"no peak" article in Houston Chronicle

avo

http://www.chron.com/cs/CDA/ssistory.mpl/editorial/outlook/3240638

Houston Chronicle
June 25, 2005

Fossil fuels' demise oversold; boring fact is oil not soon tapped out

By SCOTT W. TINKER

Peak oil.

As the U.S. Senate debates the national energy policy, many are aware of the hype surrounding this academic construct. A Web search of "peak oil" turns up an array of experts who believe that a pending peak in world oil production will soon lead to global economic collapse.

In their rosier scenarios, experts predict sky-high gasoline prices that will crush oil-dependent economies like the United States. In their darker forecasts, they say people won't be able to obtain food, heat their homes or live securely during a period of global famine and resource wars.

All of this might be entertaining were it another subject for a Hollywood film, but it has become almost a subculture (and cottage industry). For those who wonder if the global production of oil will peak and begin to decline some day, the answer is yes, it will. The more pertinent question is: Should you care?

Although talk of peak oil has rightfully focused global attention on the need to find alternatives to oil, the absolute peak of world oil production is an issue of supply and, in many ways, irrelevant. Unlike the 1973 oil embargo, in which high prices were the result of an OPEC-orchestrated supply cut back, high prices today are largely a reflection of demand-supply imbalance.

The global demand for conventional oil has, or will soon, outstrip the global capacity to supply conventional oil. Does that mean we are all doomed?

While the shock value of doomsday peak oil predictions is entertaining, it is far more important to recognize the reality of high global energy demand and begin to seek solutions — such as the energy policy being debated in the Senate — that could help mitigate the supply-demand imbalance. Solutions abound, but will take planning and coordinated investment.

In 1956, M. King Hubbert predicted correctly that U.S. oil production would peak in the early 1970s. As an aside, Hubbert predicted incorrectly that world oil would peak in 1995. What Hubbert also missed is that advances in technology would allow producers to extract oil from known fields far beyond the technology capacity of his day. Because of these advances, the shape of the oil production curve is not really a peak at all, but more of a bumpy mesa.

If there is an important peak of oil, it actually occurred in the early 1980s when oil consumption as a percentage of total global energy topped out just shy of 50 percent. The percentage has declined today to around 40 percent, a trend that has been remarkably consistent and unshockingly boring.

Hubbert can be excused for incorrectly forecasting the impact of technology, but modern-day forecasters should know better. They often claim that oil supply is made worse by modern enhanced oil recovery techniques that drain reservoirs faster. In fact, the reverse is true. The combination of higher energy prices and advanced technology will continue to extend the life of conventional oil supplies via enhanced oil recovery processes.

So what are the realistic near-term alternatives to conventional oil?

Most experts recognize the age of conventional oil will fade during 21st century. Energy demand in Asia and other developing regions will continue to outpace supply and keep oil prices high and volatile.

Fortunately, price and technology will allow for production of heavy oil, tar sands and shale oil, whose combined global reserves far exceed those of conventional oil, as well as coal liquefaction and gasification, improved gas-to-liquids technology and alternatives to oil led initially by conventional and unconventional natural gas.

Contrary to some reports, natural gas resources worldwide are substantial.

Better still, unconventional forms of natural gas, such as coal gas, shale gas and tight gas, are often found in regions where oil is not. This is good news for energy markets, which have been overly dependent upon oil from the top five oil-producing countries that control nearly 75 percent of the world's conventional oil reserves.

The challenge of natural gas is not resources, but deliverability. As liquefied natural gas ports are permitted and built around the globe, natural gas will become a global commodity and help reduce issues of deliverability that have caused price volatility. Natural gas combined with other non-coal sources of fuel will likely surpass oil as a percentage of total global energy consumption between 2015 and 2020. This crossover already happened in the United States around 1994.

If no substitute for oil existed, the world would indeed be in for an energy shock, and possibly an economic collapse. Fortunately, that is not the case, but investment must start today. U.S. energy policies must be aggressive, must focus on efficiency and conservation measures, and should lead the world in a smooth transition to an unconventional oil, clean coal, natural gas, nuclear and emerging energy supply-future. Our economy and environment will be the prime beneficiary.

