May 07, 2011
Fatih Birol: Oil Production Already Peaked
Sounding very much like Ken Deffeyes on Peak Oil, Fatih Birol, chief economist of the International Energy Agency, says world oil production has already peaked.
When we look at the oil markets the news is not very bright. We think that the crude oil production has already peaked in 2006.
Maybe we'll hit another production peak this year or next. All liquids production is up to about 2006 levels now. When you read about current oil production keep in mind that the term "all liquids" is often reported in the press as meaning oil production. But the "all liquids" term includes liquids condensed from natural gas, ethanol made from corn, and other liquids. The stuff that made Jed Clampett rich is a large but declining fraction of "all liquids". Some of those other liquids aren't as useful as oil. The biomass-derived liquids like corn ethanol excessively inflate the useful amounts of liquids because it takes oil to grow and process the corn. So the all liquids figure isn't as good as it looks.
We've been on a bumpy plateau of world oil production since late 2004. A peak in any one year is less important than when the decline off the plateau starts in earnest and how steep a production slope we ride going down. Jeremy Leggett thinks the decline could be steep. Chris Skrebowski thinks we are a few years away from the start of the decline.
Sir Richard Branson
Let's not an oil crunch take us by surprise and be poorly prepared.
Dr Jeremy Leggett
The Oil Crunch is when global supply fails to meet demand and starts to drop, and arguably we fear, starts to drop so fast that you'd almost call it a collapse.
All the calculations tell us that it, it's, it's going to be no later than 2014 and it could be as early as 2013.
So if oil production starts going down sharply can renewables fill the gap? Mason Inman points to a report which claims renewables won't grow fast enough.
Renewable energy could, in theory, take over quickly from fossil fuels, according to a draft of a new report on renewable energy by the Intergovernmental Panel on Climate Change. The study says renewables could grow 20-fold in the next four decades—more than enough to meet projected demand. But in reality, the report argues, less than 2.5 percent of that potential will be put into place.
I see one ray of hope: If natural gas production from fracturing shale continues its current trend then at least in the United States and Canada natural gas could serve as a transition energy source away from oil. If you think the price of gasoline is going to skyrocket and you also expect natural gas prices to stay low then help is on the way: For the 2012 model year the Honda Civic GX natural gas vehicle will be sold nationwide in the United States. The previous Civic GX was sold in only a few markets.
What about cost? Civic hybrid at $23,950 (which also has more expensive trim levels) costs less than the current Civic GX at $25,490. By contrast, the base Civic model starts at only $15,805.
Does a natural gas car make sense yet? It has several downsides (and all substitutes for oil have substantial downsides - that's why oil costs much more per unit of energy, it is so convenient). First off, the Civic GX only holds the equivalent of about 7.8 gallons of gasoline. So you'll have about 250-300 mile range. Second, you'll have to spend several thousand dollars more when you buy the car. Plus, you'll have to either seek out rate natural gas recharging stations or buy a home recharging natural gas compressor.
Upside: Your cost of an amount of natural gas equivalent to a gallon of gas could be a half or a third of what you pay for gasoline. Check out this map of natural gas refueling stations. Prices vary enormously depending on whether much natural gas is produced in a region. It is hard to move natural gas around in anything but pipelines. So prices vary much more than gasoline prices do. Around Salt Lake City natural gas prices are very low at $1.27 per gallon. In parts of Oklahoma it costs less than $1. Ontario Canada has some even lower prices. If you want or need to to refuel at home you'll have to pay a few thousand more for a home natural gas compression unit that'll refill your car while you sleep.
My take: If natural gas prices stay as low as they have since collapsing in 2008 then by 2020 (and perhaps much sooner) natural gas cars will be a better value than gasoline cars for a large portion of the US and Canadian populations and ditto for a number of other countries with large natural gas reserves.
Update: Cheap NG: See Jean-Marie Bourdaire's video presentation on about shale natural gas costs and prospects. He discusses Arthur Berman's skepticism on shale natural gas and indications of why it might really be as cheap as claimed.
I think Crude Oil Production may have peaked because with cheap NG, using oil for anything other than fuel for cars/trucks/ships is insane.
The US was still using 206 million barrels of oil for electricity generation in 2005.
It was half that a year later and by 2009 it was at 67 million and I would guess much less by 2011.
As of today any process that can use Natural Gas instead of oil (like the plastics industry) is going to switch to NG if possible.
