy adviser of the President, president and CEO of perhaps the largest energy investment bank in the world. Dr. Deffeyes is a professor at Princeton University who has written a book on this subject, ``The End of Oil,'' I think, ``The View From Hubbert's Peak'' is what he calls it. Then we have a few who think the peak is going to be between 2010 and 2015. And then there are three that say that it is going to be there at notice.
Mr. Speaker, there is no argument that there will be a peak except for the last one here, Lynch, who believes it will be a long plateau. He is not arguing that it will not peak, but he thinks it w ill not reach the top and fall off. It will be a long plateau.
I would like to note, Mr. Speaker, that the economists here tend to be those that think that peak will be sometime in the future. What economists do is simply predict the future from the past. They are very good at studying the past. And if, in fact, there are inexhaustible resources, it is very logical that you ought to be able to predict the future from the past. But if, in fact, there is a limited supply of oil, then you may not be able t o predict the future from the past. But notice the big group of experts, and this is who they work for and what they are, and notice several of them are retired.
We find when a military person takes off their uniform, we sometimes get kind of different testimony from them than when they wear the uniform. These people do not have any company they are accountable to. They are retired. For people who are just retired, Mr. Speaker, you tend to get very honest testimony from them. So you know who they are an d who they work for and they are very credible people and they are pretty much all saying that peaking is pretty soon.
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The next chart shows how we use the oil that we get. The big blue on top here is transportation. That is where we use about 70 percent of it. The yellow is industrial. The purple down here is electric power, and then what we use in our homes, residential, and then commercial at the very bottom.
The important part of this is the transportation, important for two reasons. One is that it is the biggest chunk of it and, secondly, it is that use of oil that cannot be readily replaced by something else. In industry they can use energy from many other sources for much that they do; but for transportation, we are pretty much stuck with oil.
The next chart shows us some of the characteristics of the fuels that we use and this is talking about energy density, how many gigajoules you get per ton. Gigajoules is a technical term. It simply means BTUs or calories or heat or energy that you get from a given volume of this. We tend to think of it in gallons or barrels, 42 gallons in a barrel by the way.
Here you see that crude oil is here at 449, and then diesel automotive as you start to refine it you get higher and higher densities.
Now, as we run down Hubbert's peak and start running low on oil and still want to drive our cars and our planes and so forth, we will have to find a substitute. Notice that the substitutes here have very much less energy density. I would like to spend just a moment, Mr. Speaker, talking about energy density because it is really very important and presents a big challenge to us.
One barrel of oil, that is 42 gallons of oil, the refined product of which you can buy now for just a tenth of a penny under $2 at some stores now. So you can buy it for well less than $100. That will buy you the work output of 12 people working all year for you.
If you have some trouble getting your arms around that, Mr. Speaker, just imagine how far that gallon of gas or diesel fuel takes your pickup truck or your SUV or your car. By the way, that is still cheaper than water in the grocery store if you are buying it in the small bottles.
Now, you could pull your car or truck or SUV as far as that gallon of fuel takes you, how long would it take you to pull your truck there. Obviously, you cannot pull it, but you can use a come-along and guard rails and trees and so forth, and by and by you will get it there. But it would take you quite a while to take it the distance t hat that one gallon takes you.
Another little example of this energy density and the tremendous challenge we face of finding something that is equivalent to this: If you work all day real hard in your yard this weekend, I will get more work out of an electric motor with less than 25 cents worth of electricity.
[Time: 21:15]
The next chart addresses the transportation challenge we have. Obviously, the oil will go further if we are using less of it, but what he says here is that we cannot conceive of any affordable, government-sponsored crash program to accelerate normal replacement schedules for our cars and trucks. The average car is on the road I think 16 years. That is the median. That does not mean it is the average because the last one is 18 years, that is the middle one, and the average light truck, about the same distance, 16 or 17 years. The average big truck, heavy truck, is on the road for 28 years.
So if you want to buy a Prius or an Insight or one of these hybrid cars now, we ought to be doing that. I am not discouraging us doing that. That will make a very small dent in oil use because the things that were bought just this year are going to be on the road 16 or 17 years for cars and light trucks and 28 years median for heavy trucks. So it will take a long time.
