Where is Peak Oil on the Risk Continuum?

In New York Times Magazine, there's an article (reg. req'd) about an art exhibit at MOMA called: 'Safe: Design Takes on Risk'. The author points to an article by Richard A. Posner who writes that:

massive infrastructure planning in anticipation of something that may never happen is, politically, a hard sell. But on an individual level, we are quite receptive to the idea that this or that consumer purchase might be just the thing to prepare us and protect us - at least from the threats we are able to imagine.

Why is it so hard to imagine worsening oil shortage as an imminent threat? Why do we systematically refuse to acknowledge the reality?

The U.S. Dept. of Energy commissioned, then buried, a report (pdf) entitled: Peaking of World Oil Production: Impacts, Mitigation and Risk Management.

Tying the pieces together

Earlier I criticized the Amory Lovins' article in the September's issue of Scientific American for not adequately addressing the depletion of fossil fuels. The next-to-last article in the printed version more directly addresses my concerns; it's entitled Economics in a Full World.

Society can no longer safely pretend the global economy operates within a limitless ecosystem.

the alternative to a sustainable economy, an ever-growing economy, is a biophysical impossibility.

the disaster will be felt eventually. Avoiding this calamity will be difficult. The sooner we start, the better.

The article points to the Laws of Thermodynamics as inviolable. Interestingly Lee Raymond, head of ExxonMobil , as noted earlier, refers to those same Laws when comparing oil to other sources of energy.

In a sidebar to the article, the author, Herman Daly, lays out 3 precepts that need to be followed for a sustainable future. We violate these precepts (call it a protocol, if you wish) at our peril.

Another blogger, in his Economist's View, quotes from the Sciam article: Measuring Human Well-Being.

boom and bust in Colorado

This piece from the Los Angeles Times looks at oil shale in the American West

Those projections are hotly debated, but as a point of comparison, should the Green River Formation produce as predicted, it would amount to as much as eight times the proven oil reserves in Saudi Arabia.

But some say the process may use more energy than it yields. Others cite harm to the land and wildlife.

More from Heinberg

This paper presented at a Reception with Their Royal Highnesses The Prince of Wales and the Duchess of Cornwall, at the California Leaders Round Table Dialogue on Peak Oil, Climate Change and Business Action; November 7, 2005 in San Francisco.

the inside scoop

Here's a much-talked-about piece by Peter Maass, The Breaking Point, that was printed in the N.Y. Times Magazine in August. Also here's an audio interview on NPR with Mr. Maass.

In another interview on Fresh Air with Terry Gross, Mr. Maass states:

let's say for example; that indeed, there are limits to what they can produce. If they just all of a sudden announced to the world; you know what, guys, we're not going to be able to produce 12.5 million barrels a day. You'll have to develop alternative energy sources. You're going to have to start conserving energy. Then, two things are likely to happen, in the immediate term. One, is that the price of oil, which is already quite high; will skyrocket even more. And, the second - and, for the Saudis, more troubling kind of result, would be movements, in America and elsewhere; towards alternative fuels. Government programs to investigate and promote them. There would be movements, towards conservation of energy. And, the result of that - not immediately, but, five or ten years down the road. Is that, indeed; there might be alternatives to oil.

This means that such a well-connected reporter as Mr. Maass has no information to share about what needs to sustain our civilization in the long-term, alternate fuels. We know from Lee Raymond's words that scientific studies of that kind were done at least 20 years ago, and surely they have been done recently. Might Mr. Maass now be researching that problem for his new book?

More Newspeak

In an MSNBC piece, John Schoen has all the answers, including the following:

an oil company is no different than, say, a gold mining company. The price of gold has little to do with how much it costs to find and produce it — it's set by supply and demand.

it takes years from the time you invest in looking for oil to the time you can pump it out of the ground. So even in places where there are still plenty of reserves (oil underground) like the Middle East, oil production (how much you get out of the ground per day) didn't grow fast enough to cover the growth in demand.

most domestic U.S. oil costs more, not less, to produce than Saudi oil. Our oilfields are much more “mature” — which is another way of saying the easy (i.e. cheap) oil has all been pumped

I'd say there is an inconsistency here: why remark about oil costs, if costs don't have much to do with price. There is a lot of evidence that the Saudi oil fields are mature. Mr. Schoen posits that growth will, in time, keep up with demand, given enough monetary incentive. Where, oh where, is the recognition that the earth is round and that oil is a finite expendable resource?

and again, remarkably,

By the early 2000s, just as investment in new oil production had slowed, demand for oil began taking off — especially in developing countries like China and India that have presided over booming economies. (Which is a good thing, by the way. If the Chinese weren't able to afford to buy billions of dollars of U.S. Treasury debt to make up for our budget deficit, we'd likely be looking at much higher U.S. interest rates — or worse. But that’s another answer for another day.)