"Abundant shale gas has changed that, sending gas prices lower and keeping them there. NGLs have followed. They are now much cheaper than naphtha, an oil-derived alternative to ethane used mainly by European and Asian competitors. With oil prices so strong, the highest-cost naphtha-based plants produce ethylene for about $1,200 a ton, says Hassan Ahmed of Alembic Global Advisors. Ethane-based U.S. producers' costs are now about half that."
206 million barrels in 2006 was only 10 days of US oil consumption. The decline of oil usage for electric power generation has been going on for decades.
Oil demand hasn't fallen. With oil around $100 per barrel it is obvious demand is very strong.
Cheap NG: See the video presentation by Jean-Marie Bourdaire of Total about shale gas costs and prospects.
I put a 2 minute summary of the Catalyst show "oil crunch" on my website
IEA oil crunch warning: governments should have worked on it 10 years ago
Do you really want your readers to base 40 years projections on a UN report?
Gee, what does the UN have to say about the progress of fusion reactors?
Got a good UN report telling us where cancer therapy will be in 2025, Randall?
We are dying to know...
Oh, the IEA predicted a global recession in 2012 due to oil prices. Wow, and we just had a huge recession a couple of years ago. Good thing we have the super geniuses at IEA to alert us for next year!
A lot of the oil-fired generation occurs in Hawaii, Alaska, Puerto Rico, and New York (?).
There is no inter-island grid for Hawaii and PR, so they ship in the most energy-dense fuel available. Their electric prices are very high, and they should consider modular nukes. Instead, they are doing the usual: wishful thinking "renewable" subsidies.
Don't know why New York is still so high; they use lots of heating oil anyway. The situation might change a lot once they start drilling the gas out of the Marcellus shale.
Randall, 10 days is about 3%. Not trivial. 20 billion dollars worth today. And oil usage for electricity hovered around 200 million barrels from 1998 to 2005.
As for demand ... the US was importing 13.7 million barrels a day in 2005 and that dropped to 11.7 million barrels in 2010.
Imports are down 2 million barrels a day.
did u heard? the swedish skeptics society confirms Andrea Rossi has a real working cold fusion device?
and those are the tunnel vision retarded living in a box scientist
something very similar of you
is it now the time? to admit that like them u are living in a small dark box made up by ur own little mind?
but becaose i cracked ur little cage u now start to see the light?
hm i wonder
here the link so u may not forever dwell in darkness
Rossi Cold Fusion Validated by Swedish Skeptic's Society
oh and by the way anybody with an average iq and a internet connection can google the fact that oil is abiotic and will never run out
u left behind the fascist propaganda like global warming and save the frogs gay stuff
now is time to get to next level
I am aware of what the Swedish Skeptics Society witnessed. But they haven't really validated it. Alan Fletcher appears to be doing a good job documenting which experiments have been done and what still needs to be done to prove or disprove Rossi's reactor works as claimed. If you want to form an opinion about Rossi's reactor then read Fletcher first.
Since Rossi won't release enough information to enable a complete validation of his claims we are all just in a holding pattern waiting for the point when he will. Until then we do not know.
NY State has regulations that make it so hard to build new generation plants near NYC that some old oil-burning plant has been kept in operation. In Florida's case the state has been lax about forcing a regulated utility to shift to a lower cost generation source.
Hawaii, Alaska, Florida, and Puerto Rico all suffer from geography problems as well. They can't set up large size plants because their demand in each local area isn't large enough to justify it. Hawaii and PR can't get their natural gas via pipeline. So natural gas would cost more. Alaska has lots of small isolated communities and a natural gas pipeline from the North Slope has yet to be built.
Why did world oil production stop rising in 4Q 2004? Why have we gone 7 years with huge growth in Asian demand without a big corresponding increase in world oil production?
Our unemployed are not using much oil and our employed can't afford as much oil as they used to buy. So naturally we use less. The Chinese are pushing Americans into smaller cars.
At this link explain figure 7. It shows in a single graph how growth in world oil production has gone thru a succession of down-shifts. I've got a simple explanation why: We can no longer grow flow rates by much due to the limited amount of oil left and the geological features of where that oil is located.
Everyone else: see that Figure 7 that Gail Tverberg has in that post. It is consistent with what I've read in books about the history of oil production. In my mind it provides a large portion of the total explanation of why US per capita economic growth has been lower since 1970.