This is not a shocking prognosis; it is, rather, a boringly achievable one.

Tinker is the state geologist of Texas and director of the Bureau of Economic Geology at the University of Texas at Austin's Jackson School of Geosciences, where he holds the Allday Endowed Chair. He spent 18 years in the energy industry and lectures extensively on the future of energy.

Novus · Light Sweet Crude Joined: Jun 21, 2005 Posts: 1637

SCOTT W. TINKER ignores the very basic premise that peak oiler doom is rooted in thermodynamics. Light sweet crude has the highest EROEI of any other energy source. Switching over to these other lower EROEI energy sources is going to be disasterous to the economy. Light sweet crude is heading well over a $100 a barrel and is going stay there FOREVER. How high is a matter in dispute. Oil at a $100 a barrel is painfull but manageable. Oil at $200 is more painfull and less managable but still survivable. Oil at $300+ is a doomsday scenario. Even a reasonable best case scenario of a soft landing will require some tough times ahead and it will by no means be a trivial non-event like Y2K.

Overlyhonest · Posted: Sun Jun 26, 2005 3:42 pm Post subject:

It surprises me that we have not seen more Tinkers out in the papers. The general population has had no reason up to this point in time to learn/understand concepts like Energy returned on energy invested or what the BTU of natural gas is compared to oil per volume.
I fully expect to see more Tinkers in the near future. The smart ones will write books supposedly debunking all of the recent peek books. They don’t have to by correct, they just have to be able to fool the general public.
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Such · Posted: Sun Jun 26, 2005 3:58 pm Post subject:

I think his point is that the end of the world is not nigh. We will learn to live with less... I've seen it in countries like Belarus, where my in-laws live. It is poor to be sure, but not Mad Max.

I do like how oil shale is call "oil shale"... it's really rock containing organics, not oil. He does make the point that energy policy must be aggressive.

And I really doubt that we will ever see sustained $200 oil (in 2005 dollars, not inflated 2020 dollars). The economy would crumble, destroy demand, and the price would fall.

Of course, then people would buy oil again until the price gets to an unsustainable level, and crash again.

BabyPeanut

MicroHydro · Light Sweet Crude Joined: Apr 10, 2005 Posts: 1286

Now I understand the meaning of the phrase, "Not worth a Tinker's damn".
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"The world is changed... I feel it in the water... I feel it in the earth... I smell it in the air... Much that once was, is lost..." - Galadriel

savethehumans · Light Sweet Crude Joined: Oct 20, 2004 Posts: 1541

Um, the Houston Chronicle is one of the most conservative, Republican newspapers in the USA. You were expecting some OTHER story out of them? Razz

Antimatter · Posted: Sun Jun 26, 2005 10:04 pm Post subject:

Actually he's a geologist not an economist. Funny how anyone who doesn't buy the peak oil party line has to be shouted down with groupthink and strawmen arguments.

RG73 · Posted: Sun Jun 26, 2005 10:57 pm Post subject:

avo

avo · Posted: Sun Jun 26, 2005 11:28 pm Post subject:

AirlinePilot · Posted: Mon Jun 27, 2005 12:08 pm Post subject:

I read that power point also. I get a feeling he is covering his ass in some ways by always saying that whatever his ideas are, we need to be aggressive and we need to be doing it now. I think he does see that things are not quite as rosey as he thought, he just won't come out and say it.

I wonder after reading everything on this site, links, articles, papers etc about alternatives (Shale, NG, LNG, coal/gas liquifaction, nuke, etc.) how people who are supposed to be intelligent can come up with a premise that things will be OK. I fail to see how we will be able to continue along the current path without some pretty major economic/social upheavels.

Personally I dont think we are headed for Bartertown, but I do see something bigger than we have ever had to deal with coming down the pike. It might not be Mad Max, but it might look like something out of the novel Dhalgren.

My other HUGE CONCERN is that when these economic problems begin, the ability to aggressively grow alternatives will just not exist as it would when things are good. I just don't see how we can get there from here. It may have been possible if change had started 10-15 years ago, but now it seems we won't be able to jump the chasm opening before us. As economies begin to decline so does everything else, including attempts to jumpstart things like shale, tar sands, and alternative resources.