Sounds Orwellian to me.

If that's not enough, try following Mr. Schoen's glib answers to the following serious question:

If, in fact, world oil production has peaked and there are (at best) twenty years worth of oil and gas reserves remaining we are facing cataclysmic change. We're not talking about the "inconvenience" of higher gasoline prices or the need to curtail emissions to arrest global climate change. We're talking about the end of life as we know it. There is no single aspect of our economy, our very lives that is not dependent on products and processes derived from oil and gas …
While "alternative" energy sources are available, they, too, are dependent on fossil fuels: photovoltaic cells and hydrogen fuel cell membranes are derived from petroleum based plastics. The sooner we acknowledge that our fossil fuel sources are finite and the day of reckoning is not that far away, the better our chances that some semblance of what we call human civilization will exist fifty years from now.
-- Ray S., Los Angeles

I don't fully agree with Ray's assumptions. For example, one might conclude from Ray's question that we have twenty years before the 'guage hits empty' (to use Mr. Schoen's words). The evidence shows that there will be reduced production each year after the peak. And there is plenty of evidence that the peak is upon us. Our society worships growth. Can we possibly handle contraction? The cataclysm could come sooner rather than later.

To counter gloom-and-doom, Mr. Schoen offers pie-in-the-sky:

Many, like Ray in Los Angeles, fear that coming oil shortages could bring “the end of life as we know it.” We agree. But that doesn’t have to be a bad thing.
post-oil life could end up being a much better one.

and

If the era of “cheap oil” is indeed over, we all have a lot of work to do. But here at the Answer Desk, we don’t believe that the game is over. There are a lot of very smart people out there working on solutions. As oil consumers, we all created this problem. The good news is that that means we all have the power to solve it.

It's not a game, Mr. Schoen, and aren't you the one with the answers? Why does our creating the problem imply that we have the power to solve it? Isn't there anyone at MSNBC who can see through such drivel?


Here's a Newsweek piece that purports to show how market forces are kicking in to advance alternate fuels. In it, the author states:

Add to that the fierce ongoing debate about "peak oil" and the declining viability of the Earth's oil supply.

The oil industry and government oversight

From aWashington Post piece

At a joint hearing before the Energy and Natural Resources Committee and the Committee on Commerce, Finance and Transportation, oil executives repeatedly explained that oil and gasoline prices are set on world markets that they do not control. Asked why they did not keep gasoline prices low after hurricanes Katrina and Rita, company officials said doing so would have caused shortages. Charging market prices, they said, held down demand.

So when supply drops, as is inevitable, we can expect ever higher prices and more contentious Hearings.

The night before the hearings, the retiring ExxonMobil CEO, Lee Raymond, spoke to Charlie Rose on PBS. Several important points emerge from that discussion:

• Mr. Raymond is a chemical engineer. [Scientific illiteracy may be the main problem.]
  
• Exxon Mobil studied alternative fuels 20 years ago and found them non-competitive, especially for transportation. Replying to Charlie Rose's remarks about current studies by other oil giants, Mr. Raymond points out that Exxon's old studies are still valid, in that the 'Laws of Thermodynamics' have not changed.
  
• Oil is priced less in 'real' dollars than they did back in 1981. The cost to find or produce oil costs 50 cents compared to $4 a barrel back then. [I am not clear about this point, but for how long will that continue?]
  
• Gasoline is priced at $6.50 in France and $7 in England per gallon, because of large gas taxes there.
• Anticipating the effect of the Katrina and Rita, ExxonMobil moved product out of the Gulf Coast areas and refined gasoline in Europe for American markets.
  
• The idea of running out and peak oil were not discussed per se, even though Mr. Raymond stressed the importance of a long term view. [What happens when prices rise ever higher to keep down demand? Mr. Raymond did cite $1000 a barrel as being inconceivable.]
  
• Charlie Rose pressed Mr. Raymond to acknowledge excess carbon dioxide as causative for global warming. Mr. Raymond would only say the jury is out. [Again, this is a distraction from the sword up there.]
• Mr. Raymond says nuclear is part of the solution. China has much nuclear[see this].
• People built electricity plants that run on natural gas thinking that fuel was plentiful; turns out, it's not.
  
• Mr. Raymond concludes we, producer and consumer, are in this situation together.

So few in government and the media get it. Here's one, Rep. Bartlett R-MD, who comes close. He hosted a peak oil conference in September where Richard Heinberg points out that one study (in pdf) by the U.S. government might have been suppressed. One of several agencies that is supposed to be concerned with peak oil is the U.S. Department of Fossil Energy. Is there something in our human natures that refuses to recognize the bad news?