That figure 7 can be used to illustrate just how much has changed: If world oil production growth of the 1960s had continued at the same rate until now we'd be burning 1.079^37 years = 16.66 times 60 million barrels or 999 millions of barrels of oil per day. Instead we are burning slightly about 80 million barrels per day.
Economic growth has become much harder to achieve because when you have to use less of one input you need to use more of others and that costs more. The substitutes also can't grow fast enough either and capital can't achieve enough compensating efficiency increases.
Some of the difference comes down to policy choices.
For example, take the policy choice to promote pavement over steel rails. The rebar in a concrete freeway is on the order of the material in a pair of heavy rails of the same length, but it takes far more fuel to move a ton-mile on the freeway and the pavement requires a lot more maintenance. If we ran most things on rails, we could electrify the energy supply with a single overhead wire and eliminate the need for petroleum; the policy choice to go with pavement makes electrification extremely difficult.
Had we made different policy choices, we wouldn't have any oil-related economic constraints.
Trains are slow. They don't go where you want them to. They don't come to your door. They are inflexible. They are loved by people who want the proles to travel at fixed times along fixed corridors. Fascists love trains. Order. Symmetry. Nothing messy.
Grotesquely overpriced for a country as big as the USA with such a small relative density of population. The USA is 179th in population density. 83 people per square mile.
There are 4 million miles of highway in the USA. Only 233,000 miles of railway.
So if oil production starts going down sharply can renewables fill the gap?
That's not really the right question - renewables don't relate directly to PO. The IPPC analysis is related to CO2 emissions, and renewables wind power are relevant there. Unfortunately, we're not likely to ramp up renewables all tha quickly because coal and NG are still cheap.
The relevant things for PO are mostly electric and NG powered transportation. Both are cost effective and not limited by supply - the question is just how quickly we'll choose to ramp them up. That choice is mostly determined by our leadership, which is controlled by the legacy industries which would like to prevent change:
"Poor Exxon. They used to be the oil company that everybody loved to hate. This spawn of the Standard Oil breakup had it all: Obscene profits, the Exxon Valdez, a mean CEO who sneered at clean energy, blatant funding for climate deniers.
But now, the new ExxonMobil is just not that special anymore.
It turns out that all the big oil companies are buying elections, paying front-groups to spread lies about climate change and dumping their tiny investments in clean energy while continuing to put out soft-focus ads touting how green and socially responsible they are. And they just don’t seem to care that much about preventing oil spills either.
In these days of peak greed, you have to drill pretty deep in the oil patch to find the worst of the worst.
A real gusher
Well, after coming up with a bunch of dry holes, the environmental and government-reform movements seem to have found the activist equivalent of Old Spindletop: Charles and David Koch."
Nick, AGW proponents tend to be quite ignorant of the science of global warming.
"The last link is particularly important, given that it shows, among other things, that those dismissing human-driven global warming tend to have a more accurate picture of the basic science than those alarmed by it."
"...this study also found that for some knowledge questions the Doubtful and Dismissive [skeptics of man-made global warming] have as good an understanding, and in some cases better, than the Alarmed and Concerned."
Anyone remotely interested in climate change on the skeptic side usually is better informed than the morons repeating the CO2 mantra.
We don't need funding from Exxon (and we certianly don't get the billions given away by governments to spew proganada) to dismiss the stupid claims made by AGW proponents.
CO2 is one many major variables that have changed over the 20th century. To try and claim a minsicule amount of warming is caused by man at one of the 1000 year peaks seen in the ice core record is assinine.
AGW is a con game, green energy is a huge squandering of monies that gets you nothing. And AGW proponents seem to be always short on facts and long on lies ... like the hockey stick.
Setting up a factory to make CNG tanks to put in cars seems far easier than building up the supply chain for EV batteries. The market can ramp up NG vehicles a lot faster than it can ramp up EVs. Plus, I expect the NGVs to be cheaper. Plus, existing vehicles can be converted to NGVs if only the US EPA won't stand in the way.
Trucks also offer additional utility. Rails can't run everywhere. Also, trains have basically larger optimal sizes and fewer running times. So trucks offer finer grained scaling of transportation.
I want to see more freight go by rail. But I only want to ride rail on vacations. Though I can't say I can find the time to take such leisurely vacations.
Trains are slow. They don't go where you want them to. They don't come to your door.