If you want to dramatically reduce oil use, you have got to get these gas hogs off the road and get some fuel efficient things on the road. What they are saying is they cannot conceive of any affordable here, and that is the key word here. Obviously, we could bribe all the people in the country to take their SUVs to the junkyard and give them enough money to get a new hybrid. That would not be affordable. That is the key word here.
What he is pointing out here is it is going take a long time to make this change from our present gas guzzling SUVs, big cars and trucks and so forth and go to these hybrids.
The next chart shows us the contribution that enhanced oil recovery can make. We have some really good techniques today, and some people will tell you do not worry. We are really good at getting oil out of the ground now, so do not worry about this peak. What this shows is it does not affect the peak. Indeed, if you think about it, it should not affect the peak, because up until this peak, the oil comes out of the ground easily. You do not need the enhanced recovery techniques to get it out because it comes out very easily anyhow. When you really need them is on the down slope, and this shows you get a little more oil out on the down slope.
The next chart shows a depiction that the authors use, and thi s is really a simplification. They will tell you that this should be a growth curve here, an exponential curve, but they are making it a wedge because it helps them to make their points. And this is a schematic one for any substitute that you want to have.
It takes awhile before you get anything out of it. You have got to build the plant and plan, and then you start producing some of whatever this is. The next chart will show us the variety of things that it is, and the longer you have, the more and mor e of it you produce a day, present this thing as a wedge.
The next chart shows us an addition of some of wedges that you might use to have more liquid fuels available.
Enhanced oil recovery, we looked at that. That will produce something.
Coal liquids. When I was a little boy, in our lamps we used coal oil. By and by that was substituted by kerosene, and Hitler ran his military in World War II on oil made from coal because he did not have any oil and we were not going to let him get any. So he h ad to make it from coal. They had a lot of coal.
Heavy oil. Heavy oil is what determines why it is heavy. It will most likely sink in water some of it. All the rest of oil floats on water, and some of it is what is called sour. When you see that sour crude, light sweet crude is the most valuable. Sour crude has a lot of sulfur in it. You have to take that sulfur out. You are really polluting the air.
Then gas to liquids, and then he shows something about efficient vehicles. It takes a while before y ou get this in the fleet, and notice in 15 years the trifling contribution that efficient vehicles have made.
The next chart is a composite here that makes a salient point that they make in their paper, and here they look at three different scenarios of when you start to address the problem and the consequences of that.
The first of these, you start your crash program when you peak out. You say, gee, we cannot get as much oil out of the ground today as we got yesterday. That will not literally be tr ue. It will be this month compared to last month because day-to-day is probably not going to make that big a difference.
If you wait until you see peak oil, what they are saying here is that run as fast as you can. With mitigation, you are still going to have a big shortfall.
By the way, I would like to refer back to their simplification of the bell curve. They simply use a slope up and a slope down, and what they are saying here, when you reach peak oil, you would really like to keep on going and u se more and more. This really, of course, is an exponential curve going up, but they show here for simplicity a straight line and what they are trying to do is fill the gap. I am going to come back to that in a couple of minutes, but I am not sure we ought to be trying to fill the gap.
The second curve here represents what happens if you anticipate it by 10 years, and notice that most of the people in that former chart thought you were going to have peak oil a lot sooner than 10 years from now, but if y ou have 10 years and start the mitigation, you are still going to have a shortfall.
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To have no economic consequences, they say they are going to have to start 20 years ahead. Now, almost nobody believes that we have 20 years ahead. So obviously, if we are trying to fill that gap, there is going to be some shortfall because it is either upon us or will shortly be upon us.
I would like to talk for just a moment about whether or not we ought to try to fill that gap. For two reasons I think that maybe we ought to be considering that that is not really a good idea.
One is there is a pretty widespread belief that the warm weather we are having and the more frequent and intense hurricanes, the melting of the icecaps and the glaciers may be due to global warming that may have resulted from an increase in greenhouse gases which are produced by burning these fossil fuels. Now, if that is true and you believe that is going to have a negative effect on our environment, our climate and so forth, which will ultimately affect us economically, then I am wondering why you would want to have more of this by trying to fill that gap.
Let me give you another maybe even better reason that you should not be thinking about filling the gap.
