Other Voices: The World Energy Outlook and you
14-12-2009
We've been seeing increased coverage of peak oil in newspapers, magazines, and online in the past few years. Now, in late 2009, there have been some brand new indications that we're already farther down the rabbit hole than we thought.
Let's back up for a second. What is peak oil, what is the world energy outlook, and what do they mean to you, your business, and your family?
Here's the short version: We aren't “running out of oil,” but we are running out of cheap and easy oil. Rates of oil extraction from the ground, globally, are dropping much more quickly than we are prepared for — despite new technologies and massive investment.
The world uses somewhere around 83 million barrels per day — enough to fill Lake Shasta to capacity in about a year and a half.
We use oil for everything in modern society. Our lifestyles, our families' well-being, and our jobs are all much more dependent on cheap abundant oil than we might ever fully realize.
For many of oil's uses, there simply is no viable substitute with the same incredible energy density, portability, and ease of use.
There is no environmental message here: This is only a reminder of our complete dependency. Without cheap abundant oil, we're all in a serious bind.
Much of the mainstream media has already caught up with scientific consensus to show that oil from the recent ultra-deep-water finds and other “unconventional” sources will not make a significant difference in the global oil outlook, for at least three specific reasons:
First, even at maximum rates of investment, drilling, and construction, that oil would take a long time to develop and get to market (5 to 15 years).
Second, when it does get to market, the flow rates will be low. The unavoidable decrease in global flow rates (“depletion”) in the next ten years will be much larger than the new flow rates from recently discovered unconventional sources by that time. In other words, even if we develop all of the new finds at breakneck pace, in 10 years we will still not have nearly as much oil flowing as we do today.
Third, this stuff is only getting more expensive. In late 2008 and early 2009, trillions of dollars of oil infrastructure projects around the world were delayed or canceled due to low oil prices.
This is a sobering view of what's to come, in terms of global extraction rates five to fifteen years down the road. The only way to get the oil companies to restart these projects is by significantly raising oil prices.
So, you can see that we have a catch-22 of epic proportions: We can have low oil prices, or we can have higher oil flow rates to slake our thirst (for a few extra years) — we just can't have both.
Here's the punchline, at least for this round: The International Energy Agency (a number-crunching organization in Europe) publishes the annual “World Energy Outlook,” providing estimates of future global oil costs and flow rates. Many countries, including England, use the report to fashion their energy infrastructure plans.
For years, analysts have observed that the report has been consistently over-optimistic, just as the oil industry berates the IEA for its “unfounded” pessimism.
In November 2009, just a day prior to the release of the World Energy Outlook, a dramatic article in a widely read UK publication shook the world's mainstream media [“Key oil figures were distorted by US pressure, says whistleblower,” www.guardian.co.uk, November 9; full reference at www.apple-nc.org/landmarks]:
“The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the U.S. has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.”
That's the story. The next step is up to you. The time for convincing has passed; the time to make plans is slipping away; the time to act is now, or never.
Join in the effort to reduce local dependency on oil and increase our resiliency to the coming changes. Learn more at www.apple-nc.org.
Tom Grundy lives in Nevada City.
www.theunion.com
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