Who said anything about trains? Rails can handle trucks too.
E-P: The US has not rejected trains. We have the largest and most efficient railroad system in the world. Billions of dollars are being invested in it. But, it is for freight not passengers. I hope that politicians do not muck it up by trying to build a passenger system.
At this link explain figure 7. It shows in a single graph how growth in world oil production has gone thru a succession of down-shifts. I've got a simple explanation why: We can no longer grow flow rates by much due to the limited amount of oil left and the geological features of where that oil is located.
The simple explanation is incorrect.
Various factors come into play including where the fact that OPEC can manipulate the price of oil for a while.
At the same time, the major economies continue to steadily use oil more efficierntly.
And economic growth hasn't been harder over time as can be seen from the healthy growth per capita in
the US, UK and Japan from 2003 to late 2007 before the financial meltdown
Won't the natural gas just be sold on the world market? Why would they keep it here when it can just be sold abroad for a higher price? And does anybody know what portion currently stays here vs. being sold abroad?
Setting up a factory to make CNG tanks to put in cars seems far easier than building up the supply chain for EV batteries. The market can ramp up NG vehicles a lot faster than it can ramp up EVs.
The Prius is a partial electric car that is less expensive than the average light vehicle, and uses 40% as much fuel as the average, and yet there is no backlog of unmet demand. Unfortunately, the problem right now isn't really the physical barriers to ramping up. The problem: the society as a whole making the choice to kick the oil habit - we haven't done that yet.
Plus, I expect the NGVs to be cheaper.
The premium for a NG civic, or a diesel Jetta, is higher than I would expect from a simple cost analysis. I'd like to know how those prices were set.
In general, a move to NG for transportation requires confidence in future NG prices - I don't see that happening yet.
Don't get distracted by the Climate Change thing. The important point: needed change in energy systems is being blocked by legacy industries.
"needed change in energy systems is being blocked by legacy industries."
No. Corrupt and wasteful subsidies are being used to warp energy systems. At no point has Wind Turbines been worth erecting, but the UK is planning to destroy its electrical grid.
100s of billion in Euro's are committed to solar and wind subsidies in the UK, Italy, Germany , Spain etc and it is damaging their economies.
Global Warming is the greatest scam in the history of human kind.
AGain, don't get distracted by the Climate Change thing. This article is about Peak Oil. It's perfectly clear that we need to do something new and different, whether it's CNG or electric cars, and that change is being blocked by the affected industries.
For instance, right now the US government is going through a planning process to raise light vehicle efficiency standards (CAFE). The regulatory agencies involved are being very timid because of the influence of industry.
The EPA makes CNG conversions grotesquely expensive. The EPA is downright evil and is run by green morons.
"he cost of CNG conversions for existing vehicles is as high as it is because of EPA licensing requirements. For an individual (or shop) to be licensed to do a conversion, the person must pay $10,000 per year, per engine type, per year of manufacture. So that if a conversion shop wanted to do conversions in 2009 for Camrys for the years 1995 to 2005, the shop owner would have to pay the government $100,000 in licensing fees. Then, if he wanted to do conversions on the same models in 2010, he would have to pay the $100,000 again, even though they are the exact same models and engines that he has been licensed on already. And if there is more than one engine involved, i.e., a 6-cylinder and 8-cylinder, the cost would double.
Therefore, if a shop owner wanted to do 10 model years of Camrys and Corollas and Celicas, and well as Honda Accords and Civics, unless there were common engines being used in these five models the licensing cost (for just one engine per) would be a half million dollars, which would have to be paid again in 2010."
Bruce backpedals from one red herring to another slightly more pale (pinker?) herring. Funny to watch. Even funnier when you note that the obvious conclusion to draw from his last post (the EPA's CNG conversion rules appear to have been written to suit the oil industry to thwart competition) is exactly the point made here: "needed change in energy systems is being blocked by legacy industries"... a point Bruce tried to deny by obfuscation. Watching him is like being a juror in the Rajaratnam trial.
It degenerates to utter hilarity when you realize that Bruce implies that the EPA is essentially run by the very energy giants it's supposedly "oppressing". This is the essence of "regulatory capture".
But back to oil and our transportation system in general...