There is an old saying that if you are in a hole, stop digging. Now, a corollary to that would be, in this case, that if you are climbing a cliff, a hill, where you will come to a precipice and by and by fall off and have to uncomfortably go down the other side, the highe r you climb, the further you have to fall. That is very germane to this because the more oil that we use, the more energy that we use, the higher we will have climbed up that cliff and the steeper will be the descent down the other side.
The next chart, and you should notice, Mr. Speaker, the page where you can find these on each one. This is from page 6 4 of their report, and let me read this because this is really significant and I suspect that not too many people know this.
World oil peaking is going to happen. That is a certainty. I think that everybody understands that oil cannot be forever. There is not an inexhaustible supply of oil. It is not going to last to forever. What does that mean?
They think that it means that we will shortly peak in oil production. I would like to emphasize that peaking does not mean that we are going to run out of oil. We will not run out of oil for a long time, maybe 100 years, but what we will have run out of is readily available, high quality oil that can be produced at the rate we would like to use it. It is oil peaking. It is not running out of oil.
A hundred years from now there will be some oil, some gas, some coal, that we can find in ever-decreasing amounts at ever-increasing cost. It will not be very much in 100 years, but there will still be some.
``World production of conventional oil will reach a maximum and decline thereafter. That maximum is called the peak.''
I would suggest, Mr. Speaker, that one can find a lot of information on this if you simply do a Google search for peak oil. Now, you get essentially the same information if you do a Google search for Hubbert's peak but peak oil will do. That is maybe easier to remember. You will find a lot of articles there relative to this.
``A number of competent forecasters,'' and we looked at that chart a few minutes ago, ``project peaking withi n a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of'' a number of things, ``geological complexities.''
Let me pause just a moment to talk a little bit about the geology here and why you do not find oil everywhere.
We believe that a very long time ago there were warm seas, and at that time, the world was warm up in northern Alaska and Siberia because there were warm seas there. In every sea there was life there that grew like algae on your pond. At the end of the season, it sank to the bottom, and then dirt was washed off of the adjoining hills and through a very long time that built up large deposits at the bottom of these warm seas.
Then the tectonic plates of the earth separated. As you know, Mr. Speaker, there are tectonic plates that ride on the molten core of the Earth, and then the crust of the Earth is above those. These separated somewhat so that the bottom of these ancient warm seas were submerged, covered by a lot of rock and dirt. They were warm enough to the molten core of the Earth that it was just the right amount of heat. They were under enough pressure, and with time in this pressure cooker, this organic material was converted to oil and gas. Gas is the volatile part of this oil.
Now, you do not only need that, Mr. Speaker, you need something else before you really have oil deposits and gas deposits. You need a dome of rock over top of this like a big umbrella that keeps the volatiles, the gas, from going up and escaping bec ause, you see, if they can escape, you do not end up with the nice, light sweet crude oil that we value so much. You end up with something like the tar sands in the oil shales. It is a little bit like the asphalt roads you drive on.
Now, if you cook that stuff, it will flow, and it is pretty much what these tar sands in oil shales are, something like that. So they were a very unique series of events that occurred that provide the oil and the gas for us, and it is no argument that you should not find it, probably are not going to find it everywhere in the world.
By the way, when I was a little boy we lived near a coal mining town, and we got what was called Run-of-mine coal. In those days there was not a big mechanical thing on a coal face digging it off. It was a miner with a pick and his shovel and his wheelbarrow. He may have had a little cart and a mule inside the mine to help him in some of the bigger mines.
But that would come out of the mine, and we would buy it just as it came out, called R un-of-mine, just the way you mined it, some big lumps on down to dust. Some of those big lumps were so big I could not put them in the furnace. So there was a sledge hammer, and we would have to break the lump to put it in the furnace. I remember breaking some of those lumps and they would fall open and there would be a fern leaf. I remember the thoughts that I had, gee, how long ago did that thing grow. It was very obvious where coal came from. You can see the vegetation inside the coal.
``Geological c omplexities, measurement problems, pricing variations, demand elasticity,'' how much of it we are going to need, ``and political influences,'' are they really going to sell us the oil or not. ``Peaking will happen, but the timing is uncertain.'' But the fact that it will peak is not uncertain. It will peak.
