No Time To Lose

April 7, 2007 at 11:05 am
Contributed by: Chris


This article, which I wrote for last week’s Energy and Capital, is one I’ve been wanting to write for some time now: a top-level survey of all the major energy sources, and where we now stand in their production. It’s a very sobering situation, one that The Street really hasn’t yet grasped. If this doesn’t get you to thinking about your Plan B, then I don’t know what will. Please share it widely.


No Time to Lose


By Chris Nelder

Last week, I covered a startling new report on the remaining global reserves of coal. That report was really a blow, and put the final nail in the coffin of the fossil fuel age . . . make that the industrial age.

Here’s why.

As that report projected, the global peak for coal will likely be around 2020, maybe sooner.

If the ASPO’s projection is right, then the global oil peak (defined as “all liquids,” including non-conventional oil and natural gas liquids) will be around 2010. The conventional oil peak appears to have been 2005, and as I have discussed previously, it appears that we may have passed the peak of all crude oil production last year, but it will be another year or more before we’ll know. At any rate, it looks like some time between now and three years from now, we’ll be past the oil peak.

The global peak of natural gas will likely be around 2010 also, but could be as late as 2020. North America is past its peak, as ExxonMobil CEO Lee Raymond said in 2005: “Gas production has peaked in North America. [ . . . ] The facts are that gas production continues to decline, and will start to decline even more rapidly. By the time we get to that period (2010–2012), we’ll need it badly.”

And from a practical standpoint, we may be past the global peak of uranium production as well. This is a complex topic–too complex to get into in this short article–but essentially, like coal, uranium comes down to a question of energetics. Only the highest-quality ores are net energy positive when used in a typical fission reactor, and there is only enough readily available ore of that quality, worldwide, to supply the world’s total current electricity demand for about six years. Most other sources of uranium, from lower-quality ores to seawater, are ultimately net energy losers, because it takes so much energy to mine and produce the fissionable material. And that energy must come from oil, gas, and coal, which are set to peak and spike in price, making it pointless to use them for such purposes as mining and processing uranium. It would be far better just to burn them.

But putting aside the question of energetics, another study by the Energy Watch Group of Germany (the same group that did the coal report), “Uranium Resources and Nuclear Energy,” indicates that even under the best-case estimates of uranium resources, production will peak before 2050, and that’s assuming today’s relatively miniscule rate of use. Increase the rate of use, or use a less optimistic reserve number, and that date quickly comes closer.

Nuclear energy has other challenges, too, besides the availability of uranium. The true cost of building nuke plants, from planning all the way through decommissioning, are never accounted for, or paid, by the operators of the plants. The decommissioning costs are invariably “externalized,” or foisted onto the public. And we have yet to deal with the last sixty years’ worth of toxic spent fuel, some quarter of a million tons of it, now scattered around the globe. Once all of those costs are taken into account, nuclear energy remains a net energy loser.

In all fairness, newer designs for nuke plants, such as breeder reactors and thorium cycle reactors, offer some hope for re-using spent fuel from fission reactors and military applications. But they are also questionable from a net cost standpoint, and in any case, large-scale commercial deployment of those technologies is unlikely, or at least far off in the future.

No Magic Bullets

All of this leaves us in a real pickle. With oil, gas, and coal all set to peak sometime between now and about 15 years from now, and nuclear unable to increase its share very much, we’re headed for a chronic energy shortfall . . . one that will continue for decades, until enough economic damage has been done to bring our energy demand back in line with supply.

Of course, this was predicted several years ago in a now-infamous paper by Robert Hirsch and Roger Bezdek with the wonky title “Peaking of World Oil Production: Impacts, Mitigation & Risk Management,” known in peak oil circles simply as “the Hirsch report.” The study was commissioned by the Department of Energy, and the authors are highly respected researchers each with decades of experience working for the likes of the RAND Corp. and SAIC. Their conclusion? If we start intensive mitigation scenarios–and by that they mean the likes of the Apollo Project plus the Manhattan Project multiplied by ten–twenty years before the peak, then we have a chance of averting serious pain, because we’ll have some time to switch to alternatives and invest in efficiency. If we start at the peak, then we have a definite, unavoidable shortfall of energy for about twenty years, with a lot of chaos. And if we start 20 years after the peak, well . . . nobody wants to think about that. Let’s just say it’s ugly. As Bezdek puts it, “There are no magic bullets, only poison pills.”