There's more than one problem with our current system of ICE-powered rubber-tired vehicles driving on pavement. Oil (and the asphalt used for a lot of that pavement) isn't the only thing getting expensive; payments to the Highway Trust Fund have been running well short of the cost of repairs for some time, and the cost of adding right-of-way to address congestion has gone through the roof.
What to do? In a word... rail. It's the major enabling technology.
Dual-mode vehicles don't just save energy by cutting rolling friction. Metal rails can serve as current returns for either overhead power or flush-mounted third rails (segmented and only powered when a vehicle is over them), which allows the system to be electrified. Steel rails carry heavy loads to the roadbed with much less damage than tires on pavement, slashing maintenance requirements and costs. Last, the lateral guidance provided by rail simplifies the task of driving to the maintenance of following distance to the vehicle ahead; this problem has been solved for some time. Assembling vehicles into "platoons" slashes air drag and multiplies the number of vehicles per lane-mile, fixing congestion without having to buy any more ROW.
An electrified rail system built for dual-mode vehicles enables EVs to go essentially unlimited distances without stopping to charge; better yet, they could re-charge while in motion. Everything from semi-loads of cargo pulled by Balquon tractors to Nissan Leafs could cruise along at highway speed while their drivers slept, read or surfed the web. If they ran far enough, they'd get off the exits with fully-charged batteries. This allows end-to-end electric travel of hundreds of miles with neither recharging breaks nor exotic batteries; the endpoints only have to be close enough to a road with electrified rail lanes.
Bruce will throw more red herrings into this thread, I'm sure of it. Laugh at him while he's still here.
"the EPA's CNG conversion rules appear to have been written to suit the oil industry to thwart competition"
The oil industry owns a lot of natural gas properties you moron.
The EPA is a left wing anti-capitalist organization that wants the destroy the economy. NG cars would save the oil industry and the ICE industry. Thats why the EPA hates NG conversions. Left wing fascists hate it when ordinary people try to take control of their own destiny. Better to nationalize GM and burden it with crappy jokes like the Volt.
Rail is a dead end in countries with low population density. Only idiots like Obama and EP think otherwise.
5 years ago there was almost a gas shortage so adding gas consumers then wasn't political opportune to say the least.
That's the flip side to prices. NG supply and pricing have been unpredictable and highly volatile. Large organizations (the kind that maintain fleets of freight trucks) don't like supply and pricing uncertainty.
Maybe in 2-4 years, when NG supply and pricing seem to have settled down for the long-term, these organizations will be ready to make large commitments to NG. Until then, it will be pilot projects and very low-hanging fruit to keep their toe in the water.
Nickg, when you adopt the old leftist standbys that big business is blocking everything, you're gonna have to exclude big oil, houston can't even drill in it's own backyard anymore, if anything, fossil fuel production is what's blocked. And even under oil boy bush and big halliburton cheney, govt subsidies to alternatives was almost equal to all the subsidy to all fossil fuels, under the guidance of the closet smoker and sierra club lackey, wind and ethanol subsidies are probably alone equal to the defense budget. The money wasted on rail is another issue, who's stopping these democrat union government slum lords from building these 400 million per mile light rail projects that go nowhere and are hijacking all the infrastructure tax money meant for highways, roads, and bridges?
This from 2007, if you throw out refined coal which I assume was clean coal research, so-called alternatives have passed all fossil fuels combined, apparently there just aren't enough new york democrat lawyers in the oil business to get the same treatment the crooks in the financial district gets.
I don't see anything blocking any of the favorite failures of the left, it's only when they perform so miserably and it becomes impossible to fake it anymore does the left stop it's silly insistence on what they think works, granted this is offshore, but its a start.
Randall, isn't total crude and condensates production setting records? Here's an AGWist lamenting we got too much fossil fuels,
"Green predictions of collapse have not materialized as the global carbon-based economic expansion continues. “The problem we face,” he said, “is not that we have too little fossil fuel, but too much.” As conventional oil declines, economies will switch to tar sands, shale gas and coal. If coal runs out, other fossil fuels will take its place. Because the greens can’t get their political and ideological acts together into a world economic view that makes sense"
"Large organizations (the kind that maintain fleets of freight trucks) don't like supply and pricing uncertainty."
"PS (NYSE: UPS) today announced it has purchased another 48 heavy tractor trucks equipped to run on Liquefied Natural Gas (LNG), bolstering its continuing effort to reduce the emissions of its truck fleet while taking a step toward energy security."
