Friday, June 1, 2007

How can peak be argued? Let me count the ways:-)

Jeff Berg

The gpc-members@yahoogroups.com list recently has been debating whether or not "The Peakers should be purged".  Apparently some feel that our belief system is potentially so noxious in effect that our mere presence should not be tolerated.  Below is the essence of what I wrote in reply.

"The Peakers should be purged!"?  Well that's rather overheated now isn't it?

What say you we instead retrench to a point of common agreement? For example cannot people of good conscience no matter their "belief" in peak oil theory at the very least agree in principle that oil and natural gas are finite?  And is this idea not so universally agreed upon as established fact as to put the peak oil "theory" on equal footing with the round earth "theory"?  And from this does it not follow that at some point the sticky stuff is going to run out or at the very least become so difficult to extract from a technical and/or economic standpoint that only a trickle relative to today's 84 Million barrels a day will be able to be managed?

And if we all can agree that this is naught but the most banal and uncontroversial of truisms then is not all we are really arguing about the when?  Early or Late? Is it an OGP or an NGP? i.e. Our Generation's Problem or the Next Generation's Problem?   NGP being a place that we have warehoused a great many issues over the years it is true but I thought this list encouraged more progressive and forward thinking thoughts and planning, no?

As to how Peak oil can be argued: Let me count the ways:-) Again, I shall speak only to the most banal and uncontroversial of truisms.

1) Globally speaking the oil extraction industry peaked in terms of discovery in 1964. Every decade since has seen less discovery than the one before it. i.e. 60's better than 70's, 70's better than 80's, 80's better than 90's, 90's wayyyy better than 00's. A trend mayhap?

Yes the technology for oil discovery and extraction has improved many fold in the last thirty years of that there can be no doubt. With the aforementioned trend as the factual context I will leave it to you dear reader to decide as to whether this is an argument for or against the likelihood of a near peak.

2) In 1981 the world started to consume more oil than it discovered. For surpassingly obvious reasons this moment in the extractive resource cycle is referred to as a "treadmill" and "spending down the inheritance".  Again, this trend has widened every decade with the gap wider this decade than the last and the 90's gap larger than the 80's. (The film that really needs to be made is "Trendspotting" methinks:-)  Today the world consumes more than 4 barrels for every one it finds.

3) Oil production is a race between those countries that are able to increase their production and those whose production is inexonerably declining. Chris Skrebowski the editor of The Petroleum Review has done a very thorough analysis of deliverability from projects in place and the described potential of those that are actually in the works. For a look at his Megaprojects analysis http://www.energybulletin.net /5266.html

4) The oil business is a very-very lucrative business. aka. Reallly big money. With this money comes a very deep pool of the very finest equipment and human talent that money can buy. The upshot of all of this technical prowess, savvy, research and analysis is that we now know that 33 of the worlds top 48 producing countries - cumulatively responsible for about 90% of the world's oil extraction - are in decline. Chevron has a very interesting site listing these and other oil facts. http://www.willyoujoinus.com/

5) Also from Skrebowski: " Quite remarkably, in the first half of 2005 the top five, the top ten and the top 22 publicly quoted oil companies all produced less crude and NGLs [Natural Gas Liquids] than they did in 2004. Compared with 2003, ten companies produced less in the first half of this year. Nine companies produced less than in 2002. Clearly, it is no exaggeration to say that the world's largest oil companies are now really struggling to hold production levels. When new production more than offsets decline, we can't see the decline clearly. Now, with total output figures declining, we may begin to see people taking notice. Unfortunately, like the tobacco industry, increased prices are very effectively masking a decline in volume."

6) All of this talk about peak misses what I consider to be an even more salient point as far as North America is concerned at least. i.e. There are two clocks ticking here the geological one, "Ask not for whom the Bell curve tolls", and the geopolitical one.  Of the two the geopolitical one is the one ticking much faster for we on Turtle Island .

The U.S. imports fourteen million barrels of oil PER DAY! This is over twice as much oil as any other country consumes in total.   In fact total U.S. consumption is 21 Mmb/d which is over 3 times higher than number China who is number 2.  More incredibly this consumption by the U.S. is greater than the total of every country outside the top 20 consumers combined!  i.e. More than the "bottom" 192.  (Aka. The ROW: Rest Of World.)  For this and the following reasons such a situation quite literally defines the term unsustainable.

1) The fundamental economic contradictions that the U.S. is trying to reconcile make the current situation unsustainable.  The U.S. is 9 trillion in debt with a current account deficit, a yearly deficit and a military budget each of a further 3/4 of a trillion per year. To finance these incomprehensible sums requires that about 80% of the world's financial system's liquidity be tied up in servicing these obligations. This is quite simply mad and will not go on indefinitely or as Herbert Stein put it when he was on Nixon's Council of Economic Advisors "Things that can't go on forever don't."  In his case he was describing the collapse of Breton Woods and the abandonment of the gold standard as a result of America 's massive Vietnam war induced debt and deficit. A mere bagatelle by comparison to the current debacle.

2) We need to use the precious and finite hydrocarbons at our disposal NOT to keep the current global economic system up and running but to help us to transition to a sustainable one. It is, ironically, going to take a whole heck of a lot of fossil fuel energy to get us off fossil fuel energy. Or at least it is going to if we are smart and want to keep anything remotely resembling the modern information age once we are done. To quote David Hughes of NR Can and the Canadian Geological Survey. "We will either manage the transition to an 80% reduction (in energy use) or we will have a 90% one forced on us." 

3) The only way to get the globe's population problem under control is to massively expand the basic infrastructure of the world's poorest people. They need water, sanitation, education and an assured food supply that they themselves grow. In return for this we will get the same thing that we got here when we achieved these very same things: a plunging birth rate.  This will require that for a time they greatly increase their fossil fuel use from where they are now and given the zero sum hydrocarbon game that is now before us by definition this means that we - the top 20- will have to reduce ours so as to make this possible.  

In a nutshell what is needed to get the world's population growth problem under control is a lower infant mortality NOT an increased infant mortality rate. That this is true is supported by every deep analysis of the dynamics of demographics.  What is also needed is that we spend the energy needed to make universal literacy, cultural and legal equality for women as well as giving women control over their reproductive choices for these 4 things will do all but all that needs be done.

Why I say spending energy instead of money is because fundamentally what needs doing is a whole heck of a lot of work in the physics sense of the term. And just as it was with the creation of these conditions for us it is only energy that can do the lion's share of the necessary physical work and infrastructure building. 

By the by as to the question of money all of this can be done for a fraction of the cost that the U.S. spends on the military each and every year. In fact all of it could likely be done in perpetuity for the one time cost of a year's worth of the world's terrifyingly misnamed "Defence" spending.

I truly could go on in this vein for quite a bit longer and at some time or other will: despite the wishes of many no doubt:-) But enough. For now I instead leave you all to your sunny summer day, may you enjoy it as much as I am about to enjoy mine. Bike on dudes:-)

ton confrere,

Jeff Berg

www.pledgeTOgreen.ca

www.postcarbontoronto.org

A listing of other articles by Jeff Berg can be found here.