Currently, we appear to be on a trajectory for the middle scenario, facing a twenty-year shortfall. According to Heinberg, here’s what the balance sheet looks like:

Oil, natural gas, and coal together supply over 87% of total world energy, which stands at about 400 quadrillion Btus, or “quads,” per year. Therefore, compensating for a realistically possible 2.5 percent annual decline in all fossil fuels averaged over the next 20 years would require developing almost 10 quads of energy production capacity from new sources each year (this assumes no growth in energy demand). Ten quads represent roughly 10 percent of total current U.S. energy production. By way of comparison, today’s total installed world wind and solar generating capacity–the result of many years of investment and work–stands at less than 1 quad.

Again: we’re going to need 10 quads of new energy production capacity each year to stay within our current energy budget. That’s just to stay even . . . with no economic growth.

Folks, within the current balance of alternatives, it just isn’t there.

A Harsh Reality

According to our best, most realistic estimates, here’s how things stand globally:

Oil: peaking some time in the next three years, possibly already past the peak.

Gas: peaking some time in the next three to thirteen years.

Coal: peaking some time in the next thirteen years.

Nuclear: probably peaking some time in the next ten years, with lots of variables, but its use won’t increase substantially.

Tar sands and oil shales: Shortages of fresh water and natural gas and/or nuclear power to process them virtually assure that they will remain minor players. According to Prof. Aleklett, President of the ASPO, the Canadian tar sands will probably hit a plateau of around 3.5 mbpd around 2015 and stay flat until it drops off around 2040 (a projection more or less in line with that of the IEA). So the tar sands would account for a mere 4% of current global oil consumption, or about the same amount of oil that will be lost due to oil field depletion less than two years after the global peak.

As if to reinforce the point, a Canadian parliamentary committee has just called for a hold on plans to build some 20 new nuclear reactors to increase Alberta’s oil sands production through 2015, until the full consequences of building the reactors are known. Undoubtedly, this will mean another delay in meeting the oil sands output projections.

In situ production of tar sands and oil shales (cooking the stuff underground before harvesting it as a liquid) may have a niche future as well, but there are so many technical hurdles yet to be overcome that it won’t amount to much for a long time. There are no commercial-scale facilities at present.

Hydro: all of the good resources have already been tapped, and due to reduced water flows (thanks to global warming) and environmental concerns, hydro power is in permanent decline.

Biofuels: Low energy return on energy invested guarantees that they, too, will remain minor players, unable to compensate for the immense loss of energy that peaking oil represents, at least for the near future. But biofuels do have a lot of room to grow, so to speak, and will have decreasing competition in the future as oil becomes more scarce. So I would rate the long-term prospects as good.

All other renewables (solar, wind, tidal, wave, and geothermal combined) currently provide around 1% of the total energy mix.

Even at the present rates of growth, they won’t be able to make up the loss of energy from the peaking of fossil fuels. The quantities of energy we’re talking about, and the time (and energy) that it takes to deploy them, are simply too vast.

At this point I consider the assertion amply proven that there are no supply-side solutions to the problem of fossil fuel peak, if we try to keep going along in some business-as-usual scenario.

It’s a grim situation, no two ways about it.

Never Sell Humanity Short

But if there’s one thing I’ve learned in my study of these subjects, it’s to never sell humanity short. When sufficiently aroused, we have an amazing ability to come up with creative solutions and change our behaviors. Nothing’s ever set in stone.

Back in 2003, when I first began my study of peak oil in earnest, I would never have imagined that in three years we’d see everybody from prime ministers to CEOs to CIA and Pentagon heads making energy security and global warming their top priorities. Hardly anybody was even thinking about biofuels. I’d have laughed at the notion that entire countries would agree to phase out incandescent light bulbs. And yet, here we are. And the renewable energy industry is in better shape than ever.

We have some major challenges ahead. We have to change assumptions that everyone alive today has always taken for granted, like economies that constantly expand, populations that grow unchecked, and endless supplies of cheap fossil fuels.

The low-hanging fruit right now is clearly efficiency. Not just swapping out our light bulbs, but improving fuel economy and insulation, changing the ways we make buildings and reconfiguring entire communities with a goal toward relocalization.

Solar makes economic sense for just about anybody now, so it’s ready to take off. Wind and geothermal are also set for big growth. Biofuels clearly have a growing role, but innovations in transportation are popping up like daisies. And other, more distant solutions are out there beckoning for the large river of R&D money that’s rapidly flowing toward them.

The dimmer the reality of fossil fuels is, the brighter the future for renewables. I’m betting my career and my future on it.

But we’ve got a lot of work to do. There is no time to lose.

Until next time,

chris signature


Rate this Article

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Copyright © 2008 GetRealList
All trademarks and copyrights on this page are owned by their respective owners.