``Oil peaking presents a unique challenge,'' they say. Then I emphasize this statement. ``The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions, wood to coal and coal to oil, were gradual and evolutionary; oil peaking will be abrupt and revolutionary.''
[Time: 21:30]
The next chart takes us back about 400 years in history. It would be nice to have one that took us back 5,000 years in history because that is about the extent of recorded history, about 5,000 years. But we go back here to the very beginning, a little bit before the beginning of the Industrial Revolution, and we notice that the Industrial Revolution began with wood and it ramped up, and we denuded largely the mountains of New England to make charcoal to take to England to make steel, and then we found coal. And the ordinate here is quadrillion BTUs. That was the amount of energy we got. Boy, did we get a lot more energy fro m coal than we did from wood. It is more dense. It is easier to get and haul large quantities of it. But notice what happened when we came to gas and oil. There was essentially an explosion in the amount of energy that we could produce. Notice up there at the top, Mr. Speaker, the recession of the 1970s produced by the Arab oil embargo.
There is a stunning statistic. Up until the Carter years, every decade, the world used as much oil as had been used in all of previous history. Now what that means is th at when we had used half of all the oil that was there, we would have only one decade of oil remaining. Now, that slowed down after the Arab oil embargo. We got a lot more efficient. The refrigerator we
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have today probably uses a third of the electricity it did then; so we really slowed down in our use of oil, or this chart curve would have kept on going up.
There is another curve we might put on here, Mr. Speaker, and that is the world's population. And it might not be too surprising that the i ncrease in population pretty much paralleled the increase in available energy. We started out with 1 billion, more or less, before the Industrial Revolution. Now we have almost 7 billion people.
Mr. Speaker, in terms of 5,000 years of recorded history, the age of oil will be but a brief blip. We have been in the age of oil about 150 years. It was about 150 years ago we first found oil in any quantities and started to use it. In another 150 years we will essentially be through the age of oil. What will o ur world look like when we have exhausted the fossil fuels? And they will be exhausted.
One of the writers in writing about this says that our great grandchildren, in looking at history and what we did with these fossil fuels, will say how could the monsters have done that. How could they have found this incredibly valuable resource buried in the ground, these riches buried in the ground, and used them wantonly with no regard that they might be finite, that they would one day run out. Matt Savinar, who wrote one of the articles that people will find when they do the Google search for peak oil, Matt Savinar begins his article by saying: ``Dear reader, civilization as we know it is coming to an end soon.'' I pulled it off the Web and gave it to my wife, and she read that first paragraph and said, The guy is crazy; I am not going to read any more.
I said, Please read on and reserve judgment.
She read on and was genuinely frightened when she had finished his article. Matt Savinar may be audacious, and I think that the future may not be so bleak as he presents it, but I will tell the Members, Mr. Speaker, if we do not do something meaningful in terms of trying to mitigate the damage, it could be, it could be as bad as Matt Savinar presents it. He may be audacious, but he is not an idiot; and I would suggest that Members read his article. It is very useful.
The next chart shows something really interesting that we have been talking about this evening. This is where we are now. We have been running up this side of Hubbert's peak. This, by the way, is worldwide. The question is now, When will the world do what the United States did in 1970? When will the world reach peak oil? I had a course in statistics when I was working for my doctorate in school maybe 55 or 60 years ago, and what they have done here, we have a probability of 95 percent. That is most likely what we will find. And then we have a 50 percent probability that it could be higher or it could be lower and then a 5 percent probability or it co uld be higher or it could be lower, and somehow they mysteriously take this as the expected value. It could be low just as well as high. That is not the expected value. The value that the statistician would tell us to expect is a 95 percent value. And, by the way, that is pretty much what the experts tell us.
A couple of Congresses ago, I was Chair of the Energy Subcommittee on the Science Committee, and I wanted to determine the dimensions of this problem. So we had a hearing and invited in the world's experts on oil reserves, and there was pretty unanimous agreement. I was surprised. It was somewhere like from 970 to 1,040, about 1,000 gigabarrels of oil that remained. Now, we have pumped about the same amount. We have pumped about 1,000 gigabarrels. That is 1,000 billion barrels. That is 1 trillion barrels, and that sounds like a lot.