Imagine if some of the 2 trillion squandered by Obama and the Democrats had been spent on converting heavy tractors to LNG or offered incentives to buy LNG tractors and or building LNG refueling stops.
"But the story here is that wet shales, i.e. ones that contain gas, oil and liquids are all part of the package from the same hole. In this scenario, oil is the $100+ prize and it is now four times more valuable than gas measured on BTU equivalency.
With limited growth potential and surging supply in U.S. markets there are only two possibilities for gas - flaring or giving it away. Flaring is not an option, but to access high priced oil, literally giving gas away, or even more incredibly paying someone to take it off their hands makes economic sense in the Texas markets."
Rail is a dead end where you unload the passengers and baggage & freight. Then you load up, and get going. Because rail has attributes of running on any known energy source and best rolling efficiency, it makes engineering sense whatever the demographics are, when point-to point freight haul is involved. Several countries including oil exporting nations have stuck with railway mode as #1 transport mode, observing the military moniker for railroads: "Second Dimension Surface Transport Logistics Platform", stand alone/apolitical methodology of keeping victuals and priority goods moving.
China is the model for Oil Interregnum preparation. WalMart business model and US financial institutions assured China's decision to maintain strict adherence to a SunTzu script for economic dominance. Weak military/economic country arranges the scene to entice strong military/economic adversary (USA) to buy artificially cheap but competitive quality goods... In natural progression stronger country moves manufacturing capacity & tech know-how to weaker, and eventually the situation is reversed. Hari-kari enters picture when former manufacturing leader has to borrow money from Sun Tzu country to buy oil maintain happy motoring facade.
Largest and most comprehensive generic railway engineering projects are under way in... China. China has world's largest stored reserves of petroleum, largest renewable electric generation hardware manufacturing plants, and is coupling renewable electricity to railway mode in many places. China operates the Panama Canal, thanks Jimmy. A major US car manufacturer has transferred crucial manufacturing technology to China, thanks GM.
Having said this, one is duty bound to offer some steps to mitigate this fine mess! Along with the usual reliance on American ingenuity to save the day, it probably is wise to look at the 1910-1960 US transport/distribution model, when America was a LENDING not a borrowing nation. American Short Line Regional Railroad Association (ASLRRA) has talent and capability to assign people to determine order of rebuild of the 100's of dormant rail branch lines necessary as trucking is stressed by ever more expensive/rationed motor fuel. Boone Picken's LNG trucking fleet helps, as do batteries, hybrid concoctions and other motor transport efforts.
In the final round-up, resource limits if not climate concerns will require railway as "Guarantor of Societal & Commercial Cohesion". Intellectually honest pursuit of the energy component challenge to maintaining sustainable economic well-being must include looking at white papers by Lionel Badel, Chris Skrepowski, Richard Heinberg, and Christopher C. Swan. Military and Strategic planners can include look at reformed US Army/Guard Railway Logistics Units, called "Railroad Operating And Maintenance Battalions (Ft Eustes, VA)". Any hint of continuing threat of attack to American homeland must certainly include massive railway capacity growth.
"Zhao Jian, a professor at Beijing Jiaotong University and a longtime critic of high-speed rail, said he worries that the cost of [the country's high speed rail] project might have created a hidden debt bomb that threatens China’s banking system.
“In China, we will have a debt crisis — a high-speed rail debt crisis,” he said. “I think it is more serious than your subprime mortgage crisis. You can always leave a house or use it. The rail system is there. It’s a burden. You must operate the rail system, and when you operate it, the cost is very high.”
“They’ve taken on a massive amount of debt to build it,” said Patrick Chovanec, who teaches at Tsinghua University. He said China accelerated construction of the high-speed rail network — including 295 sleek glass-and-marble train stations — as part of the country’s stimulus spending in response to the 2008 global financial crisis.
All that debt for just 16,000 miles of track.
"The ability to produce clean burning natural gas from shale could transform the global energy economy. Right now we burn about 7 trillion cubic feet (tcf) of natural gas to generate about 24 percent of the electricity used in the United States. The U.S. burns a total of 23 tcf annually to heat homes and to supply industrial processes as well produce electricity. Burning coal produces about 45 percent of U.S. electricity.
