Tuesday, September 23, 2008

Peak Oil Not a Big Deal

Peak Oil is Not a Big Deal, by Roger E. Sowell aka EnergyGuy.

This discusses a recent article on CNNMoney about peak oil, a coming crisis in energy, and $500 per barrel for oil. The article is found at


Excerpts from the article as allowed by copyright fair use laws follow, with my comments.

Essentially, Matt Simmons is wrong about the price of oil going to $500 per barrel because Saudi Arabia may have lied about their oil reserves. He is also wrong that the demand for oil will escalate to a point that an oil panic ensues. Mr. Simmons believes in peak oil, a theory in which many people "believe that world oil production is at or near an inflection point, after which it will fall inexorably and fail to meet projected future demands."

What Mr. Simmons fails to account for is alternative technologies. Very few commodities on earth have zero substitutes. Water for drinking is one, although there were times when wine or beer were safer. Air for breathing is another. But not oil.

As some before me have written, but Mr. Simmons has apparently forgotten, there are many alternatives to oil. Some of these include GTL, or Gas To Liquids, in which natural gas is polymerized into hydrocarbon chains suitable for use as gasoline, jet fuel, and diesel. Also, CTL, or Coal To Liquids, where coal is the starting material and gasoline, jet fuel, and diesel are products. There are also other sources of oil, including Canada's tar sands, already economic at $100 crude, and enhanced drilling and production techniques for old oil fields in California and Texas.

The East Texas oil field was managed poorly in the wild and woolly days after its discovery, leaving much of the oil in the ground. Soon we will have means to extract that oil.

But perhaps the greatest alternative is hybrid transportation technology, using electric motors as generators to recover energy from braking, and storing that energy in batteries. These roughly double the distance a vehicle can travel on the same amount of fuel. The plug-in hybrids allow the battery to recharge from the electrical grid or solar PV panels.

Hybrid systems are already in use for cars, delivery trucks, and freight locomotives. Police departments across the US are purchasing hybrid cars and conversion kits for existing cars as a means to reduce their fuel costs and stay on budget. More money spent on gasoline means less money for officer equipment, training, and hiring.

The other big alternative is hybrid vehicles fueled by CNG, compressed natural gas. Recent technology advances allow precise directional drilling of shale formations that contain huge quantities of natural gas. Coal-bed methane is another source.

A most interesting breakthrough was recently announced by ExxonMobil, of all entities. They have a radical new technology for batteries that will likely make car batteries lighter and more powerful. This is exactly what is needed for hybrid technology and pure-electric vehicles.

Yet another alternative is hydrogen from sunshine via enhanced proteins. The British scientists' breakthrough research in 2004 showed the exact atomic structure of the photosynthesis site in plant proteins where water is broken down by sunshine into oxygen and hydrogen. That hydrogen could and will be used in power plants, probably combined cycle cogeneration because it is the most efficient. The electric power will replace gasoline and coal that can then be used to produce jet fuel or diesel. A major side benefit is that nuclear power plants with their toxic wastes will be shut down forever.

Finally, there is an enormous amount of natural gas that is currently trapped as frozen methane hydrates in the deep ocean.

In short, there is no way oil will ever reach $500 per barrel unless inflation many years from now is the reason. If demand exceeds supply, the geeks and engineers will once again ride to the rescue and produce cheaper alternatives.

I am a geek, an engineer, and an energy attorney. I have a lot of faith in my fellow geeks and engineers. I have seen what we can do, and done quite a bit myself.


yanoftheskies said...

I tghink you have overlooked a key component in this debate - EROEI - enrgy return over energy invested. All the new technologies to replace oil fail this test as the amount of energy returned from oil is so much higher than any other 'fuel'. Once it takes a barrel of oil to produce a barrel of oil - stop drilling or stop any other means you are using. A way forward - live and work locally, produce localy and comsume locally. Also buy a bike while you can. Just consume less stuff .... and hope

Roger Sowell said...

Mr. Yan,

Local living is what was known as the cottage industry in the Middle Ages. Not a time of wealth, prosperity, good health, or long lives. No thank you!

Instead, we need to consume more energy in wise ways, to increase wealth, increase prosperity, improve health for all, and extend lives. A comparison of all these metrics vs energy consumption per capita shows that energy is a very very good thing to consume. Also, buy the best quality goods at the lowest price, no matter where they were made in the world.

Anonymous said...

Given an extremely extended timeline, a non-partisan dedication to this issue in Congress, and relatively stable economic conditions, the replacement of cheap oil with alternative technologies in order to maintain our current lifestyle of consumption and affluence might be feasible. However, the cost efficiency of producing any of these alternative energies is not enough to replace oil given the current technologies, and won't be even with the most optimistic estimates of rapid technological advancement.

The ability to completely adjust our infrastructure, rely on alternative sources of energy, and massively increased energy efficiency across the board is restrained by the speed at which oil production will decline once it peaks, if it hasn't already. We have to realize that the economic model of unlimited growth and continually improving conditions that we have grown up in, and thus the only one we can easily envision, was completely reliant upon an extremely cheap and powerful energy source.

I agree that cheap oil helped fuel and power the massive explosion of population, prosperity (for the West), and industrial advance. However, the fact is that the available supply of energy is simply going to decline too quickly while demand, expectations, and other economic factors continue to increase. We can't adjust in time in order to maintain our current lifestyle and affluence; we burned through the world's supply and created a world of affluence and consumerism, but now the cheap, available energy source that propped up that whole explosion is disappearing rapidly. Some substitutes can be developed, but nowhere near the adequate amount.

Adapting to the best possible lifestyle in the face of this inevitability (one of local community and extreme energy efficiency) is not a direct link to the Middle Ages. Humans have existed and prospered without modern industrialization for thousands of years; the model of the last century is not the only feasible way for people to live healthy, long, happy lives.

Unfortunately, the world population and our general lack of knowledge and skill of the most basic tasks of self-preservation and survival will make this inevitable transition a difficult one. If this transition is mismanaged, yes, we will almost certainly have famine, drought, death, war, and injustice.

However, if we attempt to minimize the impact of peak oil on our lifestyle, we can make this transition easier and ensure better lives for ourselves in the future. Our lives, our culture, and the global economy are all going to change drastically and permanently; this is inevitable. Those who follow and study peak oil want to help minimize the trauma and negative societal impacts of this change. It is an overwhelming, scary truth, but if we ignore it, we are only setting ourselves up for greater misery in the future.