But if we divide that 1,000 gigabarrels by the 84 million barrels that we use a day, 21 in our country alone, 63 in the rest of the world, 84 total, if we divide that 84 million barrels a day into the 1 trillion barrels that the experts told us are still out there, we come to about 40 years' remaining oil. Remember up until the Carter years, when we used half of it, which is about what we have used, we would have only 10 years remaining; so we have really slowed down, fortunately. We are using it much more efficiently now than we did then.
But they make two assumptions for this chart. One is that it peaks in 2016 and that there is 3,000 gigabarrels. That is not what the experts say. The experts say that there will be a total of about 2,000 gigabarrels, 1,000 already pumped, another 1,000 to be pumped. If that is true, then we would start downhill from this point.
But if we have another 1,000 gigabarrels, notice with this exponential curve how little that pushes peak oil out. Not very far. What is it? About 2017, 2016, something like that is all that it pushes out. Here it is: 2016. And if we now assume that there is more than that, it pushes it out further. But no tice what happens.
Notice what happens. Notice how quickly we fall.
I made the point before I am not sure we want to fill the gap because the analogy of if you are in a hole, stop digging is if you are climbing a hill and you are going to fall off a cliff on the other side, the lower the hill, the less you will fall. And they make exactly that point h ere in these predictions.
These are predictions of the Energy Information Agency. These are economists working for the Department of Energy. They are not oil experts. They are economists, and they do what economists do. They predict the future from the past. And they really study the past and know it, and they think that if they know the past well, they can predict the future. But what they do not take into account is that oil is finite and their predictions would be exactly right if market forces contr olled and if oil were limitless, but oil is clearly not limitless.
In the last chart that I want to spend a few minutes on, where do we go from here? From where will we get our liquid fuels? From where will we get our energy as we run down the other side of Hubbert's peak? We have here some finite resources. By ``finite'' we mean they are not forever. Some of them are pretty big if we can get the energy out. Tar sands and oil shales. Some will tell us do not worry about the future of energy because ther e is 1 1/2 trillion barrels of oil in the oil sands of Canada alone. That is true. But, Mr. Speaker, there is also an incredible amount of energy in the tides.
I pick up two 5-gallon buckets of water, and they are pretty heavy; and then I note that the Moon lifts the whole ocean about 2 feet. That is an incredible amount of energy. But because there is that incredible amount of energy out there does not mean that I can harness it and use it effectively. The same thing is pretty much true of these tar s ands. Yes, there is potentially a lot of energy there, but how effectively, efficiently can we get it out?
The Canadians are now producing oil maybe even less than $30 a barrel. They are selling for $60. That is a good deal, and they are producing a lot of it. But when we look at the energy that it takes to get it out, there are better techniques than the one they are using; but the technique they are using, they use more energy from natural gas than they get out of oil so that the energy profit ratio i s less than nothing. The oil is sought on the market and brings a good price. The gas is up there and they do not need it and it is hard to ship. So from a dollar-and-cents perspective, it may make sense to use that gas, even more energy and gas to produce the oil than they get out of the oil. But ultimately, of course, as we move to a more energy-efficient world, we will not be able to do that.
I was out at a conference in Denver, Colorado, just this past weekend; and the Shell Oil scientist that was d oing some of the tests in the oil shales of Colorado emphasized that his work was just experimental, that he could not extrapolate from what he had now done to the future. And what they have done is kind of interesting, Mr. Speaker.
They have taken a small patch of Colorado desert out there, high desert, and they have drilled a lot of holes in a circle and frozen, put pipes down there, and they froze in the ground. What they have done is to make a vessel out of frozen ground because they do not want wha t they are doing inside that big vessel to contaminate groundwater outside, and then they cook the oil.
I hear from 2 years to 4 years, for some period of time, they cook the oil inside that vessel. They keep putting hot water down there, steam down there, and they cook the oil. By the
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way, they heat that with natural gas, which is why it takes so much energy. And then they pump on that. When they have heated it up, it will flow so they can pump it out. But this is pretty small. It is hard to sc ale up from that. And they put in one unit of energy from heat and they get out 3 1/2 units of energy. That looks like a pretty good energy profit ratio, but it does not account for all the energy that goes in there: drilling the holes and refrigeration and the energy it took to make the equipment that they use and refining it when they get it out and so forth.