Just to show how so many don't get it, look at how the environmentalists react to the committee testimony. See the temporary link on this CSPAN page for coverage of a News Conference on Rising Energy Prices and Record Oil Industry Profits. Present were:
Navin Nayak from U.S. PIRG, Kert Davies from Greenpeace, Robert Dewey from Defenders of Wildlife, Sara Zdeb from Friends of the Earth, and others. 11/9/2005: WASHINGTON, DC: 20 min.

sustenance: Three Peak Oil Meetings

a blog piece about 3 recent meetings in the NY area illustrating the range of approaches. Which one represents the 'establishment' view?

a global view

Here's a blog based in Japan quoting from a book written by an Englishman. Matthew Stein analyzes the problem and, in the British vernacular, talks of what one person can do.

Here's a syndicated column that just showed up on a national site as well as in my local paper. The author argues that market solutions will take care of any scarcity. Where's your faith, man?

Deliberate obfuscation or what?

MSNBC presents this collection of articles written by John Schoen and titled, After Oil: What to do when the oil runs out. [John Schoen is a senior producer at MSNBC who helped launch the site.] Among the articles, Mr. Schoen points to the recent urgency to develop hydrogen as an energy source but later says 'hydrogen is what’s known as a “secondary” energy source' and then 'almost all of the hydrogen produced today is made from natural gas, a fossil fuel that is already in short supply'. The truth is that hydrogen is not an energy source at all (unless used in nuclear fusion - another subject altogether), but merely a repository for energy, like batteries.

Another important example of imprecision is Mr. Schoen's article on alternative energy where finally acknowledges that ' Some researchers say that these biomass fuels require more for fossil energy to make than they produce

Further on the energy cost of energy produced, see this blog entry based on this article. Besides the environmental degredation:

In 2003, the biologist Jeffrey Dukes calculated that the fossil fuels we burn in one year were made from organic matter “containing 44×10 to the 18 grams of carbon, which is more than 400 times the net primary productivity of the planet’s current biota.”(1) In plain English, this means that every year we use four centuries’ worth of plants and animals.

In another article , Mr. Schoen refers to the role of efficiency as breathlessly propounded by Amory Lovins of the Rocky Mountain Institute. Mr. Schoen includes a caveat: 'some' assert that 'the low-hanging fruit of energy efficiency has already been picked'.

Scientific American in its September theme issue, Crossroads for Planet Earth, published an article by Mr. Lovins entitled, More Profit with Less Carbon. Scientific American could have done much better where the fate of people (and science) on the Earth is concerned.

• The article regards climate rather than oil depletion as the main problem. There's no reference to Scientific American's important March 1998 article, The End of Cheap Oil.
• Mr. Lovins' arguments are hollow and unconvincing. As Vice-president Cheney has recently pointed out: we're twice as efficient as we were X number of years ago. So why then are we using twice as much oil?
• Mr. Lovins' article doesn't square with another article in the issue, Economics in a Full World: Society can no longer safely pretend the global economy operates within a limitless ecosystem. (See also this sidebar from that article.)
  

Scientific American's September issue is subtitled, 'The human race is at a unique turning point. Will we choose to create the best of all possible worlds?' This is reminiscent of Jared Diamond's book title, Collapse: How Societies Choose to Fail or Succeed. What choices do we really have?

Quoting

From the Rubaiyat of Omar Kayyam

The Moving Finger writes; and, having writ,
Moves on: nor all your Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all your Tears wash out a Word of it.

From the Book of Jonah

A plant grew up over Jonah to provice shade for his head and save him from discomfort. ... the next day the plant withered.

And the LORD said: 'You cared about the plant, which you did not work for and which you did not grow, which appeared overnight and perished overnight. Should I not care about Nineveh, that great city [whose inhabitants] do not yet know their right hand from their left.

Incidentally, Nineveh is the name of the province (among 18) in present-day Iraq that was pivotal in passing the new Iraqi constitution.

The Tragedy of the Commons

Back in 1968, Garrett Hardin wrote this scholarly essay about the tragedy ahead; the site, DieOff, for a further exploration of this theme.

How long an emergency?

Don't read this if you want to sleep well tonight. Forewarned may not be forearmed.

As grim is the scenario Mr. Kunstler paints, he actually soft-pedals the prospects. He says some areas may be depopulated. Does that mean they will just migrate elsewhere? He advises that we change our ways.

Yahoo group on Peak Oil

There are dozens of such mailing list groups, but this Yahoo! group is the largest and one of the oldest. The introduction states:

It is possible that the peak is upon us, the beginning of a plateau period before a perhaps steep decline in world oil and gas production...

The ability of alternative sources of energy to substitute for petroleum and natural gas is a subject of serious dispute.

So it seems the days of cheap oil are numbered. How this future will play out remains to be seen, but energy scarcities could bring major economic dislocations, food shortages, fighting over resources, and (literally) billions of human deaths.

Got a local food and energy system?

You will need to join the group to view its contents.