A rough calculation suggests that 100 percent of coal-powered electricity generation could be replaced by burning an additional 14 tcf of natural gas, boosting overall consumption to 37 tcf per year. The EIA estimates total U.S. natural gas reserves at 2,543 tcf. This suggests that the U.S. has enough natural gas to last about 70 years if it entirely replaced the current level of coal-powered electricity generation.
Similarly, it would be notionally possible to replace the entire current U.S. gasoline consumption with about 17 tcf of natural gas per year. So replacing coal and gasoline immediately would require burning 54 tcf annually, implying a nearly 50 year supply of natural gas."
"HWR has issued a purchase order for 200 Peterbilt 367 liquefied natural gas (LNG) trucks incorporating Westport Heavy Duty Systems (Westport HD), from Westport."
50 here, 200 there etc etc.
I am still reading that J. David Hughes Post Carbon Institute report with a more dismal outlook for natural gas production. Not far enough along yet to judge. But I increasingly think shale NG is the pivotal issue. If the optimists are correct Peak Oil is painful but the economic depression is mild. But if the pessimists are correct (and Kjell Aleklett's slow decline off peak is wrong) then major major depression is in store.
The Hughes report is useful reading just for the overview he provides on how we use energy now.
Check out Vitaliy Katsenelson's contrarian view on China. He calls it a Grey Swan because its eventual financial train wreck is predictable, only the timing can't be predicted.
Hedge fund short seller Jim Chanos makes a similar argument about China: overinvestment in capital and huge misallocations of capital. The average ROI on investments in China has been plummeting in Chanos' view and the government is to blame.
My question: how high does oil have to get to cause more financial bubbles to pop? Looks like Australia's real estate bubble is popping btw. Canada next?
Randall, Canada has a sane majority conservative government. I think it is well suited to surviving the coming collapse of Europe and the US (if anyone can). Lots of oil and NG. Banks in ok shape.
The ability to produce clean burning natural gas from shale could transform the global energy economy...if
the ability and the resource actually exist, and
it does not create equal or worse pollutants on its own. Between fraccing fluids and fugitive methane emissions, it's far from clear that this is the case. European nations, with few freshwater supplies they can afford to lose, are not jumping into the shale gas fad.
he EIA estimates total U.S. natural gas reserves at 2,543 tcf.
The EIA has a very poor record of predicting production; its projections for oil have been far too high for years on end, and the analysts never seem to learn from their mistakes. It's almost as if the EIA tells the public what the oil and gas industries want them to hear.
There's also the major issue of doubling (or more) the national pipeline system if gas is to replace oil and coal. This won't be cheap or fast, and some places like California have already suffered pipeline-capacity shortages even without adding vehicular demand.
All these analyses should include a "what if?" What if economically recoverable shale gas is a lot less than the optimists are claiming... if it takes so much pumping energy to get the de-pressurized "long tail" gas that it's not worth it? What does the country do with all the useless pipelines, and the vehicles with neither petroleum nor gas to run them? Betting on shale gas to replace oil and coal is very risky, to the point of damnfoolishness.
Are there similar risks with rail? Not that I can see. We know it works, and an electrified system is supplier-agnostic; it can run on everything from wind power to atoms. It can even run on shale gas, it'll just need a lot less and it can turn elsewhere on a moment's notice. That prevents gas producers from becoming the next OPEC, which is what I think Bruce has in mind.
Building extra pipelines to use US Natural gas would greatly improvement the balance of payments and would be well worth it to have control over the future energy supplies - instead of Saudi Arabia etc.
The pipelines won't be wasted. Coal bed methan and Methane Hydrates are there to be exploited.
And the jobs will be local. Wind Turbines are mostly built outside of the US and therfore the jobs go to China and the consumer loses billions to subsidized wind power instead of saving money with cheap gas.
Yes, the anti-capitalist greens are producing lots of propaganda that will probably doom Europe. It doesn't have to doom the US.
NG is the only fuel that can realistically replace gasoline.
But I am a pessimist at heart. I think the US and Europe are doomed. Too many green terrorists sabotaging a possible cheap energy future. Poland plans to allow shale gas exploration. Canada may survive. China will flourish. Already they are spending serious money on methane hydrates.
Replacing gasoline with NG would require roughly 75% increase of current NG extraction and transport. That means drilling wells, pipelines, seasonal storage... the works. This is not likely.
Replacing gasoline with electricity would require about a 25% increase in electric generation and much less change in peak generation and transmission capacity, depending on assumptions (peak vs. off-peak charging).