So we are not yet sure how positive that is going to be. It may be that we will use the energy from four barrels of oil and have one net plus.
By the way, that would not be all that bad because that is about the ratio in producing ethanol. We have to put in about three-fourths as much energy into the ethanol as we get out of it, about 750,000 BTUs of energy to get 1 million units of energy in producing ethanol; and that is for efficient production. Many of our ethanol production facilities now are producing ethanol, Dr. Pimental believes, with a negative energy profit ratio: the more fossil fuel energy goes in to producing it than we get out o f it.
Coal: we have about 250 years of coal remaining in our country. That is the current use rate. If we increase the use only 2 percent exponentially, that 250 years shrinks to 85 years. For many uses like our car, we cannot use coal. We are going to have to use gas or a liquid, and we are going to have to take some energy to make that conversion. Now it shrinks to 50 years. So we have got about 50 years of effective coal remaining at only a 2 percent increase. We may need to increase its use much mor e than 2 percent. It is there. We need to husband it and use it wisely.
Nuclear: we produce 8 percent of our electricity in this country from nuclear. That is 20 percent of our electricity.
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That can and maybe should grow. But the kind of plants we use, the light water reactor plants, cannot be expanded indefin itely because there is a limited supply of fissionable uranium in the world. I get wildly divergent estimates, from 30 years to 200 years. That is at current-use rates. As soon as you start exponentially increasing the rate of use, whatever that time is, it shrinks very rapidly.
That means if we really wanted to go big-scale nuclear, we need to go to breeder reactors. With breeder reactors, you borrow a lot of problems, like transporting the fuel for enrichment. You have weapons-grade plutonium produced , and you may in the future be making a choice between buying these problems and shivering in the dark because in an energy-deficient world, that may be the choice that you come to.
Nuclear fusion. Oh, how I hope we get there because then we are home-free. But planning to solve our energy problems in this country of the world with fusion is a bit like you or me planning to solve our personal economic problems by winning the lottery. It would be nice if it happened; it probably will not, and I certainly would not count on it.
And then we come to the truly renewable sources. About half of those, a little more than half comes from nuclear up here as compared to what is down here. Solar, wind, they now represent about a quarter of a percent of our total energy. A bit more than that of electricity, but about a quarter of a percent of our total electricity.
Geothermal, that is tapping into the molten core of the earth. Where we can do that, we ought to do it because that will last a very long time.
I mentioned ocean energy. Lots of energy there. The tides, the waves, thermal gradients in the ocean. There is a lot of potential energy there, but there is an old axiom that says energy to be effective must be concentrated. It is so diffuse in the ocean. We have been trying for a very long time to capture some of that energy, and it is very, very difficult.
And then we come to agricultural resources. A lot of people have high hopes for what we can get from agriculture. We can get energy from agricultur e in two different ways: One by producing fuels like ethanol and methanol by fermenting the product; and the other is by burning the product.
There are limits to both of these. We now are barely able to feed the world. Tonight a fair number of people will go to bed hungry. We could free up more of this energy if we would be content to eat the soybeans and corn rather than the pig and the cow and the chicken eating the corn and the soybeans.
To take biomass from the soil, that is what makes topsoil d ifferent from subsoil is organic material, biomass. I am sure we can get some energy from that. But we have to be careful how much to tend to get from that.
Waste energy, instead of putting it in the landfill, burn it. There is a really good plant here in Montgomery County very near. I would be proud to have that next to my church. I cannot even see that it is burning trash because trash comes in inside a big container. It is inside before it is emptied, and it looks like a nice brick office building.
If you think of this as being a hydrogen battery as opposed to an electron battery that you have in your car, you will get it right as far as hydrogen is concerned.
There is a lot of talk about a hydrogen future. That is not going to happen in the next decade or two or even three. It is going to take a very long time to ramp up, and we will always have to have some bigger energy source from which we make the hydrogen because it will always be made with an energy deficit because we are not going to repeal the second law of thermodynamics.
Mr. Speaker, I want to submit for the RECORD this report because it is not available anywhere else for the public to review.
Peaking of World Oil Production: Impacts, Mitigation, & Risk Management (By Robert L. Hirsch, SAIC, Project Leader; Roger Bezdek, MISI; Robert Wendling, MISI)February 2005
