Thursday, June 29, 2006

A Better Explanation of Peak Oil

I have only recently started reading about peak oil, but there is a great page about the theory here. The basic argument is clear and sound. As the world population increases and more countries become heavily industrialized, we will need more and more oil. Oil is a finite resource, so this has to catch up to us at some point. The only solution would be to cut energy use or find new ways to create energy. I know we have nuclear power plants, solar panels, flexible fuel vehicles, and wind generators, but nothing is prepared to fill the gap if we were denied the amount of oil we have become accustomed to using.


Dave Justus said...

Actually, there is quite a bit that can fill the gap, it is just more expensive. One example is oil sands and oil shale. At about 70 dollars a barrel, extraction of petroleum from these sources is profitable, and the reserves are huge.

Most advocates of the peak oil scenario imagine a nightmare collapse that simply isn't likely to happen.

It also seems strange to me, that they advocate using higher priced energy now (solar etc.) so we can avoid higher priced energy in the future as a result of running out of oil. There may be environmental reasons for not using petroleum, but there are not economic ones, even if we believe the most dire peak oil prophets. Even if running out will eventually 'force' us to higher priced alternatives, going there before it makes economic sense to do so is foolish.

Kevin said...

Dave's absolutely correct. For example, there's an incredible amount of oil available in the Green River basin area in the continental U.S., however it's in the form of oil shale, and it's not been economical to extract. Shell Oil has spent 25 years and hundreds of millions of dollars trying to figure out how to get the oil. Now they have a process that will allow profitable extraction as long as oil is more than $35/bbl.

Seeing that oil is selling at $70+/bbl, that means they're putting in for permits. So long as the environmentalists don't keep them tied up in court for the next six decades, we have a lot of oil yet to pump.

Yes, prices will go higher - and alternate energy sources will begin to be economically competitive - and attractive.

"Peak Oil" is attractive to the same people pushing "Global Warming" as an impending catastrophe that requires tremendous sacrifice and loss of rights so that we can stave off (or prepare for) the coming disaster. It's just one more doomsday cult.

Sandcastle said...

We don't have solutions. We have stopgaps. None of this technology is prepared to take the place of cheap oil. We continue to expand and build upon a platform that will eventually disappear.

Dave Justus said...

That depends what you mean by 'cheap.' While it is true that nothing will replace cheap energy from fossil fuels, Oil Shale and OiL Sands are still 'cheap' even at 70$ a barrel. Energy is a much lower componant of our total economy that it was during the 70s oil shocks and adjusted for inflation oil is not more expensive than it was during the early 80s.

This means, our economy can continue growing just fine for decades, perhaps centuries, without exhausting our fossil fuels. As I mentioned, there may be environmental reasons (and if you check it out, most peak oil doomsday is actually environmentalism in economic clothing) that make using fossil fuels undesirable. Someday, there may be economic reasons for fossil fuels being undesirable but that will be primarily because the alternative methods have become cheaper, not because we have run out of oil. At that point, fossil fuels will quickly be abandoned.

Peak Oil is absolutely not something to lose sleep over.

Cubicle said...

"At that point, fossil fuels will quickly be abandoned"

Quickly, i doubt it. Just look at the problems that they northeast had when a common gasoline additive was replaced.

Tanks had to be emptied and cleaned, which caused shortages. And that was just ethanol, which is fairly close to gasoline. Trying to swith to other fuels, liky hydron requires a brand new infrstructure.

If gas becomes expensive, all the gas cars are not going to disapper over night.

Other things energy sources are also not going to change quickly. You can't just open a nuck plant, quickly these days.

They only really feasiable solution is decentrailzed power (home still, homemade bio desiel, solor power, and wind power) IMHO.

Sandcastle said...

I don't think that fossil fuels will last for decades or centuries, and I haven't found any evidence that anyone within the oil industry or oustside of it believes that to be true. Oil shale can keep us going for a few years, but it too is limited. I understand your point about not abandoning oil before it is time, but we need to start implementing alternative sources of energy to make the transistion as smooth as possible. Everything takes time to build, and the sooner we get it done the cheaper and easier it will be.

Dave Justus said...

Quickly is somewhat of a relative term of course. I don't say it will happen instantly, but if x energy source is cheaper, it will be adopted pretty fast I think.

We could build nuclear power plants quite fast if we wanted to, regulatory issues increase the cost of that energy source dramatically.

Decentralized power is an interesting concept, and I admit to being fascinated by it myself. However, as a general rule many small scale operations are more expensive than centralized large scale operations. Technology may change that in the future, but it hasn't happened yet.

Home solar and especially home wind power can actually create more problems than they solve unless a very efficient energy storage method is part of the equation (fuel cells show some good promise here.) If your solar or wind powered home is still connected to the grid (almost all are) then you can create unpredictable fluxutions in power generation and power draw. If a very few homes are of this type it is absorbed by the grid as a whole without effect. If 1/3 were doing this though, it could create serious problems.

As for fossil fuels lasting decades or centuries, I believe we have enough coal to last 500 years are present consumption rates. Tar Sands and Oil Shale as I mentioned above also occur in vast quantities and have not been exploited. The Canadian Tar sands rival Saudi Arabia as far as energy reserves go although how much is extractable is still not certain.

I do agree that looking at alternative sources is a good idea. I think though that that is being done. Tons of research is taking place on new solar technologies and other alternative methods. Until they become more efficient though, mass adoption would be stupid.

Cubicle said...

"However, as a general rule many small scale operations are more expensive than centralized large scale operations."

true, I really don't see technology chaning that at all. The key is if you can produce it cheaper than you can buy it on the open market, which if all you can buy is oil based energy and it is more expensive the you could see a massive personal shift becuase an individual can do it much faster than other large compaines.

"f your solar or wind powered home is still connected to the grid (almost all are) then you can create unpredictable fluxutions in power generation and power draw. I"

That will probably happen once or twice, then every one will get their own powersource so they won't be bothered by the outages.

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Rhea said...

I am just getting up to speed on 'peak oil' and appreciate your writing about the issue.