Monday, November 16, 2009

The Age of "Cheap" Oil Is Over

In the United States, the production of oil in the lower 48 reached its maximum in the early 1970s. A few years later, there was a small upward bounce when production began on the North Slope of Alaska. Sometimes politicians play games with the extra oil we received from Alaska but the reality is that at no time did the production in the lower 48 plus production from the North Slope ever surpass the oil production of the early 1970s. We've been in decline ever since.

That means any additional oil for U.S. consumption has had to come from elsewhere, hence the huge payments we make to foreign countries who sell us oil. I've known since the 1970s that we have a problem. In retrospect, the oil from Alaska was a gift that was misunderstood and misused. Despite what any number of self-serving politicians have claimed, Alaska did not "solve" our energy crisis, but it might have given us time to build a proper energy infrastructure for the 21st century.

I'm very concerned about oil depletion but I'm not much of a Peak Oil buff, or at least as it is described sometimes in the media. I have no idea if world oil production has peaked for good or whether we might once again in the near future break the production record. I don't really care about the date of Peak Oil and given the manipulations of various politicians and oil companies, it easily morphs into vague redefinitions. Having said that, however, I'm very concerned about the politics of oil and the failure to start moving toward the actions we need to take if we are to have a reasonably bearable transition from an age of oil to something that is more sustainable.

On The Oil Drum today, which is one of the best sources for understanding energy depletion, there is a post by Nate Hagens that carries a letter by Colin Campbell, one of the first oil experts to raise alarms about oil production. The letter is a response to an article in The Guardian about experts who work for the IEA who believe not enough attention is being given by the agency to the precarious energy situation the world now faces. Campbell writes:
I was most impressed that you should give such prominence in your issue of 10th November to the role of the International Energy Agency in assessing the status of oil depletion. It is one of the most important issues facing the modern world, given the current dependence on cheap oil-based energy.

Campbell's whole letter fills in some gaps in my own knowledge about Peak Oil. In some ways, the precise date of peak oil is far less important to me than the simple fact that "cheap" oil is no longer cheap. Oil that is easy to drill is pretty much gone. Developing other sources of oil is expensive, difficult and also dirty. Light sweet crude, the easiest to use oil and the basis of the world economy for almost a hundred years, is no longer found in sufficient supply to sustain the world's needs. We are keeping our heads above water by using difficult to process heavy oil, difficult to develop offshore and arctic oil, and expensive, tedious and dirty tar sands to make up the deficit. Other methods are also being used. All the new methods are not only expensive but require a great expenditure of energy to acquire. The net energy picture is poor and if we continue to rely on the oil paradigm, it will only get worse.

Campbell's letter is excellent, though I disagree with a couple of points. First, he argues that the high energy prices of 2008 were the cause of the economic meltdown. I would say they were a major contributing factor and that oil politics will play a major role in making economic recovery difficult. The main culprit, in my view, has been 30 years of deregulation, a reckless banking sector and a lack of political and economic vision that has increasingly hampered the United States.

The other point that Campbell makes is that nuclear energy and coal will have to fill the gap until more sustainable forms of energy come online. First, environmental and safety issues aside, nuclear energy is extremely expensive.

The bigger issue, though, is coal. The problem with coal is that it's the dirtiest form of energy out there and that's before we talk about the huge amount of carbon dioxide that burning coal gives off. I'm concerned that another problem is that coal, just like oil, is addictive. If there is to be a transitional form of energy, it should be natural gas. If the natural gas found in shale is economically feasible, what would actually make sense is to ramp up natural gas power plants while actually ramping down coal burning plants. None of this of course will make any sense unless we are aggressively converting to sustainable forms of energy.

Even before global warming entered public awareness in a big way, it was obvious for many reasons that we needed to switch to alternative energy sources that do not pollute on the scale of fossil fuels. Today, I have to take Global Warming seriously in addition to the other problems of fossil fuels.

Every year even more evidence accumulates on Global Warming. And every year we see more of the effects (see these National Geographic photos; they are only a fraction of the photos being taken all over the world that show evidence of warming). It's astounding that more than two decades ago it was fairly easy to get people to take the destruction of the ozone seriously. A cause and effect was established, a solution found and effective action was implemented. What is so different about Global Warming? And what is so different about oil depletion?

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